Print Page - Meltdown

Title: Meltdown
Post by: BachQ on September 20, 2007, 11:35:04 AM

Price of oil ......... (http://oil-price.net/1m_small.gif)

1 year live DOW chart
(http://quotes.ino.com/chart/history.gif?s=INDEX_DJI&t=l&w=15&a=50&v=d12)

(http://www.durangobill.com/OilChart.gif)

(http://www.trendlines.ca/TrendlinesPeakOilDepletionScenariosChart81112B.gif)

(http://rankexploits.com/musings/wp-content/uploads/2008/03/gmt_testnoextra.jpg)

(http://farm4.static.flickr.com/3029/2807291756_9cde327b16_o.jpg)

(http://research.stlouisfed.org/fred2/data/BORROW_Max_630_378.png)

(http://piggington.com/images/sep07foreclosures.gif)

(http://www.themortgagereports.com/images/2008/04/29/foreclosure_versus_home_prices.gif)

11 July 2008

Oil sets new record= 147.27

http://www.iht.com/articles/ap/2008/07/11/business/EU-Oil-Prices.php

26 June 2008

Oil Surges to $140/bbl for the 1st Time

(http://money.cnn.com/2008/06/26/markets/oil/index.htm?postversion=2008062614)

Return of the Credit Market Collapse

Don't look now, but its back. Swept back upon the rocky shores and thrown harshly against the rocks by a vicious tide, the banks' shares are once again moving to new multi-year lows. Of course, the news is horrible, but the price action of financial shares suggests there is far worse yet to come. ... [T]he monumental credit crunch sweeping the globe ... is the proverbial elephant in the middle of the room that few like to talk about, and which once again in the last few days has passed another major round of gas. To begin with, we note that for the first quarter 2008, Banks' earnings fell by 46% to $19.30 billion with the number of officially reported 'problem' banks jumping from 76 to 90. In the first quarter, US Banks set aside a record $37.1 billion to cover losses, however, even government regulators don't believe that will be enough to stave off further problems. According to Sheila Bair, Chairwoman of the FDIC, Federal Deposit Insurance Corporation, loan-loss provisions and bank failures will likely continue to rise in coming quarters. "While we may be past the worst of the turmoil in the financial markets (ed. Don't count on it) we're still in the early stages of the traditional credit crisis you typically see during an economic downturn" stated Ms. Bair. (continued....)

(http://www.financialsense.com/Market/barbera/2008/0603.html)

(http://graphics8.nytimes.com/images/2008/04/22/business/22oil.600.jpg)

Dear Reader,

"Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, bankers, and investors in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global Peak Oil."

(http://www.lifeaftertheoilcrash.net/)

(http://www.lifeaftertheoilcrash.net/PeakGraph.jpg)

Oil hits record high above $125 a barrel
Published: Friday, May 09, 2008
LONDON (Reuters) - Oil hit a record high above $125 a barrel on Friday, boosted by strong demand for diesel, concern about supplies and a renewed bout of buying by investment funds. U.S. crude oil hit a record high of $125.10 a barrel, but by 6:24 a.m. EDT (1024 GMT), it handed back some gains and was trading $1.28 higher at $124.97.
(http://a123.g.akamai.net/f/123/12465/1d/media.canada.com/reuters/olcanat_iptc/2008-05-05t180623z_01_nootr_rtridsp_2_news-markets-oil-col.jpg)

(http://www.canada.com/ottawacitizen/news/business/story.html?id=0cc56880-98c0-4635-bb36-7ad451780c2f)

Oil prices, gasoline costs to double: CIBC report
SHAWN MCCARTHY
Globe and Mail Update
April 24, 2008 at 11:17 AM EDT
(http://images.theglobeandmail.com/archives/RTGAM/images/20080424/woilRubin0424/OilSignalHill_jack_188.jpg)

OTTAWA — Crude oil prices will soar to more than $200 (U.S.) per barrel over the next five year – driving Canadian pump prices to $2.25 a litre and forcing a fundamental transformation in the North American economy, says Jeff Rubin, chief economist with CIBC World Markets Inc. ... "Whether we are already at the peak of world oil production remains to be seen, but it increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity," the economist said. World oil production has essentially stagnated at about 85-million barrels per day over the last two years, with growing demand met by increases in natural gas liquids, a fuel source that is used by the petrochemical industry but is of little use for transportation. Mr. Rubin said he expects crude oil production to grow by about 1-million barrels per day over the next several years. Meanwhile, growing demand in China, India, Russia and the Middle East will more than offset declines in the industrialized world.

"Millions of new households will suddenly have straws to start sucking at the world's rapidly shrinking oil reserves," he wrote. He said the sharply higher oil prices will prove devastating for the North America's industrial base, particularly the auto industry. But Canadians will benefit from the spinoffs, in terms of jobs, tax revenues and procurement, from the country's oil-rich provinces.
(http://www.theglobeandmail.com/servlet/story/RTGAM.20080424.woilRubin0424/BNStory/energy/home)

Oil heading for $US135: Barclays

Nigel Wilson, Energy writer | April 03, 2008

THE price of crude oil could easily reach $US135 a barrel, international analysts say. (http://www.theaustralian.news.com.au/story/0,25197,23474259-20501,00.html)

(http://media.kiiitv.com/images/GasPricesUpTN.jpg)

(http://www.petroleumequities.com/Figure2A.jpg)

Dollar falls below 100 yen, hits record low vs euro
Thu Mar 13, 2008
(http://www.reuters.com/article/hotStocksNews/idUST24480320080313)

(http://www.planebuzz.com/gas_prices.jpg)

Oil Rises Above $110 to Record as the Dollar Falls Against Euro
By Mark Shenk

March 12 (Bloomberg) -- Crude oil rose above $110 a barrel to a record in New York after the dollar weakened to an all-time low against the euro, prompting investors to buy commodities. The dollar fell to $1.556 per euro, the lowest since the currency's 1999 debut. The declining U.S. currency has spurred investors to move funds into commodities such as oil and gold. Prices fell earlier after a government report showed that U.S. oil and gasoline supplies rose.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=a8GJB8fjITio&refer=home)

Gas Prices Jump, Oil Hits $110
By JOHN WILEN – 2 hours ago

NEW YORK (AP) — Gasoline and oil prices keep setting new records. The price of regular gas at the pump is now at a national average of nearly $3.25 a gallon. And on the futures markets, oil prices have reached a record over $110, rising in response to the dollar's continuing slide. Pump prices are following crude's recent surge, and could rise as high as $3.75 a gallon this spring, analysts say. Meanwhile light, sweet crude for April delivery has reached a new trading record of $110.20. Traders shrugged off a government report showing another increase in crude oil inventories, a report that in the past would have sent prices falling.

(http://gasprices360.com/uploaded_images/Gas-Prices-360-739874.jpg)

Oil sets record high for fifth day
Tue Mar 11, 2008 7:52am EDT
By Jane Merriman

LONDON (Reuters) - Oil rose to a record high for the fifth day in a row on Tuesday, boosted by investor flows into oil and other commodities partly to hedge against inflation and the weak dollar.

U.S. light crude for April delivery was up 85 cents at $108.75 a barrel by 6:48 EST, after touching a record $109.20 a barrel.

(http://www.reuters.com/article/hotStocksNews/idUSSYD3274320080311)

(http://www.oilcrisis.com/images/wakeUpToSolarS.gif)

Oil soars to record above $107
Mon Mar 10, 2008 5:01pm GMT
By Daniel Fineren
(http://uk.reuters.com/article/businessNews/idUKSYD26260120080310)

LONDON (Reuters) - Oil sped to a record high above $107 a barrel on Monday ... Fears of recession, following the biggest U.S. job losses in five years and strains in the credit market, have depressed equities and the dollar while prompting many investors to seek safety in commodities including oil. *** OPEC President Chakib Khelil was quoted on Monday as saying that speculation and political tension would keep prices at triple digits through the year.

(http://pictopia.com/perl/get_image?provider_id=207&size=550x550_mb&ptp_photo_id=156069)

Oil hits record near $106 on dollar, OPEC, supply
Thu Mar 6, 2008 6:49am EST
By Ikuko Kao

(http://www.reuters.com/article/hotStocksNews/idUSSYD3274320080306)

LONDON (Reuters) - Oil hit a record high near $106 on Thursday

(http://upload.wikimedia.org/wikipedia/en/thumb/2/2f/Oil_Prices_Medium_Term.png/800px-Oil_Prices_Medium_Term.png)

Bloomberg.com Jan 07, 2008

Oil $200 Options Rise 10-Fold in Bet on Higher Crude (Update2) (http://www.bloomberg.com/apps/news?pid=20601087&sid=ayQXcHVStlP8&refer=home#)

By Grant Smith

Jan. 7 (Bloomberg) -- The fastest-growing bet in the oil market these days is that the price of crude will double to $200 a barrel by the end of the year. Options to buy oil for $200 on the New York Mercantile Exchange rose 10-fold in the past two months to 5,533 contracts, a record increase for any similar period. The contracts, the cheapest way to speculate in energy markets, appreciated 36 percent since early December as crude futures reached a record $100.09 on Jan. 3. ... ``One hundred dollars a barrel is actually 14.9 cents a cup, so we're still talking about oil being remarkably cheap,'' said Matthew R. Simmons, chairman of Simmons & Co. International, a Houston-based investment bank that focuses on energy. Inventories ``are tight as a drum and I don't see how we get out of this box,'' he said in a Bloomberg television interview last week. ``Demand clearly isn't starting to slow down.''

Reuters

Oil hits record $100 a barrel
Wed Jan 2, 2008 6:13pm EST
By Richard Valdmanis

NEW YORK (Reuters) - Oil prices vaulted to a record $100 a barrel on Wednesday as violence in Nigeria, tight energy stockpiles and a weaker dollar triggered a surge of speculative buying, dealers said.

Oil prices end at a record high
Declining inventories, potential trouble with Turkey and projections for a colder winter push crude to $83.69 a barrel
By Steve Hargreaves, CNNMoney.com staff writer
October 13 2007: 8:55 AM EDT

NEW YORK (CNNMoney.com) -- Oil prices settled at a record high Friday on news of dwindling stockpiles, potential trouble with Turkey and projections for a colder winter. U.S. crude for November delivery rose 61 cents to settle at $83.69 a barrel on the New York Mercantile Exchange, after hitting a fresh trading high of $84.05 a barrel earlier in the session. The previous settlement record was $83.32 set Sept. 20.

(http://money.cnn.com/2007/10/12/markets/oil_record/index.htm)

Oil Rises Above $83 as Sliding Dollar Spurs Commodities Demand

Sept. 28 (Bloomberg) -- Crude oil rose above $83 a barrel in New York, set for its biggest monthly gain in three years, as the sliding dollar drew investors to commodities.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aW3vV2xFGmfk&refer=home)

Oil surpasses $83 per Barrel
Crude Futures Surpass $83 a Barrel, Driven Largely by Weakening DollarThe Associated Press By JOHN WILEN AP Business Writer
NEW YORK Sep 20, 2007 (AP)

Crude oil prices surged further into record terrain Thursday, breaching $83 a barrel as the weak dollar and some worrisome weather in the Gulf of Mexico spurred buying. Gasoline futures jumped as well.

(http://abcnews.go.com/Business/wireStory?id=3629439)

Title: Re: Meltdown
Post by: karlhenning on September 20, 2007, 11:38:14 AM

Yes, we had to refill the heating oil tank this week.

Title: Re: Meltdown
Post by: BachQ on September 20, 2007, 11:39:08 AM

Euro breaks $1.40 barrier
Dollar could weaken further as lower interest rates give U.S. investors a lower return on investments.
September 20 2007: 1:54 PM EDT

FRANKFURT, Germany (AP) -- The dollar took another fall on currency markets Thursday, reaching one-to-one parity against the Canadian dollar for the first time in 30 years and plumbing a new low against the 13-nation European currency.

The dramatic half-point cut in U.S. interest rates announced this week, while aimed at shoring up U.S. credit markets, also had the effect of further weakening the dollar versus other currencies by reducing the cash yield on dollars. A lower dollar can make travel more costly for U.S. residents and can also pose the risk of making imported goods more expensive over time.

The euro breached the $1.40 barrier against the dollar on Thursday. That level had long been seen as a key benchmark in terms of solidifying the euro's position on currency markets and giving it momentum toward becoming a reserve currency of choice - a position long held by the now-weakening dollar.

The 13-nation euro bought as much as $1.4064 in morning trading in Europe before falling back slightly to $1.4040, above its previous high Wednesday night of $1.3987, and more than the $1.3964 it bought in late New York trading.

The dollar also fell against other currencies, reaching parity with the Canadian dollar for the first time since November 1976. One U.S. dollar now buys one Canadian dollar.

David Jones, chief market analyst at CMC Markets in London, said the euro's rise is not likely to abate in the coming days, given fears about another interest rate decrease in the United States.

Dollar sinks to lifetime low versus euro (http://www.reuters.com/article/hotStocksNews/idUST19472920070920)

Title: Re: Meltdown
Post by: BachQ on September 20, 2007, 11:39:44 AM

Quote from: karlhenning on September 20, 2007, 11:38:14 AM
Yes, we had to refill the heating oil tank this week.

You should have done it last week! :P

Title: Re: Meltdown
Post by: karlhenning on September 20, 2007, 11:42:54 AM

Should have, but it was not possible . . . .

Title: Re: Meltdown
Post by: bwv 1080 on September 20, 2007, 11:46:44 AM

Time to break out the Drive 90 - Freeze a Yankee bumper stickers again.

Title: Re: Meltdown
Post by: dtwilbanks on September 20, 2007, 11:49:38 AM

Quote from: bwv 1080 on September 20, 2007, 11:46:44 AM
Time to break out the Drive 90 - Freeze a Yankee bumper stickers again.

Hey!

Title: Re: Meltdown
Post by: karlhenning on September 20, 2007, 11:52:52 AM

In Red Sox Nation, freezing Yankees sounds just wicked!

Title: Re: Meltdown
Post by: bwv 1080 on September 20, 2007, 12:01:58 PM

Freeze A Yankee,
drive 75 and freeze them alive
Freeze a Yankee,
Let your thermostat rise and give them a surprise.

Governor Briscoe promised us
that if any damn Yankee raised a fuss,
He'd turn off the gas, cut the oil,
and let them all freeze and boil.

They don't want an oil rig
around their seashores,
Lord, it's a terrible sight.
And don't you try to drill
in their dirty old water
if you do you're in for a fight.

Senator Kennedy told me himself
That he wouldn't let a drill
on the continental shelf.
So, when they tried to get
Texas to drill another well
We could tell them all to go to ......
Hyannis port.

Now, President Carter was a good ole boy,
A southerner thru and thru,
But when he asked
all American's to sacrifice,
He really meant ...you know who.

He want's all our oils
And our nuclear fuels
What does he take us for?
Silly fools?

Freeze A Yankee,
drive 75 and freeze them alive
Freeze a Yankee,
Let your thermostat rise and give them a surprise.

Governor Briscoe promised us
that if any damn Yankee raised a fuss,
He'd turn off the gas, cut the oil,
and let them all freeze and boil.

Cram them Yankee's in little bitty cars
While we drive around in limousines.
There ain't nothing in the world any more fun,
Then pumpin' gas in those big Mochines.

Us Texan's love our Cadillac's,
Big Continental's and Pontiac's.
We're gonna keep all the gas we can make
And let them Yankee's shiver and shake.

Well, them Yankee's say they need our oil
And they gotta have gasoline,
But don't you put no refineries way up north,
They wanna keep their air real clean.

They only got enough Ignite
To last until midnight.
Not enough fuel
to keep their mirrors cool.

Freeze A Yankee,
drive 75 and freeze them alive
Freeze a Yankee,
Let your thermostat rise and give them a surprise.

Governor Briscoe promised us
that if any damn Yankee raised a fuss,
He'd turn off the gas, cut the oil,
and let them all freeze and boil.

Save your confederate credit card,
The south wanna rise again

Title: Re: Meltdown
Post by: BachQ on September 20, 2007, 12:05:01 PM

Gold hits 28-yr high on dollar fall

By Frank Tang and Atul Prakash

NEW YORK/LONDON (Reuters) - Spot gold prices surged to a 28-year high in European trade on Thursday as the dollar sank to an all-time low against the euro and new highs in crude oil bolstered inflation concerns.

Gold rose more than 2 percent to $738.30 an ounce, its highest since January 1980, when it hit a record high of $850. By 3:09 p.m. EDT, bullion was quoted at $734.50/735.30, compared with $721.10/721.90 in New York late on Wednesday.

Most-active December gold on the COMEX division of the New York Mercantile Exchange settled up $10.40 or 1.4 percent at $739.90 an ounce, dealing between $728.90 and $746.50 which marked the loftiest level since 1980.

"The market was in two minds yesterday, jumping between $722 and $726, but the euro's push through $1.40 against the dollar gave the market fresh impetus to break up again," said Tom Kendall, metals strategist at Mitsubishi Corporation in London.

Bill O'Neill, a partner in commodity consultant LOGIC Advisors in Upper Saddle River, New Jersey, said that the Fed's latest rate cut reignited investor fears about inflation and extended support to gold.

U.S. crude broke above the record $84 a barrel in afternoon trading. Oil prices have been rising sharply this week on U.S. supply concerns and storm worries.

Gold is usually seen as a hedge against inflation.

Title: Re: Meltdown
Post by: DavidW on September 20, 2007, 03:46:49 PM

Let me ask a dumb question-- why has the dollar became so weak in the past few years?

Title: Re: Meltdown
Post by: Lilas Pastia on September 20, 2007, 05:25:33 PM

There are many reasons, but it mostly has to do with other currencies finally reflecting their stronger underlying economies. IOW other currencies were neglected. Instead of saying the US$ has gone down, you could say that the other currencies have gone up. Investors have decided not to put all their eggs in the same basket.

In the case of the canadian dollar, it hit parity with the USD today, for the first time since 1976. Five years ago, it stood at 0.62 USD. That's a 61% appreciation. Much of that is simply reflecting higher natural resources prices (oil, gas and metals). More and more traders see the CAD as a resource-backed currency. If ever the demand for resources goes down, the CAD will fall rapidly.

Gold is traditionally seen as a refuge in times of inflation or political instability (oil crisis, wars). However, it used to hold this spot in tandem with the USD. The greenback is not seen as a safe place anymore. So US$ holders are selling the greenback and buying more gold, sending it higher.

When you combine all these effects you realize that all major currencies are now fairly priced against each other.

Title: Re: Meltdown
Post by: BachQ on September 20, 2007, 05:57:00 PM

Quote from: Lilas Pastia on September 20, 2007, 05:25:33 PM
There are many reasons, but it mostly has to do with other currencies finally reflecting their stronger underlying economies.

Also:

-- Artificially low US interest rates (the lower borrowing costs imposed by the Federal Reserve yesterday will lessen the global appetite for dollar-denominated assets like stocks, bonds, real estate)

-- Huge US trade deficit (imports>exports) (i.e. USA spends US dollars to buy products from China, thereby flooding the world with an excess supply of dollars)

-- US is in debt to foreign countries (Japan, China especially)

-- weakening US economy & retreating consumers & a fucked-up president named GWB

However, I'm not sure what the relationship is between US inflation and US dollar value. Anyone? Anyone?

Title: Re: Meltdown
Post by: bwv 1080 on September 20, 2007, 06:00:29 PM

Quote from: D Minor on September 20, 2007, 05:57:00 PM

However, I'm not sure what the relationship is between US inflation and US dollar value. Anyone? Anyone?

Inflation will weaken a currency - just look at the various hyperinflation examples such as Weimar Germany and 80's Brazil.

Title: Re: Meltdown
Post by: BachQ on September 20, 2007, 06:05:35 PM

Quote from: bwv 1080 on September 20, 2007, 06:00:29 PM
Inflation will weaken a currency - just look at the various hyperinflation examples such as Weimar Germany and 80's Brazil.

Well, the US inflation rate is incredibly low, especially in light of high oil prices ....... so why isn't the value of the dollar increasing with such low inflation?

Title: Re: Meltdown
Post by: Gurn Blanston on September 20, 2007, 06:07:34 PM

Quote from: bwv 1080 on September 20, 2007, 11:46:44 AM
Time to break out the Drive 90 - Freeze a Yankee bumper stickers again.

;D

(Mine's already on. ;) )

----------------
Now playing: K 423 Duo #1 in G for Violin & Viola - Grumiaux / Pellicia - K 423 Duo #1 in G for Violin & Viola 1st mvmt - Allegro - 07 (http://www.foxytunes.com/artist/grumiaux/track/k+423++duo+%231+in+g+for+violin+%26+viola+1st+mvmt+-+allegro)

Title: Re: Meltdown
Post by: BachQ on September 20, 2007, 06:09:15 PM

Gurn, what about inflation?

Title: Re: Meltdown
Post by: bwv 1080 on September 20, 2007, 06:20:46 PM

Quote from: D Minor on September 20, 2007, 06:05:35 PM
Well, the US inflation rate is incredibly low, especially in light of high oil prices ....... so why isn't the value of the dollar increasing with such low inflation?

It is relative rates of inflation that drive currency prices, so while inflation is low in the US, it is as low or lower around the world. Commodity prices have little to do with inflation. Inflation is, as Friedman put it, always and everywhere a monetary phenomenon. It is the result of an increase in the supply of money relative to the available goods and services. With no expansion in the money supply, a rise in the price of a commodity like oil will have to be compensated for by a combination of reduced demand and reduced spending in other areas. If the price of gas doubles and your paycheck remains the same you have to either drive less, cut spending somewhere else, or go into debt.

Title: Re: Meltdown
Post by: Gurn Blanston on September 20, 2007, 06:40:18 PM

Quote from: D Minor on September 20, 2007, 06:09:15 PM
Gurn, what about inflation?

Steve's explanation works for me. In addition, I don't worry much about things I have little or no control over. :-\

8)

----------------
Now playing: Clementi: Complete Symphonies (Disc 1) - Philharmonia Orchestra & Francesco D'avalos - Symphony No. 1 in C - 1st mvmt - Larghetto - Allegro - 09/16 (http://www.foxytunes.com/artist/philharmonia+orchestra+%26+francesco+d'avalos/track/symphony+no.+1+in+c+-+1st+mvmt+-+larghetto+-+allegro)

Title: Re: Meltdown
Post by: Dungeon Master on September 20, 2007, 08:56:58 PM

Quote from: karlhenning on September 20, 2007, 11:38:14 AM
Yes, we had to refill the heating oil tank this week.

Wow - full tank, prices up ...... Sell! Sell! Sell!

Title: Re: Meltdown
Post by: m_gigena on September 21, 2007, 05:40:28 AM

Quote from: bwv 1080 on September 20, 2007, 06:20:46 PM
It is relative rates of inflation that drive currency prices, so while inflation is low in the US, it is as low or lower around the world.

We argentinians stay as outliers, as usual.
And the real inflation may double the official figures. The problem is public debt was renegociated to be adjusted to inflation ratios, so if the government shows the real inflation through official institutions each single public budget, at any level, will collapse.

Title: Re: Meltdown
Post by: m_gigena on September 21, 2007, 05:46:03 AM

Quote from: Manuel on September 21, 2007, 05:40:28 AM
We argentinians stay as outliers, as usual.
And the real inflation may double the official figures. The problem is public debt was renegociated to be adjusted to inflation ratios, so if the government shows the real inflation through official institutions each single public budget, at any level, will collapse.

Ours is half Venezuela, though.

But we don't have Dudamel, so I think we are even.

Title: Re: Meltdown
Post by: Lilas Pastia on September 21, 2007, 07:39:05 AM

Quote from: Manuel on September 21, 2007, 05:46:03 AM
Ours is half Venezuela, though.

But we don't have Dudamel, so I think we are even.

Is Venezuela's new currency the Dudamel? How many in a dollar?
8)

Title: Re: Meltdown
Post by: MishaK on September 21, 2007, 07:40:51 AM

Quote from: Lilas Pastia on September 21, 2007, 07:39:05 AM
Is Venezuela's new currency the Dudamel? How many in a dollar?
8)

Are the smaller units of Dudamels called Smurfs?

Title: Re: Meltdown
Post by: karlhenning on September 21, 2007, 07:41:48 AM

It's sort of like the guinea; there's no actual dudamel note, but it's 4 2/3 pesos.

Title: Re: Meltdown
Post by: BachQ on September 21, 2007, 08:23:45 AM

Quote from: karlhenning on September 20, 2007, 11:42:54 AM
Should have, but it was not possible . . . .

There was no oil in the world?

Title: Re: Meltdown
Post by: Lilas Pastia on September 21, 2007, 09:32:22 AM

Quote from: O Mensch on September 21, 2007, 07:40:51 AM
Are the smaller units of Dudamels called Smurfs?

Ah, lala! the things we hear... ::)

The base unit is the curl. 100 curls = one dudamel.

Ole! (http://upload.wikimedia.org/wikipedia/en/3/32/Dudi.jpg)

Title: Re: Meltdown
Post by: m_gigena on September 21, 2007, 09:36:16 AM

Quote from: Lilas Pastia on September 21, 2007, 09:32:22 AM
Ah, lala! the things we hear... ::) The base unit is the curly. One hundred curlies = one dudamel.

So hair growth is a dudamel appreciation?

Title: Re: Meltdown
Post by: bwv 1080 on September 21, 2007, 11:24:59 AM

Based on Larry's research, we in the US need to step up our competitiveness in pornography production. A large current porn account surplus would do alot to strenghen the dollar.

Title: Re: Meltdown
Post by: MishaK on September 21, 2007, 11:46:07 AM

Quote from: karlhenning on September 21, 2007, 07:41:48 AM
It's sort of like the guinea; there's no actual dudamel note, but it's 4 2/3 pesos.

Wrong coutry, Karl. In Venezuela the currency is the Bolivar.

Title: Re: Meltdown
Post by: BachQ on January 02, 2008, 02:27:16 PM

Oil hits record $100 a barrel
Wed Jan 2, 2008 6:13pm EST
By Richard Valdmanis

NEW YORK (Reuters) - Oil prices vaulted to a record $100 a barrel on Wednesday as violence in Nigeria, tight energy stockpiles and a weaker dollar triggered a surge of speculative buying, dealers said.

Oil's climb to the psychologically key triple-digit price helped send stocks tumbling on Wall Street and further darkened an already gloomy economic outlook in the United States, which has been battered by a housing crisis and credit crunch.

"Oil hitting $100 a barrel has sparked some concerns about the consumer and inflation," said Todd Salamone, vice president of research at Schaeffer's Investment Research.

U.S. crude traded once at $100 a barrel, up $4.02, before easing back to settle $3.64 higher at $99.62. It remains below the inflation-adjusted high of $101.70 hit in April 1980, a year after the Iranian revolution.

London Brent crude rose $3.99 to $97.84.

"Oil could rise further from here. It's simple supply-and-demand fundamentals," said Kris Voorspools, energy analyst at Fortis in Brussels.

The White House said it would not open up the nation's emergency crude oil reserve to lower prices. Two members of the Organization of Petroleum Exporting Countries said the cartel was powerless to bring the market down from its lofty height.

Crude prices jumped 58 percent in 2007, the biggest annual gain this decade. Oil prices have nearly tripled since 2000 -- driven by rising demand in China and other developing countries, tight stockpiles and geopolitical turmoil.

Weakness in the dollar has added to gains across the commodity sector as investors supported the underlying value of products denominated in the softening currency.

Wednesday's price surge of more than 4 percent came after suspected militant attacks in Nigeria's main oil city, Port Harcourt, heightened concern over the potential for further disruptions in shipments from the world's eighth largest oil exporter.

"With the military and the militant warlords engaged in a violent tit-for-tat, the risk for oil disruptions in Nigeria remains higher than in the past few months," said Olivier Jakob of Petromatrix.

Frequent attacks by militant groups since February 2006 have driven thousands of foreign oil workers from the oil-rich Niger Delta and cut oil exports by about 20 percent.

Investors are also particularly sensitive to signs of further fund investment in commodities at the start of the year. The broad Reuters/Jefferies CRB Index of commodities rose nearly 17 percent in 2007 as the sector rebounded from a loss in 2006.

A further decline in U.S. crude stockpiles -- already running at a three-year low -- was also expected. Weekly government data will be released Thursday, a day later than usual due to the New Year holiday.

Stocks of crude in the United States were expected to have fallen 2.2 million barrels last week, the seventh straight week of decline, as refiners processed more crude, according to a Reuters poll.

Distillate stocks, which include heating oil and diesel, were forecast to have declined by 500,000 barrels.

Title: Re: Meltdown
Post by: BachQ on January 02, 2008, 02:37:40 PM

From Timesonline

Yesterday's increase recalled the economic crisis after the Iran-Iraq war when oil hit $36.83 per barrel, equivalent to $90.46 today. The all-time inflation- adjusted high of $101.70 was reached after the Iranian revolution in April 1980. Analysts said yesterday that the lack of investment in bringing more production on stream around the world, coupled with political tension in the Africa and the Middle East, meant that oil prices were likely to remain high.

Title: Re: Meltdown
Post by: BachQ on January 03, 2008, 10:58:14 AM

WALL STREET JOURNAL

Oil Hits $100, Jolting Markets
Boom Cuts U.S. Clout,
Revives Middle East;
Dark Days for Detroit
By NEIL KING JR. , CHIP CUMMINS and RUSSELL GOLD
January 3, 2008; Page A1

The surging price of oil, from just over $10 a barrel a decade ago to $100 yesterday, is altering the wealth and influence of nations and industries around the world.

These power shifts will only widen if prices keep climbing, as many analysts predict. Costly oil already is forcing sweeping changes in the airline and auto sectors. It is intensifying the politics of climate change and adding urgency to the search both for fresh sources of crude and for oil alternatives once deemed fringe.

The long oil-price boom is posing wrenching challenges for the world's poorest nations, while enriching and emboldening producers in the Middle East, Russia and Venezuela. Their increasing muscle has a flip side: a decline of U.S. clout in many parts of the world.

Steep gasoline prices also threaten America's long love affair with the automobile, while putting strains on many lower-income people outside big cities, who must spend an increasing share of their budgets just on fuel to get to work.

No one can say for sure whether sky-high oil -- part of a price boom in a wide range of commodities, from gold to wheat -- is here to stay. But most in the industry agree that a 20-year stretch in which oil was consistently cheap is long gone. The global thirst for oil shows little sign of retreating, and large new discoveries are few. Some in the industry say prices could go far higher; others suspect that speculators -- or an economic slump in the U.S. or China -- could send prices falling in the near term.

Yesterday, with a single trade, crude-oil futures hit an intraday high of $100 a barrel, a record for the U.S. benchmark. For the day, they rose $3.64 to a record close of $99.62 a barrel. Crude is still shy of the inflation-adjusted peak of $102.81 a barrel set in April 1980, amid political turmoil in Iran and unrest elsewhere in the Middle East. The 1980 peak in nominal terms was $39.50 a barrel.

The arrival of $100-a-barrel oil adds to the pressure on the U.S. economy, which has sustained a big blow from a drop in housing prices and a wave of foreclosures. Even at today's prices, though, the oil spike alone isn't enough to push the world into recession, economists say.

When crude oil hit its 1980 high, drivers squealed and the economy slumped. So far there is no comparable pain, and America, which consumes a quarter of the world's crude, retains its taste for big cars and energy-devouring homes. That's largely because the U.S. economy is more efficient and most Americans spend less of their disposable income -- about 4% -- on gasoline than in 1980, when they spent about 6%.

The robust economies of Asia, especially China, have so far swallowed the price surges with relative ease. That's because the price spurt this time is itself largely caused by surging demand within the developing world, not by politically induced supply shocks as in the 1970s and early 1980s.

But there are signs of strain. China, in a bid to limit demand and the huge fuel subsidies it gives consumers, announced in October that it would impose an almost 10% increase in domestic prices for gasoline and diesel fuel. Other countries that heavily subsidize domestic fuel use, which include the oil-rich states Iran and Venezuela, are feeling the pinch as prices climb.

Impact on Middle East

Oil's run-up is bringing the most startling changes of all to the Middle East. Big producers like Saudi Arabia and the United Arab Emirates are using their billions in profits to build their economies with roads, schools, airports and entire new cities. The value of hydrocarbon exports from the Middle East and Central Asia is expected to approach $750 billion this year, almost four times the level in 2001, according to the International Monetary Fund.

The region's new wealth has triggered a bout of deal making that has bankers rushing to the petrostates of the Persian Gulf. McKinsey & Co. estimates that the world's biggest investors of petrodollars -- including state-owned vehicles known as sovereign-wealth funds -- now manage as much as $3.8 trillion in assets. The Abu Dhabi Investment Authority, which McKinsey estimates manages $900 billion in assets, is today among the world's largest financial-market participants -- about the same size as the Bank of Japan.

Underscoring the region's new global financial heft, Abu Dhabi recently swooped to the rescue of Citigroup Inc. with a $7.5 billion cash infusion as it struggled with write-downs from this year's credit crisis.

Even before that deal, Bahrain, Kuwait, Oman, Saudi Arabia, Qatar and the United Arab Emirates, which includes Abu Dhabi, spent about $124.3 billion in the past three years buying up foreign companies, real estate and other assets, according to London-based Dealogic. One transaction underscores the region's financial-markets ambitions. Dubai, also part of the UAE, agreed to a complex deal with Nasdaq Stock Market Inc. that essentially gives Dubai major stakes in Nasdaq, the London Stock Exchange and Nordic exchange OMX AB.

This wave of oil wealth is blunting America's influence. Oil money has galvanized the might of Russia under President Vladimir Putin. He has overseen a dramatic consolidation of power and rollback of democracy in Moscow, while sticking a thumb in the West's eye on issues ranging from independence for Kosovo to the U.S. bid to build an anti-Iran missile-defense system in Europe.

Surging oil prices have also weakened the Bush administration's efforts to use financial pressure to get Iran to back off its nuclear program. China, eager to secure all possible access to energy, increasingly is turning to Iran as a trading partner, with oil going east and Chinese technology heading the other way. High oil revenue, meanwhile, has kept the otherwise rickety Iranian economy humming and Iran's current government firmly in power.

In Khartoum, the once-drowsy capital of Sudan, glimmering skyscrapers are rising along the Nile as oil riches attract investors from Asia and the Persian Gulf. Sudan, accused by Washington of supporting terror groups and killing civilians in Darfur, had been hobbled for years by U.S. economic sanctions. Those restrictions are having less effect now, with the desire for oil resources high and with both know-how and capital pouring in from the Gulf and Asia.

Venezuela will continue to use its oil prod, perhaps more aggressively than any other country. In 2005, in one of a series of jabs at the U.S., Venezuelan President Hugo Chávez began offering cut-rate heating oil to poor neighborhoods of the Northeastern U.S. He also has used favorably priced fuel to prop up Fidel Castro and win friends in South America, while shouldering aside U.S. efforts to champion regional trade deals.

Full-Blown Oil Shock

For poor nations that don't produce oil, the past several years have been a full-blown oil shock. The price rise adds another obstacle to providing modern energy to the estimated 1.6 billion people who have no access to electricity and the 2.4 billion who cook with traditional sources like wood, coal or dung. A recent World Bank study concluded that a sustained $10 increase in the price of a barrel of oil translates roughly into a 1.5% knock to the gross domestic product of the world's poorest countries.

Few places have been harder hit than Malawi, a small southern Africa country with annual per capita gross domestic product of just $179. According to the World Bank report, a $10 oil-price increase is expected to translate into a 2.2% fall in the GDP of Malawi, where tobacco is the dominant cash drop.

Malawi subsidizes the price of gasoline and paraffin, a petroleum-derived fuel its people use for lighting and cooking. But according to an IMF study, the government is now passing along to the population all fresh increases in energy costs, and then some. Pump prices in Lilongwe, the capital, climbed about 19% in October, to the equivalent of $5.16 a gallon.

"When gasoline goes up, everything goes up, so we really have to struggle to earn a living," said James Mdachi, 43 years old, an assistant accountant for the government. He and his wife, a teacher, bring in about $200 a month, to support three children and five other dependents.

A world away, U.S. industry has so far managed to take the oil surge in stride, although economists fret that this may not last long. Auto makers, for instance, may have even more reason to fear high oil prices today than they did in the late 1970s, when price shocks and gas lines tipped Detroit's auto giants into crisis. Then and now, surging petroleum prices caught U.S. auto makers with model lineups full of powerful rear-wheel-drive vehicles designed for an era of cheap gas.

Auto makers have more things to fret about now. Surging oil prices embolden political leaders to call for tougher fuel-efficiency standards and other moves to discourage car use, such as fees that London and some other big cities levy on commuters who drive into congested districts. These ideas are gaining traction because of concern that petroleum-fueled cars and trucks exacerbate climate change. Groups worried about global warming are finding allies in more-conservative circles whose main concern is to enhance security by reducing reliance on oil from unstable nations.

After 20 years of largely leaving fuel-economy standards alone, the U.S. in December enacted an energy bill that requires auto makers to boost the average efficiency of their new-vehicle fleets to 35 miles a gallon from 27.5 by 2020. Auto makers got some important concessions, such as credits for building vehicles designed to burn ethanol and a new classification system that will make it easier for them to continue to sell larger vehicles. But the bill marks the end of an age in which the industry was able to make vehicles heavier and more powerful without making significant gains in fuel efficiency.

Moreover, the 2007 energy bill may not be the last auto makers hear from Washington. As part of her presidential campaign program, Sen. Hillary Clinton has proposed a target of 55 miles per gallon for cars and trucks by 2030.

These proposals threaten a fundamental automotive marketing strategy: Bigger is better. Industry executives, particularly in Detroit, worry that without the freedom to market large, powerful vehicles, their businesses will be decimated.

The fall of the Ford Explorer is emblematic of how $3-a-gallon gasoline has undermined Detroit's profit model. In 1999, Ford sold more than 428,000 of the midsize sport-utility vehicles, at an estimated $4,000 in profit each, and earned record profits of $7.2 billion. In 2007, through November, Ford sold just 126,930 Explorers.

Costly fuel gives a further edge to Japanese makers like Toyota Motor Corp. and Honda Motor Co. because of their expertise in small-vehicle and small-engine design. And if more markets tilt toward small, efficient diesel engines, as Western Europe already has, that's a plus for European companies such as Volkswagen AG or Renault SA.

General Motors Corp., the biggest U.S. car maker, is gambling that it can develop its own technology for plug-in hybrids and fuel-cell vehicles fast enough to stay in the game. GM is heavily promoting its plug-in hybrid Chevrolet Volt model, even though it isn't due to hit the market until 2010.

Raising Air Fares

In the global airline industry, meanwhile, pessimists just a few years ago were predicting that some carriers would fail if crude hit $45. The industry has proved adaptable, with airlines grounding their oldest and thirstiest planes, raising fares and drastically reducing labor and operating expenses.

But if oil's ascent keeps pushing up jet fuel prices, travelers are sure to feel a squeeze. John Heimlich, an economist for the Air Transport Association, predicts that if oil stays where it is or goes higher, airlines will identify their worst-performing routes and then cut the number of flights assigned to them, substitute smaller planes or cancel the routes.

Oil's rising cost is sure to put a sharper focus on calls to promote alternative fuels and curb burning of carbon-based fuels. The record there so far is decidedly mixed.

Pricey oil and a quest for "energy independence" have led to an ethanol boom, but higher corn prices now pinch that industry's profits. Historically, ethanol sold at a premium to gasoline; today there's so much ethanol available that it's selling at a discount.

Even in abundance, ethanol is a tiny factor in the U.S. fuel market, displacing a little more than 200 million barrels of crude oil annually, according to the Renewable Fuels Association. The blend of 85% ethanol and 15% gasoline called E85 is available at only bout 1,400 of the roughly 170,000 U.S. fuel stations. And though ethanol is blended into most U.S. gasoline, at up to 10%, calls to dial up that percentage have sparked controversy because of concern this might increase certain forms of air pollution.

Paradoxically, the high oil price in some ways hinders the quest to curb greenhouse-gas emissions. The oil price makes it economic to develop unconventional deposits such as Canada's oil sands. But the gummy substance is mined, and turning it into usable products takes extensive refining. Gallon for gallon, producing gasoline from oil sands emits far more carbon dioxide than making it from conventional crude.

The price rise has a similarly dirty impact at power plants. In the 1990s, when natural gas was cheap, many countries pushed to use more of that, in place of coal, to make electricity. This was good for the environment, because per unit of energy generated, natural gas emits about half as much CO2. But natural-gas prices roughly track oil prices, and they've been rising too. Their rise has prompted a resurgence in coal use, one reason greenhouse-gas emissions are going up faster than many expected. China, the second-largest oil user after the U.S., still meets the bulk of its energy needs with coal.

Oil's price run-up is fanning support for a revival of clean but controversial nuclear energy. The International Energy Agency, an energy watchdog for the U.S. and 25 other wealthy nations, has become a big promoter of nuclear power. Still, its latest annual outlook predicted the use of nuclear energy would grow by less than 1% annually world-wide between now and 2030, while coal usage would rise three times as fast.

The great oil boom of the 2000s has also wrought dramatic changes within the oil industry itself, which high prices will only intensify.

Oil-rich nations, seeking to take greater command of their resources, are marginalizing the once-mighty Western oil companies. For the first time since World War II, the future of oil and gas production isn't in the hands of Texas-educated engineers working for U.S. companies but of executives at companies like Qatar Petroleum and Russian behemoth OAO Gazprom.

Gone are the days when companies such as Exxon Mobil Corp. and Royal Dutch Shell PLC had an unmatchable combination of financial clout and technological know-how. Thanks to several years of high prices, government-controlled oil companies have the financial muscle to bankroll their own projects.

And they have access to the latest tools for finding oil and drilling holes. During the last downturn, in the 1990s, big oil companies outsourced many of these tasks to oil-field-service companies. Now the national oil companies can hire these service companies directly, bypassing integrated Western oil giants.

Schlumberger Ltd., the largest oilfield-service company by market value, has said its revenue from national oil companies tripled from 2002 through 2006, while its work for Western oil companies rose just 60%. "The growing influence of national oil and gas companies on the world energy market is abundantly evident even to the casual observer," ConocoPhillips Chief Executive James Mulva said in March.

Competing for Resources

As the state-owned giants grow more confident and self-sufficient, they have begun to compete aggressively for resources beyond their borders. Last year, Libya put some potentially oil-rich acreage out for bids. While Exxon Mobil won some of it, so too did state-controlled oil companies from Russia, India and China.

More than from their bank accounts, national oil companies' strength stems from their control of resources. Exxon Mobil, with a market capitalization of around $500 billion, is one of the largest and most successful publicly traded companies ever. But there are 12 state-controlled oil companies, such as Saudi Aramco and PetroChina Co., that control more oil reserves.

Driving this power shift is geology. Major new finds in North America and Europe have been rare for two decades. Western oil companies now control only about one in 10 barrels of the world's proven reserves. As the Western giants struggle to find fresh oil, the Aramcos of the world are only likely to rise in importance in the years ahead.

Title: Re: Meltdown
Post by: Mozart on January 03, 2008, 01:24:01 PM

Quote from: DavidW on September 20, 2007, 03:46:49 PM
Let me ask a dumb question-- why has the dollar became so weak in the past few years?

Because it's worthless paper and they just keep printing more...

Title: Re: Meltdown
Post by: Mozart on January 03, 2008, 01:28:04 PM

Quote from: Que on September 20, 2007, 10:17:48 PM
I hope that MozartMobster is still into gold (http://www.good-music-guide.com/forum/index.php/topic,13756.msg410042.html#msg410042).. :)

Q

If I was a rich man a few months ago Q, I would now be an even richer one ;D

Title: Re: Meltdown
Post by: m_gigena on January 03, 2008, 01:51:47 PM

Unusual 11 Mid-Day Movers 1/03: AKNS, SPN, BCON, NG Higher; JTX, RAD Lower

January 3, 2008 2:10 PM EST

Akeena Solar, Inc. (NASDAQ: AKNS) 29% HIGHER; continues to see upside after the Company announced that its state-of-the-art solar panel technology, Andalay, will be distributed in Europe, Japan and Australia under a license agreement with Suntech Power Holdings Co., Ltd. (NYSE: STP). Earlier this week, on Monday, Akeena's market cap was about $227 million. Today, the Company has moved past the $400 million market cap level.

Title: Re: Meltdown
Post by: BachQ on January 03, 2008, 05:06:45 PM

Unfortunately, solar panel technology is not necessarily a sure bet ........

Quote from: Manuel on January 03, 2008, 01:51:47 PM
Unusual 11 Mid-Day Movers 1/03: AKNS, SPN, BCON, NG Higher; JTX, RAD Lower

January 3, 2008 2:10 PM EST

Akeena Solar, Inc. (NASDAQ: AKNS) 29% HIGHER; continues to see upside after the Company announced that its state-of-the-art solar panel technology, Andalay, will be distributed in Europe, Japan and Australia under a license agreement with Suntech Power Holdings Co., Ltd. (NYSE: STP). Earlier this week, on Monday, Akeena's market cap was about $227 million. Today, the Company has moved past the $400 million market cap level.

Published on Cleantech.com (http://media.cleantech.com)
A good year for renewable energy?
By David Ehrlich
Published January 2, 2008 - 9:54am
It could be a strong year for alternative energy as a whole, according to a new report, but the second half of 2008 could pose a problem for solar stocks.

The report from Thomas Weisel Partners, Alternative Energy: 2008 Outlook, said investor interest in the sector remains extremely high, with solar and demand response likely to get the biggest boosts in the new year.

"Public and government opinion is rapidly shifting toward increased action on global warming, carbon emissions, renewable energy generation and new energy-efficiency technologies," said Jeff Osborne, an analyst at Thomas Weisel, in the report.

Over the past six months there's been a pronounced shift in the types of investors inquiring about stocks that Thomas Weisel covers, according to Osborne, with portfolio managers appearing to be building a cleantech theme for part of their portfolios.

St. Peters, Mo.-based MEMC Electronic Materials (NYSE: WFR) gets top marks in the cleantech sector for 2008 in the report, with Osborne raising Thomas Weisel's year-end price target on MEMC to $105 from $81.

In October, MEMC amended its long term agreement to supply solar wafers to Taiwan's Gintech Energy, increasing the value of the contract to between $3 billion and $4 billion (see MEMC, Gintech amend solar supply deal).

But all will not necessarily be well for solar.

The report sees a solid start to the year for solar on growth in the Mediterranean, but sees the second half of 2008 as a "black hole," citing subsidy changes in Spain, Germany and the U.S. and uncertainty around new polysilicon entrants in China and elsewhere.

In the U.S., new energy legislation failed to include an extension of tax credits for the solar industry.

The report sees heavy lobbying in early 2008 by the wind and solar industries to seek a separate bill, but the timing and specifics of any new legislation remains unclear (see U.S. solar & wind incentives on the way?).

Although the growth of solar is often tied to government incentives, the Thomas Weisel report highlights that demand response does not need government help to be economically viable.

"We continue to be bullish about the demand response industry as we enter 2008, particularly in the Commercial and Industrial (C&I) segment of the marketplace, which we favor over residential," said Osborne.

Utilities and grid operators are increasingly adopting demand response in their open market programs as well as forward planning, according to the report.

It notes that demand response capacity bid into the open market does not require separate state Public Utility Commission approval for pricing unlike demand response capacity committed to individual utilities under long-term contracts.

"We expect that C&I demand response aggregators like EnerNOC and Comverge's Enerwise will be active participants in these markets," said Osborne.

And unlike solar, demand response received a big incentive from the recently passed energy legislation in the U.S., with the new energy act creating a smart grid regional demonstration initiative.

The initiative allocates $100 million to support research and development in the industry.

As for fuel cells and biofuels, the other two alternative energy industries covered in the report, at least biofuels is likely to do well.

The report said the hydrogen and fuel cell industry is still in the very early stages and remains too fragmented.

"We do not see sustainable profits for many of the participants over the next three to five years," said Osborne in the report.

In November, Vancouver, British Columbia's Ballard Power Systems (Nasdaq: BLDP) agreed to sell its struggling automotive fuel cell business to Daimler (NYSE: DAI) and Ford Motor (NYSE: F) (see Ballard selling auto fuel cell business to Daimler, Ford).

On the other hand, biofuels, which received a big push from the energy act in the U.S., are likely to do well.

The new law sets a Renewable Fuels Standard for annual production of 36 billion gallons of biofuels by 2022, a fivefold increase from current production levels.

The new standard includes a 9 billion gallon biofuel mandate for 2008, but the report cautions that high corn prices and infrastructure issues are likely to weigh on the stocks for at least the next two quarters.

And it won't just be transportation fuels getting all the attention. The report said diversification away from petroleum-based products will be a key theme in 2008.

"Products such as bio-plastics are likely to receive further attention as producers look to diversify their feedstocks out of the volatile gasoline markets," said Osborne.

Title: Re: Meltdown
Post by: bwv 1080 on January 04, 2008, 07:40:10 AM

Quote from: E..L..I..A..S.. =) on January 03, 2008, 01:24:01 PM
Because it's worthless paper and they just keep printing more...

I will take any worthless dollars anyone wants to unload

I will even offer quarters in return

Title: Re: Meltdown
Post by: BachQ on January 07, 2008, 03:12:12 AM

Oil $200 Options Rise 10-Fold in Bet on Higher Crude (Update2) (http://www.bloomberg.com/apps/news?pid=20601087&sid=ayQXcHVStlP8&refer=home#)

By Grant Smith

Jan. 7 (Bloomberg) -- The fastest-growing bet in the oil market these days is that the price of crude will double to $200 a barrel by the end of the year.

Options to buy oil for $200 on the New York Mercantile Exchange rose 10-fold in the past two months to 5,533 contracts, a record increase for any similar period. The contracts, the cheapest way to speculate in energy markets, appreciated 36 percent since early December as crude futures reached a record $100.09 on Jan. 3.

While analysts at Merrill Lynch & Co. and UBS AG say the slowing U.S. economy will lead to the biggest drop in prices since 2001, the options show some traders expect oil to rise for a seventh straight year. Demand will increase 2.5 percent in 2008, according to the International Energy Agency. U.S. inventories fell to a three-year low on Dec. 28. Production from Mexico is declining and Saudi Arabia is behind schedule in opening its newest field.

``One hundred dollars a barrel is actually 14.9 cents a cup, so we're still talking about oil being remarkably cheap,'' said Matthew R. Simmons, chairman of Simmons & Co. International, a Houston-based investment bank that focuses on energy. Inventories ``are tight as a drum and I don't see how we get out of this box,'' he said in a Bloomberg television interview last week. ``Demand clearly isn't starting to slow down.''

Global Consumption

World consumption will rise to 87.8 million barrels a day this year, 2.1 million more than in 2007, or about the same amount that Nigeria supplies, according to the Paris-based IEA, an adviser to oil-consuming nations. Demand from China alone will increase 5.7 percent to 8 million barrels a day as imports expand to support an economy that's likely to grow 11 percent, the IEA said.

Oil suppliers are straining to increase production. Saudi Arabia, the world's largest exporter, said last week that the 500,000 barrel-a-day Khursaniyah oilfield missed a December start date. Brazil's Tupi field, the second-largest find of the past two decades, lies more than eight kilometers (five miles) below the ocean surface and will take at least five years to develop.

Petroleos Mexicanos, Mexico's state oil monopoly, suffered a three-year, 40 percent decline at its Cantarell field, the world's third-largest. Fighting in Nigeria reduced production 11 percent since December 2005 to 2.18 million barrels a day, according to data compiled by Bloomberg.

U.S. Inventories

Speculators don't require prices to rise all the way to $200 to make money from options since they can sell the contracts on to others as their value rises. Nymex oil futures for February delivery were worth $97.41 a barrel in electronic trading at 11:11 a.m. London time, down 50 cents. December futures were at $93.59.

Crude futures rose 2 percent in the first three trading days of the new year. U.S. crude inventories fell to a three-year low of 289.6 million barrels on Dec. 28, according to a Jan. 3 Energy Department report.

``We haven't got to $100 on just a whim,'' said Paul Horsnell, head of commodities research at Barclays Capital in London. ``This is at heart also about longer-term concerns that supply capacity investment needs higher prices to keep up with demand growth.''

Barclays forecasts oil will average $87.40 a barrel this year, a 21 percent increase from the 2007 average.

The Nymex options, which give speculators the right to buy 1,000 barrels of oil in December, are becoming a favorite for traders even if they don't expect crude to reach $200 because they are a cheaper way to speculate than using futures contracts. Options expire worthless if crude fails to reach the ``strike'' price. There were 500 of the options on Nov. 7.

The price of the options rose as high as $550 last week before closing at $300 on Jan. 4. That amounts to 30 cents a barrel. The December futures to purchase 1,000 barrels in December rose 3.5 percent to $94,010, or $94 a barrel.

`Insurance' Bet

``The most common analogy used to describe options is that it represents insurance'' against ``low probability'' events, said Tim Evans, a Citigroup Global Markets Inc. energy analyst in New York.

Oil forecasters say there's no chance of $200 crude, as the U.S., which consumes a quarter of the world's oil, slows. Prices will average $78 a barrel this year, 20 percent below the current level, and $75 in the fourth quarter, according to the median forecast of 27 analysts surveyed by Bloomberg. The last time prices fell that much was in 2001, when they dropped 26 percent.

Jobless Rate

Merrill Lynch and Morgan Stanley in New York expect the U.S. economy, the world's largest, will slip into recession this year. The jobless rate rose to 5 percent in December, the highest in two years. The Institute for Supply Management's factory index fell to the lowest level in almost five years in December.

The U.S. probably expanded 1 percent last quarter, and gross domestic product will grow 2.3 percent in 2008, according to the median estimate of 63 economists surveyed by Bloomberg.

Oil is overpriced, given the outlook for the economy, said Jan Stuart, an analyst at UBS AG in New York. He forecasts an average price of $74 a barrel this year, little changed from 2007. Merrill Lynch's Francisco Blanch predicts $78 in the fourth quarter.

``I am afraid that we are going to see an economic slowdown that we have not seen the beginning of yet that will take some significant amount of oil demand off the table,'' Stuart said in a Bloomberg television interview Jan. 2.

Most strategists didn't foresee last year's 57 percent gain. Crude traded at an average of $72.36 in 2007. A Bloomberg survey of 29 analysts in September 2006 forecast a median price of $64.

Higher Numbers

``Going through $100 means that people are seeking more protection against a higher number,'' said Michael Lewis, a strategist at Deutsche Bank AG in London. Deutsche Bank expects oil to fall to about $80 a barrel.

Options trading indicates that the likelihood of crude reaching $125 a barrel in December has almost doubled since Dec. 25, to 18 percent, Lewis said.

While $200 may remain an outside chance, Simmons at Simmons & Co. showed he's willing to make that bet. He wagered $5,000 with New York Times columnist John Tierney in August 2005 that oil would average at least $200 a barrel in 2010.

The latest assessment from OPEC, which produces 40 percent of the world's oil, suggests prices will rise.

``There is enough oil in the market,'' Chakib Khelil, the current president of the Organization of Petroleum Exporting Countries, told reporters in Algiers two days ago. Khelil, who is also Algeria's energy minister, said rising prices aren't OPEC's fault. The group is scheduled to meets on Feb. 1 in Vienna.

``You will see even $200 oil in the next five years,'' said Jean-Francois Tardif, senior portfolio manager at Sprott Asset Management Inc. in Toronto.

The following table shows the median, mean, high and low estimates for the average price of Nymex crude oil futures during the four quarters of this year and the yearly averages for 2008 and 2009. The estimates from 27 analysts were compiled by Bloomberg.

Title: Re: Meltdown
Post by: The new erato on January 07, 2008, 03:47:45 AM

My wife works for a Norwegian oil company: Holy shit - this translates into a LOT!!! of CD's! ;D

Title: Re: Meltdown
Post by: carlos on January 07, 2008, 05:45:36 AM

Well, you'll have to be used to walk. It'll be good for your
health. ;D ;D

Title: Re: Meltdown
Post by: BachQ on January 07, 2008, 08:28:44 AM

BTW, I'm putting this Lincoln up for sale ......... 11 mpg ....... Special reduced price for GMGer's .........

(http://www.desoto58.com/peoplezone/cartier75d.jpg)

Title: Re: Meltdown
Post by: springrite on January 07, 2008, 08:32:11 AM

Quote from: Dm on January 07, 2008, 08:28:44 AM
BTW, I'm putting this Lincoln up for sale ......... 11 mpg ....... Special reduced price for GMGer's .........

Oh, boy! This baby almost double's the fuel efficiency of my first car --- Oldsmobile Delta 98 (1973), 6.5mpg! (But the baby was sturdy like a tank and goes to 200mph easy!)

Title: Re: Meltdown
Post by: BachQ on January 07, 2008, 08:35:58 AM

Quote from: springrite on January 07, 2008, 08:32:11 AM
sturdy like a tank

Yeah, the beauty is that you will walk away from a head-on collision without a scratch ....... :D

Title: Re: Meltdown
Post by: m_gigena on January 07, 2008, 11:48:32 AM

OT. I just noticed Steinway Musical Instruments is traded at the NYSE under the name LVB. ;D ;D ;D

Title: Re: Meltdown
Post by: BachQ on January 07, 2008, 01:12:27 PM

Quote from: Manuel on January 07, 2008, 11:48:32 AM
OT. I just noticed Steinway Musical Instruments is traded at the NYSE under the name LVB. ;D ;D ;D

Washington Mutual Inc.'s NYSE listing is WAM! (Wolf. Ama. Mzt).

Title: Re: Meltdown
Post by: m_gigena on January 07, 2008, 03:30:56 PM

Quote from: Dm on January 07, 2008, 01:12:27 PM
Washington Mutual Inc.'s NYSE listing is WAM! (Wolf. Ama. Mzt).

Isn't it just WM?

WAM, is a relatively good acronym for Washington Mutual. But how they derived LVB from Steinway Musical Instruments is a mystery.

And the germans have their JSB too.

Title: Re: Meltdown
Post by: m_gigena on January 18, 2008, 10:20:24 AM

Bush Backs $145 Billion Economic Plan
Friday January 18, 2:08 pm ET
By Andrew Taylor and Deb Riechmann, Associated Press Writer

Bush Calls for Economic Package Worth About $145 Billion

WASHINGTON (AP) -- President Bush embraced about $145 billion worth of tax relief on Friday to jump start the lackluster economy. If Congress passes an economic stimulus package, the country will be "just fine," he said.

At the White House, Bush said such a growth package must also include tax incentives for business investment and quick tax relief for individuals. To be effective, he said an economic stimulus package would need to roughly represent 1 percent of the gross domestic product -- the value of all U.S. goods and services and the best measure of the country's economic standing.

Later, during a visit to a manufacturing plant in Frederick, Md., about 50 miles north of Washington, Bush said: "While there's some uncertainty right now, if we act quickly and in a smart way, that helps growth. We're gonna be just fine."

Title: Re: Meltdown
Post by: m_gigena on January 18, 2008, 10:29:11 AM

And it seems the market was convinced, because:

"Investors pulled back from a big early advance, with the major indexes trading mixed as Bush began to speak. By the time the president finished announcing a plan for about $145 billion worth of tax relief, the indexes were well into negative territory". (AP)

The plan must be temporary and shouldn't include any tax increases, Bush said. :P

Title: Re: Meltdown
Post by: Sean on January 18, 2008, 11:23:48 AM

It's long been obvious there are serious underlying problems in the world: they've always been there but have much accelerated in the last 15 years.

There's a real possibility that the lives of many of us here will end by starvation- the world without its present massive oil supplies, destroying 85 million barrels a day, can only support 2-4 billion people.

Every thinking person should understand about peak oil, the point at which half the world's oil has been used and when prices will rise indefinitely as demand outstrips supply- and this may well have occured in 2006. Government by fools in many countries are planning their economies for ever more petroleum based growth- road building, factory building, and infrastructure based on oil supplies.

Many people think Western modernity is doing well for itself and there's no turning back of progress. But they forget that no matter how sophisticated and expensive are cars, buses and lorries, or aircraft, or endless petroleum products factories, or crop fertilizers, THEY ARE RUNNING ON 17TH CENTURY ENERGY TECHNOLOGY.

Nothing has changed essentially since the beginnings of the industrial revolution. Humanity and its democracy and the rule of the idiot, the greedy, the immoral, the short term undead moron, has squandered and burnt its planet's greatest resource, a vast reserviour of virtually free energy that could have been used as a cushion to help us develop alternative energy supplies, the most promising of which was solar. Thousands of square kilometers of hot desert needs to be covered with high performance solar panels- and this technology could have been developed and carried out decades ago.

You can watch the first 20 mins or more of a documentary The Crude Awakening on Youtube, along with important videos of Richard Heinberg and others speaking. Nobody wants to know nobody ever did, nobody ever will, until they're killing each other, as they've begun to do. 9/11, the war on terror utter garbage, and invasion of the Middle east is all peak oil.

Also see http://www.lifeaftertheoilcrash.net/.

This isn't wacky theory, it's happening now before your eyes, as the nobody masses in control continue to lie to themselves- because they've destroyed their own leadership.

Title: Re: Meltdown
Post by: BachQ on January 18, 2008, 12:10:22 PM

Sean:

1. The Association for the Study of Peak Oil and Gas predicted in their current newsletter (January 2008) that the peak in all oil (including non-conventional sources), would occur in 2010. That's only 2 years away.

2. The biggest unknown is, perhaps, the colossal demand that will soon erupt in China, India, and perhaps Brazil and other countries.

3. If oil continues to be as centrally, vitally important to sustained economic growth and success as it has been in the past, then we're in for a shitload of trouble ...... on a scale we've never seen before, and probably cannot imagine ........

Title: Re: Meltdown
Post by: BachQ on January 18, 2008, 12:12:11 PM

Quote from: Manuel on January 18, 2008, 10:20:24 AM
if we act quickly and in a smart way, that helps growth. We're gonna be just fine."

Are you suggesting that Bush is a flaming idiot? :D

Title: Re: Meltdown
Post by: m_gigena on January 18, 2008, 12:36:01 PM

Quote from: Dm on January 18, 2008, 12:12:11 PM
Are you suggesting that Bush is a flaming idiot? :D

I wonder how does Bernanke to sync with Bush in the meetings they may have.

Title: Re: Meltdown
Post by: BachQ on January 19, 2008, 03:43:03 AM

Quote from: Manuel on January 18, 2008, 12:36:01 PM
I wonder how does Bernanke to sync with Bush in the meetings they may have.

(http://www.martini-swords.com/Clipart-Martini/martini-excalibur%201.jpg)

Title: Re: Meltdown
Post by: m_gigena on January 19, 2008, 05:40:00 AM

Title: Re: Meltdown
Post by: BachQ on February 19, 2008, 04:13:27 PM

Oil breaks $100, hits new all-time high
Crude soars as investors weigh the possibility of OPEC production cuts; Texas refinery explosion may have also lifted prices.
February 19 2008: 3:28 PM EST
NEW YORK (AP) -- Oil prices hit new record highs Tuesday as a Texas refinery fire and fears of an OPEC production cut pushed crude to settle at over $100 a barrel for the first time ever.

U.S. crude for March delivery jumped $4.51 to settle at $100.01 a barrel on the New York Mercantile Exchange, topping the previous settlement record of $99.62 set Jan. 2.

Oil also hit a new all-time trading high of $100.10 a barrel, besting the previous high of $100.9 set Jan. 3.

A weekend refinery explosion in Texas and the possibility that OPEC will cut production next month are driving prices higher, although analysts say there isn't a single factor to explain the move.

The refinery in Big Spring, Texas is owned by Alon USA. It processes nearly 70,000 barrels of oil a day. Officials say it could be closed for as long as two months.

"The refinery fire in Texas is making people a little concerned," said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Amherst, Mass.

March gasoline jumped 11.4 cents to $2.6078 a gallon, and March heating oil rose 10.41 cents to $2.751 a gallon.

The dollar fell Tuesday, giving investors another reason to buy oil. Crude futures offer a hedge against a falling dollar, and oil futures bought and sold in dollars are more attractive to foreign investors when the greenback is falling.

For the moment, investors appear to have put aside concerns about the economy that have sent oil prices down into the mid-$80 range twice since crude peaked above $100 last month. Traders are instead focused on the Organization of Petroleum Exporting Countries, which will meet early next month to map out production plans, and Venezuela, where President Hugo Chavez made conflicting statements this weekend about the country's legal dispute with Exxon Mobil Corp. (XOM, Fortune 500)

OPEC could move to cut production in the second quarter, typically a period of low demand, though many analysts feel that's unlikely. In Venezuela, Chavez said he was not serious about an earlier threat to cut oil sales to the United States, but also threatened to sue Exxon Mobil. The world's largest oil company is fighting Venezuela's nationalization of an oil project, and recently convinced several courts to freeze $12 billion in Venezuelan oil assets.

None of the news is enough to justify a nearly $3 a barrel jump in the price of crude, said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm. Echoing other analysts, Cordier argued that the oil market is in the process of "decoupling" from oil's supply and demand fundamentals. He said investors drawn by the falling dollar and momentum are pushing oil prices sharply higher despite reports last week from the Energy Department, OPEC and the International Energy Agency which all cut oil demand growth predictions for this year.

"Everyone concurs that we've got smaller demand coming in the U.S.," Cordier said.

Retail gas prices, meanwhile, jumped 1.8 cents to a national average price of $3.032 a gallon Tuesday, according to AAA and the Oil Price Information Service. Retail prices, which typically lag the futures market, are following oil prices higher. The Energy Department expects gas prices to peak near $3.40 a gallon this spring.

Other energy futures also rose Tuesday. March natural gas jumped 30.1 cents to $8.961 per 1,000 cubic feet. Analysts said prices were supported by forecasts for cooler weather, but that futures were also following oil prices higher.

In London, Brent crude for April delivery rose $3.25 to $98.16 a barrel on the ICE Futures exchange.

Title: Re: Meltdown
Post by: m_gigena on February 19, 2008, 05:19:31 PM

(http://aycu13.webshots.com/image/45292/2000549542677659336_rs.jpg) :-*

Title: Re: Meltdown
Post by: Mozart on February 19, 2008, 07:05:26 PM

And the price of gold keeps going up and up....

Title: Re: Meltdown
Post by: bwv 1080 on February 19, 2008, 09:21:44 PM

Its ridiculous to speak of peak oil as a certainty rather than a risk to be taken seriously. Some serious analysis is here:

http://www.simmonsco-intl.com/files/Minnesota%20State%20of%20Representatives.pdf (http://www.simmonsco-intl.com/files/Minnesota%20State%20of%20Representatives.pdf)

With limited data and access to the major oil fields of the world there is no way to accurately calculate the timing of a peak. Nor is it known at what price level the development and production of heavy sour crude reserves in the Canadian oil sands and other locations (which are about equal to the middle east in production capability) are feasable.

Despite this, there is no reason why in the short term oil cannot fluctuate down to $50 / bbl in the face of a slowing global economy.

Title: Re: Meltdown
Post by: bwv 1080 on February 19, 2008, 09:33:37 PM

CERA is an organization that disagrees with Simmons on several points:

The new report describes CERA's liquids supply outlook as "not a view of endless abundance." However, based on a range of potential scenarios and field-by-field analysis, CERA finds that not only will world oil production not peak before 2030, but that the idea of a peak is itself "a dramatic but highly questionable image."

Global production will eventually follow an "undulating plateau" for one or more decades before declining slowly. The global production profile will not be a simple logistic or bell curve postulated by geologist M. King Hubbert, but it will be asymmetrical – with the slope of decline more gradual and not mirroring the rapid rate of increase -- and strongly skewed past the geometric peak. It will be an undulating plateau that may well last for decades.

During the plateau period in later decades, according to the CERA analysis, demand growth will likely no longer be largely met by growth in available, commercially exploitable natural oil supplies. Non-traditional or unconventional liquid fuels such as production from heavy oil sands, gas-related liquids (condensate and natural gas liquids), gas-to-liquids (GTL), and coal-to-liquids (CTL) will need to fill the gap.

Critical Issue

CERA argues that understanding the difference between a plateau and a peak followed by a precipitous decline, as well as the timing of events, is critical to the global energy future. "Corporations, governments, and other groups, including nongovernmental organizations, need to have a coherent description of how and when the undulating plateau will evolve so that rational policy and investment choices can be made," according to the report.

"It is likely that the situation will unfold in slow motion and that there are a number of decades to prepare for the start of the undulating plateau. This means that there is time to consider the best way to develop viable energy alternatives that would eventually provide the bulk of our transport energy needs and ensure that there is a useable production stream of conventional crude for some time to come," CERA concludes.

Peak Theory Shortcomings

The CERA review also finds that current "peak oil" advocacy suffers from several problems:

The peak argument is not presented in the context of a credible systematic evaluation of available data; its proponents have not made available a transparent and detailed analysis that would allow an objective and rational discussion. At base "their methodology is to impute decline curves against currently proven reserves and declare that the game – and the argument – is over."
The underlying analytical model formulated by the late M. King Hubbert both fails to recognize that recoverable reserve estimates evolve with time and are subject to significant change, and it also underplays the substantial impact of technological advances. Consequently, total annual production at the high point in 1970 was 600 million barrels higher – 20 percent -- than Hubbert's projection of peak production for the US Lower 48, although he correctly anticipated its timing within two years.
Hubbert's method requires accurate knowledge of the ultimate recoverable reserves of an area, but his 1956 analysis could never have incorporated the impact of giant discoveries in Alaska and the deepwater Gulf of Mexico, and therefore couldn't have predicted the production profile for the U.S. As a result, total cumulative U.S. production between the high point in 1970 and 2005 exceeded Hubbert's predictions by the equivalent of more than 10 years of US production at present rates.
Hubbert-posited post-peak reservoir decline curve assumptions are rebutted by observation that the geometry of typical oilfield production profiles is often distinctly asymmetrical and does not generally show a precipitous mirror-image decline in production after an apparent peak, even without the application of new technology or enhanced oil recovery techniques. As a result, in the US Lower 48 where Hubbert came closest to accurately forecasting a peak, oil production in 2005 was some 66 percent higher than projected by Hubbert, and cumulative production between 1970 and 2005 was some 15 billion barrels higher, a variance equal to more than eight years of US production at present rates.

http://www.cera.com/aspx/cda/public1/news/pressReleases/pressReleaseDetails.aspx?CID=8444

Title: Re: Meltdown
Post by: BachQ on February 20, 2008, 08:42:03 AM

Quote from: bwv 1080 on February 19, 2008, 09:21:44 PM
With limited data and access to the major oil fields of the world there is no way to accurately calculate the timing of a peak.

Quote from: bwv 1080 on February 19, 2008, 09:33:37 PM
Global production will eventually follow an “undulating plateau” for one or more decades before declining slowly.

We might already be in the midst of the "undulating plateau," ........ and, to that extent, the question becomes: "how long will the plateau last before the irreversible decline sets in; and, how rapid/steep will the decline be once we've peaked?"

Sean's doomsday/nightmare scenario could actually happen if the "spare capacity" situation is as bleak as Simmons & Co.'s assessment (see Simmons, pages 56-61).

Title: Re: Meltdown
Post by: Sean on February 20, 2008, 08:50:30 AM

http://www.good-music-guide.com/community/index.php/topic,5771.0.html

Still nobody replied to this thread. It reminds me of the showing of the documentary film The Crude awakening I went to a few weeks back- the sense of a wrong hushed up was overwhelming: it was as though the greatest possible sin was being committed by showing a film that challenged the lived status quo. The sheer opprobrium around the cinema was something to behold: the masses' world is the world of the democratic majority, dogged self-deception and pig-headed refusal to face reality.

Title: Re: Meltdown
Post by: BachQ on February 20, 2008, 09:22:30 AM

From Reuters

FACTBOX: Why oil prices are at a record high
Wed Feb 20, 2008 9:36am EST
(Reuters) - U.S. crude oil hit an all-time high of $100.10 a barrel on Tuesday, 1 cent above the previous record peak reached on January 3.

Robust demand for crude, real and threatened disruptions to supply and a weak U.S. dollar have fuelled the rally from a dip below $50 at the start of 2007.

Adjusted for inflation, oil is only just below the $101.70 peak hit in April 1980, according to the International Energy Agency, a year after the Iranian revolution.

FUNDS

Investment flows from pension and hedge funds into commodities including oil have boomed, as has speculative trading.

At the same time, a global credit crunch has brought some other markets, such as the U.S. asset-backed commercial paper market, to a virtual standstill.

Some of that money has found its way into energy and commodities, analysts say.

DOLLAR WEAKNESS

The fall in the value of the dollar against other major currencies has helped drive buying across commodities as investors view dollar assets as relatively cheap.

It has also reduced the purchasing power of OPEC's revenues and increased the purchasing power of some non-dollar consumers.

OPEC oil ministers have noted that although prices are rising to record nominal levels, inflation and the dollar have softened the impact.

Some analysts say investors have been using oil as a hedge against the weaker dollar.

DEMAND

While previous price spikes have been triggered by supply disruptions, demand is a main driver of the current rally.

Global demand growth has slowed after a surge in 2004 but is still rising, despite an economic slowdown in top consumer the United States. Higher prices have so far had a limited effect on economic growth.

Analysts say the world is coping with high nominal prices because, adjusted for exchange rates and inflation, they are lower than during previous price spikes and some economies have become less energy intensive.

OPEC SUPPLY RESTRAINT

The Organization of the Petroleum Exporting Countries, source of more than a third of the world's oil, started to reduce oil output in late 2006 to stem a fall in prices.

Fewer OPEC barrels entering the market helped propel the rally and consumer nations led by the International Energy Agency have urged OPEC to pump more oil.

At meetings in December and earlier in February, OPEC left output unchanged. Some in OPEC, such as Iran, want the group to cut supplies at the next OPEC meeting, on March 5.

VENEZUELA

A row between OPEC member Venezuela and Exxon Mobil Corp., the largest fully publicly traded oil company, has prompted price gains this month.

Venezuela has suspended oil exports to Exxon, escalating the country's fight with the U.S. oil firm over compensation for an nationalized oil project. Venezuela has also threatened to cut exports to the United States.

Oil producers in the Middle East have assured the United States that they could compensate for a supply disruption if Venezuela slows exports.

NIGERIA

Supply of crude from Nigeria, Africa's largest oil exporter, has been cut since February 2006 because of militant attacks on the country's oil industry.

Oil companies have detailed about 515,000 bpd of shut Nigerian production due to militant attacks and sabotage.

REFINERY BOTTLENECKS

Limited additions to refining capacity in major consumer nations such as the United States are partly behind rising crude prices.

The International Energy Agency said last year additional global refining capacity over the next five years will lag earlier expectations as rising costs and a shortage of engineers delay construction.

IRAQ

Iraq is struggling to get its oil industry back on its feet after decades of wars, sanctions and underinvestment.

Exports of Kirkuk crude from the country's north are stabilizing as the system recovers from technical problems that had mostly idled the pipeline since the U.S.-led invasion of Iraq in March 2003.

Title: Re: Meltdown
Post by: bwv 1080 on February 20, 2008, 10:41:02 AM

Quote from: Sean on February 20, 2008, 08:50:30 AM
http://www.good-music-guide.com/community/index.php/topic,5771.0.html

Still nobody replied to this thread. It reminds me of the showing of the documentary film The Crude awakening I went to a few weeks back- the sense of a wrong hushed up was overwhelming: it was as though the greatest possible sin was being committed by showing a film that challenged the lived status quo. The sheer opprobrium around the cinema was something to behold: the masses' world is the world of the democratic majority, dogged self-deception and pig-headed refusal to face reality.

Perhaps taking sensationalistic documentaries at face value is not the best basis to make policy decisions?

Title: Re: Meltdown
Post by: bwv 1080 on February 20, 2008, 10:46:50 AM

Quote from: Dm on February 20, 2008, 08:42:03 AM
We might already be in the midst of the "undulating plateau," ........ and, to that extent, the question becomes: "how long will the plateau last before the irreversible decline sets in; and, how rapid/steep will the decline be once we've peaked?"

Sean's doomsday/nightmare scenario could actually happen if the "spare capacity" situation is as bleak as Simmons & Co.'s assessment (see Simmons, pages 56-61).

Simmons is a Club of Rome guy, which leads me to discount much of his doom-mongering. Nor do I think his solutions of centralized energy "Marshall Plans" or "Manhatten Projects" are feasible. We already see in the ethanol fiasco what happens when government gets into dictating alternate energy schemes - a bunch of handouts to corporate and special interest groups that have nothing to do with sustainable energy. The best motivation for rationing and finding alternative energy sources is the price of oil. I would even support taxes that kept the price at $100 were it to fall.

Title: Re: Meltdown
Post by: BachQ on February 20, 2008, 11:16:37 AM

Quote from: bwv 1080 on February 20, 2008, 10:46:50 AM
The best motivation for rationing and finding alternative energy sources is the price of oil. I would even support taxes that kept the price at $100 were it to fall.

Fascinating. Meanwhile, the worldwide consumption of oil continues to increase ...... and increase ........ and increase .......

Title: Re: Meltdown
Post by: BachQ on February 20, 2008, 11:18:06 AM

Peak oil meets global warming:

(1) Mass evacuations from cold climates due to astronomical cost of heating homes.
(2) Mass evacuations from warm climates due to drought, famine, and astronomical cost of air conditioning.

Title: Re: Meltdown
Post by: BachQ on February 20, 2008, 11:21:36 AM

Peak oil meets climate change

Irish Times: Two frightening trends stand out from the annual report published this week by the International Energy Agency (IEA).

Warning about a crude oil supply crunch before 2015 involving an abrupt price increase, it says oil markets everywhere will become more sensitive than ever to Middle East disruptions, including political developments in Iraq, Iran, Saudi Arabia and Turkey. And the IEA calculates that, on unchanged policies, total global emissions of carbon dioxide will rise from 27 billion tonnes in 2005 to 42 billion tonnes in 2030. That level would see world temperatures rise six degrees centrigrade by then - an utterly unsustainable increase that is also avoidable.

These two trends thus bear out the stark warning given by Dr Jeremy Leggett this week in an Academy Times lecture in Dublin boldly entitled Half Gone: Peak Oil meets Climate Change. A former oil industry consultant and Greenpeace campaigner, he said the combination of the two "is going to hit society with a big, seismic shock . . . I hope I am wrong, but I don't believe we can avoid the third great oil crisis. We will be mobilising as though for war". Uncannily, this week's financial and economic headlines bear him out. Markets are exercised by the prospect of the international oil price reaching $100, driven by huge increased demand from China and India. Along with the growing competition from alternative biofuel production, this stokes up food prices and general inflation and contributes to uncertainties about interest rates and the current worldwide share and banking credit turmoil.

It is salutary to recall that the international oil price was $16 a barrel in 1999. That is the essential background for understanding some of the geopolitical changes since then. Foremost among them has been the resurgence of Russia over those years, coinciding exactly with President Vladimir Putin's rise to power. Russia is now the world's second largest oil producer after Saudi Arabia, ahead of the United States, Iran and China. But as the IEA report makes clear, the Middle East region remains central, notwithstanding its political volatility. This is underlined in remarks made by a former Saudi ambassador to the US, who says an attack on Iran would make "the whole Gulf an inferno of exploding fuel tanks and shot-up facilities", which would "shoot up the price of oil astronomically".

Given how the possibility of such a US attack has moved so far on to the international agenda, it is high time these likely consequences were taken far more seriously than has been the case so far. It would bring an oil crunch perilously near. The prospect of global warming on the scale suggested over the next two decades is even more frightening. A six degree increase is three times more than scientists say the earth can withstand without irreversible and runaway environmental degradation.

Energy and climate change are now directly affecting the world's peace and prosperity. We have only a short time to cut oil dependence and slash carbon emissions.

Title: Re: Meltdown
Post by: BachQ on February 22, 2008, 04:26:19 PM

From Reuters

Solar sector set to shine
Fri Feb 22, 2008 11:24am EST
By Eva Kuehnen

FRANKFURT (Reuters) - Solar power will be a bright investment prospect as the appetite for green energy grows, even though the global credit crisis is making banks more wary of providing financing.

In the short term, the sector will also have to contend with a shortage of silicon, a key ingredient for solar cells that turn sunlight into electricity, and possible changes in political support as elections take place.

"This year will be a very volatile year," said Sven Hansen, chief investment officer at clean technology investor Good Energies, which has about 7 billion Swiss francs ($6.38 billion) under management.

"The industry will see fantastic growth, but it will be a bumpy ride in terms of how financial markets value photovoltaic companies."

The number of new large-scale solar energy plants has been growing rapidly particularly in sun-drenched countries like Spain and Italy, but also in Germany and the United States, where regulatory conditions offer incentives and stable returns for investors.

Conditions could change because of a presidential election in the United States and general elections in Spain in March.

"Whether there are support programs in place has a strong impact on markets' development," Hansen said.

Growth is still expected to be strong, driven by increased interest from institutional investors, such as pension funds and insurers, which are seeking alternative stable and long-term opportunities.

Experts also expect the silicon shortage to ease next year as silicon makers hike up capacities and production.

"Leverage ratios are more difficult, but we will ride out the storm. The business is not shut," said Peter van Egmond Rossbach, director of investment at Impax Asset Management.

The firm provides finance for renewable energy projects around the world and has $2 billion under management.

Thirty percent is invested in solar, 40 percent in wind and the rest in other renewable energy projects, it said.

"It just means that (project financing) is getting more expensive and we have to bridge with equity," he added.

RISK AVERSION

Tighter liquidity on global financial markets resulting from a crisis in the U.S. subprime mortgage market last year has made banks more risk-averse.

As a result, conditions have become tougher, pushing up interest payments for loans and other financing costs, which reduces the cashflow and leads to higher purchase prices for investors.

"We notice it in the purchase prices," said Barbara Flesche, head of equity sales at Epuron, a project developer, which is fully-owned by German solar group Conergy (CGYG.DE: Quote, Profile, Research).

Epuron develops, finances, develops and operates large-scale renewable energy projects, bringing together investors, banks and equipment producers.

It has completed deals worth about 800 million euros ($1.18 billion) since 1998, it said.

Banks were less willing to provide high gearing for such major projects, which dampened investor hopes of a higher return on equity, Flesche said.

But she added: "The risk for purchase prices is not something that's hurting us dramatically -- so far."

Flesche said demand from institutional investors for such large-scale renewable portfolios was still strong and was now also reaching into new markets such as Turkey, Greece or Italy.

"It will become more difficult to get bank financing, but not impossible," Epuron's Flesche said.

The European Photovoltaic Industry Association (EPIA) expects the global market to be five times bigger than it was in 2007 within the next five years.

It said it expected annual installations to reach a 10.9 gigawatt peak by 2012 globally, up from a peak of about 2.2 gigawatts in 2007, adding that annual growth rates of well above 25 percent could be expected.

The European Energy Council has forecast that by 2010 about 1.6 percent of total energy generation will derive from photovoltaic sources, which compares to a share of 0.01 percent in 2003.

By 2010 the council expects about 19 percent of generation will derive from renewables, 15 percent from nuclear and 66 percent from fossil sources.

Title: Re: Meltdown
Post by: BachQ on February 22, 2008, 04:30:09 PM

From Reuters

Energy storage nears its day in the sun
Fri Feb 22, 2008 5:01pm EST
By Gerard Wynn

MONACO (Reuters) - Energy storage is an unglamorous pillar of an expected revolution to clean up the world's energy supply but will soon vie for investors attention with more alluring sources of energy like solar panels, manufacturers say.

"It's been in the background until now. It's not sexy. It's the enabler, not a source of energy," said Tim Hennessy, chief executive of Canadian battery makers VRB Power, speaking on the sidelines of a "CleanEquity" technologies conference in Monaco.

VRB will start mass production this year of a longer-lasting rival to the lead acid battery currently used to store energy for example produced by solar panel, Hennessy said.

Low carbon-emitting renewable energy is in vogue, driven by fears over climate change, spiraling oil prices and fears over energy supply and security.

While the supply of the wind and sun far exceeds humanity's needs it doesn't necessarily match the time when people need it: the sun may not be shining nor the wind blowing when we need to cook dinner or have a shower.

Soaring production of solar panel and wind turbines is now spurring a race to develop the winning energy storage technologies which will drive the electric cars and appliances of the future.

The race is heating up as manufacturers with entirely different solutions near the moment of commercial production.

For example, UK-based ITM Power sees the future of energy storage in the explosive gas hydrogen. The company is developing a piece of kit called an electrolyzer which uses solar or wind power to split water into hydrogen and oxygen.

The hydrogen is then stored in a pressurized container until it is needed, whether to drive a car, produce electricity or for cooking.

"With batteries you're taking enormous quantities of basic raw materials," said Chief Executive Jim Heathcote, referring to cadmium in nickel cadmium varieties. His company won an award for research at the Monaco conference, organized by corporate finance advisers Innovator Capital.

"Two things we're confident of is the supply of renewable energy and water," he said.

ITM Power aims to start production later this year of electrolyzers and next year of hydrogen fuel cells which generate electricity.

"The one problem everyone's had is how to store. The ability to take (surplus) renewable energy and make useful fuel out of it is almost priceless," Heathcote said.

RICH

The economic opportunities are highlighted by a third company, U.S.-based EnerDel, which aims to supply batteries for the "Th!nk City" electric vehicle, manufactured by Norway's Think Global.

In the case of electric cars, cheap, lightweight batteries are needed to power motors, and will eliminate carbon emissions if the batteries are charged using renewable power sources.

EnerDel has patented a lithium-ion battery which it says is lighter and cheaper than the nickel metal hydride batteries currently used in hybrid electric cars such as the Toyota Prius.

"I think energy storage is the next frontier," said Charles Gassenheimer, chairman of EnerDel's owners Ener1 Inc.

The "Th!nk" car could be the world's first mass production electric vehicle, starting in earnest in 2009. It will go from 0 to 60 miles an hour in about 8 seconds and have a range of up to 100 miles, said Gassenheimer.

Investors have given their thumbs up to Ener1, which now has a market capitalization of around $700 million, a ten-fold increase over two years ago.

Title: Re: Meltdown
Post by: BachQ on February 23, 2008, 09:38:17 AM

New York Times
February 23, 2008
THE ENERGY CHALLENGE

Move Over, Oil, There's Money in Texas Wind

By CLIFFORD KRAUSS

SWEETWATER, Tex. — The wind turbines that recently went up on Louis Brooks's ranch are twice as high as the Statue of Liberty, with blades that span as wide as the wingspan of a jumbo jet. More important from his point of view, he is paid $500 a month to permit 78 of them on his land, with 76 more on the way.

"That's just money you're hearing," he said as they hummed in a brisk breeze recently.

Texas, once the oil capital of North America, is rapidly turning into the capital of wind power. After breakneck growth the last three years, Texas has reached the point that more than 3 percent of its electricity, enough to supply power to one million homes, comes from wind turbines.

Texans are even turning tapped-out oil fields into wind farms, and no less an oilman than Boone Pickens is getting into alternative energy.

"I have the same feelings about wind," Mr. Pickens said in an interview, "as I had about the best oil field I ever found." He is planning to build the biggest wind farm in the world, a $10 billion behemoth that could power a small city by itself.

Wind turbines were once a marginal form of electrical generation. But amid rising concern about greenhouse gases from coal-burning power plants, wind power is booming. Installed wind capacity in the United States grew 45 percent last year, albeit from a small base, and a comparable increase is expected this year.

At growth rates like that, experts said, wind power could eventually make an important contribution to the nation's electrical supply. It already supplies about 1 percent of American electricity, powering the equivalent of 4.5 million homes. Environmental advocates contend it could eventually hit 20 percent, as has already happened in Denmark. Energy consultants say that 5 to 7 percent is a more realistic goal in this country.

The United States recently overtook Spain as the world's second-largest wind power market, after Germany, with $9 billion invested last year. A recent study by Emerging Energy Research, a consulting firm in Cambridge, Mass., projected $65 billion in investment from 2007 to 2015.

Despite the attraction of wind as a nearly pollution-free power source, it does have limitations. Though the gap is closing, electricity from wind remains costlier than that generated from fossil fuels. Moreover, wind power is intermittent and unpredictable, and the hottest days, when electricity is needed most, are usually not windy.

The turbines are getting bigger and their blades can kill birds and bats. Aesthetic and wildlife issues have led to opposition emerging around the country, particularly in coastal areas like Cape Cod. Some opposition in Texas has cropped up as well, including lawsuits to halt wind farms that were thought to be eyesores or harmful to wetlands.

But the opposition has been limited, and has done little to slow the rapid growth of wind power in Texas. Some Texans see the sleek new turbines as a welcome change in the landscape.

"Texas has been looking at oil and gas rigs for 100 years, and frankly, wind turbines look a little nicer," said Jerry Patterson, the Texas land commissioner, whose responsibilities include leasing state lands for wind energy development. "We're No. 1 in wind in the United States, and that will never change."
Texas surpassed California as the top wind farm state in 2006. In January alone, new wind farms representing $700 million of investment went into operation in Texas, supplying power sufficient for 100,000 homes.

Supporters say Texas is ideal for wind-power development, not just because it is windy. It also has sparsely populated land for wind farms, fast-growing cities and a friendly regulatory environment for developers.

"Texas could be a model for the entire nation," said Patrick Woodson, a senior development executive with E.On, a German utility operating here.

The quaint windmills of old have been replaced by turbines that stand as high as 20-story buildings, with blades longer than a football field and each capable of generating electricity for small communities. powerful turbines are able to capture power even when the wind is relatively weak, and they help to lower the cost per kilowatt hour.

Much of the boom in the United States is being driven by foreign power companies with experience developing wind projects, including Iberdrola of Spain, Energias de Portugal and Windkraft Nord of Germany. Foreign companies own two-thirds of the wind projects under construction in Texas.
A short-term threat to the growth of wind power is the looming expiration of federal clean-energy tax credits, which Congress has allowed to lapse several times over the years. Advocates have called for extending those credits and eventually enacting a national renewable-power standard that would oblige states to expand their use of clean power sources.

A longer-term problem is potential bottlenecks in getting wind power from the places best equipped to produce it to the populous areas that need electricity. The part of the United States with the highest wind potential is a corridor stretching north from Texas through the middle of the country, including sparsely populated states like Montana and the Dakotas. Power is needed most in the dense cities of the coasts, but building new transmission lines over such long distances is certain to be expensive and controversial.

"We need a national vision for transmission like we have with the national highway system," said Robert Gramlich, policy director for the American Wind Energy Association. "We have to get over the hump of having a patchwork of electric utility fiefdoms."

Texas is better equipped to deal with the transmission problems that snarl wind energy in other states because a single agency operates the electrical grid and manages the deregulated utility market in most of the state.

Last July, the Texas Public Utility Commission approved transmission lines across the state capable of delivering as much as 25,000 megawatts of wind energy by 2012, presuming the boom continues. That would be five times the wind power generated in the state today, and it would drive future national growth.

Shell and the TXU Corporation are planning to build a 3,000-megawatt wind farm north of here in the Texas Panhandle, leapfrogging two FPL Energy Texas wind farms to become the biggest in the world.
Not to be outdone, Mr. Pickens is planning his own 150,000-acre Panhandle wind farm of 4,000 megawatts that would be even larger and cost him $10 billion.

"I like wind because it's renewable and it's clean and you know you are not going to be dealing with a production decline curve," Mr. Pickens said. "Decline curves finally wore me out in the oil business."
At the end of 2007, Texas ranked No. 1 in the nation with installed wind power of 4,356 megawatts (and 1,238 under construction), far outdistancing California's 2,439 megawatts (and 165 under construction). Minnesota and Iowa came in third and fourth with almost 1,300 megawatts each (and 46 and 116 under construction, respectively).

Iowa, Minnesota, Colorado and Oregon, states with smaller populations than Texas, all get 5 to 8 percent of their power from wind farms, according to estimates by the American Wind Energy Association.
It has dawned on many Texans in recent years that wind power, whatever its other pros and cons, represents a potent new strategy for rural economic development.

Since the wind boom began a few years ago, the total value of property here in Nolan County has doubled, and the county judge, Tim Fambrough, estimated it would increase an additional 25 percent this year. County property taxes are going down, home values are going up and the county has extra funds to remodel the courthouse and improve road maintenance.

"Wind reminds us of the old oil and gas booms," Mr. Fambrough said.
Teenagers who used to flee small towns like Sweetwater after high school are sticking around to take technical courses in local junior colleges and then work on wind farms. Marginal ranches and cotton farms are worth more with wind turbines on them.

"I mean, even the worst days for wind don't compare to the busts in the oil business," said Bobby Clark, a General Electric wind technician who gave up hauling chemicals in the oil fields southwest of here to live and work in Sweetwater. "I saw my daddy go from rags to riches and back in the oil business, and I sleep better."

Wind companies are remodeling abandoned buildings, and new stores, hotels and restaurants have opened around this old railroad town.

Dandy's Western Wear, the local cowboy attire shop, cannot keep enough python skin and cowhide boots in stock because of all the Danes and Germans who have come to town to invest and work in the wind fields, then take home Texas souvenirs.

"Wind has invigorated our business like you wouldn't believe," said Marty Foust, Dandy's owner, who recently put in new carpeting and air-conditioning. "When you watch the news you can get depressed about the economy, but we don't get depressed. We're now in our own bubble."

Title: Re: Meltdown
Post by: BachQ on February 27, 2008, 02:07:04 AM

New York Times

February 27, 2008
Gas Prices Soar, Posing a Threat to Family Budget
By JAD MOUAWAD

Gasoline prices, which for months lagged behind the big run-up in the price of oil, are suddenly rising quickly, with some experts saying they could approach $4 a gallon by spring. Diesel is hitting new records daily, and oil settled at a record high of $100.88 a barrel on Tuesday.

The increases could not come at a worse time for the economy. With growth slowing, energy increases that were once easily absorbed by consumers are now more likely to act as a drag on household budgets, leaving people with less money to spend elsewhere. These costs could worsen the nation's economic woes, piling a fresh energy shock on top of the turmoil in credit and housing. "The effect of high oil prices today could be the difference between having a recession and not having a recession," said Kenneth S. Rogoff, a Harvard economist.

The depth of the nation's economic problems became clearer Tuesday with the release of figures showing that prices at the producer level rose 1 percent in January from December, driven in large measure by energy costs. Compared with a year ago, prices were up 7.4 percent, the worst producer price inflation in the United States since 1981. Other new figures showed that home prices around the country are falling at an accelerating pace, suggesting no end is in sight for the housing slump. On Tuesday, diesel prices rose to a record $3.60 a gallon, compared with $2.62 a gallon last year.

For a decade, rising oil prices failed to dent global economic growth. In the United States, consumers absorbed the higher costs because of easy credit and rising prosperity, while in developing countries, government subsidies helped ease the pain. The rise in energy prices was a result of growing demand around the world. The price of oil has quadrupled in six years, and the close Tuesday was not far below the inflation-adjusted high set in April 1980, after the Iranian revolution. That record, $39.50 a barrel, equals $103.76 in today's money. As oil prices spiked last fall, low wintertime gasoline demand helped keep prices in check. But now, experts say, the price of oil is finally showing up at the pump.

But global oil demand, the relentless driver behind higher prices, is still expected to increase by 1.4 million barrels a day this year, analysts estimate. That growth, from China and the Middle East, may help keep prices up, whatever happens to the American economy. While demand keeps growing, producers are struggling to catch up. They are not replacing the oil they are pumping out of the ground fast enough because of restrictions on access to fields, as well as rising costs. Meanwhile, demand in China, India and the Middle East is expected to push oil consumption up by more than one million barrels a day, each year, for the next decade.

"An oil crisis is coming in the next 10 years," John B. Hess, the chairman of the Hess Corporation, said at a recent conference held by Cambridge Energy Research Associates. "It's not a matter of demand. It's not a matter of supplies. It's both."

Title: Re: Meltdown
Post by: Sean on February 27, 2008, 08:39:00 AM

Dm, some theorists insist the we are in the post peak environment already and the only question is how smooth or sharp the gradient on the other side to begin with is going to be. Nobody quite knows, but developed societies around the world could be on the verge of collapse, only hastened by most people not ready to take steadily reducing living standards lightly after centuries of improvement. People think such statements are preposterous, or a joke. But one reason nobody talks about them much is that there's no real answer to the problem. Afghanistan and Iraq are the first of the oil wars.

Title: Re: Meltdown
Post by: BachQ on February 27, 2008, 03:52:17 PM

Quote from: Sean on February 27, 2008, 08:39:00 AM
Dm, some theorists insist the we are in the post peak environment already [such that] the only question [remaining] is how smooth or sharp the gradient on the other side to begin with is going to be.

There is evidence that we may have peaked in 2005, and that we'll be in the midst of an "undulating plateau" for a few years (perhaps as long as five or ten more years of undulation) ....... But you are 100.00% correct that, once we've moved beyond the plateau, the only question remaining "is how smooth or sharp the gradient" of decline will be.

Quote from: Sean on February 27, 2008, 08:39:00 AM
Nobody quite knows, but developed societies around the world could be on the verge of collapse, only hastened by most people not ready to take steadily reducing living standards lightly after centuries of improvement. People think such statements are preposterous, or a joke. But one reason nobody talks about them much is that there's no real answer to the problem. Afghanistan and Iraq are the first of the oil wars.

If the slope of the post-plateau decline in oil production is steep, then the effect on society will be utterly catastrophic. The concepts of "inflation" and "depression" will be redefined, and global hostilities will become a daily phenomenon, and a matter of survival.

The US has already positioned itself to dominate the Middle East in the event of oil wars ........ but will other nations cave in to the US domination? Not if it becomes a matter of their very survival.

Quote from: Sean on February 27, 2008, 08:39:00 AM
But one reason nobody talks about them much is that there's no real answer to the problem.

If the slope of the decline is shallow, then global society will have time (conceivably) to find alternative means of fuel, and to gradually adapt to the extremely stark reality of excessive oil consumption (increasing by 1.4 million barrels a day in 2008) coupled with persistant and inevitable decreasing oil production.

Meanwhile: "The price of oil reached $102 per barrel today - a second record in as many days " (http://www.guardian.co.uk/business/2008/feb/27/oil.centricabusiness)

Title: Re: Meltdown
Post by: Sean on February 27, 2008, 06:23:19 PM

For what it's worth Dm, the peak oil phenomenon all makes a lot of sense to me: the changes in the world and its values ride on top of an underlying imbalance that is given exact expression by peak oil. You only have to look at the state of greed and waste in the West to see what's going to happen. Once the supermarket can't get its deliveries and shuts, we'll starve.

Title: Re: Meltdown
Post by: BachQ on February 27, 2008, 08:24:22 PM

Quote from: Sean on February 27, 2008, 06:23:19 PM
For what it's worth Dm, the peak oil phenomenon all makes a lot of sense to me: the changes in the world and its values ride on top of an underlying imbalance that is given exact expression by peak oil. You only have to look at the state of greed and waste in the West to see what's going to happen. Once the supermarket can't get its deliveries and shuts, we'll starve.

Greed, selfishness, and shortsightedness derive from and are manifestations of human nature. Soon, China, India, and the Middle East will be as guilty of selfish greed and waste as we Westerners. A quick look at where China and India are headed today reveals that they are more than happy to jump on the wasteful, shortsighted, selfish consumerism bandwagon.

Yes, human nature in general, and capitalism specifically, have rendered inevitable the peak oil phenomenon, and it is precisely because of human nature that no one will be able to stop the catastrophic consequences of this juggernaut.

Title: Re: Meltdown
Post by: BachQ on February 27, 2008, 08:56:59 PM

"The high cost of gas is helping fuel a surge in food prices. Higher transportation expenses, along with growing demand for agricultural exports from the United States and increasing need for corn-based ethanol for gas supplies, has sent commodity costs soaring. Last week, the federal government reported that the Consumer Price Index rose a greater-than-expected 0.4% in January and 4.3% over the past 12 months, mainly because of higher food and energy costs. Food and beverages jumped 4.8% for the year and transportation soared 9.4%. A bushel of yellow corn, for instance, cost an average of $5.12 in January, up 41% from a year earlier, according to U.S. Department of Agriculture statistics. Not only does this contribute to the higher prices of food made from corn, but it increases farmers' cost of feeding cattle and pigs."

(http://money.cnn.com/2008/02/27/news/economy/fuelandfood/index.htm?cnn=yes)

Title: Re: Meltdown
Post by: Sean on February 27, 2008, 11:30:49 PM

Thanks for that link, and the other info.

The way I see it, as you probably know, is that not all people have the greedy human nature we speak of here- but most do, and thus it's the rise of democracy that has legitimized it: majority rules, and it's said that this is right and moral. Yet good leaders not dependent on pleasing the masses could have made better decisions.

If you haven't already do check out the material on Youtube and Stage6- esp Richard Heinmann, Crude awakening and other excellent oil crisis videos.

Title: Re: Meltdown
Post by: BachQ on February 28, 2008, 03:37:02 AM

Quote from: Sean on February 27, 2008, 11:30:49 PM
Thanks for that link, and the other info.

The way I see it, as you probably know, is that not all people have the greedy human nature we speak of here- but most do, and thus it's the rise of democracy that has legitimized it: majority rules, and it's said that this is right and moral. Yet good leaders not dependent on pleasing the masses could have made better decisions.

If you haven't already do check out the material on Youtube and Stage6- esp Richard Heinmann, Crude awakening and other excellent oil crisis videos.

Thanks, Sean. I think you mean Richard Heinberg (and his lecture "Peak Everything"). Truly fascinating stuff.

According to Heinberg, crude oil extraction peaked in May, 2005, and the peak from all fossil fuels will occur in about 2010 (less than 2 years from now); with a gradual decline until 2030. After 2030, there will be a "quickly increasing rate of decline." Heinberg's central conclusions are that (1) fossil fuels are the root problem of just about everything plaguing the planet; and (2) scarcity is a more pressing issue than climate change.

The upshot is that by 2030, society will become reconfigured away from globalized mechanization toward "demechanized economic re-localization" ....... IOW, a COMPLETELY different lifestyle in which we're all going to become organic gardeners, bicyclists, and wood choppers .......

Can you supply a link for Crude Awakening?

Title: Re: Meltdown
Post by: Florestan on February 28, 2008, 05:11:11 AM

Quote from: Dm on February 28, 2008, 03:37:02 AM
The upshot is that by 2030, society will become reconfigured away from globalized mechanization toward "demechanized economic re-localization" ....... IOW, a COMPLETELY different lifestyle in which we're all going to become organic gardeners, bicyclists, and wood choppers .......

What? No CD or DVD players, that is, no music? :o

Title: Re: Meltdown
Post by: paulb on February 28, 2008, 05:52:38 AM

Quote from: Florestan on February 28, 2008, 05:11:11 AM
What? No CD or DVD players, that is, no music? :o

Our stereo systems will be hooked up to a bicycle style generator, the faster you pedal the louder you get your stereo ;D
man could you try to pedal out a entire Mahler sym, w/o falling asleep/dropping dead from exhaustion. :D

Title: Re: Meltdown
Post by: Florestan on February 28, 2008, 06:02:28 AM

Quote from: paulb on February 28, 2008, 05:52:38 AM
Our stereo systems will be hooked up to a bicycle style generator, the faster you pedal the louder you get your stereo ;D
man could you try to pedal out a entire Mahler sym, w/o falling asleep/dropping dead from exhaustion. :D

Just imagine playing some "Power Orchestral Music"... :D

Title: Re: Meltdown
Post by: Sean on February 28, 2008, 12:35:38 PM

Hi Dm, last time I rummaged for this on Youtube there was about the first 20 mins variously available of this documentary. I went to see the whole thing at a tiny cinema a few months ago, in an right atmosphere of opprobrium, absolutely ridiculous but exactly what I'm saying about democracies not wanting to know about difficult issues, and making out that we shouldn't know, as a matter of moral majority and peer pressure. It's true.

The opening music is Glass's Facades from Glassworks by the way. There's many more good videos though including a six part one I forget the title of...

http://www.youtube.com/watch?v=6HRZPpbpSjg

Title: Re: Meltdown
Post by: BachQ on February 28, 2008, 04:36:31 PM

Quote from: Sean on February 28, 2008, 12:35:38 PM
here's many more good videos though including a six part one I forget the title of...

Thanks, Sean. Here's a five-part one that's a tad longwinded, but a good intro that's relatively recent (Nov 07).

Peak Oil (What the Fighting is All About)

part 1 http://www.youtube.com/v/0QFaUcUdLcM

part 2 http://www.youtube.com/v/rT7v9cfrVl4

part 3 http://www.youtube.com/v/JNYcFITUgHs

part 4 http://www.youtube.com/v/y0ykKlL9nns

part 5 http://www.youtube.com/v/Y3dnZcCNNNw

Title: Re: Meltdown
Post by: BachQ on February 28, 2008, 04:38:28 PM

Oil jumps 3 percent to new peak on UK gas terminal fire
Thu Feb 28, 2008 2:41pm EST
By Matthew Robinson

NEW YORK (Reuters) - Oil surged more than 3 percent to an all-time high on Thursday after news that a fire struck a major European natural gas terminal. Record weakness in the U.S. dollar encouraged oil's gains, fueling a broad commodities rally. U.S. crude surged $3.10 to $102.74 a barrel by 2:07 p.m. EST, breaking the inflation-adjusted high of $102.53 reached in 1980. London Brent crude gained $2.83 to $101.10 a barrel.

Title: Re: Meltdown
Post by: Sean on February 28, 2008, 11:03:22 PM

I'll have a good look at those a bit later today- nice one; will check out the Peak Everything talk also, if I haven't seen it. The scary thing is that peak oil could be happening right now and we can't be sure exactly what it's going to mean in the immediate future, in what are surely our very precarious developed societies. I am sure though that posterity will think what a bunch of self-deceptive morons the democratic masses were thinking (as far as they really do) that the Middle East invasions were to do with 'terrorism' and such.

Good that you take an interest in this. This puts you ahead of everyone else on the forum, there can be no doubt about that...

Title: Re: Meltdown
Post by: BachQ on February 29, 2008, 02:56:17 AM

Sean, here is a link to a 7-part series; copied below is part 2/7 ..... "utterly serious" stuff. This was uploaded 4 days ago, so perhaps you haven't seen it yet ......

2/7 http://www.youtube.com/v/7nqcavvB66g&feature=related

According to the Hirsch Report:

1. If government takes action 20 years in advance of peak oil = relatively smooth transition.

2. If government takes action 10 years in advance of peak oil = "significant economic dislocation and disruption"

3. If government waits until peak oil has already happened, then there will be "absolutely massive & catastrophic economic disruption and dislocation"

According to Matthew Simmons: on a scale of 1 to 10, "if global warming is placed as a 3 on a scale of 1 through 10, .... peak oil is a 12"

According to Dr Peter Lloyd: root problem = overpopulation (e.g., mankind is being forced to use increasingly marginal land to survive + deforestation + drought = dustbowl scenario).

Title: Re: Meltdown
Post by: Sean on February 29, 2008, 08:35:42 AM

Hi Dm, sure, I just had a look at those first five, most of which new to me, with some good info there.

What drives my cynicism here is this. I don't know how old you are but my first decade was the 1970s and the world was so very different, and very beautiful and real in a way it certainly isn't today. I very much feel that people are not even alive today in an important sense, something I could discuss at length.

But underlying this massive corruption of our social world, which I really do insist on, is this phenomenon of peak oil- and it makes so much sense, complementing exactly the adverse developments on the social level.

Lets have a look at the others.

Title: Re: Meltdown
Post by: bwv 1080 on February 29, 2008, 09:01:41 AM

Quote from: Sean on February 29, 2008, 08:35:42 AM

What drives my cynicism here is this. I don't know how old you are but my first decade was the 1970s and the world was so very different, and very beautiful and real in a way it certainly isn't today.

How so?

Title: Re: Meltdown
Post by: Sean on February 29, 2008, 09:54:54 AM

Hello bwv, well the digital technology revolution and the simulation of reality has something to do with it- instead of analogue being improved, it was scrapped altogether and synthesized sound put in its place as a fake and clever subsititute for real sound. And thus with the rest of society, even to the extent that the likes of Facebook and mobile phones feed on massive alienation between people while ludicrously claiming to connect people. The rise of postmodernism has been a great watershed in Western and the world's history. It's a phoney world...

Title: Re: Meltdown
Post by: BachQ on February 29, 2008, 04:57:36 PM

Sean, you've already seen these, but for others, here is a collection of introductory materials from Richard Heinberg.

Oil - The Party Is Over - Richard Heinberg

http://www.youtube.com/v/ux0EbSNMc_Y&feature=related

Richard Heinberg on current gas prices

http://www.youtube.com/v/VlH_-JzYGAo&feature=related

The Richard Heinberg Interview Parts 1 & 2

1/2 http://www.youtube.com/v/DHXdS9XYVs8

2/2 http://www.youtube.com/v/osbQ9UHMAvY&feature=related

Title: Re: Meltdown
Post by: BachQ on February 29, 2008, 05:06:35 PM

Quote from: Sean on February 29, 2008, 08:35:42 AM
But underlying this massive corruption of our social world, which I really do insist on, is this phenomenon of peak oil- and it makes so much sense, complementing exactly the adverse developments on the social level.

Since capitalism depends on oil, query whether capitalism could survive beyond the oil crash? Since democracy depends on capitalism, query whether democracy could survive post-oil crash? What will government look like post-crash?

(Sean, you've been thinking about these issues for years, but I've only considered them for a total of 48 hours ........)

Title: Re: Meltdown
Post by: Sean on March 01, 2008, 12:04:50 AM

Dm, no not years really- I only came across peak oil a few months back. However I do remember people talking about the crucial importance of oil years ago and that did stay with me. I also remember being taught in geography at school in 1985 that an energy crisis was predicted for 2020: nothing meaningful has been done, nothing. Hence I really do think that democratic short sightedness and its pleasing of the simplistic immediate desires of the masses will be discredited in the post-oil world.

And you really do need to have a strong sense of critical detachment to even discuss something like peak oil- most people really hate it. It strikes at their personal model of the world and personal identity, and at the wasteful short term nature of their societies- the extent to which they want to bury this colossal problem is a discussion in itself.

When you have an issue that underlies everything else it's at that point that good decisions need to be made: the boss of a company doesn't ask the workforce about everything decided on, but if the results are good and right the workers will always at least privately acknowledge it. It's prime-mover decisions that are beyond most people and which they don't want to be asked about.

Title: Re: Meltdown
Post by: Sean on March 01, 2008, 12:06:25 AM

The series on Youtube called The End of oil, I think it was, has some good stuff in it.

Title: Re: Meltdown
Post by: BachQ on March 01, 2008, 05:34:37 AM

Quote from: Sean on March 01, 2008, 12:06:25 AM
The series on Youtube called The End of oil, I think it was, has some good stuff in it.

Yeah, there's a 6-part series called END OF OIL ...... that's pretty good.

Title: Re: Meltdown
Post by: BachQ on March 01, 2008, 05:45:43 AM

2 short vids:

The Middle East, & The Impending Oil Crisis

http://www.youtube.com/v/4nyMZ2jIcmQ

The inevitable collapse of the dollar

http://www.youtube.com/v/4n3g5lUgkWk&feature=related

Title: Re: Meltdown
Post by: Sean on March 01, 2008, 10:48:53 AM

Thanks Dm.

Title: Re: Meltdown
Post by: BachQ on March 01, 2008, 08:54:57 PM

Oil, Smoke & Mirrors (1/5)

http://www.youtube.com/v/fwMrbHGYlUs

Our conception of limitless oil is an illusion ...... a "consensus trance"

Oil, Smoke & Mirrors (2/5)

http://www.youtube.com/v/Ar8KtGNw040&feature=related

Decline in investor confidence --> contracting economy --> "2d Great Depression"

"Mainstream media have done an abyssmal job of reporting on 9/11 & peak oil"

Oil, Smoke & Mirrors (3/5)

http://www.youtube.com/v/Ph4MUfz0390&feature=related

Oil, Smoke & Mirrors (4/5)

http://www.youtube.com/v/TBYqAigrE6E&feature=related

Oil, Smoke & Mirrors (5/5)

http://www.youtube.com/v/pfBZtG7opyQ&feature=related

Title: Re: Meltdown
Post by: bwv 1080 on March 01, 2008, 09:13:43 PM

Quote from: Dm on February 29, 2008, 05:06:35 PM
Since capitalism depends on oil, query whether capitalism could survive beyond the oil crash? Since democracy depends on capitalism, query whether democracy could survive post-oil crash? What will government look like post-crash?

(Sean, you've been thinking about these issues for years, but I've only considered them for a total of 48 hours ........)

Capitalism does not depend on oil - it worked OK before it was widely used. However our standard of living does depend (now) on oil, however a huge amount of investment and research is being done on alternatives and replacements. Oil is not going away anytime soon, so you do not have to worry about seeing Sean in ten years dressed like this:

(http://www.cinemaxasia.com/images/posters/378x195/the_road_warrior.jpg)

The problem with doom-mongers is that they cannot see what is right in front of them - that billions of people will go on trying to find a way to feed themselves and their families and that the odds are so overwhelming as to be certain that solutions will be found. None of these peak oil guys, Simmons included, adequately addresses the largely untapped reserves of sour crude in Canada tar sands and elsewhere. Not than energy is not a serious problem, but economies will adjust to changes in supply.

Also, I would give you a tip that the minute anyone starts talking about the 'certainty' that the dollar will become worthless it is a cue that you have crossed the border of crankdom.

Title: Re: Meltdown
Post by: Sean on March 01, 2008, 09:50:20 PM

bwv, oil isn't going to run out anytime soon but demand for it will outstrip supply anytime soon. And what that means is a little unclear to most thinkers: when people become aware that a problem is serious rather than a blip, stock markets tend to react sharply not in terms of a gentle curve, and trillions will disappear from stocks because all the big companies depend on petroleum.

Also Canadian/ Colorado(?) oil sands produce about two barrels of oil for one barrel expended, in a long complex process. Oil fields by contrast can produce 100 barrels for one expended. It does look bad.

Title: Re: Meltdown
Post by: BachQ on March 02, 2008, 03:44:12 AM

Quote from: Sean on March 01, 2008, 09:50:20 PM
bwv, oil isn't going to run out anytime soon but demand for it will outstrip supply anytime soon. And what that means is a little unclear to most thinkers: when people become aware that a problem is serious rather than a blip, stock markets tend to react sharply not in terms of a gentle curve, and trillions will disappear from stocks because all the big companies depend on petroleum.

D-Day will come when consumers' expectations (consumer confidence) catch up with the reality of dwindling, finite oil supply ....... and the inevitable rampant inflation for all goods and services which are directly or indirectly reliant upon petroleum (i.e., just about everything). What's really sad is that, as the Chinese are attempting to emulate the Western standard of living by manufacturing zillions of cars and building zillions of roads and highways, they are building a doomed petroleum-based infrastructure that will be rendered obsolete in a matter of a few years. In this sense, China is really clueless, and China will be hit the hardest. But such is the potency of this narcotic which we call petroleum: it creates illusions of longterm structural soundness, but, in reality, it is a short-term opiate which turns everyone and everything it touches into an oil addict -- we are all a bunch of shortsighted oil junkies .......

Title: Re: Meltdown
Post by: Sean on March 02, 2008, 04:55:35 AM

QuoteIn this sense, China is really clueless

I hesitate to make judgements like this, but I've been there and it's true. To quote Gandhi, 'of China, nothing can be said'.

Title: Re: Meltdown
Post by: bwv 1080 on March 02, 2008, 06:14:59 AM

http://www.ens-newswire.com/ens/jan2008/2008-01-08-091.asp

Switchgrass Ethanol Yields Large Net Energy Gain
LINCOLN, Nebraska, January 8, 2008 - (ENS) - Switchgrass grown for biofuel production produced five times more energy than needed to grow, harvest and process it into cellulosic ethanol, finds a large farm study by researchers at the University of Nebraska-Lincoln published Monday.

The five year study also found greenhouse gas emissions from cellulosic ethanol made from switchgrass were 94 percent lower than estimated greenhouse gas emissions from gasoline production.

"This clearly demonstrates that switchgrass is not only energy efficient, but can be used in a renewable biofuel economy to reduce reliance of fossil fuels, reduce greenhouse gas emissions and enhance rural economies," said principal researcher Ken Vogel, a U.S. Department of Agriculture-Agricultural Research Service geneticist in the university's agronomy and horticulture department.

In a biorefinery, switchgrass biomass can be broken down into sugars including glucose and xylose that can be fermented into ethanol similar to corn. Grain from corn and other annual cereal grains, such as sorghum, are now primary sources for ethanol production in the U.S.

In the future, perennial crops, such as switchgrass, as well as crop residues and forestry biomass could be developed as major cellulosic ethanol sources that could potentially displace 30 percent of current U.S. petroleum consumption, Vogel said.

Plant geneticist Ken Vogel examines a field of young switchgrass. (Photo courtesy UNL)
Technology to convert biomass into cellulosic ethanol is now at the development stage. Six small commercial scale biorefineries are being built with scale-up support from the U.S. Department of Energy.

Vogel's study involved switchgrass fields on farms in Nebraska, North Dakota and South Dakota. It is the largest study to date examining the net energy output, greenhouse gas emissions, biomass yields, agricultural inputs and estimated cellulosic ethanol production from switchgrass grown and managed for biomass fuel.

The study took place on 10 fields of 15 to 20 acres each with four in Nebraska near Atkinson, Crofton, Lawrence and Douglas; four in South Dakota near Highmore, Bristol, Huron and Ethan; and two in North Dakota near Streeter and Munich.

Trials began in 2000 and 2001 and continued for five years. Farmers were paid for their work under contract with the university and documented all production operations, agricultural inputs and biomass yields. The researchers used this information to determine the net energy estimates.

Switchgrass grown in this study yielded 93 percent more biomass per acre and an estimated 93 percent more net energy yield than previously estimated in a study done elsewhere of planted prairies in Minnesota that received low agricultural inputs, Vogel said.

Less land will be needed for energy crops if higher yields can be obtained.

Researchers point out in the study that plant biomass remaining after ethanol production could be used to provide the energy needed for the distilling process and other power requirements of the biorefinery. This results in a high net energy value for ethanol produced from switchgrass.

By contrast, corn grain ethanol biorefineries must use natural gas or other sources of energy for the conversion process.

In this study, switchgrass managed as a bioenergy crop produced estimated ethanol yields per acre similar to those from corn grown in the same states and years based on statewide average grain yields.

But higher yields compared to corn can be expected in the future, said Vogel, who points out that corn grain conversion technology is mature, while cellulosic conversion efficiency technology is still developing.

Vogel said he does not expect switchgrass to replace corn or other crops on Class 1 farm land. He and his colleagues are developing the grass for use on marginal, highly erodible lands similar to that currently in the federal Conservation Reserve Program. All the fields in this study met the qualifying criteria for that program.

Researchers found that switchgrass grown on the marginal fields produced an average of 300 gallons of ethanol per acre compared to average ethanol yields of 350 gallons per acre for corn for the same three states.

The researchers point out that this was a baseline study. The switchgrass cultivars used in this study were developed for use in pastures. New higher yielding cultivars are under development for specific use in bioenergy production systems.

Switchgrass yields continue to improve, Vogel said. Recent yield trials of new experimental strains in the three states produced 50 percent higher yields than achieved in this study.

Switchgrass in this study employed UNL's best management practices for switchgrass, including no-till seeding, herbicides, weed control and adaptive cultivars.

Six cellulosic biorefineries that are being co-funded by the U.S. Department of Energy also are in the works across the United States. These plants are expected to produce more than 130 million gallons of cellulosic ethanol per year.

Researchers reported their findings in the current issue of "Proceedings of the National Academy of Sciences," online at: http://www.pnas.org/cgi/content/abstract/0704767105v1.

Title: Re: Meltdown
Post by: bwv 1080 on March 02, 2008, 06:19:54 AM

Silicon Valley gets interested in solar power
By G. Pascal Zachary Published: February 17, 2008

E-Mail Article

Listen to Article

Printer-Friendly

3-Column Format

Translate

Share Article

Text Size

Can Silicon Valley become a world leader in cheap and ubiquitous solar panels for the masses?

Given the valley's tremendous success in recent years with down-to-earth products like search engines and music players, tackling solar power might seem improbable. Yet some of the valley's best brains are captivated by the challenge, and they hope to put the development of solar technologies onto a faster track.

There is, after all, a precedent for the way the valley tries to approach such tasks, and it is embodied in Moore's Law, the maxim made famous by an Intel co-founder, Gordon Moore. Moore's Law refers to rapid improvements in computer chips - which would be accompanied by declining prices.

A link between Moore's Law and solar technology reflects the engineering reality that computer chips and solar cells have a lot in common.

"A solar cell is just a big specialized chip, so everything we've learned about making chips applies," said Paul Saffo, an associate engineering professor at Stanford University and a longtime observer of Silicon Valley.

Today in Technology & Media
Sony PlayStation 3 poised for strong yearMaking next popular cellphone can be study in psychologyRadio frequency ID tags raising privacy concerns
Financial opportunity also drives innovators to exploit the solar field. "This is the biggest market Silicon Valley has ever looked at," said T.J. Rogers, chief executive of Cypress Semiconductor, which is part owner of SunPower, a maker of solar cells in San Jose, California.

Rogers, who is also chairman of SunPower, said the global market for new energy sources would be larger than the computer chip market.

"For entrepreneurs, energy is going to be cool for the next 30 years," he said.

Optimism about creating a "Solar Valley" in the geographic shadow of computing all-stars like Intel, Apple and Google is widespread among some solar evangelists.

"The solar industry today is like the late 1970s when mainframe computers dominated, and then Steve Jobs and IBM came out with personal computers," said R. Martin Roscheisen, chief executive of Nanosolar, a solar company in San Jose.

Nanosolar shipped its first "thin film" solar panels in December, and the company says it ultimately wants to produce panels that are both more efficient in converting sunlight into electricity and less expensive than today's versions.

Dramatic improvements in computer chips over many years turned the PC and the cellphone into powerful, inexpensive appliances - and the foundation of giant industries. Solar enterprises are hoping for the same outcome.

But Silicon Valley's love affair with solar could be short-lived.

"We've seen a lot of pipe dreams in the industry over the years; a lot of wild claims never came through," said Lisa Frantzis, a specialist in renewable energy at Navigant Consulting in Burlington, Massachusetts.

Another brake on the pace of solar innovation might be consumer behavior. It often can be hard to get consumers to change their habits, and homeowners may be slow to swap out expensive water heaters for new solar solutions. Reliability is also an issue: while current solar technologies have proved relatively durable, it is unknown how resilient the next generation of solar will be.

"We need technologies that can survive on a rooftop for 20 years," said Barry Cinnamon, chief executive of Akeena Solar of Los Gatos, California, a designer and installer of solar systems.

Affordable solar development also still depends on government subsidies.

So what does Silicon Valley bring to the mix? Expertise in miniaturization and a passion for novelty among its entrepreneurs.

"There are suddenly a lot of new ideas coming into this field," said Paul Alivisatos, a professor of chemistry at the University of California, Berkeley, who also has his own solar start-up.

One novel approach is called "solar thermal," which uses large mirrors to generate steam to run conventional turbines that generate electricity.

In 2006, Vinod Khosla, a veteran venture capitalist best known as a co-founder of Sun Microsystems, discovered an obscure Australian company, Ausra, pursuing solar thermal. He persuaded the management of Ausra to move to Silicon Valley and helped it raise money.

Ausra recently signed a deal with PG&E, the big California utility company, to supply a large solar plant. "The best work in solar is happening in Silicon Valley," Khosla said.

The promise of Solar Valley has investors opening their wallets as never before.

But some worry that promising technologies of today must be renewed, and quickly, if the logic of Moore's Law is to define solar.

"There's a lot of money being thrown at the problem and that's healthy; it gives it a real chance of succeeding," Alivisatos said. "But so much of our effort is going into short-term victories that I worry our pipeline will go dry in 10 years."

G. Pascal Zachary teaches journalism at Stanford and writes about technology and economic development.

Title: Re: Meltdown
Post by: BachQ on March 02, 2008, 08:50:32 PM

Quote from: bwv 1080 on March 02, 2008, 06:14:59 AM
Switchgrass grown for biofuel production produced five times more energy than needed to grow, harvest and process it into cellulosic ethanol, finds a large farm study by researchers at the University of Nebraska-Lincoln published Monday. The five year study also found greenhouse gas emissions from cellulosic ethanol made from switchgrass were 94 percent lower than estimated greenhouse gas emissions from gasoline production.

"This clearly demonstrates that switchgrass is not only energy efficient, but can be used in a renewable biofuel economy to reduce reliance of fossil fuels, reduce greenhouse gas emissions and enhance rural economies," said principal researcher Ken Vogel, a U.S. Department of Agriculture-Agricultural Research Service geneticist in the university's agronomy and horticulture department.

That's very promising. An EROEI of 5:1 is acceptable (although it doesn't measure up to oil's EROI of 30:1), and it's likely that, over the long-term, with hybrid switchgrasses developed, that ratio could increase.

It would be interesting to know: (1) how many years it would take to make biofuels commercially viable on a widespread (universal) basis? (2) how many acres of switchgrass would be needed to meet the shortfalls in oil production, it being understood that there is a tradeoff in diverting land from agricultural uses to biofuel uses?

I think your larger point is that VIABLE alternatives to oil ARE available. While this is true, they are a far cry from oil, and they are decades away from commercial viability. This preliminary study took FIVE YEARS ......... so how many decades until anything remotely commercially viable will emerge?

Meanwhile, GWB would rather spend $800 billion on IRAQ than $80 million on biofuel or solar research. How far will society need to descend into financial turmoil before this becomes a priority?

Title: Re: Meltdown
Post by: BachQ on March 03, 2008, 06:18:17 AM

Dollar Falls to Record Against Euro as Manufacturing Contracts

By Bo Nielsen and Gavin Finch BLOOMBERG.COM

March 3 (Bloomberg) -- The dollar declined to a three-year low against the yen and a record versus the euro on speculation the U.S. economic slump will cause banks to report more losses from the collapse of the subprime-mortgage market. ... "The dollar is in a clear free-fall, down versus every major and emerging-market currency,'' Jan Loeys, head of global- market strategy at JPMorgan Chase & Co. in London, wrote in a note to clients.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=arBylXjkXLfY&refer=home)

Title: Re: Meltdown
Post by: BachQ on March 03, 2008, 09:03:36 AM

NEW YORK TIMES

March 3, 2008
Oil Prices Pass Inflation-Adjusted Record
By JAD MOUAWAD
Setting an all-time record, oil prices rose to nearly $104 a barrel on Monday morning, exceeding their inflation-adjusted high reached in the early 1980s during the second oil shock.

Oil futures rose as much as $2.11 to $103.95 on the New York Mercantile Exchange. That level tops the record set in April 1980 of $39.50 a barrel, which would translate to $103.76 a barrel in today's money.

The latest surge in oil prices is taking place as investors seek refuge in commodities to offset a slowing economy and declines in the dollar, as well as to hedge against inflation.

The dollar fell to its lowest level in three years against the yen on Monday. It also dropped to a record $1.5274 in early New York trading against the euro following steep declines last week.

Today's record oil prices are markedly different from the energy crises of the 1970s and 1980s, which were brought about by sudden interruptions in oil supplies.

Since the year 2000, oil prices have more than quadrupled as strong growth in demand from the United States and Asia outstripped the ability of oil producers to increase their output.

Other energy futures also rallied on Monday. Heating oil futures jumped 6.06 cents to $2.8675 a gallon, while gasoline futures rose 5.65 cents to $2.7264 a gallon. Natural gas gained 20 cents to $9.566 per thousand cubic feet.

In London, Brent crude futures rose $2.07 to $102.17 a barrel on the ICE Futures exchange.

The OPEC oil cartel meets on Wednesday and is expected to leave its production levels unchanged. The oil producing group had suggested last month that it might curb production soon to make up for a seasonal decline in oil demand.

But with oil prices at their current levels, analysts said members of the Organization of the Petroleum Exporting Countries will find it politically difficult to curb their output at this time.

Title: Re: Meltdown
Post by: BachQ on March 05, 2008, 08:23:05 AM

Quote from: Dm on March 02, 2008, 08:50:32 PM
Meanwhile, GWB would rather spend $800 billion on IRAQ than $80 million on biofuel or solar research. How far will society need to descend into financial turmoil before this becomes a priority?

I stand corrected. Iraq costs the US $2 TRILLION, not $800 billion ........ I apologize for the error .........

March 4, 2008
Op-Ed Columnist
New York Times
The $2 Trillion Nightmare
By BOB HERBERT
***

The war in Iraq will ultimately cost U.S. taxpayers not hundreds of billions of dollars, but an astonishing $2 trillion, and perhaps more. There has been very little in the way of public conversation, even in the presidential campaigns, about the consequences of these costs, which are like a cancer inside the American economy.

On Thursday, the Joint Economic Committee, chaired by Senator Chuck Schumer, conducted a public examination of the costs of the war. The witnesses included the Nobel Prize-winning economist, Joseph Stiglitz (who believes the overall costs of the war — not just the cost to taxpayers — will reach $3 trillion), and Robert Hormats, vice chairman of Goldman Sachs International.

***

Title: Re: Meltdown
Post by: Lethevich on March 05, 2008, 08:25:44 AM

Quote from: Dm on March 05, 2008, 08:23:05 AM
The witnesses included the Nobel Prize-winning economist, Joseph Stiglitz (who believes the overall costs of the war — not just the cost to taxpayers — will reach $3 trillion), and Robert Hormats, vice chairman of Goldman Sachs International.

Damn. I am annoyed enough at the UK government for wasting money that is needed in this country on their Iraqi adventure, I feel sorry for US citizens who are in it far more deeply.

Edit: bad I am at grammar.

Title: Re: Meltdown
Post by: Harry on March 05, 2008, 08:53:29 AM

A liter of petrol cost 1,55 euro's, in Holland, and considering that 80 liters go in my car, that's a awful lot of money.....

Title: Re: Meltdown
Post by: paulb on March 05, 2008, 12:01:39 PM

Quote from: Dm on March 05, 2008, 08:23:05 AM
I stand corrected. Iraq costs the US $2 TRILLION, not $800 billion ........ I apologize for the error .........

March 4, 2008
Op-Ed Columnist
New York Times
The $2 Trillion Nightmare
By BOB HERBERT
***

The war in Iraq will ultimately cost U.S. taxpayers not hundreds of billions of dollars, but an astonishing $2 trillion, and perhaps more. There has been very little in the way of public conversation, even in the presidential campaigns, about the consequences of these costs, which are like a cancer inside the American economy.

On Thursday, the Joint Economic Committee, chaired by Senator Chuck Schumer, conducted a public examination of the costs of the war. The witnesses included the Nobel Prize-winning economist, Joseph Stiglitz (who believes the overall costs of the war — not just the cost to taxpayers — will reach $3 trillion), and Robert Hormats, vice chairman of Goldman Sachs International.

***

Ck out my post on March 1, page 13 of the Hillary/Obama/OR would you rather take a hot poker?" topic.

Qote : "3 Trillion ++ all said N done with the Iraq war"

I do not need any economist to confirm what I figured out myself.
Thou it is good to geta second opinion :)

I think in like 30 or 40 yrs, the 20 something generation is going to storm the pentagon.
I hope i am still around, I'll be passing out cool drinks for the kids.
I wish we could have Joshua resurrect with his bugel horn and everyone shout at once and watch the walls come crumbling down.

Title: Re: Meltdown
Post by: paulb on March 05, 2008, 12:13:01 PM

Quote from: Dm on March 02, 2008, 03:44:12 AM
D-Day will come when consumers' expectations (consumer confidence) catch up with the reality of dwindling, finite oil supply ....... and the inevitable rampant inflation for all goods and services which are directly or indirectly reliant upon petroleum (i.e., just about everything). What's really sad is that, as the Chinese are attempting to emulate the Western standard of living by manufacturing zillions of cars and building zillions of roads and highways, they are building a doomed petroleum-based infrastructure that will be rendered obsolete in a matter of a few years. In this sense, China is really clueless, and China will be hit the hardest. But such is the potency of this narcotic which we call petroleum: it creates illusions of longterm structural soundness, but, in reality, it is a short-term opiate which turns everyone and everything it touches into an oil addict -- we are all a bunch of shortsighted oil junkies .......

this is a very good post.
I think you have hit on a few notes, a few chords :) that will shape the political landscape in the comming decade.
China and her oil needs.
there my friend we have a senario.
btw Saudi Arabia is not saying how much oil they have.
No one knows for sure if there mega fields are close to peak or not.
Mexico has begun the slow down hill slide on her fields.
The oil sands production really pollute the ozone, but no one is crying foul play. Oil money talks big.

Title: Re: Meltdown
Post by: head-case on March 05, 2008, 12:16:46 PM

Quote from: Sean on March 01, 2008, 09:50:20 PM
trillions will disappear from stocks because all the big companies depend on petroleum.

This quote alone shows that you are a half-wit. When stocks lose their value nothing "disappears." It just means that person A sold it to person B for a certain amount of money but person B can't convince person C to buy it for the same amount of money. The money that person B invested in the stock didn't disappear, person A has it and person C is happy to get the stock for a bargain price.

Unfortunately your poorly concealed glee at the supposed collapse of civilization is unjustified.

Title: Re: Meltdown
Post by: m_gigena on March 05, 2008, 01:33:39 PM

Quote from: head-case on March 05, 2008, 12:16:46 PM
This quote alone shows that you are a half-wit. When stocks lose their value nothing "disappears." It just means that person A sold it to person B for a certain amount of money but person B can't convince person C to buy it for the same amount of money. The money that person B invested in the stock didn't disappear, person A has it and person C is happy to get the stock for a bargain price.

Unfortunately your poorly concealed glee at the supposed collapse of civilization is unjustified.

You are wrong here. A has the money, C has nothing more than the chance to get a bargain. The stocks B purchased are now a part of his portfolio, so they are a fraction of B's assets. If the prices plummet B is losing wealth. Now, suppose B asks and gets a loan or a mortgage with the stocks as warrant...

Title: Re: Meltdown
Post by: head-case on March 05, 2008, 02:16:42 PM

Quote from: Manuel on March 05, 2008, 01:33:39 PM
You are wrong here. A has the money, C has nothing more than the chance to get a bargain. The stocks B purchased are now a part of his portfolio, so they are a fraction of B's assets. If the prices plummet B is losing wealth. Now, suppose B asks and gets a loan or a mortgage with the stocks as warrant...

All of the wealth that B lost was gained by A, who has more cash than he started with after buying and selling the appreciating asset. The result is to transfer wealth from the dumb/unlucky to the smart/lucky.

Title: Re: Meltdown
Post by: m_gigena on March 05, 2008, 02:38:45 PM

Quote from: head-case on March 05, 2008, 02:16:42 PM
All of the wealth that B lost was gained by A, who has more cash than he started with after buying and selling the asset. The result is to transfer wealth from the dumb/unlucky to the smart/lucky.

No, you don't get it. After selling stocks to B, A doesn't have any link at all with B's financial results.

This is how it goes (a silly example):

I) A purchases stocks from Z for a total of $60, and
II) sells them to B for $100.
III) The market cracks, and the stocks are worth $40.

A has $100 bucks, cash. (He won $40)
B has a stock portfolio worth $40 (His loss is $60)

Practice this at home with any numbers you want. There's no real link between the profit/loss they make. The picture doesn't go as simple as "All of the wealth that B lost was gained by A".
Add the possibility of leverage to the scenario and it might get awful.

Title: Re: Meltdown
Post by: head-case on March 05, 2008, 02:46:31 PM

Quote from: Manuel on March 05, 2008, 02:38:45 PM
No, you don't get it. After selling stocks to B, A doesn't have any link at all with B's financial results.

This is how it goes (a silly example):

I) A purchases stocks from Z for a total of $60, and
II) sells them to B for $100.
III) The market cracks, and the stocks are worth $40.

A has $100 bucks, cash. (He won $40)
B has a stock portfolio worth $40 (His loss is $60)

Z has $60, which he obtained by selling a portfolio which he can now buy back for $40 (his gain, $20).

The prosperity of an economy isn't related to how much there is sitting around in assets, it depends on economic activity, which is essentially how fast everyone is spending their money. Of course, bad market conditions can interfere hurt liquidity and hurt the economy.

Title: Re: Meltdown
Post by: m_gigena on March 05, 2008, 03:41:48 PM

Quote from: head-case on March 05, 2008, 02:46:31 PM
Z has $60, which he obtained by selling a portfolio which he can now buy back for $40 (his gain, $20).

LOL. Z has no gain. You see... 40+20 = 60

Quote from: head-case on March 05, 2008, 02:46:31 PM
The prosperity of an economy isn't related to how much there is sitting around in assets,

Yes, it is very related to that.

Quote from: head-case on March 05, 2008, 02:46:31 PM
economic activity, which is essentially how fast everyone is spending their money.

No, that's just circulation speed.

Quote
Of course, bad market conditions can interfere hurt liquidity and hurt the economy.

It's not "can interfere", it's "WILL INTERFERE". Bad market conditions, sometimes, tend to turn off investors.

Title: Re: Meltdown
Post by: head-case on March 05, 2008, 04:15:31 PM

Quote from: Manuel on March 05, 2008, 03:41:48 PM
LOL. Z has no gain. You see... 40+20 = 60

Z sells IBM share to A for $60.
IBM stock appreciates, A sells to B for $100
IBM depreciates (crashes, if you prefer), share is worth $40.
Z buys IBM share from B for $40.

At the beginning of the scenario Z has one share of IBM. At the end of the scenario (assuming Z has decided to reinvest) Z has one share of IBM plus $20 cash, A has $40 profit due to the transaction, B has $60 loss due to the transaction. As long as IBM is still selling computers and paying dividends gains and losses cancel.

Title: Re: Meltdown
Post by: m_gigena on March 05, 2008, 04:28:14 PM

Quote from: head-case on March 05, 2008, 04:15:31 PM
Z sells IBM share to A for $60.
IBM stock appreciates, A sells to B for $100
IBM depreciates (crashes, if you prefer), share is worth $40.
Z buys IBM share from B for $40.

At the beginning of the scenario Z has one share of IBM. At the end of the scenario (assuming Z has decided to reinvest) Z has one share of IBM plus $20 cash, A has $40 profit due to the transaction, B has $60 loss due to the transaction. As long as IBM is still selling computers and paying dividends gains and losses cancel.

First of all, you are changing your parameters, you said C would purchase from B.

Second, you are still not getting it right. It doesn't matter if Z has: "ONE SHARE + $20 Cash", for what is important is the value of that share. At one instant, it makes no difference if you have either:
$60 in cash or
a $40 share, plus $20 cash.

Results:
Z has the same wealth
A won $40
B lost $60 =======> There's a loss of $20 somewhere in this Economy.

Quote from: head-case on March 05, 2008, 04:15:31 PM
As long as IBM is still selling computers and paying dividends gains and losses cancel.

The dividend flux is always priced in the stock. And if there's a general loss of $20 in this economy, are you so sure IBM will be able to keep selling computers at the same pace?

Title: Re: Meltdown
Post by: Florestan on March 05, 2008, 10:54:25 PM

Quote from: Manuel on March 05, 2008, 04:28:14 PM
Results:
Z has the same wealth
A won $40
B lost $60 =======> There's a loss of $20 somewhere in this Economy.

No, there is none. Look at it this way:

Time zero: Z has one IBM share, A has 60$, B has 100$
Time zero+1 (Z sells to A) : Z has 60$, A has one IBM share, B has 100$
Time zero+2 (IBM stock appreciates, A sells to B): Z has 60$, A has 100$, B has one IBM share
Time zero+3 (IBM stock depreciates, B sells to Z): Z has one IBM share + 20$, A has 100$, B has 40$

At each time, the total sum of the wealth is 160$ + one IBM share. Nothing is lost, as it should have been obvious from the very beginning. Money don't disappear, they just pass from one pocket to another. Just like mass or energy, money obey a law of conservation. :)

Title: Re: Meltdown
Post by: Sean on March 06, 2008, 01:26:12 AM

The two trillion dollars will never be paid- it's not real money and is only borrowed from the future stock market. By the time it has to be paid all the world's major financial institutions will have collapsed with the end of petroleum- that's the argument and the US policy.

Title: Re: Meltdown
Post by: BachQ on March 06, 2008, 03:45:15 AM

fr: Reuters

Oil hits record near $106 on dollar, OPEC, supply
Thu Mar 6, 2008 6:49am EST
By Ikuko Kao

(http://www.reuters.com/article/hotStocksNews/idUSSYD3274320080306)

LONDON (Reuters) - Oil hit a record high near $106 on Thursday as a weak dollar helped prices to extend the previous day's gains, which were prompted by a drop in U.S. oil inventories and OPEC's decision to keep output unchanged. U.S. light crude for April delivery struck a new record of $105.96 a barrel and was trading $1.05 higher at $105.57 by 6:29 a.m. EST.

"The crude squeeze continues. The sharp rise in crude was exacerbated by a weak U.S. dollar, OPEC's decision to stand still," Citigroup said in a research note. The dollar fell to a record low against the Swiss franc and hit a fresh trough against the euro on Thursday.

Title: Re: Meltdown
Post by: bwv 1080 on March 06, 2008, 05:38:16 AM

Quote from: Florestan on March 05, 2008, 10:54:25 PM
No, there is none. Look at it this way:

Time zero: Z has one IBM share, A has 60$, B has 100$
Time zero+1 (Z sells to A) : Z has 60$, A has one IBM share, B has 100$
Time zero+2 (IBM stock appreciates, A sells to B): Z has 60$, A has 100$, B has one IBM share
Time zero+3 (IBM stock depreciates, B sells to Z): Z has one IBM share + 20$, A has 100$, B has 40$

At each time, the total sum of the wealth is 160$ + one IBM share. Nothing is lost, as it should have been obvious from the very beginning. Money don't disappear, they just pass from one pocket to another. Just like mass or energy, money obey a law of conservation. :)

not quite. what you have demonstrated is that the simple trading example is a zero sum game (as all stock trading is relative to the return of the market). If IBM had say paid a $2 dividend at each point in time then it would be a positive sum game. On the other hand IBM could go bankrupt after Z bought it back.

money is created all the time by fractional reserve banking and destroyed by various sorts of business failures

Title: Re: Meltdown
Post by: head-case on March 06, 2008, 08:04:37 AM

Quote from: bwv 1080 on March 06, 2008, 05:38:16 AM
not quite. what you have demonstrated is that the simple trading example is a zero sum game (as all stock trading is relative to the return of the market). If IBM had say paid a $2 dividend at each point in time then it would be a positive sum game. On the other hand IBM could go bankrupt after Z bought it back.

money is created all the time by fractional reserve banking and destroyed by various sorts of business failures

Of course, if IBM price fluctuates due to speculation while its business is operating fine, there is no problem. If IBM tanks because their sales are off then there is a problem, but the falling stock price is the symptom, not the cause. The problems of a falling share price are indirect, such as IBM can't raise cash as easily by issuing more stock (the private sector version of printing more money).

Title: Re: Meltdown
Post by: johnQpublic on March 06, 2008, 08:20:11 AM

Two Days Ago: Price of oil reaches all-time high

Crap

Yesterday: Price of oil reaches all-time high

Double crap

Today: Price of oil reaches all-time high

Triple Crap!!!

Title: Re: Meltdown
Post by: BachQ on March 06, 2008, 08:27:28 AM

(http://graphics8.nytimes.com/images/2008/03/05/business/06solar_600.jpg)

NEW YORK TIMES
March 6, 2008
The Energy Challenge
Turning Glare Into Watts
By MATTHEW L. WALD
BOULDER CITY, Nev. — At first, as he adjusted pumps and checked temperatures, Aaron Boucher looked like any technician in the control room of an electrical plant. Then he rushed to the window and scanned the sky, to check his fuel supply.

Mr. Boucher was battling clouds, timing the operations of his power plant to get the most out of patchy sunshine. It is a skill that may soon be in greater demand, for the world appears to be on the verge of a boom in a little-known but promising type of solar power.

It is not the kind that features shiny panels bolted to the roofs of houses. This type involves covering acres of desert with mirrors that focus intense sunlight on a fluid, heating it enough to make steam. The steam turns a turbine and generates electricity.

The technology is not new, but it is suddenly in high demand. As prices rise for fossil fuels and worries grow about their contribution to global warming, solar thermal plants are being viewed as a renewable power source with huge potential.

After a decade of no activity, two prototype solar thermal plants were recently opened in the United States, with a capacity that could power several big hotels, neon included, on the Las Vegas Strip, about 20 miles north of here. Another 10 power plants are in advanced planning in California, Arizona and Nevada.

On sunny afternoons, those 10 plants would produce as much electricity as three nuclear reactors, but they can be built in as little as two years, compared with a decade or longer for a nuclear plant. Some of the new plants will feature systems that allow them to store heat and generate electricity for hours after sunset.

Aside from the ones in the United States, eight plants are under construction in Spain, Algeria and Morocco. Another nine projects are in various stages of planning in those countries as well as Israel, Mexico, China, South Africa and Egypt, according to a count kept by Frederick H. Morse, formerly in charge of solar energy at the Energy Department and now a consultant.

Mr. Morse and others say that solar thermal plants could meet most of the galloping growth in power demand in Phoenix, Las Vegas and the rest of the southwestern United States. In fact, experts say enough sunshine hits the deserts of the Southwest that such plants could theoretically power the entire United States. But that is a far-off dream, since it would require big new transmission cables.

The workability of solar thermal power was established in the 1980s, when developers in California built a series of plants in the Mojave Desert, eventually reaching 354 megawatts of capacity. A megawatt is enough electricity to run 1,000 room air-conditioners at once.

The California plants grew more sophisticated and costs shrank as the project progressed. But then the price of a competing fuel, natural gas, collapsed in the 1990s and building new solar plants became uneconomic.

Today, natural gas prices are much higher, and political opposition is rising to construction of new coal-burning power plants. Many states, including California, are imposing mandates for renewable energy. All of that is reviving interest in solar thermal plants.

The power they produce is still relatively expensive. Industry experts say the plant here produces power at a cost per kilowatt- hour of 15 to 20 cents. With a little more experience and some economies of scale, that could fall to about 10 cents, according to a recent report by Emerging Energy Research, a consulting firm in Cambridge, Mass. Newly built coal-fired plants are expected to produce power at about 7 cents per kilowatt-hour or more if carbon is taxed.

The solar plants receive a federal tax subsidy, like other types of renewable energy, which makes the economics work for builders but also feeds skepticism about the technology's long-term potential. "Unless there's a subsidy involved, it doesn't seem like a very attractive technology," said Revis James, a renewables expert at the Electric Power Research Institute, a utility industry consortium.

Still, solar plants do tend to produce peak power during the hottest part of the day, when demand is highest and electricity is costly, so at certain times they are already competitive with plants using natural gas. And they have an advantage over the other widely available form of renewable power, wind turbines: they are more predictable.

With California utilities struggling to meet a state quota of 20 percent renewable power by 2010, the state has grown interested in solar plants. Pacific Gas and Electric has committed to building several plants and is expected to make announcements about new solar plants soon.

In Phoenix on Feb. 21, the Arizona Public Service unit of Pinnacle West announced plans for a large plant to be built by a Spanish company, Abengoa, and finished in 2011. That one will store heat so that it can continue to produce power for up to six hours after sunset.

Donald E. Brandt, the chief executive of Pinnacle West, said the decision to build the new solar plant was as important as his company's decision in 1973 to build the Palo Verde nuclear plant, the largest and most modern in the United States.

"The key is, the solar technology has advanced," Mr. Brandt said. At 280 megawatts, "it's a critical size; it's a real power plant; it's meaningful; it's beyond the demonstration stage."

Companies that build the plants have been working on improving the technology, raising efficiency and lowering costs. A battle among competing approaches is expected over the next few years.

The plant here, Nevada Solar One, built by a Spanish company, Acciona, is of a proven design. It uses a mirror in the shape of a parabola to focus light onto a black pipe with a heat-transfer fluid inside. The fluid is used to boil water into steam, which turns a generator that can produce 64 megawatts.

That is small compared with a plant running on coal or natural gas, but far bigger than a typical installation involving solar photovoltaic panels, the type of solar power most people are familiar with. That technology, while good for some uses, is far more expensive than solar thermal power.

Suppliers of thermal systems are gearing up for a boom. In Las Vegas, a company called Ausra is building a factory to make mirrors for one type of solar plant; it will double the world's manufacturing capacity. A German company, Schott, is building a factory in Albuquerque that will make heat-collecting tubes.

The newest solar-thermal technology involves building a "power tower," a tall structure flanked by thousands of mirrors, each of which pivots to focus light on the tower, heating fluid. That design can work even in places with weaker sunlight than a desert.

One of the big advantages of these plants is that they can be built with the capacity to store heat in what amounts to a giant Thermos. Experts say that will smooth production and make it easier to integrate the plants into the electrical grid.

If large numbers of plants are built, they will eventually pose some problems, even in the desert. They could take up immense amounts of land and damage the environment. Already, building a plant in California requires hiring a licensed tortoise wrangler to capture and relocate endangered desert tortoises.

"The one thing that's eventually going to raise its head is desert biodiversity, and the land area itself," said Terrence J. Collins, an environmental expert and professor at Carnegie Mellon University.

Building the plants in deserts poses another obvious problem: deserts are not exactly teeming with power lines. "Whatever you do, you've got to have the wiring," Mr. Collins said.

Despite the difficulties, solar thermal plants have an other-worldly beauty as they run.

At Nevada Solar One the other day, Mr. Boucher, 30, ran the computerized control room. Dressed in a T-shirt, sneakers and a Boston Red Sox cap worn backwards, he looked a bit like a teenage gamer as he used a computer mouse to manipulate the plant.

He was trying to produce as much electricity as possible while saving heat to tide the plant over as clouds cast episodic shadows on the solar array. "I've been fighting it all day," he said.

Outside, row after row of U-shaped mirrors, covering nearly a square mile, stretched across the desert. In the center of each U, where the force of the sun was magnified 70 times, ran a pipe painted black, and inside it flowed oil that warmed to hundreds of degrees as it collected the heat needed to run a generator.

The buzz in the control room, as Mr. Boucher worked, contrasted with the sanguine scene beyond the windows. Imperceptibly, in the dusty wind of the high desert, 182,000 mirrors moved from east to west, tracking the sun across the sky.

Title: Re: Meltdown
Post by: bwv 1080 on March 06, 2008, 08:46:02 AM

Quote from: head-case on March 06, 2008, 08:04:37 AM
Of course, if IBM price fluctuates due to speculation while its business is operating fine, there is no problem. If IBM tanks because their sales are off then there is a problem, but the falling stock price is the symptom, not the cause. The problems of a falling share price are indirect, such as IBM can't raise cash as easily by issuing more stock (the private sector version of printing more money).

But that begs the question, what you are calling speculation is simply the market trying to estimate the present value of IBM's earnings, incorporating known information about the company - its sales, management quality etc. Whatever the stock price, diluting current investors by issuing new shares will lower the price.

Title: Re: Meltdown
Post by: bwv 1080 on March 06, 2008, 10:45:48 AM

You can download the book here:
http://www.oilendgame.com/ReadTheBook.html

I just ordered a hard copy

...
In the book's powerful summary conclusion, Dr. Amory Lovins, president of the Rocky
Mountain Institute and the report's principal author, argues persuasively that by 2035 we
can be entirely independent of imported oil and that "it will cost less to displace all of the
oil that the United States now uses than it will cost to buy that oil." Specifically, he
continues, "by 2025, the annual economic benefit of displacing all of our current oil
imports would be $130 billion gross (or $70 billion net of the displacement's cost). To
achieve this does not require a revolution, but merely consolidating and accelerating trends
already in place."
But 2035 is not, of course, tomorrow. In order to improve our immediate energy security,
we must diversify our sources of hydrocarbons away from the Middle East. Even a cursory
survey of alternative sources of natural gas leads one to consider Russia.
First, a few facts. Today, measured in barrels of oil equivalent, Russia is the largest
producer of energy in the world. It also has more natural gas than any other country in the
world -- roughly 1,700 trillion cubic feet (proven recoverable). This gas is heavily
concentrated on the North coast of Russia on the Yamal peninsula. And it is stranded. That
is, there are no pipelines to get it to the market. These circumstances, however, make it an
ideal site to anchor several so-called trains to produce liquefied natural gas (LNG) for ship
transport to North America.
Today, independent companies are producing gas in the Yamal peninsula for less than $1
per thousand cubic feet (mcf) and there is solid evidence that it could be liquefied, shipped
and delivered to North America for at least one-third less than the current price of over
$6/mcf.
Some will say -- in the wake of the Yukos affair -- that the risk of politically motivated
interference in Russia is too great for investments of the scale required. It takes little
thought, however, to distinguish between an isolated confrontation driven by personal
differences -- as the Yukos affair is -- and one driven by the huge Russian strategic interest
in penetrating the U.S. gas market.
In sum, it is entirely in American and Russian interest to encourage and facilitate a
growing trade in LNG. Especially when one considers the alternative of remaining reliant
on oil and gas from the Persian Gulf.
Among the serious problems facing the new administration surely the long-term threat to
our economy of $45/bbl oil and $6/mcf natural gas must be near the top. This threat is
accentuated by the threat of disruption of deliveries from the Persian Gulf. It is becoming
clear, however, that the means to achieving near-term energy security and ultimate
independence from foreign oil are at hand. Courage and leadership are all that it takes to
get us there.
Mr. McFarlane served as President Reagan's national security adviser and now chairs
an energy and environmental development firm in Washington.

Title: Re: Meltdown
Post by: m_gigena on March 06, 2008, 01:34:01 PM

Quote from: Florestan on March 05, 2008, 10:54:25 PM
No, there is none. Look at it this way:

Time zero: Z has one IBM share, A has 60$, B has 100$
Time zero+1 (Z sells to A) : Z has 60$, A has one IBM share, B has 100$
Time zero+2 (IBM stock appreciates, A sells to B): Z has 60$, A has 100$, B has one IBM share
Time zero+3 (IBM stock depreciates, B sells to Z): Z has one IBM share + 20$, A has 100$, B has 40$

At each time, the total sum of the wealth is 160$ + one IBM share. Nothing is lost, as it should have been obvious from the very beginning. Money don't disappear, they just pass from one pocket to another. Just like mass or energy, money obey a law of conservation. :)

Just like Head-case, you don't get it. It's not just about money (cash, coins, bank deposits), I'm speaking about VALUE.

Time zero: Z has one IBM share (WHICH IS WORTH $60), A has 60$, B has 100$
Time zero+1 (Z sells to A) : Z has 60$, A has one IBM share, B has 100$ ==> JUST A TRANSFERENCE

Time zero+2a (IBM stock appreciates): Z has 60$, A has one IBM share WHICH NOW IS WORTH $100, for whatever price adjustment, B has 100$

Time zero+2b (A sells to B): Z has 60$, A has 100$, B has one IBM share WORTH 100

Time zero+3a (IBM stock depreciates): Z has 60$, A has 100$, B has one IBM share NOW WORTH $40

Time zero+3b (B sells to Z): Z has one IBM share WORTH $40 + 20$*, A has 100$, B has 40$

*Z's net worth is always $60, it doesn't matter if he now has $20 and the same share, because it's the same as before. Wanna know why? Because the first one had a value of $60, and this new one is accepted at the market at $40.

Quote
not quite. what you have demonstrated is that the simple trading example is a zero sum game (as all stock trading is relative to the return of the market).

Transactions, yes. But within them value fluctuates, and so does people wealth and, when aggregated, the net worth of the whole Economic framework. This is what Florestan and Head-case don't seem to understand.

Quote
money is created all the time by fractional reserve banking and destroyed by various sorts of business failures

Title: Re: Meltdown
Post by: head-case on March 06, 2008, 02:14:38 PM

I understood you the first, second and third time. Your definition of value is simply irrelevant if the item in question has any intrinsic worth. If that share of IBM is still paying its dividend it is no better or worse than it was before the price fluctuation. After black Monday, when the US stock market lost one third of its value in one day, nothing happened. The people who sold the day before were happy, the people who bought the day before were unhappy, and the economy went forward exactly as before (after the federal reserve took some measures to make sure that liquidity was maintained and that the financial markets didn't seize up).

Quote from: Manuel on March 06, 2008, 01:34:01 PM
Just like Head-case, you don't get it. It's not just about money (cash, coins, bank deposits), I'm speaking about VALUE.

Time zero: Z has one IBM share (WHICH IS WORTH $60), A has 60$, B has 100$
Time zero+1 (Z sells to A) : Z has 60$, A has one IBM share, B has 100$ ==> JUST A TRANSFERENCE

Time zero+2a (IBM stock appreciates): Z has 60$, A has one IBM share WHICH NOW IS WORTH $100, for whatever price adjustment, B has 100$

Time zero+2b (A sells to B): Z has 60$, A has 100$, B has one IBM share WORTH 100

Time zero+3a (IBM stock depreciates): Z has 60$, A has 100$, B has one IBM share NOW WORTH $40

Time zero+3b (B sells to Z): Z has one IBM share WORTH $40 + 20$*, A has 100$, B has 40$

*Z's net worth is always $60, it doesn't matter if he now has $20 and the same share, because it's the same as before. Wanna know why? Because the first one had a value of $60, and this new one is accepted at the market at $40.

Transactions, yes. But within them value fluctuates, and so does people wealth and, when aggregated, the net worth of the whole Economic framework. This is what Florestan and Head-case don't seem to understand.

Title: Re: Meltdown
Post by: orbital on March 06, 2008, 03:20:10 PM

Stock market is not a zero-sum game (precisely because there is the added value of dividends and there is an entity behind the stock). However, also note that in the long run there are always a disproportional number of investors who lose money to those who make money. Thus, the added wealth (by dividends or secondary offerings or whatever) is distributed among less and less people.

Just imagine a pool of 16 investors with $100 each who all have a 50% chance of making or losing $50 on every trade. At the end of 4 trades, there will be only 5 investors who will have made money, 5 investors who are square, and 6 that have lost their initial investment.

A big crash on the stock market may not have a big effect on wealth lost or made in aggregate, but more number of people will have lost their money compared to those who made money, and this creates a hurdle on economic activity if sustained losses in market continue.

Title: Re: Meltdown
Post by: bwv 1080 on March 06, 2008, 04:33:42 PM

Quote from: orbital on March 06, 2008, 03:20:10 PM
Stock market is not a zero-sum game (precisely because there is the added value of dividends and there is an entity behind the stock).

My point was that relative to the return of the broad market, trading individual stocks is a zero-sum game because the average dollar gets the market return. Actually when you factor in costs, trading stocks is a negative sum game

QuoteHowever, also note that in the long run there are always a disproportional number of investors who lose money to those who make money. Thus, the added wealth (by dividends or secondary offerings or whatever) is distributed among less and less people.

Not if there is no persistance in winners. Wealth would revert to the mean, or the market return.

Quote
A big crash on the stock market may not have a big effect on wealth lost or made in aggregate, but more number of people will have lost their money compared to those who made money, and this creates a hurdle on economic activity if sustained losses in market continue.

Again it begs the question on why the market crashed - whether or not it reflects some change in underlying economic condititons

Title: Re: Meltdown
Post by: paulb on March 06, 2008, 05:56:51 PM

Quote from: orbital on March 06, 2008, 03:20:10 PM

A big crash on the stock market

alot of people have lost money, = their accts are less after the Sept crash.
and the losses continue.
basically whats going on now is athe prelude of things to come.
IOW the market is screwed.

Iraq war expense
deficits in trade
oil up
unemployment up
real estate market crash
natural disaster expenses

You can not find anything, not one, nothing, zero positive concerning the US economy/which ultimately influences how the market goes.

A crash is inevitable.

People are losing money in the stock exchange and this triggers more pull back.

Title: Re: Meltdown
Post by: BachQ on March 07, 2008, 04:25:58 AM

Quote from: paulb on March 06, 2008, 05:56:51 PM
Iraq war expense
deficits in trade
oil up
unemployment up
real estate market crash
natural disaster expenses

You mention the real estate bubble, but you fail to mention the credit bubble ......... As such, we're currently faced with twin bubbles (housing bubble + credit bubble) ....... And you know the old saying: "a double bubble means double trouble" .......... :D

Title: Re: Meltdown
Post by: bwv 1080 on March 07, 2008, 07:05:11 AM

How about the doom bubble?

Title: Re: Meltdown
Post by: BachQ on March 07, 2008, 12:35:52 PM

(http://i.cdn.turner.com/cnn/2008/images/03/07/t1home.bush.fri.afp.gi.jpg)

"it's clear our economy has slowed"

$100 oil hurts, just like a recession
Economists, once so dismissive of pricey crude's economic impact, say it's going to hurt.
By Steve Hargreaves, CNNMoney.com staff writer
Last Updated: March 7, 2008: 3:38 PM EST
NEW YORK (CNNMoney.com) -- Five months ago many economists said high oil prices wouldn't hurt the economy - now they're choking on their words.

(http://money.cnn.com/2008/03/07/news/economy/oil_recession/index.htm)

Back in October, when oil prices were near $90 a barrel and the economy was still humming along economists said high oil prices shouldn't cut into economic growth. The economy used oil more efficiently than it did in the 1970s, and spending on gas was just a small percent of people's budget, the experts said.

Fast forward to March and you've got a sputtering economy, and economists saying $105 oil deserves a big part of the blame.

Even the White House is beginning to sound more pessimistic, predicting Friday that the the economy could contract.

"You have a very significant restraint on consumer spending," said Chris Lafakis, an associate economist at Moody's Economy.com, an economic consultancy. "It acts as a tax would."

Lafakis said consumers spend an extra $5 billion each year for each $1 increase in the price of crude.

When economists were predicting that oil wouldn't negatively impact the economy, they based their assertion on a price of about $80 a barrel.

But if oil stays at $100 a barrel for the next 12 months, consumers will have shelled out an extra $100 billion on oil by next year. That's an extra $100 billion not being spent at the mall, mega-mart or multiplex.

"The entire stimulus package could be drained by higher energy costs," Lafakis said, referring to the $120 billion lawmakers will refund to taxpayers in an effort to keep the economy out of recession. "That has the potential to turn a mild recession into something more dark."

Worse to come

Of course, high oil prices are not the only thing weighing on consumer spending, which accounts for about two-thirds of all U.S. economic activity. Declining home values mean people can't access cash through a home equity loan or profit from higher sale prices. In addition, the economy is shedding jobs, and unemployed people tend to spend less money.

"On its own, $100 oil wouldn't pull the economy into recession," said Beth Ann Bovino, a senior economist at Standard and Poor's. "But given the other factors, it's just another shoe to drop."

Both Bovino and Lafakis have similar predictions for the economy - a mild recession lasting the first and second quarters of 2008, then a modest recovery beginning in the second half of this year.

However, if oil goes to $115 or $120 a barrel - certainly not an outlandish thought given that crude prices have nearly doubled over the last 12 months - then those bets may be off.

Bovino said $115 oil, along with worsening conditions in the credit and foreign investment market, could be enough to keep the economy in recession through the first part of 2009.

"It would sure give the pessimistic forecast more credibility," she said.

Title: Re: Meltdown
Post by: paulb on March 07, 2008, 01:10:21 PM

150/barrel
depends on what al qaeda wants to do. and the chavez/ahmahdinejad collilition.
that would put gas at near $5/gal
its inevitable, a matter of when.
Bush looks very worried.
He will go down as the president who took up great torch of spending and ran like few before him. 2 wars at 40+ billion/month.
Obama will take that torch and outrun Bush like a hare outruns a tortoise, utilizing the old theory of spending ones way out a recession.

the $ will fall further in true value.
if OPEC begins to ask for payment in Euros or in Gold, the $ has *had it*.

Title: Re: Meltdown
Post by: BachQ on March 07, 2008, 02:16:39 PM

Quote from: paulb on March 07, 2008, 01:10:21 PM
Bush looks very worried.
He will go down as the president who took up great torch of spending and ran like few before him. 2 wars at 40+ billion/month.

Bush will go down in history as the "Bubble President"

(http://drinkingliberally.org/blogs/oakland/archives/bubbles%5B1%5D.jpg)

Internet Bubble - Burst
Housing Bubble - Burst
Credit Bubble - Burst
Dollar Bubble - In process of bursting
Stock market Bubble - To be determined
Import Bubble - In process
Deficit Bubble - To be determined
War (Iraq) Bubble - To be determined
China Bubble - To be determined

(http://farm3.static.flickr.com/2269/2055551167_03eaedfdb5_o.jpg)

Title: Re: Meltdown
Post by: paulb on March 07, 2008, 02:29:41 PM

I learned the other day Georgie was a *poor little rich boy*, silver spoon, , C student, escaped the Viet war, given the texas governorship based on old texas name, etc etc.
So spending 40 billiona month on a war is just what a early baby boomer needs to satisfy his ego.
He is cut off from the american's public true wish, which is to get out both wars and stay out wars.
I forsee some sort of protest against washingtons spending habits.

I was never for spending billions on the gulf coast for Katrina disaster.

Each state must be held accountable for its own problems.

Washington has over stepped its boundaries.

But as the american public is unaware of these issues, washington is free to do as she pleases with no conflicts.

Title: Re: Meltdown
Post by: BachQ on March 10, 2008, 10:02:56 AM

Oil sets record, gas closing in
Prices at the gas pump come close to last spring's record high as oil soars past $108 a barrel to hit another record high.
Last Updated: March 10, 2008: 2:13 PM EDT

(http://money.cnn.com/2008/03/10/markets/bc.oilprices.ap/index.htm?cnn=yes)

NEW YORK (AP) -- Oil prices surged Monday to a new inflation-adjusted record and their fifth new high in the last six sessions on an upbeat report on wholesale inventories. Gasoline prices, meanwhile, were poised to set a new record at the pump, having surged to within half a cent of their record high of $3.227 a gallon. Light, sweet crude for April delivery rose $3.02 to $108.17 on the New York Mercantile Exchange after earlier setting a new trading record of $108.17. The national average price of a gallon of gas rose 0.7 cent overnight to $3.222 a gallon, 69 cents higher than one year ago, according to AAA and the Oil Price Information Service. Last May, prices peaked at $3.227 as surging demand and a string of refinery outages raised concerns about supplies. That record will likely be left in the dust soon as gas prices accelerate toward levels that could approach $4 a gallon, though most analysts believe prices will peak below that psychologically significant mark. In its last forecast, released last month, the Energy Department said prices will likely peak around $3.40 a gallon this spring; a new forecast is due Tuesday. Retail gas prices are following crude oil, jumped 24% in a month on its way to setting new inflation-adjusted records four times last week. On Monday, crude prices surged to yet another record after the Commerce Department said wholesale sales jumped by 2.7% in January, their biggest increase in four years, according to Dow Jones Newswires.

U.S. gasoline price should hit record Tuesday: AAA
By Matthew Robinson
Reuters

NEW YORK (Reuters) - U.S. average gasoline prices should hit an all-time peak on Tuesday and may break $4 a gallon in some areas this summer, battering consumers already reeling from high energy costs, according to travel and auto group AAA.

Monday's surge in crude to near $108 a barrel should be enough to lift gasoline prices averaging $3.222 a gallon now above the current record $3.227, said Geoff Sundstrom, AAA fuel price analyst.

"I would anticipate we'd hit a new record price tomorrow," said Sundstrom. "It's primarily due to the crude price."

(http://www.reuters.com/article/domesticNews/idUSN1046134820080310)

Reuters

Gasoline prices hit new high, seen jumping more
Sun Mar 9, 2008 11:16pm GMT

(http://uk.reuters.com/article/wtMostRead/idUKN0940508020080309)

NEW YORK (Reuters) - U.S. average retail gasoline prices have reached a new high of almost $3.20 per gallon and will likely jump another 20 to 30 cents in the next month, worsening the pain of consumers struggling to make ends meet in an economic downturn.

Gasoline prices are rising sharply as refiners, who have kept prices down in order to compete for sales, become more willing to pass on their higher costs of crude oil, according to an industry analyst on Sunday.

The national average for self-serve regular unleaded gas was nearly $3.20 a gallon on March 7, up about 9.44 cents per gallon in the past two weeks, according to the nationwide Lundberg survey of about 7,000 gas stations. The price has risen 64 cents per gallon in the past 12 months.

"The price increase was entirely due to the higher costs of crude oil," said survey editor Trilby Lundberg.

Although the latest price represents a nominal all-time high, when adjusted for inflation it is a smidgen below the record of $3.18 per gallon reached on May 18, 2007, Lundberg said.

Lundberg said things will likely get worse, with prices at the pump rising 20 to 30 cents per gallon in the next month as refiners begin passing on to customers more of their higher costs for crude oil.

"Should prices indeed rise 20 to 30 cents, they would vastly exceed previous prices on an inflation-adjusted basis," Lundberg said.

Refiners since last spring have deliberately refrained from passing on their higher costs for crude oil, in order to compete for sales, she said.

"But refiner profit margins have become so slim that they will now raise prices to recover their lost margins," said Lundberg. Likewise, she said retailers will also be less willing to hold back from passing on their higher costs to drivers.

Moreover, prices will also rise because of the return to daylight savings time and the approach of warmer weather, Lundberg said.

"Spring demand growth will soak up the current surplus of U.S. gasoline and put more pressure on prices," Lundberg said.

At $3.58 a gallon, the San Francisco Bay Area had the highest latest average price for self-serve regular unleaded gas on March 7, while the lowest price was $2.95 in Cheyenne, Wyoming.

The average U.S. diesel price was $3.80 a gallon in the latest survey, up 22 cents a gallon from two weeks ago, and $1.02 higher than this time last year.

Title: Re: Meltdown
Post by: BachQ on March 10, 2008, 10:11:32 AM

Manufacturers' costs soar at record pace

By Sumeet Desai and Christina Fincher

LONDON (Reuters) - Manufacturers' costs are rising at the fastest rate since records began 22 years ago while factory gate inflation is holding at its highest level in more than 16 years, data showed on Monday.
(http://uk.reuters.com/article/businessNews/idUKL1012013520080310)

Title: Re: Meltdown
Post by: BachQ on March 11, 2008, 05:18:51 AM

Title: Re: Meltdown
Post by: The new erato on March 11, 2008, 02:28:14 PM

If you just now can manage to strengthen the dollar, we Norwegians can be even richer (= more CDs for me)! ;D

Title: Re: Meltdown
Post by: BachQ on March 12, 2008, 03:24:58 AM

"ENERGY OPTIONS with MATT SIMMONS"

http://www.youtube.com/v/GCGsIN5TWqA

Matt Simmons is the author of Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy

(http://ecx.images-amazon.com/images/I/514R5PVMYBL._SS500_.jpg)
Peak oil theory states that oil will have a beginning, middle, and an end of production, and at some point it will reach a level of maximum output. It is estimated that approximately half of all oil that will be recovered, has been recovered, and oil production may reach a peak in the near future, or perhaps already has. Then what?

Title: Re: Meltdown
Post by: BachQ on March 12, 2008, 01:10:50 PM

Title: Re: Meltdown
Post by: BachQ on March 13, 2008, 09:05:40 AM

Oil hits record of $111 on dollar slump
Thu Mar 13, 2008 11:53am EDT
By Ikuko Kao

LONDON (Reuters) - Oil rose to a fresh record high on Thursday, hitting new peaks for the seventh trading day, as a weak dollar overshadowed an increase in U.S. crude inventories. U.S. crude for April delivery struck a new high of $111.00 a barrel. It was trading at $110.93, up $1.01 by 11:02 a.m. EDT London Brent crude for April, which expires on Friday, also hit a new peak at $107.88. It was trading at $107.77. "We're looking at the U.S. dollar, we're looking at speculation, we're looking at geopolitics. Those three things tying together are defying fundamentals," said Peter McGuire, managing director of Commodity Warrants Australia. The dollar dropped to a 12-year low against the yen and a record low versus the euro on Thursday on uncertainty about the long-term impact of the Federal Reserve's efforts to ease strained credit and money markets.
(http://www.reuters.com/article/hotStocksNews/idUSSYD3274320080313)

Dollar falls below 100 yen, hits record low vs euro
Thu Mar 13, 2008
(http://www.reuters.com/article/hotStocksNews/idUST24480320080313)

Title: Re: Meltdown
Post by: BachQ on March 14, 2008, 10:45:22 AM

U.S. airline shares drop on fuel, economy
Fri Mar 14, 2008 1:59pm EDT

NEW YORK (Reuters) - Shares in U.S. airlines dropped on Friday, led by an 8 percent fall by Delta Air Lines (DAL.N: Quote, Profile, Research), as investors fret over high jet fuel prices and an economic slowdown. "The stocks are feeling a lot of pressure as investors continue to recognize the major risks that airlines are facing," said Morningstar equities analyst Brian Nelson. "Investors are coming to the realization that if we do have a prolonged downturn in passenger demand and jet fuel prices stay where they are, there could be some major concerns about the survival of some of these carriers," he added.
Oil prices, which affect the cost of jet fuel, fell on Friday but held stubbornly above $110 a barrel. The Amex airline index fell 4.6 percent to near its all-time low as the broader stock market reeled on concerns about cash position at Bear Stearns

Title: Re: Meltdown
Post by: BachQ on March 14, 2008, 11:28:51 AM

CNBC : Oil Supply Shock

GAO report on Peak Oil

http://www.youtube.com/v/4fo3sxhBylw&feature=related
The U.S. is vulnerable and the government is unprepared for unacceptably high risks of oil supply shock, with Matthew Simmons, Simmons & Co. International chairman; John Kilduff, Fimat USA Energy Risk Management senior vice president and CNBC's Bob Pisani

Title: Re: Meltdown
Post by: BachQ on March 14, 2008, 11:29:33 AM

Matt Simmons on Bloomberg News (3/4/08)

http://www.youtube.com/v/bANON6KLlGE

Matt Simmons (Bloomberg): Peak Oil Now, Oil Perhaps to $300

http://www.youtube.com/v/4IwtAQzrfiw&feature=related

Title: Re: Meltdown
Post by: BachQ on March 15, 2008, 10:53:27 AM

Wall Street Journal

March 14, 2008, 10:45 pm
Peak Oil? Industry Numbers Disagree
Posted by Keith Johnson

The supply of oil, one of the most crucial elements for all energy choices—renewable or otherwise—is a subject of dispute even among the denizens of the industry. The "peak-oil" debate returned on the final day of The Wall Street Journal's "ECO:nomics" conference, politely pitting a reluctant oil-industry worrier, Christophe de Margerie, head of France's Total SA, against Daniel Yergin, head of bullish Cambridge Energy Research Associates. The question they hashed out: What does a $110-a-barrel price say about the supply of oil?

Mr. Yergin's view: Not much that's fundamental. Today's high price is "not about the supply and demand of oil, it's about the supply and demand of dollars," Mr. Yergin said, citing a "flight to commodities" by investors skittish about the credit-market crunch. That shift is artificially inflating the price of oil as a hedge against inflation and a weak dollar, he said. "This is the fifth time we've run out of oil," he deadpanned, recounting past ostensible crises in the industry and talking up his company's big database of global oil information. "With the data, you don't see a peak." CERA currently thinks the new ceiling of global oil production is 105 million barrels a day, and that's only because personnel and equipment shortages are delaying new projects.

Mr. de Margerie was less sanguine. "There's a virtual world, and then there's reality," he said. The crunch is due to a slate of "above-ground" factors that make it unlikely the world will ever produce the amounts of oil Mr. Yergin or the International Energy Agency think it will, Mr. de Margerie said. That includes sudden and voracious demand from China and India; cost issues that make exploration more expensive for companies; geopolitical barriers that make that exploration untenable; and environmental constraints that hamstring oil production in way they never did before.

The industry long relied on excess capacity, especially in OPEC's biggest member, Saudi Arabia, the Total chief said. What little spare capacity the Saudis have—itself the subject of bitter peak-oil arguments—is needed as a global insurance policy. "We cannot reach 100 million barrels a day," he said. Yet the two sides may be drifting closer together. CERA's forecast has been getting more bearish recently, something Mr. Yergin chalks up to personnel and equipment shortages throughout the industry.

"In two years, we will share the same figure" for global production, Mr. de Margerie told Mr. Yergin.

(http://blogs.wsj.com/environmentalcapital/2008/03/14/peak-oil-industry-numbers-disagree/?mod=googlenews_wsj)

"Peak Oil is a scientific fact that is recognized by the National Academy of Science, National Academy of Engineering, and the U.S. General Accountability Office, etc. Scientific and independent U.S. government agencies conclude that Peak Oil is here now, or within a few years." For a review of these studies, see: http://www.peakoilassociates.com/POAnalysis.html

Title: Re: Meltdown
Post by: Sean on March 15, 2008, 09:00:34 PM

Thanks for posting on the thread here Dm. It's scary stuff, the scariest thing being that most people just can't comprehend the magnitude of what may well be happening: the world is based on petroleum and if it really is peaking and running out right now as it appears, this could be the end of Western civilization.

I'm doing some work in S.Korea and even feel kind-of safer over here. The fact is that most people will never accept reality as it is when it conflicts with their normative model of the world and the view of things given them by their society. This is the immense disaster of democracy, the placing of the abilities and limitations of insight of the masses at the top of society instead of at the bottom, alongside the denigration of good leaders who don't always smile and say happy things.

And as a quick example, I was reading about the Vietnam war recently and people in Saigon still not believing that the communists would actually arrive, even when they were just outside the city- they had too smash down the gates and come for people before it sank in... The democratic mass cannot cope with more than it is actually given.

Title: Re: Meltdown
Post by: BachQ on March 16, 2008, 10:43:11 AM

Quote from: Sean on March 15, 2008, 09:00:34 PM
It's scary stuff, the scariest thing being that most people just can't comprehend the magnitude of what may well be happening: the world is based on petroleum and if it really is peaking and running out right now as it appears, this could be the end of Western civilization.

I'm doing some work in S.Korea and even feel kind-of safer over here. The fact is that most people will never accept reality as it is when it conflicts with their normative model of the world and the view of things given them by their society. This is the immense disaster of democracy, the placing of the abilities and limitations of insight of the masses at the top of society instead of at the bottom, alongside the denigration of good leaders who don't always smile and say happy things.

Sean, welcome back! Hope you're enjoying your visit to S. Korea.

In a 1977 address to the U.S., then-President Jimmy Carter warned that the U.S. faced a "national catastrophe" unless citizens adopted strict conservation measures to reduce the rapid depletion of oil and natural gas reserves. This warning was ignored and the catastrophe is now imminently upon us.

Why humans are so shortsighted ......... I don't know .......... But even if the Western world were to undertake a massive conservation effort, Asian countries (which are only now beginning to rev up their oil- consuming habits) would escalate the depletion...... so there is no stopping the imminent oil crash .........

I'm glad that you're doing your traveling now, because there won't be any affordable jetfuel in about 5-10 years ........

Title: Re: Meltdown
Post by: BachQ on March 16, 2008, 06:48:29 PM

Peak in world oil output

Some analysts cite a lack of preparation for a looming economic event.
By David R. Francis | columnist
The Christian Science Monitor.
(http://www.csmonitor.com/2008/0317/p15s01-wmgn.html)

Last week the price of crude oil broke new records, running about $110 a barrel. That's well above the previous record (in inflation-adjusted dollars) reached in 1980 after the revolution in Iran resulted in the nationalization of its oil. Since tanks of crude are full to brimming, many traders in oil markets suspect that $110 could be the top price for now. But a growing number of oil-market analysts reckon the supply of oil to the world economy has reached a peak or is about to. The discoveries of new oil are now exceeded by the output of old oil. At some point, global oil output will start to decline, as happened in the United States in 1971.

If that is the case, before long $100-a-barrel oil will be regarded as "the good old days," says Robert Hirsch, a senior energy analyst at Management Information Services, Inc., a Washington, D.C., research and consulting firm. The price of oil in the New York futures market, a financial market that promises the delivery of oil in the future, has already climbed more than $20 in the past two months.

Global oil production has been on a plateau at around 85 million barrels per day (b.p.d.) for about 3-1/2 years. It is widely debated whether that output level could be pushed much higher to reach demand in the future, which, according to the International Energy Agency (IEA) in Paris, could reach 98.5 million b.p.d. in 2015 and 116.3 million b.p.d. in 2030.

What greatly concerns Mr. Hirsch is that the US and most of the world has not prepared seriously for a "peak" in world oil output. "If we wait until the problem hits us, we are in for very serious economic problems worldwide for at least 20 years," he says. "There is no good news. Nobody is really doing anything."

The peak for production of conventional liquid crude has or will occur sometime between 2005 to 2016, says Roger Bentley, an advocate of the peak-oil view at Reading University in Britain. That same time span holds for nonconventional oil sources, such as the Canadian oil sands or the Venezuelan oil tars, he maintains.

A few years back, Hirsch and two other experts wrote a report for Science Applications International Corporation on the impact of the peak. It concluded that the price volatility of oil will increase dramatically and, "without timely mitigation, the economic, social, and political costs will be unprecedented ... extremely damaging."

The US Congress has moved to force auto companies to improve the gas mileage of their cars. And it is encouraging the output of biofuels from corn or other vegetation. To Hirsch, however, the latter move is "a stupid thing to do." That's because it trades food for fuel, and more food is needed for a growing world population. "People didn't think it through," he says. Moreover, the production of corn requires a great deal of oil used as fertilizer as well as fuel for tractors and other transport needs. So the net energy gain is small and one result has been higher food prices.

Though no "crash" program to tackle the problems arising from peak oil is visible, Messrs. Bentley and Hirsch see growing recognition of oil output reaching a peak – even among major oil companies. "More and more people are talking about it and warning about it," says Hirsch.

The IEA notes that its 26 member countries have stockpiled enough oil to cover 122 days of net imports and that these stores are growing. But this is for emergencies: that is, disruptions in oil supplies due to political problems or other difficulties. It doesn't deal with a long-term decline in total oil output and the rising demand for oil in such emerging markets as China and India.

The apparent recession in the US will likely trim demand for energy, including oil, for as long as the slump lasts.

But at some point demand will again grow. When that occurs, as the Hirsch study notes, the challenge of oil production peaking will deserve "immediate, serious attention, if risks are to be fully understood and mitigation begun on a timely basis."

And this mitigation will require "a minimum of a decade of intense, expensive effort," including government intervention.

Title: Re: Meltdown
Post by: BachQ on March 16, 2008, 06:57:57 PM

Oil dependency fuels crisis

Things are likely to get worse before they get better

March 16, 2008
David Olive
Business Columnist
(http://www.thestar.com/Business/article/346541)(http://multimedia.thestar.com/images/99/75/de2be2b440b6b240383dded98c57.jpeg)

...More ominously, we've run out of easily accessible oil reserves. In the past 18 years, despite billions of dollars in exploration spending, the oil industry has found just one new field of considerable size, in Kazakhstan's portion of the Caspian Sea. Typical of new finds in the industry's modern era, the Kashagan field is over-budget and has been plagued with delays.

With the industrial revolutions in China and India barely underway, and no sign of a decline in consumption in mature economies, the world will soon need far more oil than the 85 million barrels of crude per day that producers currently pump out of the ground. Even some industry leaders now doubt they can keep matching demand with supply much beyond the next decade.

"I don't think we're going to see the supply go over 100 million barrels a day," James Mulva, CEO of ConocoPhillips Co., told a Wall Street conference in November, citing the near-term supply target widely settled upon in the industry. "Where is all that going to come from?"

To be sanguine about oil continuing to play its huge role in the global economy requires a belief in a lot of things going right. The following, by no means complete, list of such developments suggests that our oil dependence, or "addiction" as U.S. President George W. Bush said in his 2007 State of the Union address, simply isn't sustainable beyond the next decade.

• Demand side: On this front, mature economies like Canada and the U.S. will have to curb consumption, which they've shown no sign of doing even as pump prices have soared in recent years. And oil-producing countries, many of which subsidize pump prices at levels as low as 25 cents a gallon, would have to reverse the recent, disturbing trend of big increases in local consumption of oil they once exported – even though that would mean arresting their transformation into more affluent economies.

The excruciatingly slow pace of development of alternative fuels and energy efficient vehicles, homes and commercial buildings will have to accelerate rapidly. (Is it inconceivable that we could mandate a limit on vehicles of more than four cylinders?) And following the example of Europe and Asia, North Americans will have to shed their qualms about nuclear power as a substitute for the oil-fired power plants that are especially numerous in the U.S.

North American motorists would have to accept "congestion fees" that tax them for driving in built-up areas, long in place in London, Rome and several other cities. They'd also have to accept a hefty carbon tax on gasoline and heating fuels as a further incentive to conservation. That would be a further increase in pump prices that could put more than a few farmers and independent transport-truck operators, taxi drivers and pizza-delivery folks out of business. It would also raise prices at Wal-Mart, Loblaws and every other retailer dependent on "just-in-time" delivery of goods in order to minimize inventory.

Finally, North America would have to make substantial investments in modernized public transit and inter-city rail. Civic leaders and urban planners would have to impose restrictions on developers intent on building remote residential subdivisions and corporate campuses in favour of intensified use of urban land in order to make improved public-transit systems economically viable.

And in recognition of the energy-hog nature of airliners, travellers would have to endure even higher fuel surtaxes on domestic routes, prodding a shift to more use of inter-city buses and rail on domestic routes, and the use of aircraft for long-haul routes only. That, too, would push up prices, this time for overnight delivery by FedEx and UPS cargo planes.

• Supply side: On this front, private-sector oil giants like Exxon Mobil Corp. and Royal Dutch/Shell Group PLC, which for years have restrained growth in exploration spending, would have to significantly increase their exploration and production (E&P) budgets at shareholder expense to find and exploit the last remaining sizable oil reserves. Most of these reserves will be neither easy to locate nor politically palatable to exploit. But if we're determined suck the planet dry of oil, the quest will take oil firms into the tropical rainforests of Ecuador and Indonesia, the pristine Alaska National Wildlife Refuge (ANWAR) and offshore California. (If it's good enough for Galveston, Texas, where the seaside view is of rigs in the Gulf of Mexico, it should be good enough for Santa Barbara and Pebble Beach.)

Given that the world's few remaining "elephants," or large-sized oil reserves, are located in remote and politically unstable regions, the private oil firms and their political patrons in the West will have to adopt a less hostile regard for the state enterprises that control most of those reserves, striking joint ventures with the likes of Venezuela's PDVSA, Mexico's Pemex, Brazil's Petrobras, Norway's Statoil, the Libyan National Oil Co. and Russia's Gazprom and Lukoil.

The profit-oriented firms will also be competing with China's Petro-China, Sinopec and CNOOC for the same African and offshore Costa Rica oil plays, where the odds will be against the investor-owned firms given that the Beijing agencies have deeper pockets, better local political connections, and a more tolerant regard for despotic, civil-rights abusing regimes than the average shareholder of BP PLC or Chevron Corp.

A degree of increased environmental degradation will have to be accepted, as with the toxic lakes now proliferating in Athabasca and the similar fate in store for Venezuela's undeveloped oil sands, which surpass in size those of Alberta. The longstanding tolerance of Saudi Arabia's repressive regime will have to be extended to Riyadh's kleptocratic counterparts in Iraq, Iran, Libya and Kazakhstan, whose oil reserves have long been neglected due to international sanctions and rampant domestic violence that makes kidnapping of foreign oil workers a routine experience.

The world's colleges and universities will have to quickly step up their output of geologists, petroleum engineers and rig hands, currently in severe short supply because the oil-price slumps of the 1980s and 1990s induced the global oil industry to impose an effective hiring freeze on talent, creating a missing generation of oilpatch workers.

Local officials in North America will have to steamroller NIMBY sentiments in order to ensure the construction of modern refineries able to handle the low-grade output of oil-sands producers. More refineries are also needed to remove the supply bottleneck arising from the current refinery shortage, and the abrupt price spirals that result when fires, explosions or routine maintenance require that one or more of the continent's aging refineries be taken out of production. (There has not been a ribbon-cutting on a new U.S. refinery since America celebrated its bicentennial in 1976.)

Perhaps all will go according to the above plan. Then we might avoid the predicted outcome of some oil industry leaders that without R&D breakthroughs in alternative fuels and more energy-efficient vehicles, plus a radical change in consumer behaviour, the global industry will hit a ceiling in how much crude it can produce as early as 2012.

Old habits die hard. Too many elements of the modern economy were built on Texas and Middle East oil that fetched less than $2 a barrel for the entire history of oil extraction until the 1970s. Once a blessing of sorts, our oil dependency now is a curse that, in the mind of noted oil forecaster Matthew Simmons, eclipses even global warming. "Peak oil (a widely held theory that global oil production will soon peak and go into irreversible decline) is likely already a crisis we don't know enough about," Simmons told the Wall Street Journal. "At the furthest out, it will be a crisis in 2008 to 2012. Global warming, if real, will not be a problem for 50 to 100 years." To be sure, the scientific consensus on climate change appears unassailable, with doubts remaining only about how many decades will pass before it changes our way of life if it isn't aggressively addressed. It is odd, though, that global warming has captured the public imagination far more thoroughly than an oil crisis right on our doorstep.

Title: Re: Meltdown
Post by: Sean on March 16, 2008, 07:55:44 PM

Hi Dm, yes George Bush recently began a major address with the words There are no limits to the greatness of America- nice ring to it but seems he was trying to say Carter was wrong, ie to say what people want to hear...

Title: Re: Meltdown
Post by: BachQ on March 17, 2008, 08:36:56 AM

Our "black Monday" for oil
The record high price of crude that was hit this month reflects the new reality of global energy consumption -- and may presage dark times for America.
By Michael T. Klare

Mar. 17, 2008 |
(http://www.salon.com/news/feature/2008/03/17/oil/)

According to the U.S. Department of Energy, combined oil demand from China and India, already at 8.9 million barrels per day in 2004, is expected to hit 12.1 million barrels by 2010 and 15.5 million barrels by 2020. These are staggering rises. If you include anticipated consumption by Brazil, Mexico, South Korea and other rapidly industrializing nations, demand from the developing world is expected truly to soar.

To this tsunami of new energy needs must be added an already high level of consumption by the mature industrial powers led by the United States, the European Union and Japan. This shows little sign of lessening, which means we face an unprecedented surge in the total demand for oil. According to the Department of Energy, combined world oil consumption, which reached 83.7 million barrels per day in 2006, is projected to hit 90.7 million barrels in 2010 and 103.7 million in 2020. We're talking about an increase of 20 million barrels per day in just 15 years. To achieve this would require a mammoth, unbelievably costly effort on the part of the world's giant oil companies (and their lenders and government backers) -- and even then it might not be possible.

Lurking behind soaring demand is another crisis entirely -- a crisis of production. The energy industry is now in the difficult process of transitioning from a world of easily tapped oil supplies to one in which mainly tough-oil options prevail. Those "easy-oil" supplies are the ones we've long been familiar with: the giant petroleum reservoirs in friendly, stable countries that provided most of the world's oil during the formative years of the Petroleum Age, stretching from the late 19th century until the Arab oil embargo of 1973.

These mammoth reservoirs include Ghawar in Saudi Arabia, Burgan in Kuwait, and Cantarell in Mexico -- monster fields that produce hundreds of thousands or even millions of barrels of crude per day. In the last quarter-century, however, discoveries of "elephant" fields like these have been almost nonexistent. The world is, as a result, becoming increasingly dependent on smaller fields, often in remote, unwelcoming locations that require far more expense to develop and bring online. This, too, is adding to the price of oil.

As an illustration of this trend, take Kashagan, a giant oil field discovered in 2000 in Kazakhstan's sector of the Caspian Sea. It represents the single largest discovery worldwide in the past 40 years. Although it does harbor significant reserves of oil and gas, the field poses staggering challenges to the international consortium of energy companies attempting to develop it. It contains, for example, high concentrations of poisonous hydrogen sulfide gas, which makes its development using conventional (and cheaper) production technology impossible. Development costs to bring the field online have already soared from an estimated $57 billion to $135 billion with no end in sight. In the meantime, the projected date for the start-up of production at Kashagan has been continually pushed back. Once expected to come online in 2005, it's now slated for 2011 at the earliest. This, in turn, has led a frustrated Kazakh government to demand that the state-owned KazMunaiGaz energy company be given a larger stake in the field's operating consortium.

Most of the other big discoveries of recent years -- the "Jack" field in the deep waters of the Gulf of Mexico, the Doba field in Chad, fields off Russia's Sakhalin Island, and the Tupi field in the deep Atlantic off Brazil -- exhibit similar characteristics. They are either far offshore and difficult to develop or entail problematic relationships with unreliable governments -- or, worse yet, some combination of the two. You can essentially do the math yourself when it comes to the future cost of oil produced at such sites.

So here's the really bad news at the pump, so to speak: The inability of the global energy industry to keep pace with rising demand is only likely to become more pronounced as, in the years ahead, the world reaches maximum sustainable daily petroleum output and commences what just about all energy experts now agree will be an irreversible decline. No one can be sure when exactly this will occur, but a growing chorus of specialists believes that we are moving ever closer to that moment of "peak" oil output -- with some specialists placing it as soon as 2010-12.

Finally, let's not forget that the equivalent of the Iranian Revolution of 1980 remains with us. The oil heartlands of the planet are increasingly in crisis and the price of oil is regularly driven up by that as well. Iraq, with the world's second largest reserves of petroleum, is convulsed by war. Nigeria, a major supplier to the United States and Europe, has experienced a significant reduction in output recently due to ethnic violence in the oil-rich Niger Delta region. Venezuela's production has fallen because many anti-Chavez oil technocrats have been purged from the state-owned oil monopoly PdVSA. Iran's output has suffered as a result of the economic sanctions imposed by the United States. Political violence, corruption and state interference in the energy sector have also led to depressed output in Chad, Mexico, Russia and Sudan.

At one time, the world's major oil producers could compensate for a downturn in output in any area by ramping up production from the "spare" (or reserve) capacity at their disposal. This was critical in 1990, following Iraq's invasion of Kuwait, and again in 2001, following the terrorist attacks of 9/11. Both times, Saudi Arabia simply upped production, adding hundreds of thousands of barrels per day in spare capacity, thereby averting a catastrophic energy crisis in the United States. But the Saudis and the other members of OPEC no longer possess significant spare capacity. They're pumping oil for all they're worth in order to benefit from the current surge in prices. Hence, any sudden loss of production in conflict-torn areas translates quickly into rising prices.

Can we expect the levels of conflict in oil-producing regions to subside sooner or later, bringing prices down? Unfortunately, this is a wholly unrealistic prospect because oil production itself increasingly acts as a goad to conflict. While extracting petroleum generates enormous wealth for privileged elites, it leaves others in many countries, usually of a different ethnic or religious identity, with few benefits from the resource in their midst. Take the Niger Delta area, where ethnic minorities continue to fight to obtain a larger share of oil revenues that historically have been monopolized by elites in the distant national capital, Abuja. The Kurds in Iraq have similarly been struggling to take control over the oil revenues generated by the giant fields in portions of that war-ravaged country they claim. This threatens to turn the oil-producing city of Kirkuk, in particular, into a future battleground.

While no one can predict just where the next conflicts will break out over the allocation of oil revenues or the control of valuable oil fields, it is safe to predict that such conflicts will remain an abiding, price-hiking feature of the global political landscape. Instability is now not only the norm, but spreading in these areas, and high oil prices are an inevitable corollary.

The bottom line: Oil prices are high today, not due to a temporary disruption in the global flow of petroleum as in 1980, but for systemic reasons that are, if anything, becoming more pronounced. This means news headlines with the phrase "record oil price" are likely to be commonplace for a long time to come. The only good news may lie in just how bad the news really is. Sooner or later, ever rising energy costs are likely to push the United States and other oil-consuming nations into deep recession, thus depressing demand and possibly beginning to bring energy prices down. But this is hardly a recipe for lower prices that anyone would voluntarily choose.

What, then, will be the lasting consequences of higher energy costs? For the ordinary American consumer the answer is simple, if grim: A diminished quality of life, as discretionary expenses disappear in the face of higher costs for transportation, home heating, and electricity, not to speak of basics like food (for which, from fertilizers to packaging, oil is a necessity). For the poor and elderly, the implications are dire: In some cases, it will undoubtedly mean choosing among heat in winter, adequate nutrition and medicine.

Finally, there are the implications for the United States as a whole. Because the U.S. relies on petroleum for approximately 40 percent of its total energy supply, and because nearly two-thirds of its crude oil must be imported, this country will be forced to devote an ever-increasing share of its national wealth to energy imports. If oil remains at or above the $100 per barrel mark in 2008, and, as expected, the United States imports some 4.75 billion barrels of the stuff, the net outflow of dollars is likely to be in the range of $475 billion. This will constitute the largest single contribution to America's balance-of-payments deficit and will surely prove a major factor in the continuing erosion of the dollar.

The principal recipients of petro-dollars -- the major oil-producing states of the Persian Gulf, the former Soviet Union and Latin America -- will undoubtedly use their accumulating wealth to purchase big chunks of prime American assets or, as in the case of Hugo Chavez of Venezuela or the Saudi princes, pursue political aims inconsistent with American foreign policy objectives. America's vaunted status as the world's "sole superpower" will prove increasingly ephemeral as new "petro-superpowers" -- a term coined by Sen. Richard Lugar of Indiana -- come to dominate the geopolitical landscape.

So, while March 3 may have only briefly made the headlines here, it may well be remembered as the true "black Monday" of our new century, the moment when energy costs became the decisive factor in the balance of global economic power.

Title: Re: Meltdown
Post by: BachQ on March 17, 2008, 05:04:09 PM

Richard Heinberg's Peak Everything - 6 part series 2007

pt 1http://www.youtube.com/v/ybRz91eimTg&feature=related

pt 2 http://www.youtube.com/v/b3_mYowxlEg&feature=related

pt 3 http://www.youtube.com/v/2p6U-ZvR5Yk&feature=related

pt 4 http://www.youtube.com/v/JyO0WS79Xec&feature=related

pt 5 http://www.youtube.com/v/F5EcK-CdLNA&feature=related

pt 6 http://www.youtube.com/v/hJpUswRKwIw&feature=related

Peak from all fossil fuels will occur in about 2010; with a gradual decline until 2030; After 2030, quickly increasing rate of decline.

Implications: scarcity is a more pressing issue than climate change.

93% of total energy supply is non-renewable (fossil fuels + uranium)

Title: Re: Meltdown
Post by: BachQ on March 17, 2008, 05:11:10 PM

British Airways fears oil price rise may destroy its profit margins
By Danny Fortson, Business Correspondent
Friday, 7 March 2008

British Airways has warned it would no longer be able to operate profitably if the price of oil continues to rise and that a sustained high price would lead to "fundamental changes in the industry". The carrier sounded the warning at an investor day yesterday in which it predicted that its fuel bill would rise to £2.5bn this year, representing nearly a third of its entire cost base and £450m more than the previous year. Combined with the heavy spending on Heathrow's new Terminal Five, the soaring costs led the chief executive Willie Walsh to abandon his long-held target of achieving 10 per cent margins, predicting instead that it would see a margin of about 7 per cent for the 2009 financial year.
Shares in the carrier plunged to a new low on the news, falling 7 per cent to close down 20p at 245p, just as oil hit a new all-time high of $105.97. BA's finance director Keith Williams warned that it was reaching a level at which the carrier's profits could be obliterated altogether. "A question I am sometimes asked is how high fuel prices have to go before you lose your operating profit," he said. "That would be just under $120 per barrel next year. Long-run prices at those sorts of levels would result in pretty fundamental changes in the industry."

The inexorable rise of the oil price has mirrored the fall in BA shares over the past year. While the price of the black stuff has roughly doubled, BA has watched about half of its market value, about £2.8bn, evaporate. The company has managed to offset much of the rising cost through fuel surcharges foisted on to customers. Mr Williams said it recoups about two-thirds of its rising fuel bill through these fees, and hinted that more could be in the offing. In the past three years, the company has pushed through 12 increases, meaning that customers flying on its longest overseas routes now pay an average of £128 on top of the basic return ticket price. Mr Williams said the expected drop in profitability would be exacerbated by a slowdown in America. "We've started the down-cycle, particularly in the US," he said.

The gloomy outlook overshadowed what were otherwise decent projections for the company. Mr Walsh predicted that the company would increase turn-over by up to 4.5 per cent to £9.1bn next year. Long-haul premium traffic, the slice of customers that account for most of the carrier's profits, grew 11 per cent last February from the same time a year earlier (after taking an extra trading day this year into account), a trend Mr Walsh predicted would continue despite a "sharp slowdown in the US and the UK" and a less extreme deceleration in Asia and Europe.

Mr Walsh also reiterated his desire to lead airline consolidation, expressing his "admiration" for the successful tie-up between Air France and KLM. Iberia, the Spanish airline that he considered buying last year before pulling out, remains in his sights. Having declined to make a move at €3.60 (£2.76) per share, the stock has plummeted in the ensuing months. "Some people have accused me of lack of ambition," he said. "I look at the stock price now and say it was a bloody good decision."
Even so, he said that the Spanish carrier "remains attractive" and that he still covets rival Bmi for its significant presence at Heathrow. Peter Caldwell, an analyst at Barclays Wealth, summed up what seemed to be the view of most in the City. He said: "High oil prices and an uncertain volume outlook means the shares should be avoided, with lower oil and/or improving data being the main catalysts for a better share performance."

Title: Re: Meltdown
Post by: BachQ on March 18, 2008, 08:40:51 AM

United will ground at least 15 planes
Fear of fuel cost increases soaring past $1 billion, prompts Chicago-based airline to plan plane and other cost reductions.
March 18, 2008: 11:11 AM EDT

CHICAGO (AP) -- United Airlines says it's taking steps to offset sharply rising fuel costs. The Chicago-based airline said today that it plans to remove 15 to 20 older, less fuel-efficient airplanes from its fleet and may reduce capacity. The moves come in the face of soaring oil prices that United says could increase its fuel costs by more than 1 billion dollars this year. United also says it's looking to reduce other costs and continue passing along the higher fuel expenses to its passengers by charging extra for some products and services. United is the dominant carrier at Denver International Airport, and employs about 6,000 people in the area. The nation's second-largest airline, operated by UAL Corp., (UAUA, Fortune 500) has already raised fares by as much as $50 per round trip.

Fuel is United's largest expense. Every $1 increase in the price of a barrel of oil boosts the airline's costs by about 60 million dollars.

Title: Re: Meltdown
Post by: BachQ on March 18, 2008, 12:16:00 PM

Delta to cut 2,000 jobs
Tue Mar 18, 2008 3:39pm EDT
By Mark McSherry

NEW YORK (Reuters) - Delta Air Lines Inc unveiled plans to cut 2,000 jobs and scale back flights on Tuesday, leading efforts by U.S. carriers to cut costs in the face of soaring fuel prices and a weakening economy. (http://www.reuters.com/article/ousiv/idUSN1819231020080318)

Title: Re: Meltdown
Post by: BachQ on March 18, 2008, 12:32:00 PM

oil production likely to peak in 2011 - analyst
By: Jade Davenport
Published: 18 Mar 08 - 12:55

--------------------------------------------------------------------------------

The point at which the world's oil output would peak and production would enter a terminal decline might become a global reality as soon as 2011, an expert predicted on Tuesday.

Peak oil, which referred to the point when no further production expansion would be possible, had become a contentious issue of debate in recent years with analysts predicting various dates and scenarios at when peak oil would be a reality.

Speaking at the Oil Africa conference in Cape Town Energy Institute researcher Chris Skrebowski said that while a debate on the issue continued to rage globally, the reality was that the world would soon begin to run out of oil reserves.

In fact, he said that some oil-producing countries had already begun to experience peak oil.

"Approximately 28 of the world's significant - as well as 40 minor - oil producers are experiencing a decline in production."

To this extent, Skrebowski explained that the Organisation for Economic Cooperation and Development (OECD) oil-production peaked in 1997 and had now experienced a decline of over 10% of 2,2-million barrels a day a day (bbl/d).

Similarly, the North Sea oil field had peaked in 2000 and production had declined by 1,6-million bbl/d, and non-Opec production peaked in 2002 and had declined by 771 000 bb/d.

The sum total of this fall in production amounted to a 35% decline in global production. However, Skrebowski insisted that it was only once the world experienced a 51% decline in production that the state of peak oil would be reached.

According to Skrebowski, there were eight key pieces of evidence that insisted that the world was looming ever-closer to peak oil. These included the falling rate of discoveries of new oil-fields; sustained high oil prices; the age of the largest fields; the lack of real growth potential in oil-producing countries; the current lack of incremental flows; the sustained depletion of oil reserves; nongeologic threats to future oil-supplies; and the struggle to hold production by many of the major oil producers.

He explained that peak oil was predicted to become a reality in 2011 on the basis that the world's major oil fields were being depleted at a rate of 4,5% a year.

In other words, if the rate of depletion of the world's major oil fields continued at a rate of between 4,5% and 5% a year, oil production could peak, and subsequently decline, as early as 2011. However, if the rate of depletion should exceed 5% a year, peak oil could become a reality as early as 2010, said Skrewboski.

Once the state of peak oil was reached, which was represented as 93-million bb/d, Skrebowski explained that global supply would rapidly fall short of demand and would further drive up the oil price.

To this extent, Skrebowski predicted that the oil price could reach as high as $140/bl by 2011 and would continue to rise as supply became increasingly constrained.

Growth in demand

In terms of growth in demand, International Energy Agency (IEA) Senior Analyst Eduardo Lopez said that the demand for oil would be a third higher than it was in 1996. This equated to a projected demand of 94,3-million bb/d, or 50 000 gallons every second, by 2012.

However, chairperson of the Association for the Study of Peak Oil in South Africa Simon Ratcliffe warned that if demand for oil continued to increase unabated, the world's oil reserves would be deplete by 2030.

As a result, the world was teetering on the edge of a major oil-crisis and Ratcliffe believed that there was an urgent need to reduce dependency on the liquid commodity to avoid an impending disaster.

Ratcliffe thus concluded that the real opportunities in the energy sector lay in renewables and that more effort needed to be invested into developing alternative fuel sources.

(http://www.engineeringnews.co.za/article.php?a_id=129415)

British scientist predicts oil peak in 2011

• Thursday, Mar 20, 2008
A British Energy researcher, Mr. Chris Shrebowski, has predicted that oil production will peak in 2011 as the "world's biggest oil fields have become old, tired and faded." "I have faith in what I am saying and it is not a mere theatrical analysis," Skreboweski said in a paper entitled "How close are we to peak Oil?" "The reality is that oil peak will imminently occur in 2011" he said at the 3rd sub Sahara oil and gas conference in Cape Town. He said: "The oil industry is slow-moving and predictable and is the most important source of energy on the planet accounting for 36.4 per cent of all energy."

The British scientist noted the failing discovery rate of oil saying "there continues to be few large discoveries, current lack of incremental flows; and few countries experiencing real growth potentials". He said that 25 major and 40 minor oil producers were already in decline and oil companies were struggling "to hold production." "Of the world's 120 oil fields, 50 are in decline, 44 are not in decline, 12 are unclear while seven are undeveloped," Skrebowski said.

"We are dependent on oil and if depletion continues at five per cent a year, oil peak will be experienced in 2011 at around 93 million barrel a day." He however, advised that to avoid economic disaster, "we need to shed oil demand" and cited the surface transport which he said could reduce use of fuel and increase its use of electric by 80 per cent.

(http://www.thetidenews.com/article.aspx?qrDate=03/20/2008&qrTitle=British%20scientist%20predicts%20oil%20peak%20in%202011&qrColumn=BUSINESS)

Title: Re: Meltdown
Post by: BachQ on March 19, 2008, 12:17:57 PM

Gasoline price spike has only just begun
Motorists should expect to pay upwards of $3.75 a gallon in the coming weeks as prices at the pump catch up with record crude, but relief may arrive by summer.
By Steve Hargreaves, CNNMoney.com staff writer
March 19, 2008

NEW YORK (CNNMoney.com) -- Gasoline has hit record levels - and experts say it will likely continue to soar in tandem with the skyrocketing price of crude. The national average retail price for gas has risen about 30 cents in the past month to $3.279 a gallon, exceeding the all-time high set last year, according to the motorist organization AAA. And experts say motorists should prepare to pay nearly $4 a gallon - and in some places even more than that - before the price of gas finally comes down in the late spring as high prices crimp demand.

U.S. military fuel costs double from 2003 to 2007
Thu Mar 20, 2008 2:56pm EDT
By Rebekah Kebede

NEW YORK, March 20 (Reuters) - Skyrocketing crude prices have more than doubled U.S. military's global fuel spending since the start of the Iraq war in 2003 up till 2007, even as the volumes the military purchased slipped by 10 percent over the same period, the Department of Defense's energy-buying arm said.

The military spent some $12.6 billion on jet fuel, diesel and other fuels for its worldwide operations in 2007, the last period for which data is available, up from $5.2 billion in 2003, according to data released this week by the Defense Energy Support Center.

(http://www.reuters.com/article/middleeastCrisis/idUSN20389654)

Title: Re: Meltdown
Post by: BachQ on March 19, 2008, 05:25:46 PM

"Cantarell Field is a 'poster child' for Peak Oil concerns." (http://www.energybulletin.net/41707.html)

Title: Re: Meltdown
Post by: BachQ on March 20, 2008, 06:39:31 AM

Most who take the "no Peak Oil" (or no Peak Oil until 2030 and then an "undulating plateau") side of the debate speak of RESERVES. They don't often address the difficult topic of trying to explain where the RATE will come from. ... Among other things, huge RESERVES of poor QUALITY oil are not going to be able to provide the RATE of production necessary to stem the declines from the giant high QUALITY fields that are now old in AGE, much less continue to increase our total RATE. In summary, Peak Oil is about RATE. And RATE is dependent on the SIZE, AGE and QUALITY of the RESERVES.

(http://energybulletin.net/39308.html)

Title: Re: Meltdown
Post by: BachQ on March 20, 2008, 11:11:50 AM

Obama eyes active role in oil markets
Thu Mar 20, 2008 12:48pm EDT

WASHINGTON (Reuters) - Democrat Barack Obama would take an active role in U.S. oil markets as president, tackling concerns about the dominance of large oil companies and eyeing the Strategic Petroleum Reserve as a potential weapon to combat high prices, his top energy adviser said.

Jason Grumet, the presidential hopeful's key energy and environmental policy aide, told Reuters this week that an Obama administration would crack down on any competition lapses in the sector that have resulted from big corporate mergers. Grumet also said Obama would seek to link a future U.S. carbon emissions trading system with the European Union's scheme as soon as possible while focusing attention on China and India in forging a global warming pact. Grumet, head of the Washington-based Bipartisan Policy Center in addition to advising the Obama campaign, said the oil industry had "concentrated incredible market power in a small number of companies" in a way that caused alarm. "Senator Obama has a deep concern that the consolidation of the industry -- these national mergers, you know, that were allowed under both Clinton and Bush administrations -- are a cause for some concern," he said. He said an Obama administration would examine "whether these mergers and consolidations have decreased competition in a way, concentrated market power in a way, that is undermining to consumers."

(http://www.reuters.com/article/politicsNews/idUSN2034448720080320)

New York Times
March 21, 2008
Oil and Gold Prices Continue to Slide
By MICHAEL M. GRYNBAUM
Oil, gold and other major commodities fell sharply on Thursday, capping their steepest weekly drop in a half-century, as investors fled what many had believed to be the last safe haven in turbulent markets. Oil tumbled 6.9 percent in two days of trading, and most other commodities fell by 7 percent or more in that period — including a precipitous 15 percent drop for wheat. This week's declines brought an abrupt end to months of big price increases that had attracted speculative cash. "It was the last thing that bankers could hang their hats on," said Fadel Gheit, an analyst at Oppenheimer & Company. "Everything else had melted before their eyes." For the four-day week ending Thursday, an index created by the Commodity Research Bureau in Chicago fell 8.3 percent, the sharpest one-week decline since the index began in 1956. (Markets are closed for Good Friday.) Seeking to make sense of the sharp declines, some analysts on Thursday saw a bubble bursting.

Title: Re: Meltdown
Post by: BachQ on March 21, 2008, 02:43:23 AM

The 'Peak Oil' Theory: Will Oil Reserves Run Dry?
OIL SUPPLIES, OIL PRICES, PEAK OIL, ENERGY
By Kenneth Stier,
Features Writer
CNBC.com
| 20 Mar 2008 | 06:27 PM ET
Oil's recent slide and the slackening demand that an economic slowdown's expected to bring have stimulated hopes that crude could soon safely stabilize below the $100 range.

But beneath seesawing supply and demand lies the deeper question of just how much oil the planet has in the first place — and how much it will have in the future.

The answer to that question supports — or undermines — the theory that we are in the midst of an ever-tightening supply that will lock prices into a permanent, rising arc. That, in nutshell, is what's meant by the term "peak oil".
It's an issue that matters, especially to major energy players who are in a race to disprove the theory and trying to bring on-stream more oil fields than are currently being depleted.

John Hofmeister, president of Royal Dutch Shell's US operations, shared his thoughts on the supply issue on CNBC's Squawk Box on Thursday. He took aim at the peak oil theory as popularized by Matthew Simmons, the author of "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy." (See the Hofmeister interview at left.)

"The peak oil theory has really swamped the world — God bless Matt Simmons," Hofmeister told CNBC.
Simmons is mistaken, said Hofmeister, because he is overly focused on a single country: Saudi Arabia, the world's largest exporter and OPEC swing producer.

Although Saudi Arabia is a dominant player, the Shell executive said focusing solely on Saudi Arabia leaves out the all other places around the globe where Big Oil — ExxonMobil , Chevron , BP and the like — and national oil companies are busy exploring for untapped oil reservoirs.

Those reservoirs could include the vast — but currently restricted — reserves of the US Outer Continental Shelf, which holds an estimated 100 billion barrels of oil and natural gas. Tapping into such a large supply would slash the $500 billion US sends overseas for each year for oil imports.

As things stands, however, only 15 percent of those reserves are currently exploitable, a good part of that off the coasts of Louisiana, Alabama, Mississippi and Texas.
Simmons is also off the mark, Hofmeister contends, because he excludes unconventional sources of oil such as the oil sands of Canada, where Shell is already active.

The Canadian oil sands — a natural combination of sand, water and oil found largely in Alberta — is believed to contain 1 trillion barrels of oil. Another 1 trillion barrels are also trapped in rocks in Colorado, Utah and Wyoming.

Given all that, we asked Simmons, who is chairman of Simmons & Co. International, a specialized energy investment-banking firm based in Houston, to respond to Hofmeister's comments and explain how his peak oil scenario can be avoided.
CNBC: What's your response to critics like Hofmeister?

Simmons: There is a kind of schizophrenia within the likes of Shell where the chairman basically says, "We think by 2012 global demand will exceed conventional supply" and yet Hofmeister basically says the idea that we are ever going to have peak oil is ridiculous.

CNBC: But he's suggesting you are leaving out unconventional sources of energy in your calculations.

Simmons: They make the distinction [between conventional and unconventional], but they don't seem to make the connection about the vast difference of flow. They are so hung up on the total estimated volume. Once they start in a project they say, "Well, the reserves last forever so we can book a million barrels of reserves."

The energy that is consumed to get oil out of the oil sands of Canada — in massive amounts of potable water and natural gas — is so vast you are really turning gold into lead. What you get out is a very low quality amount of oil that has to be upgraded and diluted with high quality oil to get synthetic crude. What I can't figure out is why the executives of these oil companies don't understand that.

CNBC: And what about the reserves on the Outer Continental Shelf?

Simmons: That's sort of irrelevant because we have such an unbelievable shortage of deep-water rigs. We are totally out of deep-water drilling rigs. There are about 100 that are struggling to get built. Four will ready by the end of next year.

And none of that deep-water stuff they are talking about has been properly tested to know if it is even commercial. It's in such remote areas that we just don't have the tool kit to realistically bring it on stream before maybe ten years from now — maybe 6-7 years from now.
CNBC: What about other major finds such as the major off-shore discovery Brazil has made that is estimated could be the third largest oil field in the world?

Simmons: There have only been five wildcat wells drilled there. That's like me saying I have drilled a well in Kansas, and another in Colorado and in New Mexico and in the panhandle of Texas and if they are all part of one giant oilfield, it is the biggest oil field ever in the Western Hemisphere. That's an enormous "if."

You can claim that, but the proof of that would only be after you drill about 100 wells and flow test them all. And what we know is that 99 percent of those types of reservoirs never connect.

CNBC: You still think there are production difficulties in Saudi Arabia, but what do you expect will be the impact on production worldwide?

Simmons: Yes, and it's why we have such a hard time growing production any more, and unfortunately demand doesn't understand that. We are basically having to run faster and faster to stay in place as too many areas go into steady and steep decline.

You look at the North Sea ... the last 7-8 years, Norway and the UK have been declining a rate of about 17-18 percent per year. And once you get a field down to its last 10 percent, then it levels out and goes into a long steady state of gentle decline — that is the state of Prudhoe Bay today.

CNBC: So, what is your prognosis for prices?

Simmons: I think prices have to go way higher. The sooner people get used to the fact that we are still living in a fool's paradise, the better ... you just can not argue that $100 a barrel is expensive when you realize it is 15 cents a cup — do you know anything other than crude oil that sells for 15 cents a cup? I know wine doesn't, bottled water doesn't.
(http://www.cnbc.com/id/23728987)

Title: Re: Meltdown
Post by: BachQ on March 21, 2008, 05:19:21 PM

End of oil: End of another human era
Ioannis Michaletos
21 Mar 2008

The oil era seems to end in several decades from today, whilst the world markets are experiencing an upward trend in the energy price index. Moreover the consumption of fossil fuel is accelerating due to the growth of the Asian economies and in Eurasia the Russian corporations are eager in controlling most of the energy flow to Europe.

The worldwide oil consumption has increased some 25% over the past decade more than 85 million barrels of oil are needed to meet the daily needs of the globe. With the present consumption rates the oil era will end in less than 40 years. This can be calculated by the fact that the total known reserves amount around 1, 2 trillion barrels. Further, the reserves are distributed unequally in the different geographical zones of the earth, and that means that some countries will experience a shortage much sooner than others.

The oil price has already reached $111.5 and it remains to be seen if it is going to stabilize at even higher price. By taking into account that 40% of energy consumption derives from oil; Western governments already predict a slower growth with and as much as 0.5% of GDP lost in the coming year. Moreover the combination of increased consumption (By India-China), the upward pressure by the options & derivatives market, the weakening of the Dollar and the diminishing reserves, create an explosive situation that can erupt in the future and lay the basis of a world economic crisis.

The greater Middle East region still reigns with the largest oil fields and some other countries like Venezuela, Russia, and Nigeria can be said to form the foundation of the production markets. On the other hand the five largest petroleum corporations (Exxon-Mobil, Shell, BP, Chevron, and Total) made more than $120 billion of profits in total last year, of which 39.5 billion were Exxon-Mobil's alone. Due to their immense cash-flow the oil industry is still considered as one of the pillars of the modern economic system, apart from their influence in major geostrategic decisions.

The depletion of reserves

It is more than certain that the last drop of oil produced will derive from an oil well in the Middle East. The region according to the BP Statistical Review of World Energy 07 produces 31.5% of the world's total and holds 61.5% of the known reserves.

China's dynamic entrance in the market assists greatly in the projection that in 20 years from now consumption will have increased some 40% and at that period the peak oil will not just be a term but a distressful reality. Of course the 39 years estimation is calculated for the world total and not for every individual country. Thus the rich in oil states will further upgrade their importance since they will be the ones dictating the rules of the game during the last annum of the oil period. For instance Iraq holds around 115 billion barrels and produces 2 million per day. That's sufficient for another 100 years or so, whilst Saudi Arabia with 264 billion barrels and 11 million barrels production can hold on for not more of 67 years. Iran another key country will have sufficient amounts for around another 87 years. As it can be shown the interest of the world is rightly centered in the Middle East, because apart from other political developments, those countries will play a very significant role for the global economy from 2040 and beyond.

The OPEC states in general produce 45% of the global production and have 76% of the total reserves. Their cartel is challenged only periodically by the hedge funds that profit from legal gambling on the energy prices. Should the trend continue OPEC will further empower itself, when other non-member oil producing countries such as Norway, Brazil, and Russia deplete their resources (9, 18.5 & 22.5 years respectively).

The main quest for all the main energy players is to discover new oil fields or to take advantage of the new technologies in order to proceed in alternative modes of extracting oil. The oil sands in Canada could prove to be a promising opportunity, worth some 165 billion barrels of oil, even though that won't stop the peak oil reality, rather it will delay a bit the overall path.

Furthermore over the past generation there has been little investment in the refinery sector of the oil energy industry. Both USA and Russia have neglected to invest in their refinery industries, thus contributed in the overall scenery. There are also serious considerations around Russia's ability to manage its energy know-how in order to invest in new oil fields as well, thus future plans relating to oil transfer and new pipelines might end up to be just pipedreams, whilst future seams bleak for the market that cannot wait for long-term investments.

Since the first industrial extraction of oil int he modern era, more than 1.1 trillion barrels have been consumed. The interesting part is the acceleration of consumption during the past generation. In 1984 China required 1.7 million barrels per day; nowadays the figure has stepped to 7.5 million. India consumed 0.8 million barrels and today it needs 2.6 million. Both countries are still behind the living status of the post-industrialized Western markets and that is not reassuring that consumption rates will lower their growth. As it can be easily understood the oil era cannot have any future judging the nature of our social system which is based in over-consumption and the eagerness of the Eastern Asian states to imitate the Western way of living.

The underlying strategic landscape

The pessimist projections will lead to an overturn of the standing political balances across the world. Every state in need of oil will have to move fast in order to acquire new sources and be able to withstand the passage from the oil era to a new one, which is not yet well defined. It is not by coincidence that two of the most critical areas in the planet are Iraq, and Iran –As they have been for many decades now-.Even the former Director of the American Federal Bank (Greenspan) has implied that the war in Iraq had mainly motives that include the control of the commodity beneath its surface. The American economy which is responsible for 25% of the world's consumption is still very much dependent on oil, despite recent moves to initiate renewable resources investments of a grand scale. The interest on the global warming and the environmental destruction was highly elevated since 2001, due to purely political and economic reasons that relate to the demise of the oil era and the turbulent situation in the Muslim world that controls much of this source. The issues here is the high costs of using sources as the solar and wind one and the low returns on investments that they provide. Actually oil is still much cheaper than any renewable commodity, thus the main challenge will be for the USA to retain its primal position in the world energy system for several decades and in parallel introduce new cost-effective technologies. To that one can add that the growth of renewable energy might alter the established world order by changing the importance of certain geographical regions in favor for other ones; and that constitutes another strategic quest for the policy planners and futurologists alike.

China and India are due to their rising needs two other power units that alter the established strategic notions. They will have to secure new energy sources; therefore they will try to re-engineer the global power blocs to their advantage. The deals signed between Iran-China, Russia-China, African countries & China, since 2001 are just a preparatory phase of what may follow next. Venezuela under Chavez leadership constitutes an emblem of energy nationalism which seems to becoming a trend in Latin America. His policies have global repercussions and an alignment of his state with the emerging giants of the East is a probable outcome in the near future.

Iraq by itself is a major issue, since the production of the country is not sufficient enough to assure a steady flow to the markets, as it was the case before the 2003 war. For the moment there are not signs of any positive development in that field and it should be noted that Iraq was at time the second largest oil producer in OPEC and its severe decrease means significant rise in oil prices. Terrorism also –And not just in Iraq- is an X factor for oil prices. For instance the attack on the oil industry complex in Saudi Arabia by Al Qaeda in May 2004 witnessed a sudden spike on prices, despite the failure of the terrorist act. One should wonder of the consequences of a successful terrorist attack in an oil-producing country, a hypothesis regularly discussed by security analysts across the globe.

Lastly Russia is a state that uses its natural resources wealth for geopolitical expansion and its main tool to re-establish most of the space lost due to the break-up of the USSR and the dissolution of the Soviet Empire. Actually when mentioning Russian diplomacy nowadays one means energy politics. Moscow is steadily becoming the major source for the European markets and gains footholds in East Asia. Simultaneously it retains a grip in the production of Central Asian countries by signing a multitude of agreements that require the trespassing of their exporting pipelines from its territory in order to influence directly the production of Kazakhstan, Uzbekistan and others.

The short-term projection in relation to the strategic landscape is actually more difficult to define than the long-term. OPEC seems to loose its influence it has since 1973 due to the Russia initiatives, the USA control of Iraq, the Venezuelan directions and the all-pervading reach of the international capital markets in the form of the hedge funds. Note however that the peak oil will elevate once again OPEC that holds most of the resources and certainly the Middle East can be said to represent the Middle of every energy related strategy in the future.

The quest for alternative production

The presentation of the aforementioned challenges & events already sweeping across the world, have activated a quest for making use of any type of material possible in order to both ease dependency on oil & gas along with the political implications that this implies. The Shell Research & Development sector has transmitted in the media that there is a great chance of making use of Kerogen a mixture of organic chemical compounds found in sedimentary rocks. A region in the USA that contains large amounts is a 17,000 Sq. mile one between Utah and Colorado. It is guessed that approximately 800 billion barrels of retrievable oil can be extracted an amount three times the one of the Saudi Arabia's reserve. The area mentioned is named Green River and can produce up to 5 million barrels of oil per day, which is 17% of the present daily consumption. Shell expects to receive the appropriate license to begin using a new method to extract oil from there, and this revolutionary development might alter the future of oil politics. It has to be noted that there are not any clear projections on the financial viability of this investment, something that will be ascertained in the future.

Notable Kerogen amounts can be found also in Brazil, China, Jordan, Israel, Thailand, Russia and Korea. In total at least 3 trillion barrels of oil can be retrieved which is almost 3 times the currently assessed petroleum reserves. A drawback of the extraction process by Kerogene is the use of excessive amounts of water, something that might hinder the ability to use this technology in desert regions lacking water. Shell has invested 855 million USD on Kerogen research in 2006 and according to Fortune magazine the corporation has dedicated over 200 million Dollars per annum over the past 28 years in this project. Certainly this might be a future solution that will have its ramifications in the energy security politics.

The International Energy Agency predicts that up to 2030 the world energy needs will increase at least 60% due to the growth of China, India and the other booming developing economies. That means that in the next generation or so, the countries in OECD alone should develop new energy resources as much as 2,000 GW. That means renewable energy production should be introduced in any case regardless of the discovery of new modes of producing hydrocarbon.

Photovoltaic energy is being viewed as a promising renewable energy resource that has a plentiful of advantages. It is a clean mode of producing electricity without emissions; it doesn't involve substantial operational costs and can provide a durable and trustworthy production. Germany for example which produces for 2006, 3,063 MWp and holds around 50% of the global market.

Wind energy is another resource that has gained popularity and promises clean energy and energy security at the same time. According to the World Wind Energy Association globally, the wind power generation more than quadrupled between 2000 and 2006. At the end of 2006, worldwide capacity of wind-powered generators was 73.9 gigawatts, and the main producers are: Denmark (19% of its electricity production), Spain & Portugal (9%), Germany & Ireland (6%).

Lastly the Coal Storage techniques that have been introduced by BP, Total, Duke Energy, RWE, Vattenfal and others, might revive coal as clean energy resource, although the whole process is under scientific review and the commercial results are about to be seen in a decade from now.

What lies ahead?

The synthesis between the energy security quest by the Western countries and the demise of the oil era, leave no other option but for the use and deployment of new technologies and techniques in the field of alternative energy. Despite the fact that they are less cost effective presently, they have the crucial advantage of relieving the world from the perils of environmental destruction, although the current projections by concerned citizens and NGO's portray a much worse depiction of what the reality is actually, a hotly debated subjected suitable for another discourse.

In the meantime before the demise of oil and the introduction of renewable energy new methods have to be used in order to ease the transformation, especially in the countries affected mostly. Furthermore the ongoing research on the use of hydrogen power is bearing fruits, even though it has to be noted that for the mid-term and possibly until the end of the first centenary of the 21st century, hydrogen will rely to the use of natural gas as a cost effective and reliable way to produce hydrogen. A latest development on that is the effort by the Abu Dhabi Emirate to invest 15 billion Dollars in order to construct the largest hydrogen production facility in the world. That will constitute the first phase of this gigantic project that will use natural gas as a production commodity, a material in abundance in that country.

Albeit that will not solve the issue of energy dependency of Western states by the gas producers notable Russia and the Middle East. Thus it is probable that for political reasons solar, wind, wave and other forms of renewable energy will enter the market with a greater role, until technological advancements can solve the complex issue of hydrogen production.

Technology & energy security considerations go hand by hand in the peak oil era that has to be managed skillfully by the political establishments across the globe in order not to experience a looming crisis that will certainly erupt to a military one and will visualize the Armageddon perhaps as envisaged in the Apocalypse. Energy is the blood of the global system since the period man became dependent in machinery for his own needs. That will continue into the future and this century seems to be a pivotal age for the human race to enter a new stage shedding the hydrocarbon one. The decisions made by the politicians in the near future will dictate more at stake than it can be assumed at a first glance presently.

(http://www.analyst-network.com/article.php?art_id=1862)

Title: Re: Meltdown
Post by: BachQ on March 22, 2008, 03:50:55 AM

Energy Stocks Haven't Caught Up With Oil Prices
It's the Companies, Not the Shareholders, That Benefit as the Fuel Skyrockets

By Alejandro Lazo
Washington Post Staff Writer
Sunday, March 23, 2008; Page F01

Energy companies have recorded whopping profits as the price of oil has surged over the past year. But while shares of those firms have traditionally tracked oil prices, they haven't kept pace this time around.

The cost of one barrel of oil on the New York Mercantile Exchange, for example, has doubled in a little over a year, rising from $50 in January 2007 to $101.84 last week. Yet the S&P Energy Index, which tracks the stocks of major energy companies, has risen only about 26 percent over the same period.

The reason, analysts said, is that oil prices have been driven to record highs by more than just demand for the product.

The decline of the dollar, in which commodities are priced, has helped make oil more expensive. At the same time, large institutional investors seeking shelter from the recent volatility of the stock market have rushed into commodities, driving up the price of oil and other goods on speculation, analysts said.

"Obviously, the $100 oil has not pushed the stock of oil companies," said Fadel Gheit, an oil analyst with Oppenheimer. "The high oil prices have resulted in record profits for the companies but have not benefited their stocks."

Gheit said the reason for the stocks' more gradual climb is that "nobody believes that oil prices are sustainable at the current level." Suggestions by many economists that the United States is either about to enter a recession or is already in one have led many analysts to predict that consumers will cut back on consumption of gasoline, which is widely expected to reach $3.50 to $4 a gallon this summer.

This week provided evidence to support Gheit's point of view. The price of oil plummeted 7.7 percent after hitting a record high of $110.84 a barrel on March 13.

The decline was driven partly by the same investors who had rushed into oil and other commodities rushed back out again, returning to financials stocks after the Federal Reserve moved to prop up the banking system.

In addition, heavily indebted firms have unloaded their investments in raw materials such as gold and oil in a bid to reduce risk and amass cash at a time when liquidity is crucial, analysts said.

"The largest speculators are the largest financial companies," Gheit said. "This is what created the artificial bubble we have."

That kind of volatility involving oil and the companies that make their money from it is likely to persist in coming months. Big institutions in search of cash could continue to shed their investments in oil while the price is still high. Other investors may bet that the dollar has finally hit bottom after a steady drop against foreign currencies. And a slowing economy would lessen demand for energy.

Randy Bateman, chief investment officer for Huntington Asset Advisors, said he remains bullish on the energy sector.

"Our philosophy is that there is going to be a great deal of demand from developing countries such as China and India," Bateman said. "And demand from these companies is still going to be pretty high, irrespective of what happens to the U.S. dollar."

Price volatility affects the bottom lines of individual companies differently, depending on which part of the industry they're in. Oil companies generally fall into three groups: production, refining and oil services.

Large production companies such as Chevron and Exxon Mobil are likely to be the most subject to swings in the price of oil. Even with the recent downturn, the overall upward trend of recent years has brought them enormous revenues. Exxon Mobil posted world-record profit in the past two years, taking in $40.6 billion in 2007.

Refiners such as Valero Energy, Tesoro and Sunoco are also vulnerable to swings in demand and tend to have smaller profit margins than the big producers. Large companies such as Halliburton that offer services to the producers have less direct exposure to shifts in the price of oil and currently stand to reap the benefits of increased spending on the part of the large producers.

"Really, I think the producers are going to be the ones that are going to have the most psychological swings when there is a downturn in oil prices," Bateman said. "But drillers, pipeline companies, the proppants manufacturers -- they are all going to have huge demand for their services."

Shell hikes oil price anew

22 March 2008

Oil giant Shell Corp. implemented Saturday another round of oil price increase, jacking up its pump products by P.50 per liter. In an advisory, Shell said the increase on gasoline, diesel, and keronese would be effective 12:01 a.m. of Saturday. It added that the oil price hike is "due to the significant increase in the world oil prices."

Title: Re: Meltdown
Post by: BachQ on March 23, 2008, 03:10:14 AM

Times Argus
Article published Mar 23, 2008
'The Long Emergency' predicts dire future

James Kunstler's "The Long Emergency" is something like required reading among peak oil activists, and it's a great primer for those not yet familiar with peak oil's full ramifications. But I know of no other book so deeply, consistently pessimistic; it's a vision of a future that resembles Hieronymus Bosch's nightmarish depictions of the apocalypse. Or maybe the movie Road Warrior.

But the scope of Kunstler's inquiry and his scholarship make it uncomfortably plausible.

The book begins with an excellent history of our discovery, use of, and eventual over-reliance on fossil fuels, primarily oil. The sheer quantity of energy that humankind was suddenly able to access, and the changes it wrought, cannot be adequately conceived by those of us who have lived our lifetimes amidst its benefits.

The first well was drilled into a surface seep in Pennsylvania in 1859. With the coal, water and horse-powered industrial revolution already ramping up, the new energy source was quickly exploited to power new machines of all kinds. The U.S.-led world production for over a century, an era Kunstler describes as the "cheap oil fiesta." The party's about to end in "a tremendous trauma for the human race."

Oil's pervasive influence on every aspect of our way of life proceeded in chains of causality that Kunstler deftly portrays. With automobile mass production starting in 1918, Americans gained a great way to travel and transport goods. Cars required better roads, so extensive highway building commenced. Shorter travel times resulted in a mass migration of city dwellers into nearby rural areas where they could enjoy a simulacrum of "country living." Enormous housing tracts arose around urban centers, and a sprawling retailing infrastructure grew up to supply them. Above all else, the suburban way of life was born of, and demanded, oil.

Peak oil was first proposed in 1956 by M. King Hubbert, a geologist and chief researcher for Shell Oil. He inventoried all known U.S. oil deposits, plotted consumption rates, and came up with "Hubbert's Curve" — a graph that predicted the highest possible rate of extraction, arriving about when our total in-ground oil supply was half used up.

His projections proved correct. U.S. production peaked in 1970 and has been falling ever since.

But just then Middle Eastern production capacity came into its most robust phase. The U.S. bought whatever was needed to fuel our ever more oil-thirsty lifestyles.

Then another generation of oil scientists used Hubbert's methods to look at global production, predicting a peak between 2000 and 2010. Most now say global oil peaked in 2007: We've used half the world's oil; we're already on the "bumpy plateau" at the top, the down slope just ahead.

Kunstler posits the fate of nations in an era of competition for oil and the collapse of oil-dependent social and economic systems. It will be especially hard in the U.S. Those suburbs are too spread out, while our skyscrapered urban centers are too dense, viable only thanks to oil-guzzling infrastructure. Our economy is based on cheaply transporting huge quantities of goods from around the globe.

Oil shortages will profoundly affect the availability of food and water. The "food bubble" of the last 50 years resulted only from having lots of oil to run agricultural equipment, make fertilizers, pump water from underground for huge irrigation systems, and power the trucks and refrigeration systems that deliver edibles to our tables. The past century of food abundance resulted in huge population increases, leaving us with too many people to survive on the carrying capacity of a world short on oil.

Kunstler's cascade of effects continues on through famines, epidemics, social unrest and wars — all exacerbated by global warming.

One casualty will be what Kunstler calls our "hallucinatory" economy, epitomized by the stock market. The hugely complex financial instruments and trading schemes that now govern our economy have divorced real value from perceived or potential value. The financial sector, now an "industry" in its own right, runs money shell games and pyramid schemes that work only if we maintain faith in perpetual economic growth. A psychological product of the oil fiesta, that faith won't survive, and the markets it supports won't either.

Kunstler doesn't offer much in the way of solutions. Renewable energy won't save us; he methodically explains the limitations of each energy technology and source, rejecting the idea that they can replace any significant part of the lost oil bonanza.

Instead, we'll need to ratchet down our material expectations and live in austerity. We will need to produce essential goods locally, close to where we'll use them. We'll live in smaller, walkable cities surrounded not by malls but by farms. We'll all do more manual labor.

It would be easier to dismiss Kunstler's darker speculations if he hadn't proven surprisingly prescient. For example, in expounding on the "hallucinatory economy" and the downfall of suburbia, he wrote about the housing boom and described sub-prime lending practices in detail, warning of economic disaster.

Kunstler wrote the book in 2004-05, three years before the sub-prime and housing bubble burst, with ramifications still unfolding. One has to wonder just how much more he's gotten right.

Daniel Hecht is a novelist and executive director of Vermont Environmental Consortium. For more information on any Green Grapevine topic, contact vec@norwich.edu.

(http://www.timesargus.com/apps/pbcs.dll/article?AID=/20080323/ENVIRONMENT/803230357/1033/ENVIRONMENT)

Title: Re: Meltdown
Post by: Sean on March 23, 2008, 03:59:27 PM

Good one Dm- it must be a scary read. I have a great deal to say about postmodernism and democracy and the small mindedness and inability of the masses to make proper and moral sense of the world. I knew there was something seriously going wrong with values and the whole modernization process in the early '80s, and the present issue makes complete sense to me: I'm sure it's right without even knowing any technical info myself.

Title: Re: Meltdown
Post by: Sean on March 23, 2008, 11:42:08 PM

Some great stuff here, and a humorous rant besides-
http://www.kunstler.com/

Title: Re: Meltdown
Post by: BachQ on March 24, 2008, 06:18:00 PM

Thanks, Sean. While James Howard Kuntsler does not have the credentials of Richard Heinberg, Matt Simmons, Colin Campbell, etc., he has a lot of good stuff to say, and he is not lacking in opinions.

On his website can be found this:

PetroCollapse New York Conference
October 5, 2005

Remarks by James Howard Kunstler
Author of The Long Emergency

In the waning months of 2005, our failure to face the problems before us as a society is a wondrous thing to behold. Never before in American history have the public and its leaders shown such a lack of resolve, or even interest, in circumstances that will change forever how we live.

Even the greatest convulsion in our national experience, the Civil War, was preceded by years of talk, if not action. But in 2005 we barely have enough talk about what is happening to add up to a public conversation. We're too busy following Paris Hilton and Michael Jackson, or the NASCAR rankings, or the exploits of Donald Trump. We're immersed in a national personality freak show soap opera, with a side order of sports 24-7.

Our failure to pay attention to what is important is unprecedented, even supernatural.

This is true even at the supposedly highest level. The news section of last Sunday's New York Times did not contain one story about oil or gas - a week after Hurricane Rita destroyed or damaged hundreds of drilling rigs and production platforms in the Gulf of Mexico - which any thought person can see leading directly to a winter of hardship for many Americans who can barely afford to heat their homes - and the information about the damage around the Gulf was still just then coming in.

What is important?

We've entered a permanent world-wide energy crisis. The implications are enormous. It could put us out-of-business as a cohesive society.

We face a crisis in finance, which will be a consequence of the energy predicament as well as a broad and deep lapse in our standards, values, and behavior in financial affairs.

We face a crisis in practical living arrangements as the infrastructure of suburbia becomes hopelessly unaffordable to run. How will fill our gas tanks to make those long commutes? How will we heat the 3500 square foot homes that people are already in? How will we run the yellow school bus fleets? How will we heat the schools?

What will happen to the economy connected with the easy motoring utopia - the building of ever more McHouses, WalMarts, office parks, and Pizza Huts? Over the past thirty days, with gasoline prices ratcheting above $3 a gallon, individuals all over America are deciding not to buy that new house in Partridge Acres, 34 miles from Dallas (or Minneapolis, or Denver, or Boston). Those individual choices will soon add up, and an economy addicted to that activity will be in trouble.

The housing bubble has virtually become our economy. Subtract it from everything else and there's not much left besides haircutting, fried chicken, and open heart surgery.

And, of course, as the housing bubble deflates, the magical mortgage machinery spinning off a fabulous stream of hallucinated credit, to be re-packaged as tradable debt, will also stop flowing into the finance sector.

We face a series of ramifying, self-reinforcing, terrifying breaks from business-as-usual, and we are not prepared. We are not talking about it in the traditional forums - only in the wilderness of the internet.

Mostly we face a crisis of clear thinking which will lead to further crises of authority and legitimacy - of who can be trusted to hold this project of civilization together.

Americans were once a brave and forward-looking people, willing to face the facts, willing to work hard, to acknowledge the common good and contribute to it, willing to make difficult choices. We've become a nation of overfed clowns and crybabies, afraid of the truth, indifferent to the common good, hardly even a common culture, selfish, belligerent, narcissistic whiners seeking every means possible to live outside a reality-based community.

These are the consequences of a value system that puts comfort, convenience, and leisure above all other considerations. These are not enough to hold a civilization together. We've signed off on all other values since the end of World War Two. Our great victory over manifest evil half a century ago was such a triumph that we have effectively - and incrementally - excused ourselves from all other duties, obligations and responsibilities.

Which is exactly why we have come to refer to ourselves as consumers. That's what we call ourselves on TV, in the newspapers, in the legislatures. Consumers. What a degrading label for people who used to be citizens.

Consumers have no duties, obligations, or responsibilities to anything besides their own desire to eat more Cheez Doodles and drink more beer. Think about yourself that way for twenty or thirty years and it will affect the collective spirit very negatively. And our behavior. The biggest losers, of course, end up being the generations of human beings who will follow us, because in the course of mutating into consumers, preoccupied with our Cheez Doodle consumption, we gave up on the common good, which means that we gave up on the future, and the people who will dwell in it.

There are a few other impediments to our collective thinking which obstruct a coherent public discussion of the events facing us which I call the Long Emergency. They can be described with precision.

Because the creation of suburbia was the greatest misallocation of resources in the history of the world, it has entailed a powerful psychology of previous investment - meaning, that we have put so much of our collective wealth into a particular infrastructure for daily life, that we can't imagine changing it, or reforming it, or letting go of it. The psychology of previous investment is exactly what makes this way of life non-negotiable.

Another obstacle to clear thinking I refer to as the Las Vegas-i-zation of the American mind. The ethos of gambling is based on a particular idea: the belief that it is possible to get something for nothing. The psychology of unearned riches. This idea has now insidiously crept out of the casinos and spread far-and-wide and lodged itself in every corner of our lives. It's there in the interest-only, no down payment, quarter million-dollar mortgages given to people with no record of ever paying back a loan. It's there in the grade inflation of the ivy league colleges where everybody gets As and Bs regardless of performance. It's in the rap videos of young men flashing 10,000-dollar watches acquired by making up nursery rhymes about gangster life - and in the taboos that prevent us from even talking about that. It's in the suburbanite's sense of entitlement to a supposedly non-negotiable easy motoring existence.

The idea that it's possible to get something for nothing is alive and rampant among those who think we can run the interstate highway system and Walt Disney World on bio-diesel or solar power.

People who believe that it is possible to get something for nothing have trouble living in a reality-based community.

This is even true of the well-intentioned lady in my neighborhood who drives a Ford Expedition with the War Is Not the Answer bumper sticker on it. The truth, for her, is that War IS the Answer. She needs to get down with that. She needs to prepare to send her children to be blown up in Asia.

The Las Vegas-i-zation of the American mind is a pernicious idea in itself, but it is compounded by another mental problem, which I call the Jiminy Cricket syndrome. Jiminy Cricket was Pinocchio's little sidekick in the Walt Disney Cartoon feature. The idea is that when you wish upon a star, your dreams come true. It's a nice sentiment for children, perhaps, but not really suited to adults who have to live in a reality-based community, especially in difficult times.

The idea - that when you wish upon a star, your dreams come true - obviously comes from the immersive environment of advertising and the movies, which is to say, an immersive environment of make-believe, of pretend. Trouble is, the world-wide energy crisis is not make-believe, and we can't pretend our way through it, and those of us who are adults cannot afford to think like children, no matter how comforting it is.

Combine when you wish upon a star, your dreams come true with the belief that it is possible to get something for nothing, and the psychology of previous investment and you get a powerful recipe for mass delusional thinking.
As our society comes under increasing stress, we're liable to see increased delusional thinking, as worried people retreat further into make-believe and pretend.

The desperate defense of our supposedly non-negotiable way of life may lead to delusional politics that we have never seen before in this land. An angry and grievance-filled public may turn to political maniacs to preserve their entitlements to the easy motoring utopia - even while reality negotiates things for us.

I maintain that we may see leaders far more dangerous in our future than George W. Bush.

The last thing that this group needs is to get sidetracked in paranoid conspiracy politics, such as the idea that Dick Cheney orchestrated the World Trade Center attacks, which I regard as just another form of make-believe.

This is what we have to overcome to face the reality-based challenges of our time.

At the bottom of the Peak Oil issue is the fear that we're not going to make it.

The Long Emergency looming before us is going to produce a lot of losers. Economic losers. People who will lose jobs, vocations, incomes, possessions, assets - and never get them back. Social losers. People who will lose position, power, advantage. And just plain losers, people who will lose their health and their lives.

There are no magic remedies for what we face, but there are intelligent responses that we can marshal individually and collectively. We will have to do what circumstances require of us.

We are faced with the necessity to downscale, re-scale, right-size, and reorganize all the fundamental activities of daily life: the way we grow food; the way we conduct everyday commerce and the manufacture of things that we need; the way we school our children; the size, shape, and scale of our towns and cities.

These are huge tasks. How can we bring a reality-based spirit to them?

I have a suggestion. Let's start with one down-to-earth project that we can take on with confidence, something we have a reasonable shot at accomplishing, and fairly quickly, something that will address our energy problems directly and will make a difference for the better. Let's get started rebuilding the passenger railroad system in our country.
Nothing else we might do would make such a substantial impact on our outlandish oil consumption.

We have a railroad system that the Bulgarians would be ashamed of.

The fact that we are not talking about this shows how deeply unserious we are - especially the Democratic party. I am a registered Democrat. Where is my party on this issue? Where was John Kerry? Where are Senators Hillary Clinton and Charles Schumer? We should demand that they get serious about rebuilding the public transit of America - not next month or next year but tomorrow, starting at the crack of dawn.

Any person or any group who finds themselves in trouble has to begin somewhere. They have to take a step that will prove to themselves that they are not helpless, that they are capable of accomplishing something, and accomplishing that first thing will build the confidence to move on to the next step.

That's how people save themselves, how they reconnect with reality-based virtue.

We were once such a people. We were brave, resourceful, generous, and earnest. The last thing we believed was the idea that it was possible to get something for nothing. That we were entitled to a particular outcome in life, apart from the choices we made and how we acted. We can recover those forsaken elements of our collective character. We can be guided, as Abraham Lincoln said, by the better angels of our nature.

We lived in a beautiful country with vibrant towns and cities, and a gorgeous, productive rural landscape, and we were sufficiently rewarded by them so we did feel driven to seek refuge in make-believe all the livelong day. When we wanted to accomplish something we set out to do it, to make it happen, not merely to wish for it. We knew the difference between wishing and doing - which is probably the most important thing that adult human beings can know.

I hope we can get back to being that kind of people. This effort here today is a good start.

Title: Re: Meltdown
Post by: BachQ on March 24, 2008, 06:47:07 PM

Richard Heinberg's Official Website can be accessed by clicking here :D :D :D (http://www.richardheinberg.com/)

Title: Re: Meltdown
Post by: Sean on March 24, 2008, 11:57:00 PM

Good one Dm.

Title: Re: Meltdown
Post by: BachQ on March 25, 2008, 05:46:20 AM

Food prices rising across the world

MEXICO CITY, Mexico (AP) -- If you're seeing your grocery bill go up, you're not alone.

From subsistence farmers eating rice in Ecuador to gourmets feasting on escargot in France, consumers worldwide face rising food prices in what analysts call a perfect storm of conditions. Freak weather is a factor. But so are dramatic changes in the global economy, including higher oil prices, lower food reserves and growing consumer demand in China and India. *** Meanwhile, record oil prices have boosted the cost of fertilizer and freight for bulk commodities -- up 80 percent in 2007 over 2006. The oil spike has also turned up the pressure for countries to switch to biofuels, which the FAO says will drive up the cost of corn, sugar and soybeans "for many more years to come."

In Japan, the ethanol boom is hitting the country in mayonnaise and miso, two important culinary ingredients, as biofuels production pushes up the price of cooking oil and soybeans.

(http://www.cnn.com/2008/WORLD/americas/03/24/food.ap/index.html)

Title: Re: Meltdown
Post by: BachQ on March 25, 2008, 06:34:13 AM

High-priced fuel scares airlines

By Dan Reed, USA TODAY

Like poker players dealt a bad hand, they're trying to act calm, but $100-plus oil is starting to really scare the people who run the USA's airlines. Record prices for both crude oil and refined jet fuel are threatening to send U.S. carriers spiraling toward deep losses, drastic service cutbacks, job cuts and, perhaps by year's end, an industrywide cash crunch.

(http://i.usatoday.net/money/_photos/2008/03/25/jet-fuelx.jpg)

A year ago, airline managers were talking about the return of a profits cycle in 2007 that would grow larger this year and extend into 2009 or even 2010. Now, they're grounding and selling planes, trimming service on marginal routes and eliminating it on others where there's no hope of making money. They are cutting jobs, rolling out more service charges and — to the consternation of travelers — raising fares almost weekly by amounts never seen before. They're also watching their cash balances closely and nervously.

Prolonged oil prices above $110 a barrel could do what all the airlines' long list of problems in the last seven years have not — drive one or more out of business. That's a worst-case scenario, however. The government's Energy Information Administration forecasts crude oil prices will average $94 a barrel this year. And airlines have a well-established record of surviving the most horrible business conditions.

But even if expectations of prolonged triple-digit oil prices prove wrong, no one expects them to fall back near last year's average of $72 a barrel, which was then perceived as painfully high. So U.S. carriers are certain to spend much more on fuel this year than they did last year — $2 billion more in Delta's (DAL) case at current oil prices, for example.

That means the USA's air carriers appear headed toward the kind of huge losses they rang up in the post-9/11 years before earning very modest profits in 2006 and 2007. In recent reports, several industry analysts have projected those losses could range from $1 billion to $9 billion.

"Something's gotta give somewhere," says Joe Hodas, a spokesman for Frontier Airlines (FRNT).

A small, Denver-based discounter, Frontier is squeezed not only by fuel prices but also by competition from United (UAUA) and Southwest (LUV) at its Denver hub.

Low-cost carriers such as Frontier are perhaps most threatened by high oil prices because fuel represents a bigger share of operating budgets, and because they have fewer assets they can turn into cash for survival. But Hodas says triple-digit oil prices are a threat to all carriers. "None of us can sustain $110-a-barrel oil long term; none of us, I don't think," he says. "Whether it's consolidation or the shrinking of capacity, you're going to see more of that (as airlines) deal with these fuel prices."

Analyst Michael Derchin at FTN Midwest Securities says airlines are entering "another Darwinian period of survival of the fittest." Not only must capacity be reduced, "Fares will have to be a lot higher," he says. And fuel surcharges like those now in place on most international tickets sold must be "adopted domestically as part of the pricing system."

That's already happening. There have been at least seven successful major fare increases this year involving the big network carriers. Eleven days ago, United led the industry in tacking up to $50 to the round-trip price of domestic tickets, a huge price increase by airline standards in any era. Five days later Delta followed with a $10 boost to domestic fares, and American (AMR) and Northwest (NWA) added $20 to most trans-Atlantic fares.

To reduce their exposure to high fuel prices, Frontier, JetBlue (JBLU) and AirTran (AAI) are selling some of their new planes. ATA Airlines, once the dominant discounter at Chicago's Midway Airport, is shutting down scheduled flying except for its West Coast-to-Hawaii flights. It will concentrate on charter service, where it's easier to pass higher oil prices on to the customer.

"The high cost of fuel and the fact that it stayed high were overbearing," says Steve Forsyth, spokesman for ATA's parent, Global Aero Logistics.

Even Skybus, the tiny year-old discounter that offers a few seats on all its flights for $10 one way, is reducing flights and scaling back its growth plans in the face of high oil prices.

Breaking the budget

Oil prices are affecting big carriers, too:

•Northwest Airlines. CEO Doug Steenland two weeks ago called oil prices, which were then at $105 a barrel, a "serious budget breaker," because an average annual price above $100 a barrel would add $1.7 billion to Northwest's fuel bill this year. That's more than double its 2007 pretax profit of $764 million.

•United Airlines. It currently spends about $173,000 to fuel a Boeing 747 for a flight from Chicago to Hong Kong, roughly double what it cost four years ago. United has to get nearly $500 in revenue out of each of the 347 seats on that plane just to pay for the fuel — and it still has to cover other expenses, including crew salaries, in-flight meals, the plane's upkeep, marketing and the cost of the jet itself.

•American Airlines. Its annual fuel bill rises $33 million for every penny increase in the average annual price of a gallon of jet fuel. Last year, it paid $2.12 a gallon after adjusting for its fuel hedges. As recently as January, it had been forecasting an increase of about $1.5 billion in its annual fuel bill this year, a daunting increase for a company that earned a profit of just $504 million last year. In a Monday filing with the Securities and Exchange Commission, American said it now expects to pay an average of $2.98 a gallon this year, and for its fuel bill to rise $2.6 million this year, to a total of $9.3 billion. (http://www.usatoday.com/money/industries/travel/2008-03-24-jet-fuel-costs_N.htm)

Title: Re: Meltdown
Post by: BachQ on March 25, 2008, 09:49:36 AM

New York Times

March 25, 2008
Editorial
Pain at the Pump and Beyond

The surge in the price of energy couldn't come at a worse time. The average price nationally of regular gasoline has shot up to a record $3.28 a gallon. Combine that with the collapse of the housing market and the seizing financial sector, and it is putting a boot to the gut of an economy that is either already in a recession or close to one.

The Bush administration can't be entirely blamed for the pain at the gas pump. But its shortsighted energy policies — zealously focused on increasing the energy supply, with little attention paid to conservation and greater fuel-efficiency — means the country is far too dependent on oil that is both ruinously expensive and ruinous for the environment.

There are several reasons for oil's dizzying price spiral. Soaring demand in fast-growing developing countries like China and India means there is little oil to spare. The turmoil in financial markets — the White House can take a good chunk of the blame for that — has driven prices even higher, as investors have bought oil and other commodities as stocks and the dollar plunge.

Meanwhile, President Bush's strategy for ensuring that the nation's energy security is focused on one thing: getting more oil by drilling in the Arctic and sending Vice President Dick Cheney to ask his Saudi friends to pump more. Neither could ever produce enough.

Not everyone is unhappy with oil at $100-plus a barrel. Authoritarian governments in Iran, Venezuela, Sudan and Russia are pocketing the profits and enjoying the political impunity that comes with such riches.

At home, the news is bad and getting worse. Consumer prices rose more than 4 percent in the past year, largely because of rising energy costs. Americans have started to reduce spending on other consumer goods, which is weakening the economy. The risk of inflation leaves the Federal Reserve with less room to maneuver.

If any good can come out of this mess, it would be an understanding — by corporations, consumers and government — that the era of cheap oil is truly over. With that, the country could finally focus on developing clean alternative energy sources and reducing oil consumption, a strategy that has served other countries well.

Take cars. Until last December, Republican and Democratic administrations had refused to raise fuel-efficiency standards for 30 years. And raising the puny gasoline tax remains a political nonstarter. By contrast, in Britain, gas at the pump costs around $7.70 a gallon, of which about $4.90 are taxes. In France, taxes account for about $4.60 of the retail price of $7.50 a gallon. Unsurprisingly, their cars get much better gas mileage than the guzzlers still popular in the United States.

Higher taxes on energy mean other rich countries are more energy-efficient across the board. The average German or Japanese uses little more than half the energy consumed by an average American. In Germany and Japan, per-capita emissions of carbon dioxide spewed by cars, power plants and other sources of energy are half those in the United States. In France, they are a third.

Americans are beginning to curb consumption. Gasoline demand declined in the first 11 weeks of the year for the first time since 1997. But it is far too little, and government policy is lagging far behind the problem.

The landmark energy bill passed in December tightened fuel standards for the first time since 1975 — demanding a 40 percent increase in cars' and light trucks' average fuel-efficiency by 2020. Still, the Department of Energy estimates that by 2022, the new standards would have reduced gasoline consumption by about only two million barrels a day, which amounts to a 17 percent cut in projected gasoline consumption.

A lot more needs to be done to prepare the American economy for a world of scarcer, more expensive energy. To start, the nation has to replace the oilmen in the White House with leaders who have a better grasp of the economics of energy and the interests of all Americans.

Title: Re: Meltdown
Post by: BachQ on March 26, 2008, 10:31:16 AM

Oil Firms 'In Liquidation,' Says 'Peak Oil' Advocate
PEAK OIL DEBATE, OIL SANDS, OIL, ENERGY, ENERGY PRICES, CHESAPEAKE, MATTHEW SIMMONS
By Kenneth Stier, Features Writer
CNBC.com
| 25 Mar 2008 | 01:26 PM ET

(http://media.cnbc.com/j/CNBC/Sections/News_And_Analysis/__Story_Inserts/graphics/__PEOPLE/M_to_Z/Simmons_Matt.standard.jpg)

The "peak oil" debate continued to rage with one of its principal proponents, energy sector investment banker Matthew Simmons, appearing on CNBC Tuesday to insist that major oil firms are "actually in liquidation."

Peak oil is the name given to the theory that the planet is in the midst of an ever-tightening supply — which in turn means oil prices will be locked into a permanent, rising arc. Simmons' assessment of major oil companies' fate is the "grim reality," he says, of the firms even as they insist that vast potential remains from unconventional sources. Among those untapped reserves are the "tar sands" or "oil sands" of Canada — naturally occurring mixtures of earth, water and oil found largely in Alberta.

That was the contention of John Hofmeister, president of Royal Dutch Shell's US operations, who shared his views on CNBC's "Squawk Box" last week. "His assumptions are correct based on his hypotheses, but his hypotheses are too narrow," Hofmeister said of Simmons. "In other words, he is looking at conventional oil only, and in the industry we look at unconventional oil as well."

But Simmons said it's "convenient" for major oil firms like Shell to book reserves, such as its oil sands project in Alberta, but doing so amounts to an exercise in "turning gold into lead" because of the vast energy and potable water resources needed there to produce low-quality oil. The water is converted to steam to blow oil from the sands and then to melt the tar, but this still leaves low-quality oil that is later mixed with higher quality oil to finally yield synthetic crude. The cost of Shell's Canada oil sands project has now ballooned to $14 billion but would yield only 100,000 barrels per day — about the same as a single major well in Saudi Arabia — making it an unsure business proposition, Simmons said.

His critique is not limited to Shell though. All major oil firms, he said, are "overlooking the fact that they are actually in liquidation, their production has been in decline for several years [and] no matter how much money they intend to spend, they just can't get ahead of their [production] decline curves. And their proven reserves are shrinking very rapidly." Simmons, who is chairman of Simmons & Co. International, a specialized energy investment-banking firm based in Houston, is also the author of "Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy." Surging demand, especially from developing countries, point to an arc of higher energy prices, he added.

"Unless we have a very severe meltdown in the global economy, I think we would be better off assuming that China and India are going to lead the way of the developing countries starting to behave more and more like Japan did in the '50s and '60s," he said. "If that happens, then we need to be prepared for for one of two things: either bringing on supply to the tune of a new North Sea every two or three years — which is impossible — or watching demand outstrip supply. And finally we [will] create shortages that literally create a run on the energy bank, just like we had a run on Bear Stearns."

One bright spot for the industry has been the performance of small exploration and production companies, said Simmons, who mentioned Oklahoma City-based Chesapeake Energy Corporation , a company that has been able to post double-digit growth in natural gas production. He said the firm accomplished this by deploying close to 20 percent of the drilling rigs in the US, working on "fairly incidental" wells. "But you put them all together and you have the ability to have double-digit growth," he said. "If Chesapeake were basically the size of a major oil company, they couldn't pull it off. So they have benefited because they are small and nimble."

On Monday Chesapeake announced it's expanding its existing multi-billion dollar drilling program, and branching out into oil drilling as well. Chesapeake also plans to expand its capital budget by $275 million in 2008 and by $675 million in 2009.

URL: http://www.cnbc.com/id/23794175/

(http://www.cnbc.com/id/23794175)

Title: Re: Meltdown
Post by: BachQ on March 26, 2008, 10:36:51 AM

Peak Oil vs. Global Warming: "What this report tells us, however, is that we can't simply focus on one crisis—no matter how large and looming—without taking into consideration the other key drivers of change. The onset of peak oil will alter how we deal with climate disruption, rendering climate strategies that don't take peak oil into account of limited value. Similarly, the fact of global warming must shape how our economies deal with a permanent oil crunch. "
(http://ieet.org/index.php/IEET/more/cascio20080325/)

Title: Re: Meltdown
Post by: BachQ on March 26, 2008, 10:43:28 AM

Airline shares fall sharply on oil rally
Wed Mar 26, 2008

CHICAGO (Reuters) - Airline stocks fell sharply on Wednesday as the price of a barrel of oil -- directly linked to the price of jet fuel -- rallied more than $4. (http://www.reuters.com/article/hotStocksNews/idUSN2632672220080326)

Title: Re: Meltdown
Post by: BachQ on March 26, 2008, 10:56:33 AM

MATT SIMMONS: Oil Firms "In Liquidation"

http://www.youtube.com/v/FAasJZMRqTg

Title: Re: Meltdown
Post by: BachQ on March 27, 2008, 06:06:11 AM

"Forget about rising sea levels. The advent of peak oil will make global warming seem like a day at the beach. Petroleum doesn't just fuel our automobiles, it's in everything, from fertilizer to pharmaceuticals to food products." (http://www.newsreview.com/sacramento/Content?oid=643529)

March 26 (Bloomberg) -- Reserve Bank Governor Tito Mboweni warned South Africans to tighten their belts as rising energy and food prices stoke inflation. ``We have a very, very difficult time ahead of us,'' Mboweni told lawmakers in Cape Town today. ``It doesn't seem like oil prices are going to be of assistance to us for a while. We have to tighten our belts.'' *** The higher oil price has translated into increases in the prices of other goods, known as ``second-round inflation,'' Mboweni said. ``If you remove food and energy, pressure is still on the up side. It's not the nicest time to be a central bank governor.'' (http://www.bloomberg.com/apps/news?pid=20601116&sid=aKTemynedrqA&refer=africa)

Title: Re: Meltdown
Post by: BachQ on March 28, 2008, 06:40:05 AM

"If by 2050, the per capita energy consumption of China and India were to approach that of South Korea, and if the Chinese and Indian populations increase at currently projected rates, those two super giant countries by themselves would consume more oil than the entire world used last year. John Hess, chairman of Hess Corp., a global oil and mineral exploration company, said recently, "An oil crisis is coming in the next 10 years. It's not a matter of demand. It's not a matter of supplies. It's both."

"The problem is graver than it appears for one simple reason: Replacing oil in the transportation sector requires strong government action two decades before a peak because of the time needed to replace vehicles and fuel infrastructure. That was the conclusion of a major study funded by the Department of Energy in 2005 -- yes, the Bush DOE -- on "Peaking of World Oil Production." The report notes: "The world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary."

"Ouch! The same central point is true about global warming. If we want global carbon dioxide emissions to peak and start declining, the planet will need to start aggressive mitigation policies two decades in advance. We're at about 30 billion tons of annual CO2 emissions and rising 3 percent per year. By 2020, we'll be over 40 billion tons annually. If we average more than 18 billion tons of CO2 a year this century, we risk widespread desertification, sea level rise (of 80 feet or more) and the loss of up to 70 percent of all species." (http://www.salon.com/news/feature/2008/03/28/peak_oil_solutions/)

Title: Re: Meltdown
Post by: BachQ on March 28, 2008, 06:54:33 AM

(http://www.belfasttelegraph.co.uk/template/ver/gfx/template/components/header/belfasttelegraph_logo.gif)

Energy costs soaring to £1,000
[Published: Friday 28, March 2008 - 13:35]

Householders in Northern Ireland can expect to fork out over £1,000 on energy bills this year - an increase of nearly 30% since 2006, the Belfast Telegraph can reveal today. The bulk of the rise - up over £200 in just two years - can be blamed on the rocketing cost of home heating oil. The Telegraph has calculated that the expected average bill for home heating oil and electricity this year to be a staggering £1,015 - at least. In 2006, the figure was £785. We are anow spending around £1,388 on running cars on unleaded petrol, based on an average annual use of 1,286 litres - compared to £1118.82 in 2006. The forecast is equally bleak for the cost of food - the industry has predicted that the average price of a basket of groceries will go up by as much as 20% this year. The increasing cost of keeping food in the cupboard is mostly down to the rising cost of fuel - which again affects the cost of keeping our motors on the road.

However, it is in the cost of home heating oil that families are facing the worst increases.

Two years ago, it cost £403 to buy 1200 litres of fuel. Now it costs around £630.

These soaring prices are dictated by the cost of crude oil - which is buffeted by strong demand, tight global supplies and political uncertainty.

The weak US dollar, the trend for investors to move money from pension and hedge funds into commodities like oil, wheat and gold because they are regarded as safer investments, and the decision of oil-producing countries represented in Opec not to boost supplies, have also contributed to the recent rises in crude oil prices, according to the Northern Ireland Oil Federation.

David Blevings, the federation's executive director, said: "We are only too aware of the increased energy costs across the board and as a responsible industry we want to offer services and products that may help minimise the impact of increased prices on consumers.

"We are suggesting that consumers concerned about the increased prices should consider using a pre-payment system such as direct debit to help budget. In addition, we would recommend consumers having their boiler serviced and top up loft insulation to maximise heat retention in the home.

"Most analysts would agree that a sharp price correction is due as milder weather approaches and demand slackens. The good news is that local oil distributors operate in an extremely competitive market and these competitive pressures ensure that immediately the price of oil drops on the international market the savings are offered to consumers in order to retain their custom".

The Northern Ireland Consumer Council expressed dismay at the rises and said wages were not rising in tandem with the cost of living. Carol Edwards, the council's head of education, said: "Every day brings stories of rising prices. We're paying more for food, we're paying more at the petrol pumps, the price of oil and rates are up but our incomes aren't keeping up and this is putting a real strain on the people's pockets."

"It's more important than ever to make your money go as far as possible. Shop around, compare prices and make sure that you are getting all the benefits that you are entitled to," she said.

According to research by the Department for Social Development, one in three households here are living in fuel poverty, an increase of around 7% in 2004.

Gas and electricity prices are stable although Phoenix Natural Gas is to review its prices next month.

Kerstie Forsyth from NIE Energy, which introduced a below-inflation increase of 3.9% in November last year, said: "NIE Energy has no plans to review tariffs again until this autumn."

(http://www.belfasttelegraph.co.uk/news/local-national/article3558579.ece)

Title: Re: Meltdown
Post by: Sean on March 28, 2008, 09:17:41 PM

Hi Dm, what genuinely worries me is that most people aren't interested in difficult or fundamental problems, I know this from long experience- they just don't fit into their minds, and look to good leadership at this point, someone else to deal with basic things. Peak oil is about the biggest problem humanity's ever faced and the best response by far for people is to ignore it. Goodness knows what's going to happen in the next few years.

Title: Re: Meltdown
Post by: Mozart on March 28, 2008, 11:00:59 PM

Isn't it strange that the Mayans predicted a major event will occur in 2012, and all this crap is happening now. Frightening! We all better enjoy life, because in a few years it's going to take a turn for the worst...Do more now! Its the last years of a comfortable existence.

Title: Re: Meltdown
Post by: Wanderer on March 29, 2008, 12:13:00 AM

Not really. Considering they were unable to predict their major event, I think you'll be quite safe enjoying life for quite a long time.

Title: Re: Meltdown
Post by: Sean on March 29, 2008, 12:54:26 AM

They did predict it, almost to the day- check it out.

Title: Re: Meltdown
Post by: Wanderer on March 29, 2008, 01:41:42 AM

And whence comes this baseless assertion? Is elias indeed in danger?

Title: Re: Meltdown
Post by: BachQ on March 29, 2008, 04:26:26 AM

Quote from: E..L..I..A..S.. =) on March 28, 2008, 11:00:59 PM
Isn't it strange that the Mayans predicted a major event will occur in 2012, and all this crap is happening now. Frightening! We all better enjoy life, because in a few years it's going to take a turn for the worst...Do more now! Its the last years of a comfortable existence.

Several peak oil advocates have predicted the "beginning of the end" to be around 2012 ........ and Chinese government officials have projected global peak oil in 2012.

Transitioning to a New Paradigm
Now is the time to establish a strategic plan to address the inevitable end of cheap oil.

By Roscoe G. Bartlett

Oil runs our economy. Oil runs our military. Oil makes and transports the food that we eat. That's why it makes no sense for our country to wait for global peak oil to impose a radical and permanent end of cheap oil.

Oil production reached a maximum, or peak, in the United States in 1970. It has declined every year since. Oil production has also peaked in 33 of 48 major oil-producing countries. Many experts predict that global peak oil is imminent. Chinese government officials have projected global peak oil in 2012. The Department of Energy's Energy Information Administration estimates global peak oil won't occur until 2037. Only the timing of global peak oil is in dispute among energy experts, but the year won't be known until after it has occurred. Energy advisor Robert L. Hirsch in his recent World Oil article cautions that peak oil was not apparent in the 48 continental United States, Great Britain or Norway one year in advance (see http://worldoil.com/magazine/MAGAZINE_DETAIL.asp?ART_ID=
2696&MONTH_YEAR=Oct-2005). A 1999 National Petroleum Council report failed to predict the apparent 2005 peak in North American natural gas production.

From 2003 to 2004, the average increase in oil consumption in Belarus, Kuwait, China and Singapore was 15.9 percent. With worldwide demand increasing, what effect would a decline in oil supply from global peak oil have on oil prices? The National Commission on Energy Policy and Securing America's Future Energy issued a report on Sept. 6 titled, "Oil Shockwave" (access the report at www.energycommission.org). The commission estimated a 4 percent sustained shortfall in global oil supply would raise the price of oil above $160 per barrel. (http://www.solartoday.org/2006/mar_apr06/transitioning.htm)

Title: Re: Meltdown
Post by: greg on March 29, 2008, 05:11:18 AM

Actually, the cause for the oil shortage is that Ubloobideega keeps drinking it. Just one of his ways of trying to destroy the world since he still can't figure out yet how to make 0 K.

Title: Re: Meltdown
Post by: Mozart on March 29, 2008, 05:00:48 PM

Quote from: Wanderer on March 29, 2008, 01:41:42 AM
And whence comes this baseless assertion? Is elias indeed in danger?

We all are in danger of drop in quality of life, hunger and thirst, and savages using violence to try and quench those needs. Maybe not tomorrow, but it will happen gradually and surely.

Title: Re: Meltdown
Post by: Wanderer on March 29, 2008, 11:19:58 PM

Quote from: Mozart on March 29, 2008, 05:00:48 PM
We all are in danger of drop in quality of life, hunger and thirst, and savages using violence to try and quench those needs.

Not because of some ancient prophecy, surely.

Title: Re: Meltdown
Post by: BachQ on March 30, 2008, 03:19:52 AM

"Climate change is certainly a huge problem—the summer Arctic sea ice is clearly disappearing—requiring an effective longer term solution. However, the rising oil price is a disconcerting fact of life right now. Shortages are likely less than a decade away. It's high-time for climate activists to wake up and smell the coffee on peak oil. I studied the climate issues for over a decade before turning to the peak oil problems, which struck me as being immediate and inimical to our ability to solve all the other problems we have—including climate. Many climate activists have tunnel vision that prevents them from appreciating the real oil supply problems we have to solve right now. Everything is viewed through the lens of climate change. This view is naive—we're about to get plowed under by the oil market fundamentals." (http://www.energybulletin.net/42120.html)

Title: Re: Meltdown
Post by: BachQ on March 31, 2008, 05:51:31 AM

Europe Inflation Accelerates to 3.5%, Sentiment Drops (Update4)

By Fergal O'Brien

March 31 (Bloomberg) -- European inflation accelerated to the fastest pace in almost 16 years, making it harder for the European Central Bank to cut interest rates as a global credit squeeze saps confidence among executives and consumers.

Consumer-price inflation in the euro area accelerated to 3.5 percent this month, the highest rate since June 1992, the European Union's statistics office in Luxembourg said today. *** The euro's 11 percent advance against the dollar in the last six months, which makes euro-area goods less competitive, and oil prices above $100 a barrel are undermining confidence. At the same time, the worst U.S. housing slump in more than a quarter of a century is slowing the world's largest economy, damping demand for European exports.
(http://www.bloomberg.com/apps/news?pid=20601068&sid=aSwRuclTLUJ0&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 01, 2008, 10:21:23 AM

From: International Business Times

Peak Oil Review
-- March 31st, 2008
By Tom Whipple
Posted 01 April 2008 @ 09:30 am EST

1. Production and Prices

Prices rose as high as $107.70 a barrel at mid-week when it was reported that a pipeline linking southern Iraqi oilfields with the export terminal at Basra had been cut. Prior to the report, concerns that a weakening US economy would cut demand had kept prices just above $100 per barrel. By Friday, however, reports that the damage had been repaired and that oil exports were back to normal led to prices closing the week at $105.62. Oil is now 65 percent higher than a year ago.

Prices were supported last week by the stocks report that showed US refineries operating at an unusually low 82.2 percent of capacity. Total US petroleum stocks decreased by 6.5 million barrels last week. US inventories except for distillates are still in good shape for this time of the year. Overall consumption of petroleum products in the US is now down by 2.2 percent from last year, except for gasoline consumption which is only down by 0.3 percent.

Tanker tracker Petrologistics reported that OPEC probably increased its production by 100,000 b/d during March with most of the increase coming from Iran which had weather-related delays in February. Of more significance was a statement by Russia's Natural Resources Minister that Russia's oil output may decline for the first time in a decade.

Prices in the coming week are likely to be driven by developments in Iraq and status of the US dollar which many are predicting will continue to decline next week as the US economic situation deteriorates.

2. Basra

Baghdad's 30,000 man assault on militants in Basra on Tuesday may mark the beginning of a turning point in the Iraqi situation. As the Shiite militia forces loyal to cleric al-Sadr came under attack, demonstrations and fighting soon spread as far north as Baghdad. Prior to the attack, it was reported that Iraq has boosted exports to a post-invasion high of 400,000 b/d through the northern pipeline to Turkey, and that exports through Basra were holding steady at about 1.5 million b/d.

Initially the government announced that the fighting was having no impact on oil exports; however that changed when the largest crude pipeline to the export terminal was blown up, slowing exports by possibly as much as 800,000 b/d for two or three days. By the end of the week, the damage had been repaired, but many oil workers were trapped at home or at job sites by the fighting. Over the weekend, a ceasefire was arranged after it became clear that the government offensive had bogged down, that further fighting would only damage the Shiite cause and would likely reduce oil revenues to both sides.

Explanations abound as to why the Maliki government decided to upset the status quo by launching a military operation to reduce the power of the Mehdi forces operating in Basra. Most of these center on intra-Shiite power struggles and the extent of Iranian influence in Iraq's future.

Since 2003, oil exports from Basra have only occurred with the consent of the local groups that share, officially or unofficially, in the revenues. Last week's attack shows that the Maliki government does not have the military strength to dislodge the pro-Sadr forces from Basra and will have to acquiesce in the revenue and power sharing for the foreseeable future.

Tensions are still high in Baghdad and Basra. Many observers are worried that the increased fighting, curfews, as well as power, food, and water shortages, could threaten the Maliki government and the U.S. position in Iraq.

3. China

Reports from China make it clear that Beijing does not anticipate any significant problems from a slowing U.S. economy and expects that GDP growth in 2008 will be a robust 10.7 percent. If Beijing is correct that increasing domestic demand coupled with exports to affluent oil-exporters and other states will keep the economy humming, there are serious implications for worldwide demand for oil and coal over the rest of the year.

Chinese oil imports during January and February increased by 9.5 percent. Last week, renewed fuel shortages, the worst in three years, were spreading across China as the government struggled to overcome the problem of increased import prices vs. fixed retail prices. This situation has sparked rumors that have led to hoarding in anticipation of higher prices.

Government oil refineries, under orders to produce as much gasoline and diesel as possible, processed 407 million barrels of oil during the first two months of 2008, up 7.4 percent from 2007. Output of gasoline was up by 4.1 percent while diesel refining increased by 12.5 percent.

Despite increased imports and refining during the past winter, reports of widespread shortages in March suggest that increased imports and pressure on world markets are likely. PetroChina announced last week that it will be importing 1.7 million barrels of finished gasoline during April to help relieve the shortages. Given the importance Beijing places on having the Olympic Games run smoothly next August, it is likely the government will import as much fuel as necessary to overcome the shortages.

4. Food Shortages

Last week saw widespread reports of rapidly increasing food prices across the world that bring into question just how long government policies of increasing biofuel production will last. High food prices and shortages have already led to civil disturbances around the world and more troubles are expected.

The most serious problem is that the price of rice, which is the main food of nearly half the world's population, has nearly doubled on the international markets in the last 3 months. Rice exporters such as Thailand, Vietnam, Egypt, India, and the Philippines are considering or have already restricted or halted rice exports.

In the U.S. a problem could be shaping up around the size of the US corn planting this spring. The problem is that soybeans are commanding historic high prices at more than $13 a bushel (compared with $5.50 a bushel for corn) and are much cheaper to produce. Observers say all signs point to a sharp decline in U.S. corn planting this spring which could spell a significant tightening of supplies impacting everyone from consumers to cattle feeders to ethanol producers.

5. Energy Briefs

*

Russian oil output may fall this year for the first time in a decade as the country struggles with rising costs and harder-to-reach fields, according to Natural Resources Minister Trutnev. A decline would end a 10-year, 58 percent surge in production. Trutnev's outlook contradicts that of the Energy Ministry, which expects an increase of 1.8 percent to 10 million barrels a day of crude and gas condensate. (3/29, #16)
*

Russia may cut the tax on oil extraction by $4.2 billion a year, the finance minister said. The reduction, which may start next year, is to spur investment and revive output (3/25, #18)
*

In South Africa, power supplier Eskom plans "pre-emptive" load shedding for 2.5-hour durations every second day for the next three months. The load shedding is needed to stabilize the country's electricity grid, run and maintain its power plants, and build its coal stockpile reserves. The load shedding will go on until the end of June, when a power-conservation program is to be tabled by the government. (3/28, #8)
*

The likelihood of massive worldwide crude oil shortages in the next few decades may mean that South Africans will have to develop alternatives. This was the warning sounded by the Dept. of Minerals and Energy on Tuesday on the "immediate" need to put in place legislation to regulate the generation of alternative and renewable forms of energy. (3/26, #6)
*

A global shortage of electric generating capacity is dramatically curbing world metal production, a trend expected to continue for years and result in sustained commodity price hikes, a report by Barclays Capital says. South Africa, Brazil, Chile, Indonesia and Thailand all have critically low levels of power reserves. (3/25, #8)
*

In India, delays in the Indo-US civil nuclear cooperation agreement have led to a shortage in fuel supplies that has resulted in most of India's nuclear power plants showing a decline in production. This has led to a 10 per cent reduction in overall power generation. Mumbai's power shortfall has increased by 30 percent this year as its 16 million inhabitants use record disposable income and easier credit terms to pay for air-conditioners and refrigerators. (3/27, #11, #12)
*

In Bangladesh, fear is growing about a large shortage of electricity during the summer months. The projected supply is between 3500 and 4000 MW, whereas total demand is projected at between 5000 and 5500 MW. (3/25, #16)
*

In Mexico, the secretary of the Senate Energy Committee said there are no plans to set up joint-venture companies with outside firms for oil production. This leaves state-owned Pemex in charge of finding and developing new oil fields. (3/28, #9)
*

Mexico expects average oil production to be at least 50,000 barrels/day lower than the company's previous target for the year due to waning output at the country's main field. Output would average between 3.0 million barrels a day and 3.1 million barrels a day for this year. (3/27, #8)
*

Pemex is struggling to replace the oil it produces each year from the giant Cantarell offshore oil field that is suffering a steep decline. Last year, Pemex only found enough oil to replace half of what it produced during the year. Earlier last week, Pemex reported that its crude production fell by 6.9% year-on-year in February to 2.929 million b/d, while crude exports plummeted by 19.4% to 1.429 million b/d. (3/26, #8-9)
*

From US truckers and farmers to loggers, construction workers and fishermen, skyrocketing diesel prices are pushing what many consider the backbone of the American economy right up to the breaking point. Diesel prices have jumped 22 percent during the last two months to an average of $4.03. (3/28, #13)
*

Rice prices jumped 30 per cent to an all-time high on Thursday, raising fears of fresh outbreaks of social unrest across Asia where the grain is a staple food for more than 2.5bn people. Global rice stocks are at their lowest since 1976. (3/28, #17)
*

Shell in Gabon said Wednesday it was working to resolve a strike that has halted crude oil production for the last seven days. Action by oil workers for Shell and France's Total has halted crude production of 90,000 barrels a day. (3/27, #7)
*

A Nigerian oil workers' union accused ExxonMobil on Friday of reneging on agreements in a labor dispute and said it may launch an industry-wide strike. (3/29, #10)
*

Senators from North Dakota and Montana say the future of coal as an energy source depends on capturing and storing carbon dioxide emissions. (3/27, #15)
*

Oil companies have begun looking for crude deposits off Greenland's west coast, thanks to its melting ice pack. Speculation says there may be more oil there than the entire past production of the North Sea, and that production could start within 15 years. (3/27, #16)
*

Eni SpA, Italy's largest oil company, said authorities in Kazakhstan are investigating potential fraud in a 2005 contract awarded by a unit developing the Kashagan oil field as well as in tax payments on two projects. Kazakh officials say Eni may owe $235 million in taxes, fines and interest for not repaying or improperly withholding value added tax related to the Kashagan development, Eni said. (3/29, #8)
*

Venezuela's oil minister said Friday that ExxonMobil stopped buying oil from the Chalmette, La., refinery owned jointly by the U.S. oil giant and Venezuela's PdVSA. The oil minister also reiterated that shipments of hard-to-process heavy oil that used to go to Chalmette are now purchased by China. (3/29, #12)
*

A glut of trucks in the US and the sliding dollar have encouraged a boom in exports of class 8 rigs, the biggest vehicles on the road, vividly underscoring the contrast between the faltering US economy and fast-growing emerging markets. Russia and Mexico are the biggest buyers. Hundreds of used American trucks are also on the road in Nigeria, Vietnam and South Korea. (3/29, #17)
*

Venezuelan President Hugo Chavez said last Monday that a proposal for a new tax on oil companies for what the government deems 'sudden gains' from world oil price fluctuations 'is ready.' (3/25, #10)
*

Japan, the world's third-largest oil consumer, increased crude imports 10% last month as oil requirements rose to meet growing demand for heating oil. (3/26, #14)
*

Ecuador's state oil company reported oil export revenues of $1.27 billion in the first two months of 2008, more than double the $487 million reported in the same period of 2007. According to Dow Jones Newswires Petroecuador exported 16.1 million barrels of crude oil between January and February, up 42% from 11.37 million barrels registered a year earlier. (3/25,#11)

Quote of the Week

If any good can come out of this [pain at the pump] mess, it would be an understanding — by corporations, consumers and government — that the era of cheap oil is truly over. With that, the country could finally focus on developing clean alternative energy sources and reducing oil consumption, a strategy that has served other countries well.
—New York Times Editorial
(http://www.ibtimes.com/articles/20080401/peak-oil-review-march-31st-2008.htm)

Title: Re: Meltdown
Post by: BachQ on April 02, 2008, 12:27:19 PM

fr: BLOOMBERG Last Updated: April 2, 2008 16:16 EDT

Oil Rises, Gasoline Surges to Record on U.S. Fuel-Supply Drop

By Mark Shenk

April 2 (Bloomberg) -- Crude oil rose more than $3 a barrel and gasoline surged to a record after an Energy Department report showed that U.S. supplies of the motor fuel fell a third week. ``The robust supply cushion for gasoline appears to be vanishing before our eyes,'' said John Kilduff, vice president of risk management at MF Global Ltd. in New York. Crude oil for May delivery rose $3.85, or 3.8 percent, to settle at $104.83 a barrel at 2:46 p.m. on the New York Mercantile Exchange. Prices are up 59 percent from a year ago. Pump prices are following futures higher. Regular gasoline, averaged nationwide, rose 0.1 cent to a record $3.827 a gallon, AAA, the nation's largest motorist organization, said today on its Web site. (http://www.bloomberg.com/apps/news?pid=20601087&sid=addyR_Oco5Lk&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 02, 2008, 12:39:12 PM

Oil heading for $US135: Barclays

Nigel Wilson, Energy writer | April 03, 2008

THE price of crude oil could easily reach $US135 a barrel, international analysts say.

Commodities analysts at Barclays Capital last month revised their long-term average crude oil price upwards from $US95 a barrel, set only 18 months ago, to $US135 a barrel. Kevin Norrish, the group's director of commodities research, said in Perth yesterday that global commodities markets were increasingly facing energy constraints. He said that while crude oil had only recently passed its inflation-adjusted peak achieved in the early 1980s, the whole of the forward curve for West Texas Intermediate, as measured by the New York Mercantile Exchange, was at least $US35 a barrel higher than it was even two years ago. Such a rate of acceleration in energy prices had never happened before and had big implications for other commodity prices and global inflation. He warned that marginal production costs for minerals were rising fast.
(http://www.theaustralian.news.com.au/story/0,25197,23474259-20501,00.html)

Title: Re: Meltdown
Post by: Sean on April 02, 2008, 03:33:28 PM

Dm, do you know of any opinions from experts on the present increases? The whole thing is really alarming, and you know it's bad when most people just don't want to know: a pig headed refusal to face the facts is the best they can do.

Title: Re: Meltdown
Post by: BachQ on April 03, 2008, 06:33:16 AM

Hi Sean! How are you?

Quote from: Sean on April 02, 2008, 03:33:28 PM
Dm, do you know of any opinions from experts on the present increases?

Actually, a majority of experts have expressed the belief that the current oil price spike is due to the interaction of several factors. Specifically, the oil price spike is caused by:

1. Speculators who are wary of the dollar's freefall and investing in safehaven commodities like gold and oil futures.

2. Growing demand (esp. in Asia).

3. Iraq war and concommitant instability (e.g. the recent Basra pipeline sabotage).

4. Higher marginal costs of extracting oil.

5. Cyclical nature of oil prices.

Because a majority of analysts don't think peak oil will happen until 2010-2012, the current price hike is seen as being largely unrelated to the underlying limitations in supply (i.e., peak oil).

IOW, if the current price spike is not related to peak oil, then just imagine how high the prices will escalate once we reach peak oil! At that point, widespread economic collapse is all but certain.

Title: Re: Meltdown
Post by: BachQ on April 03, 2008, 12:16:33 PM

Petroleum Man will be virtually extinct soon
by Colin Campbell

"it is now evident that the world faces the dawn of the Second Half of the Age of Oil, when this critical commodity, which plays such a fundamental part in the modern economy, heads into decline due to natural depletion. A debate rages over the precise date of peak, but rather misses the point, when what matters — and matters greatly — is the vision of the long remorseless decline that comes into sight on the other side of it. The transition to decline threatens to be a time of great international tension. Petroleum Man will be virtually extinct this Century, and Homo sapiens faces a major challenge in adapting to his loss. Peak Oil is by all means an important subject."

Colin Campbell is Founder of Association for the Study of Peak Oil & Gas and ASPO Honorary Chairman (http://www.commodityonline.com/news/topstory/newsdetails.php?id=6971)

Title: Re: Meltdown
Post by: BachQ on April 03, 2008, 12:28:10 PM

"Minivans, global air travel and the transport of goods by diesel truck soon will become the stuff of yesterday as the world adapts to depleting oil reserves. The planet, posits a new book by two Canadian academics, is on the cusp of a revolution in transportation that will steer people away from petroleum-fuelled vehicles and into ones that are either battery-powered or connected to electrical grids."

(http://www.canada.com/vancouversun/news/editorial/story.html?id=a5a37e1e-3d2c-4b11-8313-4125a1d4cd3f)

"the key to our collective futures is whether or not the decline in the availability of fossil fuels, particularly oil, will come upon us so fast that that the earth will not have the resources -- fuel, minerals, food, organizational coherence – to effect a worldwide change from fossil fuels to renewable energy."
(http://www.fcnp.com/national_commentary/the_peak_oil_crisis_the_transition_20080402.html)

"But the end of the American dream won't come easily. There is simply too much invested in maintaining this way of life. Even as the choices continue to dwindle for average Americans, people will fight to maintain a way of life they feel entitled to have."

(http://thetyee.ca/Entertainment/2008/04/04/EndOfSuburbia/)

Excerpted from the Wall Street Journal

Northwest Airlines Takes Steps To Counter Fuel Costs
By KATHY SHWIFF
April 3, 2008 6:03 p.m.

Struggling to cope with record oil prices and a weakening economy, Northwest Airlines Corp. said Thursday it will raise fares, fuel surcharges and baggage fees and cut its domestic flight schedule by 5%. The move is the latest by a major carrier to trim back service and pile extra fees on customers as relentless growth in the cost of fuel threatens the industry's attempt to put a half-decade slump and a round of bankruptcies behind it. Northwest also said it has suspended plans to hire more pilots and flight attendants and will cut capital spending that doesn't involve airlines by about $100 million this year, to $150 million. Employees' pay won't be cut, and any job losses will happen through attrition if possible.

"Over the past several months, the price of oil has risen dramatically to all time highs and there is no reasonable basis to conclude that oil prices will materially decline anytime soon," Chief Executive Doug Steenland said in a release. "These increased costs are significant and call for a strong response from us." *** Oil prices have surged to record highs this year amid rising demand from India and China, global tensions and a falling U.S. dollar that tends to raise the price of commodities such as oil that are denominated in dollars. Benchmark U.S. crude oil futures settled Thursday at $103.83 a barrel, up 8.2% so far this year.

Those rising prices are sucking cash out of airlines' coffers. Steenland said in March the company expects at least $1.7 billion in higher fuel costs than Northwest expected last May, when it was preparing to exit bankruptcy court. UAL Corp., parent of United Airlines, said at the time it expects $1.5 billion in extra costs.

This week, three airlines have announced they would close: ATA Airlines Inc., Aloha Airgroup Inc. and Champion Air. Among major carriers, Delta Air Lines said in March that it will cut about 2,000 jobs, trim domestic flights by an additional 5%. Northwest and Delta have discussed a merger that many hoped would jumpstart consolidation in the industry and help airlines better compete. But talks have been snarled by the inability of pilots at the two airlines to agree on seniority issues.

Skybus becomes third airline this week to close

(CNN) -- Skybus Airlines announced Friday it is shutting down its passenger flights -- becoming the third airline this week to cease operations.

The low-cost carrier couldn't overcome "the combination of rising jet fuel costs and a slowing economic environment," the company said Friday. "These two issues proved to be insurmountable for a new carrier."

Skybus, an Ohio-based airline founded in 2004, will cease operations effective Saturday.

Earlier in the week, ATA Airlines and Aloha Airlines announced they would shut down flights as both companies work through bankruptcy filings.

ATA, an Indiana-based low-cost charter airline, filed for Chapter 11 status Wednesday as a result of financial problems "following the loss of a key contract for our military charter business," the company said. The company started operation in 1973.

Hawaii-based Aloha Airlines announced Sunday it would shut down its passenger operations this week after filing for bankruptcy protections last month, concluding 61 years of service.

In its bankruptcy filing, Aloha said it was unable to generate enough revenue from its inter-island passenger flights because of below-cost fares by competitors Mesa Air Group's go! airline. The company said it was forced to match the competitor's fares during an unprecedented increase in the cost of jet fuel.

Skybus said all flights Friday would be completed; passengers with reservations for Saturday and beyond were told to seek refunds from their credit card companies.

(http://www.cnn.com/2008/TRAVEL/04/04/airlines.bankruptcy/index.html)

Title: Re: Meltdown
Post by: orbital on April 03, 2008, 12:31:40 PM

Quote from: Sean on April 02, 2008, 03:33:28 PM
Dm, do you know of any opinions from experts on the present increases? The whole thing is really alarming, and you know it's bad when most people just don't want to know: a pig headed refusal to face the facts is the best they can do.

Sean, doomsday scenario authorship does nothing to subtract from the problem at hand either. If this looks like a two-way communication between you and Dm that does not mean that you are more aware of it than anybody else. The fact is there is not much any of us here can do about peak-oil, except try to adopt a less petrolium dependent life style for ourselves, and get ready to embrace the hard times -if they indeed come.
Anyone who wants to be active about this subject should pursue a path where they can actually achieve some results. And that involves pressuring those in charge of your government's energy policies. Because just talking about how people do not talk about it will not get you to anywhere positive.

Title: Re: Meltdown
Post by: BachQ on April 03, 2008, 02:15:58 PM

"Dear Reader,

"Civilization as we know it is coming to an end soon. This is not the wacky proclamation of a doomsday cult, apocalypse bible prophecy sect, or conspiracy theory society. Rather, it is the scientific conclusion of the best paid, most widely-respected geologists, physicists, bankers, and investors in the world. These are rational, professional, conservative individuals who are absolutely terrified by a phenomenon known as global Peak Oil." (http://www.lifeaftertheoilcrash.net/)

(http://www.lifeaftertheoilcrash.net/PeakGraph.jpg)

Title: Re: Meltdown
Post by: BachQ on April 03, 2008, 03:03:29 PM

Quote from: Sean on April 02, 2008, 03:33:28 PM
Dm, do you know of any opinions from experts on the present increases? The whole thing is really alarming, and you know it's bad when most people just don't want to know: a pig headed refusal to face the facts is the best they can do.

Sean, responding further on the point of the role of speculation / speculators:

Congress told speculators not driving up oil price
Thu Apr 3, 2008 6:44pm BST
By Tom Doggett

WASHINGTON (Reuters) - The U.S. futures market regulator on Thursday told skeptical members of Congress that speculators were not responsible for pushing crude oil prices to record highs, but one lawmaker warned that commodity markets had become casinos.

Market fundamentals such as strong oil demand in China and India, a weak U.S. dollar and geopolitical tensions in big oil producing countries "provide the best explanation for crude oil price increases," Commodity Futures Trading Commission (CFTC) Chief Economist Jeffrey Harris told a Senate panel's hearing.

Harris said his agency, which regulates futures markets, has seen "little evidence that changes in speculative positions are systematically driving up crude oil prices."

Many senators on the Energy and Natural Resources Committee disagreed, saying hedge funds and other speculators had pushed up oil prices.

"There is an orgy of speculation in the futures markets," said Democrat Byron Dorgan. "This is a 24-hour casino with unbelievable speculation."

At the hearing on what's behind skyrocketing crude costs, Dorgan said about 20 times more oil is sold daily in the futures markets than actually exists.

As crude has surged above $100 a barrel, the number of outstanding oil futures contracts at the New York Mercantile Exchange has soared from about 1 million contracts in 2004 to over 2.8 million in the most recent week, Harris said.

But the economist said the share of outstanding NYMEX oil contracts held by speculators has increased only marginally -- from 31 percent to about 37 percent over the last three years.

He said the NYMEX oil futures market has had a steady ratio over the last 22 months between about 310 noncommercial, or speculative, traders and about 120 commercial traders such as oil companies or airlines that need to hedge fuel costs.

Despite the CFTC's reassurances, lawmakers from both parties expressed concern about rollicking futures trading.

"I'm not sure things are hunky-dory," Pete Domenici, the top Republican on the Senate energy panel, told Harris.

Sean Cota, who heads a heating fuel dealers trade group, told lawmakers the amount of money speculators are required to put up to trade oil futures should be increased.

"It has become apparent that excessive speculation on energy trading facilities is the fuel that is driving this runaway train in crude oil prices," Cota said.

"Hedge funds and investment banks are not driven to provide U.S. citizens the most affordable energy supplies; they are driven to profit from volatility," Cota said.

Stock market investors generally are required to keep more cash in margin accounts than futures investors are.

Several committee members supported higher margin requirements for futures trading. But the head of the committee, Democrat Jeff Bingaman, said he did not know if Congress would pass a bill to do so.

Cota urged lawmakers to support a bill that would require traders in oil futures to take actual delivery of the crude, which would effectively chase speculators from the market.

Chances of passing that bill, sponsored by Rep. John Larson of Connecticut, during this election year were unclear.

(http://uk.reuters.com/article/oilRpt/idUKN0337748220080403)

Title: Re: Meltdown
Post by: Sean on April 03, 2008, 08:18:34 PM

Sure thing orbital, and I guess you're right that I have a cynical streak. However the mess we're in comes directly from the character of the society and the decisions, or rather blind greed, that have propelled it up to now... I feel I want to wash my hands of it, not form some misguided lobby group that has the weight of a billion idiots against it in democratic control and with no moral sense of the future.

Title: Re: Meltdown
Post by: head-case on April 03, 2008, 09:27:20 PM

Quote from: Sean on April 03, 2008, 08:18:34 PM
I feel I want to wash my hands of it, not form some misguided lobby group that has the weight of a billion idiots against it in democratic control and with no moral sense of the future.

Why don't you "wash your hands" of western society, for real. Live in the undeveloped world that you claim to admire so much. Then you could die of amoebic dysentery or dengue fever, like a real third worlder, rather than snapping picturesque photos of their miserable condition.

Title: Re: Meltdown
Post by: BachQ on April 05, 2008, 06:15:18 PM

End of the world as we know it
You might feel fine, but high oil cost, scarcity mean American Empire is about to come crashing down
Guy R. McPherson
University of Arizona professor
Apr. 6, 2008 12:00 AM

Peak oil spells the end of civilization. And, if it's not already too late, perhaps it will prevent the extinction of our species.

M. King Hubbert, a petroleum geologist employed by Shell Oil Co., described peak oil in 1956. Production of crude oil, like the production of many non-renewable resources, follows a bell-shaped curve. The top of the curve is termed "peak oil," or "Hubbert's peak," and it represents the halfway point for production.

The bell-shaped curve applies at all levels, from field to country to planet. After discovery, production ramps up relatively quickly. But when the light, sweet crude on top of the field runs out, increased energy and expense are required to extract the underlying heavy, sour crude. At some point, the energy required to extract a barrel of oil exceeds the energy contained in barrel of oil, so the pumps shut down.

Most of the world's oil pumps are about to shut down.

We have sufficient supply to keep the world running for 30 years or so, at the current level of demand. But that's irrelevant because the days of inexpensive oil are behind us. And the American Empire absolutely demands cheap oil. Never mind the 3,000-mile Caesar salad to which we've become accustomed. Cheap oil forms the basis for the 12,000-mile supply chain underlying the "just-in-time" delivery of plastic toys from China.

There goes next year's iPod.

In 1956, Hubbert predicted the continental United States would peak in 1970. He was correct, and the 1970s gave us a small, temporary taste of the sociopolitical and economic consequences of expensive oil.

We passed the world oil peak in 2005, and we've been easing down the other side by acquiring oil at the point of a gun - actually, guns are the smallest of the many weapons we're using - paying more for oil and destroying one culture after another as the high price of crude oil forces supply disruptions and power outages in Third World countries.

The world peaked at 74.3 million barrels per day in May 2005. The two-year decline to 73.2 million barrels per day produced a doubling of the price of crude. Later this year, we fall off the oil-supply cliff, with global supply plummeting below 70 million barrels/day. Oil at merely $100 per barrel will seem like the good old days.

Within a decade, we'll be staring down the barrel of a crisis: Oil at $400 per barrel brings down the American Empire, the project of globalization and water coming through the taps. Never mind happy motoring through the never-ending suburbs in the Valley of the Sun. In a decade, unemployment will be approaching 100 percent, inflation will be running at 1,000 percent and central heating will be a pipe dream.

In short, this country will be well on its way to the post-industrial Stone Age.

After all, no alternative energy sources scale up to the level of a few million people, much less the 6.5 billion who currently occupy Earth. Oil is necessary to extract and deliver coal and natural gas. Oil is needed to produce solar panels and wind turbines, and to maintain the electrical grid.

Ninety percent of the oil consumed in this country is burned by airplanes, ships, trains and automobiles. You can kiss goodbye groceries at the local big-box grocery store: Our entire system of food production and delivery depends on cheap oil.

If you're alive in a decade, it will be because you've figured out how to forage locally.

The death and suffering will be unimaginable. We have come to depend on cheap oil for the delivery of food, water, shelter and medicine. Most of us are incapable of supplying these four key elements of personal survival, so trouble lies ahead when we are forced to develop means of acquiring them that don't involve a quick trip to Wal-Mart.

On the other hand, the forthcoming cessation of economic growth is truly good news for the world's species and cultures. In addition, the abrupt halt of fossil-fuel consumption may slow the warming of our planetary home, thereby preventing our extinction at our own hand.

Our individual survival, and our common future, depends on our ability to quickly make other arrangements. We can view this as a personal challenge, or we can take the Hemingway out. The choice is ours.

For individuals interested in making other arrangements, it's time to start acquiring myriad requisite skills. It is far too late to save civilization for 300 million Americans, much less the rest of the planet's citizens, but we can take joy in a purpose-filled, intimate life.

It's time to push away from the shore, to let the winds of change catch the sails of our leaky boat.

It's time to trust in ourselves, our neighbors and the Earth that sustains us all.

Painful though it might be, it's time to abandon the cruise ship of empire in exchange for a lifeboat.

Guy R. McPherson is a professor of conservation biology at the University of Arizona.

(http://www.azcentral.com/arizonarepublic/viewpoints/articles/0406vip-mcpherson0406.html)

Title: Re: Meltdown
Post by: BachQ on April 07, 2008, 03:11:36 PM

Peak Oil Review -- April 7th, 2008
By Tom Whipple
Posted 07 April 2008 @ 05:20 pm EST

1. Prices, Production and Exports

It was another week of volatility for oil prices as a potpourri of fundamentals, financial crisis, hearings, unemployment and a looming recession drove oil prices one way and then another. After losing $4 a barrel on Monday as speculators closed positions, prices recovered on Wednesday after the EIA reported that US gasoline stockpiles had fallen by 4.5 million barrels the previous week, twice what analysts had expected. On Friday, prices rose again to close out the week at $106 a barrel after the report that US jobs had declined for the third straight month, confirming fears that the US was headed for a recession. This time oil prices rose on bad economic news in expectation that there will be more interest rate cuts, a weaker dollar, and a flight to safe assets such as oil.

2. Electricity Shortages and Diesel

Stories of current and imminent shortages of electric power are becoming more frequent each day. A combination of inadequate rain for hydro power, unaffordable oil and coal for thermal power, and rapidly increasing demand is leaving country after country with inadequate power for national grids.

It is becoming apparent that one of the unforeseen consequences of globalization is that there is simply not enough power being produced in the world to run the flood of inexpensive electric consumer goods – TVs, kitchen appliances, air conditioners -- that are pouring from the factories of Asia onto the world.

The increasingly frequent "rolling blackouts" that are appearing around the world unfortunately are killing "essential" systems – water pumps, hospitals, banking computers, factories, TV stations, and telephone exchanges – as well as the less-essential consumer devices.

While electric companies may eventually be able to make special arrangements to exempt organizations that are vital to the economy from blackouts, there are massive numbers of organizations around the world that are completely dependent on electricity to keep functioning. For these, the choice is generate their own electricity with their own generators or shut down.

What is developing is a new and potentially very large demand for gasoline and particularly diesel fuel as the national power grids fall further and further behind in their ability to keep up with demand for electricity. Higher prices and shortages are clearly in store as more and more Chinese-made small and medium sized electric generators come into service around the world.

3. Rice, Inflation and Oil

Rice prices increased by 50 percent in the last two weeks to an all-time high as importing countries scrambled to hold off social unrest by securing supplies from the few exporters still willing to sell. As the staple food for 3 billion people, 33 countries are facing unrest as the price of food and energy becomes unaffordable.

(http://www.ibtimes.com/articles/20080407/peak-oil-review-april-7th-2008.htm)

Title: Re: Meltdown
Post by: BachQ on April 07, 2008, 05:27:01 PM

Oil peak theorist warns of chaos, war
SHAWN MCCARTHY

From Tuesday's Globe and Mail

April 7, 2008 at 9:09 PM EDT

WASHINGTON — Matt Simmons sounds the alarm like the Cassandra of the oil industry, warning that crude production has peaked and that looming energy shortages could derail global growth and even spark armed conflict.

As a prominent "peak oil" theorist, the veteran oil industry financier paints a grim picture of a world facing resource scarcity. Still, it doesn't take a "peak-ist" to conclude that the global oil producers will find it increasingly difficult to keep up with growing demand.

He squared off yesterday against other experts who argue that the world has yet to reach the physical limits of oil production. But while they disagreed on the extent of the problem, the panelists at a U.S. Department of Energy conference in Washington concurred that future crude production will be constrained by physical, economic and political factors that add up to tight markets and higher oil prices.

Despite oil prices that have topped $100 (U.S.) a barrel, there was little sense at yesterday's conference, put on by the Department of Energy's Energy Information Administration, that high prices would spark either a boost in oil output or a sharp fall in global demand.

Record pump prices – and a sharply slowing economy – have cut into U.S. demand, which represents 25 per cent of the world's total. But analysts who follow the emerging economies said there is no sign yet that triple-digit crude prices have seriously dented demand in China or India.

Global demand for oil will continue to grow, analysts forecast, even as the developed world reduces consumption in the face of high prices and environmental concerns. Economic growth and rising living standards in developing countries like China, India and the Middle East will more than offset reduced energy consumption in the mature economies of North America and Europe.

The views of Mr. Simmons, who runs Houston-based Simmons & Assoc. investment bank, bordered on apocalyptic.

Oil shortages "could lead to social chaos and war," he warned. "The issue is the most serious risk to sustaining the 21st century. Peak oil is real, and we have to take it seriously." He argued that production of conventional crude peaked in May, 2005, at 74 million barrels a day.

Since then, the world has met rising consumption – now at about 88-million barrels a day – by cutting inventories, tapping natural gas liquids that typically are included in crude production figures and using better refinery efficiencies.
Peter Jackson, a director at the Cambridge Energy Research Assoc., said Mr. Simmons was overstating decline rates of existing fields, was not taking into account the prospect for new discoveries, and played down the importance of unconventional resources such as Canada's oil sands.

Still, he said the industry faced "above ground" problems that would make it difficult to keep production growing fast enough to meet rising demand. About 90 per cent of existing conventional reserves are controlled by state-owned oil companies, many of which are not investing enough in capacity expansion, he said.

At the same time, the industry worldwide has seen construction costs explode, even as oil companies are forced to exploit smaller, more remote and more geologically complex reserves. The average cost of producing a barrel of oil has more than doubled in the past eight years, with most of that increase occurring in the past four, he said.

James Schlesinger, who was the United States' first energy secretary 30 years ago during the oil shock of the late 1970s, warned of a new crisis looming.

That 1970s shock was the result of supply disruptions caused by the 1973 Arab embargo and then the Iranian revolution. The current runup in prices reflects a more fundamental disconnect between constrained supplies and rising demand in the developing world, he said.

"At some point during the decade immediately ahead, we will hit a plateau, and this will have a tremendous shock both economically and politically," Mr. Schlesinger said.

(http://www.reportonbusiness.com/servlet/story/RTGAM.20080407.wrpeakoil08/BNStory/Business/home)

Title: Re: Meltdown
Post by: head-case on April 07, 2008, 07:18:47 PM

I see the chicken little thread never dies.

Title: Re: Meltdown
Post by: Sean on April 08, 2008, 03:31:09 AM

Hard reality, rapidly catching up with our house of cards-

http://www.energybulletin.net/

For instance, http://www.energybulletin.net/42498.html

Title: Re: Meltdown
Post by: BachQ on April 08, 2008, 08:39:19 AM

Quote from: head-case on April 07, 2008, 07:18:47 PM
I see the chicken little thread never dies.

How about this: over the next four years, I'll invest heavily in solar energy stocks, and you invest heavily in airlines and automobile manufacturing stocks ........ and we'll compare results in four years!

Title: Re: Meltdown
Post by: BachQ on April 08, 2008, 08:40:54 AM

Quote from: Sean on April 08, 2008, 03:31:09 AM
Hard reality, rapidly catching up with our house of cards-

http://www.energybulletin.net/

For instance, http://www.energybulletin.net/42498.html

Excellent. Thanks Sean! :)

Title: Re: Meltdown
Post by: head-case on April 08, 2008, 02:47:34 PM

Quote from: Dm on April 08, 2008, 08:39:19 AM
How about this: over the next four years, I'll invest heavily in solar energy stocks, and you invest heavily in airlines and automobile manufacturing stocks ........ and we'll compare results in four years!

Exactly my point, the economy will adapt, other sources of energy will be developed, and all of the "chaos and war" and "end of civilization as we know it" people will be revealed as lunatics.

Title: Re: Meltdown
Post by: BachQ on April 09, 2008, 12:42:56 PM

"as early as 2013, there will be substantial shortages of uranium worldwide." (http://www.celsias.com/2008/01/06/nuclear-reactors-for-the-uk-is-this-a-good-idea/)

Title: Re: Meltdown
Post by: BachQ on April 09, 2008, 12:45:22 PM

"our oil reserves are nearly depleted or are at least on the downward curve of production. For the last quarter century, we have used more oil each year than we have found. New finds will likely be hard-to-extract sources that will be costly to produce. The $3-plus gas price is just the first sign of a very changed future staring us down. The curve of oil supplies shows that the downward slope will be much steeper than the gradual climb as more and more oil reserves were discovered in the middle of the 20th century." (http://www.hometown-pages.com/main.asp?SectionID=26&SubSectionID=186&ArticleID=20312&TM=84592.1)

Title: Re: Meltdown
Post by: BachQ on April 09, 2008, 12:46:59 PM

The Age of Scarcity (http://www.businessweek.com/investor/content/apr2008/pi2008044_430100.htm?chan=top+news_top+news+index_businessweek+exclusives)

Title: Re: Meltdown
Post by: BachQ on April 09, 2008, 12:48:40 PM

Final Conclusions of Peak Oil Series

The peaking of all fossil fuels this century will result in dramatic changes in how people in today's industrialized societies conduct their lives. First, a near-term decline in world oil production will force us to re-think our entire economic and physical infrastructure. Natural gas will peak shortly after that and will cause even more dislocation. Using coal as an oil/gas substitute would only worsen our global warming
situation, and in any case coal may also peak within two to three decades. No combination of lternatives appears to be able to replace more than about 10 percent of our present transport energy in a sustainable manner. The only potentially workable adaptation appears to be re-localization of everything we do ? including massive reduction in energy use, local energy generation, local food production, local building materials and local fabrication of all essential commodities. (http://www.whatcomwatch.org/php/WW_open.php?id=854)

Title: Re: Meltdown
Post by: head-case on April 09, 2008, 12:59:45 PM

I'd be worried if this wasn't all jibberish.

Title: Re: Meltdown
Post by: BachQ on April 09, 2008, 02:40:16 PM

Oil roars to record over $112 on U.S. inventory drop

(http://www.reuters.com/resources/r/?m=02&d=20080409&t=2&i=3826740&w=192&r=2008-04-09T222417Z_01_SYD32743_RTRUKOP_0_PICTURE0)

Wed Apr 9, 2008 6:24pm EDT
By Matthew Robinson

NEW YORK (Reuters) - Oil surged to a record high over $112 a barrel on Wednesday after a government report showed a sharp drop in U.S. inventories ahead of the summer driving season.

U.S. crude settled up $2.37 at $110.87 a barrel after peaking at $112.21 and eclipsing the previous record of $111.80 hit March 17. London Brent settled $2.13 higher at $108.47 a barrel after hitting an all-time high of $109.50.

U.S. crude stockpiles fell 3.2 million barrels last week as imports declined, countering analyst expectations for a build, while gasoline and distillate inventories also tumbled, the U.S. Energy Information Administration reported.

U.S. gasoline and heating oil futures as well as London gas oil also hit record highs after concern about diesel supplies amid strong European and Asian demand supported crude earlier this week.

"This is a perfect storm for the energy markets, with records hit all around," said Phil Flynn, analyst at Alaron Trading in Chicago.

"But distillates are taking the center stage here because of tightness of supply of diesel and with a cold winter and the recent refinery fire in Finland." he added.

Further strength came from weakness in the dollar, which fell against the euro and the yen on views the U.S. Federal Reserve could cut interest rates by a 50 basis points this month amid worries of a possibly severe U.S. economic downturn.

The weak dollar has helped boost prices for commodities denominated in the greenback by boosting non-U.S. spending power and by luring investors seeking an inflation hedge.

High oil prices and the weakening U.S. economy have stirred demand worries in the world's largest energy consumer. The government on Tuesday forecast U.S. summer driving use would fall for the first time since 1991.

Despite calls from consuming nations for OPEC to raise oil production to help tamp record prices, cartel members insist markets remain well supplied.

(http://www.reuters.com/article/hotStocksNews/idUSSYD3274320080409)

Oil hits another record high

http://www.youtube.com/v/djOSq18pMj4

Title: Re: Meltdown
Post by: BachQ on April 09, 2008, 02:42:51 PM

Quote from: head-case on April 09, 2008, 12:59:45 PM
I'd be worried if this wasn't all jibberish.

I know. This notion of an "oil crisis" is patently absurd.

Title: Re: Meltdown
Post by: BachQ on April 09, 2008, 03:23:05 PM

Gasoline hits a new record high

Nationwide average price for a gallon of regular unleaded soared to another all-time high of $3.343, AAA survey says. Gas prices are up nearly 20% from what they were last year. A month ago, the nationwide average was $3.222 a gallon. The average price per gallon of diesel fuel rose more than a cent to $4.032, just a few tenths of a cent below the record high set in late March. The rising price of diesel fuel has been a major concern for workers in the trucking industry. Diesel averaged $3.829 a gallon last month and $2.904 a year ago. Costliest in California. California led the nation in pricey gas, at $3.746 a gallon. Hawaii and Alaska both maintained gas prices above $3.60 a gallon.

(http://money.cnn.com/2008/04/09/news/economy/gas_prices/index.htm?postversion=2008040907)

(http://peakwatch.typepad.com/photos/uncategorized/2008/04/07/oil_prices_nytimes.gif)

"The bottom line is that we still do not know what effects all these ever-more painful oil price increases are having on the U.S. economy, as reported in Fuel prices aren't done setting records (Houston Chronicle, April 9, 2008). We are still lost at sea. ... It seems obvious that Americans can not absorb these net oil price increases over and over again, especially in a slumping economy, without incurring some very substantial losses sooner or later. Because the U.S. imports about 66% of its oil, price increases operate as a tax on consumers. Peak oil remains primarily a price phenomenon for now, but it's hard to sort out the effects because the messed up U.S. economy has multiple failures. The effects of oil price escalation on real U.S. GDP growth will be revealed over time, and it is hard to avoid the conclusion that the eventual outcome will not be salutary for American consumers."

(http://www.energybulletin.net/42569.html)

Title: Re: Meltdown
Post by: head-case on April 09, 2008, 05:34:29 PM

Quote from: Dm on April 09, 2008, 02:42:51 PM
I know. This notion of an "oil crisis" is patently absurd.

No doubt supplies of oil will be exhausted eventually. Other sources of energy will be found. Civilization will go on.

Title: Re: Meltdown
Post by: BachQ on April 10, 2008, 02:07:36 PM

European Power Climbs to Records, Consumers May Pay the Price

By Lars Paulsson and Nicholas Larkin

April 10 (Bloomberg) -- Power prices rose to records across Europe, potentially increasing costs for consumers and industry on the continent as economic growth slows.

Power for 2009 in Germany, Europe's biggest electricity market, climbed to a record 65.50 euros ($105) a megawatt hour, gaining 1.2 percent, according to broker GFI Group Inc. The contract traded at 65.25 euros at 3:35 p.m. Berlin time. French, Dutch and U.K. contracts also rose to records.

European electricity prices are in the third year of a rally as the price of oil is surging and after the introduction of the European Union's emissions-trading program. The increased costs for the continent's 306 million people and industry may dent an economy that's being threatened by a possible U.S. recession and add to inflation pressures. (http://www.bloomberg.com/apps/news?pid=20601085&sid=aJFj5Qo6D4V8&refer=europe)

Title: Re: Meltdown
Post by: BachQ on April 10, 2008, 03:44:45 PM

Petroleum inflation could pump up price of plastic
By KARA McGUIRE, Star Tribune

April 10, 2008

The high price of oil is hitting consumers' wallets with each trip to the gas station or grocery store.

But the effect of $110 per barrel of crude oil doesn't stop there. Take a look around and chances are many of the items in the room are partially made of petroleum -- from carpet fibers, synthetic fabrics, lubricants, and mattress foam to most anything plastic.

Unlike the prices on necessities such as food and fuel, manufacturers and retailers are loath to pass on the increasing cost of discretionary goods to consumers. But energy and retail analysts say 2008 could be the turning point, when companies facing shrinking profit margins and soft consumer spending will have no choice but to raise prices and hope customers keep buying despite the unsteady economy.

To cope with squeezed profit margins and slower sales, companies will try logistics, sourcing, and shipping changes before price increases.

For instance, to ease the pain from the spike in diesel fuel used by trains and trucks, retailers might ship less frequently or source closer to home, said Piper Jaffray retail analyst Jeff Klinefelter.

"Everything moves by truck, rail, or jet," said Tom Kloza of the Oil Price Information Service. He said high diesel prices get lost in the consumer-focused fuel debate, but they're four to five times higher than in 2002 and $1 higher than in 2007. He doesn't think consumers have felt those increases yet.

Fuel surcharges are becoming the norm for companies and for individual travelers, said Thrivent energy analyst John Groton. Delta Air Lines recently increased its fuel surcharge by $5 each way. As jet-fuel prices have soared, Northwest and other major carriers also have imposed fuel surcharges on certain routes.

Manufacturers also are changing designs and packaging to reduce costs. For example, water and pop bottles are being made with thinner plastic, said Frank Esposito, a reporter for the trade publication Plastics News. Some manufacturers are using substitute materials such as waxboard for ice cream cartons, he said.

Since late 2002, the price of high density polyethylene used to make milk bottles is up 144 percent, according to Plastics News. In that same span, the price of plastic used for pop and water bottles is up 65 percent. PVC used to make plumbing and sewer pipes is now 111 percent more expensive. Esposito pointed out that plastic prices have been high since Hurricane Katrina, which hit the epicenter of the nation's plastics manufacturing industry along the Gulf Coast in 2005.

For others, squeezed profit margins mean leaving the business. Last year, General Electric sold all its plastic businesses and Dow Chemical unloaded some it owned to Middle Eastern companies with cheaper, easier access to oil and natural gas.

"Fewer and fewer plastics will be produced here long-term," Esposito predicted. Those that are sticking with the business are considering natural alternatives -- plastic made from crops such as soybeans and corn. Those alternatives would appeal to a consumer set that is saying no to plastic bags at grocery stores and to disposable diapers with plastic linings, citing geopolitical and environmental concerns, not cost.

If he were a betting man, said Kloza of the Oil Price Information Services, he'd bet crude oil, jet fuel, and diesel would decline in price shortly, but he expects gasoline prices at the pump to rise as high as $3.75 a gallon.

Title: Re: Meltdown
Post by: BachQ on April 11, 2008, 06:40:14 AM

Japan Wholesale Prices Soar at Fastest Pace in 27 Years

April 11 (Bloomberg) -- Japan's wholesale prices rose at the fastest pace since 1981, pushed by higher fuel and food costs, highlighting concern inflation may accelerate even as the economy slows. ``Rising energy and raw-material costs are hurting companies' profits and higher food prices are weighing on consumer spending.'' Higher costs of oil and food are prompting some companies to raise prices and forcing consumers to absorb them. (http://www.bloomberg.com/apps/news?pid=20601087&sid=agkWpECRbX3E&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 11, 2008, 06:41:35 AM

Pemex and Mexican Peak Oil Equal Expensive Oil
By Dan Denning • April 11th, 2008

Pemex better start exploring for more oil in the Gulf of Mexico or its going to pump out all its reserves in less than ten years. Mexican President Felipe Calderon went on national television last night in Mexico and told his countrymen (in Spanish, we presume), "We have to act now because we're running out of time and out of oil." Mexico exports 1.5 million barrels per day to the U.S., putting it third behind Canada and Saudi Arabia, and just ahead of Nigeria and Venezuela.
(http://www.dailyreckoning.com.au/pemex/2008/04/11/)

Title: Re: Meltdown
Post by: BachQ on April 11, 2008, 07:10:39 AM

U.S. Consumer Confidence Index Falls to 26-Year Low (Update2)

By Courtney Schlisserman

April 11 (Bloomberg) -- Confidence among U.S. consumers sank to a 26-year low in April as the labor market continued to deteriorate and gasoline prices rose. The Reuters/University of Michigan preliminary index of consumer sentiment decreased to 63.2 from 69.5 in March. The reading was below the lowest forecast in a Bloomberg News survey and the weakest since March 1982. Americans are confronting the loss of 232,000 jobs so far this year, along with higher food and energy costs and overall weakening in the economy. Consumer spending in the first half will advance at the slowest rate in 17 years, according to economists surveyed by Bloomberg News.

``The consumer's feeling increasingly hemmed in,'' said Brian Bethune, director of financial economics at Global Insight Inc. in Lexington, Massachusetts. ``They've got higher energy bills, higher gasoline bills, higher food bills and obviously the employment markets are nowhere near as strong as they were. The economy is in a recession.'' Higher energy costs have weighed on consumers' outlooks in recent months. The average price of crude oil futures traded on the New York Mercantile Exchange in March jumped to $105.42 a barrel, from $95.01 a month earlier. Gasoline reached a record $3.332 a gallon in the week ended April 7, according to the Energy Information Administration. The administration, which is the Energy Department's statistical arm, forecast on April 8 that gasoline will cost an average of $3.54 a gallon between April and September. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aPxxISSEt8iE&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 11, 2008, 07:11:17 AM

How soaring fuel prices hurt kids

Across the nation, school districts are slashing spending on teachers, books and computers as filling up the school bus gets more expensive. (http://money.cnn.com/2008/04/10/news/economy/schools_fuel/index.htm?postversion=2008041016)

Title: Re: Meltdown
Post by: BachQ on April 11, 2008, 07:11:54 AM

Peak Everything, by Richard Heinberg (http://www.richardheinberg.com/museletter/185)

Title: Re: Meltdown
Post by: BachQ on April 11, 2008, 07:12:52 AM

Scrapping Skyscrapers

The problem with these sky-scraping symbols of long-term sustainability, according to Larry Hughes of Dalhousie's Energy Research Group, is "figuring out how to heat the damn things. If we assume the heat source will be oil," he says, "it's very short-sighted, naive to the extreme." (http://www.thecoast.ca/Articles-i-2008-04-10-151960.113118-p19973.113118_Scrapping_skyscrapers.html)

Title: Re: Meltdown
Post by: BachQ on April 11, 2008, 11:19:56 AM

Oil Price Defies Easy Calculation
Gasoline Sets Record at Pump Despite Struggles in U.S. and Overseas Economies

(http://media3.washingtonpost.com/wp-dyn/content/photo/2008/04/10/PH2008041003870.jpg)

By Steven Mufson
Washington Post Staff Writer
Friday, April 11, 2008; Page D01

Is there a fair price for oil?

It doesn't seem that way. Over the past year, the price of crude oil has nearly doubled even though oil inventories are ample, there has been no disruption in supplies, and petroleum demand in the United States, the world's biggest consumer, has leveled off in recent weeks as the economy has slowed. Yesterday, the AAA auto club said prices at the pump set records of $3.357 a gallon for regular unleaded gasoline and $4.045 for diesel, even though U.S. gasoline consumption fell 0.6 percent in the first quarter. ... Yesterday, Citigroup became the latest bank to raise its oil price forecasts, upping its estimate of the full-year average for 2008 by 20 percent, to $96 a barrel, and boosting its 2009 estimate by 17 percent, to $88 a barrel. When the U.S. economy is weak, banks generally lower their expectations for oil prices.

(http://www.washingtonpost.com/wp-dyn/content/article/2008/04/10/AR2008041003778.html)

Title: Re: Meltdown
Post by: BachQ on April 11, 2008, 11:20:41 AM

A 12-member citizens group, the Vancouver Peak Oil Executive, was formed recently in Vancouver to spread word about the necessity of change. It aims "to build awareness of the imminent peak oil crisis and its potential effects on the metro Vancouver area." The VPOE is promoting "relocalization" -- getting people to walk to work, buy locally produced food and goods, shop at corner stores. Consequences of inaction in the face of the global crisis, says a press release issued by the group, "are enormous." Consequences of delay are also scary. Societal change around depleting oil reserves is not something to be done in a panic. Yet vested interests and a sense of intertia seem to be delaying our day of reckoning. Even today, car manufacturing are running vehicles with V-6 and V-8 engines off their assembly lines. Gigantic new airport terminals and highways continue to be built. North America is resisting change, sticking to comfortable habits. But, like it or not, our petroleum-fuelled existence with distant suburban neighbourhoods reached by multi-laned freeways with overpasses and arterials is going to change. There may even be a bright side. "A lot about the way we live now is unhealthy, frightening and repulsive," Kunstler says. "It probably requires a correction. And boy, are we going to get one."
(http://www.canada.com/vancouversun/news/editorial/story.html?id=55d5588b-2e0a-4835-80f7-9546ef7c46e7)

Title: Re: Meltdown
Post by: BachQ on April 11, 2008, 05:46:28 PM

New York Times

April 12, 2008
Frontier Airlines Files for Bankruptcy
By GRAHAM BOWLEY

Frontier Airlines on Friday became the latest budget carrier to file for bankruptcy protection ... Frontier's shares were down $1.03, to 54 cents in late trading.

On Wednesday, Oasis Hong Kong Airlines, a long-haul budget carrier that tried to offer premium service and spacious seats at low prices, suddenly went into liquidation and canceled all flights. At that time, it was the fourth budget carrier worldwide to halt operations over a period of a week and a half. The series of bankruptcies could undermine travelers' confidence in budget airlines.

The high price of jet fuel has taken a heavy toll on the airline industry and particularly on low-margin discount carriers. The other three to shut down since March 31, all in the United States, are Aloha Airgroup, ATA Airlines and Skybus Airlines. As with most airlines Frontier has struggled with higher fuel costs. In addition, it has faced increased competition from United and Southwest at its large hub in Denver.

Title: Re: Meltdown
Post by: Sean on April 11, 2008, 06:10:55 PM

Yes I noticed about the HK airline...

Title: Re: Meltdown
Post by: drogulus on April 12, 2008, 07:02:37 PM

We aren't going to run out of coal for several centuries. In the meantime we'll find something else. We're going to pay more for it, though, whatver it is.

Title: Re: Meltdown
Post by: Sean on April 12, 2008, 08:09:31 PM

QuoteAt present, I'm still trying to fathom the enormity of the issue, and trying to understand why only a tiny handful of people care about this issue, and why our world leaders are utterly clueless, and what will be left of society when it is overpopulated by a factor of ten and runs out of every resource except for sunlight .........

I guess it is a bit strange. But my answer is that the world we're living in is really not so developed as people think and that nobody knows how to replace the simple and ancient fossil fuel base to society. There's plenty of energy in the universe but we've wasted the opportunity that oil gave us, the cushion of free energy for a few decades, that could have been used to look ahead and find something else.

Solar power is the best bet of the existing alternatives but no serious steps have been taken: 50 000 square km of Sahara could have been covered in high performance solar panels, at immense cost but at immense value to humanity's future. This cannot be done under democratic systems because most people do not have that kind of vision and will just vote for short term profligacy and waste.

Most people just do not want to know about problems they don't know how to solve, especially when they're fundamental to life and their model of the world in their heads. My own father for instance refuses to discuss the matter with me and had nothing but contempt when I said I was going to a showing of the Crude awakening documentary, trying to make out it was me who was being unrealistic about the world- and the atmosphere in the cinema was one of real disapproval and opprobrium.

I really do blame all this on democracy and the spread of democracy...

Title: Re: Meltdown
Post by: Sean on April 12, 2008, 08:11:49 PM

Quote from: drogulus on April 12, 2008, 07:02:37 PM
We aren't going to run out of coal for several centuries. In the meantime we'll find something else. We're going to pay more for it, though, whatver it is.

That's why China's building hundreds of coal powered electricity stations.

But 99% of the world's vehicles run on petroleum, not coal.

drogulus, this problem is fundamental and massive: the window of opportunity to find something else has already been squandered.

Title: Re: Meltdown
Post by: drogulus on April 13, 2008, 06:49:04 AM

Quote from: Sean on April 12, 2008, 08:11:49 PM

drogulus, this problem is fundamental and massive: the window of opportunity to find something else has already been squandered.

It certainly would have been better if we has done more to solve the problem during the last crisis in the '70s. We did do something about it, because that was when the first energy effiency standards for consumer products came in along with fuel economy standards. Then there were the synthetic fuels and shale oil programs, solar power and others. But this was also the time when Three Mile Island and then Chernobyl killed off the possibility of a new generation of nuclear reactors (politically, not technically). When oil bottomed out near $10 a barrel in the '90s people traded in their 4-cylinder sedans that made 130 hp for 6-cylinder models with 240+ hp, or an equally powerful SUV that got even less mileage. Why do you need a car that goes 0-60 in 7.2 sec. to commute or pick up groceries? Why do you need a fake off-road vehicle to do the same thing?

Title: Re: Meltdown
Post by: BachQ on April 13, 2008, 02:54:55 PM

High diesel prices squeeze truckers
Independent drivers have been hit especially hard, and some will be forced out of business.
By Amanda Paulson | Staff writer of The Christian Science Monitor
from the April 11, 2008 edition

"While all Americans are facing sticker shock at the pump these days, truckers have been hit particularly hard, watching the cost of diesel skyrocket past gasoline. The national average for diesel is hovering just above $4 a gallon, due to high crude-oil prices and rising demand for diesel, especially in China and Europe. Truckers often pay close to $1,000 to fill up a tank that might have cost $600 to fill a few years ago." (http://www.csmonitor.com/2008/0411/p02s01-usec.html)

Title: Re: Meltdown
Post by: Bogey on April 13, 2008, 02:56:37 PM

Quote from: Dm on April 13, 2008, 02:54:55 PM

High diesel prices squeeze truckers
Independent drivers have been hit especially hard, and some will be forced out of business.
By Amanda Paulson | Staff writer of The Christian Science Monitor
from the April 11, 2008 edition

(http://www.csmonitor.com/2008/0411/p02s01-usec.html)

FWIW, this is a publication that I have high regard for.

Title: Re: Meltdown
Post by: BachQ on April 13, 2008, 03:00:45 PM

Coming Ecological Collapse: Failing Ecosystems the Mother of All Bubbles
Dr. Glen Barry

(http://www.thepeoplesvoice.org/cgi-bin/blogs/media/dead_world.jpg)

Within the current sub-prime mortgage and financial bubbles, and food and energy price increases, we are witnessing the logical and inevitable economic consequences of over-population, resource scarcity, inequitable and unreasonable consumption, and unsustainable economic growth. Growth and livelihoods based upon unreasonable presumptions of continued resource outputs from dwindling ecosystems is a dangerous, unprecedented "ecological bubble" that threatens civilization and mass apocalyptic death.

The global growth machine is seizing up because it is hitting ecological limits, and as a result of its own greed. Clearly the addition of a billion more people every decade and a half, physical limits upon arable land and fossil fuels -- as well as exceeding the atmosphere's waste absorption capacity and minimum amount of intact terrestrial ecosystems necessary to power the biosphere -- are together severely negatively impacting economies and individual's well-being.

*** As the economic bubble deflates we might as well get on with finding a way to live simply, sustainably, equitably and justly with the Earth and each other. Because when the water, food and climate bubbles fully burst -- we are going to need each other, and to be ready.

(http://www.thepeoplesvoice.org/cgi-bin/blogs/voices.php/2008/04/12/p24731)

Title: Re: Meltdown
Post by: BachQ on April 13, 2008, 03:07:22 PM

Now survivalism isn't just for eccentrics
Idea of 'extreme preparedness' heads to the mainstream
Alex Williams, New York Times

Sunday, April 13, 2008

[EXCERPTS]

***

Survivalism, it seems, is not just for survivalists anymore. Faced with a confluence of diverse threats - a tanking economy, a housing crisis, looming environmental disasters and a sharp spike in oil prices - people who do not consider themselves extremists are starting to discuss doomsday measures once associated with the social fringes. They stockpile or grow food in case of a supply breakdown, or buy precious metals in case of economic collapse. Some try to take their houses off the electricity grid, or plan safe houses far away. The point is not to drop out of society, but to be prepared in case the future turns out like something out of "An Inconvenient Truth," if not "Mad Max."

***

Many of the new, nontraditional preparedness converts are "Peakniks," Rawles said, referring to adherents of the "Peak Oil" theory. This concept holds that the world will soon, or has already, reached a peak in oil production, and that coming supply shortages might threaten society. While the theory is still disputed by many industry analysts and executives, it has inched toward the mainstream in the last two years, as oil prices have nearly doubled, surpassing $100 a barrel.

The topic, which was the subject of a U.S. Department of Energy report in 2005, has attracted attention in publications like the New York Times Magazine and the Wall Street Journal, and was a primary focus of "Megadisasters: Oil Apocalypse," a recent History Channel program.

Another book, "The Long Emergency" (Atlantic Monthly Press, 2005) by James Howard Kunstler, an author and journalist who writes about economic and environmental issues, argues that American suburbs and cities may soon lay desolate as people, starved of oil, are forced back to the land to adopt a hardscrabble, 19th-century-style agrarian life.

Such fears caused Joyce Jimerson of Bellingham, Wash., a coordinator for a recycling-composting program affiliated with Washington State University, to make her yard an edible garden, with fruit trees and vegetables, in case supplies are threatened by oil shortages, climate change or economic collapse. "It's all the same ball of wax, as far as I'm concerned," she said.

Scott Troyer, an energy consultant in Sunnyvale, said he was spurred by discussions of peak oil - "it's not a theory," he said - and other energy concerns to remake his suburban house in anticipation of a petroleum-starved future. Troyer, 57, installed a photovoltaic electricity system, a pellet stove and a cool roof to reflect the sun's rays, among other measures.

Troyer remains cautiously optimistic that Americans can wean themselves from oil through smart engineering and careful planning. But, he said, "The doomsday scenarios will happen if people don't prepare."

(http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/13/MNIL1008L2.DTL)

Title: Re: Meltdown
Post by: BachQ on April 13, 2008, 03:09:00 PM

Sunday Herald

Crushed on the road to oil armageddon

Another week, another set of dire omens and fears for the UK haulage industry. Last week it was the turn of Unite, Britain's largest trade union to warn that unless the government implements an essential users' rebate on diesel tax, small companies will go bust and employees will lose out on wages. With the industry reeling over the price of diesel and the massive amount of tax commercial users have to pay, Ron Webb, Unite's national secretary for road transport, said: "The government needs to listen to the trade associations. Unless they introduce a method of returning some of the tax to road haulage companies they will simply not be able to continue to operate. Not only will small companies go bust but larger companies are informing us across the bargaining table that unless they see a change soon it will mean lower wages for employees." (http://www.sundayherald.com/business/businessnews/display.var.2192910.0.crushed_on_the_road_to_oil_armageddon.php)

Title: Re: Meltdown
Post by: BachQ on April 13, 2008, 03:12:50 PM

Oasis Hong Kong Airlines Liquidates

(http://www.telegraph.co.uk/telegraph/multimedia/archive/00449/oasis404_449588c.jpg)

Long-haul budget carrier Oasis Hong Kong Airlines went into liquidation today, leaving hundreds of travellers stranded. After 18 months in operation, flights were cancelled with immediate effect. Its collapse comes amid a time of spiraling fuel costs. Oasis launched in October 2006, flying daily from Gatwick to Hong Kong, and then added flights from Hong Kong to Vancouver.

(http://www.telegraph.co.uk/travel/1307946/Oasis-Hong-Kong-Airlines-goes-into-liquidation.html)

High oil prices drive Sun Country to cut jobs
By LIZ FEDOR, Star Tribune
(http://www.startribune.com/business/17567669.html)

Title: Re: Meltdown
Post by: Sean on April 13, 2008, 04:02:44 PM

Some good points drogulus. Petrol conservation is going to be important, but it's obviously not an alternative. When you think that our civilization is running on the same fossil fuels that the the Iron Age used you see the magnitude of the problem here. (Was Chernobyl in 1985?)

Title: Re: Meltdown
Post by: BachQ on April 14, 2008, 04:20:24 PM

Thursday, March 13th, 2008

Money Morning Predicts That Oil Prices Will Reach $187 a Barrel
By William Patalon III
Executive Editor
Money Morning/The Money Map Report

A plummeting greenback, inflationary fears fanned by the U.S. central bank and soaring global demand are combining to fuel a record advance in crude oil prices. But the market madness of recent days is just the start. Crude oil prices will hit $187 a barrel within 36 months, translating into gasoline prices of more than $6 a gallon, and giving investors one of their biggest profit opportunities in decades, Money Morning Investment Director Keith Fitz-Gerald predicts.

That forecast runs counter to many analysts who are describing the current spike in energy prices as a speculative "bubble" fueled by fearful investors. "Many people think high oil prices are a bubble. Maybe, but not for long and certainly not given the growth in global demand," Fitz-Gerald says. "Of course, prices will not stabilize anytime soon. Savvy investors [will realize that] we are still in the very early stages of a generational game with the potential to be played for great profits."

(http://www.moneymorning.com/2008/03/13/three-ways-to-play-money-mornings-prediction-that-oil-prices-will-reach-187-a-barrel/)

Title: Re: Meltdown
Post by: BachQ on April 14, 2008, 04:21:42 PM

Crude to hit $175, says Goldman Sachs
by Dylan Bowman on Saturday, 15 March 2008

(http://www.arabianbusiness.com/images/magazines/arabianbusiness.com/web/Oil-field_thumb.jpg)

Oil prices could hit $175 a barrel in the next few years as commodities witness "explosive rallies" spurred by supply constraints, investment bank Goldman Sachs Group said on Friday. The bank said in a report that political decisions on money flows, labour and technology were "substantially constraining supply growth" of commodities, reported newswire Bloomberg. "This will likely support the ongoing structural bull market in commodities until these policy-driven investment constraints are removed and/or demand is adjusted," Goldman Sachs said.

*** Goldman Sachs said $175 crude "represents the price level required to maintain trend economic growth against our anemic supply growth forecasts, assuming growth in the US re-accelerates early next year". An industry expert last month claimed oil prices could top $300 per barrel within the next five years, describing current highs of $100 a barrel as "cheap". The International Energy Agency (IEA) warned last week the era of cheap oil had ended. It said the baseline for oil prices has moved higher and that only a severe world recession could send oil back below $60 a barrel for a sustained period. Oil has climbed from below $20 in early 2002. (http://www.arabianbusiness.com/index.php?option=com_content&view=article&id=513777&Itemid=1)

Title: Re: Meltdown
Post by: BachQ on April 14, 2008, 04:22:51 PM

The Coming War with Iran: It's About the Oil, Stupid
Apr 13, 2008

***

"... It's been known for at least thirty years that America needs alternative energy sources. But instead of an alternative energy plan we got the invasion of Iraq by oilmen wedded to a dying business, willing to kill hundreds of thousands to cling to the last drop. The US is never leaving the region or withdrawing from Iraq.***" (http://www.iranian.ws/iran_news/publish/article_24796.shtml)

Title: Re: Meltdown
Post by: BachQ on April 14, 2008, 04:23:43 PM

Development ministers urge action on food prices
Sun Apr 13, 2008

"... One of the main factors behind the surge in prices is the increased use of crops for biofuels as an alternative energy source. Almost all of the rise in global corn production from 2004 to 2007 went to biofuels in the United States." (http://www.reuters.com/article/newsOne/idUSN1330953920080413?pageNumber=1&virtualBrandChannel=0)

Title: Re: Meltdown
Post by: Sean on April 14, 2008, 04:29:07 PM

Well done Dm. We'll soon see who the real conspiracists are.

Title: Re: Meltdown
Post by: BachQ on April 15, 2008, 03:25:29 AM

(http://www.reuters.com/resources/r/?m=02&d=20080414&t=2&i=3878579&w=&r=2008-04-14T173238Z_01_SYD32743_RTRUKOP_0_PICTURE0)

Oil hits record high, weak dollar supports
April 15

By Randy Fabi

LONDON (Reuters) - Oil advanced to a lifetime peak above $112 a barrel on Tuesday as investors sought to hedge against a battered dollar. U.S. crude rose 39 cents to $112.15 a barrel at 6:00 a.m. EDT, after touching a record high of $112.48 earlier in the session. Oil is up 17 percent from the start of the year and is averaging near $100.

Oil hits records on supply disruptions, dollar

By Annika Breidthardt

SINGAPORE (Reuters) - Oil futures surged to record highs on Tuesday, breaking through buy-stops as they extended gains on the back of supply disruptions and a weak dollar. U.S. light crude for May delivery rose 59 cents to $112.35 a barrel at 12:02 a.m. EDT, after touching a high of $112.48 a barrel and surpassing its previous $112.21 a barrel record. U.S. futures are up 17 percent from the start of the year.

The dollar stayed under pressure on Tuesday ahead of U.S. data and financial institutions' first-quarter results expected to give clues on the state of the economy and credit markets. A weak dollar tends to raise prices for commodities denominated in that currency by boosting non-U.S. spending power and by attracting investors seeking an inflation hedge. U.S. gasoline futures hitting fresh highs on Monday also helped. They rose as the United States gears up for the summer driving season, when demand traditionally peaks, but the Energy Information Administration has drivers may use less for the first time since 1991, due to lofty pump prices and a weak economy. And the U.S. government said U.S. consumers were spending more than ever to fill up at the pump, as the average price for gasoline climbed to a new high of $3.39 a gallon after rising 5.7 cents over the last week.

(http://www.reuters.com/article/hotStocksNews/idUSSYD3274320080415)

Oil Rises to Record as Falling Dollar Prompts Commodity Buying

By Christian Schmollinger

April 15 (Bloomberg) -- Crude oil rose to a record as investors purchased futures contracts to hedge against the falling dollar after the Group of Seven failed to end the currency's slide. The dollar was at $1.5827 per euro as of 11:19 a.m. in Tokyo from $1.5832 late in New York yesterday. It touched $1.5913 on April 10, the highest level since the European currency's debut in 1999. China, the world's second-largest oil consumer, imported 25 percent more crude in March versus a year ago, offsetting projected demand declines in the U.S.

Crude oil for May delivery climbed as much as 72 cents, or 0.6 percent, to $112.48 on the New York Mercantile Exchange, the highest since futures began trading in 1983. It was at $112.40 at 11:14 a.m. in Singapore. Prices have gained 77 percent from a year earlier. *** Oil has risen 37 percent and the dollar has dropped 12 percent against the euro since the Federal Reserve began lowering interest rates on Sept. 18. (http://www.bloomberg.com/apps/news?pid=20601087&sid=apqtjHwyrwjU&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 15, 2008, 03:28:13 AM

When the oil runs out
James Samuel says we should all be preparing for life in a world without cheap oil.

By JEFF NEEMS - Waikato Times | Tuesday, 15 April 2008

"Our settlements and communities lack the resilience to enable them to weather the severe energy shocks that will accompany peak oil." Transition Towns aims to equip communities with the tools to prepare for life with an environment affected by climate change, and without cheap energy sources, particularly oil. Many oil industry experts believe the world's oil production has peaked already, and that prices will continually increase as supplies diminish and eventually dry up the "peak oil" theory. It is gaining publicity worldwide as crude oil prices push above the $US100 a barrel mark. It has been the subject of the award-winning documentary film Crude Awakening: The Oil Crash and the equally compelling The End Of Suburbia. (http://www.stuff.co.nz/stuff/waikatotimes/4481230a6579.html)

Title: Re: Meltdown
Post by: BachQ on April 15, 2008, 03:29:33 AM

Oil Prices Set to Increase Further
By Elliott H. Gue

Editor of The Energy Letter and The Energy Strategist
14 April 2008

***
Growing oil production fast enough to meet the worlds rapidly growing demand will be difficult, expensive and subject to a great deal of risk. For example, the CERA panelist noted that every year producers need to find an additional 3 million to 3.5 million barrels per day of oil production per day just to offset declines from older fields. Global liquids supply is running on a treadmill; drilling and field development must continue just to maintain current production rates.

According to CERA, there are 546 giant oilfields in the world that currently account for just more than half of production. Only 80 of those fields are currently undeveloped or not fully developed. And the inventory of giant fields is declining because few major discoveries have been made in recent years. Therefore, producers will increasingly target smaller fields in which production is more complex and expensive.

And costs overall in the industry are rising. CERA publishes an index of total capital costs in the oil industry. That index was set to 100 in the year 2000. Currently, the CERA capital costs index is closer to 200. Actual costs have, in the very least, doubled.

There are also above-ground risks. In other words, even though oilfield geology may allow for expanded production, there are other factors influencing production. For example, many of the most promising fields are located in countries with significant political instability such as parts of Africa.

Other promising plays are located in nations where production is controlled by state-owned national oil companies (NOC). NOCs have, in recent years, sought to exert more control over their resources. In many cases, this has meant that the big western producers with the best technology simply cant get access to reserves on favorable terms.

Then theres the simple problem of infrastructure. Much existing infrastructure in global oilfields is ageing and needs to be replaced. In addition, key assets such as deepwater rigs are in short supply, resulting in delays to key projects.

All told, global oil production estimates are an exercise in probabilities, not certainties. My view remains that some forecasts of future production are way too optimistic. There are just too many best-case assumptions in the EIA projections. I seriously doubt that the world will see 120 million barrels per day of liquids production in 2030.

Nonetheless, an immediate peak and decline would appear somewhat overly pessimistic. Higher energy prices have allowed producers to target fields once thought uneconomical, such as those in deepwater.

Whats absolutely clear is that future oil production growth isnt a certainty and will be expensive to bring online. This suggests that the era of low energy prices is over: Good whether oil production has already peaked. Or can it continue to grind higher for another 15 to 20 years? (http://www.ibtimes.com/articles/20080414/oil-prices-set-to-increase-further.htm)

Title: Re: Meltdown
Post by: BachQ on April 15, 2008, 03:30:21 AM

Bakken no energy panacea

***The Bakken Formation, a 40,000 square kilometre territory reaching into Saskatchewan, Manitoba, Montana, and North Dakota, showed a "25-fold increase in the amount of oil that can be recovered," at least compared to 1995 estimates.

A 25-fold increase? That's huge – or so it sounds.

But then you start comparing numbers. Assuming all 4.3 billion barrels could be retrieved, it would represent nine months of oil consumption in the United States.

Canada's oil sands hold about 177 billion barrels, and Saudi Arabia has an estimated 250 billion barrels, if you can believe the numbers.

Now, let's consider the nature of the Bakken oil. It doesn't sit in big underground pools where you can just pop in a metal straw and suck it out. This oil is trapped in layers of shale – a sedimentary rock – up to 3,000 metres deep. Getting at it is expensive and difficult, and certainly damaging to the surrounding landscape and environment.

You thought the oil sands were messy and energy-intensive? Bakken is tough oil. You have to drill down and then horizontally through rock, which has to be fractured to release the oil that is tucked away in small pores.

It will cost dearly to go after Bakken oil, just as Chevron will have to pay a bundle if it hopes to extract the 3 to 15 billion barrels it has discovered in the Gulf of Mexico, kilometres under the water at its "Jack" wells. (http://www.thestar.com/Business/article/414164)

Title: Re: Meltdown
Post by: BachQ on April 15, 2008, 04:01:41 AM

Fears emerge over Russia's oil output
By Carola Hoyos and Javier Blas in London

Published: April 14 2008 22:10 | Last updated: April 15 2008 07:40

Russian oil production has peaked and may never return to current levels, one of the country's top energy executives has warned, fuelling concerns that the world's biggest oil producers cannot keep up with rampant Asian demand.

The warning helped on Tuesday to push crude oil prices to a fresh all-time high above $112 a barrel, threatening to stoke inflation in many countries.

Leonid Fedun, the 52-year-old vice-president of Lukoil, Russia's largest independent oil company, told the Financial Times he believed last year's Russian oil production of about 10m barrels a day was the highest he would see "in his lifetime". Russia is the world's second biggest oil producer.

Mr Fedun compared Russia with the North Sea and Mexico, where oil production is declining dramatically, saying that in the oil-rich region of western Siberia, the mainstay of Russian output, "the period of intense oil production [growth] is over".

The Russian government has so far admitted that production growth has stagnated, but has shied away from admitting that post-Soviet output has peaked.

Viktor Khristenko, Russia's energy minister who is pushing for tax cuts that could stimulate investment, said last week: "The output level we have today is a plateau, stagnation."

Russia was until recently considered as the most promising oil region outside the Middle East. Its rapid output growth in the early 2000s helped to meet booming Chinese demand and limited the rise in oil prices.

The trend, however, has turned, with supply dropping below year-ago levels for the first time this decade, according to the International Energy Agency, the energy watchdog.

Oil futures on Monday rose to $111.79 a barrel, just below last week's record of $112.21 a barrel. (http://www.ft.com/cms/s/0/282adfd4-0a4c-11dd-b5b1-0000779fd2ac.html?nclick_check=1)

Title: Re: Meltdown
Post by: Sean on April 15, 2008, 04:43:47 PM

I posted this one before...

Many peak oil thinkers are sceptical that much progress on alternative energies will be made at this late stage in the age of oil. Oil production is 84 million barrels a day, which is likely at its peak- it might just go to 90mbd, then no matter what the demand is, for example it'll be 120/ 150 etc in the coming decade or two, output will slip inexorably to 80, 75, 70, 65 and so on. Once the markets realize this is an inevitability and not a blip, the result could be no gentle slide but a rather catastrophic holding onto funds: trillions and trillions of dollars will disappear from the world, companies and stock markets losing value, possibly over only a period of a few months.

Once supermarket lorries are seen failing to make their deliveries and are abandoned and looted on roadsides, society will collapse- we are that precariously balanced, and of course that's the reality behind 9/11 'attacks' and the subsequent control of Middle East reserves, the last of the world's oil. D'you know what 84 million barrels x365 days looks like? If it was a building it would be 1 x 1 x 4.5 kilometers tall ,with this yearly consumption going up by 10 stories or more each year. How much oil do you think is in the world's rocks?

Here's a couple of things I came across in a Youtube oil video, paraphrased for you- made an impression on me:

Einstein pointed out that the phenomenon of exponential growth is one of the most powerful in nature- where a quantity is subject to an ongoing factor, usually x2. The question then, as Richard Heinman puts it, is whether humanity is smarter than yeast, which expands its numbers without regard for its food source: it doubles and doubles until it reaches half the size of its remaining food, then doubles once more (cf China and India), still thinking everything's great, finds there's nothing left to eat at all and the entire lot of it dies.

I like this example as well, futher illuminating how most people aren't noticing there's a problem. There's this lake you've always used, essential to your life for water, fish, plants, animals etc. Unknown to you or your village, a virulent foreign water lilly takes hold, which doubles its coverage overnight, blocking out all else and killing and poisening the lake: it begins with a single tiny spore on day 1 and will cover the lake completely on day 30.

On which day do you think you might notice there was problem? When an eighth of the lake was covered? A quarter? Arguably most people wouldn't notice until it was half covered. How long would this give you to do something about it before the lake and your livelihood was destroyed? One day- you'd be on day 29. How long would you have if you noticed when it was a quarter covered? Two days, or three days if you were sharp enough to see it an eighth covered.

In this time left you also have to draw other people's attention to the problem, convince them that an eighth coverage was indeed a problem at all, think of a solution, agree on the solution, work out how to bring it about, work out who will do what etc etc etc, all within three days, when 27 passed while everyone still thought things were just fine. It wouldn't happen of course and the village would be overcome- certainly not in a democratic situation with idiots endlessly debating, when a clear sighted decisive leader is needed.

Title: Re: Meltdown
Post by: head-case on April 15, 2008, 10:11:46 PM

Quote from: Sean on April 15, 2008, 04:43:47 PM
I posted this one before...

Many peak oil thinkers are sceptical that much progress on alternative energies will be made at this late stage in the age of oil. Oil production is 84 million barrels a day, which is likely at its peak- it might just go to 90mbd, then no matter what the demand is, for example it'll be 120/ 150 etc in the coming decade or two, output will slip inexorably to 80, 75, 70, 65 and so on. Once the markets realize this is an inevitability and not a blip, the result could be no gentle slide but a rather catastrophic holding onto funds: trillions and trillions of dollars will disappear from the world, companies and stock markets losing value, possibly over only a period of a few months.

Once supermarket lorries are seen failing to make their deliveries and are abandoned and looted on roadsides, society will collapse- we are that precariously balanced, and of course that's the reality behind 9/11 'attacks' and the subsequent control of Middle East reserves, the last of the world's oil. D'you know what 84 million barrels x365 days looks like? If it was a building it would be 1 x 1 x 4.5 kilometers tall ,with this yearly consumption going up by 10 stories or more each year. How much oil do you think is in the world's rocks?

Here's a couple of things I came across in a Youtube oil video, paraphrased for you- made an impression on me:

Einstein pointed out that the phenomenon of exponential growth is one of the most powerful in nature- where a quantity is subject to an ongoing factor, usually x2. The question then, as Richard Heinman puts it, is whether humanity is smarter than yeast, which expands its numbers without regard for its food source: it doubles and doubles until it reaches half the size of its remaining food, then doubles once more (cf China and India), still thinking everything's great, finds there's nothing left to eat at all and the entire lot of it dies.

I like this example as well, futher illuminating how most people aren't noticing there's a problem. There's this lake you've always used, essential to your life for water, fish, plants, animals etc. Unknown to you or your village, a virulent foreign water lilly takes hold, which doubles its coverage overnight, blocking out all else and killing and poisening the lake: it begins with a single tiny spore on day 1 and will cover the lake completely on day 30.

On which day do you think you might notice there was problem? When an eighth of the lake was covered? A quarter? Arguably most people wouldn't notice until it was half covered. How long would this give you to do something about it before the lake and your livelihood was destroyed? One day- you'd be on day 29. How long would you have if you noticed when it was a quarter covered? Two days, or three days if you were sharp enough to see it an eighth covered.

In this time left you also have to draw other people's attention to the problem, convince them that an eighth coverage was indeed a problem at all, think of a solution, agree on the solution, work out how to bring it about, work out who will do what etc etc etc, all within three days, when 27 passed while everyone still thought things were just fine. It wouldn't happen of course and the village would be overcome- certainly not in a democratic situation with idiots endlessly debating, when a clear sighted decisive leader is needed.

How many times are you going to quote the same jibberish?

Title: Re: Meltdown
Post by: Sean on April 15, 2008, 10:37:10 PM

Well I was kind-of surprised no one responded before: these are Richard Heinberg's arguments and they're good ones. Probably why no one responded.

Title: Re: Meltdown
Post by: head-case on April 16, 2008, 05:04:16 AM

Quote from: Sean on April 15, 2008, 10:37:10 PM
Well I was kind-of surprised no one responded before: these are Richard Heinberg's arguments and they're good ones. Probably why no one responded.

They're not. Extrapolation of short term trends over long times is the biggest blunder of the economist. I think you should concentrate on your more vital work, such as your study of the apostrophe.

Title: Re: Meltdown
Post by: BachQ on April 16, 2008, 05:47:38 AM

Quote from: Sean on April 15, 2008, 10:37:10 PM
Well I was kind-of surprised no one responded before: these are Richard Heinberg's arguments and they're good ones. Probably why no one responded.

Thanks for posting that, Sean. 8) I have the full Heinberg interview earlier in the thread ..........

Title: Re: Meltdown
Post by: BachQ on April 16, 2008, 05:50:06 AM

Oil and farm prices spark inflation fears
By Javier Blas in London

Published: April 14 2008 11:34 | Last updated: April 14 2008 19:43

Energy and agricultural commodities prices moved higher boosted by robust demand in emerging markets and supply disruptions. The rise in basic commodities threatens to stoke further inflationary pressures in both rich and poor countries. Multilateral institutions, including the World Bank, have also raised their concern about food riots. Crude oil prices moved towards their recent record high level of $114 a barrel boosted by supply disruptions in Nigeria, the US and Mexico, and robust demand, particularly for diesel and heating oil, in emerging countries. Signals that Opec, the oil producer's cartel, is lowering its production to match a seasonal slowdown in demand, also helped to push prices higher, traders said.

(http://www.ft.com/cms/s/0/290c971e-0a0e-11dd-b5b1-0000779fd2ac.html)

Title: Re: Meltdown
Post by: BachQ on April 16, 2008, 05:53:28 AM

Oil hits new high above $114, dollar supports
Wed Apr 16, 2008 8:40am EDT

LONDON (Reuters) - Oil struck a new record high above $114 a barrel on Wednesday, buoyed by the weak U.S. dollar, inflows of speculative money and long-term constraints on supply. U.S. crude was 53 cents higher at $114.32 a barrel by 5:43 a.m. EDT, just below a fresh peak of $114.41. Today's price is more than three times the average price of 2002, when oil's rally began.

(http://www.reuters.com/article/hotStocksNews/idUSSYD3274320080416)

Oil prices surge to record
The Associated Press

April 16, 2008 at 8:14 AM EDT

NEW YORK — Oil prices surged to record highs Wednesday as the weakening U.S. dollar drove up investments into commodities. Light, sweet crude for May delivery rose as high as $114.53 (U.S.) a barrel in electronic trading on the New York Mercantile Exchange before retreating to $114.46 by midday in Europe, up 67 cents. Annual inflation in euro nations rose to a record 3.6 per cent in March, boosted by higher prices in transport fuel, heating, dairy products and bread, said Eurostat, the EU's statistical agency. It is the highest inflation rate in 16 years.
(http://www.reportonbusiness.com/servlet/story/RTGAM.20080416.woilprices0416/BNStory/energy/home?cid=al_gam_mostview)

Title: Re: Meltdown
Post by: BachQ on April 16, 2008, 05:57:09 AM

Dollar Falls to Record Against Euro as EU Inflation Quickens

(http://www.bloomberg.com/apps/data?pid=avimage&iid=igDOpuatu5ZQ)

By Ye Xie and Lukanyo Mnyanda

April 16 (Bloomberg) -- The dollar fell to a record low against the euro as European inflation accelerated and U.S. housing starts tumbled, reducing chances the European Central Bank will follow the Federal Reserve in cutting interest rates. The U.S. currency had its biggest decline versus the euro in three weeks, dropping as low as $1.5969. The Canadian and Australian dollars and Norwegian krone increased after crude oil rose to a record of $114.53 a barrel. The euro touched 80.76 pence against the pound, the highest since the European currency's 1999 debut.

``We are in an uncharted territory,'' said Robert Lynch, a senior currency strategist in New York at HSBC Bank USA NA. ``The general upward trend for the euro against the dollar remains.'' The U.S. currency weakened 1 percent to $1.5941 against the euro at 9:26 a.m. in New York, from $1.5790 yesterday. The dollar decreased 0.6 percent to 101.25 yen, from 101.83. The euro rose 0.4 percent to 161.43 yen, from 160.78. The dollar has dropped 15 percent against the euro since September as the Fed cut the target lending rate 3 percentage points to 2.25 percent to protect the U.S. economy from the collapse of the subprime-mortgage market. (http://www.bloomberg.com/apps/news?pid=20601087&sid=attAG_pdH4m0&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 16, 2008, 06:10:51 AM

Global crises inspire local action in city of the future

Dr Paul Chatterton

YOU know an idea is hovering around the edges of the mainstream when it makes it into the script of Radio 4's The Archers. Organic farmer Pat Archer is starting an action group called Transition Ambridge, a move to plan how the community can act now and survive rather than allow itself to be battered by two mammoth geopolitical and environmental problems ahead of us in the real world.

Firstly, we are fast approaching (at some time thought to be in the next five to 30 years) what's called "peak oil", the time when the world's oil consumption outstrips the rate of production. This, together with fossil fuel scarcity, will require us to drastically reduce our energy use, even without climate change.

Secondly, the Government says we must reduce our carbon emissions by 60 per cent by 2050 in order to help to slow down or reverse the rate of climate change. Some scientists say this is nowhere near enough to avert the disaster ahead caused by global warming.

A growing network of communities around the UK, Ireland and beyond are deciding to take the future into their own hands, rather than waiting around for governments to come up with solutions.

They are becoming "transition" villages, towns or cities, which means they're planning how they can move forward into an era when we can no longer depend on oil and must also find a sustainable way of living
which does not help to wreck the planet.

The comfortable town of Totnes in Devon is the cradle of Transition in this country, having embarked on its first projects four years ago. Transition Totnes was led by local visionary and academic Rob Hopkins, who also helped to create the first transition town, Kinsale in the Republic of Ireland.

About 40 very varied communities, including the cities of Canterbury, Nottingham, Leicester and Bristol, are now joining the transition train. The Pennine villages of Slaithwaite and Marsden together kicked off their transition brainstorming recently, and Leeds looks ready to climb on board, too.

A Transition City Leeds event being held this weekend will, it's hoped, bring together people from the city and surrounding area to be part of the development of a (probably oil-free, hopefully carbon- neutral) future.

But what, in a practical sense, is this transition network coming up with that can possibly make a difference? Well, for example, in Totnes some of the projects already on the go involve helping businesses to switch to renewable energy tariffs, the bulk purchase of solar thermal heating kits for residential hot water, matching unused garden space with gardenless growers, and educating children about the movement by encouraging them to make films about their vision for the future of the town.

Totnes also has its own currency, the Totnes Pound, which is used by 70 shops locally as part of the move to produce, distribute and consume as many goods as possible within the area. In the Cotswolds town of Stroud, projects include shared bike schemes, the promotion of kitchen gardens, so- called "edible landscapes" like nut trees and planning of an Oil Depletion Protocol.

As in all transition communities, the ideas come from local people. There's no model handed out by a central HQ, and no such nerve centre exists anyway. Transition is about a return to real democracy, say its advocates.

The time after "Peak Oil" has been called the era of "energy descent", when the oil we do use will be difficult to get hold of and very expensive. We can either wait until that time to react with a knee-jerk, or start planning now in a more rational way, says Paul Chatterton, senior lecturer in human geography at Leeds University. He's one of a group spreading the word about the birth of Transition City Leeds.

"In Totnes, where there are lots of progressive types like greenies (including Green Party councillors) and Lefties, it was easy to get the idea off the ground," says Dr Chatterton. "It took off like wildfire, and now involves thousands of people, working on areas from agriculture and distribution to local food directories, health and education, transport and energy.

"After years of declining interest in local elections, the Transition Totnes thing has involved loads of people in discussion of the future of their town. It's a whole different approach to politics.

"It's about saying, 'Let's not be doom-mongers, but let's not be climate change deniers either, or pretend that oil isn't getting more expensive. Let's plan, prepare and tackle the problems together'."

One of the chief aims of the transition network is to force the Government to follow where local communities lead, even though tension will always exist due to Whitehall's inherent relationship with big business. The idea is not to create some sort of one-size-fits-all Stalinist Utopia, says Dr Chatterton. "We all know where that led. No, this is about letting a thousand flowers bloom, saying 'How can we unleash the creative genius in our community?' Everyone's an expert in their own life, and has ideas, and we want to bring everyone in on their own terms. There will be no central committee telling us how to do it." He is aware of the need to convince the wider community that this is not just about a group of eco-enthusiasts and Left-leaning activists.

"It's not like the future of our city is only of interest to one group. The future's everyone's problem, surely, so everyone's got to get into a conversation about it and bring along their skills." Dr Chatterton says the transition will mean creating a strong local economy which is resilient to the blows of energy shortages, or even the collapse of the global economy.

In Leeds, where many people are employed by large supermarkets and call centres, the shock-proof city of the future may well replace those jobs with others involving expertise in hi-tech agriculture, energy, recycling, green construction engineering and architecture. The food we eat will have been produced in a highly energy-efficient way, and travelled few miles from field to plate.

Far from the whole deal spelling a mood of drabness and austerity, a positive approach to downscaling consumerism might well mean that we cheerfully espouse a "less is more" philosophy towards our daily lives. Amassing fewer goods, but enjoying the old-fashioned simple pleasures around family and neighbours might be one new (but also rather old-fashioned) direction we'll decide to take. "The future Leeds might look a bit more like Heartbeat. Would that be so bad?"

"I'd like to see a sensible discussion in all the neighbourhoods of the city about our needs and how to supply them locally," says Dr Chatterton, who was born and bred in Leeds. "We could be pretty self-sufficient in Yorkshire. That's not to say we should close the borders, by the way. I'm not suggesting that. But we do have a robust city, with universities and many FE colleges to train the people we might need in different jobs, and lots of green belt beyond the city to meet local food demands. We have huge resources."

He's not so keen on the word "movement" when attached to transition, sustainability or any other idea that to him is simple common sense. "It implies that some of us are in it and some are out of it, when what we're talking about is our joint future. When someone refers to people who care about all these issues as 'you lot', I just say: 'Have you got your own separate planet to live on, and can you jump off it when disaster happens? We're all here and in this together, mate'."

The Transition City Leeds workshop will be held on Saturday, April 19, 10am-5pm at Centenary House, North Street, Leeds. The event is free and lunch is provided. Children welcome but no crèche facilities available. Information: transition-city-leeds.wikispaces.com/ or
email transitioncityleeds@ hotmail.co.uk
(http://www.yorkshirepost.co.uk/features/Global-crises-inspire-local-action.3986108.jp)

Title: Re: Meltdown
Post by: BachQ on April 16, 2008, 06:17:01 AM

Russia Hits Peak Oil
Rob Mackrill - Tue 15 Apr, 2008
A Russian oil executive has admitted Russian oil production has hit a peak

Peak Oil theory gets a shot in the arm...

Russia was the new frontier for oil production a few short years ago. Not any more it seems, according to an FT report today...

Russian oil has peaked already according to Leonid Fedun, vice-president of Russian oil giant Lukoil,

10m barrels a day from the world's number two oil producing country is as good as it gets in his lifetime he reckons. He's 52 but given the average life expectancy of Russians that may not be too long. And it's not going to be stable. Oil rich Western Siberia is more like Mexico and the North Sea i.e. output is sliding fast. "The period of intense oil production growth is over" claims Fedun. They've sucked up the oil fast and now the party's over.

The Russian government has admitted so far to oil production growth "stagnating" but not that it has "peaked" says the FT so this is news to those less intimately familiar with Russian oil reserves. It's a blow. In recent years, increased Russian production has helped offset the additional and growing demand from Asia and help keep a lid on the price of crude. So, if Mr Fedun right, this particular brake on the price has reached its limit. Future new production for Big Oil increasingly rests on 'unconventional' sources such as the 54,000 square miles of black rock that comprise the Athabasca Oil Sands in Alberta, Canada.

Such public admissions do nothing to weaken the oil price, so are self-serving in the short-term to producers such as Lukoil. But contributing factors such as the fortunes of the dollar are outside their control. The fact the greenback is near record lows against the euro ahead of further economic news pending adds further upside as does a supply disruption in Mexico in a tight market. "We just don't have the big cushion any more that we used to have," Robert Nunan of Mitsubishi in Tokyo tells CNBC. And in the old days when the rich nations slumped, so did global demand. These days as the song said: 'It ain't necessarily so'. China's diesel imports went up 49% in March. Eugen Weinberg, an analyst at Commerzbank AG tells Bloomberg:

"The predominant market view is that the emerging economies will overcompensate for any possible demand slump in OECD countries."

This is bad news for inflation and casts doubt on how much this is a late cycle phenomenon and lagging indicator. If the west slumps but the eats continues regardless, commodities may not – and certainly haven't yet - ease off like they used to.

Sweet light crude hit an all time high of $112.48 yesterday. Brent hit an all time high of $110.45. Pump prices ain't coming down anytime soon even with the now mandatory 2.5% biofuel content.

Elsewhere on the oil patch, Downing Street is said to be keeping a close eye on Chinese stake-building in BP. The purchases are via a sovereign wealth fund which has already a 1.6% holding in French oil company Total. Their stake in BP has reached almost 1%.

European stocks are positive this morning as Silvio Berlusconi wins a third term in the Italian election and in spite of a fall in formerly bullish German business confidence. The FTSE 100 is 73 points higher in early afternoon trade at near 5,900 as Tesco proved its supermarket chain is a sound defensive play in difficult times. It cheered the market, and no doubt shareholder Warren Buffett, by beating analysts' estimates with a 12% increase in profits to £2.8bn. Plus it is creating another 30,000 jobs across the group. Perhaps it can soak up some of those City redundancies in the process.

Tesco's main growth drivers came from their businesses in Asia and eastern Europe. Good news from their newly launched US operation – Fresh & Easy – where its performance has confounded the doubters, sales are "ahead of budget" and is selling more per square foot than local rivals.

Not a boast department store Debenhams may be making right now. Interim profits have fallen more than 12% and sales fell slightly on a like-for-like basis. CEO Rob Templeman says it's a "tough trading environment, particularly in clothes". He sees slowing sales as a result of shoppers feeling the impact of tighter credit rather than a weakening economy. He makes the point that the credit squeeze has developed fast so could be reversed quickly too. Perhaps but the Bank of England has not developed yet the taste of dramatic action along the lines of that instigated by the Fed. The effect of a quarter point cut while the UK mortgage market appears to be fast disappearing looks like fiddling while Rome burns.

The Royal Institute of Chartered Surveyors throw their thoughts into the house price debate today. Not good they say. Worst we've seen it for a long time. Since we started keeping records in 1978, in fact. 78.5% more surveyors are reporting falls than rises says Bloomberg. I don't know about you but I find that a bit of a tricky stat to get my head around. Presumably for every 100 surveyors reporting rises, 178 or so are reporting falls. Whatever the technicalities "the situation is serious and getting worse," in the eyes of David Stubbs, an economist at RICS tells Bloomberg. Lower interest rates are needed to restore confidence he says. Of course, but then from recent evidence that doesn't seem to be doing a great deal to help as base rates ease while mortgage rates (from the dwindling number of deals available) tighten. The latest inflation read provides some welcome encouragement for Mervyn King. Though still 50bps above target, CPI held steady in March at 2.5%, better than the 2.6% expected by analysts.

Gordon Brown sat down with mortgage lenders this morning and rarely can incentives on all sides been greater and more urgent to sort out a deal to get things moving again. Brown will not want the taxpayer on the hook for the risk of dodgy mortgage assets via the Bank of England but the commercial banks and in time things should return to some form of normality. But that won't happen until normal service can be resume in interbank lending. Given that Libor has actually firmed slightly since the 25 basis point cut last week to 5.93% this looks some way off yet.

This credit squeeze is almost eight months old and past credit squeezes have lasted 9-18 months according to David Smith in The Sunday Times. As we know from our investments, of course, the past is not necessarily an accurate guide to the future. J P Morgan see the pall of the credit crisis infecting financial markets for the next ten years at least as regulation increases on commercial banks and central banks tighten their grip.

(http://www.dailyreckoning.co.uk/commodities-trading/russia-hits-peak-oil-00087.html)

Title: Re: Meltdown
Post by: BachQ on April 16, 2008, 02:57:39 PM

Oil Rises to Record in New York on Unexpected Drop in Supplies

By Margot Habiby

April 17 (Bloomberg) -- Crude oil touched a record $115.21 a barrel in New York after the Energy Department reported unexpected declines in U.S. crude inventories and refinery operating rates. Oil inventories fell 2.36 million barrels to 313.7 million barrels in the week ended April 11, the department said yesterday. Refinery capacity was 81.4 percent, the lowest since October 2005 following hurricanes Katrina and Rita. Crude oil for May delivery rose as much as 28 cents to $115.21 a barrel and traded at $115.12 at 8:17 a.m. Sydney time in after-hours electronic trading on the New York Mercantile Exchange. Yesterday, oil futures gained $1.14, or 1 percent, to settle at $114.93 a barrel, a record close.

Prices are up 4.6 percent this week and 83 percent from a year ago.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aPcfwNOzGQD8&refer=home)

Oil surges to 3rd straight record high

Crude prices hit a new record - reaching as high as $115.07 - after a government report shows that stockpiles fell more than expected last week.

By Kenneth Musante, CNNMoney.com staff writer
Last Updated: April 16, 2008: 5:49 PM EDT

NEW YORK (CNNMoney.com) -- Oil prices settled at a record high for the third day in a row on Wednesday. Prices spiked to a record $115.07 a barrel in midday trading, after a government report showed an unexpected crude supply drop. U.S. light sweet crude for May delivery settled at $114.93 a barrel on the New York Mercantile Exchange.

In the short term, momentum could push crude prices higher still, according to Brian Hicks, co-manager of the Global Resources Fund at U.S. Global Investors. However, Hicks says, "at some point, seasonal factors will come into play and we will see a pullback in the second quarter." There is lower demand for crude in the second quarter because consumers are in between the winter heating months and the summer driving months. Crude began the year at just under $96 a barrel, which means the price has soared by nearly 20% already this year. In its weekly inventory report, the Energy Information Administration said crude stocks fell by 2.3 million barrels in the week ended April 11. Analysts had been expecting an increase of 1.7 million barrels after last week's unexpected drop, according to a Dow Jones poll.

(http://money.cnn.com/2008/04/16/markets/eia/index.htm?cnn=yes)

Title: Re: Meltdown
Post by: Bogey on April 16, 2008, 04:39:11 PM

Irrational Exuberance

Tom Kloza, chief analyst of the Oil Price Information Service, says the recent run-up in oil prices is due more to speculation in the commodities market than to supply shortages and the growing economies and populations in Asia. "The EIA has been steadfast in saying that it's all about supply and demand, but I disagree," Kloza contends.

"It's not the demand from average Joes, but demand from hedge funds, banks, commodities pools and so forth that's responsible for taking crude oil from $70 to $110 a barrel. There are a lot of huge funds that are invested in commodities, and one of their favorites is crude oil.

"I estimate that there's about $25 billion in oil futures — and that's $25 billion speculating on a higher price right now than a lower price," Kloza adds. "I think you'll find a lot of people in the oil industry will agree, and they're not going to complain if Wall Street is carrying the water for them. They've been the beneficiaries of that irrational exuberance."

Related Links From MSN Money 12 Ways to Find Cheaper Gas
Should You Buy a Used Hybrid?

Like many who follow the oil industry, Kloza believes that the price of crude oil is "overheated" and due for a correction.

"I compare it to the housing market a few years ago," he says. "It's been lifted by the sentiment that the oil market is a place where you can't lose money and values will move up higher and higher every year. But I think we'll see less of a bubble burst and more of a letting the pressure out like we've seen in the housing market. It could be a template for what we'll see in oil."

The EIA's MacIntyre agrees and says crude oil prices will be softened by new production streams. But he predicts prices will rise before they lower, mainly due to seasonal demand this spring, when pump prices traditionally shoot up as predictably as May flowers.

Read: Gasoline's New Math: Miles Per Dollar

"Along with many other analysts, we've been expecting crude oil prices to decline for many months, and they keep going up," he says. "In March they were down considerably, but the expectation is not just that the price will slow demand a bit more, but that a lot of non-OPEC production that has been delayed will catch up to us later this year and next year. And as the market starts proceeding with that production, prices will start dropping."

"From what I hear, oil companies are investing based on $55 to $75 a barrel oil," says Tippee. "Historically, that's still pretty valuable oil. But I think that's what we'll see and gas prices will come down. But the big question is when."

Wait for the Fall

Just don't expect to see any dramatic price drops until well after the summer driving season, MacIntyre warns. "We expect gas prices to increase and peak nationally somewhere around $3.50 a gallon," he says. But consumers could see some relief by the end of 2008 and into 2009 as new production comes online.

"A couple of things are going to work in the favor of a more temperate price of gasoline down the road," adds Kloza. "Ethanol is going to displace a lot of the demand for gasoline because it's going to take 10 percent of gasoline out of the formula and replace it nearly everywhere east of the Mississippi this year. The second thing is prices won't be up a spectacular amount from previous years; it may be up a percentage point or so. But this is not the start of the $4- to $5[-dollar-a gallon] apocalypse for gasoline."

Full article here: http://editorial.autos.msn.com/article.aspx?cp-documentid=473819&topart=luxury

Title: Re: Meltdown
Post by: BachQ on April 17, 2008, 11:59:12 AM

Quote from: Bogey on April 16, 2008, 04:39:11 PM
Like many who follow the oil industry, Kloza believes that the price of crude oil is "overheated" and due for a correction.

"I compare it to the housing market a few years ago," he says. "It's been lifted by the sentiment that the oil market is a place where you can't lose money and values will move up higher and higher every year. But I think we'll see less of a bubble burst and more of a letting the pressure out like we've seen in the housing market. It could be a template for what we'll see in oil."

Muddled logic.

The market for oil is nothing like that for housing ......... Oil is a limited commodity whose supply is certain to decline progressively and increasingly.

Title: Re: Meltdown
Post by: BachQ on April 17, 2008, 12:00:18 PM

Pickens Reverses Position to Bet on Higher Oil Prices (Update4)

By Daniel Whitten

April 17 (Bloomberg) -- Boone Pickens, a billionaire energy investor, said he reversed course and is betting the price of crude oil will rise.

Pickens, 79, the founder and chairman of Dallas-based BP Capital LLC, said today in a speech at Georgetown University that the price of crude will only continue to climb and demand will eventually be dampened.

``The position is long, not short,'' Pickens told reporters after his speech. ``I covered the short position, it was a mistake on my part. We missed.''

Crude oil futures in New York touched $115.54 a barrel today, the highest intraday price since trading began in 1983.

Investors looking for higher returns have flocked to commodities. Oil in New York surged 82 percent over the past year as the Standard & Poor's 500 Index dropped 7.4 percent and the Dow Jones Industrial Average declined 1.2 percent.

Pickens said he thought oil was approaching $125 a barrel. Oil will eventually reach $150 per barrel, he said, while cautioning ``I won't be investing in $150 oil.''

Pickens said his BP Capital Energy Equity Fund fell 21 percent in the first quarter of this year. Since 2001, the fund has grown 800 percent, he said.

World oil supplies won't exceed 85 million barrels a day because of high depletion rates of existing wells, he said in his speech. This supports his belief in a climbing price.

Global Supplies

``There is only 85 million barrels of oil globally in the market coming a day and I don't think you can increase that 85 million,'' Pickens said.

World oil demand during the four years ending 2008 is rising at an average annualized pace of about 1.4 percent, according to International Energy Agency forecasts.

Over the same period, non-OPEC oil supply is seen climbing at a slower pace of 0.9 percent. The Organization of Petroleum Exporting Countries has this year been reluctant to commit to pumping more, saying supply and demand are in balance.

Pickens endorsed Republican presidential candidate John McCain, while criticizing his energy policies. Recent McCain proposals to stop putting oil into the federal Strategic Petroleum Reserve and to suspend a gasoline tax for the summer wouldn't be good for the country, Pickens said.

``I'm hoping he will become better informed and come up with better ideas about energy than he has up to now,'' he said.

He plans to invest $10 billion in 4,000 megawatts of wind projects within the next several years.

``We are going to put a lot of money into wind next month,'' Pickens said, adding he expects at least a 25 percent return on his investment.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aTsRVnVao4eo&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 17, 2008, 12:03:01 PM

Oil prices headed toward $125/barrel: Pickens
Thu Apr 17, 2008
(http://www.reuters.com/resources/r/?m=02&d=20080417&t=2&i=3924998&w=&r=2008-04-17T160832Z_01_N17426881_RTRUKOP_0_PICTURE0)

By Chris Baltimore

WASHINGTON (Reuters) - Crude oil prices are still headed upward and could top $125 a barrel in the near-term, legendary oil investor T. Boone Pickens said on Thursday. "It will go up," said Pickens, who heads the BP Capital hedge fund with over $4 billion under management. "Oil is moving to a substantially higher level -- say above $125 a barrel." U.S. crude futures hit a record $115.54 on Thursday. Oil prices have more than quintupled since 2002, propelled higher by soaring demand from emerging economies like China alongside slow increases in global production capacity. Despite new production from the Canadian oil sands and elsewhere, Pickens said global crude oil production is unlikely to rise above its current rate of about 85 million barrels per day, while global demand will likely hit 87 million bpd in the third quarter of 2008. Pickens also expects U.S. natural gas prices to rise from current levels near $10 per million British thermal units to $12-$14 this upcoming winter. Pickens, in Washington on Thursday to deliver a speech about energy at Georgetown University, made more than $1 billion in 2006 by betting on rising oil prices.

Pickens' hedge fund lost over 20 percent in the first three months of 2008 on a bet that oil prices would fall. Pickens said his fund is now looking for oil and natural gas prices to rise. (http://www.reuters.com/article/ousiv/idUSN1742688120080417)

Title: Re: Meltdown
Post by: BachQ on April 17, 2008, 12:06:01 PM

The "long emergency" and the new normal

CHARLES MOORE
AT LARGE
Published Thursday April 17th, 2008
Appeared on page A9

It is increasingly difficult to dismiss the sense that economic and social systems we've come to regard as "normal," locally and globally, are strained to the limit and breaking down. Crude oil nudging $112 a barrel send motor fuel prices to record highs. People in Haiti rioting and booting their prime minister in protest and frustration over skyrocketing food prices. People killed in food riots in West Africa. These seemingly disconnected phenomena are part and parcel of a perfect storm of converging factors including energy shortages, climate change, and a third-world population explosion that will oblige us to redefine "normal."

We are arguably already in what author and activist James Howard Kunstler dubbed in is 2006 book of the same title, The Long Emergency.

I don't always agree with Kunstler - 10 years ago he was profoundly mistaken about the impact of the Y2K bug, while I predicted by mid-1999 that it would be a transitory hiccup - but I think he's on to something with projected consequences of peak oil.

If you think high fuel prices of the past several months are a temporary economic blip and anticipate return to relatively cheaper oil prices of quite recent memory, you're likely out of luck. The U.S. Energy Information Administration says conventional world oil production peaked in May 2005, and the peak in all oil (including non-conventional sources like tarsands) is estimated to come in 2010.

Actually, oil production per capita peaked in the 1970s at about 5.26 barrels per year and is now 4.73 barrels per year. In the meantime, China's oil consumption has grown by 8 per cent annually since 2002, doubling from 1996-2006, and India's oil imports are projected to more than triple from 2005 levels by 2020, while at least nine of the world's 21 largest oilfields are in decline.

Even those raw statistics are somewhat optimistic, since the half of nominal reserves remaining are much more difficult and costly to extract and of poorer quality than the easy half were. A substantial proportion will never be pumped, and worldwide discovery of new oil has declined to insignificant levels.

Meanwhile global oil demand is projected to increase 37 per cent over 2006 levels by 2030 according to the U.S.-based Energy Information Administration. World population grew from 6.07 billion in 2000 to 6.45 billion in 2005, forecast to double from 1980 levels by 2030, by which time oil production is expected to have diminished back to 1980 levels, with predictable inflationary effect.

The impact will reach far beyond the cost of filling up our cars and heating our homes, and is already being profoundly felt by the world's poorest and most vulnerable in brutal food price increases driven by grain and oilseed shortages consequential to crop diversion for biofuels production, crop failures and lower production at least partly attributable to climate change, and the fact that modern agriculture is heavily dependent on oil to fuel machinery, shipped-in seed, fertilizer, and chemicals, and energy-intensive processing and distribution of food products. Few farmers grow even their own food.

The "long emergency" is already dominant existential reality for many, according to World Bank president Robert Zoellick, who told The Guardian newspaper last week: "In the U.S. and Europe over the last year we have been focusing on the prices of gasoline at the pumps. While many worry about filling their gas tanks, many others around the world are struggling to fill their stomachs." He castigates U.S. and European governments for embracing biofuels as an oil alternative, diverting agricultural land away from food and steepening the price spike.

Zoellick noted that wheat prices rose by 120 per cent over the past year, more than doubling the price of bread, while rice is up 75 per cent in just two months. On average, the Bank calculates food prices have risen by 83 per cent in the past three years, to a point that in Bangladesh a 2kg bag of rice now consumes almost half of typical daily income for poor families.

The outlook is bleak. Biofuels are a "cure" worse than the disease. A "hydrogen economy" is a pipe (line) dream. Most hydrogen to power fuel cells is derived from natural gas. Solar, wind, and tidal power will help, but can't come close to substituting for cheap oil, the end of which portends the end of a globalized consumer economy. We will be obliged to become more local and agrarian, and to rediscover techniques and skills necessary to function at a subsistence level, if that is indeed possible, given today's population dynamics and practical ignorance.

Commercial air travel will die, and the folly of letting North America's railways deteriorate will hit home.

The suburbs, under which lie much of the continent's best agricultural land, will become the new slums, and the "long emergency" may become the new normal.

Charles W. Moore is a Nova Scotia based freelance writer and editor. He can be reached by e-mail at cwmoore@gmx.net. His column appears each Thursday.

(http://telegraphjournal.canadaeast.com/opinion/article/270231)

Title: Re: Meltdown
Post by: BachQ on April 17, 2008, 12:09:38 PM

U.S. gasoline prices to rise despite slowdown: EIA

(http://www.reuters.com/resources/r/?m=02&d=20080416&t=2&i=3912277&w=&r=2008-04-16T204454Z_01_N16457220_RTRUKOP_0_PICTURE0)
Wed Apr 16, 2008 4:44pm EDT
By Tom Doggett

WASHINGTON (Reuters) - Drivers should not be fooled into thinking a weak economy and less gasoline use will help lower pump prices any time soon, the federal Energy Information Administration said on Wednesday.

"Even though U.S. gasoline demand has been lower than year-ago levels so far this year, EIA still expects that rising gasoline demand over the next few months will still drive retail prices higher," the agency said in its weekly review of the oil market.

The national price for regular, self-service gasoline hit a record $3.39 a gallon this week, according to the EIA, the Energy Department's forecasting arm.

"This year's upcoming spring and summer are expected to see retail gasoline prices rise even further from current high levels," the agency said.

While high crude oil prices have been mostly to blame for pushing gasoline costs to record levels, increasing seasonal gasoline demand will likely raise retail pump prices to $3.50 a gallon and above, even if gasoline use is down from year-ago levels, the EIA said.

"The simple fact that more and more gasoline will be used over the next few months will probably be enough to cause retail gasoline prices to increase, even if crude oil prices begin declining, as EIA is currently projecting," the agency said.

The switch-over by refineries to making less-polluting gasoline for the summer is more costly and will also help to raise gasoline prices, the agency said.

The EIA said, if crude oil prices stay above an average $104 a barrel in May and June, consumers could pay more than $3.60 a gallon for gasoline.

U.S. oil prices topped a record $115 a barrel on Wednesday at the New York Mercantile Exchange.

High gasoline prices have become a bigger issue in the U.S. presidential race, with Sen. John McCain, the presumptive Republican nominee, proposing this week to suspend for the summer the federal excise tax of 18.4 cents levied on every gallon of fuel sold.

(http://www.reuters.com/article/domesticNews/idUSN1645722020080416)

Title: Re: Meltdown
Post by: BachQ on April 18, 2008, 04:09:14 AM

Crude prices are more than five times higher than they were even in 2002, with some analysts arguing that peak oil - the maximum rate of production - is close at hand. Reports this week have suggested that two big producers, Russia and Nigeria, may have reached their peak oil point although Brazil lightened the gloom by announcing that companies there had made a large oil discovery. (http://www.guardian.co.uk/business/2008/apr/18/commodities.oil)

Title: Re: Meltdown
Post by: BachQ on April 18, 2008, 04:11:37 AM

George Bush is an Idiot who Refuses to Face Reality (title rephrased)

(http://i.l.cnn.net/cnn/2008/POLITICS/04/18/bloomberg.adult/art.bloomberg.gi.jpg)
NEW YORK (CNN) -- New York City Mayor Michael Bloomberg said Thursday that whoever wins the presidency in November, "at least we'll have an adult in office who can lead and accomplish something." "I'm looking for a candidate that is willing to face reality and say, 'We can't have everything and there are costs and we've got to make choices.'"

"Right now, everybody is afraid to tell the American public that there's no easy answers," he said. "Nobody is willing to do anything other than say, 'I'm in favor of motherhood and apple pie.'"

"You may have a different solution to the problem than I do, but at least tell me, tell the public, there's a reason to stand up and pull together, and it's going to require sacrifice and dedication and compromise," he said. Asked if he was criticizing President Bush, Bloomberg said, "He's not running for office. It's immaterial, and I'm not focused on the past. I've always tried to focus on the future. "What this country has to do is not judge George W. Bush on the last eight years. The public voted him into office twice and then he governed for eight years. What is before us now is a very important decision: who do we want to lead for the next four years ... that's what we should be focusing on."

This week, the mayor said he had no immediate plans to endorse anyone. A few months ago, Bloomberg briefly flirted about running for president. He later wrote in an editorial to the New York Times that he would not be a presidental candidate. (http://www.cnn.com/2008/POLITICS/04/18/bloomberg.adult/index.html)

Title: Re: Meltdown
Post by: BachQ on April 18, 2008, 04:12:57 AM

German Producer-Price Inflation Accelerates on Oil

By Gabi Thesing

April 18 (Bloomberg) -- German producer-price inflation, an early indicator of price pressures in the economy, accelerated to the fastest pace in 15 months in March on higher energy costs. Prices for goods from newsprint to plastics increased 4.2 percent from the same month a year earlier, the most since December 2006, after rising 3.8 percent in February, the Federal Statistics Office in Wiesbaden said today. Economists expected a 4 percent gain, the median of 28 estimates in a Bloomberg News survey shows. From February, prices advanced 0.7 percent.

The euro gained after the inflation report, which may reinforce investor expectations that the European Central Bank will keep the benchmark interest rate at a six-year high of 4 percent even as counterparts cut borrowing costs. Evidence that companies are raising prices and wages has raised concern among ECB policy makers about an inflation spiral. ``The risk is rising that companies will pass on these increases, fueling inflation,'' said Jens Kramer, an economist at Norddeutsche Landesbank in Hanover. ``This is likely to alarm the European Central Bank even further.''

German chemical companies BASF AG and Lanxess AG said last month they aim to pass on higher materials costs to customers.

Record Oil Price

Mineral oil products rose 20.5 percent in the year and 4 percent from February, the statistics office said. Excluding energy costs, producer prices rose 2.8 percent from March 2007. The price of oil has surged 82 percent in the past year and reached a record $115.54 a barrel yesterday. German inflation was at 3.3 percent in March, above the ECB's limit for a 13th month. The ECB seeks to keep inflation just below 2 percent. Policy makers are concerned unions will push through demands for higher wages to compensate for the increased cost of living. Germany's Ver.di union last month negotiated a settlement for as many as 2.1 million public-sector staff that it said was worth 8.9 percent over two years. Consumer prices in the 15 euro countries accelerated to 3.6 percent in March, the highest in almost 16 years.

ECB council members Axel Weber and Juergen Stark, who both hail from Germany, said this week the ECB's benchmark rate may not be high enough to contain inflation. ``We believe that the current monetary policy stance will contribute to achieving our objective,'' Stark said April 15. ``But we cannot be sure.''

Still, the euro's 17 percent gain against the dollar in the past year is blunting some of the impact of rising prices by making imports cheaper. The currency added as much as 0.2 percent to $1.5934 today, reversing an early decline.

Slowing economic growth may also dampen inflation risks. Germany's leading government sponsored economic institutes said yesterday Europe's largest economy will expand 1.8 percent, after predicting growth of 2.2 percent in October. The economic expansion will slow to 1.4 percent next year. (http://www.bloomberg.com/apps/news?pid=20601100&sid=axH2MvN4fwes&refer=germany)

Title: Re: Meltdown
Post by: BachQ on April 18, 2008, 04:14:25 AM

The rising impact of high oil prices

Americans now spend a larger share of their income on energy than at any time since 1986.
By Ron Scherer | Staff writer of The Christian Science Monitor
from the April 18, 2008 edition

New York - Americans cannot avoid the soaring price of oil. They pay for it at the pump, with gasoline at a record $3.42 a gallon. They get hit by fuel surcharges when they book airline flights. Higher fuel prices are a major reason for rocketing food prices – in part, because corn is being diverted from the food supply to make ethanol, in part because of higher fuel costs to produce and transport food.

Now, rising energy prices – oil hit records above $115 a barrel this week – are causing concern about the potential damage to the economy. Americans are spending a larger share of their income on energy than at any time since 1986. That has crimped pocketbooks and helped dampen consumer sentiment. Purchases of everything from cars to clothing are falling. "We are all worth less and earning less than a year ago," says economist Mark Zandi of Moody's Economy.com. "That is why consumers are pulling back, and judging from the confidence numbers they are in a panic mode."

Many energy analysts believe the bad news is just beginning – the price of gasoline is expected to continue rising through Memorial Day. Since the beginning of April, the price of gasoline has risen by 13 cents per gallon, according to AAA, a drivers' organization in Heathrow, Fla. AAA is predicting gasoline prices on a national basis will hit $3.50 a gallon by Memorial Day. "It's well within the range of possibilities, but we think $4 a gallon is still premature," says Geoff Sundstrom, a spokesman. One indicator of the effect of the steady rise in oil prices came on Wednesday when the Labor Department reported that the March consumer price index, a measure of the rate of inflation, rose by 0.3 percent – or close to a 4 percent annual rate after no change in February. Energy prices alone rose 1.9 percent in March, with gasoline climbing 1.3 percent. If it were not for a large drop in clothing prices – due to retailers trying to unload inventory – the overall inflation rise would have been much higher. If you didn't eat and didn't drive, the inflation rate was only 0.2 percent, barely within the Federal Reserve's comfort level. In the past three months, average consumer spending on energy came to $663 billion, or 6.5 percent of total consumer spending, according to Moody's Economy.com. A year ago, it represented 5.8 percent and in 2002, it was 4.1 percent of their spending (see chart). "If gasoline breaks through $4 a gallon by Memorial Day, that would mean spending on gasoline would have risen by $100 billion since the beginning of the year, or roughly the size of the tax rebate checks going out," says Mr. Zandi. "The rebate checks are going to pay for filling up our tank."
(http://www.csmonitor.com/2008/0418/p01s01-usec.html)

Title: Re: Meltdown
Post by: BachQ on April 18, 2008, 04:15:21 AM

A World Without Flight

Today's Vancouver Sun has a provocative editorial wondering whether peak oil and stratospheric fuel prices might just mean the end of commercial flight as we know it. Many airlines are already struggling against rising fuel costs, with some even going belly-up. And if global efforts to curtail greenhouse gases ever started addressing commercial flight, the combination would be near-fatal to an industry whose contributions to manmade climate change are fairly staggering. So what would happen after that?

(http://blogs.tnr.com/tnr/blogs/environmentandenergy/zeppelin.jpg)

Urban studies professor Anthony Perl believes air travel in the future will be reserved for the rich, many of whom will use "micro jets." Others will pay big bucks to be transported in larger, fuel efficient aircraft that ply high volume, long-range routes. He foresees a new type of passenger aircraft, designed for fuel efficiency—one that's bat-shaped, resembling a B-52 bomber, with 20-seat rows. ... Globally, no more than 25 airports will be functional by 2025, Perl predicts, only one of them in the Pacific Northwest.

We're assuming—probably safely—that Richard Branson won't ever invent his hoped-for superjet that can fly without fossil fuels. But it's a difficult world to envision. Here in the United States, sure, a whole bunch of airline flights could become either redundant or less critical if we built ourselves a vast high-speed rail infrastructure. But what about flights overseas? Well, there's always the suggestion made by George Monbiot: Bring back the Zeppelin. Is that our future? No flying cars, no intergalactic travel, just... blimps? A flight from New York to London on an airship would take 43 hours—and that's if there are no high winds to disrupt take-off and landing. Well, as long as they offer wireless Internet and decent reclining seats, maybe it could work... And no, I'm not sure how seriously to take all of this.

--Bradford Plumer
(http://blogs.tnr.com/tnr/blogs/environmentandenergy/archive/2008/04/17/a-world-without-flight.aspx)

Title: Re: Meltdown
Post by: BachQ on April 18, 2008, 01:56:12 PM

Oil surge continues, price hits $117 US

Last Updated: Friday, April 18, 2008 | 2:07 PM MT CommentsRecommendCBC News
Oil prices reached another new high on Friday as crude hit $117 US a barrel.

The price of oil for May touched its new peak in electronic after-hours trading on the New York Mercantile Exchange. During the regular trading, oil closed at $116.69 US, which was up $1.83 from Thursday's close.

Analysts put the latest record price down to instability in Nigeria. A rebel group said Friday it had sabotaged a pipeline run by a Royal Dutch Shell PLC joint venture. A Shell spokeswoman confirmed that the pipeline appeared to have been damaged by explosive and was leaking.

The rebel group — the Movement for the Emancipation of the Niger Delta — has been attacking oil installations since early 2006, and vowed to stage more attacks.

The attacks on the oil facilities of Nigeria have cut the OPEC member's output by almost one-quarter.
(http://www.cbc.ca/canada/calgary/story/2008/04/18/oilhighs.html)

Title: Re: Meltdown
Post by: BachQ on April 19, 2008, 07:13:31 AM

Nine reasons the peak now looks more imminent (2004)
By Prof. Richard Heinberg

When Richard Heinberg wrote The Party's Over: Oil, War, and the Fate of Industrial Societies he expected that global oil production peak would most likely to fall within the window of 2006 to 2015. These days (18 months after the book was finished) he's more likely to say 2006 to 2010. Here's nine events which explain that, extracted from an e-group discussion:

Since the publication of THE PARTY'S OVER we've seen:

1. Sharply declining discovery figures for 2002 and 2003.

2. Increasingly pessimistic assessments from ASPO (Colin Campbell) pulling projections of the peak for all liquids back from about 2015 to 2007.

3. Evaporation of spare capacity throughout the entire global production/distribution system, leading to the recent run-up in oil prices.

4. Matthew Simmons's dire assessments of the state of Saudi Arabia's reserves.

5. Statements by Roger Blanchard and others about the major projects coming on line in the next couple of years (mostly in deep water off the coasts of West Africa, Brazil, and in the Gulf of Mexico) that are likely to boost total global production temporarily--but that will play out rather quickly. There seem to be few big projects further out in the 2008-2012 frame to replace or supplement these.

6. The peaking of production in ever more nations--now including Norway, Great Britain, and Oman; Richard Duncan reckons that, of 44 significant producing nations, 24 are past their individual all-time peaks.

7. Statements by industry representatives (e.g., Jon Thompson of ExxonMobil) that, given current depletion rates, huge new replacement projects will be needed as soon as 2010 in order to keep up with rising demand.

8. Soaring demand from China, Japan, Korea, and the US.

9. Increasing instability in the Middle East, fomented in large part by the unwise and spectacularly bungled US-British invasion and occupation of Iraq, but threatening now to spill over into Saudi Arabia and other nations.

[T]o me, all of this suggests that the peak will come sooner rather than later. Increasingly the arguments of the optimists seem to be mere hand-waving, with nothing solid to back them up. Where are the countervailing trends?

--Professor Richard Heinberg Santa Rosa CA (http://www.energybulletin.net/997.html)

Title: Re: Meltdown
Post by: BachQ on April 19, 2008, 07:16:26 AM

Billionaire Texas oil man makes big bets on wind
Fri Apr 18, 2008 9:00am

By Chris Baltimore

WASHINGTON (Reuters) - Legendary Texas oil man T. Boone Pickens has gone green with a plan to spend $10 billion to build the world's biggest wind farm. But he's not doing it out of generosity - he expects to turn a buck. Next month, Pickens' company, Mesa Power, will begin buying land and ordering 2,700 wind turbines that will eventually generate 4,000 megawatts of electricity - the equivalent of building two commercial scale nuclear power plants - enough power for about 1 million homes.

"These are substantial," said Pickens, speaking to students at Georgetown University on Thursday. "They're big."

Pickens knows a thing or two about big. He heads the BP Capital hedge fund with over $4 billion under management, and earned about $1 billion in 2006 making big bets on commodity and equity markets.

America is facing a looming power crunch, with electricity demand expected to grow 15 percent in a decade. And while many states have rejected big coal-fired power projects on environmental concerns, they are offering a bounty of incentives to build renewable sources.

U.S. crude futures at new records above $115 a barrel means a bright future for renewable sources like wind and solar.

Pickens' wind farm is part of his wider vision for replacing natural gas with wind and solar for power generation, and using the natural gas instead to power vehicles.

To picture Pickens' energy strategy, imagine a compass.

Stretching from north to south from Saskatchewan to Texas would be thousands of wind turbines, which could take advantage of some of the best U.S. wind production conditions.

On the east-west axis from Texas to California would be large arrays of solar generation, which could send electricity into growing Southern California cities like Los Angeles.

(http://www.reuters.com/article/newsOne/idUSN1719800520080418)

Title: Re: Meltdown
Post by: BachQ on April 19, 2008, 07:19:49 AM

The Demise of Oil - Energy Security Concerns, Global Antagonism and Dilemmas
17/04/2008

Since the first industrial extraction of oil in the modern era, more than 1.1 trillion barrels have been consumed. The interesting part is the acceleration of consumption during the past generation. In 1984, China required 1.7 million barrels per day; nowadays the figure has increased to 7.5 million. India consumed 0.8 million barrels and today it needs 2.6 million. (http://www.dtt-net.com/en/index.php?page=view-article&article=3918)

Title: Re: Meltdown
Post by: BachQ on April 19, 2008, 07:20:35 AM

To get a better picture of where we were two generations ago vs. where we will be in less than a generation, consider this: in the 1950s the ratio of energy returned in coal-burning power plants to energy spent in coal mining, transporting and processing was 30 to 1. This same ratio is now down to about 3 to 1. In the next 10 to 15 years, for the United States and much of the world, this ratio will be 1 to 1 and coal will no longer be a viable source of power.
(http://www.heraldnet.com/article/20080419/OPINION03/149952913)

Title: Re: Meltdown
Post by: BachQ on April 19, 2008, 07:22:04 AM

*** When combined, the figures for oil depletion and population, using simple arithmetic, what we end up with is a decline in population, over the years, that is not "hill-shaped," so to speak, but "valley-shaped." The curve, in other words, does not begin as a plateau and then gradually steepen, but rather the reverse: there is a sudden plunge, which then smooths out at the end. (In a larger time-frame, some of these figures have been discussed in "Peak Oil and Famine: Four Billion Deaths.")

*** An even more serious, though seemingly trivial, "pessimistic" factor will be largely sociological: To what extent can the oil industry maintain the advanced technology required for drilling ever-deeper wells in ever-more-remote places, when that industry will be struggling to survive in a milieu of social chaos, an anarchistic world in which intricate division of labor, large-scale government, and high-level education no longer exist?

*** [As a preview,] let us repeat the well-known formula that we live in a world in which "oil is everything." That is to say, everything in the modern world is dependent on oil. >From oil and other hydrocarbons we get fuel, lubricants, plastic, paint, synthetic fabrics, asphalt, pharmaceuticals, and many other things. On a more abstract level, we are dependent on oil and other hydrocarbons for manufacturing, for transportation, for agriculture, for mining, and for electricity. ("Alternative energy" is just science fiction.) When oil goes, our entire industrial society will go with it. There will be no means of supporting the billions of people who now live on this planet. Above all, there will be insufficient food.

(http://www.countercurrents.org/goodchild141107.htm)

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 03:48:58 AM

Chris Nelder, an investment researcher on energy, cites the Association for the Study of Peak Oil and others to assert "The peak oil debate is essentially over: we're staring down the peak in the next two to three years."
(http://dailycamera.com/news/2008/apr/20/we-the-species/)

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 03:49:32 AM

"The end of the world as we know it," is how Michael T. Klare, an American professor of peace and world security studies at Hampshire College in Massachusetts, describes our presently crisis-hobbled home planet. His new book, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, is disturbing but highly recommended reading for realists.
(http://opinion.inquirer.net/viewpoints/columns/view/20080420-131535/A-Sober-Earth-Day)

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 03:50:32 AM

Published on 19 Apr 2008 by Energy Bulletin. Archived on 19 Apr 2008.

Review: Reinventing Collapse by Dmitry Orlov
by Amanda Kovattana

*** Orlov's main goal is to get Americans to understand what it will mean to live without an economy, when cash is virtually useless and most people won't be getting any income anyway because they'll be out of a job. Peak oil gurus already talk about how economic growth will be curtailed by decreasing supplies of energy, but Orlov takes it one step further by adding currency collapse and the collapse of the known economic system into an unknown bartering system. The reader cannot escape his picture of inevitable collapse as he takes pains to explain that the usual channels of activism, politics and private enterprise, if we use them to attempt to mitigate the collapse, will only make things worse because these systems are ideologically driven and incapable of putting into practice what is needed to happen to ensure survival.

*** In the end the picture that emerges is that of a simplified America based on complex interrelationships between people one can trust, hand skills to make things work, an ability to relate up and down the social classes and left and right to different social groups, being able to grow food, being able to downgrade living standards dramatically and manage expectations, being self-sufficient, flexible and adaptable sounds like a big improvement to the hollow, consumer driven, meaningless, success culture we do live in.

In his conclusion, Orlov neither tries to sell cheerful optimism, Al Gore style, or grind you to a pulp Kunstler, Long Emergency style. For that I am grateful, as well as for the experience of having my mind opened to the view while drifting silently to earth wondering what crocodiles will be lurking in the swamps of post-collapse America
(http://www.energybulletin.net/42910.html)

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 03:53:49 AM

An Age of Transition
The United States, China, Peak OIl, and the Demise of Neoliberalism
by Minqi Li

Until recently, the global capitalist economy has enjoyed a period of comparative tranquility and grown at a relatively rapid pace since the global economic crisis of 2001–02. During this period of global economic expansion there have been several important economic and political developments. First, the United States—the declining hegemonic power but still the leading driving force of the global capitalist economy—has been characterized by growing internal and external financial imbalances. The U.S. economy has experienced a period of debt-financed, consumption-led "expansion" with stagnant wages and employment, and has been running large and rising current account deficits (the current account deficit is a broad measure of the trade deficit). Second, China has become a major player in the global capitalist economy and has been playing an increasingly important role in sustaining global economic growth. Third, global capitalist accumulation is imposing growing pressure on the world's natural resources and environment. There is increasingly convincing evidence that the global oil production will reach its peak and start to decline in a few years. Fourth, the U.S. imperialist adventure in the Middle East has suffered devastating setbacks and there has been growing resistance to neoliberalism and U.S. imperialism throughout the world.

As the U.S. housing bubble bursts and the dollar's dominance over the global financial system becomes increasingly precarious, the U.S. economy is now going into recession and the global capitalist economy is entering into a new period of instability and stagnation. The coming years are likely to see a major realignment of the various global political and economic forces and will set the stage for a new upsurge of the global class struggle.

***

Peak Oil and the Limits to Accumulation

Suppose the Chinese capitalist class has the necessary wisdom and will to pursue a Keynesian, social-democratic-style restructuring. Will such a restructuring take Chinese capitalism onto a path of sustained stable and rapid growth, and will the expansion of the Chinese economy in turn lead the global capitalist economy into another "golden age"?

...Since 2000, the growth of China's energy consumption ... has greatly accelerated. It now accounts for 15 percent of the world total and amounts to 70 percent of U.S. energy consumption. At the current growth rate, China's energy consumption will double in seven years and China will soon overtake the United States to become the world's largest energy consumer. China depends on coal for about 70 percent of its total energy consumption and China's coal consumption is also growing at a rate indicating a doubling in seven years. China's oil consumption (already accounting for one-third of the world's incremental demand for oil) is growing at a rate that implies a doubling in nine years. In other words, in about a decade if the current trend holds up, China will consume one and a half times as much energy as the United States consumes today. Will the world energy supply keep pace with China's rapidly growing demand while meeting the demand from the rest of the world?

The global capitalist economy depends on fossil fuels (oil, natural gas, and coal) for 80 percent of the world's energy supply. Oil accounts for one-third of the total energy supply and 90 percent of the energy used in the transportation sector. Oil is also an essential input for the production of fertilizers, plastics, modern medicine, and other chemicals.

Oil is a nonrenewable resource. In a recent study, the German Energy Watch Group points out that world oil discoveries peaked in the 1960s and world crude oil production has probably already peaked and will start to decline in the coming years. Outside OPEC, oil production in twenty-five major oil producing countries or regions has already peaked, and only nine countries or regions still have growth potential. All the major international oil companies are struggling to prevent their oil production from declining.3

Colin Campbell of the Association for the Study of Peak Oil and Gas estimates that the world production of all liquids (including crude oil, tar sands, oil shales, natural gas liquids, gas-to-liquids, coal-to-liquids, and biofuels) is likely to peak around 2010. After the peak, the world oil production will fall by about 25 percent by 2020 and by about two-thirds by 2050. Campbell also estimates that the world natural gas production will peak by 2045. In an earlier study, the German Energy Watch Group expects the world coal production to peak by 2025.4

Nuclear energy and many renewable energy sources (such as solar and wind), in addition to their many other limitations, cannot be used to make liquid and gaseous fuels or serve as inputs in chemical industries. Biomass is the only renewable energy source that can be used as a substitute for fossil fuel in the making of liquid or gaseous fuels. But large-scale production of biomass could lead to many serious environmental problems, and the potential of biomass is limited by the available quantity of productive land and fresh water. Ted Trainer, an Australian eco-socialist, estimates that meeting the current U.S. demand for oil and gas would require that the equivalent of nine times all U.S. crop land or eight times all currently forested U.S. land be fully devoted to production of biomass. Trainer concludes that "there is no possibility that more than a quite small fraction of liquid fuel and gas demand could be met by biomass sources."5

If world oil production and the production of other fossil fuels reach their peak and start to decline in the coming years, then the global capitalist economy will face an unprecedented crisis that it will find difficult to overcome.

The rapid depletion of fossil fuels is only one among many serious environmental problems the world is confronting today. The capitalist economic system is based on production for profit and capital accumulation. In a global capitalist economy, the competition between individual capitalists, corporations, and capitalist states forces each of them constantly to pursue accumulation of capital on increasingly larger scales.

Therefore, under capitalism, there is a tendency for material production and consumption to expand incessantly. After centuries of relentless accumulation, the world's nonrenewable resources are being rapidly depleted and the earth's ecological system is now on the verge of collapse. The survival of the human civilization is at stake.6

Some argue that because of technological progress, the advanced capitalist countries have become "dematerialized" (decreasing the throughput of materials and energy per unit of output) as economic growth relies more upon services than traditional industrial sectors, thus making economic growth less detrimental to the environment. In fact, many of the modern services sectors (such as transportation and telecommunication) are highly energy and resource intensive.

Despite such claims regarding dematerialization, the advanced capitalist countries are ecologically much more wasteful than the periphery, with per capita consumption of energy and resources and a per capita ecological footprint far higher than the world average. According to the Living Planet Report, North America has a per capita ecological footprint of 9.4 global hectares, more than four times the world average (2.2 global hectares). The supposedly environmentally friendly European Union has a per capita ecological footprint of 4.8 global hectares, or more than twice the world average. Cuba, the only country that remains committed to socialist goals among the historical socialist states, is the only country that has accomplished a high level of human development (with a human development index greater than 0.8) while having a per capita ecological footprint smaller than the world average.7

Claims of the advanced capitalist economies to dematerialization in the wider, more meaningful sense of declining overall environmental impact are in fact refuted by the Jevons Paradox, which says that increased efficiency in the throughput of energy and materials normally leads to an increase in the scale of operations, thereby enlarging the overall ecological footprint. This has been a normal pattern throughout the history of capitalism.8

Moreover, part of what is referred to as dematerialization arises from the relocation of industrial capital from the advanced capitalist countries to the periphery in pursuit of cheap labor and low environmental standards. The dramatic rise of Chinese capitalism partly results from this global capital relocation. Although the advanced capitalist countries may have become slightly "dematerialized" in this sense, the capitalists and the so-called middle classes in China, India, Russia, and much of the periphery are emulating and reproducing the very wasteful capitalist "consumerist" life style on a massively enlarged scale. Global capitalism as a whole continues to move relentlessly toward global environmental catastrophe.

(http://www.monthlyreview.org/080401li.php)

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 03:56:03 AM

Author offers bleak outlook for Eau Claire
Change of lifestyle needed, speaker cautions
Timothy Langton
Issue date: 4/21/08 Section: News

James Howard Kunstler paid a compliment to the city of Eau Claire, although one it probably didn't want to hear.

"This town has done an amazing job of committing suicide," Kunstler said.

Such was the theme for Kunstler's presentation "The Long Emergency: The Converging Catastrophes of the 21st Century" Thursday in Zorn Arena. Those looking for a message of inspiration and hope for the future found no such things in his biting and often fiery speech.

Kunstler has written extensively on what he believes to be the fall of the American lifestyle. He authored "The Geography of Nowhere," "The Long Emergency" and his new novel, "World Made by Hand," an imagined account of life following the end of oil.

He outlined what he believes is going to happen to the United States after the world's oil production reaches its peak, meaning the process of extracting oil from the ground will cost more than it can be sold for. After this point, Kunstler said there will be a drastic change in how the country's economy, infrastructure and communication are run.

With a lack of oil imports and production, the United States is going to have to move toward a rural, agrarian society, he said. The sprawling cities and suburbs that dot the country will not be feasible, Kunstler argued, requiring more centralized communities and economies.

"We have to make these changes," he said. "It's not a matter of if we like it or don't like it."

Eau Claire is as guilty as any other city across the country of not planning for the end of the high-energy use era, he said. Strip malls, car dealerships and other buildings on the outstretches of town won't survive long after passing the peak oil point.

People should not hope for alternative fuels to take the place of oil, Kunstler said. He said the current American lifestyle of high-energy usage will not be feasible in the near future.

"No combination of alternative fuels are going to permit us to run stuff were running the way we're running it," he said.

Senior Cecilia Artola said she found Kunstler's speech to be overly pessimistic and lacking hope.

"He wants to send us back to the 19th Century instead of forward," Artola said. "I don't think things are going to turn out that way."

But Kunstler warned of hoping solutions will come that will allow the industrialized world to continue its way of life.

"It's not healthy for people to believe they can get something for nothing," he said, referring to what he called a "delusional" culture of wishful thinking.

Kunstler said he could offer no solutions for those who wanted to take something hopeful away from his speech.

"You have to generate the hope yourself."
(http://media.www.spectatornews.com/media/storage/paper218/news/2008/04/21/News/Author.Offers.Bleak.Outlook.For.Eau.Claire-3337394.shtml)

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 04:01:44 AM

Oil supply response to high prices to stay sluggish
Mon Apr 21, 2008

By Alex Lawler - Analysis

ROME (Reuters) - Oil at over $117 a barrel should give producers every incentive to pump more, but the supply response to record prices has been limited and few predict that will change any time soon.

Supply from outside the Organization of the Petroleum Exporting Countries has missed forecasts in recent years, despite a surge in oil prices from $20 in early 2002.

While oil firms are investing more, much of the boost is being eroded by rising costs. Access to big sources of reserves is getting harder and projects are becoming more complex, increasing the risk of delays.

"The international oil companies don't have as much access to the oil as they had in the past," said Adam Sieminski, chief energy economist at Deutsche Bank. "That and other hindrances are slowing down the supply response."

"The supply response might get better, but not right away."

An International Monetary Fund study published earlier this month found that the responsiveness of supply to high prices is likely to remain limited for a while yet.

According to the IMF, rising costs for rigs and shortages of skilled engineers has largely cancelled out the increase in industry spending. But there are other factors that are less likely to ease.

"A significant component of these costs is the result of geological constraints -- a more permanent rigidity -- implying that the responsiveness of supply to high prices is likely to remain low for some time," the IMF said.

The IMF suggests measures to curb demand, such as the ending of domestic fuel subsidies and the adoption of more fuel efficient cars, would lead to faster relief from high prices -- topics in the air at the World Energy Forum in Rome running until Tuesday.

CONSTRAINTS

Such constraints include the peaking of supply at conventional fields in many countries and faster decline rates at fields once they have hit peak output, the IMF said.

The surging price of oil for future delivery reflects growing concern that supply will not meet demand. Crude for delivery in December 2015 is trading at over $100 a barrel, up from $86 at the end of 2007.

In addition to geology, growing risks above the ground such as in the political environment or legal framework have also prevented supply from coming on stream.

"Operating risk is seen to be on the rise," said Harry Tchilinguirian, oil analyst at BNP Paribas.

"Risk in the operating environment can be due to civil unrest or more simply unilateral, forced changes in the contractual agreements."

Emboldened by high prices, many producers have been grabbing more cash and control from companies that work their oil and gas fields.

OPEC's members, whose oil industries are run by national oil companies, sit on three-quarters of the world's proven reserves. Some, including top reserves holder Saudi Arabia, ban foreign investment in their oilfields.

Another factor that may be holding back supply is competing claims on capital at oil companies.

Firms such as Exxon Mobil(XOM.N: Quote, Profile, Research), Royal Dutch Shell (RDSa.L: Quote, Profile, Research) and BP Plc (BP.L: Quote, Profile, Research) are handing back billions of dollars to investors though share buybacks and dividends, potentially limiting increases in investment.

According to the IMF, the rise in costs has largely cancelled out the increase in spending.

An IMF study of 53 national and international oil firms found they spent more than $240 billion in nominal terms in 2006, although the real level of investment was less than half that.

The supply response will improve in future, Tchilinguirian said, as more non-conventional oil is developed and high prices spur developments beneath deep water, such as the recent Carioca find offshore Brazil.

Others, such as the IMF, see the pace remaining slow.

"Although investment eventually does respond to prices, it does so with a greater lag and more slowly than in the past."

(http://www.reuters.com/article/ousiv/idUSL1416872920080421)

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 04:05:44 AM

Emerging Market Oil Use Exceeds U.S. as Prices Rise (Update1)

By Mark Shenk

April 21 (Bloomberg) -- Traffic jams in Beijing and humming air conditioners in Dubai are replacing U.S. highways and suburbs as the driver of global oil prices.

China, India, Russia and the Middle East for the first time will consume more crude oil than the U.S., burning 20.67 million barrels a day this year, an increase of 4.4 percent, according to the International Energy Agency in Paris. U.S. demand will contract 2 percent to 20.38 million barrels daily, the IEA says.

Economic growth of more than 8 percent in China and India, coupled with increasing car ownership among the countries' combined populations of 2.45 billion people, will more than compensate for falling U.S. demand. Oil use worldwide will increase 2 percent this year because of growth in emerging markets, the Paris-based IEA says. (http://www.bloomberg.com/apps/news?pid=20601109&sid=a_YCEx7do3LQ&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 07:46:32 AM

Oil running out as prime energy source: world poll
Sun Apr 20, 2008 5:06pm EDT
By Deborah Zabarenko, Environment Correspondent

WASHINGTON (Reuters) - Most people believe oil is running out and governments need to find another fuel, but Americans are alone in thinking their leaders are out of touch with reality on this issue, an international poll said on Sunday.

On average, 70 percent of respondents in 15 countries and the Palestinian territories said they thought oil supplies had peaked. Only 22 percent of the nearly 15,000 respondents in nations ranging from China to Mexico believed enough new oil would be found to keep it a primary fuel source.

"What's most striking is there's such a widespread consensus around the world that oil is running out and governments need to make a real effort to find new sources of energy," said Steven Kull, director of WorldPublicOpinion.org, a global research organization that conducted the poll.

Concerns over climate change, which is spurred by emissions from fossil fuels including oil, also were a factor among respondents, Kull said.

The current tightening of the oil market is not temporary but will continue and the price of oil will rise substantially, most respondents said.

"They think it's just going to keep going higher and a fundamental adaptation is necessary," Kull said in a telephone interview.

In the United States, the world's biggest oil consumer and among the biggest emitters of climate-warming pollution from fossil fuel use, 76 percent of respondents said oil is running out, but most believed the U.S. government mistakenly assumes there would be enough to keep oil a main source of fuel.

U.S. GOVERNMENT "NOT FACING REALITY"

"Americans perceive that the government is not facing reality," Kull said.

The United States is alone among major industrialized nations in rejecting the Kyoto Protocol, which aims to limit greenhouse gas emissions that exacerbate global warming.

Last week, President George W. Bush said U.S. greenhouse emissions, especially carbon dioxide spewed by the burning of fossil fuels like oil, would stop growing by 2025 but gave no details on how this would come about.

The announcement drew sharp criticism from environmental groups. Others pointed out this means emissions will continue to grow for the next 17 years.

Only in Nigeria did a majority -- 53 percent -- believe enough new oil would be found to keep it a primary energy source, a reflection of its status as a major oil exporter and member of OPEC.

The poll was conducted in China, India, the United States, Indonesia, Nigeria, Russia, Mexico, Britain, France, Iran, Azerbaijan, Ukraine, Egypt, Turkey, South Korea and the Palestinian territories.

The margin of error varied from country to country, ranging from plus or minus 3 percentage points to plus or minus 4.5 percentage points, Kull said.

WorldPublicOpinion.org involves research centers around the world, and the locations of these centers determined which countries were included in the poll. Kull noted that the poll included countries that make up 58 percent of the global population.

The project is managed by the Program on International Policy Attitudes at the University of Maryland.

(http://www.reuters.com/article/newsOne/idUSN1835277320080420)

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 07:46:59 AM

Gas prices push higher
The nationwide average for a gallon of gas touches $3.47.
Last Updated: April 20, 2008: 4:29 PM EDT
CAMARILLO, Calif. (AP) -- A survey says the national average price for regular gasoline rose nearly 16 cents in the past two weeks. The average price of self-serve regular gasoline on Friday was $3.47 a gallon, mid-grade was at $3.59 and premium was $3.70. That's all according to the Lundberg Survey of 7,000 stations nationwide released Sunday. Regular is up 60 cents from a year ago. The national average price for a gallon of diesel is $4.21. That's $1.24 more than a year ago. (http://money.cnn.com/2008/04/20/news/economy/lundberg.ap/index.htm?cnn=yes)

Title: Re: Meltdown
Post by: BorisG on April 21, 2008, 07:47:15 AM

THE WALL STREET JOURNAL: Bears Baffled by Oil Highs

By GREGORY MEYER
April 21, 2008; Page C10

As crude-oil prices edge further into uncharted territory, life as a bear has become lonelier than ever.

Benchmark crude futures have registered an electric performance so far this year and now — near $117 a barrel — hover well above some of the highest near-term forecasts. The speed of the ascent has caught many market participants off guard and forced banks and brokerages to repeatedly revise their oil-price outlook upward.

Yet some analysts continue to warn that oil prices are teetering close to a steep fall — at least back near $80 a barrel. For these observers who see the world's oil supply-and-demand balance loosening and weighing on prices, the red-hot rally is nothing short of astonishing.

"I personally think this is the mother of all bubbles," said Michael Lynch, president of Strategic Energy & Economic Research Inc., a consulting firm in Amherst, Mass. He expects prices to pull back to $80 a barrel by late June, and in the long run step down to $50 as pent-up supply in Iraq, Nigeria, Venezuela and other underproducing exporters starts to flow.

For Tim Evans, an energy analyst and inveterate bear at Citigroup in New York, that bubble is "still expanding," filled with sentiment that seems to ignore signs of what he views as a supply surplus through the end of this year.

"There's no supply-demand deficit," Mr. Evans said.

The case for lower oil prices is straightforward: The prospect of a deep U.S. recession or even a marked period of slower economic growth in the world's top energy consumer making a dent in energy consumption. Year to date, oil demand in the U.S. is down 1.9% compared with the same period in 2007, and high prices and a weak economy should knock down U.S. oil consumption by 90,000 barrels a day this year, according to the federal Energy Information Administration.

The benchmark crude futures contract on the New York Mercantile Exchange first touched $100 a barrel on Jan. 2 and has marched higher since then. Nymex crude has risen 22% this year and 91% since the start of 2007, settling at $116.69 a barrel Friday after touching a record intraday high of $117.

The International Energy Agency, the Paris-based energy watchdog of the world's richest nations, earlier this month lowered its forecast for world oil demand growth by 460,000 barrels a day and now envisions demand will total 87.2 million barrels a day this year, nearly 1.3 million barrels a day more than last year. The IEA also sees supply from outside the Organization of Petroleum Exporting Countries growing by 815,000 barrels a day, the strongest growth since 2004, leading bears to contend the world is amply supplied.

The bulk of the oil market doesn't seem bothered by this argument. Buyers have been emboldened by what they see as faltering supply, with OPEC members holding oil production steady and supply from outside the cartel growing but not as quickly as originally expected.

While the Federal Reserve's aggressive interest-rate easing cycle is aimed at stimulating the economy at a dangerous impasse, the oil market has taken its monetary policy cues squarely from the weak dollar. As fears gather that the rate cuts are leaving the U.S. economy extremely vulnerable to inflation, the rise in the price of oil is also seen by some as an early harbinger of those gathering price pressures, reminiscent of the commodity price spike in the early 1970s.

Mr. Lynch at Strategic Energy argues the dynamics of supply and demand justify a price of $30-$40 a barrel, while jitters in unstable exporting regions might reasonably double that price.

"But $114? I mean, the run-up in price we're seeing in the last six weeks or so has happened while the fundamentals have, generally speaking, gotten bearish," he said.

Even with red flags on the horizon and oil prices shattering predictions, the rally has generated a sort of self-fulfilling momentum.

"We're stuck in this rut of an upward market until something major changes in the macro picture," said Adam Robinson, an energy research analyst at Lehman Brothers. After revising up, Lehman sees the Nymex benchmark crude averaging $89 a barrel this quarter and $93 in 2008.

To Mr. Evans of Citigroup, those factors are already here. Higher prices are sowing the seeds of their own collapse, he says, as consumers start cutting back and producers search for oil that once was too costly to extract. By his reckoning, oil should be trading between $70 and $80 a barrel.

"We don't need any further evidence for this market to turn lower," he said.

Title: Re: Meltdown
Post by: BachQ on April 21, 2008, 07:51:41 AM

Oil soars to record above $117
Mon Apr 21, 2008 9:26am EDT
By Ikuko Kao

LONDON (Reuters) - Crude oil prices surged above $117, setting a new record high on Monday because of worries of supply disruptions from major producers and comments by OPEC reiterating there is no need to raise output.

U.S. light crude struck a record high of $117.40 a barrel. It was trading 27 cents higher at $116.96 by 1155 GMT (7:55 a.m. EDT).

London Brent crude also struck its all time peak of $114.65. It was trading at $114.20, up by 28 cents.

The Organisation of the Petroleum Exporting Countries (OPEC) sees no need to raise oil production to counter high oil prices, the group's president Chakib Khelil said on Sunday.

His remark was followed by Iranian oil minister Gholamhossein Nozari, who said on Monday oil prices were not too high in real terms.

"OPEC's assertion that an increase in its oil production will not help to bring down prices should be put to the test," the Centre for Global Energy Studies said in a research note.

SCOTTISH REFINERY

These remarks come amid concerns over North Sea production due to an impending strike by workers at a refinery in Scotland and supplies from Nigeria, Africa's largest oil exporter.

Scottish oil refinery Grangemouth has started to shut down ahead of a two-day strike later in April.

If the union goes ahead with the strike, it will effectively close down a part of the North Sea oil production and some gas output, refinery operator Ineos said in a statement on Saturday.

Refined oil product prices also soared as such a refinery hiccup could further tighten fuel supplies.

Supplies of distillates products, including gas oil for heating and diesel, have been tight in many areas in the world and gasoline demand is expected to rise toward the summer driving season.

London's gas oil futures showed the biggest percentage gain in the oil complex. New York's heating oil and gasoline futures set their record highs.

A rebel group in Nigeria said on Monday it attacked two major oil pipelines there.

Royal Dutch Shell confirmed on Friday that a small amount of production had been shut in due to apparent attacks to its pipeline.

A fall in the dollar also contributed to oil's rally. A weak dollar has devalued assets in the U.S. currency, pushing investors to shift part of their money to commodities and oil.

(http://www.reuters.com/article/ousiv/idUSSYD3274320080421)

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 03:02:53 AM

Peak Oil Review -- April 21st, 2008

By Tom Whipple
Posted 21 April 2008 @ 03:24 pm EST

1. Production and Prices
2. China
3. Food vs. Fuel
4. Brazil's Giant Field
5. Energy Briefs
1. Production and Prices

It was another week of steadily rising oil prices with crude moving from a low of $109.74 a barrel on Monday to new high of over $117 a barrel by Friday. By now the reasons for the continued climb are familiar – stagnant production, shrinking exports, inceasing demand, a falling dollar, the flight to safety in commodites, declining US stockpiles, and, of all things, the perception of an improving US economy.

This week several new factors contributed to the increase. Reports that Russian oil production slipped during the first quarter for the first time in a decade, coupled with assertions by senior Russian oilmen that Moscow's production is not going higher, was troublesome. Saudi King Abdullah's statement that he had ordered some new oil discoveries left untapped to preserve oil wealth for future generations also has serious long term implications for oil importers. During the week the Saudis said that they had trimmed output to 9 million b/d from 9.2 million.

Once again the week's US stocks report showed low refinery utilization, unexpectedly large drops in crude and gasoline inventories, and distillate stocks up only slightly. The rapid drop in gasoline stockpiles, although still about normal, already is starting to raise concerns about sufficient supplies for the summer driving season which starts in five weeks.

Electricity shortages which are spreading to numerous countries across the underdeveloped world continue to increase demand for diesel as the only readily available way to generate electricty.

Finally, natural gas prices climbed seven percent last week and are now up 41 percent so far this year. US stockpiles, which last November were a record 3.5 trillion cubic feet, are now down to a post-heating season 1.2 trillion. To match last November's supply, inventories will have to increase by 77 billion cubic feet a week which is well above the usual 68 billion a week addition to stocks during the summer months. US natural gas prices are still too low to compete with world prices for attracting LNG cargos. Qatar said it is now sending LNG cargoes to China rather than the US and Europe because Beijing was willing to pay more. During the last two months, US LNG imports were less than a third of what they were last year. The temporary closure of the Independence Hub in the Gulf of Mexico to repair a leak may reduce the amount of natural gas available for storage by 30 billion cubic feet.
2. China

Beijing announced last week that, despite weakening exports and bad winter weather, GDP grew by a surprisingly strong 10.6 percent in the first quarter and industrial production was up 16.4 percent. An all-out but probably unsustainable effort to increase crude and natural gas production resulted in a 2.7 percent increase in crude and a 16 percent increase in natural gas during March. Coal output rose 18 percent to 211.3 million tons last month and electricity output increased 17 percent to 289.8 million megawatt-hours. The IEA now estimates that China's oil consumption will rise 4.7 percent to 7.9 million barrels a day during 2008.

The pace of China's diesel imports is bound to keep pressure on the world market. In March diesel imports rebounded to 3.6 million barrels, after dropping to 2.4 million during the February snows and holiday season. In January imports were a record 6.1 million barrels. Preliminary information for May suggests that China will import at least 4.4 million barrels during the month, in part to offset production losses due to a refinery fire in Guangdong province. Reports of diesel shortages at retail stations across China continue.

Prior to last fall, China imported relatively small quantities of diesel. This rapid increase in their demand for diesel, together with efforts to mitigate power shortages around the world with diesel generators, suggest that diesel prices will continue to climb for the foreseeable future.
3. Food vs. Fuel

Rapid price increases, the suspension of food exports and the onset of food riots across the world is moving the issue of converting food grains into fuel to the world's center stage. Food shortages that are now engulfing the world are unlike any seen in recent decades in that they are not completely weather-related. World population is increasing by 78 million people each year; some 4 billion people are now so well off they can eat more grain-intensive meat; climate change is causing droughts and reducing irrigation water; and the movement to divert food into biofuels for motor vehicles continues. More stories about "how the rich are starving the world by making biofuels—dubbed "a crime against humanity"—are appearing in the world's press.

Currently, the U.S., the EU, India, China, and Brazil all have programs underway to substantially increase their use of biofuels. Since 2000, the amount of corn used to make ethanol has increased nearly six-fold. By next year, according to the National Corn Growers Association, some 4 billion bushels of corn--about one-third of the expected U.S. crop -- will be used to make motor fuel. The problem is being compounded by the increasing cost of oil and natural gas, which is pushing up fertilizer, irrigation, and shipping costs.

Thus far, the reaction to this situation has been minimal. In Europe and China, government leaders are beginning to question whether biofuels make sense, and have asked for studies on the issue. In the U.S., there is as yet little discernable movement. Concerned groups continue to publish tracts calling for the elimination of biofuels production while the ethanol industry continues to deny vehemently that there is link between corn-based ethanol production and global food shortages. Last week the U.S. administration, whose energy policy is largely based on increasing ethanol production, also denied there is a link.

If history is any guide, Europe is likely to change biofuels policies before it happens in the U.S., where the notion of energy independence through growing food has become deeply entrenched. As the situation worsens, and U.S. food prices continue to rise, a consensus will develop that food-based ethanol was a bad idea. After serious political struggles, ethanol mandates and subsidies should gradually be eliminated. The only question is how much irreversible damage will be done before this happens.
4. Brazil's Giant Field

Last week started on an optimistic note when the head of Brazil's National Petroleum Agency announced that the country's off-shore Carioca oil prospect may hold 33 billion barrels – enough to supply every refinery in the U.S. for six years. Carioca was immediately touted as the biggest discovery in 30 years and the third biggest oil field ever discovered.

The next day a statement from Brazil's national oil company Petrobras pointed out that there was really no new information about the size of the field other than what was released last September. While fifteen wells have been drilled into the formation that is called "pre-salt", it will be some time before any definitive estimate concerning the size of the formation, which lies beneath 10,000 meters of ocean and seabed, can be made.

In the meantime, Brazil's stock market regulators are investigating the man who released what he said was "informal information" from sources in Petrobras. Most observers believe there is considerable oil off the coast of Brazil, but that it will be many months if not years before the full extent of the discovery is determined. At any rate, extracting the first commercial flows of oil will be very expensive, won't arrive for five or six years at the earliest, and will span many years.
5. Energy Briefs

(clips from recent Peak Oil News dailies are indicated by date and item #)

*

A new worldwide poll shows that most people believe oil is running out and that governments need to find another fuel. Americans are alone in thinking their leaders are out of touch with reality on this issue. On average, 70 percent of respondents in 15 countries and the Palestinian territories said they thought o peaked. (4/21, #4)
*

Reports of actual or potential electricity shortages continue to pour in from around the world. In addition to the ongoing rolling blackouts in South Africa and South Asia, we now have reports of problems in New Zealand, Panama, Nicaragua, Costa Rica, Viet Nam, the Marianas, Chile, Argentina, and Poland. In Pakistan this week many were injured during riots protesting the electricity shortage. There is increasing discussion of the economic damage these blackouts are causing and of diesel generators being installed to keep facilities operating. (4/15, #6)
*

The government of Ecuador is seeking to increase state control of oil under its new constitution. The government will seek temporary, six-month contracts with foreign oil companies with which it is currently renegotiating agreements. Following that, the current participation contracts would be changed into service contracts. Last year Ecuador increased its share of windfall profits to 99% from 50% under a presidential decree. (4/15, #15)
*

UK Chancellor Darling has demanded an urgent review of international biofuels programs as part of a plan to tackle the world's mounting food crisis. The Chancellor said he had asked the World Bank to produce an analysis - for June's G7 meeting of global leaders - of the impact of green policies, including American and European biofuel programs, on global food shortages. (4/14, #20)
*

Rice prices hit the $1,000-a-ton level for the first time last week as importers scrambled to secure supplies, exacerbating the tightness provoked by export restrictions by Vietnam, India, Egypt, China and Cambodia. The jump came as the Philippines, the largest rice importer, failed for the fourth time to secure as much rice as it wanted. Kazakhstan, one of the world's biggest wheat exporters, halted foreign sales. A big food company in Japan said high corn prices had forced it to buy cheaper genetically-modified corn for the first time, breaking a social, though not legal, taboo and signaling that opposition to GM foods could weaken. (4/18, #18; 4/16, #2)
*

Kazakhstan will have Chinese help in developing oil and gas resources on the continental shelf of the Caspian Sea, according to a joint communiqué issued last week. The two governments also agreed that they would build a natural gas pipeline to be completed by the end of 2009 to eventually pump some 30 billion cubic meters a year to China from Central Asia. (4/15, #4)
*

Turkmenistan, Central Asia's top natural gas exporter, cut its gas production in the first quarter of 2008. Russia's Gazprom, currently the only buyer of Turkmen gas, agreed last year to pay $130 per thousand cubic meters (tcm) in the first half of 2008 and $160 per tcm in the second. In 2007 Gazprom bought Turkmen gas at $100 per tcm. (4/15, #5)
*

The US, the world's biggest nuclear power producer, will start between four and eight new reactors in 2016 to 2017. The exact number will depend on manufacturers' capacity, electricity prices and capital costs. (4/15, #14)
*

US crude oil imports from Venezuela fell 18.3 percent in February from January. The steep drop corresponds with Venezuela's Feb.12 decision to cut off oil sales to ExxonMobil Corp. March crude imports from Venezuela averaged 927,000 barrels a day, down 208,000 barrels a day from February, and 16.9 percent, or 188,000 barrels a day from a year earlier, according to the EIA data. (4/16, #6)
*

Venezuelan lawmakers gave final approval to a new tax on oil companies meant to grab a bigger share of the windfall oil revenue in times of high prices. Oil Minister Rafael Ramirez said the new tax should generate roughly $760 million a month, or more than $9 billion a year. The funds will go directly into the Fonden development fund, President Chavez's favorite spending fund.(4/16, # 8) Unlike the previous oil tax boosts, this latest move to tap more money from the oil sector will increase the tax burden on its own state oil company, hitting PDVSa harder than it will the private oil producers. (4/20, #7)
*

Poland and Ukraine stepped up plans to extend an oil pipeline that bypasses Russia, a move that could help diversify supplies and reduce Moscow's energy clout in the region. Last October, Poland, Ukraine, Azerbaijan, Georgia and Lithuania set up the "Sarmatia" consortium to build a new pipeline by 2011. (4/16, #16)
*

Baghdad and the Kurdish region government have reached a deal on an oil law, including a method for weighing the validity of the oil deals the Kurds have signed with foreign firms. US imports from Iraq averaged 780,000 b/d in February up 44 percent or 237,000 b/d over January. (4/17, #5, #6)
*

Kazakhstan is attempting to fine a Chevron-led oil project $307 million for environmental violations. The government is accusing the consortium of storing sulphur extracted from the crude in big outdoor piles. (4/18, #3)
*

BP said it will start up the giant Thunder Horse platform in the Gulf of Mexico by the end of 2008. Between 2007 and 2009, BP expects to bring on-stream more than 25 projects adding 650,000 barrels a day of new production. (4/18, #11)
*

Mexico's state oil firm hopes to turn a long-ignored oil basin into a major producer as the country's traditional fields run dry. This month Pemex is collecting drilling bids for the Chicontepec basin, according to Compranet, the government's procurement Web site. Experts say it will be a difficult task for Pemex to reach its production target of 100,000 barrels a day by the end of this year at the geologically challenging area. (4/20, #8)

Quote of the Week
'It would be a profound mistake if we get into a situation where we are growing corn that is essential for feeding people and converting it into fuel. That is not sustainable.'
—UK Chancellor Alistair Darling speaking to a G-7 meeting in Washington

(http://www.ibtimes.com/articles/20080421/peak-oil-review-april-21st-2008.htm)

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 03:23:12 AM

Top News April 22, 2008, 12:01AM EST text size: TT
Oil: How High from Here?
Prices could reach new record highs as traders bid up oil in reaction to a weak U.S. dollar brought on by low interest rates
by Moira Herbst

The news from the trading pits is, well, no news at all: Oil prices are again breaking records. On Apr. 21, the price of a barrel of the benchmark West Texas Intermediate crude for May delivery hit $117.76 on the New York Mercantile Exchange—an all-time high—before settling at $117.46. Oil prices are up 23% so far this year, and 16% in April alone.

Those prices in the futures market are hitting consumers in the here and now, rippling through everything from gasoline to food to home heating fuel. The average price of a gallon of regular unleaded gasoline hit a high of $3.50 on Apr. 21. Diesel prices also set a record, at $4.20 a gallon, according to AAA and the Oil Price Information Service.

Not surprisingly, consumers are looking for a culprit. In a comment posted to a BusinessWeek.com opinion piece arguing that there is no actual shortage of gasoline (BusinessWeek.com, 4/1/08), "Ward" wrote on Apr. 17: "Impeach the oil cos. Then impeach their main apologist, GWB [George W. Bush]." Indeed, some oil-company stocks rose along with crude on Apr. 21, with Hess (HES) closing up 7% at 112.56; ExxonMobil (XOM) up 0.3% to 94.26; and Marathon Oil (MRO) up 0.9% to 49.21.

But analysts say a complex mix of factors—from low interest rates to the sagging dollar to the faltering economy—is behind the oil price hike. And they don't expect a letup any time soon.

"This [price spike] isn't an issue of supply and demand," says Joel Fingerman, principal of Chicago-based Oil Analytics, an energy consulting firm. "This is about money flow. It could stop here or at $150."

An Effect of the Declining Dollar
In other words, traders are bidding up the price of oil. It's the downside, in one sense, of the scramble by the Federal Reserve Board to rescue the financial markets in the wake of the subprime mortgage meltdown. Since October, the Fed has been consistently cutting interest rates—most recently on Mar. 18, and it's expected to do so again on Apr. 28. Each time it does so, the value of the dollar falls against other currencies. Traders react by investing in other commodities as a hedge against the falling dollar, and dollar-denominated commodities (such as oil) become more expensive.

"As long as the Fed continues to cut rates, traders will keep selling the dollar, buying the euro, and buying commodities like oil," says Peter Beutel, president of the New Canaan (Conn.)-based energy risk management firm Cameron Hanover. It also doesn't help that investors are still skittish about putting more money into stocks. "Traders are relentlessly long [on oil] because there's nowhere else to go," says Phil Flynn, an analyst and vice-president at brokerage firm Alaron Futures & Options in Chicago. "They're heading to oil and other commodities for safety."

It's unclear how much lower the dollar can go. The euro has been gaining ground against the dollar since 2003, and has risen 24% against the dollar since January, 2007. The euro increased 0.4% to $1.59 on Apr. 21—within 1¢ of a record—as European Central Bank officials reiterated concern that inflation has accelerated.

The Mother of All Corrections?
Some analysts say oil's sharp climb will only lead to a sharp and painful correction. As inflation causes consumer spending to slow, and endangers industries from airlines to trucking—at a time when the economy is weak anyway—it's logical demand for oil-based products will fall.

It wouldn't be the first time: Crude prices more than doubled in four months during 1990, after Iraq invaded Kuwait, to more than $32 a barrel. But prices had plummeted by about a third the following January. And by 1998 oil was trading below $11 a barrel. "I don't think the path we're on is sustainable," says Flynn. "Even if this is a long-term bull market [in oil futures], we're getting close to what could be the mother of all corrections."

But some traders are betting that low interest rates, a feeble dollar, and robust demand from China and India will keep demand for energy stoked and prices high. Fadel Gheit, senior energy analyst for Oppenheimer (OPY), says unless the U.S. government steps in to rein in speculators' power in the market, prices will just keep going up. He says the U.S. has been "unable or unwilling" to regulate oil markets, which proves a convenient way to contain the growth of China and spur energy conservation in the U.S.

"We're tolerating high prices for a reason," says Gheit. "No one has the courage to give us the bitter medicine of high taxes, so speculators have control of this market. There is no conductor on this train."

(http://www.businessweek.com/bwdaily/dnflash/content/apr2008/db20080421_325349.htm)

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 03:34:00 AM

Oil hits new record above $118 a barrel
Tue Apr 22, 2008 7:20am EDT
By Jane Merriman

LONDON (Reuters) - Oil rose to a record high above $118 on Tuesday, boosted by a jump in oil demand last month from China, the world's second biggest energy consumer, and worries about supply from key producers Russia and Nigeria.

U.S. light crude for May delivery was up 25 cents at $117.73 a barrel by 1108 GMT (7:08 a.m. EDT), easing from an all-time peak of $118.05 hit earlier in the day.

London Brent crude was up 40 cents at $114.83 a barrel, after rising to a record peak of $115.03.

Oil has hit a string of record highs this month, driven by booming demand from emerging markets such as China that has coincided with long-term supply constraints.

A weak U.S. dollar has also played a part in boosting the price of dollar-denominated commodities like oil and also attracted speculative inflows from hedge funds.

"Every time the market does make new highs, it suggests that the upward trend is still intact and that provides a catalyst for the funds to keep buying it," said Tony Machacek of Bache Commodities Ltd.

China's oil demand leapt 8 percent in March from a year ago, the fastest rate in 19 months as refiners boosted imports ahead of the Olympics.

But the high cost of producing more oil plus political constraints on new supplies mean the market looks set to struggle to keep pace with growing emerging market demand.

"The news that Russia, the largest non-OPEC producer, will produce less this year than the year before and Nigeria's output may be set to fall because of lack of investment makes people realize high prices are justified," said Bob Greer, executive vice president at commodity fund manager PIMCO.

"The 5 year forward contract has gone above $100," he said, referring to a surge in long-dated oil prices.

From 2010 to 2016, for example, oil prices currently range from around $106 to nearly $108 a barrel.

The long-term drivers for investment in the oil market include tight spare capacity, slow output growth from non-OPEC producers and robust demand from emerging economies. This is more than compensating for declining demand from industrial countries.

SUPPLY DISRUPTIONS

Against this backdrop, the market is sensitive to any events that could threaten supply.

Pipeline attacks in OPEC member Nigeria last week shut 169,000 barrels per day (bpd) of Bonny Light production, forcing Royal Dutch Shell Plc (RDSa.L: Quote) to declare force majeure on crude oil exports.

Nigerian rebels also attacked two Shell oil pipelines in the Niger Delta on Monday.

An oil refinery at Grangemouth in Scotland has begun shutting down ahead of a two-day strike due to start on Sunday. Some North Sea oil and natural gas output will have to be shut in if the strike halts the refinery.

The Organization of the Petroleum Exporting Countries has insisted the market has enough oil and refused to pump more crude despite calls for more oil from consumer nations.

A lack of spare global output capacity means very little can be done to tame record high oil prices, Shokri Ghanem, head of Libya's National Oil Corporation said.

"Prices will have to stay high in the long term to encourage exploration and production," he said, speaking on the sidelines of the International Energy Forum in Rome.

(http://ca.reuters.com/article/businessNews/idCASYD3274320080422)

Title: Re: Meltdown
Post by: MN Dave on April 22, 2008, 05:15:15 AM

(http://www.henrystrobel.com/saintboniface/spennerbuggy.jpg)

Title: Re: Meltdown
Post by: BorisG on April 22, 2008, 05:21:36 AM

U.S. says high oil prices risky to economy

Tue Apr 22, 2008 8:00am EDT

ROME (Reuters) - Oil prices that hit a record on Tuesday are clearly too high and not beneficial for the U.S. economy, a top U.S. energy official said.

The United States has been remarkably resilient in the face of expensive energy, but a rally on oil to more than $118 a barrel is an economic threat, U.S. Acting Deputy Secretary of Energy Jeffrey Kupfer told a news briefing.

"Oil prices are clearly too high. We are not happy with the prices or the direction they're going in," Kupfer said.

Echoing remarks last week by U.S. Energy Secretary Sam Bodman, he said the United States would not delay its plan to buy more oil for its Strategic Petroleum Reserves, in spite of the oil price.

Producer countries have blamed the weakness of the U.S. dollar for the strength of the oil market and have said supplies for now are more than adequate.

By contrast, Kupfer said fundamentals of supply and demand were a major factor.

"Fundamentals are tight right now ... Our message is take a look at fundamentals," he said on the sidelines of the International Energy Forum in Rome, which brings together producers and consumers.

Kupfer dismissed concerns by producers that high prices would erode demand and increase use of alternative fuels, saying fossil fuels would continue to meet the vast majority of energy needs.

The United States has led a push to biofuels, blamed for a steep rise in food prices as they take up land that would otherwise be used for agriculture.

"We are concerned about the issue of rising food prices but don't think the use... for energy is what's contributing in a large way to the run up of food prices," Kupfer said.

He added the United States had committed about one billion dollars to development of next generation biofuels, which would not compete with food supplies.

Clinton threatens to 'obliterate' Iran if Israel attacked

25 minutes ago

WASHINGTON (AFP) — Democratic presidential hopeful Hillary Clinton threatened to "obliterate" Iran if it launches a nuclear attack on Israel, in an interview broadcast Tuesday.

"I want the Iranians to know that if I'm the president, we will attack Iran," Clinton told ABC News, asked what she would do as president were Iran to launch a nuclear attack on Israel.

"In the next 10 years, during which they might foolishly consider launching an attack on Israel, we would be able to totally obliterate them."

The tough talk came just prior to Tuesday's Pennsylvania primary, a key milestone in the marathon Democratic nominations race pitting Clinton against her rival Senator Barack Obama.

Clinton must win the Pennsylvania primary, but she needs to do more than simply scrape past Obama to rescue her trailing White House bid, pundits say.

Obama's camp Monday accused Clinton of trying to scare voters, as she rocked their White House race with a dark campaign ad featuring images of Al-Qaeda mastermind Osama bin Laden.

The ad uses pictures of Pearl Harbor, bin Laden and the devastating 2005 hurricane that swamped New Orleans, mirroring the "3:00 am phone call" spot credited with helping Clinton to win in Texas and Ohio last month.

"You need to be ready for anything -- especially now, with two wars, oil prices skyrocketing and an economy in crisis," the male narrator intones. "Who do you think has what it takes?"

Both Democrats have vowed to defend Israel against any Iranian attack, but they differ on how to engage the Islamic republic over its nuclear ambitions.

Both call for diplomacy, but Obama has gone further, renewing a promise of "direct talks" at a leaders' level with Tehran and others the United States regards as foes, at a candidate debate here last week.

Iran should be presented with "carrots and sticks," the Illinois senator said, while stressing "they should also know that I will take no options off the table when it comes to preventing them from using nuclear weapons or obtaining nuclear weapons."

At the debate, he said: "An (Iranian) attack on Israel is an attack on our strongest ally in the region, one whose security we consider paramount."

"That would be an act of aggression that I would consider unacceptable, and the United States would take appropriate action."

Title: Re: Meltdown
Post by: ezodisy on April 22, 2008, 05:50:23 AM

all this news is great if you're invested 8)

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 07:05:31 AM

Quote from: ezodisy on April 22, 2008, 05:50:23 AM
all this news is great if you're invested 8)

It's great up until the time that the very fabric of society collapses and the house of cards comes tumbling down on top of you .......

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 07:06:53 AM

In UK, gas and electricity prices rise by record one-day amount as oil cost hits all-time high

Oil, gas and electricity prices hit fresh records, raising fears that the global economy is becoming "destabilised." Experts warn the situation is likely to get worse as prices rise by a further 25 per cent by September. Meanwhile, the price of unleaded petrol is expected to hit an average of £5 a gallon within a matter of weeks.

Gordon Brown will today host a summit at Downing Street to discuss the impact of soaring food and commodity prices across the world. Millions of Britons have noticed sharp increases in basic foods such as bread, butter, cheese, pasta, rice and meat. In the Third World, protests have erupted over price rises amid fears of shortages.

The first deputy managing director of the IMF, John Lipsky, said yesteday: "Overall commodity prices, especially those for foods and energy, have now reached levels where they risk becoming a destabilising force in the global economy." He said costly food and continuing turmoil in the financial markets will mean that global growth will be 1 to 2 per cent below expectations.
(http://www.dailymail.co.uk/pages/live/articles/news/news.html?in_article_id=561114&in_page_id=1770)

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 07:17:53 AM

New York Times

April 22, 2008
Fuel Costs Pummel Airlines in First Quarter
By REUTERS
Filed at 10:47 a.m. ET

CHICAGO (Reuters) - Record high fuel prices led three of the largest U.S. airlines to report hefty quarterly losses Tuesday, with UAL Corp (NASDAQ:UAUA) , parent of United Airlines, posting its largest loss since it completed a Chapter 11 restructuring two years ago.

AirTran Holdings (NYSE:AAI) , parent of AirTran Airways, reversed its year-ago profit while JetBlue Airways (NASDAQ:JBLU) also reported a loss, although it was smaller-than-expected and below the loss it posted in the same quarter a year earlier.

The entire airline industry has been clobbered in the first quarter by soaring fuel prices, despite carriers' best efforts to control costs and stir up new revenue streams.

The losses reported Tuesday, which follow those reported last week by AMR Corp (NYSE:AAR) (NYSE:AMR) and Continental Airlines (NYSE:CAL) , put additional pressure on carriers to merge as a way to cut costs and boost revenue.

Last week, Delta Air Lines (NYSE:DAL) and Northwest Airlines (NYSE:NWA) proposed a merger that would create the world's largest airline.

UAL's loss was the largest reported by a major carrier for the quarter. But the airline said it plans to ramp up cost-cutting for 2008, trim domestic capacity and pull 30 aircraft from its fleet.

"We consider the first quarter to be disappointing, though are impressed that the company is taking more aggressive steps than others in response to crushing fuel costs," said Jamie Baker, analyst at JP Morgan, in a research note.

UAL shares fell 9 percent to what would be new 52-week closing low of $19.50 in Nasdaq trading on Tuesday.

Airline shares were broadly weaker on Tuesday with the Amex airline index down more than 8 percent at its lowest level on record after Nymex crude oil futures hit a new record high of $118.47 a barrel.

STEEP LOSS

UAL said it lost $537 million, or $4.45 per share in the first quarter, more the triple the loss of $152 million, or $1.32 per share, a year earlier.

Wall Street analysts had expected the parent of the No. 2 U.S. airline to lose $3.41 per share, according to Reuters Estimates.

UAL, which completed a massive bankruptcy restructuring in 2006, blamed the results on its consolidated fuel bill, which rose $618 million in the quarter. The company reported operating revenue of $4.71 billion, up from $4.37 billion a year earlier.

UAL said it is targeting $200 million in nonfuel cost savings in addition to the $200 million announced earlier in the year. The cost cuts will require a reduction in UAL's salaried and management work force by 500 employees and its unionized work force by about 600 by the end of 2008.

The 1,100 job cuts represent about 2 percent of the company's work force of more than 55,000, according to the UAL Web site. UAL said it would pull 30 aircraft from its operating fleet, 10 to 15 more planes that initially announced in March.

UAL also is reducing capital expenditures by about $200 million from $650 million as previously planned and cutting domestic capacity by about 9 percent by the fourth quarter.

"In this extraordinarily difficult environment, we recognize the pace of change needs to accelerate, and our actions today reflect just that," UAL Chief Executive Glenn Tilton said in a recorded message to employees.

Other major airlines are implementing significant cost cuts. Delta, for example, said in March it would cut 2,000 jobs and scale back operations.

In addition to these steps, airlines -- including United -- are aiming to boost revenue by charging higher fares, and adding new fees for items and services that used to be included in the the price of a ticket. Most notably, some carriers have started to charge passengers to check a second bag. JetBlue announced its new fee to check a second bag Tuesday.

UAL ended the quarter with an unrestricted cash and short-term investment balance of $2.9 billion.

Earlier Tuesday, low-cost carrier AirTran said it lost $34.8 million, of 38 cents per share, in the first quarter, reversing a year-ago profit of $2.2 million, or 2 cents per share. The carrier recorded fuel costs of $268 million, up from $102 million a year earlier.

JetBlue, meanwhile, posted a narrower-than-expected net loss of $8 million, or 4 cents per share, compared with a loss of $22 million, or 12 cents per share, a year earlier.

AirTran shares were down 11 percent at $4.06 on the New York Stock Exchange. JetBlue shares were down 2 percent at $4.83 on Nasdaq.

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 08:29:43 AM

High oil price dampening world growth: IMF's Lipsky
Mon Apr 21, 2008 7:59am

By Simon Webb

ROME (Reuters) - Record high oil prices over $117 a barrel are slowing world economic growth, John Lipsky, first deputy managing director of the International Monetary Fund (IMF), told Reuters on Monday.

"It's dampening growth -- that's for sure, but of course it is benefiting exporters," he said.

"It's going to slow growth as we've said before. It's one of the many factors this year, globally."

Lipsky said IMF assumptions for world growth were based on slightly lower prices than at present for oil, which hit a record $117.40 a barrel on Monday.

He reiterated the IMF saw economic growth declining by between one and two percentage points, not just because of oil, but also because of costly food and financial sector troubles.

When asked if he saw a risk to the downside, he replied: "Definitely, yes."

The IMF's latest World Economic Outlook earlier this month put world growth at 3.7 percent this year, down from a growth forecast in January of 4.1 percent.

The global watchdog has predicted the U.S. economy would enter a modest recession in 2008 and start gradually to recover in 2009.
(http://www.reuters.com/article/GCA-Oil/idUSL2150839220080421)

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 08:33:59 AM

Middle East energy demand soaring, matching China
Mon Apr 21, 2008 7:59am EDT
By Margaret Orgill - Analysis

(http://www.reuters.com/resources/r/?m=02&d=20080421&t=2&i=3958656&w=&r=2008-04-21T115942Z_01_L21364269_RTRUKOP_0_PICTURE0)

LONDON (Reuters) - Energy demand in the Middle East is growing as fast as in industrial powerhouse China and will help to offset any decline in the United States, the world's top fuel burner, as well as keep prices high.

Although it has only a fraction of the population, huge fuel subsidies and an economic boom fuelled by record oil prices have driven a rapid increase in Middle Eastern energy consumption.

"Middle East energy demand looks as if it will grow at the same rate as China but with 10 percent of the population," said Jeff Brown, managing director of Singapore-based FACTS Global Energy consultancy.

Crude consumption in Asia and the Middle East is forecast to grow by almost 900,000 barrels a day this year, whereas U.S. demand could fall by 400,000 bpd in a pessimistic scenario, said Eduardo Lopez, senior oil demand analyst at the International Energy Agency, energy adviser to developed consumer nations.

"The countries driving demand growth are relatively isolated at this point from any financial crisis the United States may face," said Lopez.

Record oil prices, rather than denting demand in the Middle East, will encourage greater consumption as the flow of petrodollars to the region will continue to stimulate rapid economic growth.

Huge subsidies, which make fuel almost free in many states, remove any incentives for energy efficiency, while environmental arguments for reducing carbon emissions have made little impact in the region.

SUBSIDIES TO CONTINUE

Almost all oil-rich countries will continue to subsidize fuel heavily as they have the funds thanks to soaring revenues but also because the region's authoritarian regimes see cheap fuel as part of a social pact with their populations.

"Cheap fuel is seen as a given right. It is a social bargain for political compliance," said Samuel Ciszuk, Middle East and North Africa analyst at Global Insight.

In Saudi Arabia, gasoline costs 12 cents a liter compared with 68 cents in China, $2.14 in Britain and 86 cents in the United States. nL27166010

The exception is Iran, the world's fourth-largest crude exporter, which recently started to ration subsidized gasoline to control costs and to curb imports.

Iran is different because it has a much larger population than other Middle East states and because of U.S. sanctions it finds it more difficult to import fuel, forcing the country to turn to expensive spot market purchases.

In addition, relying on imported fuel makes the country vulnerable to pressure over its nuclear program.

"Iran is an anomaly in the region. You couldn't see (rationing) happening in Saudi Arabia or Kuwait as they do not have the same geopolitical problems," said the IEA's Lopez.

"They are not subject to sanctions so can buy what they need in international markets."

The situation in Iran is likely to change in coming years as the country is increasing its refining capacity and could become a gasoline exporter from 2012.

DEMAND GROWING FAST

Middle East oil demand stood at 6.6 million barrels a day in 2007, and is set to rise to 7 million bpd this year, according to the Paris-based IEA.

Chinese demand is around 7 million bpd and oil use in both China and the Middle East is forecast to grow between 5 and 6 percent a year, said the IEA.

FACTS consultancy forecasts energy demand in the two regions rising between 400,000 and 500,000 bpd over the next 5-7 years.

"If anything, the Middle East looks more robust than China. As oil prices go up, then their economies continue to boom and they don't feel any price impact at the retail level," said Brown from FACTS.

The International Monetary Fund this month revised up its forecast for Middle East economic growth by 0.2 percent to 6.1 percent, up from 5.8 percent in 2007.

Demand is soaring not only for transport fuels, including diesel and jet, but also for fuel oil for power generation as gas projects have failed to keep up with demand for natural gas for electricity production.

Apart from Qatar, all Gulf states are short of gas.

The region, especially Saudi Arabia, is planning a big expansion in refining capacity to meet local demand, including from its rapidly expanding petrochemical industry, as well as for export.

Much of the extra capacity will come onstream around 2013.

(http://www.reuters.com/article/GCA-Oil/idUSL2136426920080421)

Title: Re: Meltdown
Post by: ezodisy on April 22, 2008, 08:37:03 AM

Quote from: Dm on April 22, 2008, 07:05:31 AM
It's great up until the time that the very fabric of society collapses and the house of cards comes tumbling down on top of you .......

? Time for a girlfriend? ;)

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 08:47:58 AM

Note: although this is really not about oil, I'm in the gloom-and-doom mode, so what the hell ....... :D

U.S. housing slump may exceed Depression: Shiller
JOHN CHRISTOFFERSEN

The Associated Press

April 22, 2008 at 10:25 AM EDT

NEW HAVEN, Conn. — An influential economist says the slump in the U.S. housing market could cause prices to fall more than they did in the Great Depression.

Yale University economist Robert Shiller, pioneer of a widely watched home price index, says there's a good chance housing prices will fall further than the 30 per cent drop in the historic depression of the 1930s.

He says home prices nationwide have dropped 15 per cent since their peak in 2006.

Mr. Shiller, who long predicted the housing market bubble, spoke Tuesday about the state of the economy at the New Haven Lawn Club.

His Standard & Poor's/Case-Shiller home price index is considered a strong measure of home prices because it examines price changes of the same property over time, instead of calculating a median price of homes sold during the month. (http://www.reportonbusiness.com/servlet/story/RTGAM.20080422.wushomes0422/BNStory/Business/home)

Title: Re: Meltdown
Post by: ChamberNut on April 22, 2008, 08:57:50 AM

Quote from: Dm on April 22, 2008, 03:34:00 AM

Oil hits new record above $118 a barrel
(http://ca.reuters.com/article/businessNews/idCASYD3274320080422)

Investing in a good pair of roller skates or in-line skates is a wise idea. Hanging on to car bumpers never looked so enticing.

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 09:01:03 AM

Tuesday, Apr. 22 2008
Euro Soars To New Record In Line With Surging Crude Futures

SAN FRANCISCO -- The euro rose to a new record high against the dollar of $1.6007 Tuesday, in line with a surge in crude-oil futures, which came within 26 cents of $120 a barrel. The euro was last trading at $1.5996. "Should a move over $1.6010 occur though, all bets are off, as sources expect significant buy-stops to kick in, which could see a move toward $1.6050 come quickly," wrote currency strategists at Action Economics.

(http://www.foxbusiness.com/markets/industries/finance/article/euro-soars-new-record-line-surging-crude-futures_573668_9.htm%5B/url)

Title: Re: Meltdown
Post by: MN Dave on April 22, 2008, 09:02:20 AM

Hey, how about posting some nice Henry Purcell news in the Purcell thread?

Of course you'd have to dig it back up. :'(

Title: Re: Meltdown
Post by: BachQ on April 22, 2008, 10:03:32 AM

Quote from: ezodisy on April 22, 2008, 08:37:03 AM
? Time for a girlfriend? ;)

How about a girlfriend with a really doomy & gloomy avatar, like this:

(http://nextgenprofootball.net/images/shroom.jpg)

Title: Re: Meltdown
Post by: Guido on April 22, 2008, 10:11:15 AM

I haven't read throught this whole thread, and I'm sure that someone has commented on this already, but this outrage of gas prices being above $3.50 a gallon is laughable to me - in England they are approximately $10 a gallon depending on where you go. Hopefully this will reduce the amount that people use, but I'm not banking on it.

Title: Re: Meltdown
Post by: (poco) Sforzando on April 22, 2008, 10:30:25 AM

Quote from: Guido on April 22, 2008, 10:11:15 AM
I haven't read throught this whole thread, and I'm sure that someone has commented on this already, but this outrage of gas prices being above $3.50 a gallon is laughable to me - in England they are approximately $10 a gallon depedning on where you go. Hopefully this will reduce the amount that people use, but I'm not banking on it.

And in Venezuela, last time I read about it, it's $.12 a gallon. The outrage in the US appears to stem less from the actual number than from the precipitious increase in the past year. (Not to mention the inexplicable discrepancies: within 10 minutes yesterday I saw both $3.89 and $3.63 a gallon from Exxon and Sunoco respectively. WTF?)

But I'd have much more sympathy with the outrage over gas prices if there were any signs of people driving less, driving more fuel-efficient vehicles, or driving at moderate speeds. If you're going to drive at 70 MPH in one of those gaz-guzzling monstrosities (aka SUVs) that seem to make up 50% of private American vehicles nowadays, don't complain about the price of gas.

Title: Re: Meltdown
Post by: Guido on April 22, 2008, 11:08:46 AM

QuoteBut I'd have much more sympathy with the outrage over gas prices if there were any signs of people driving less, driving more fuel-efficient vehicles, or driving at moderate speeds. If you're going to drive at 70 MPH in one of those gaz-guzzling monstrosities (aka SUVs) that seem to make up 50% of private American vehicles nowadays, don't complain about the price of gas.

I'd never thought of it in that way. Very interesting.

gas prices have seen a huge hike over here during the last few months btw.

Title: Re: Meltdown
Post by: BorisG on April 22, 2008, 11:15:55 AM

The girlfriends will gravitate to the guys who can spare a dime.

For those who cannot spare a dime, there is always

(http://www.untitled.se/gallery/sixfinger.jpg)

Title: Re: Meltdown
Post by: (poco) Sforzando on April 22, 2008, 12:17:27 PM

Quote from: BorisG on April 22, 2008, 11:15:55 AM
The girlfriends will gravitate to the guys who can spare a dime.

For those who cannot spare a dime, there is always [picture]

In truth, BorisG, I have no idea what you're saying.

Title: Re: Meltdown
Post by: greg on April 22, 2008, 03:18:23 PM

Quote from: Sforzando on April 22, 2008, 10:30:25 AM
But I'd have much more sympathy with the outrage over gas prices if there were any signs of people driving less, driving more fuel-efficient vehicles, or driving at moderate speeds. If you're going to drive at 70 MPH in one of those gaz-guzzling monstrosities (aka SUVs) that seem to make up 50% of private American vehicles nowadays, don't complain about the price of gas.

Oh, driving at moderate speeds is impossible. Why? Because everyday I'm about to be run over by a huge truck or SUV while going 5 miles an hour over the speed limit. I really don't care anymore, I'll just let them run over me. It'll be on their conscience the rest of their life, after all.

Quote from: Dm on April 22, 2008, 10:03:32 AM
How about a girlfriend with a really doomy & gloomy avatar, like this:

(http://nextgenprofootball.net/images/shroom.jpg)

That would be great! A person out their to relate to, wouldn't that be a fantasy?

Title: Re: Meltdown
Post by: (poco) Sforzando on April 22, 2008, 07:19:50 PM

Quote from: GGGGRRREEG on April 22, 2008, 03:18:23 PM
Oh, driving at moderate speeds is impossible. Why? Because everyday I'm about to be run over by a huge truck or SUV while going 5 miles an hour over the speed limit. I really don't care anymore, I'll just let them run over me. It'll be on their conscience the rest of their life, after all.

Whatever. Drive as fast as you like, but then don't turn around and complain that gas is so high.

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:27:18 AM

Corn, rice surge as global food tensions mount
Tue Apr 22,

By Ayesha Rascoe and Nicole Maestri

WASHINGTON/NEW YORK (Reuters) - With global tensions over food supplies mounting, prices of world staples rice and corn surged on Tuesday amid strong demand and concerns over slow planting of the new U.S. corn crop.

Meanwhile, the Asian Development Bank warned Asian countries against export controls, and the Inter-American Development Bank said the food-versus-fuel debate had changed the way it evaluates financing of biofuel projects that could siphon off staples like corn or soybeans. Even in the United States, the world's breadbasket, a leading retailer reported signs of growing concern about rising food costs and dwindling supplies.

James Sinegal, chief executive officer of Costco Wholesale Corp (COST.O: Quote, Profile, Research), a U.S. warehouse club selling food to consumers and businesses, told Reuters on Tuesday the retailer had seen a spike in demand for items like rice and flour.

Sinegal said some Costco store managers may have taken "precipitous action," by putting limits on sales of certain items. But he said if the retailer runs out of these items, they are usually back in stock the next day. "We don't want to create a panic situation," he said. American bakers also are dealing with tight supplies. Rye flour stocks have been depleted and by June or July there will be no more U.S. rye flour to purchase, said Lee Sanders, senior vice president for government relations and public affairs at the American Bakers Association.
(http://www.reuters.com/article/ousiv/idUSN2236001820080423)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:28:49 AM

US regulator fears wave of bank failures
By Daniel Pimlott, Krishna Guha and Joanna Chung in Washington and Ben White in New York
Published: April 22 2008

US bank failures could rise above "historical norms" as a weakening economy puts pressure on badly underwritten loans, particularly in commercial real estate, according to a bank regulator.
In an interview with the Financial Times, John Dugan, who oversees about 1,700 national banks as comptroller of the currency, said the growing problems for lenders follow a period of almost four years in which no institution regulated by his agency had failed.
(http://www.ft.com/cms/s/c4e0c530-10b1-11dd-b8d6-0000779fd2ac,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2Fc4e0c530-10b1-11dd-b8d6-0000779fd2ac.html&_i_referer=http%3A%2F%2Fwww.ft.com%2Fhome%2Fus)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:30:11 AM

Surging oil, disappointing outlooks hit Wall St.
Tue Apr 22, 2008

By Caroline Valetkevitch
NEW YORK (Reuters) - Stocks sank on Tuesday as oil prices neared $120 a barrel and fed worries about inflation and consumer spending, while a series of disappointing profit outlooks made the mood even worse.
Airline stocks .XAL were particularly hard hit, plunging 12.4 percent to a record low, as soaring oil has pushed jet fuel costs to record levels and retailers' shares .RLX dropped 2.2 percent on fears that Americans will curtail shopping to pay for higher gasoline prices.
(http://www.reuters.com/article/hotStocksNews/idUSL2281532720080423)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:33:12 AM

Oil must stay high if world to have enough supply
Tue Apr 22, 2008 12:33pm EDT
By Peg Mackey and Alex Lawler

ROME (Reuters) - Energy producers cannot halt a rally that has driven oil to nearly $120 a barrel and the world might have to live with even higher prices if it wants supplies for the future, exporters said on Tuesday.

Three days of talks in Rome between producers and their customers drew broad agreement a weak dollar has pushed oil prices higher and that the cost of extracting more from the ground has soared.

One thing the 60 or so energy ministers and dozens of industry executives struggled to agree was that the price, which hit a record of $119.74 a barrel on Tuesday, was too high.

"The oil market is in a state of fear, if not panic," said Shokri Ghanem, head of Libya's National Oil Corporation, but he also said expensive oil was necessary.

"Prices will have to stay high in the long term to encourage exploration and production."

Producers and consumers alike were worried, but for different reasons. Producers were nervous about falling demand and consumers dreaded economic collapse.

"Oil prices are clearly too high. We are not happy with the prices or the direction they're going in," said Jeffrey Kupfer, acting deputy secretary of energy for the United States, the world's biggest energy consumer.

The International Monetary Fund has predicted the U.S. economy would enter recession this year and some fear high prices could cause global economic damage.

"Definitely it will have some negative impact on economic growth -- that's for sure," said Nobuo Tanaka, executive director of the International Energy Agency, which represents consumer nations.

AGREE ON COST, NOT PRICE

When he arrived in Rome at the weekend, Tanaka said he wanted the International Energy Forum (IEF) to reach agreement the price was too high.

A closing statement said ministers had expressed concern over "the current level of oil prices". An earlier draft had said "the current high level of oil prices".

"The forum noted that oil prices should be at levels that are acceptable to producers and consumers to ensure global economic growth, particularly in developing countries."

Consensus was more forthcoming about the impact of labor shortages in the oil industry and that a rally across the commodities complex has driven up the cost of new production.

"There's definitely cost inflation. On that, there is a certain agreement, but what level is another question, but everybody is saying there's cost inflation. That is one reason for the high price," said Tanaka.

If rising costs are one factor behind higher oil prices, the most topical issue is the weak dollar, which has encouraged investors to flock to some commodities as an inflation hedge.

Iraqi Oil Minister Hussain al-Shahristani said the oil price was not as high as it seemed because it is measured in the U.S. dollar, which has hit record lows against other currencies.

"It's not really so high that it's beyond the capacity of most countries to cope with it," he said.

Producer countries need their revenues, mostly in dollars, to be high enough to finance investment in infrastructure.

Ali al-Naimi, oil minister of leading exporter Saudi Arabia, has repeatedly said the world has enough oil in the near term.

For the future, he said the world's reserves were adequate, but needed investment.

"At its heart, this is not an energy resource issue, it is primarily an investment issue," Naimi said in a speech.

(http://www.reuters.com/article/ousiv/idUSL20434820080422)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:35:41 AM

Surge in oil prices prompts warnings of global recession

By Danny Fortson, Business Correspondent
Wednesday, 23 April 2008

The price of oil has surged to a new record above $119 per barrel. Given the spate of "Record Oil Price!" stories that have filled newspapers in recent months, investors might be inclined to dismiss the latest threshold crossed – if it weren't for the increasingly dire warnings being issued about the havoc that expensive oil may wreak on the global economy.

The latest came yesterday, courtesy of the head of the International Energy Agency, Nobuo Tanaka. The soaring price of oil, he warned, may be what tips the global economy into recession. "I have some concern" about an oil-induced recession, said Mr Tanaka, speaking at the International Energy Forum in Rome. The unprecedented territory into which the price has travelled is having a "negative impact on economic growth", he added.

The inexorable rise of the cost of the black stuff – it closed yesterday at $119.37 in New York – has become a source of growing concern for politicians and economists already worried about the slowing economies of Western Europe and America. In the past five years, it has nearly quintupled; in the past two months, it has surged by nearly a third.

Mr Tanaka's comments came on the heels of a speech in which he delivered a stark message to the world's assembled oil barons.

"The world's energy economy is on an unsustainable pathway. In the short-to-medium term, there is an urgent need for investment to restore an adequate cushion between oil supply and demand," he said. "As shown by the World Energy Outlook [report], unless government policies change, world energy demand will grow by 55 per cent by 2030."

With the credit crunch reverberating further into the real economy, the worry is that the oil price (along with the rocketing prices of other commodities) could push major economies into "stagflation" – no growth coupled with inflation.

Opec, the cartel of oil producing nations that pumps about a third of the world's oil, has tried to deflect calls from big consuming nations such as America and in Western Europe by saying the price run-up can be blamed on traders and speculators. This is partly true. The falling value of the dollar has led investors to look for a hedge against the falling greenback. Commodities in high demand and valued in dollars, have proved an enticing investment. It is this argument that Opec has relied on to keep production steady. Abdullah al-Badri, the cartel's secretary-general, confirmed this week that it has no intention of ramping up production. The most recent run of rising prices was in fact set off by Saudi Arabia cutting its production. It is now the only country that can realistically boost production, as the rest of Opec members are operating at capacity.

"What they are worried about is that demand is going to decline in the coming months and they don't want to flood the market and see the price go south," said Muhammad-Ali Zainy, a senior energy economist at the Centre for Global Energy Studies. According to its research, Saudi Arabia has no incentive to provide relief as the government needs the oil price to remain at at least $70 per barrel in order to meet its own budget requirements. Mr Zainy predicted that the oil price will average about $99 per barrel this year.

The major oil companies, meanwhile, are having to do everything in their power just to replace fields that are running dry, let alone make new discoveries to boost production. Royal Dutch Shell, Europe's biggest oil company, is ploughing $25bn (£12.5bn) into exploration and production annually but expects output to fall over the next several years. An oil-induced recession would of course lead to a relaxation of its price. Given the rising pressure it is putting on consumers, a slowdown could very well happen.

In the UK, for example, the top six energy suppliers all pushed through major increases – about 15 per cent – to gas and electricity prices this year due largely to the rising price of wholesale gas, which is linked to the price of oil. Since nPower kicked off the rate rises in January, wholesale gas prices have jumped by another 45 per cent, while electricity prices have leapt by a quarter.

(http://www.independent.co.uk/news/business/news/surge-in-oil-prices-prompts-warnings-of-global-.htmlssion-814116.html)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:37:09 AM

Food prices "massacre" of world's poor: Chavez
Wed Apr 23, 2008

CARACAS (Reuters) - Soaring food prices are a "massacre" of the world's poor and are creating a global nutritional crisis, Venezuelan President Hugo Chavez said on Tuesday, calling it a sign that capitalism is in decline.

His comments came only hours after the United Nations' World Food Program called more expensive food a "silent tsunami" that threatens to plunge more than 100 million people on every continent into hunger.
"It is a true massacre what is happening in the world," Chavez said in a televised speech, citing U.N. statistics about deaths caused by hunger and malnourishment. "The problem is not the production of food ... it is the economic, social and political model of the world. The capitalist model is in crisis."
(http://www.reuters.com/article/newsOne/idUSN2233242820080423)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:38:51 AM

April 22, 2008, 1:59 pm
Peak Oil? Saudis Squeeze the Stone Even Harder
Posted by Keith Johnson

As oil reserves get harder and more expensive to suck out of the ground, one big question looms: Is Saudi Arabia facing "practical peak oil" or the real thing? Saudi Arabian officials made waves last week with an announcement that the kingdom would voluntarily limit future oil production, in order to leave oil wealth "for future generations." Last weekend, Saudi officials said that the world's biggest oil producer won't be diving into new exploration projects after next year, citing sluggish Western demand and the search for alternative fuels to petroleum. So are the Saudis smartly shepherding their oil resources? Or are they obliquely acknowledging that getting them out of the ground will be increasingly difficult and expensive?

Neil King in the WSJ reports today (sub reqd.) on the challenges facing Saudi Aramco as it launches its last big project before taking an upstream hiatus: The tricky development of the big Khurais field, which could pump more than 1 million barrels of oil per day. The paper says:
Even in Saudi Arabia, home to more than a quarter of the world's known recoverable reserves, the age of cheap and easily pumped oil is over. To tap Khurais, Saudi Arabian Oil Co., known as Aramco, has embarked on the most complex earth- and water-moving project in its history. It is spending up to $15 billion on a vast network of pipes, oil-treatment facilities, deep horizontal wells and water-injection systems that it calls "one of the largest industrial projects being executed in the world today."
With crude oil approaching $120 despite sluggish demand growth in the U.S., the idea of "peak oil"—that the world's oil glass is already half-empty—is increasingly gaining currency. Other once-formidable oil producers like Russia, the U.K., and Mexico are all seeing production decline as fields age. While Aramco has been very good at squeezing the maximum amount of oil out of each reservoir, even the world's biggest oil producer is finding that it's no longer shooting fish in a barrel:
"Khurais and [offshore field] Manifa are the last two giants in Saudi Arabia," says Sadad al-Husseini, a former Aramco vice president for oil exploration. "Sure, we will discover dozens of other smaller fields, but after these, we are chasing after smaller and smaller fish."

Unlike previous mammoth fields, Khurais needs a push while it's still young—in the form of sea-water injection to get wells pumping. And that's tricky business: Aramco seismologists spent years poring over rock formations to build their gameplan. It's costly, too: The paper reports that Saudi costs for adding new oil production have quadrupled in recent years, from $4,000 for each new barrel per day of capacity to about $16,000 for each additional barrel. As Western leaders implore OPEC to boost production, and the OPEC producers with the most play coy, the question remains: How much play is really left in the global spigot?

Title: Re: Meltdown
Post by: Florestan on April 23, 2008, 03:40:33 AM

AFAIC, comrade Chavez can stuff his presidency up his a$$ and f...k off.

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:41:13 AM

Oil prices are not going to fall much, ever
By Nick Louth
April 22 2008

As the price of oil climbs to $117 a barrel and petrol at the pump reaches 110p a litre, motorists are wondering how long this latest spike is going to last. Is it just another of those temporary jumps in the cost of fuel that we saw in the 1970s and 1980s or is this a new reality which will last for good?
The answer is that it is likely to stay. While market prices may or may not continue shooting into the stratosphere over the next few months, they are certainly incapable of falling back down to the levels of $60-$70 a barrel seen even a year ago.

The reason is that oil supply is increasingly constrained by extraction costs while demand, fanned by the growth of huge emerging economies like China and India, is remorseless. The International Energy Agency forecasts that in 2008, the world will need an extra 1.3 million barrels a day (bpd), but only 800,000 extra bpd will be supplied.

The supply side

I'm not actually talking about oil running out. This isn't directly an argument in favour of the "Peak Oil" theory, the idea that we will in the next few years began an irrevocable fall in oil output.
Peak oil may be true, but is harder to prove. What is happening right now is more to do with the cost of accessing oil and bringing it to market, not whether it's available under the ground.
There are a number of trends working in parallel to constrain supply:
·   The easiest and cheapest to access oil fields are running out
·   New fields are still being discovered, but tend to be smaller and less accessible, and so more expensive than they fields they replace
·   There is a dramatic shortage of drilling rigs, pipeline suppliers, and skilled staff to meet the surge in exploration required. That has raised costs
·   There is a new assertiveness among oil producing nations which has crimped supply, limited the profits and thus discouraged investment in new fields by western oil firms

The easy oil is running out

According to China's academic energy economist Xiaojie Xu, the 14 largest oil fields in the world, which together account for a fifth of global output, are all showing declining production. These old fields, where the cost of producing each extra barrel of oil is just a few dollars, are having to be replaced by new fields more expensive fields.

The cost of developing new fields can be astronomical. A massive new field recently discovered in the South Atlantic off Brazil may contain 8 billion barrels of oil and gas. The bad news is that to reach it means getting rigs aimed at an ocean bed 7,000 feet down, then drilling a further 17,000 feet through sand, rock, and a massive salt layer. That's a total of 4.5 miles.

It's never been done before, and it will cost, big-time. Petrobras, the firm which discovered it, expects to spend $50-$100 billion over the next five years just to get at the oil. It just wouldn't be worthwhile if oil prices went back to the levels seen in 2005.

Political muscle emerges

Then there is politics, of a kind that frequently emerges when oil prices rise. Venezuela, for example, is sitting on billions of barrels of oil in heavy tar sands in its Orinoco fields, not so very far away from energy-hungry Texas. Yet oil majors are reluctant to invest given the uncertain climate surrounding the anti-US government of Hugo Chavez, which has nationalised a number of foreign operations. Instead they are turning to Canada, which also has tar sands, but of a trickier and heavier type. These will cost still more to process.

In Russia, the world's second largest oil producer, a different kind of politics is in operation. In the last two years both Shell and BP have been short-changed on what they considered were legally-binding terms for some of the biggest reserves in the country.

Russian turmoil spooks markets

Russia's own oil firms have been in turmoil too. In-fighting between the government and some of the billionaire oligarchs who controlled the domestic industry has combined with a big jump in taxes to make exploration in Russia a much less enthralling prospect than it was a decade ago.
Investment fund Prosperity Capital has calculated that even at prices of $110 a barrel, production companies in west Siberia, the main oil producing region, are only left with $10 after operating costs, taxes and export duties.

With such slim incentives it is no wonder that Russian oil output is now officially expected to peak this year and decline thereafter. This news last week shocked the market, which had expected further rises in output in coming years, and helped contribute to the recent price surge.

Is $90 now the floor?

In the past, oil producing nations in the OPEC cartel have responded to temporary shortfalls in the oil market by opening the taps to make up the difference. However, faced with what looks like a long-lasting deficit they have decided to be less accommodating. Meeting on Monday in Rome, OPEC blamed speculators for the tight market, while the Venezuelan oil minister Rafael Ramirez predicted that prices "would not fall below $90".

King Abdullah of Saudi Arabia summed up the new conservation attitude, one which perhaps Britain should have followed with North Sea oil, when he said "I keep no secret form you that when there are some new [oil] finds, I said: 'No, leave it in the ground, with grace from God our children need it.'"

Don't look to Iraq either

One of the great hopes was for recovery in production in Iraq, and the opening up of new exploration areas in the west and north of the country. Still, with output already back up to 2.3 million bpd, above the level which preceded the US-led invasion of 2003, the best gains already look in the bag.
So if supply cannot adjust enough, how about demand? Demand though is affected by both price and wealth effects.

The wealth effect

Increasing wealth means that for every British commuter who opts to go green and start using a bicycle instead of his car, 100 or more third world consumers are ditching their bicycles as soon as they can afford a car. In a decade's time, China's car demand is expected to overtake that of the US.

The idea of elasticity

The rising price of oil has made relatively little dent in this demand. The demand for oil is what economists call relatively inelastic in that it takes a big jump in prices to cut demand.
There are obvious reasons for this. Oil is the lifeblood of the global economy. Not only is it largely irreplaceable in transport, but chemicals, plastics, fertilisers, and textiles are made of it. Much of the price of food, heating, cooking and lighting depends upon it.
For decades we have taken cheap oil for granted and public transport has withered so much that many of us now simply have no alternative but to drive. The entire shape of cities, particularly in North America, is predicated on oil so cheap that no services or facilities, not even a newsagent or convenience store, need be within walking distance of the suburbs where most people live. A worst-case new reality wouldn't just mean junking the SUVs but tearing up the newer cities.
There is a positive slant to all this though. While governments dither over climate change and fail to set agreements to reverse carbon emissions, the market place is helping it do its job. Ever-higher fuel costs, especially if sustained over decades, will spur the technology to save fuel, make us choose smaller cars and greener homes, and curb our holiday flights.
For now, though, the price looks like going on up.
(http://money.uk.msn.com/investing/articles/nicklouth/article.aspx?cp-documentid=8133723)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:43:51 AM

Bush Says US Not in Recession; Dollar Slumps to New Low; Oil Hits New High
By Scott Stearns New Orleans22 April 2008

(http://www.voanews.com/english/images/AP_New_Orleans_summit_George_bush_22apr08_190.jpg)

President Bush says the U.S. economy is not in recession, but there is no doubt it is slowing down with higher food and health care costs depressing retail sales and a growing number of Americans struggling to make their house payments.
Record-high oil and gasoline prices are only making things worse. Speaking to reporters at the close of a summit with the leaders of Canada and Mexico, President Bush again called on Congress to approve a controversial plan that would allow drilling for oil in an Alaskan wildlife refuge.
"No question rising gasoline prices are like a tax on our working people," he said. "What is happening is that we have had an energy policy that neglected hydrocarbons in the United States for a long period of time, and now we are paying the price."

(http://www.needlenose.com/i/swopa/BushIdiot2.jpg) (http://www.voanews.com/english/2008-04-22-voa54.cfm)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 03:44:59 AM

Dollar weakness spurs oil price rises

23/04/2008

Fears of a worldwide recession are growing as the relentless increase in the price of oil shows no sign of slowing.
Oil prices were within a whisker of $120 a barrel in New York yesterday, reaching a peak of $119.90 before closing at $119.37. Worries about shortages have dominated the International Energy Forum in Rome where the International Monetary Fund has called on Opec producers to accelerate production plans and Nobuo Tanaka, head of the International Energy Agency warned that soaring oil prices cold push the world economy into recession.
(http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/04/23/cnoil123.xml)

Title: Re: Meltdown
Post by: Florestan on April 23, 2008, 03:46:31 AM

Will you ever stop, I wonder? :D

Title: Re: Meltdown
Post by: karlhenning on April 23, 2008, 03:51:17 AM

I should think there is room in this world for both canola and olive oil, without chaos or famine.

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 08:45:45 AM

Delta reports $6.4B loss in first quarter

ATLANTA (AP) — Delta Air Lines, the nation's third-largest carrier, says its loss widened in the first quarter to a whopping $6.39 billion due to soaring fuel prices and the steep decline in the company's market value.
The results badly missed Wall Street expectations, despite a 12% increase in sales.
The Atlanta-based company said Wednesday the loss is equivalent to $16.15 a share. That compares with a loss of $130 million that Delta reported in the year-ago January-March quarter, when it was still in bankruptcy.
Excluding special items, primarily a $6.1 billion non-cash charge relating to the decline in Delta's market value due to sustained record fuel prices, the airline lost $274 million, or 69 cents a share, in the first quarter
(http://www.usatoday.com/money/companies/earnings/2008-04-23-delta_N.htm)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 08:46:46 AM

Oil prices push airlines to shrink, airfares to grow
By Dan Reed and Marilyn Adams, USA TODAY

Record oil prices that hit an all-time peak of $119.90 a barrel on Tuesday are pushing the USA's airlines into crisis mode. From the biggest national network carriers to the smallest discounters, they're slamming already-slowed growth plans into reverse and talking loudly about raising fares — by a lot.
Delta CEO Richard Anderson told reporters at a Washington briefing Tuesday that oil prices have gotten so high that every fare in the industry needs to go up 15% to 20% just for the carriers to stay even.
Senior executives at United (UAUA), AirTran (AAI) and JetBlue (JBLU) on Tuesday announced large first-quarter losses because of high oil prices. They said their airlines will stop growing or, in United's case, speed the rate at which it is shrinking. All three warned that the cuts will go deeper if oil prices don't fall soon.
That trio joined American (AMR), Continental (CAL), Southwest (LUV) and Delta (DAL), which already had announced plans to shrink or to curtail their growth plans. Northwest has signaled that it, too, plans to cut capacity.
But in light of Tuesday's record oil prices, investors weren't appeased. The Amex Airline index fell 12.35%, and all but two carriers, JetBlue and Southwest, saw their shares lose more than 10% of their value. Shares of United and AirTran were hit especially hard, falling almost 37% and 21%, respectively.
(http://www.usatoday.com/money/industries/travel/2008-04-22-airlines-oil-fares_N.htm?loc=interstitialskip)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 08:47:55 AM

"The world is effectively in the throes of peak oil. Crude and refined product prices trend upwards while markets become increasingly sensitive to news and rumors. Bad weather around ports, unrest in a third-world producer country or populist grandstanding by its leader with geopolitical flourishes, a pipeline accident, a closedown for repair, new worries about exchange rates – any of these would be sufficient for the financial media to report that 'crude futures jump on supply concerns.'" (http://www.energybulletin.net/43046.html)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 08:49:06 AM

Soaring energy prices fuelling a domestic crisis across the UK

There may be panic at the petrol pumps, but the increasing price of oil means that gas and electricity bills have also seen inflation-busting rises – and there's worse to come as Gina Davidson discovers.
FOR a while it seemed that the customer had the best of all worlds. The monopolies of British Gas and the national electricity board were smashed, so if you didn't like how much you were forking out for your domestic fuel, then all you had to do was switch.

But now, thanks to the continuing rise in oil prices and the increasing reliance on importing gas, that option isn't quite what it seems any more.

The days of being able to save a bundle on your bills by moving from one utility company to another have gone. As energywatch's director of campaigns Adam Scorer says: "The sad truth is that millions of consumers are switching but their bills still rise. For millions more, switching to a cheaper tariff is either fraught with difficulty or just plain impossible.

"In a high price environment where the average bill exceeds £1000 a year, the least expensive deal on offer does not equal affordable energy. No-one can seriously think that switching, by itself, provides the answer for Britain's besieged energy consumers."

Besieged is the right word. In the last five years gas bills have soared by 108.7 per cent, while electricity prices have risen by 69 per cent. This year alone, gas and electricity prices have risen by 15 per cent.

As a result everyone is feeling the pinch – but those on low incomes and state pensions have been hardest hit. In fact, pensioners' winter fuel payments have been wiped out. A typical pensioner household aged 65 to 74, with gas central heating, has seen gas bills go up by £260 per year, and electricity by £160 per year, while the value of the winter fuel payment per household for those aged 60-79 is just £200, and £300 for those aged over 80.

Meanwhile, a study published this week shows that 6.8 million households are currently in debt to their supplier – with the average amount households owe standing at £114.

Other research, this time by Age Concern, the Child Poverty Action Group and National Energy Action, has shown the number of households in fuel poverty – that's those that have to spend more than ten per cent of their disposable income on power – has soared by 600,000 in recent months to 4.5 million.

This includes the vast majority of single pensioners and lone-parent families entitled to basic state benefits, who now face a choice between heating and eating. It also looks like things are likely to get worse.

Already wholesale gas and electricity prices have risen by a third since the start of February and the problem is made worse by rocketing oil prices, which hit a record £59 a barrel this week.

Unless wholesale prices fall substantially, bills will start rising again by August or September – possibly by as much as 25 per cent for gas, while electricity could go up another ten per cent.

Such a hike would add around £180 to a standard average bill, pushing it towards £1200 a year. Unsurprisingly energywatch has already warned the Government that such a huge increase will "consign another million households to fuel poverty".

The Government has been trying to do something. Along with the big six power companies it announced a £225 million scheme to lift 100,000 households out of fuel poverty over the next three years, involving low tariffs or funding home insulation. But according to Mr Scorer, more needs to be done.

"To give real help to the fuel poor and vulnerable consumers, the Government must mandate suppliers to produce a social tariff for their neediest consumers – one which will be the lowest tariff available and not be available only online.

"Also, energy companies raise more than £320m from prepayment users, around a million of whom are fuel poor. On average a prepayment customer pays £215 more than a direct debit online user and one million fuel poor homes have prepayment meters – this needs to end.

"Furthermore, the Government needs to invest £320m to help cold weather payment groups get the winter fuel payment."

Mark Todd, of energyhelpline.com also believes winter fuel payments should be extended to help cover bills. "There is no doubt that there is an energy crisis looming. The winter fuel allowance that is paid to the elderly should be extended to the poor, because it should be as much about stopping poor kids freezing in their homes as old people."

What the Government can't control though is the fact that North Sea reserves are dwindling. As a result, by 2010, the UK will be importing at least half its gas from countries such as Norway and Russia – which could see the country literally being held to ransom to get the energy it requires.

Sam Laidlaw, chief executive of Centrica, believes the gas that's imported could cost even more. "Seven years from now, we'll be importing at least 75 per cent of the gas we need. To get this gas we have to compete on price terms with European energy suppliers who are buying under contracts directly linked to the price of oil – which has risen by 80 per cent since early 2007. The wholesale gas price has risen sharply in response. The time-lag of pricing mechanisms in Europe means it may be higher in the winter," he says.

"Price volatility is also intense. Current prices for summer 2008 are at unprecedented levels, more than 45 per cent higher than this time last year – and yet despite this, gas has not been flowing into the UK when high prices should have attracted it in."

Indeed, Norwegian gas suppliers have already stated that Britain is a secondary priority for its gas exports compared with mainland Europe – no matter the price the power companies pay.

Anyone got any candles?

(http://news.scotsman.com/politics/Soaring-energy-prices-fuelling-a.4010070.jp)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 08:50:10 AM

POLL: Confidence Suffers as Gas Prices Soar
Gasoline Prices, Struggling Economy Pushed Confidence Below Symbolic Barrier
Analysis by Madeleine Perez
April 22, 2008 —
Soaring gasoline prices and a struggling economy have pushed consumer confidence below a symbolic barrier, with the ABC News Consumer Comfort Index down to -40 this week on its scale of +100 to -100. It hasn't been this low since July 1993.
Two of the index's three components are grim: Eighty-five percent of Americans say the economy's in bad shape and more than three-quarters, 77 percent, call it a bad time to spend money. Ratings of personal finances, as usual, are better, but not good enough to lift confidence overall.
The CCI has reached -40 or lower only 83 times previously in 1,164 weeks of ongoing polling, all from 1990 to 1993, during the 1990-91 recession and its aftermath. Its record low, -50, was in early 1992. It's dropped from -20 to -40 this year alone, far below its long-term average, -10 in weekly polls since December 1985.
Confidence is buckling under the weight of housing and credit crises and rising retail gas prices: $3.51 a gallon this week, up 12 cents from last, to the highest price on record.
INDEX Only 15 percent of Americans rate the national economy positively, the fewest since October 1993 and 25 points below the long-term average. Just 23 percent rate the buying climate positively, its lowest since July 1992 down 8 points this year and 15 points off the long-term average, 38 percent.
Personal finances are traditionally the strongest of the three measures: Fifty-two percent rate theirs positively, 5 points below the long-term average.
TREND The CCI fell in each quarter of 2007, starting the year at -5 and ending at -20. This year that trend has accelerated; the first quarter was the index's worst since 1993. It fell by 14 points in three weeks from Jan. 20 to Feb. 11, gained a little back, then headed down again. It's now far closer to its record low than its all-time high, +38 in January 2000.
GROUPS The CCI as usual is higher in better-off groups, though the index is negative across the board. It's -6 among higher-income Americans while -74 among the least well-off, -30 among college-educated adults while -53 among high-school dropouts, -39 among whites but -55 among blacks and -33 among men while -46 among women.
Partisan differences remain: The index is -13 among Republicans, but -40 among independents and -53 among Democrats.
Here's a closer look at the three components of the ABC News CCI:
NATIONAL ECONOMY Fifteen percent of Americans rate the economy as excellent or good, the same as last week. The highest was 80 percent Jan. 16, 2000. The lowest was 7 percent in late 1991 and early 1992.
PERSONAL FINANCES Fifty-two percent say their own finances are excellent or good; it was 53 percent last week. The best was 70 percent, last reached in January 2000. The worst was 42 percent on March 14, 1993.
BUYING CLIMATE Twenty-three percent say it's an excellent or good time to buy things; it was 24 percent last week. The best was 57 percent Jan. 16, 2000; the worst, 20 percent in fall 1990.
METHODOLOGY Interviews for the ABC News Consumer Comfort Index are reported in a four-week rolling average. This week's results are based on telephone interviews among a random national sample of 1,000 adults in the four weeks ending April 20, 2008. The results have a three-point error margin. Field work by ICR-International Communications Research of Media, Pa.
The index is derived by subtracting the negative response to each index question from the positive response to that question. The three resulting numbers are added and divided by three. The index can range from +100 (everyone positive on all three measures) to -100 (all negative on all three measures). The survey began in December 1985.

(http://www.abcnews.go.com/PollingUnit/story?id=4704086&page=1)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 08:51:35 AM

"Additional factors influencing oil prices include more evidence of the high cost of new oil production, the recognition that the growing economies of oil producing countries limit the oil they have left over for exporting after domestic use, and finally the growing understanding of peak oil in the popular press. All of these long term oil shortage indications seem to have brought the peak oil concept into respectability among oil traders and would thus seem to be enough to push up the oil price even without a boost from the IEA, which suggested that oil supplies are growing tighter in the short run." (http://seekingalpha.com/article/73570-where-the-oil-rally-goes-facts-and-speculation)

Title: Re: Meltdown
Post by: BachQ on April 23, 2008, 08:53:05 AM

Wall St Journal

Load Up the Pantry

April 21, 2008 6:47 p.m.

I don't want to alarm anybody, but maybe it's time for Americans to start stockpiling food.No, this is not a drill.You've seen the TV footage of food riots in parts of the developing world. Yes, they're a long way away from the U.S. But most foodstuffs operate in a global market. When the cost of wheat soars in Asia, it will do the same here.Reality: Food prices are already rising here much faster than the returns you are likely to get from keeping your money in a bank or money-market fund. And there are very good reasons to believe prices on the shelves are about to start rising a lot faster."Load up the pantry," says Manu Daftary, one of Wall Street's top investors and the manager of the Quaker Strategic Growth mutual fund. "I think prices are going higher. People are too complacent. They think it isn't going to happen here. But I don't know how the food companies can absorb higher costs." (Full disclosure: I am an investor in Quaker Strategic)Stocking up on food may not replace your long-term investments, but it may make a sensible home for some of your shorter-term cash. Do the math. If you keep your standby cash in a money-market fund you'll be lucky to get a 2.5% interest rate. Even the best one-year certificate of deposit you can find is only going to pay you about 4.1%, according to Bankrate.com. And those yields are before tax.Meanwhile the most recent government data shows food inflation for the average American household is now running at 4.5% a year.And some prices are rising even more quickly. The latest data show cereal prices rising by more than 8% a year. Both flour and rice are up more than 13%. Milk, cheese, bananas and even peanut butter: They're all up by more than 10%. Eggs have rocketed up 30% in a year. Ground beef prices are up 4.8% and chicken by 5.4%.These are trends that have been in place for some time.And if you are hoping they will pass, here's the bad news: They may actually accelerate.The reason? The prices of many underlying raw materials have risen much more quickly still. Wheat prices, for example, have roughly tripled in the past three years.Sooner or later, the food companies are going to have to pass those costs on. Kraft saw its raw material costs soar by about $1.25 billion last year, squeezing profit margins. The company recently warned that higher prices are here to stay. Last month the chief executive of General Mills, Kendall Powell, made a similar point.The main reason for rising prices, of course, is the surge in demand from China and India. Hundreds of millions of people are joining the middle class each year, and that means they want to eat more and better food.A secondary reason has been the growing demand for ethanol as a fuel additive. That's soaking up some of the corn supply.You can't easily stock up on perishables like eggs or milk. But other products will keep. Among them: Dried pasta, rice, cereals, and cans of everything from tuna fish to fruit and vegetables. The kicker: You should also save money by buying them in bulk.If this seems a stretch, ponder this: The emerging bull market in agricultural products is following in the footsteps of oil. A few years ago, many Americans hoped $2 gas was a temporary spike. Now it's the rosy memory of a bygone age.The good news is that it's easier to store Cap'n Crunch or cans of Starkist in your home than it is to store lots of gasoline. Safer, too.

(http://online.wsj.com/article/SB120881517227532621.html)

Title: Re: Meltdown
Post by: karlhenning on April 23, 2008, 10:08:55 AM

Quote from: Dm on April 23, 2008, 08:46:46 AM

Oil prices push airlines to shrink, airfares to grow

Quote from: Dm on April 23, 2008, 08:49:06 AM
Soaring energy prices fuelling a domestic crisis across the UK

Hmm. Reduced flights London to Bangkok. No wonder Sean thinks it's the end of the world.

Title: Re: Meltdown
Post by: BachQ on April 24, 2008, 04:52:17 AM

Quote from: Florestan on April 23, 2008, 03:46:31 AM
Will you ever stop, I wonder? :D

Yes, on or about December 21, 2012 .......... That's the time when I will stop, along with the rest of the world ........

Title: Re: Meltdown
Post by: BachQ on April 24, 2008, 04:52:54 AM

GETTING ABOUT GREEN: SYDNEY'S FUTURE AFTER THE OIL AGE

With the price of oil now reaching more than $120 per barrel, the reality of peak oil and rising costs at the petrol pump are truly straining the budgets of most Australian families.This worsening issue, the future of the petrol engine and Sydney's troubled transport infrastructure were the focus of a recent UTSpeaks public lecture presented by three of University of Technology Sydney's (UTS) leading sustainability researchers.More than 250 people heard presentations that scoped the problems facing transport in Sydney and associated environmental dangers ahead.According to UTS Institute for Sustainable Futures (ISF) Senior Research Consultant Dr Michelle Zeibots the rising price of petrol will, not surprisingly, hit families living in the outer lying regions of Sydney hardest, where reliance on car trips is greatest."It is inevitable that people living nearer to public transport in outer suburbs will be forced financially to rely on it far more," Dr Zeibots said. "The problem is, however, compared with cities like Tokyo, these same regions are very poorly serviced by public transport, presenting an urgent problem for our governments."ISF researcher and NSW Manager for the Clean Energy Council Chris Dunstan suggested that plug-in hybrid electric cars could be one solution to Sydney's love affair with road travel.He said while biofuels offered some relief from our reliance on fossil fuels, the production of ethanol and bio diesel would demand the cultivation of vast tracts of agricultural land needed for food production and even then would provide only 15%-25% of our forecast fuel needs to 2050."Electric vehicles alone are also a problematic option due to the high expense of batteries with the capability to run vehicles," Mr Dunstan said. "Plug-in hybrid vehicles, on the other hand, make it possible to use batteries with backup fuels to spread demand while significantly minimising greenhouse emissions."Charging batteries in family plug-in hybrid vehicles would ideally take place during periods of cheaper off-peak supply of electricity. The challenge will be to ensure that charging vehicles during off-peak periods doesn't compete with electrical heating of water and running home air conditioners. It certainly makes a stronger case for widespread use of solar water heating and more efficient strategic use of our electricity supply."Senior Lecturer in urban planning with the UTS Faculty of Design, Architecture and Building, Dr Garry Glazebrook, painted a sobering picture of the environmental consequences of climate change due to the greenhouse effect. He said we were fast approaching a concentration of CO2 in the atmosphere that would lead to dramatic and irreversible climate change, acidification of the oceans and dramatic rise in sea level."We are addicted to the car despite the fact it is a very costly way of travel financially and environmentally," Dr Glazebrook said. "Much of our real financial costs are obscured to us by staggered fees associated with car ownership – registration costs, depreciation and so on."We need to get used to the idea of travelling less and when we do travel, choose options that have far fewer environmental impacts."Alternative sources of energy used in association with public transport is one of the most obvious and urgent solutions we should be pursuing. There is no reason why our train system in Sydney should not be run entirely on green energy and our buses be fuelled by electricity."Making urban areas car-free and more conducive to public transport and bike use is an urgent path that Sydney's planners could choose to adopt, as is happening in many other cities throughout the world."In short, all three presenters agreed that far-reaching change is needed now if the quality of our lives and the lives of future generations is to be preserved and environmental disaster averted.
(http://tandlnews.com.au/2008/04/24/article/FVYQFTFIMA.html)

Title: Re: Meltdown
Post by: BachQ on April 24, 2008, 04:55:30 AM

The U.S. economy: On the brink of collapse?
By: Ashahed M. Muhammad/Special to the NNPA from the Final Call
Posted: 4/20/08

(http://media.collegepublisher.com/media/paper263/stills/382yutzj.jpg)

(NNPA) - While America experiences turbulent economic conditions affecting even the nation's most powerful and influential financial giants, an even more severe economic downturn looms for Blacks and Latinos.

Though the subprime lending crisis is the latest economic factor affecting a large number of Americans, other factors such as the rising price of oil, government budgets strained by costs of natural disasters and the increasing debt caused by the mounting cost of the Iraq War are wreaking havoc on America's economy.

In a new book titled, "The Three Trillion Dollar War" by Joseph Stiglitz and Linda Bilmes, their research found that the Bush administration lowballed the estimated cost of the Iraq War saying that it would run between $50 and $60 billion. Before the war, former Secretary of Defense Donald Rumsfeld reportedly scoffed at the estimates of other economic advisers who said the cost could approach $200 billion. Former Deputy Defense Secretary Paul Wolfowitz, who many consider to be the primary architect of the Iraq War, suggested Iraq's oil revenues would finance post-war reconstruction. This has yet to materialize and the cost of the war is being shouldered by American taxpayers.

In fiscal year 2008 alone, the Bush administration has asked for $200 billion in financing approval from Congress. The government's latest estimate has placed the cost of the Iraq War at around $600 billion. Still other financial analysts have placed the long-term cost at between $2 and $4 trillion.

The recent financial troubles of Bear Stearns prompted an emergency bail out by the Federal Reserve and JP Morgan Chase & Co. to avoid what many financial analysts predicted could have been a total economic collapse of financial markets. Another troubled lender, Countrywide Financial Corporation, was rocked by allegations of financial irresponsibility and possible impropriety leading to a downward spiral in stock prices. Well-known companies such as Morgan Stanley, Lehman Brothers, Merrill Lynch, Citigroup, UBS and Goldman Sachs are taking another look at their risky loan processes and closely monitoring their stock prices.

On March 31, Treasury Secretary Henry Paulson proposed a set of massive changes to the financial system of the United States which included expansion of the power of the Federal Reserve.

Those companies at the very high end of financial wealth management are intricately involved in the financial system of the United States. While losses are heavy among many financial lenders and investors, many are financially insulated from the consequences felt by the average American living paycheck to paycheck.

Managing Editor of Political Affairs magazine Joel Wendland is a frequent critic of the Bush administration's fiscal policies. He said there are varying opinions of what an actual recession is, based on frame of reference.

"Some [economists] who are oriented toward Wall Street see recessions as starting only when hard times hit Wall Street. Progressive economists talk about recession from the standpoint of the impact of (the) crisis on working families. One economist said workers haven't really recovered from the 2001 recession as high unemployment figures, stagnant real wages, and the enormous cost of Bush-type polices - health care cuts, education cuts, tight state and local budgets, no new funding for anti-poverty programs, and so on - indicate that for millions of working families, disproportionately African American, Latino, but also millions of white, the 2001 recession never went away," said Wendland.

Ginna Green of the Center for Responsible Lending, an advocacy resource for predatory lending opponents, said ironically, the policies and practices of leading financial lenders have brought the American economy to the brink of collapse and caused a loss of economic confidence.

"We've got a major player (Bear Stearns) who has had a major hand in causing the problem getting a federal bailout and yet, we can't do the same for every day hardworking Americans who were put into loans that shouldn't have been offered in the first place," said Green.

According to the Center for Responsible Lending, more than 2 million families will face foreclosure in the next 24 to 36 months. Forty million families living in surrounding neighborhoods will feel the effects of these foreclosures as property values in their areas plunge by an estimated $350 billion.

In a separate, joint study by several regional policy and advocacy groups titled "Paying More for the American Dream" released in March, huge pricing disparities of mortgage loans granted to Black and Latino borrowers were found - including subprime and convention prime loans.

Even during times of greater economic stability, the unemployment rate of Blacks and Latinos is higher than that of whites leading some experts to suggest the unemployment rate is actually higher than what is being reported.

"Because the government only counts people who are looking for work and who have applied for unemployment compensation benefits, the real figures of unemployed are much higher than reported," said Wendland.

Arewa L. Karen Winters, a prevention specialist and cultural programs coordinator at the Bobby E. Wright Comprehensive Community Behavior Health Center, Inc. in Chicago said the dire economic conditions within the Black and Latino communities are resulting in an increase in the abuse of drugs, alcohol, and the use of sex-especially among young people-as a result of what she called "a massive economic void" in the community.

"A lot of it is (because of) poverty. When you talk about a recession and young people who have no food at home, some of them have no lights or gas, that makes them angry and then they go out here and see other students dressing nice, it makes them angry, it makes them hostile," said Winters.
(http://media.www.districtchronicles.com/media/storage/paper263/news/2008/04/20/Cover/The-U.s.Economy.On.The.Brink.Of.Collapse-3336739.shtml)

Title: Re: Meltdown
Post by: BachQ on April 24, 2008, 04:56:22 AM

$100 fill-ups arrive at gas pumps
(http://i.l.cnn.net/cnn/2008/LIVING/04/23/gas.prices/art.gas1.cnn.jpg)

COALINGA, California (CNN) -- Noel Bosse and Ken Davis watch as the numbers keep spinning at the gas pump -- 70 bucks, 80 bucks. Gulp, guzzle, then it stops: $101 for about 25 gallons.

The $100 fill-up has arrived in the United States. "I think it's absolutely ridiculous," Bosse says with disgust. Bosse and Davis are returning from Las Vegas, Nevada, heading back to their home near Seattle, Washington. They're pulling a trailer full of Arabian horses in their passenger van.
Bosse says they're averaging 200 miles every fill-up or 10 miles to the gallon. Bosse has been showing dogs and horses in competitions across the country for 35 years. With gas prices soaring, she's starting to rethink some of the upcoming shows.

"We're sitting here hauling a horse trailer eating gas," she says. "I don't see how people make it these days." California is home to the nation's highest average gas price, $3.87 for regular unleaded; diesel is pushing $4.43 a gallon, according to Troy Green, with AAA. San Francisco is the most expensive city, averaging $3.97 a gallon. However, a drive around the city shows many stations have jumped over $4.
The national average for regular unleaded is $3.53 and rising daily. Last year at this time, it was $2.86 per gallon. According to AAA, 24 states and the District of Columbia are averaging at or above $3.50 a gallon for regular unleaded. The state with the lowest gas is New Jersey, at $3.34 per gallon.

Title: Re: Meltdown
Post by: BachQ on April 24, 2008, 04:57:46 AM

The Biofuels Scam, Food Shortages and the Coming Collapse of the Human Population
by Mike Adams (see all articles by this author)

(NaturalNews) It was one of the dumbest "green" ideas ever proposed: Convert millions of acres of cropland into fields for growing ethanol from corn, then burn fossil fuels to harvest the ethanol, expending more energy to extract the fuel than you get from the fuel itself! Meanwhile, sit back and proclaim you've achieved a monumental green victory (President Bush, anyone?) all while unleashing a dangerous spike in global food prices that's causing a ripple effect of food shortages and rationing around the world.

I think politicians need to spend less time bragging about their latest greenwashing schemes and more time studying The Law of Unintended Consequences. Because while growing fuel on cropland initially sounds like a great idea, any honest assessment of the total impact leads you to the inescapable conclusion that biofuels are largely a government-sponsored scam. With a few exceptions (see below), biofuels produce no net increase in energy output, and they cause food shortages while creating strong economic incentives for the destruction of the very rainforests we desperately need to stabilize the climate!

And now we're just starting to see the early signs of the economic and social insanity that has been unleashed by this foolish pursuit of biofuels around the world: Food rationing in Sam's Club stores in the U.S., rapidly-rising prices on bread, rice and corn, and price spikes at cafeterias and restaurants that depend on these staple ingredients. The price of rice has tripled globally, unleashing riots in Haiti and Bangladesh, and the United Nations has issued warnings that millions of people around the world now face starvation because they can't afford to buy food. Americans are even starting to hoard food once again, after years of avoiding basic preparedness measures. (One benefit to all this, however, is that farmers are actually getting paid decent prices for their crops now, after years of operating on the verge of bankruptcy...)
Most biofuel efforts are a sham
Not all of these price spikes are due to the conversion of croplands to biofuel fields, but much of it is. As a result, it's suddenly becoming obvious to nearly everyone that the pursuit of biofuels, as currently structured, is a grand greenwashing hoax. It doesn't produce more fuel than it consumes, and it drives up food prices to boot!

Now, there are biofuels programs that really do work. The growing and harvesting of sugar cane in Brazil, for example, provides an 8-to-1 return on energy investment. But even that pursuit is tarnished by claims of unsafe work environments and massive environmental pollution (the sugar cane fields are burned before being harvested, a process that releases massive amounts of CO2 into the environment).

The only truly promising biofuels technology available today is based on microalgae. Feed CO2 to a vat of algae, and you can produce biofuels cheaply and responsibly, without destroying the environment. But these programs are only in experimental phases. Nobody is producing biofuels on a large scale from algae farms (not yet, anyway).

And that leaves the great American breadbasket: The corn and wheat fields. It is here that food is now being displaced by crops grown for biofuel processing. So where a farmer used to grow corn as a food source, he's now growing it to sell to a biofuel processing facility which turns the corn into ethanol. Obviously, the laws of economics come into play here, meaning that every bushel of corn used for biofuels production means one less bushel of corn available for food. Factor in the laws of supply and demand, and you can see that the more crops we use for biofuels, the higher the prices will rise for food.

Politicians, it seems, have no understanding of economics. They need to study the basics as they are presented in Henry Hazlitt's Book, Economics in One Lesson, which is a Libertarian-oriented guide that explains basic economics to anyone willing to learn. Economics is focused on the study of human behavior, or more precisely, consumer choice. Now, it seems, consumers are about to be faced with a choice they never wanted to have to make: Should I buy fuel, or food?

In other words: Do I want to drive my car, or do I want to eat?
You can have fuel or food, but not both
Under a biofuels-focused agricultural policy, the same limited resources (soil, sunlight and water, essentially) can be used for only one thing at a time. You can't use the corn twice, obviously (you can't eat the corn and process it for biofuels at the same time), so you've got to make a choice: Will you grow the corn for fuel, or for food?

The more you grow for fuel, of course, the less food you have, and that drives up food prices. But if you swing back the other way and grow more corn for food to ease food prices, the fuel prices go up. Trying to solve both problems at once is a bit like trying to pick up a wet watermelon seed with your fingers: It keeps slipping to the side.

One thing that has become abundantly clear in all this is that the era of cheap food and cheap fuel is over. I've written about this on NaturalNews, where I use the term "food bubble" to describe the most recent era of cheap food. As it turns out, cheap food is only made possible by cheap oil, and with oil now approaching $120 a barrel (a price that virtually no one thought possible just two years ago), food prices are simultaneously skyrocketing. (Modern farming practices use a lot of fossil fuel. So does transporting food across the country or around the world. Eat local, folks!)

Add to this the fact that global climate change is already underway, altering weather patterns and creating floods, droughts and other agricultural calamities, and you start to get the picture of just how bad things might get. That's not even to mention the very serious problem of collapsing honeybee populations due to a mysterious condition called colony collapse disorder that's devastating honeybee populations across North America right this minute. Honeybees, in case you didn't know, pollinate plants that represent about 30% of all the calories consumed by Americans. That's about one out of every three bites of your dinner, and it all depends on the "free" work performed by honeybees -- bees who are apparently going on strike by refusing to keep working for us.
Prepare for mass global starvation
So, to repeat, the food bubble is now starting to implode. What does it all mean? It means that as these economic and climate realities unfold, our world is facing massive starvation and food shortages. The first place this will be felt is in poor developing nations. It is there that people live on the edge of economic livelihood, where even a 20% rise in the price of basic food staples can put desperately-needed calories out of reach of tens of millions of families. If something is not done to rescue these people from their plight, they will starve to death.

Wealthy nations like America, Canada, the U.K., and others will be able to absorb the price increases, so you won't see mass starvation in North America any time soon (unless, of course, all the honeybees die, in which case prepare to start chewing your shoelaces...), but it will lead to significant increases in the cost of living, annoying consumers and reducing the amount of money available for other purchases (like vacations, cars, fuel, etc.). That, of course, will put downward pressure on the national economy.

But what we're seeing right now, folks, is just a small foreshadowing of events to come in the next couple of decades. Think about it: If these minor climate changes and foolish biofuels policies are already unleashing alarming rises in food prices, just imagine what we'll see when Peak Oil kicks in and global oil supplies really start to dwindle. When gasoline is $10 a gallon in the U.S., how expensive will food be around the world? The answer, of course, is that it will be triple or quadruple the current price. And that means many more people will starve.

Fossil fuels, of course, aren't the only limiting factor threatening future food supplies on our planet: There's also fossil water. That's water from underground aquifers that's being pumped up to the surface to water crops, then it's lost to evaporation. Countries like India and China are depending heavily on fossil water to irrigate their crops, and not surprisingly, the water levels in those aquifers is dropping steadily. In a few more years (as little as five years in some cases), that water will simply run dry, and the crops that were once irrigated to feed a nation will dry up and turn to dust. Mass starvation will only take a few months to kick in. Think North Korea after a season of floods. Perhaps 95% of humanity is just one crop season away from mass starvation.
The carrying capacity of planet Earth has reached its apex
The truth about all this, folks, is that the resources on our planet can only support a limited population, and I think we've over-populated the planet to a point where we're wiping out non-renewable resources at an alarming rate. This means a population correction is due. When there are too many people consuming too much food, using up too much water and burning too much oil, you can get away with a rapid expansion for a little while (a few decades, perhaps), but eventually reality kicks in and there's a global population correction that brings the population size back down to levels that can be sustained on the planet.

It's not a pretty picture. We're talking about the loss of a billion human lives, perhaps more. This is what's coming. It's as predictable as the laws of gravity. When you over-populate a planet and use up all the resources, the population eventually finds itself in a resource panic, and mass death ensues. You can observe the same thing with colonies of bacteria on a nutrient-rich petri dish: They will expand at an accelerating rate, multiplying their numbers until there's no more food left in the petri dish, and then they will experience a massive die-off. You might say that human beings are smarter than bacteria, and that's true, but as current events are clearly demonstrating, they're not much wiser! They still doom themselves to the same stupid fate by refusing to look at the long-term implications of their actions.

Humans are really good at making babies and eating food, but they're terrible at thinking even ten years ahead about the implications of their present-day decisions. That's why the global population control masterminds call people "feeders and breeders," by the way. Those are the two things human beings do extremely well: Fornicate and clean their plate. (Not necessarily in that order, though...)

The economies of our world have, sadly, been based on economic models that strongly encourage this kind of consumption and growth. We live in a "throwaway economy," where people are encouraged to consume and expend as much as possible. No corporation makes money teaching people how to use less. And so we've pushed for aggressive expansion since about the 1950's: Build more, eat more, consume more. We've turned farm lands into housing tracts, and rainforests into biofuel fields. We've over-fished the oceans, over-farmed the soils and over-extended ourselves to the point where a population correction is inevitable. We, the human race, have painted ourselves into a desperate corner, and the simple fact of the matter is that unless we quickly discover some new energy technology that provides the world with cheap, plentiful energy, we are headed straight towards a global population implosion that will leave a billion or more people dead.

And biofuels, of course, are no answer for this problem. You cannot grow enough corn to solve the problems of an expansionist, imperialistic race of beings (that's us humans) who have taken over the planet like a cancer tumor, wiped out countless species, destroyed huge swaths of natural rainforests, poisoned the oceans and rivers, polluted the skies and, at every opportunity, betrayed the very Earth that has given us a home in the first place. Humans can betray Mother Nature for a while, but in the end, we will pay a dear price for our own arrogance, greed and lack of vision. The human race is being sent back to kindergarten, where it needs to learn some basic lessons about living in harmony with the planet. Lessons like: Don't use up all the resources in a few generations. Don't think you're smarter than nature. And never forget how much Mother Nature does for us all for free! (Like pollinating the crops, producing oxygen, cleaning the air, water, etc. Read the book Mycelium Running to learn more...)

In time, we will either learn these lessons, or we will perish. It's really as simple as that. And all these suddenly-popular "save the planet" efforts we've seen by corporations recently are just a joke. We can't save the planet. The planet will be fine after we're gone, folks. What we're trying to save here is human civilization. The very idea that we think we can "save the planet" is arrogant all by itself. All we can do is respect the planet and find ways to live with it as polite guests living on a generous host.

Whether humans survive the next hundred years or not, planet Earth certainly will. And frankly, the planet will do much better without us. With humans gone, the Earth would quickly be restored to a vibrant, pristine state, full of life and abundance. The Earth doesn't need us, folks. But we, of course, certainly need the Earth. The real question is this: Can we learn to play nice and treat the Earth with respect? If not, we won't be around much longer to worry about it.
Nature needs to be granted legal standing
One final thought: I am an advocate of the idea that Mother Nature needs to be granted legal standing. I believe that humans do not automatically "own" nature, and that we cannot simply cut down forests, bulldoze mountainsides, fish the oceans, build dams and engage in other highly disruptive activities without first getting permission and paying royalties to a global Mother Nature Authority that stands up for the rights of the planet. Nature is not ours to own or destroy. We, as the guests on this planet, have no right to simply assume ownership over other living systems on this planet and exploit them for our own financial gain. The "destroy and consume" model of free market enterprise is simply not sustainable, folks. It does not lead us to a happy future; it leads to our own destruction.

Or, put another way, over the last hundred years or so, mankind has committed countless acts of violence against nature. It has pursued a policy of committing atrocities against Mother Nature -- a kind of genocide against anything non-human (animals, plants, fish, etc.). Humans have proven themselves to be, by far, the most violent and destructive life forms to ever exist on this planet. And yet paired with that violence, humans are an infant species, with little or no foresight, with virtually no ability to see the future implications of their own actions. We are, in a sense, the dumbest intelligent creatures ever to walk the face of this Earth.

We can land a man on the moon, but we can't even prevent our own rainforests from being clear-cut by soybean farmers and cattle ranchers. We can develop high-tech medicines, but we can't even openly recognize the more powerful medicines found in a simple dandelion plant. We can create amazing computers and televisions and internet technologies the beam information across the globe at the speed of light, but we pollute those information pathways with corporate ads for useless stuff and dangerous medicines that only make our fellow humans beings less enlightened. We are capable of so much, and yet we have accomplished so little. We are, by any honest assessment, a race of little children, running around the planet with far too much power and not nearly enough maturity. We're like a band of infants with flamethrowers.

Frankly, we don't deserve this planet, and Mother Nature is about to take it away from us. It's time for us to either grow up, or perish. And all these people who say "we have to protect the economy, not the environment" should probably just be rounded up and shipped off to Mars where they can play with the Martian dust all they want until they finally get the picture.
(http://www.naturalnews.com/023091.html)

Title: Re: Meltdown
Post by: karlhenning on April 24, 2008, 05:03:45 AM

QuoteGulp, guzzle, then it stops: $101 for about 25 gallons.

Our tank is 19 gallons. Not that anyone asked.

Title: Re: Meltdown
Post by: BorisG on April 24, 2008, 08:33:31 AM

Oil prices slip on dollar recovery, rising US crude inventories

1 hour ago

LONDON (AFP) — Oil prices fell on Thursday as traders took profits after this week's record-breaking run on the back of the strengthening dollar and rising US crude stockpiles.

New York's main oil futures contract, light sweet crude for delivery in June, dropped 1.21 dollars to 117.09 dollars a barrel. The May contract had struck a record high 119.90 dollars before expiring on Tuesday.

London's Brent North Sea crude for June delivery lost 85 cents to 115.61 dollars on Thursday, after hitting a peak of 116.75 dollars on Tuesday.

"Crude futures slipped lower, falling under pressure from the recovering greenback," said Sucden analyst Andrey Kryuchenkov.

"It seems that a larger-than-expected increase in US crude inventories during last week and a stronger dollar were good excuses for some investors to book profits."

US crude reserves rose 2.4 million barrels last week, beating market expectations for a 1.5-million-barrel gain.

In the foreign exchange market on Thursday, the euro fell to 1.5708 dollars from 1.5882 in New York late on Wednesday, after a disappointing survey on business confidence in Germany.

"The dollar continued to strengthen against the euro, putting some downward pressure on oil prices and correcting after hitting a record low beyond 1.60 dollars against the single currency earlier this week," Kryuchenkov noted.

A stronger US currency makes dollar-priced crude more expensive for foreign buyers and therefore tends to discourage demand.

However, prices were supported by ongoing supply worries.

Talks aimed at heading off a planned strike at one of Britain's key oil refineries broke down on Wednesday, a union spokesman said.

The collapse of discussions between officials from Unite and Ineos, which owns the Grangemouth refinery between Glasgow and Edinburgh, means 1,200 workers at the site will go on strike Sunday and Monday.

"There will still be some worries around Grangemouth," said Petromatrix analyst Olivier Jakob. "We will see some support coming from that."

Ineos has begun shutting down Grangemouth, the biggest refinery in Scotland, producing 210,000 barrels of oil a day, and has warned of fuel shortages later this week if the strike were to go ahead.

Traders were monitoring production problems in Nigeria, which is the largest crude producer in Africa.

Members of a white-collar union working for Mobil Producing Nigeria (MPN), an affiliate of US oil group ExxonMobil, began an indefinite strike on Thursday over pay and working conditions.

Earlier this week, the Anglo-Dutch oil giant Shell said it had reduced output by 165,000 bpd following the sabotage of supply pipelines to the Bonny export terminal in southern Nigeria.

Nigeria has a daily oil output of 2.1 million barrels but unrest in the crude-rich Niger Delta has cut exports by a quarter since January 2006.

Title: Re: Meltdown
Post by: BachQ on April 24, 2008, 09:14:36 AM

Oil prices, gasoline costs to double: CIBC report
SHAWN MCCARTHY
Globe and Mail Update
April 24, 2008 at 11:17 AM EDT
(http://images.theglobeandmail.com/archives/RTGAM/images/20080424/woilRubin0424/OilSignalHill_jack_188.jpg)

OTTAWA — Crude oil prices will soar to more than $200 (U.S.) per barrel over the next five year – driving Canadian pump prices to $2.25 a litre and forcing a fundamental transformation in the North American economy, says Jeff Rubin, chief economist with CIBC World Markets Inc.

In a new report, Mr. Rubin forecast a continued run-up in crude prices, despite a slowing world economy and slumping petroleum demand in United States, the world's leading oil consumer.

He said he expects crude prices – now trading at above $116 (U.S.) a barrel - to average $150 by 2010, and more than $200 by 2012. That would translate into pump prices of $7 (U.S.) per gallon in the United States, and $2.25 per litre in Canada, double the current levels.

"Whether we are already at the peak of world oil production remains to be seen, but it increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity," the economist said.
World oil production has essentially stagnated at about 85-million barrels per day over the last two years, with growing demand met by increases in natural gas liquids, a fuel source that is used by the petrochemical industry but is of little use for transportation.

Mr. Rubin said he expects crude oil production to grow by about 1-million barrels per day over the next several years.

Meanwhile, growing demand in China, India, Russia and the Middle East will more than offset declines in the industrialized world.

"Millions of new households will suddenly have straws to start sucking at the world's rapidly shrinking oil reserves," he wrote.

He said the sharply higher oil prices will prove devastating for the North America's industrial base, particularly the auto industry. But Canadians will benefit from the spinoffs, in terms of jobs, tax revenues and procurement, from the country's oil-rich provinces.
(http://www.theglobeandmail.com/servlet/story/RTGAM.20080424.woilRubin0424/BNStory/energy/home)

Title: Re: Meltdown
Post by: BachQ on April 24, 2008, 09:16:36 AM

The Era of Cheap Food, Energy and Credit at an End
Rob Mackrill - Thu 24 Apr, 2008

Eight years into the new millennium it feels like the end of an era. An era of cheap credit, cheap food and cheap energy

Eight years into a new millennium, it feels like the end of an era. The end of the eras of cheap credit, cheap food and cheap energy. Will they be back? Even Pollyanna might swallow hard before giving the nod to that one. On the credit front, banks around the world may have lost somewhere in the region of a $1trn between them, so something has to give. Namely loans to customers. Whether they be first time buyers trying to get a foot on the housing ladder, a business needing finance or some private equity house putting together a leveraged buyout. Subprime has blown a large hole in the banks, and that means credit rationing for customers.

On the subject of mishaps... The one-time claim of Swiss banking conservatism looks again to be a claim as hollow as their Emmental today as Credit Suisse revealed anything but credit. They notched up a first quarter loss after a $5.2bn write-down. But fear not. Central banks are on the case. They're cutting interest rates. The Fed has cut rates from 4.5% to 2.25% in double quick time and is expected to lop another quarter off next week. The Bank of England is trying to ease too, though in a much more sedate fashion as suits the Old Lady of Threadneedle Street, while she squints in alarm at the potential wrecking ball of food and energy inflation.

Who'd want to be a Monetary Policy Committee member today? For the past decade a tweak here a tweak there, some good lunches and plenty of kudos. Today, a full blown crisis on your leather-bound desk. Stuttering growth in the blue corner. Pugnacious 'flation in the red corner. The MPC as referee looking for a fair fight according to its own Queensbury rules. The problem is you need to help your old fighter in the blue corner back on his feet, but that is only going to wind up the bruiser in the red corner. That help is principally interest rates. But if you keep cutting them while a loaf of bread is £1.20 and rising and a litre of petrol is £1.09 and rising - £1.12 is anticipated next month - then that escalates the risk of 'flation going berserk and flattening all in sight.

But if you don't cut rates to choke inflation you risk a '70s style housing crash, says Edmund Conway of The Telegraph. This dilemma is taxing the nine member MPC and has created an unusual split in their thinking. Last time around, the majority voted on a quarter point cut, one voted for a half point cut and two voted to keep on hold. The good news is Lombard Street Research note is that although food/fuel prices are on the march, this has not yet shown up in higher wage growth. To us, the key caveat there are the two words 'not yet'. Today there's a teachers strike today for the first time in 21 years as they bid for an inflation-proofed pay deal. Will more follow their example?

As for the era of cheap food, its return looks unlikely unless there's a catastrophic reversal of the long-term economic and demographic growth trends in place. Or agricultural production revives once again confounds global warming and the Malthusians. China will one day boast a middle class whose numbers will equal the entire population of the US. Will they want to subsist on a bowl of rice a day? No. They'll be wanting hamburgers, pizza, steak and sushi... or the cultural equivalent thereof. The rich world will just have to learn to share with the nouveau riche world and bid more for it. Food rationing in the east. Food rationing in the west. Mighty US retailer Walmart is limiting the purchase of rice, reports Bloomberg, and another US retail giant, Costco, is considering a similar move. Elsewhere, Irish Banana importer Fyffes reports higher import costs are accelerating fruit price inflation.

And then there's cheap energy... Well, maybe one day we'll be saved by science, but the quest for an alternative to finite hydrocarbons remains a live one. And until that day comes we'll continue to be pay close attention to the oil price, now retreated to $117 from its recent relentless march up to $120 high. And on the idea mentioned recently of what price oil has to hit before people start giving up on the car, a reader writes...

"Oil at 200 bucks within the next five years? Quite probable, but down to 80-85 first as this spike runs out of steam. Overall when peak oil ( maximum daily supply exceeded by minimum daily demand - not the stuff in the ground ) hits us then the price will go as high as it can ($400) before the global transportation infrastructure grinds to a halt and with it the global economic infrastructure . Global warming just doesn't stand a chance because we won't see 2100 as a civilised planet."

*** An item of business news catches the eye this morning...

Britain 's largest housebuilder, Persimmon plc. reports sales have slipped by 24% this year and warns it faces the worst mortgage market since the '70s. News that has had investors running for cover and sent the shares more than 8% lower together with the broader market, down more than 100 points. But what did they expect? If you can't get a mortgage how can you buy a house even if you're brave enough to want to. The sector is facing a "triple witching" says Merrill Lynch:

"Worryingly, it is clear that the UK housebuilders are entering a new and potentially volatile period characterised by significantly constrained mortgage availability, buyers deferring purchases in anticipation of price falls, and, most recently, their growing concerns about employment security."
Finally, a chart tracing the decline of an ancient habit quite possibly making a comeback. It's called saving for a rainy day...

Though it's possible the data might be missing something. One in ten prefer to stash cash under the mattress, according to the latest findings from the Newcastle Building Society.
Regards,
Rob Mackrill
The Daily Reckoning
(http://www.dailyreckoning.co.uk/economic-forecasts/era-cheap-food-energy-credit-end-00104.html)

Title: Re: Meltdown
Post by: BachQ on April 24, 2008, 09:17:02 AM

U.S. gasoline theft on the rise along with prices
Thu Apr 24, 2008 9:08am EDT

NEW YORK (Reuters) - U.S. motorists, angered by soaring gasoline prices, are resorting increasingly to theft -- a trend that could worsen heading into summer driving season, a national association of fuel retailers said Thursday.
"It is getting bad. When the price of gasoline goes up, the number of drive-offs goes up," said Dan Gilligan, president of the Petroleum Marketers Association of America, which represents about 8,000 retailers.
Drive-off means a motorist pulls up to a gas station's pump, fills the car's tank, and then speeds off without paying for the fuel.

U.S. gasoline prices struck a record $3.56 per gallon on average Thursday, bringing them more than 24 percent higher than a year ago amid a surge in the cost of crude oil, according to travel group AAA's daily survey of up to 100,000 service stations. Energy experts have said gasoline could top $4 a gallon in many parts of the country heading into summer, when demand for the fuel typically peaks with road travel as Americans go on vacation.
Gilligan said that some state fuel dealer associations were pressing lawmakers to make it easier to prosecute motorists who fill up and then drive off without paying, while many service stations were starting to require payment up front. "The last time we had a spike up in gasoline, lots of retailers switched to requiring payment before fill-up," said Gilligan. "But many retailers still want to preserve the trust relationship they have with their customers."
(http://www.reuters.com/article/newsOne/idUSN2447526520080424)

Title: Re: Meltdown
Post by: BachQ on April 24, 2008, 09:18:35 AM

Thai rice hits new record, feeding food fears
Thu Apr 24, 2008 7:51am EDT
By Apornrath Phoonphongphiphat

BANGKOK (Reuters) - Rice prices in Thailand, the world's top exporter, surged to $1,000 a tonne on Thursday as concerns about food security first triggered by a handful of Asian export bans spread as far as the United States.

This week's five percent jump takes prices to nearly three times their level at the start of the year, intensifying fears of social unrest in Asia as millions of the region's poor find themselves struggling to pay for staple goods.

The surging price of fuel and food, which some analysts attribute to panic buying by both consumers and governments rather than a dire shortage of supply, has so far sparked riots in Africa and Haiti, but not Asia.

Having started with India's imposition of export curbs to protect domestic supplies last year, the crisis was felt in the United States this week, with major retailers saying they had started to notice signs of panic buying.

Sam's Club, a unit of retail giant Wal-Mart, said on Wednesday it was capping sales of 20-pound (9 kg) bulk bags of rice at four bags per customer per visit to prevent hoarding.

The previous day, rival Costco Wholesale Corp said it had seen increased demand for items such as rice and flour as customers, worried about global food shortages, stocked up.

"Everywhere you see, there is some story about food shortages and hoarding and tightness of supplies," said Neauman Coleman, an analyst and rice broker in Brinkley, Arkansas.

NEW ERA?

In Bangkok, some traders said Thai 100-percent B grade white rice, the world's benchmark, could hit $1,300 a tonne due to unsated demand from number-one importer the Philippines, which fell well short of filling a 500,000 tonne tender last week.

Manila said on Thursday it had increased the size of another tender on May 5 to 675,000 tonnes from 500,000 tonnes, putting yet more heat under the price of a grain that for decades moved sedately between $200 and $300 a tonne.

There is also a big question mark over Iran and Indonesia, two countries that normally buy as much as 1 million tonnes of Thai rice each year but which have bought nothing so far in 2008 because of the soaring prices.
Indonesia's trade minister said on Thursday her country can meet domestic demand for rice this year, avoiding the risk of social unrest, thanks to a bumper rice harvest, curbs on rice exports and subsidies for the poor.

"If the production of rice is as planned for this year, I think we can feel pretty okay that it's going to be stabilized," Mari Pangestu said in an interview.

Even though some analysts say the price, part of a wider global rally in crop prices, is based on jittery governments rather than fundamentals, Thailand's top exporters say the world is now set for an era of expensive food.

"Prices will remain firm for the rest of the year," Chookiat Ophaswongse, head of the Rice Exporters Association in Bangkok, told Reuters.

Asian rice prices could rise another 10-15 percent as African importers step up buying, but the market might be set for a sharp fall nearer year's end, a grains trader said on Thursday.

"You might not see a correction in prices in the next two to three months. But when crops kick in, you could see a 30 to 40 percent correction in prices towards the end of the year," said Vijay Iyengar, managing director of grains trader Agrocorp International Pte Ltd.

Rice futures on the Chicago Board of Trade climbed 2.5 percent on Wednesday to an all-time high of $24.85 per hundredweight.

However, grain futures tumbled four percent to a five-month low due to expectations of a large global wheat crop in 2008.

With the northern hemisphere harvest only two months away, officials said planting had started well in Western Australia after good rains, while India said a record harvest and bulging government stocks meant no imports were needed this year. China's top wheat-growing provinces of Henan and Shandong were also looking at a bumper winter harvest after recent rains, the Xinhua news agency said.

CRITICISM

Brazil became the latest country on Wednesday to suspend rice exports, following in the footsteps of India and its close rival for the mantle of world number-two supplier, Vietnam.
However, Thailand, which accounts for nearly a third of all rice traded globally, reiterated that it would not impose any curbs, saying it had enough stocks to meet its export commitments.
"We don't need to restrict Thai exports because in the next few months, a new crop will come out and we have enough stock for the Thai people and also for exports, according to the agreements that we have signed," government spokesman Wichianchot Sukchotrat told reporters in Kuala Lumpur.
The Asian Development Bank and free-trade advocates have criticized the export curbs as an overreaction that has distorted the market.
"If we restrict trade, we're simply going to add food scarcity to the already large problems of food shortages that exist in different countries," EU Trade Commissioner Peter Mandelson said
(http://www.reuters.com/article/hotStocksNews/idUSBKK27206620080424)

Title: Re: Meltdown
Post by: greg on April 24, 2008, 01:59:46 PM

Quote from: Dm on April 24, 2008, 04:52:17 AM
Yes, on or about December 21, 2012 .......... That's the time when I will stop, along with the rest of the world ........

Probably before then, when you run out of money to pay for an internet connection since all of it is being used for gas.
Btw, I drove the speed limit. I looked back at the several SUVs trying to run me over, and laughed at them. MWAHAHAHAHAHA...... they were going so slow, couldn't go past me. I wonder how those $#*(@) liked that. 8)

Title: Re: Meltdown
Post by: drogulus on April 24, 2008, 02:10:13 PM

The oil price increases are happening because the poor are getting richer faster than ever in the past, putting a huge burden on resources. The proportion of world resources consumed by the richest countries is declining as a percentage of the total as China and India continue to grow at an astonishing pace. Food prices will rise for related reasons. For the U.S. and Europe not much will change. Things get more expensive because of growth within advanced economies or within other economies drawing from the same resource pool. The relative decline of the rich will only be felt over the long term, though Americans are getting a taste of it as the dollar declines.

Title: Re: Meltdown
Post by: BorisG on April 24, 2008, 03:00:16 PM

ConocoPhillips 1Q profit up 17 pct. on higher oil prices

Thursday April 24, 5:05 PM EDT

HOUSTON (AP) — ConocoPhillips, the third-largest U.S. oil company, said Thursday its first quarter profit rose almost 17 percent as record high oil prices offset disruptions that hurt earnings from its refining operations.

The Houston-based company said net income rose to $4.14 billion, or $2.62 a share, for the January-March period, from $3.55 billion, or $2.12 a share, in the year-ago quarter.

On average, Wall Street analysts surveyed by Thomson Financial expected earnings per share of $2.42.

ConocoPhillips said revenue rose to $54.9 billion from $41.3 billion a year ago.

As expected, soaring crude prices in the first three months of the year gave ConocoPhillips a big lift. Crude prices have neared a record $120 a barrel in recent trading sessions.

"Although we delivered solid financial results during the first quarter, unplanned downtime negatively impacted our performance," Jim Mulva, ConocoPhillips' chairman and chief executive, said in a statement.

The company said net income from its exploration and production arm rose nearly 24 percent to $2.89 billion in the first quarter from a year ago, as higher commodity prices offset lower volumes and higher taxes.

Daily production in the most-recent quarter averaged 1.79 million barrels of oil equivalent a day, down from 2.02 million barrels a year ago. The company attributed the decline to the expropriation of its Venezuelan oil projects last year and its exit from Dubai, as well as normal field decline and unplanned downtime in the continental U.S.

Production results include ConocoPhillips' Canadian Syncrude operations but not its Russian Lukoil business.

Earnings fell sharply on the refining and marketing side, to $502 million from $1.14 billion a year ago — a decline ConocoPhillips said earlier this month was not unexpected.

The root of the problem was refining margins, which were squeezed by higher crude prices. Those margins reflect the difference between the cost of crude and what the company makes on refined products such as gasoline.

Lower volumes also hurt, as ConocoPhillips said it encountered unplanned downtime at its U.S. Gulf Coast refineries.

Despite the higher earnings, ConocoPhillips shares fell $1.59 to $82.89 Thursday.

Title: Re: Meltdown
Post by: BorisG on April 24, 2008, 03:05:00 PM

Occidental earnings surge on record crude prices

Thu Apr 24, 2008 3:35pm EDT

By Michael Erman

NEW YORK (Reuters) - Occidental Petroleum Corp (OXY.N: Quote, Profile, Research) said on Thursday its first-quarter earnings rose more than 50 percent as the U.S. oil company reaped the benefits of record crude prices.

Oil prices have surged since 2002 due to demand from emerging economies, supply concerns and the weak dollar. For most of the first quarter of 2008 prices were at or near record levels.

Benchmark U.S. oil prices averaged about $98 a barrel during the quarter, up nearly 70 percent from last year.

The company took in an average of $86.75 per barrel of oil it produced in the quarter, up from $51.67 a barrel in the year-earlier period.

On Thursday on the New York Mercantile Exchange in afternoon trading June crude CLM8 was $116.05 per barrel.

Net income rose to $1.85 billion, or $2.23 a share, from $1.21 billion, or $1.43 a share, a year earlier.

Excluding $27 million in one-time gains from tax refunds and sales, the company earned $2.20 a share, well above analysts' average estimate of $1.94 a share.

"Pound for pound, Oxy generates more profits from production than any other company in the industry," said Oppenheimer & Co analyst Fadel Gheit, who said the company's shares were undervalued.

"They are flush with cash ... They are actually tightening screws and cutting headcount," he said.

Sales rose 50 percent to $6.02 billion.

Natural gas prices were also higher. Occidental's average realized price for the quarter rose 27.7 percent to $8.15 per thousand cubic feet.

The company said it was raising its capital spending for 2008 to $4 billion to drill additional wells in the Rocky Mountains and California. It had previously forecast spending $3.6 billion for the year.

Los Angeles-based Occidental's oil and gas production rose 8.4 percent to 607,000 barrels of oil equivalent (BOE) per day in the quarter, mostly due to new production from the Dolphin Energy gas project in the United Arab Emirates.

It expects second-quarter oil and gas production to rise from first-quarter levels, helped by increases in Argentina, Colombia, the Rocky Mountains, the Permian Basin and Oman.

The company expects oil and gas production in the current quarter in the range of 610,000 to 620,000 BOE per day.

Occidental's shares fell $1.15, 1.4 pct, to at $83.34 on Thursday afternoon. They hit an all-time high of $86.96 on Tuesday.

(Reporting by Michael Erman, Editing by Maureen Bavdek, Toni Reinhold)

Title: Re: Meltdown
Post by: BorisG on April 24, 2008, 03:06:35 PM

Iraq is expected to reap huge oil-profits windfall

By PAULINE JELINEK
The Associated Press

Apr. 24, 2008

WASHINGTON -- New data on Iraq oil revenues suggests that country's government will reap an even larger than expected windfall this year -- as much as $70 billion -- according to Stuart Bowen, special inspector general for Iraq reconstruction, in his latest quarterly report.

The previously undisclosed information is likely to strengthen the hand of U.S. lawmakers complaining that Iraqis aren't footing enough of the bill for rebuilding their nation -- particularly in light of rising oil production and world prices.

Oil prices Wednesday hovered near $120 a barrel.

Iraq's oil numbers

Monthly exports: Oil export revenue was $5.83 billion in December, according to new figures from the Iraqi government -- more than $1 billion over what it previously reported. That compares with $3.3 billion in July and $2.4 billion in January 2007.

Trend: The latest data "clearly substantiates ... that Iraq is enjoying a record windfall as the result of record oil prices, record oil production and record oil exports," Bowen said.

2008 exports: With the revised December figure, and continued strong production and export figures since then, Iraq's oil revenues could soar to $70 billion in 2008, Bowen said.

Budget projection: Iraq's 2008 budget is about $48 billion with some 84 percent coming from oil, officials have said. That was calculated using a $57-a-barrel price.

Congressional reaction

Legislation: Citing Iraq's oil windfall, Sen. Carl Levin, D-Mich., chairman of the Armed Services Committee, said that he will introduce legislation that would prohibit U.S. money from being spent on reconstruction and possibly other war-related costs. GOP lawmakers have signaled a willingness to back a measure on spending, depending on how it is written.

Other proposals: Lawmakers have suggested restricting future reconstruction dollars to loans instead of grants and asking Baghdad to pay for the fuel used by U.S. troops as well as take over U.S. payments to predominantly Sunni fighters in the Awakening movement.

Iraq's reaction

Samir Sumaida'ie, Iraq's ambassador to the U.S., sought Wednesday to assure members of Congress that Iraq was doing what it could.

"I assured them that the Iraqi government is not only willing, it is actually stepping up and taking [on] as much of the financial cost of reconstruction as possible. And we're doing it as fast as we can."

Online: www.sigir.mil

Title: Re: Meltdown
Post by: BorisG on April 24, 2008, 03:07:22 PM

Many Mexicans see oil as last frontier against US invasion

By JULIE WATSON – 1 hour ago

MEXICO CITY (AP) — Even with oil prices at record highs, Mexico's state-run oil company is managing to lose money. But a presidential plan to fix Petroleos Mexicanos by inviting foreign help is stirring deep-seated emotions over sovereignty — and causing a paralysis that could doom America's third-largest oil supplier.

Leftist legislators have padlocked the doors of Congress, camping out in the chambers for two weeks in protest. Opponents on the right have attacked them in a national TV ad, invoking images of Adolf Hitler.

Everyone in Mexico — from top leaders to housewives — seems to be swept up in the fervor.

While President Felipe Calderon's administration calls the congressional lockdown an international embarrassment, Fernanda de Jesus Arriola gives up her afternoon soaps and takes her young children to march in Mexico City.

"Calderon is a right-winger who is going to take away our way of life," said Arriola, 35, pulling her 6-year-old daughter's pink Barbie suitcase as her family walked with hundreds of protesters. "It's the same as strangling us because foreign oil companies are exploiters who will enslave us."

Pemex is rapidly running out of the oil that provides more than one-third of Mexico's federal budget. Finding more will require drilling thousands of feet below the surface of the Gulf of Mexico — an exceedingly difficult challenge. Nearly everyone agrees that Pemex lacks the capacity to accomplish this without serious reforms.

The trouble is, Mexico's Constitution bans Pemex from joint ventures with private and foreign companies that have the technology and expertise to find oil in such deep water.

Calderon has backed off the politically explosive idea of changing the Constitution, proposing merely to ease some state restrictions on involvement by private companies.

His plan still retains much more state control than other Latin American government oil monopolies do. Even Cuba is working with outside companies to drill in the Gulf. Brazil's state-owned Petroleo Brasileiro SA has used joint ventures with private oil companies to become an industry leader, recently discovering what could be the world's third-largest oil field off its coast.

But while Mexicans may shop at Walmart and eat at McDonald's, oil is a birthright. The sentiment dates back to March 18, 1938, when President Lazaro Cardenas kicked out the American and European oil companies that refused to pay union wage demands while reaping Mexico's oil profits.

Every year on that day, school children learn about the bold eviction of foreign companies, especially those from the United States, whose annexation of half of Mexico's territory after the 1846 Mexican-American War still hurts.

Women offered their jewelry to help pay to establish the national oil company. Arriola says her grandparents gave their chickens and pigs, and she is hell bent on protecting the company 70 years later.

"We are defending our resources, our patrimony, our dignity," she said.

Arriola snarls traffic and waves banners daily with hundreds of other women, who call themselves the "Adelitas" based on a famous folk song about a female soldier who took up arms in the Mexican Revolution.

They are spurred on by leftist leader Andres Manuel Lopez Obrador, who still refuses to concede the 2006 presidential election he narrowly lost to the conservative Calderon.

Lopez Obrador had receded into the background until Calderon made his Pemex proposal. Now he's back to commanding tens of thousands of protesters in the streets.

But oil expert Justin Dargin says Mexicans' passion for their oil could doom the company — and possibly the country.

The national turmoil is keeping anyone from dealing with declining production, leaky pipelines and a lack of technology to tap into potential reserves in the Gulf, where U.S. companies are busily preparing to drill.

Mexico's Cantarell oil field — discovered in 1976 and one of the world's largest — is drying up. Pemex reported a 2007 net loss of US$1.48 billion (euro98 billion) this week, as its revenues are drained to fund schools, hospitals and public works. Meanwhile, every other major oil company is reinvesting unprecedented profits in oil exploration.

Mexico could lose its standing as a major oil exporter in five years if it does not find more oil, experts say.

"We're talking about the vitality of the Mexican state. That's how important this issue is," said Dargin, a research fellow at Harvard University.

Even what Calderon has on the table may not be enough. Boxed in politically, Calderon proposes merely easing bureaucratic barriers and letting Pemex pay outside contractors "bonuses" — not a percentage cut — for any oil they find. Analysts say that's a good start, but won't likely entice major oil companies to invest billions in deep-water drilling.

The impasse isn't likely to be resolved any time soon.

Congress remains under lockdown with Lopez Obrador's allies demanding a 120-day national debate on the issue. Legislators from the ruling National Action Party and the Institutional Revolutionary Party have proposed 72 days.

In an interview with The Associated Press, Lopez Obrador said Thursday that his protests had already succeeded by preventing what he called "el fast-track" for Calderon's reforms.

"They couldn't do what they wanted, which was to pass it quickly in the pre-dawn hours when no one was watching," said Lopez Obrador, who plans another mass rally on the issue Sunday in Mexico City's central square.

On the other side, a conservative group that supports Calderon's bill ran television spots comparing Lopez Obrador to Hitler. The spots were pulled this week after they outraged some viewers.

For Maria Elena Hernandez, 53, much more is at stake than Mexico's image, which wasn't helped when the congressional takeover forced the cancellation of an official state reception for India's president.

The retired secretary joined demonstrators singing the national anthem to police guarding an office building where legislators have fled in hopes of getting some work done.

"If we let down our guard, the Americans would come in and install their oil workers," said Hernandez, wearing a white baseball cap and T-shirt emblazoned with "Defend Pemex." "Soon they would be telling us that we have to pay rent to live here."

Title: Re: Meltdown
Post by: bwv 1080 on April 24, 2008, 05:08:00 PM

Oil Squeeze

With this winter's sudden spate of gasoline shortages now beginning to disappear, can motorists count on a hassle-free spring and summer on the highway? Hardly. By Memorial Day or shortly thereafter, shortages may start appearing all over again.

The problem this time is the Iranian oil shutoff. At first, U.S. officials dismissed the Iranian oilfield strike as a temporary phenomenon of no great consequence. But the strike has been dragging on since late October, and for the last month virtually no crude at all has been pumped out of the ground. Last week, in fact, the U.S. faced the bizarre situation of having to rush an emergency shipment of 200,000 barrels of diesel fuel and gasoline to Iran because local refinery output is insufficient to meet domestic needs.

Washington brows are beginning to furrow at the prospect that the U.S. might wind up with not even enough oil for itself, let alone anyone else. The nation depends on Iran for only about 5% of its petroleum needs, but other countries are nowhere near so lucky. Worldwide, Iran normally supplies about 20% of the total petroleum imports of all the consuming nations. Japan usually relies on Iran for 15% of its needs, and Western Europe generally is heavily dependent on Iranian oil, as is Israel, whose oil needs the U.S. has pledged to fulfill in the event of shortages. If the flow of Iranian oil remains stopped up for very long, the industrial nations will have to begin sharing the still available supplies. If that happens, the U.S. could suffer much more than a 5% drop in its normal supply and availability of crude.

So far, Saudi Arabia has helped to make up for the loss of Iran's oil by boosting its own output nearly 30% to some 10.3 million bbl. a day, close to the maximum that it is presently possible to pump from the Saudi fields. Iraq, Nigeria and Kuwait have also increased production somewhat. Right now, total world production is off by about 2 million bbl. a day. That is roughly equal to about 4% of global petroleum consumption, or more than enough to supply all the daily needs of Britain or Canada.

The oil companies are presently filling the gap by drawing upon their inventories, but that cannot continue for long. Even if all of Iran's striking oilworkers were to go back to their jobs this week, it could take as long as six months to bring the country's production back to an acceptable level. Oilmen actually say that if shortages of gasoline and other refined products are to be prevented from developing later this spring, the Iranian fields must start coming back on stream in the next six to eight weeks—a highly questionable prospect, given the country's political situation.

Occasional gasoline shortages this summer would merely foreshadow inevitable and worse dislocations next winter. Usually, the oil companies draw down their inventories steeply during the winter months anyway, then use the spring and summer to replenish their stocks. But U.S. inventories are already 10% below what they were this time last winter; they now stand at some 298 million bbl., or about a one-month supply. So if Iran's production is not resumed soon, says Energy Secretary James Schlesinger, "we would face much larger drawdowns next winter than we will have the resources to maintain."

Title: Re: Meltdown
Post by: BachQ on April 25, 2008, 04:08:11 PM

U.N.: Soaring food prices 'global crisis'

U.N. Secretary-General Ban Ki-moon calls for immediate action to quell rising food costs.
Last Updated: April 25, 2008: 10:00 AM EDT

VIENNA, Austria (AP) -- A sharp rise in food prices has developed into a global crisis, U.N. Secretary-General Ban Ki-moon said Friday. Ban said the U.N. and all members of the international community are very concerned, and immediate action is needed. He spoke to reporters at U.N. offices in Austria, where he was meeting with the nation's top leaders for talks on how the United Nations and European Union can forge closer ties.

"This steeply rising price of food - it has developed into a real global crisis," Ban said, adding that the World Food Program has made an urgent appeal for additional $755 million. "The United Nations is very much concerned, as all other members of the international community," Ban said. "We must take immediate action in a concerted way all throughout the international community." Ban urged leaders of the international community to sit down together on an "urgent basis" to discuss how to improve economic distribution systems and the production of agricultural products.

First Published: April 25, 2008: 7:31 AM EDT
(http://money.cnn.com/2008/04/25/news/food_crisis.ap/index.htm?postversion=2008042510)

Title: Re: Meltdown
Post by: BachQ on April 25, 2008, 04:09:33 PM

Why grocery bills are set to soar
PAUL WALDIE
From Friday's Globe and Mail
April 25, 2008 at 4:01 AM EDT

Canada's near-free-ride on food inflation is coming to an end and consumers better brace for some steep increases in their grocery bills. Food prices have been largely flat for months, mainly because of the surging Canadian dollar, which has reduced the cost of importing products from the United States such as fruits and vegetables. But with the dollar stabilizing near parity with the U.S. greenback and oil hitting record levels, "Canada's good luck on food prices is likely to run out in 2009," said Avery Shenfeld, a senior economist at Canadian Imperial Bank of Commerce. Mr. Shenfeld estimates food inflation will jump from zero to 3.5 per cent next year, outpacing the overall inflation rate for the first time in years. Another CIBC report forecast that oil prices will almost double by 2012, sending gasoline to $2.25 a litre.
(http://www.theglobeandmail.com/servlet/story/RTGAM.20080424.wfood25/BNStory/National/home)

Title: Re: Meltdown
Post by: BachQ on April 25, 2008, 04:10:49 PM

U.S. Economy: Sentiment Sinks to 26-year Low (Update2)
By Bob Willis

April 25 (Bloomberg) -- U.S. consumer confidence fell more than forecast in April to a 26-year low as record fuel prices and rising unemployment threatened to reduce spending. The Reuters/University of Michigan sentiment index decreased to 62.6, from 69.5 the previous month. The measure was down from a preliminary estimate of 63.2 issued on April 11. Consumers are growing increasingly anxious because the economy has lost almost a quarter million jobs so far this year, gasoline is up 17 percent and property values have fallen. Sales of houses and cars have declined as a result, contributing to a slowdown that may bring an end to the six-year expansion.
``Consumers are feeling the pinch, not only from the labor market, but also from prices,'' Aaron Smith, an economist at Moody's Economy.com in West Chester, Pennsylvania, said in a Bloomberg Television interview. ``There's a squeeze on incomes from two sides.''
Economists had forecast the consumer sentiment gauge would fall to 63.2 from 69.5 in March, according to the median of 60 projections in a Bloomberg News survey.
The index of consumer expectations for six months from now, which more closely projects the direction of consumer spending, dropped to 53.3 from 60.1 last month.
Stocks fell, pushing the Dow Jones Industrial Average down 56.2 points, or 0.4 percent, to 12,792.8 at 12:28 p.m. in New York.
Current Conditions
A measure of current conditions, which reflects Americans' perceptions of their financial situation and whether it's a good time to make big-ticket purchases like cars, decreased to 77 from 84.2 last month.
Consumers were also more concerned about inflation. Americans thought prices would increase 4.8 percent over the next 12 months, up from a 4.3 percent estimate in March. Longer term, inflation was pegged at 3.2 percent, the highest level since August 2006 and compared with 2.9 percent last month.
The economy lost 80,000 jobs in March, the most in five years, following a 76,000 drop in payrolls in each of the prior two months, according to figures from the Labor Department. The jobless rate rose to 5.1 percent, the highest level in more than two years.
Rising fuel costs have contributed to a drop in auto sales and prompted some shoppers to limit trips to malls. The average price of regular unleaded gasoline rose to a record $3.58 a gallon yesterday, according to data from AAA.
Auto Sales
Cars and light trucks sold at an average 15.2 million annual pace in the first three months of the year, the fewest since the third quarter of 1998. Some 14.9 million autos will be sold this year, the fewest since 1995, Standard & Poor's forecast this month.
AutoNation Inc., the largest publicly traded U.S. car dealer, yesterday said first-quarter profit fell 35 percent as weak housing markets in states including California hurt demand for new vehicles.
``We expect to continue to see a challenging automotive retail market as long as the current economic difficulties persist,'' Chief Executive Officer Michael Jackson said in a statement.
Only one-third of consumers polled by the University of Michigan said they planned to spend the tax-rebate checks that the Treasury Department is poised to send as part of the Bush administration's economic stimulus plan. The majority of Americans plan to use the money to pay down debt or boost savings, the report said.
Bush Comments
President George W. Bush today said Americans will start getting that tax rebates next week and predicted the money will give the economy a boost.
Economists surveyed by Bloomberg earlier this month forecast consumer spending will rise at a 0.5 percent pace in the first half of the year, the smallest gain since 1991. The economy is unlikely to grow at all through June, the survey also showed.
Those polled put the odds of the economy entering a recession this year at 70 percent, up from 50 percent in the prior month's poll.
The biggest housing slump in a generation is leading the downturn. Home prices nationwide have fallen 10 percent from their peak, according to the S&P Case-Shiller home-price index, and many economists are forecasting values will keep dropping. Falling property prices make Americans feel less wealthy and reduce the amount of equity owners can tap for spending.
Rising foreclosures are also lifting stress levels. Foreclosure filings jumped 57 percent and bank repossessions more than doubled in March from a year earlier as rates on adjustable mortgages increased, Irvine, California-based RealtyTrac Inc., a seller of default data, said last week.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=ap4JffQHDqgE&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 25, 2008, 04:11:58 PM

Oil jumps past $119 on U.S.-Iran tensions
Fri Apr 25, 2008 1:07pm EDT
By Randy Fabi

LONDON (Reuters) - Oil jumped more than $3 to over $119 a barrel on Friday on Nigerian and North Sea supply disruptions and rising tensions between the United States and Iran. U.S. crude futures surged $3.44 to $119.50 a barrel by 1248 p.m. EDT (1648 GMT), near the all-time peak of $119.90 reached on Tuesday. London Brent crude traded $3.12 higher at $117.46 a barrel, after hitting a new record of $117.56 earlier.

A cargo ship hired by the U.S. military fired warning shots at boats suspected to be Iranian, the U.S. Navy said on Friday, underscoring tension in the Gulf as the Pentagon sharpened its warnings to Tehran.
Iran denied there had been any confrontation between its forces and a U.S. ship in the Gulf, Iranian media reported.

Tensions between Washington and the OPEC nation last year helped send oil to then record highs. Crude prices have surged more than five-fold since 2002 as supplies struggle to keep pace with rising demand in emerging economies such as China. Oil also found support on Friday from Nigerian production lost due to a workers strike and rebel attacks and disruptions caused by a planned refinery strike in Scotland. "You have everything coming together and that's lifting us off again," said Tom Bentz, analyst for BNP Paribas Commodity Futures in New York. A strike by Nigerian workers at Exxon Mobil forced the company to shut down some 200,000 barrels per day of crude oil output, a senior union official said. Nigerian rebels said on Friday they had sabotaged an oil pipeline in the Niger Delta belonging to Royal Dutch Shell late on Thursday. The company had already shut 169,000 bpd of Bonny Light crude oil output after a pipeline attack there a week ago.

"Our candid advice to the oil majors is that they should not waste their time repairing any lines as we will continue to sabotage them," the Movement for the Emancipation of the Niger Delta (MEND) said in an emailed statement. Shell confirmed the Friday attack and said it was trying to assess the extent of the damage to the pipeline. In the North Sea, BP said it had begun shutting down UK's Forties oil pipeline in preparation for a planned two-day strike at a major Scottish refinery this weekend.
The 700,000 barrel-a-day Forties pipeline carries about half of Britain's North Sea oil production.
(http://www.reuters.com/article/ousiv/idUSSYD3274320080425)

Title: Re: Meltdown
Post by: BachQ on April 25, 2008, 04:15:18 PM

Japan inflation hits 10-yr high; bonds hit hard
Fri Apr 25, 2008 2:58am EDT
By Yoko Nishikawa
TOKYO (Reuters) - Japanese annual inflation hit a decade-high of 1.2 percent in March, helping trigger one of the biggest ever sell-offs in yen bonds as investors realized Japan has no immunity from price pressures facing the rest of the world, and that could eventually lead to a rate hike despite a weak economy. Trading in bond futures on the Tokyo Stock Exchange was halted for a time to allow the market to settle, the first test of a circuit breaker mechanism introduced to the market this year.
Like other central banks, the Bank of Japan faces rising fuel, raw materials and food prices as it ponders what to do with rates, already at a very low 0.5 percent in Japan.

But because the increases in consumer prices in major economies are largely due to climbing costs, rather than strengthening demand, investors have until recently been eyeing more rate cuts, rather than hikes. Gasoline prices rose 19.0 percent in March from a year earlier, while that of heating oil rose 29.2 percent. The so-called "core, core CPI", excluding prices of fresh food and oil products, rose 0.5 percent from a year earlier. "What's happening now is price increases involving elements of deflation," said Takeshi Minami, chief economist at Norinchukin Research Institute, who stuck .
(http://www.reuters.com/article/ousiv/idUST34031320080425)

Title: Re: Meltdown
Post by: BachQ on April 25, 2008, 04:17:38 PM

The Peak Oil Crisis: The Case for 2008
Written by Tom Whipple
Thursday, 24 April 2008

It is conventional wisdom for most of the people following the peak oil story that we still have a few years to go before the real troubles begin. Some say 2011, others 2015 or later, but in general, among those calculating the depletion vs. new supply balance most have been talking about troubles starting in years rather than months.

Let's ponder for a second the meaning of "peak oil." Ever since the concept was invented some 50 years ago, peak oil has meant the point in time when world oil production increases to a level that never again will be reached. For most of us, however, peak oil will not be a point on a government chart, but will be the day when we drive up to a gas station and find the tanks empty, restrictions on how much we can buy, or more likely a price that makes us realize our lifestyles are going to change. We can no longer afford to use our cars in the manner that we have been doing all our lives.

In recent weeks there have been developments suggesting that the troubles associated with peak oil may be coming faster than many realize. First, it is necessary to recall that world oil production has been essentially flat for the last three years. We did hit a new nominal "peak" a couple of months back, but the increased production was minor as compared to the forces of demand building across the world. With production stagnant, consumption in the rich countries holding about the same, and consumption in China, India, Russia and the Middle Eastern oil producers surging higher, something had to give. The "give" was in those places that could afford $20 a barrel oil, but could not afford it at $120 a barrel. For the last few years, an increasing share of the oil flow going to poor countries has been redirected to those that could pay the price. Outbidding the world's poor is finite, however, so that at some point there simply won't be enough oil going to poorer places for the richer ones to buy up. Then we have the interesting news from the big producers. After ten years of rapid post-Soviet growth, Russian oil production seems to have reached a plateau. As Russian domestic consumption is rising rapidly, there is nowhere for their exports to go but down – and they are. Next the Saudis, who after spending $100 billion or so on new oil wells in recent years, say they will soon have the capacity to produce 12.5 million barrels a day. However, the King of Saudi Arabia announced last week that he has decided to leave some of their oil in the ground for the grandchildren. Somebody passed the word the Saudi production was going down to 9 million barrels a day from 9.2 million -- so much for the hope that the Saudis were going to keep us in our accustomed lifestyles. Then we have Mexican production and exports dropping faster than predicted and Venezuela doing its best to sell its oil to anyone but the U.S. The most important factor, however, may be the Chinese who insist on growing their economy at 10 or 11 percent a year. Chinese oil imports are up 14 percent over last year in the first quarter and by almost 25 percent in March as domestic production stagnates and Beijing prepares for the Olympics. Chinese imports for May are already looking to be above normal.

As could be expected, given flat or dwindling world exports, and stiff competition for the remainder, U.S. imports of crude and petroleum products have not been keeping up during the last few weeks and U.S. stockpiles have been dropping more than normal for the time of year. Some say this is because our economy is slowing and we will need less oil. Others say ordering and refining more oil is about to pick up so that all will be well shortly. The definitive answer to this question is not far away, for this is the time of year when our stockpiles of crude oil, gasoline, and distillates normally build. If the situation stabilizes and stocks start climbing in the next few weeks, we can relax a little for another year. This week's stockpile report shows some improvement with crude inventories up, but gasoline and distillate inventories still falling. Despite the weakening U.S. economy, the Department of Energy still shows U.S. oil and gasoline consumption up by nearly one percent over last year. Thus far in 2008 our crude imports are down 1.7 percent over last year and our net imports of refined products are down by 5.2 percent. If our stockpiles do not start to build more rapidly in the next month or two, then watch out, for in recent years the U.S. has slowly moved towards a just-in-time system for oil and products to lower inventory costs. Keep in mind that much of our "stockpile" is trapped in pipelines, sitting in partially-processed tanks at refineries, and aboard ships and barges where it is no use to the consumer. It was only a couple of years ago that we were hours away from shortages. There are many forces at work in the world's oil markets today. How they will all balance out over the rest of the year is impossible to tell. During the last few months, however, developments suggesting much higher prices and shortages have come to the fore as witnessed by the steadily increasing prices for oil and gasoline. Unless something comes along to reverse these forces in the next few months, we are likely to suffer very serious economic troubles before the year is out.

(http://www.fcnp.com/national_commentary/the_peak_oil_crisis_the_case_for_2008_20080424.html)

Title: Re: Meltdown
Post by: BachQ on April 25, 2008, 04:18:18 PM

The Four Seasons Of Civilization

Duane Elgin, author of numerous books including Voluntary Simplicity, postulated fifteen years ago that civilizations evolve through specific stages which ironically follow the shape of a bell curve, similar to the Peak Oil curve, in their development and to which Elgin refers as the "four seasons" of growth. This was long before the bell curve of Peak Oil was familiar to many other individuals besides M. King Hubbert, father of the Peak Oil theory, who died four years before Elgin's book was published.

According to Elgin, Stage I of the development of a civilization, "Springtime" is characterized by high growth and an era of faith in future potential. During springtime, there is little bureaucratic complexity, and activities are largely self-regulating. Stage II or "Summer", is an era of reason where social consensus begins to weaken and bureaucratic complexity increases with less self-regulation and more external regulation. "Autumn" follows, ushering in an era of cynicism where consensus weakens considerably, special interest groups surpass the power of a shared social purpose, and bureaucratic complexity mounts faster than the ability to effectively regulate. An era of despair characterizes Stage IV, "Winter", and the collapse of consensus is supplanted by conflicting social purposes. Bureaucratic mechanisms and their complexity become overwhelming, and society begins to break down.

Elgin believes that three possible outcomes are likely to emerge from the breakdown of the system. One outcome is collapse as the biosphere is pushed beyond its limits and can no longer support the burden of humanity. Stagnation is another option, in which members of the system expend energy on simply maintaining the status quo. Revitalization is the most desirable option which results from a "period of intense communication and reconciliation that builds a working consensus around a sustainable pathway into the future."

The author notes that we get collapse by "perpetuating the status quo and running the biosphere into ruin. We get stagnation when citizens are passive and rely on remote bureaucracies and technological solutions to handle a deteriorating local-to-global situation. We get revitalization only when we directly engage our predicament as individuals, families, communities, and nations."

Although Elgin has presented the three options in this particular order, it is clear to me that the current civilization has long since passed through stagnation and is rapidly collapsing. In my opinion, while revitalization may have been possible decades ago when society's elite first learned of Peak Oil, climate change, and numerous renewable energy options, it is now possible only as a consequence of collapse for the simple reason that the progression of collapse has rendered voluntary revitalization extraordinarily problematic, if not impossible.

Richard Heinberg's Peak Everything reveals unequivocally that virtually every resource on earth has reached or passed its peak of availability to the human race. Elgin's 1993 theory, however, offers a larger picture in which the likelihood that civilization itself has peaked and is on the downward side of the bell curve is logically plausible.

The immediate "winter of our disconnect" (and discontent), described above, has been characterized by an astonishingly rapid unraveling of civilization which appears to accelerate with every passing day. The larger winter is not about specific events such as foreclosures, bankruptcies, food rationing in America, or melting glaciers, but rather the final evolutionary stage of civilization and its eventualities in which we now find ourselves embroiled. In other words, particular occurrences of unraveling indicate irrefutably that we have entered Peak Civilization.

It is crucial, in my opinion, to comprehend Peak Civilization so that just as we understand that all of earth's resources have peaked which would prevent us from embracing the chimera of a "return to normalcy", we more astutely grasp the progression of human evolution and its implications in the macrocosm. That is to say that a clear understanding of Peak Oil prevents any rational human being from assuming that a return to cheap and abundant energy is feasible in his/her lifetime. Likewise, recognizing that civilization is in an irreversible trajectory of descent may assist us in conserving our valuable mental, emotional, and spiritual energy so that we do not expend it on phantoms of long-term revitalization.

Past-Peak Elections-You Have No Government

At this point it becomes necessary to distinguish between long-term and short-term revitalization. From my perspective, as stated above, collapse must occur in order for long-term revitalization to become possible, so attempting to prevent collapse also prevents one from honoring the current stage of civilization now unfolding. One example of understanding civilization's "winter" is to grasp that the only thing more futile than addressing energy depletion with ethanol use is the delusion that legitimate presidential elections actually occur in America offering valid choices between two genuinely opposing candidates who represent two distinct political parties and who are beyond domination, contamination, or exploitation by the transnational corporations that in fact manage the United States.

Furthermore, to fully understand Peak Civilization is to understand that the federal government per se does not exist, but rather an elite corporate cartel engaged in the management of citizens-citizens who are now completely on their own in terms of their survival as the pseudo-government continues to implode. Moreover, the cartel's direct intent is the cessation of nation states to be supplanted by corporations and their subsidiaries.

Therefore, the task before us is not to perpetuate the status quo by participating in the ersatz federal election debacle, but to, in the words of John Michael Greer "transition to a Third World lifestyle." I believe that any politician who suggests that we can do otherwise and survive as individuals or as a nation, may be committing a crime against humanity. Politicians and centralized systems are incapable of effecting meaningful change. Or as Greer states, "...getting the Federal government to do something constructive about the situation, for instance - [is] a waste of time. That sort of change isn't going to happen. It's not simply a matter of who's currently in power, although admittedly that doesn't help. The core of the problem is that even proposing changes on a scale that would do any good would be political suicide."

Although nothing could be more unpalatable for the American public, transitioning to a Third-World lifestyle is precisely what it is being forced to do. And as Greer comments:

There's no way to sugar-coat that very unpalatable reality. Fossil fuels made it possible for most people in the industrial world to have a lifestyle that doesn't depend on hard physical labor, and to wallow in a flood of mostly unnecessary consumer goods and services. As fossil fuels deplete, all that will inevitably go away. How many people would be willing to listen to such a suggestion? More to the point, how many people would vote for a politician or a party who proposed to bring on these changes deliberately, now, in order to prevent total disaster later on?

What Peak Civilization Really Looks Like

Peak Civilization by definition means the disappearance of public education, healthcare, government-issued currency, commercial food production, public access to regional water supplies, interstate commerce, the North American energy grid, and the very infrastructure of the United States. Yet one need not succumb to fatalism. While long-term revitalization cannot be realized now, its seeds can be and are being planted by the proliferation of vibrant relocalization movements erupting and evolving around the world, many of which have been spotlighted at the Truth To Power website. As Duane Elgin emphasizes: "A revitalizing society is a decentralizing society, with grassroots organizations that are numerous enough, have arisen soon enough, and are effective enough to provide a genuine alternative to more centralized bureaucracies."

The first headlines of food rationing in America are buzzing across the internet as I write this article. They underscore the unequivocal reality that collapse is going to compel us to feed ourselves or quite simply, we will perish. I believe that food security is the most urgent, the most immediate issue to which we must attend at this moment of Peak Civilization. For months, this website has been informing readers about food storage and preservation and other aspects of preparedness. It is now time, if you have not already done so, to organize groups of citizens in your neighborhood, schools, churches, and community centers to plant and maintain gardens. In addition, collapse is compelling us to rapidly mobilize our neighborhoods and communities to not only accumulate our own supply of stored water but to organize citizens to work with local public water utilities to ensure that they remain public and are not privatized.

Health care professionals reading these words need to consider offering local workshops on a regular basis teaching citizens how to treat injuries and illnesses in the absence of a viable healthcare system. Doctors, nurses, dentists, and all manner of medical personnel are likely to be overwhelmed with patients during and after the full-scale breakdown of the system when hospitals and clinics have closed and almost no one can afford health insurance. A recent CBS News video link emailed to subscribers recently by Truth To Power confirms the imminent, total collapse of America's healthcare system and reveals the extent to which anyone with the slightest bit of training in the field is likely to find her/himself inundated with throngs of sick people desperately seeking care.
(http://atlanticfreepress.com/content/view/3791/32/)

Title: Re: Meltdown
Post by: BachQ on April 25, 2008, 04:19:40 PM

Here's what happens: as prices rise, oil-exporting countries benefit from an influx of petrodollars. That, in turn, spurs economic expansion, which in turn increases domestic oil consumption. As demand rises, more oil is devoted to meeting that domestic demand, leaving less oil to export.
As exports fall, worldwide prices rise even more.
What Brown finds scarier than $120 oil is the latest projections from the International Energy Agency that forecast a 4.4 percent rise in oil consumption this year from key emerging markets — China, India, Russia and the Middle East.

Outpacing our demand

For the first time, the agency predicts, demand from those regions will outpace ours. In other words, the first steps of the Export Land Theory may be under way. Increases in world supplies have been relatively modest compared to this surging demand. Because exports are essentially the oil that's left after domestic demand is met, exports will decline, Brown said.
Consider what he predicts will happen with Saudi Arabia, the second-largest supplier of oil to the U.S. after Canada: If production remains at about its current level, its rising domestic consumption will claim all of its exports in about 20 years. He believes we'll soon begin seeing declines of about 5 percent annually.

"When you look at the initial two years of decline, it's the scariest thing in the world," Brown said. "The very lifeblood of the Western economy is draining away before our eyes."
China, of course, is often blamed for the increase in global oil demand, given its huge population and emerging economy.

Its consumption will rise almost 5 percent this year, according to the agency. So will India, which by year end will be using more oil than is produced by Venezuela annually. The agency predicts a larger rise — almost 6 percent — in the Middle East, a region that for years produced much of the world's oil, yet consumed little. Newer fields such as Angola are adding to supply, but the increases won't be enough to offset declines already under way from countries such as Mexico, the third-largest U.S. oil supplier, Brown said
(http://www.chron.com/disp/story.mpl/business/steffy/5729358.html)

Title: Re: Meltdown
Post by: bwv 1080 on April 25, 2008, 04:57:05 PM

MONEY & BANKING
The death of equities

The masses long ago switched from stocks to investments having higher
yields and more protection from inflation. Now the pension funds--the
market's last hope--have won permission to quit stocks and bonds for
real estate, futures, gold, and even diamonds. The death of equities
looks like an almost permanent condition--reversable someday, but not
soon.

...Pension fund money can now go not only into listed stocks and
high-grade bonds but also into shares of small companies, real estate,
commodity futures, and even into gold and diamonds...

To millions of people, that ruling could mean a higher return on their
pension fund assets after years in which inflation has nibbled away at
the return from mere traditional investments. On another level, the
Labor Dept. ruling [for pension funds] is just one more in a nearly
endless string of unhealthy things that have happened to the stock
market over the past decade.

At least 7 million shareholders have defected from the stock market
since 1970, leaving equities more than ever the province of giant
institutional investors. And now the institutions have been given the
go-ahead to shift more of their money from stocks--and bonds--into
other investments. If the institutions, who control the bulk of the
nation's wealth, now withdraw billions from both the stock and bond
markets, the implications for the U.S. economy could not be worse
worse. Says Robert S. Salomon Jr., a general partner in Salomon Bros.:
"We are running the risk of immobilizing a substantial portion of the
world's wealth in someone's stamp collection."

Until now, the flight of institutional money from the financial markets
has been merely a trickle. But it could turn into a torrent if this
year's 60% increase in oil prices touches off a deep recession while
pushing inflation sky-high. As it is, the nation's financial markets
and its capital flows have been grossly distorted by 13 years of
inflation. Before inflation took hold in the late 1960s, the total
return on stocks had averaged 9% a year for more than 40 years, while
AAA bonds--infinitely safer--rarely paid more than 4%. Today the
situation has reversed, with bonds yielding up to 11% and stocks
averaging a return of less than 3% throughout the decade.

Further, this "death of equity" can no longer be seen as something a
stock market rally--however strong--will check. It has persisted for
more than 10 years through market rallies, business cycles, recession,
recoveries, and booms.

The problem is not merely that there are 7 million fewer shareholders
than there were in 1970. Younger investors [Baby Boomers?], in
particular, are avoiding stocks. Between 1970 and 1975, the number of
investors declined in every age group but one: individuals 65 and
older. While the number of investors under 65 dropped by about 25%,
the number of investors over 65 jumped by more than 30%. Only the
elderly who have not understood the changes in the nation's financial
markets, or who are unable to adjust to them, are sticking with
stocks.

Even if the economic climate could be made right again for equity
investment, it would take another massive promotional campaign to
bring people back into the market. Yet the range of investment
opportunities is so much wider now than in the 1950s that it is
unlikely that the experience of two decades ago [the 1950s], when the
number of equity investors increased by 250% in 15 years, could be
repeated. Nor is it likely that Wall Street would ever again launch
such a promotional campaign. The end of fixed stock market
commissions has thinned the ranks of firms that sell stocks and
reduced the profit from selling stocks for virtually all firms. Wall
Street has learned that there are more profitable things besides
stocks to sell, among them options, futures, and real estate, that it
did not have in the 1950s. For better or for worse, then, the U.S.
economy probably has to regard the death of equities as a
near-permanent condition--reversible some day, but not soon.

Says Alan B. Coleman, dean of Southern Methodist University's business
school: "We have entered a new financial age. The old rules no longer
apply."

The one rule whose demise did the stock market in could be summed up
thus: By buying stocks, investors could beat inflation. Stocks were a
reasonable hedge when inflation was low. But they proved helpless
against this awesome inflation of the past decade. "People no longer
think of stocks as an inflation hedge, and based on experience, that's
a reasonable conclusion for them to have reached," says Richard Cohn,
an associate professor of finance at the University of Illinois.
Indeed, since 1968, according to a study by Salomon of Salomon Bros.,
stocks have appreciated by a disappointing compound annual rate of
3.1%, while the consumer price index has surged by 6.5%. By contrast,
gold grew by an incredible 19.4%, diamonds by 11.8%, and single-family
housing by 9.6%.

"Given the type of consistent high-level inflation we've been
experiencing, the stock market represents speculation, and some
tangible assets represent the opposite," says Edward R. McMillan,
chief economist for Seattle's Rainier National Bank.

Today, one of the strongest proponents of gold investing is Alaska
Governor Jay Hammond. He plans to resubmit a bill to the legislature
early next year to lift a law, passed in the early 1960s, that
prevents the state's public employee and teachers retirement funds
from investing in gold, foreign securities, or real estate. At least
three other states are also interested in tangibles for their
retirement funds. "The statute was fine for the 1960s, but
unfortunately we're not living under those same economic conditions,"
says Alaska's deputy treasury commissioner, Peter Bushre. "We're
living under double-digit inflation, huge balance-of-trade deficits,
and a serious energy problem. The current action in both the bond
market and equity market bear [pun?] me out."

...For investors, however, low stock prices remain a disincentive to
buy [so much for buying on the dips]. The only stocks that have done
well recently have been hyper-growth stocks such as energy-related,
gambling, high-technology, or fast-growing small companies. A decade
ago, by contrast, the entire equity market was perceived as an
inflation hedge. Then, in the early 1970s, large growth stocks,
especially the so-called "nifty fifty" were in vogue as inflation
fighters--until the 1974 recession dealt them a blow from which they
have yet to recover.

Unfortunately, hyper-growth stocks are not big enough to attract big
institutional money. Private pension funds, for example which control
some $300 billion in assets and are the single most important factor
in the financial markets, put more than 120% of their new cash into
equities in the late 1960s [a sell signal?]. To do so, they even sold
bonds to raise money to buy stocks. Today the amount of new pension
money flowing into equities is a minuscule 13% as the funds have built
up their cash portions or stuffed their portfolios with short-term
securities paying high rates.

In short, the financial markets are so eccentric that for more than 10
years the largest returns have come from taking the fewest risks.
Indeed by constantly rolling over short-term paper, investors have
beaten returns on stocks and bonds...

...In fact, the only reason the mutual fund industry has been able to
survive the death of equities is the dramatic success of such funds,
which invest in T-bills, bank CDs, and other short-term paper. Mutual
fund assets now total some $65 billion, and of this amount, some $22
billion represents assets of money-market funds. And whereas stocks
once made up 80% of mutual fund assets, today that figure has slumped
to less than 50%.

Clearly, money market funds--most of which allow investors to write
checks on their accounts--will prosper until interest rates begin to
ease. But even when rates do fall, the money will not flow back into
the stock market from which it came. Indeed, putting life back into
the U.S. equity market will be a long and difficult process.

Other foreign stock markets such as those in Toronto, Hong Kong, and
London have been doing as well or better [than the U.S. market]. One
reason is the influx of U.S. money that a decade ago would have flowed
into Wall Street. Atlantic Richfield Co., for one, will invest in
foreign stocks for the first time this year. The company will take 3%
of its U.S. equity allocation and put it into shares of companies
based in Japan, Germany, Britain, and France. "The attraction is that
these economies are growing at a rate equal to or better than our own
and have business cycles different from ours," says Howard H.
Ockelmann, the big oil company's investment officer.

Undoubtedly, another reason for the surge of investment in foreign
stocks is the negative attitude toward business in the U.S. "The
Japanese do everything they can to make their strongest and most
competitive companies do well. Americans attack their largest and
most successful companies," says Andrew J. Hutchings, an equity
manager for Royal Trust Co. in Toronto.

Wall Street looks beyond stocks

As investors have fled equities, so Wall Street, to survive, has fled
them, too. Indeed, the flight from equities, combined with the
freeing of fixed brokerage commission rates on May 1, 1975, has
changed the very nature of the securities industry. And while the
industry has markedly fewer firms than it had, and thus should be
sounder financially, the truth is that Wall Street's future still is
very much in doubt. "Anybody who thinks that it will be easy sailing
for Wall Street during the 1980s is dead wrong," says James Balog,
senior executive vice-president of Drexel Burnham Lambert Inc. in New
York. "There still are many problems that we must deal with."

...securities firms will continue to diversify away from equities, all
the while hoping that the stock market will somehow regain some of its
luster and make their task somewhat easier. At the same time,
executives of those firms will be devising and implementing new
long-term strategies, not really knowing whether they or their
organizations will remain in the business long enough to reap the
benefits from some of these plans.

Whatever caused it, the institutionalization of inflation--along with
structural changes in the communications and psychology--have killed
the U.S. equity market for millions of investors. "We are all
thinking shorter term than our fathers and grandfathers did," says
Manuel Alvarez de Toledo of Shearson Loeb Rhoades Inc.'s Hong Kong
office.

Today, the old attitude of buying solid stocks as a cornerstone for
one's life savings and retirement has simply disappeared. Says a
young U.S. executive: "Have you been to an American stockholders'
meeting lately? They're all old fogies. The stock market is just not
where the action's at."

Title: Re: Meltdown
Post by: BorisG on April 25, 2008, 07:37:38 PM

Bush says rebates going out Monday will boost economy

Apr 25, 9:41 PM (ET)

By TOM RAUM

WASHINGTON (AP) - President Bush said tax rebates will start going out Monday, earlier than previously announced, and should help Americans cope with rising gasoline and food prices, as well as aid a slumping economy.

Democrats said they were glad the rebate checks were about to go out, but suggested that multinational oil companies were not among the businesses the stimulus package was originally designed to help.

"Starting Monday, the effects of the stimulus will begin to reach millions of households across our country," Bush said Friday in remarks on the South Lawn of the White House.

Those first rebates will be directly deposited into people's bank accounts. The Internal Revenue Service had been saying direct deposits wouldn't start until next Friday. Bush said paper checks would begin going out on May 9, a week earlier than previously announced.

"The money is going to help Americans offset the high prices we're seeing at the gas pump, the grocery store, and also give our economy a boost to help us pull out of this economic slowdown," Bush said.

Bush's emphasis on fuel and food prices differed from other comments he's made since signing the economic stimulus legislation, intended to aid the economy by boosting overall consumer spending - which accounts for roughly two-thirds of the nation's economic activity.

Bush has suggested the rebates could trigger a spending spree. "When the money reaches the American people, we expect they will use it to boost consumer spending," he said last month.

By saying expressly that people could use these one-time checks to pay for such necessities as food and gas, Bush underscored the deepening challenges facing the economy.

Democrats were quick to pick up on the change of focus.

"It's galling to think that taxpayers' stimulus checks will be lining the pockets of OPEC. The sad truth is that the average American family will spend almost their entire stimulus check on higher gas prices this year," said Sen. Charles Schumer, D-N.Y., chairman of the Joint Economic Committee of Congress.

OPEC is the Organization of Petroleum Exporting Countries.

"Unless the administration gets OPEC to increase oil supply, American consumers are going to be in for a scorching summer of $4 gasoline with no relief in sight," Schumer said.

House Speaker Nancy Pelosi, D-Calif., agreed that people "need this rebate to cope with the rising cost of gas and groceries." She said that, while the rebates would help to get the economy moving, there was a need for a second stimulus package "and we have begun some conversation with the administration and Republicans."

As he had earlier in the week, Bush used the word "slowdown" to describe the state of the economy. He has denied that the nation is in a recession, although many economists say it is.

"It's obvious our economy is in a slowdown. But, fortunately, we recognized the signs early and took action," Bush said.

The rebates - up to $600 for an individual, $1,200 for a couple and an additional $300 for each dependent child - are the centerpiece of the government's $168 billion stimulus package, enacted in February. Roughly 130 million households are expected to get them.

Bush made the comments before boarding his helicopter at the start of a day trip to Connecticut.

People must file a tax return for their 2007 income to be eligible for a rebate check.

The IRS now says all checks for those who filed tax returns on time are scheduled to be deposited or mailed by July 11.

The economy - burdened by the collapse of home prices, a financial and credit crisis, and now rising energy and food prices - grew at an anemic 0.6 percent in the final three months of last year and is believed to have gotten even weaker in the first three months of this year.

The government will report on the first quarter's performance next week.

With the economy faltering, the nation's unemployment rate has climbed to 5.1 percent, the highest since September 2005, when it suffered from the devastating blows of the Gulf Coast hurricanes. Job losses in the first three months of this year neared the quarter-million mark.

Foreclosures have surged to record highs and financial companies have taken multibillion losses on mortgage investments that soured. The situation has sent a tremor through Wall Street and has sent the administration, Congress and presidential contenders looking for ways to provide relief.

---

AP Economics Writer Jeannine Aversa contributed to this report.

Title: Re: Meltdown
Post by: XB-70 Valkyrie on April 25, 2008, 07:50:08 PM

Food shortages
Oil prices skyrocketing
Habitat destruction
Urban sprawl
Fish stocks on the decline
Housing prices skyrocketing
Deforestation
Desertification
Heavy metal toxicity in all the world's oceans
Longer and longer commutes
Climage change

Maybe if we all think really, really, really hard, we can figure out what may be silently driving all these diverse phenomena!

Oh, what could it be!? What could it be!? I wonder!? ::)

Title: Re: Meltdown
Post by: Sean on April 25, 2008, 07:53:45 PM

Dm, good grief, you have some good reading in those last few posts! Who are you!? I like this point below, but the Peak Civilization stuff and the peak oil problems forthcoming in terms of months not years have that plausible ring to them that makes you question and put your life into perspective.

I'm in S.Korea. Their grain stocks are poor, but they have strong communitarian values and self support that might see them through some serious supply problems? (Or maybe it won't- such values didn't do 60m Chinese much good in the Great Leap Forward). The savest places in the world could be what are presently seen as the bottom of the pile- the villages in central Africa who don't know what oil is and aren't even connected by road: they won't even know if the rest of the world folds. I have travel plans to get out there actually, I've been before, and I'm thinking about bringing them forward.

QuoteHere's what happens: as prices rise, oil-exporting countries benefit from an influx of petrodollars. That, in turn, spurs economic expansion, which in turn increases domestic oil consumption. As demand rises, more oil is devoted to meeting that domestic demand, leaving less oil to export.
As exports fall, worldwide prices rise even more.

Title: Re: Meltdown
Post by: BorisG on April 25, 2008, 08:01:40 PM

Quote from: Sean on April 25, 2008, 07:53:45 PM
The savest places in the world could be what are presently seen as the bottom of the pile- the villages in central Africa who don't know what oil is and aren't even connected by road: they won't even know if the rest of the world folds. I have travel plans to get out there actually, I've been before, and I'm thinking about bringing them forward.

Congo Cracks Down on 'Penis Theft'

By Bridget Johnson, Reuters, Apr. 22, 2008

If you're of the faint of heart or sensitive to the discussion of certain sensitive body parts, don't read on. If you love the kind of odd news that Reuters dishes out on a daily basis, read on.
So nobody's ever surprised at a story of violence in Congo. This is a place where limbs are lost, people are disemboweled, and few blink an eye. But some Congo residents are furious about a different kind of loss:

"Police in Congo have arrested 13 suspected sorcerers accused of using black magic to steal or shrink men's penises after a wave of panic and attempted lynchings triggered by the alleged witchcraft.
Reports of so-called penis snatching are not uncommon in West Africa, where belief in traditional religions and witchcraft remains widespread, and where ritual killings to obtain blood or body parts still occur.

Rumours of penis theft began circulating last week in Kinshasa, Democratic Republic of Congo's sprawling capital of some 8 million inhabitants. They quickly dominated radio call-in shows, with listeners advised to beware of fellow passengers in communal taxis wearing gold rings.

Purported victims, 14 of whom were also detained by police, claimed that sorcerers simply touched them to make their genitals shrink or disappear, in what some residents said was an attempt to extort cash with the promise of a cure.

'You just have to be accused of that, and people come after you. We've had a number of attempted lynchings. ... You see them covered in marks after being beaten,' Kinshasa's police chief, Jean-Dieudonne Oleko, told Reuters on Tuesday."

Title: Re: Meltdown
Post by: Sean on April 25, 2008, 08:04:11 PM

I've been to Kinshasa- one of the most amazing and interesting places in the world, totally insecure and chaotic beyond description.

Title: Re: Meltdown
Post by: BachQ on April 26, 2008, 09:01:23 AM

Quote from: Sean on April 25, 2008, 07:53:45 PM
I like this point below, but the Peak Civilization stuff

I do too. If this Peak Civilization framework is true, we're all fucked given our current social/political structure .........

Title: Re: Meltdown
Post by: BachQ on April 26, 2008, 09:03:37 AM

IEA warns against retreat on biofuels
By Carola Hoyos and Javier Blas in London

Published: April 25 2008 22:30 | Last updated: April 25 2008 22:30

Biofuel production is critical to meeting current and future fuel demand in spite of its possible role in driving up food prices, the west's energy watchdog has warned.

Amid signs of a growing backlash against biofuels in the wake of the worst food price spike since the 1970s, the International Energy Agency said that the crop-based fuel was vital to meeting current and future demand.
(http://www.ft.com/cms/s/1be14e44-12f7-11dd-8d91-0000779fd2ac.html)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 07:19:47 AM

Oil Climbs to a Record on Shut U.K. Pipeline, Nigeria Strike
By Mark Shenk

April 28 (Bloomberg) -- Crude oil rose to a record $119.93 a barrel in New York on the shutdown of a North Sea pipeline and as a strike and militant attacks reduced output from Nigeria. BP Plc closed the Forties Pipeline System, carrying 40 percent of the U.K.'s oil production, after a strike at the Grangemouth refinery cut power supplies. A walkout by Exxon Mobil Corp. workers entered a fifth day in Nigeria, where production has dropped 50 percent since April 25. ``As long as there are disruptions of high-quality crude, supplies prices are going to move higher,'' said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ``If the Nigerian strike isn't settled, we could easily see oil rise to $125 by the end of the week.''

Crude oil for June delivery rose 43 cents, or 0.4 percent, to $118.95 a barrel at 10:38 a.m. on the New York Mercantile Exchange. Oil increased 79 percent in the past year as supply failed to keep up with surging demand in China, India and the Middle East. Chakib Khelil, president of the Organization of Petroleum Exporting Countries, said on April 26 that the group won't consider raising output before its next meeting in September. Investors moved to commodities as a hedge against the dollar as it fell to a record low against the euro, and as an alternative to equity and bond markets.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=amzIBTQ4LTAM&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 07:20:49 AM

Commodities / Oil Companies
Apr 27, 2008 - 02:40 PM

By: Martin_Hutchinson

Venezuelan President Hugo Chavez said a few months ago that if the United States invades Iran , we could expect to see oil at $200 a barrel. With oil already approaching the $120 mark, we may get there even without invading Iran. My colleague - Money Morning Investment Director Keith Fitzgerald - agrees with Chavez that oil prices are headed much higher: In fact, since back in December, when crude oil was trading at $90, Fitzgerald has been predicting that petroleum prices would reach $187 a barrel . And there's growing support for his view: In mid-March, Goldman Sachs forecast oil prices of $175 within two years while just yesterday (Tuesday), noted MSNMoneycentral columnist James Jubak predicted that oil would reach $180 a barrel in the next few years.
(http://www.marketoracle.co.uk/Article4490.html)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 07:21:25 AM

Fuelled with Innovation
By Sheila McNulty, Financial TimesPublished: April 28, 2008, 00:05

The world's major oil companies are being forced to turn to the once unimaginable raw materials of chicken fat, tar and algae to make fuels and sustain their businesses into the next century.For, in spite of massive legacy positions in oil and gas built over 100 years, gone are the days of the 1970s, when the majors controlled 85 per cent of the world's oil reserves - the raw materials on which they built their businesses.Instead, state-owned oil companies in countries ranging from Russia to Venezuela now control more than 80 per cent of reserves, and heightened nationalism from the owner governments often blocks the majors from exploiting resources. When the majors are permitted in, they are frequently subjected to high royalties and taxes. This is forcing them to look beyond fossil fuels for their raw materials. "The IOC (international oil company) model that has proven very successful for the last century - it does need to transform itself," says Jim Mulva, Conoco chief executive. "We don't have the availability of new exploration acreage that, historically, we used to get. We, as producers of energy, have to look for newer, exotic types of energy."Conoco has developed technology to turn coal into a synthetic natural gas, is turning solid bitumen into synthetic fuel in Canada's vast oil sands, and is working with Tyson Chicken to produce diesel from animal fat. Now it is trying to decide whether to develop the coal technology with partner Peabody Energy, or simply to sell it, so diversifying to include the business of developing technology for third-party use. "This is how we are working to transform ourselves," Mulva says.A large part of that transformation is to come from technology, which Conoco hopes to use not only to help fully develop its 50 billion barrel oil and gas resource base but to enable it to move beyond conventional fuels.

(http://www.gulfnews.com/business/Business_Feature/10208987.html)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 07:22:38 AM

The collapse of the United States is accelerating: Oil in Euros vs. US

In the last eight years implementing the plans for the Project for the New American Century (PNAC) designed "to promote American global leadership" has backfired. To accomplish PNAC's goals, all threats needed to be eliminated. From the onset, the United Sates earmarked two countries as mortal enemies: Venezuela and Iran. With Venezuela, it is well documented that the CIA attempted to overthrow the democratically elected government of Chavez. And with Iran, the United States continues to use it as a scapegoat for its failures in Iraq. These cold war tactics however are proving to be US's undoing.
The United States is hemorrhaging from every orifice, and oil prices can be used to measure the rapidity of its demise.

In April 2006, Venezuelan president Hugo Chávez launched "a bid to transform the global politics of oil by seeking a deal with consumer countries which would lock in a price of $50 a barrel." At the time, this proposed price was $15 a barrel below global market levels, and what must surely seems to be a steal at the current $118 a barrel.

How critical was the decision not to take Chavez's proposal seriously? Just two short years later, in April 2008, President Mahmoud Ahmadinejad of Iran is stating that oil at current levels is too cheap. That's calling a 136% increase in price not enough, and most analysis and the market seem to agree. So what has changed in that time? The perceived value of the US dollar of course.
(http://www.thepeoplesvoice.org/cgi-bin/blogs/voices.php/2008/04/27/the_collapse_of_the_united_states_is_acc)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 07:23:41 AM

SUVs hit used car lots as consumers look to downshift into more affordable vehicles
By ADRIAN SAINZ , Associated Press
April 27, 2008

MIAMI - For used car dealer Ivan Hoyos, accepting a sport utility vehicle as a trade-in is no longer good business. The only SUV he's offering at his Florida Auto Sales and Finance is his mother's red 2004 Mitsubishi Endeavor. "Nobody is buying used SUVs," said Hoyos, 35, who stopped accepting them six months ago. "The truth is more and more dealers are staying away from used SUVs and large trucks ... It doesn't pay. You can't have a unit sitting on the lot forever."
As gas prices pass $3.50 a gallon nationally and the economy teeters on recession, independent used car dealers like Hoyos and massive chains like AutoNation Inc. are having trouble selling used SUVs as buyers prefer smaller, more fuel-efficient vehicles likes hybrids and crossovers (CUVs).
(http://www.startribune.com/business/18271049.html%5B/url)

Title: Re: Meltdown
Post by: BorisG on April 28, 2008, 07:48:13 AM

SUVs, the Edsels of the 21st century? Good.

I welcome high oil prices, anything, to get these roadhogs out of my sight. $:)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 08:47:37 AM

Buffett says recession may be worse than feared
Mon Apr 28, 2008 11:09am EDT
By Jonathan Stempel

(http://www.reuters.com/resources/r/?m=02&d=20080428&t=2&i=4049932&w=&r=2008-04-28T150919Z_01_N28474614_RTRUKOP_0_PICTURE0)

NEW YORK (Reuters) - Warren Buffett, the world's richest person, said on Monday the U.S. economy is in a recession that will be more severe than most people expect. Buffett made his comments on CNBC television after his Berkshire Hathaway Inc (BRKa.N: Quote, Profile, Research) (BRKb.N: Quote, Profile, Research) agreed to invest $6.5 billion in the takeover of chewing gum maker Wm Wrigley Jr Co (WWY.N: Quote, Profile, Research) by Mars Inc in a $23 billion transaction.

"This is not a field of specialty for me, but my general feeling is that the recession will be longer and deeper than most people think," Buffett said. "This will not be short and shallow. "I think consumers are feeling gas and food prices," he added, "and not feeling they've got a lot of money for other things."
He was not immediately available for further comment. Known for his frugality, the 77-year-old Buffett has lived in the same 10-room Omaha, Nebraska, house for a half-century, despite being worth an estimated $62 billion.

On Wednesday, the U.S. Commerce Department is expected to say how fast the economy grew in the first quarter. Economists on average have projected that gross domestic product grew at an annualized 0.2 percent rate in the quarter. Two quarters of declining GDP is a traditional indicator of recession. That last happened in 2001. Economists expect the U.S. Federal Reserve on Wednesday to cut a key lending rate for a seventh time beginning last September. Berkshire is a $197 billion conglomerate best known for its insurance holdings, such as auto insurer Geico Corp, but it owns more than 70 businesses.
Many of those businesses are tied to the housing market, including Acme Brick Co, insulation maker Johns Manville, and the real estate brokerage HomeServices of America Inc.

(http://www.reuters.com/article/ousiv/idUSN2847461420080428)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 02:45:43 PM

OPEC president sees $200 oil possible: report
Mon Apr 28, 2008 5:59am EDT

ALGIERS (Reuters) - OPEC President Chakib Khelil does not rule out oil prices reaching $200 a barrel, even though supply is adequate, because the market is driven by the dollar's slide, Algerian government newspaper El Moudjahid reported on Monday. "Questioned about a possible rise which would go to $200, the minister did not rule out this eventuality, explaining that this rise is indexed from now on to the fall in the dollar or to the rise in the dollar," El Moudjahid reported.

"In terms of fundamentals, stocks are high, demand is easing, supply is satisfactory. Therefore normally, without geo-political problems and the fall of the dollar, the prices of oil would not be at this level," he was quoted as saying. Khelil, a former World Bank official, is also Algeria's Minister of Energy and Mines.
He added: "The prices are high due to the fact of the recession in the United Sattes and the economic crisis which has touched several countries, a situation which has an effect on the devaluation of the dollar, and therefore each time the dollar falls one percent, the price of the barrel rises by $4, and of course vice versa," he was quoted as saying in brief remarks to journalists on Sunday.
He added that: "If this (the dollar) strengthens by 10 percent, it is probable that (oil) prices will fall by 40 percent."

If the U.S. economic situation improved from now to the end of the year "that would help the market to stabilize." "But I don't think that an increase in production would help lower prices, because there is a balance between supply and demand and the stocks of gasoline in the United States have recorded a surplus and are at their highest level for five years." The independent El Watan newspaper reported Khelil as saying that if the dollar's value on currency markets stayed as it was at present, then oil prices would be expected to remain at between $80 and $110 a barrel.
(http://www.reuters.com/article/pressReleasesMolt/idUSL289112520080428)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 02:46:45 PM

Gas Could Hit $10 a Gallon: Report
2008-04-28 12:40pm

The price of a gallon of gasoline could soon cost $10 - more than double what the average national price currently is - based on predictions by a pair of industry analysts.

Based on current market conditions and the volatile world in which we live, the analysts said, there is every reason to believe gasoline prices in the U.S. could skyrocket as the summer driving season approaches.

Their conclusion that gas prices could rise to somewhere between $7 and $10 a gallon are also based on indications crude oil prices could climb as high as $200 a barrel in a few years.

The chairman of Houston-based Dune Energy, Alan Gaines, told The New York Sun he sees prices rising to between $7 and $8. The other analyst, Sean Brodrick - a commodities tracker at Weiss Research in Jupiter, Fla. - believes gas will reach $8 - $10 a gallon, the paper reported.

Such prices would be a shock to the U.S., but drivers in Europe are used to paying as much as $9 a gallon - which includes a $2-per-gallon tax.

Early in 2007, when oil was hovering around $50 a barrel and gas prices averaging around $2.30 Gaines was accurate in his prediction that oil would soar above $100 a barrel and gasoline would reach $4 a gallon this summer.

But, the Sun reported, the prediction of $200 oil is more dubious, considering it would cause major economic distress in the U.S. and the world.

"Further, just about every expert I talk to cautions me to expect a sizable pullback in oil prices, maybe to between $50 and $70 a barrel, expecially if there's a global economic slowdown," Sun writer Dan Dorfman said.

(http://www.newsroomamerica.com/usa/story.php?id=416214)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 02:48:14 PM

Gas prices hammer small businesses
Service providers look to cut costs

By KEN SUGIURA
The Atlanta Journal-Constitution
Published on: 04/28/08

The miles pile up on Stephanie Wiernik's Ford Ranger, and the math makes less and less sense.
For six years, Wiernik has been the rare violin teacher who traveled to students' homes to give lessons.
"I enjoy that, because it makes me more a part of their family culture," said Wiernik, 29, of Woodstock.
But with gas prices at record levels and still rising, Wiernik has concluded she has to make a change to make the job worthwhile — raising fees or having students come to her are two options."It doesn't make sense, money-wise, to drive to people's houses," she said.

The bite of historically high fuel prices has snared even young violinists. Those reliant on their cars and trucks to make a living — couriers, plumbers, mobile dog groomers — are making changes to stay afloat.
"It's costing me about $500 a day to run six trucks," said Jonathan Perez, owner of a Duluth air conditioning and heating service company. "It's a huge impact on our business."

Perez has made some difficult concessions to gas prices. Two weeks ago, he bumped up the cost of a service call from $55 — the price it had been since he went to work for his father nine years ago — to $65. While Perez' Cool Masters companyprides itself on same-day service, dispatchers now wait a day or two until more calls arrive in the same area to cut down on trips.

Perez estimates that three out of 10 potential customers go elsewhere when they learn of the wait time.
Previously, fuel costs were not "a major factor in our overhead," Perez said. "Now it's the first thing we have to think about."

At Marietta Dodge, the Sprinter cargo van has become an increasingly popular purchase. Business link manager Don Garner said he has sold about 100 Sprinters, noted for their fuel efficiency, since January.
Among his customers is Superior Plumbing in Kennesaw, which says it is benefiting, relatively speaking, from its decision to switch its entire fleet of cargo vans to the Sprinter. Owner Jay Cunningham said the Sprinter gets about 20 miles per gallon compared with about 10 mpg in the old vans.

"When you're using what feels like hundreds of gallons an hour, you want to look at that idea seriously," he said.

Fuel efficiency is a drain for Sonya Sanchez, a mobile dog groomer. Her ambulance-sized truck putters along at 9 mpg, she said. The truck is saddled with 80 gallons of water, adding about 640 pounds.
She spends between $1,600 and $2,000 on gas monthly. Because of the extra costs, she says her assistants take home more money than she does.
In an Atlanta Journal-Constitution article in November 2006, Sanchez touted mobile businesses — office supplies, veterinarians, car service and the like — as the wave of the future.

Now, she said, "I don't know how they're hanging on."

In a typical year, Georgia Messenger Service, a courier in the Doraville area, might raise rates once, possibly twice. However, because of gas increases, the company has already raised rates twice since January."We have a heart, too," said vice president Kenny Overby. "It hurts us to have to do it."
Wiernik knows all about it. Teaching the violin helped put her through college and has been her full-time job for five years. When considering raising her fees — between $20 and $37.50 for a half-hour lesson — she anguishes over squeezing out middle-class students.

But, with students spread out across Cobb and north Fulton counties, she doesn't think she has a choice as long as gas prices stay high.

At the end of the school year, she said, "I'm putting on my ruthless face."
(http://www.ajc.com/business/content/business/stories/2008/04/28/fleetgas_0428.html)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 02:49:36 PM

Brazil Oil Trapped by 500-Degree Heat, Salt Barrier (Update2)
By Joe Carroll

April 28 (Bloomberg) -- Brazil's plan to become one of the world's biggest oil exporters hinges on exploiting crude 6 miles below the ocean surface in deposits so hot they can melt the metal used to carry uranium to nuclear plants.

Tapping what may be the biggest oil finds in the Western Hemisphere in three decades will require equipment that can withstand 18,000 pounds per square inch of pressure, enough to crush a pickup truck, pipes that can carry oil at temperatures above 500 degrees Fahrenheit (260 Celsius) and drill bits that can penetrate layers of salt more than one mile thick.

Petroleo Brasileiro SA, the state-controlled oil company, is betting on the Tupi and Carioca fields to become one of the world's seven biggest crude exporters. Until the tools needed to exploit the reservoirs are invented, the crude will remain locked under the sea, said Matt Cline, a U.S. Energy Department economist.

``This is a very, very technically challenging environment where no one's ever done this,'' Cline, who tracks the Latin American oil industry, said in a telephone interview from Washington. ``These discoveries are in very deep water, and once you get to the seabed they are very deep under the floor, with a layer of salt that is definitely a difficult barrier.''

Brazil's oil will be harder to develop than the Gulf of Mexico, where the deepest wells are now in production, Cline said. Exxon Mobil Corp. and Chevron Corp., the two biggest U.S. oil companies, saw diamond-crusted drill bits disintegrate and steel pipes crumple when they attempted to tap deposits beneath the Gulf's seafloor two years ago.

Uncharted Depth

Pumping oil from the Brazilian finds, parts of which are 32,000 feet (10,000 meters) below the ocean's surface, will require boring almost twice as far down as the world's deepest producing offshore well.
The obstacles will discourage development unless crude prices stay high, said Tina Vital, an analyst at Standard & Poor's in New York. U.S. oil futures, which reached a record at $119.93 a barrel in after-hours electronic trading yesterday, have jumped 81 percent in the past year.

Engineers will have to overcome temperatures that range from near freezing above the ocean floor to temperatures that can melt bismuth, used for transporting uranium rods and for shotgun shells. Layers of salt will also increase the challenge because the crystals absorb seismic waves used to pinpoint oil deposits.

Seismic Issue

``The seismic issue is important because if you don't identify the location of the oil properly, you're going to waste a lot of money when you drill the hole in the wrong spot,'' said Vital, a former Exxon engineer.

Brazil pumped 2.13 million barrels of oil a day in the last three months of 2007, more than OPEC members Angola, Libya and Algeria.

Tupi, 155 miles (250 kilometers) off Brazil's coast, may begin production by 2012, according to consulting firm Strategic Forecasting in Austin, Texas. The field may have 8 billion barrels of recoverable oil.

No start date has been set for Carioca, which Petroleo Brasileiro said will take at least three months to evaluate. A Brazilian regulator said this month the reservoir may have 33 billion barrels.
If confirmed by further drilling, the reserves will be triple the size of Alaska's Prudhoe Bay, the largest U.S. field.

Record Depth

The ocean-depth record for production was set last year by Anadarko Petroleum Corp. The company is extracting natural gas from beneath 8,960 feet of water in the Gulf of Mexico, where pressure measures 3,069 pounds per square inch, squeezing joints and tearing at seals.

``What we do at that water depth in the ocean is similar to NASA's space program, but they get to do it without any pressure trying to attack them,'' Kevin Renfro, production engineering manager at Woodlands, Texas-based Anadarko, said in a November interview.

Petrobras hasn't said how much it spent to sink wells at Tupi and Carioca. Similar drilling by Exxon and Chevron Corp. in the Gulf of Mexico cost $180 million to $200 million for each well.
``A big find might not be a good find if it costs so much to develop that it's not commercially viable,'' S&P's Vital said. ``We don't have any idea at all yet of all the costs that are going to be involved. Those costs are going to set the floor for oil prices.''

$50,000 Drill Bits

Chevron, which has the deepest Gulf of Mexico exploration well, including distance below the seafloor, destroyed as many as a dozen $50,000 drill bits at each of the 14 wells in its $4.7 billion Tahiti project.
Exxon Mobil abandoned a Gulf project that would have been the deepest well after pressure and heat shut down the venture in August 2006. The Irving, Texas-based company developed pipes tough enough to withstand temperatures that would shatter regular steel at its Sakhalin-1 project in Russia. The metal may help make Brazil's offshore fields accessible, Vital said.

``These challenges in the Brazilian offshore area are too great for any one company or even country to be able to digest themselves,'' Vital said.
(http://www.bloomberg.com/apps/news?pid=20601109&sid=aoC91kszkcf4&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 28, 2008, 02:50:37 PM

Retail gasoline price hits record $3.60/gallon: EIA
Mon Apr 28, 2008 4:47pm EDT

WASHINGTON (Reuters) - The U.S. average retail price for gasoline skyrocketed 9.5 cents over the last week to a new high of $3.60 a gallon, the federal Energy Information Administration said on Monday.
The national average price for regular, self-service gasoline is up 63 cents from a year ago due to high crude oil costs, which on Monday reached a record $119.93 a barrel at the New York Mercantile Exchange.

The pump price has jumped 21 cents a gallon in the last two weeks alone and is expected to keep climbing.

The EIA's weekly survey of service stations showed gasoline was the most expensive on the West Coast at $3.79 a gallon, up 5.2 cents. San Francisco had the highest city price at $3.92, also up 5.2 cents.

The Rocky Mountain states had the lowest regional price at $3.48 a gallon, up 6.2 cents. Houston had the best bargain at the pump, up 8.1 cents to $3.47.

Separately, the average price U.S. truckers paid for diesel fuel reached a new record of $4.18 a gallon, up 3.4 cents in the last week and $1.37 higher than a year ago, the EIA said.

The central Atlantic states had the most expensive diesel at $4.38 a gallon, up 0.6 cent. The Gulf Coast region had the cheapest fuel at $4.11, up 3.6 cents, the EIA said.

Truckers on Monday drove their big rigs through downtown Washington and held a rally at the Capitol to protest high diesel prices. It costs about $1,200 to fuel up a tractor trailer.

Rising fuel costs could increase the cost of goods transported by trucks, including food, retail and manufactured goods.
(http://www.reuters.com/article/newsOne/idUSWBT00888120080428)

Title: Re: Meltdown
Post by: Sean on April 28, 2008, 03:07:05 PM

What's the price of oil today? Is it over $120 yet? Is peak oil happening now? I hope not.

Title: Re: Meltdown
Post by: Al Moritz on April 28, 2008, 11:14:28 PM

Glenn Beck: U.S. is a suicidal superpower

http://www.cnn.com/2008/US/04/24/beck.oil.prices/index.html?iref=mpstoryview

NEW YORK (CNN) -- If you're a poor sap who needs to eat or drive in the near future, then you might want to consider taking out a second mortgage (assuming you could even get one) pretty soon.

Food and gas prices have been all over the news lately, and even a big dumb rodeo clown like me can see that it's all connected. Our policies, which try to cater to everyone from oil company executives to environmentalists, end up benefiting no one -- and now we're all paying the price.

I know that real economists probably will say that the causes of these skyrocketing prices are extremely complicated to understand, but the truth is that it's actually pretty simple: We've done this to ourselves.

I don't know if it's because of our arrogance, our stupidity or maybe both, but I believe that history may one day judge America as the most suicidal superpower of all time. After all, what country that cares about its future would do what America has done to its supply of food and fuel, two of the most critical things that any civilization needs to survive?

For example, look at the way we treat our food supply. We've spent decades giving billions of dollars in government subsidies with incentives for the wrong things, we've mandated that huge areas of farmland stay open for "conservation" and we're using grains that could feed tens of millions of people to make a crappy biofuel that you can't even buy anywhere.

That's not arrogance?

Our fuel policy has been even more absurd. We're completely dependent on foreign countries, many of whom hate us, to keep our trucks moving, our planes flying and our homes warm.

That's not arrogance and suicidal stupidity?

Take a look at the top five countries we currently rely on for oil imports. You tell me if these are the five you would choose if you were creating your own world superpower from scratch: Canada, Saudi Arabia, Mexico, Nigeria, Venezuela.

Aside from Canada, that's not exactly a "Who's Who" list of stable, America-loving countries.

And if you think I cut off the list at five because the next five are so friendly, think again. Here's the next five: Iraq, Angola, Kuwait, Colombia, Ecuador.

The point is that we don't control our own destiny, foreigners do. Despite bipartisan hatred for high oil prices, they've gone up 49 percent since 2006. If we could've done something, anything, to stop that, we would have. But the sad fact is that we can't.

That's why, instead of offering real solutions, most politicians offer something else: blame. Democrats blame Republicans, Republicans blame Democrats, and nothing ever gets solved. President Bush provided a good example of that last week when he was asked about high oil and gas prices.

"We've had an energy policy that neglected hydrocarbons in the United States for a long period of time, and now we're paying the price. We should have been exploring for oil and gas in ANWR, for example," he said. "But, no ... our Congress kept preventing us from opening up new areas to explore in environmentally friendly ways. And now we're becoming, as a result, more and more dependent on foreign sources of oil."

Personally, I think the president is right; we should be drilling in the Arctic National Wildlife Refuge. In fact, we should've been drilling there a decade ago, but that's not the point anymore. Opening ANWR now would be like stopping at the bathroom on your way to the electric chair; you're only delaying the inevitable.

Should we still do it? Yes. Frankly, we need all the time we can buy ourselves to find a long-term solution; our nation's very survival is at stake. But ANWR is not the answer, it's a Band-Aid, and I worry that our shortsighted politicians would use it as an excuse not to look for viable replacements for oil, which is what we really need.

Fortunately, there is some good news in all of this: Oil prices this high mean that a lot of formerly dismissed alternatives will finally make good economic sense.

For example, back in 1980, Congress passed the Energy Security Act, which led to the creation of something called the Synthetic Fuels Corp. (SFC). Lawmakers provided SFC with up to $88 billion in loans and incentives to get started (the equivalent of about $230 billion in today's dollars) with the goal of creating two million barrels a day of synthetic oil within seven years.

So why aren't you putting SFC oil into your SUV right now? Well, it turns out that members of the Organization of Petroleum Exporting Countries didn't appreciate the competition so they started bringing down the price of oil. From 1980, when SFC launched, to 1986, when it was shut down, oil went from more than $39 a barrel to less than $8 a barrel. Suddenly, synthetic oil didn't seem so important anymore.

In announcing the SFC's closure, then-Energy Secretary John Herrington said that oil prices had simply dropped too low to make it a viable business.

But the good news is that those economics don't work anymore. The state of Montana, which is leading the synthetic fuel charge, says we can now make it for somewhere around $55 a barrel. That's more than a 50 percent discount from what it costs to buy the real stuff.

It's the opportunity of a lifetime, a chance to use OPEC's price gouging and monopoly against it.

So let me be the big, dumb rodeo clown once again and ask the obvious question: Why aren't we doing it?

Title: Re: Meltdown
Post by: Al Moritz on April 28, 2008, 11:18:17 PM

http://en.wikipedia.org/wiki/Synthetic_fuel

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 07:43:02 AM

Quote from: Al Moritz on April 28, 2008, 11:14:28 PM
We've done this to ourselves.

Precisely. We're our own worst enemy.

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 07:44:47 AM

Quote from: Al Moritz on April 28, 2008, 11:14:28 PM
Opening ANWR now would be like stopping at the bathroom on your way to the electric chair; you're only delaying the inevitable.

:D (also very true!)

Title: Re: Meltdown
Post by: MN Dave on April 29, 2008, 07:48:02 AM

Quote from: Dm on April 29, 2008, 07:43:02 AM
Precisely. We're our own worst enemy.

Well duh. ;D

Our time is over. We blew it.

Title: Re: Meltdown
Post by: BorisG on April 29, 2008, 07:50:20 AM

BP and Shell post big profits in era of record oil prices

By Jane Wardell, AP Business Writer, Tuesday April 29, 11:02 am ET

BP and Shell post forecast-busting first quarter profits on back of record oil prices

LONDON (AP) -- BP PLC and Royal Dutch Shell PLC, Europe's two biggest oil producers, posted forecast-busting first-quarter earnings on Tuesday thanks to record crude oil prices that are expected to bolster profits across the industry.
The combined profits of $17 billion reignited calls for a windfall tax on oil profits as consumers struggle to pay for food and fuel.

British Prime Minister Gordon Brown suggested that some of those profits should be reinvested in costly exploration for new oil reserves in the North Sea.

BP posted a 63 percent surge in first-quarter net profit to $7.6 billion (4.9 billion euros), while Shell reported a 25 percent rise, to a record $9.08 billion (5.81 billion euros).

Revenue at BP jumped 44 percent to $89.2 billion (57.1 billion euros), while sales at Shell soared 55 percent to $114 billion (72.95 billion euros).

Last week ConocoPhillips reported a 16 percent rise in net income to $4.14 billion. Like BP and Shell, the third biggest U.S. producer far outpaced industry expectations. More big profits are expected from the biggest two U.S. companies, Exxon Mobil Corp. and Chevron Corp., when they report first-quarter earnings later this week.

Crude oil hit $111.80 per barrel during the quarter, while gas jumped an average of 22 percent. Crude has pushed even higher since, reaching a record $119.93 per-barrel this week.

BP shares jumped 5.7 percent to 611.5 pence ($12.06, while Shell rose 5.2 percent to 26.03 euros ($40.51).

The enormous profit reports from European companies coincided with the end of a two-day refinery strike in Britain that shut off 700,000 barrels of oil per day, brought from the North Sea to a BP plant.

Truck drivers staged a protest in London's Park Lane on Tuesday, blaring their horns to protest a 30 percent rise in the price of diesel over the past year. A similar protest took place in Washington, D.C. on Monday, and it wasn't the first.

"The price of fuel is becoming something many families are struggling with," said Sheila Ranger, a spokeswoman for the RAC Foundation, a commuter advocacy group. "This will be the last straw for some motorists."

Shell's Chief Financial Officer Peter Voser said oil companies are not to blame.

"We don't understand the oil price at this stage," he said. "The fundamentals will not justify an oil price as we see it at the moment."

Shell's earnings from oil production rose 52 percent to $5.14 billion (3.3 billion euros), due almost entirely to the price increases. The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day, as a 9 percent rise in gas production outweighed a 6 percent fall in oil production.

Stripping out the impact of oil inventories that have risen in value, refining profits would have fallen 20 percent, Shell said.

"It seems that better marketing and trading were able to offset the weak refining environment," analyst Alexandre Weinberg of Petercam.

Shell has invested heavily to improve production after a string of setbacks, including an accounting scandal in 2004. More recently, it has faced attacks on its pipelines in Nigeria and a forced sale of part of its stake in a major project on Russia's Sakhalin Island to a state-run enterprise.

BP's profit follows an even rougher period for the company from production outages, U.S. environmental fines and fraud and the scandal-tinged departure of its chief executive.

Chief Executive Tony Hayward, who took over from John Browne a year ago, has focused on bringing new production and refining capacity on line to improve earnings.

"At last, it appears that BP is beginning to improve its operational performance and this looks set to drive a stronger financial performance in the second half," said Tony Shephard, analyst at Charles Stanley & Co.

BP's closely watched replacement cost profit rose 48 percent to $6.59 billion (4.34 billion euros), compared with $4.44 billion in the first quarter of 2007. The replacement cost figure is viewed by many analysts as the best measure of an oil company's underlying performance because it excludes changes in the value of crude inventories, measuring the amount it would cost to replace assets at current prices.

The company said refining availability improved for the sixth successive quarter.

"BP is still not firing on all cylinders but its operational turnaround looks to be on track with a strong second half recovery in prospect," said Charles Stanley & Co. analyst Tony Shephard.

AP Business Writer Toby Sterling in Amsterdam contributed to this report.

Title: Re: Meltdown
Post by: bwv 1080 on April 29, 2008, 08:46:48 AM

New York Bank Failure

In The Bronx, N. Y., a small merchant went to a branch of Bank of United States and asked officials to buy his stock in the institution. They told him to keep it, that it was a good investment. He misunderstood, and by late afternoon a good-sized run had developed. Police kept clamorous depositors in line. The bad news spread to other branches.

That afternoon most of the great bankers of New York gathered on the tenth floor of the Federal Reserve Bank of New York. Specifically, their meeting was precipitated by the run on Bank of United States. But actually the run was only the climax to weeks of silent withdrawals, months of rumor, two attempts to merge Bank of United States with three other banks (TIME, Dec. 8). Only two days before the run, it was announced that the second attempt to merge had failed.

To the bankers' meeting came about 100 executives. Practically all of the great Manhattan institutions were represented. A late arrival was Charles Edwin Mitchell of National City Bank. He found the door locked, turned to a guard and said: "I am Mr. Mitchell."

"That doesn't impress me," responded the guard.

Eventually Mr. Mitchell was admitted. The gathering he saw was probably as great in dollar-power as any similar meeting ever held. Perhaps Mr. Mitchell recalled the momentous meeting in 1907, the year he arrived from Chicago to start his Manhattan banking career.*

The room into which Mr. Mitchell was admitted was the Governor's Room. Soon the bankers began breaking up into little groups, wandering through the building, earnestly and gravely discussing what should be done if Bank of United States failed.

Another late arrival was lanky Owen D. Young who came about 11 p. m. in full dress, accompanied by Thomas William Lamont of J. P. Morgan & Co. Looking taller than usual in his full dress, Mr. Young paused to peer down at and converse with small, able Isidor Kresel, counsel for Bank of United States, also the busy new special investigator of New York's magistracy scandals. Shortly before 3 a. m. Lieutenant Governor Herbert H. Lehman came, was hurriedly ushered into the conference room by James Herbert Case, chairman of Federal Reserve Bank of New York, who, for the public good, had previously agreed to head the merger into which Bank of United States failed to go.

Not until 3 a. m. did the bankers begin to leave. And not until 4 a. m. did the entire conference disband. Then Joseph A. Broderick, Superintendent of Banks in New York State, announced that he would have something to say in the morning. Reporters easily guessed what it would be, were sorry that their morning papers could not carry the sensational news that the Superintendent of Banks had taken over Bank of United States.

To the bank's depositors, many of whom were in line by 9 a. m., the news brought some hysteria. To the Stock Exchange, unsettled all week by fear of this development, the news brought uncertainty, alternate selling and buying. To the market in bank shares it brought much selling. If the Bronx merchant who had tried to sell his Bank of United States stock the day before had succeeded, he would have received 11½a share. After the closing, he would have been lucky to get more than $3. Last year this stock sold at $240.

But while the late conference of the preceding night had failed to prevent the closing, it had at least given bankers a definite plan of action. To all European. houses and newspapers assurance had been sent that Bank of United States, despite its imposing name, was only a small State bank, had no connection with the U. S. Government. And with unprecedented speed, members of New York Clearing House announced they would lend 50% of Bank of United States' deposits as soon as balances could be checked. Proudly signing the Clearing House statement were two banks which had contemplated entering the four-ply merger—Manufacturers Trust and Public National Bank.∙Their admission to the Clearing House relieved many a person of worry.

The troubles of Bank of United States began shortly after it entered a vigorous period of expansion. For many months its deposits have fallen, and it is estimated that now $160,000,000 is tied up against $212,000,000 on deposit Oct. 17. Half of the deposits are thought to be in thrift accounts.† Many large accounts were also tied up. The Salvation Army had on deposit $50,000 of the proceeds of the Army-Navy charity football game (see p. 34). J. C. Brownstone & Co., a clothing firm whose senior partner is a Bank of United States director, had the bulk of its liquid assets in the bank, asked for a receiver. Burns Bros. Coal dropped sharply on the Exchange on rumors that it too was involved, but the company announced it had less than $100,000 in the bank. The City of New York sought in vain to release a $1,500,000 deposit. Another big depositor was Industrial Council of Cloak, Suit & Skirt Manufacturers. The bank has around 400,000 depositors, 23,000 shareholders. Last week the State was busy investigating reports that the bank had sold stock to depositors at $198 a share, promised repurchase in the event of a decline, an illegal banking act.

The immediate difficulties are supposed to lie in large frozen assets, consisting of loans on mortgages, real estate and buildings, loans to the garment and fur trades. The bank's exact position will not be known for a long time, but the official hope that it will be reorganized is not widely accepted.

Conservative Manhattan bankers last week were angry at Bernard K. Marcus, dark-haired, heavily-built president of Bank of United States. His aim was perhaps much too high. Only last year he stated: "Often we've put two or three days work into one. We have gone ahead two or three times as fast as we would have had we been working only one day at a time." To bankers, a day's work is a day's work, to be done well, thoroughly. Constantly repeated was the story that at every conference Banker Marcus had adopted an attitude of "You know you are afraid to let my bank fail, so meet my terms." Complicating the bank's affairs is the existence of 57 subsidiary companies which are believed to have borrowed $20,000,000 of the bank's funds.

Significance. Many a banker argued late and loudly over the question of whether the big organizations ought to have prevented the failure of Bank of United States, cost what it might. One side said it would have been worth $50,000,000 to prevent fear from spreading through the ranks of the financially ignorant. The other side said that in helping the weak the strong impair their own strength, and hence the fundamental strength of the country. Agreed: It depends upon the particular case.

Title: Re: Meltdown
Post by: bwv 1080 on April 29, 2008, 08:57:04 AM

The Biggest Bankruptcy Ever

THE nation's largest railroad succumbed last week to a lethal combination of politics, tight money, mismanagement and fumbled Government rescue efforts. A federal court ordered the tottering Penn Central Transportation Co. into a bankruptcy reorganization. The order prevents creditors from collecting a mountainous debt, while permitting trains to run as usual. Its impact was felt far beyond the railroad. The Penn Central's financial collapse, largest in U.S. corporate history, spread anxiety among businessmen and Government officials about the fortunes of several other large corporations—to say nothing of other railroads.

There have been widespread, but so far unconfirmed, rumors that some conglomerates, airlines and other fast-expanding companies are in money trouble. In Philadelphia, Dolly Madison Industries, an overbuilt conglomerate, last week petitioned for a bankruptcy reorganization. So did Four Seasons Nursing Centers, a large Oklahoma-based chain.

Both the Penn Central debacle and the general corporate cash bind raised concern about the precarious condition of the commercial-paper market (see following story). Like Penn Central, many companies have been using short-term borrowings in that market to finance long-term projects, a classic formula for disaster. Now corporations with anything less than top credit ratings will find increasing difficulty in selling their own notes and bonds, even to refinance existing debts.

Potential for Mischief. It was the Penn Central's liquidity crisis that forced the railroad to declare insolvency. In his petition to the court, Chairman Paul Gorman said that the line was "virtually without cash, unable to meet its debts, [and] has no means of borrowing." The petition declared only that the company could not repay $9,795,000 in commercial notes and $21,900,000 in debt and rental charges on its equipment, all due by July 1. But that is a minuscule part of the railroad's financial woes.

The transportation company lost $182 million last year, and by Government estimate is highballing toward a $150 million deficit this year. Though the railroad's parent holding company, Penn Central Co., has assets of nearly $7 billion, the bulk of its salable holdings of real estate, securities and other non-rail property is already pledged to secure some $2.6 billion of debt, including $700 million falling due this year.

Three weeks ago the Administration agreed to help the railroad by letting the Defense Department underwrite $200 million in bank loans. But that plan ran into such severe political fire from key Democrats in Congress that the Administration withdrew its offer. The critics threatened to make an election issue out of the loan by portraying it as a bailout for the Administration's friends in big business and banking. "The potential for political mischief really scared people," says a top Administration official.

Many Congressmen and Senators questioned whether the Government ought to come to the aid of any private company—large or small—with a record of sloppy management. The hardest blows were struck by Wright Patman, chairman of the House Banking Committee. A Texarkana Populist who detests both big city banks and railroads, Patman attacked the legality of the Administration's plan to guarantee the loans under the Defense Production Act.

Delaying the Debtors. With that, Penn Central executives hastily presented the bankruptcy petition. The bankruptcy covers only the Penn Central Transportation Co. (1969 assets: $4.6 billion), which operated the railroad. Neither the parent Penn Central Co. nor the several solvent subsidiaries of the railroad corporation were immediately affected. Among the latter are the Buckeye Pipe Line Co., a 7,000-mile network of petroleum lines; Arvida Corp., which is developing land and apartments on 35,000 acres in Florida; and Great Southwest Corp., which has extensive housing and other realty ventures in California, Texas, Georgia, Hawaii and Missouri. Ultimately, the courts will decide whether, as congressional critics of the Penn Central insist, the profits and property of the railroad's affiliates should be siphoned off to meet its debts.

In ordinary bankruptcy proceedings, the assets of the company are turned into cash, which is distributed among creditors. The Penn Central, however, filed under Section 77 of the federal Bankruptcy Act, which is designed to help railroads delay paying their debts while they keep running. Since the start of the Depression, some three dozen railroads have been reorganized under Section 77, and none have gone out of business. The process often requires 20 years. Last week the Philadelphia district court picked Judge John P. Fullam, 48, to handle the Penn Central case.

Fullam's first big job, after a mid-July hearing, will be to appoint one or more trustees to run the railroad. The trustees will have the power to float new loans to keep the line operating. While waiting for those loans, Transportation Secretary John A. Volpe warned last week, the railroad may have to shut down for lack of cash to meet expenses, which include the $20 million a week payroll for its 94,000 employees. Said Volpe: "I don't believe any of us can say with any degree of certainty if the payroll will be met or not."

Volpe may have been exaggerating in order to gain support for an Administration bill to aid the Penn Central and other impoverished railroads. That measure would empower the Transportation Department to underwrite up to $750 million in private loans. Volpe said that four or five more railroads might soon follow the Penn Central into bankruptcy unless federal aid is forthcoming.

Whether the Penn Central failure foreshadows further trouble for the U.S. economy remains to be seen. Most bankers and economists consider chances of a money crisis to be slight, but they add a crucial qualifier: provided there is no unexpected series of bankruptcies among big companies. When the federal financial managers last year severely restricted the money supply in order to hold back inflation, they knew that there would be some business failures—though they hardly expected the world's largest transportation company to go under. By most measures, the recession so far has been mild, and it has succeeded in breaking an inflationary psychology. In May, the wholesale price index rose at an annual rate of 1.2%, after four straight months of 3.6% gains. Profit-starved companies have been reducing their capital spending and inventories, and such moves should help relieve the squeeze on corporate cash during the next few months.

Meanwhile, consumers are accumulating a great deal of spending power, which could later help to revive the economy. The personal savings rate has rebounded. Personal income, already increased by raises in social security benefits and Government pay, will rise further with expiration of the 5% income tax surcharge this week. Most important, the Federal Reserve has been feeding money into the economy at a brisk though uneven rate since February. But since it usually takes nine months for a change in money policy to turn the economy around, business is not likely to start picking up until late this year or early in next year.

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:27:13 AM

The truth is that peak oil has already had an impact on all of the major events of this young century. And it will have a major impact on all of our lives at a most personal level in the years to come. The public needs to be informed. Our civilization is about to undergo a radical change unparalleled in history. And those we are allowing to call the shots are more concerned with their own personal gain than with the general welfare.

(http://www.dossiersdunet.com/spip.php?article138)

ALso,
http://blogs.earthsky.org/beverlyspicer/2008/04/28/the-waking-up-syndrome/

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:29:13 AM

Bush Blames Congress for Failing to Act on Energy (Update1)
By Roger Runningen

April 29 (Bloomberg) -- President George W. Bush blamed Congress for blocking his initiatives to mitigate rising energy costs by expanding domestic production and said lawmakers also are delaying action on other measures to address higher food costs and the mortgage crisis. ``It's a tough time for our economy,'' Bush said at a news conference today at the White House. While the public is demanding action, ``on many of these issues, all they are getting is delay.'' Bush said lawmakers have been ``vocal'' in opposing measures to expand U.S. oil production, including exploration in the Arctic National Wildlife Refuge.

He dismissed calls by to stop oil purchases for the Strategic Petroleum Reserve. A group of 14 Senate Republicans earlier today asked Bush to stop filling the reserve to ease price pressures, matching a similar request previously made by Democrats in the House. Bush said ``it is in our national interest'' to get the reserve filled, and halting purchases wouldn't lower the cost of oil because it amounts to 0.10 percent of global demand. ``I have analyzed the issue and I don't think it would affect price,'' Bush said.

Gasoline Taxes

In the presidential campaign, Democrat Hillary Clinton and Republican John McCain propose a ``gas tax holiday'' by suspending the 18.4-cent per gallon federal gasoline tax and the 24.4-cent tax on diesel fuel. Democrat Barack Obama opposes a tax suspension, saying it will do little for consumers and divert money needed for highway and bridge repairs. Bush said he would ``take a look'' at any proposals that may come from Congress. He said Congress would open more domestic land to oil exploration if it was ``truly interested'' in solving the problem of high gas prices. Gasoline is averaging $3.60 a gallon nationally, up 66 cents from a year ago. Diesel, used by trucks that transport many goods to retailers, is at $4.24 a gallon, up from $2.92 last year, according to a survey by the American Automobile Association. He declined to say whether the U.S. economy is in a recession. ``Economists can argue over the terminology,'' Bush said. ``The average person doesn't really care what we call it.''

Food Prices

On the rising cost of food, which Bush said is related to higher energy prices, the president said lawmakers also were partly at fault because they have failed to overhaul the ``massive, bloated'' farm bill. Now is the time for ``reducing unnecessary subsidies'' to wealthy farmers, he said.
``We are deeply concerned about food prices here at home,'' he said. This year, Bush said, the U.S. would be ``generous'' in food donations because of scarcities overseas.
He also called on lawmakers to act on his proposals to ease the housing crisis.
``Americans should not have to wait any longer for their elected officials to pass legislation to help more people stay in their homes,'' Bush said.
Home prices in 20 U.S. metropolitan areas fell in February by the most on record, pointing to an imbalance between supply and demand that shows no sign of ending.
Prices will probably keep sliding as foreclosures push even more properties onto the market just as stricter lending rules limit the number of qualified buyers. Shrinking home values have contributed to a slowdown in consumer spending that may already have tipped the economy into a recession.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=a2ysLBEUsUnw&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:29:59 AM

We Must Imagine a Life Without Oil
By Mark Hertsgaard, The Nation
Posted on April 29, 2008, Printed on April 29, 2008
http://www.alternet.org/story/83548/

It used to be that only environmentalists and paranoids warned about running out of oil. Not anymore. As climate change did over the past few years, peak oil seems poised to become the next big idea commanding the attention of governments, businesses and citizens the world over. The arrival of $119-a-barrel crude and $4-a-gallon gasoline this spring are but the most obvious signs that global oil production has or soon will peak. With global demand inexorably rising, a limited supply will bring higher, more volatile prices and eventually shortages that could provoke -- to quote the title of the must-see peak oil documentary -- the end of suburbia. If the era of cheap, abundant oil is indeed coming to a close, the world's economy and, paradoxically, the fight against climate change could be in deep trouble.
Though largely unnoticed by the world media, a decisive moment in the peak oil debate came last September, when James Schlesinger declared that the "peakists" were right. You don't get closer to the American establishment and energy business than Schlesinger, who has served as chair of the Atomic Energy Commission, head of the CIA, Defense Secretary, Energy Secretary and adviser to countless oil companies. In a speech to a conference sponsored by the Association for the Study of Peak Oil, Schlesinger said, "It's no longer the case that we have a few voices crying in the wilderness. The battle is over. The peakists have won." Schlesinger added that many oil company CEOs privately agree that peak oil is imminent but don't say so publicly.
One who does is Jeroen van der Veer, CEO of Royal Dutch Shell. Without using the term "peak oil," van der Veer warned in January, "After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand."
Of course, peak oil could arrive sooner than 2015; columnist George Monbiot has claimed in the Guardian that a Citibank report calculates the date at 2012. But even 2015 leaves a very short time in which to prepare, because modern societies were built on cheap, abundant oil.
"The world has never faced a problem like this," warned a 2005 study funded by George W. Bush's Energy Department. "Previous energy transitions (wood to coal and coal to oil) were gradual and evolutionary; oil peaking will be abrupt and revolutionary."
The United States, with its two-hour commutes, three-car families, atrophied mass transit and petroleum-based food system, is most vulnerable to an oil shock. But similar vulnerabilities exist in most industrial societies, not to mention the roaring economies of China and India, where oil consumption is rising faster even than GDP as newly middle-class consumers buy the cars they have long dreamed of.
At first glance, one might think that peak oil would help the fight against climate change. After all, less available oil should translate into less oil consumption and lower greenhouse gas emissions. But modern civilization, to borrow George W. Bush's term, is addicted to oil. If peak oil arrives before the addiction is treated, the junkie will seek even more dangerous ways to get his fix.
Indeed, this is already happening. In Canada, energy companies are mining so-called tar sands -- a mix of sand, water and heavy crude oil that can be refined into usable petroleum. But burning tar sands is about the worst thing to do if we want to avoid catastrophic climate change because the resulting petroleum has a much greater carbon footprint than conventional oil. Currently, a dozen such projects are under way; projects awaiting approval would quadruple the emissions those projects generate. One encouraging sign: in response to a lawsuit filed by Ecojustice, the top federal court in Canada has temporarily blocked a tar sands project proposed by an ExxonMobil subsidiary on climate change grounds. "This is something which will clearly apply to every single oil-sands project that comes before environmental assessment of any kind," said Sean Nixon, a lawyer for Ecojustice Canada.
More encouragement: some high-level government officials recognize the danger of peak oil and may be contemplating action. British Foreign Secretary David Miliband wants his country to consider creating "a post-oil economy." New York Governor David Paterson has spoken in detail about the imminence of peak oil and what government can do about it: invest in greater energy efficiency in the short term and new low-carbon energy sources in the medium to long term. Plug-in hybrid cars, for example, can get more than 100 miles per gallon -- double that of today's generation of hybrids. And if the plug-in hybrids rely on electricity generated by solar, wind or other green energy sources, they fight climate change and peak oil at the same time.
Finally, activists in scores of towns and cities around the world are trying to prepare their communities for the transition to a post-oil economy. Rather than wait for national governments and multinational corporations to save them, these ordinary citizens are examining how their communities can produce their own energy, food, buildings and other essentials using local resources rather than materials that arrive from afar via oil-based transport. "Economic relocalization will be one of the inevitable impacts of the end of cheap transportation fuels," argues peak oil theorist Richard Heinberg. In Britain this movement has taken the form of "transition towns," which seek, in the words of organizer Rob Hopkins, "to design a conscious pathway down from the oil peak." Drawing on the experience of his hometown of Totnes, in Devon, Hopkins has just published The Transition Handbook, which explains how other towns can also begin preparing for the post-oil future.
Some of the transition movement's ideas -- printing local currency, forming solar buying clubs, building "cob" houses made of mud -- may seem quaint, inconvenient or naïve. But nothing is more naïve than assuming that the endless oil that modern societies grew addicted to over the past fifty years will last forever. The day of reckoning appears imminent, and as Hopkins says, "it is better to plan for it than be taken by surprise."

(http://www.alternet.org/environment/83548/)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:30:52 AM

New York Times

April 29, 2008
Oil Price Rise Fails to Open Tap
By JAD MOUAWAD

(http://graphics8.nytimes.com/images/2008/04/28/business/worldbusiness/28oil600.jpg)

As oil prices soared to record levels in recent years, basic economics suggested that consumption would fall and supplies would rise as producers drilled for more oil.
But as prices flirt with $120 a barrel, many energy experts are becoming worried that neither seems to be happening. Higher prices have done little to suppress global demand or attract new production, and the resulting mismatch has sent oil prices ever higher.
That has translated into more pain at the pump, with gasoline setting a fresh record of $3.60 a gallon nationwide on Monday. Experts expect prices above $4 a gallon this summer, and one analyst recently predicted that gasoline could reach $7 in the next four years.
A central reason that oil supplies are not rising much is that major producers outside the OPEC cartel, like Russia, Mexico and Norway, are showing troubling signs of sluggishness. Unlike OPEC, whose explicit goal is to regulate the supply of oil to keep prices up, these countries are the free traders of the oil market, with every incentive to produce flat-out at a time of high prices.
But for a variety of reasons, including sharply higher drilling costs and a rise of nationalistic policies that restrict foreign investment, these countries are failing to increase their output. They seem stuck at about 50 million barrels of oil a day, or 60 percent of the world's oil supplies, with few prospects for growth.
"According to normal economic theory, and the history of oil, rising prices have two major effects," said Fatih Birol, the chief economist at the International Energy Agency in Paris. "They reduce demand and they induce oil supplies. Not this time."
With global supplies tight, geopolitics continue to play a big role in pushing up oil prices. Oil futures closed at $118.75 a barrel, up 23 cents, on the New York Mercantile Exchange, after strikes by oil workers in Scotland and Nigeria that shut down nearly 1.7 percent of the world's daily production.
Countries outside the Organization of the Petroleum Exporting Countries have been the main source of production growth in the past three decades, as new fields were discovered in Alaska, the North Sea and the Caspian region.
But analysts at Barclays Capital said last week that non-OPEC supplies were "seemingly dead in the water." Goldman Sachs raised similar concerns last month, saying that growth in non-OPEC supplies "can no longer be taken for granted."
At the same time, oil consumption keeps expanding. Global consumption is forecast to increase by 1.2 million barrels a day this year, to 87.2 million barrels a day, with much of the growth in demand coming from China, India and the Middle East, according to the International Energy Agency, a group that advises industrialized countries.
In the United States and through much of the developed world, the higher fuel prices have led drivers to reduce their consumption, and gasoline demand is expected to drop this year. But that drop will be more than offset by the rise in energy demand from developing countries. In the next two decades, demand is projected to jump by 35 percent, and developing countries will consume more oil than industrialized countries.
Higher oil prices mean record profits for oil companies that have, to some extent, masked the supply problems. Exxon Mobil and Chevron are both expected to deliver knockout performances when reporting quarterly earnings this week, even as they struggle to increase production.
"What is disturbing here is that things seem to get worse, not better," said David Greely, an analyst at Goldman Sachs. "These high prices are not attracting meaningful new supplies."
The outlook for oil supplies "signals a period of unprecedented scarcity," Jeff Rubin, an analyst at CIBC World Markets, said last week. Oil prices might exceed $200 a barrel by 2012, he said, a level that would very likely mean $7-a-gallon gasoline in the United States.
Some regions are simply running out of reserves. Norway's production has slumped by 25 percent since its peak in 2001, and in Britain, output has dropped 43 percent in eight years. Production from the giant Prudhoe Bay field in Alaska has dropped by 65 percent from its peak two decades ago.
In many other places, the problems are not below ground, as energy executives like to put it, but above ground. Higher petroleum taxes and more costly licensing agreements, a scarcity of workers and swelling costs, as well as political wrangling and violence, are making it harder to raise production.
"It's a crunch," said J. Robinson West, chairman of PFC Energy, an energy consulting firm in Washington. "The world is not running out of oil, but rather it's running out of oil production capacity."
Mexico, the second-biggest exporter to the United States, seems increasingly helpless to find new supplies to offset the collapse of its largest oil field, Cantarell. A combination of falling production and rising domestic consumption could wipe out Mexico's exports within five years.
Foreign investment could help Mexico produce oil from deeper waters, but that is a controversial proposition in a country where oil has long been seen as part of the national patrimony.
Another country, Russia, is also a focus of analysts' worries. Russia is not exactly running out of places to look for oil — a huge chunk of eastern Siberia remains unexplored — and the country has been the biggest contributor to the growth in energy supplies in the last decade.
But Russian energy officials warned recently that the days of stunning growth that followed the collapse of the Soviet Union were over, as the country focuses on stabilizing its output. Russia today produces about 10 million barrels of oil a day, up from a low of 6 million barrels in 1996.
The Russian government has been muscling Western companies to gain more control over its energy resources. That rise in energy nationalism could freeze new investment and slow any meaningful growth in supplies there for years.
As countries like Russia slow output, analysts say OPEC will have to pick up the slack. The oil cartel accounts for 40 percent of the world's oil exports and owns more than 75 percent of global reserves. But there are serious concerns that OPEC will also find it tough to increase production.
Saudi Arabia, the world's top oil exporter, is completing a $50 billion plan to increase capacity to 12.5 million barrels a day, but it signaled recently that it would not go beyond that. That means Saudi Arabia could fall short of the 15 million barrels a day that most experts had expected it to produce in the long run.
OPEC's 13 members plan to spend $150 billion to expand their capacity by five million barrels a day by 2012. But OPEC will need to pump 60 million barrels a day by 2030, up from around 36 million barrels a day today, to meet the projected growth in demand. Analysts say that without Iran and Iraq — where nearly 30 years of wars and sanctions have crippled oil production — reaching that level will be impossible.
Not everyone is pessimistic about energy supplies. A study by the National Petroleum Council, an industry group that provides advice to the secretary of energy, concluded that the world still had plenty of petroleum resources that could be tapped.
In fact, high prices have set off a global dash for oil. Brazil, for example, has struck large offshore fields that could turn the country into one of the world's top 10 producers. But developing new fields can take many years.
To make up the shortfall, the world is also increasingly turning to fuels from unconventional sources, like biofuels or heavy oil. Canadian tar sands, for example, have attracted large investments.
But the International Energy Agency estimates that current investments will be insufficient to replace declining oil production. The energy agency said it would take $5.4 trillion by 2030 to raise global output. Otherwise, it warned that a crisis before 2015 involving "an abrupt run-up in prices" could not be ruled out.

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:32:14 AM

Quote from: Sean on April 28, 2008, 03:07:05 PM
What's the price of oil today? Is it over $120 yet? Is peak oil happening now? I hope not.

Sean, according to Richard Heinberg, "it's happening" ........

(http://globalpublicmedia.com/sites/globalpublicmedia.com/files/RH.jpg)

It's Happening

There is a surreal quality to the experience of seeing the unfolding of unpleasant events that one has predicted. Plenty of times over the past few years I've said, "I want to be proven wrong!" Who in their right mind would wish to see economic collapse and famine? But it was obvious that, given the direction our society is headed, these must be the consequences. Now, with oil at $117 a barrel, the US economy teetering, and food riots erupting in Haiti, Egypt, and Asia, one could perhaps gain some satisfaction in saying "I told you so." But what faint compensation that would be. We are all going to have to share the bitter fruits of our society's century-long growth binge, whether we have criticized it or participated wholeheartedly. The only silver lining is the possibility that now, at last, as the trends (Peak Oil, the failure of growth-based economics, the failure of industrial agriculture, climate chaos, and so on) are becoming so starkly clear, policy makers will begin seriously to contemplate a Plan B (or C, as Pat Murphy insists). For those of us who have been lobbying in that latter direction for some while, this is no time to let up, but rather the ideal moment to redouble our efforts.
(http://globalpublicmedia.com/richard_heinbergs_museletter_193_its_happening)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:33:34 AM

The Clock is Ticking for A US Attack on Iran

Now it looks like the attack is coming soon.

The Washington Post's Ann Scott Tyson is today reporting in an article headlined, Joint Chiefs Chairman Says US Preparing Military Options Against Iran, that Admiral Michael Mullen, the nation's top military officer, thinks the US military is not stretched too thin to take on Iran, and that Iran is becoming an "increasingly lethal and malign influence" in Iraq. This article comes only a day after a US civilian ship under contract to the US military to deliver supplies to Iraq fired on Iranian boats in the Persian Gulf--just the kind of aggressive action that could lead to an Iranian reaction and trigger a full-blown US response. The Persian Gulf is now crammed full of US attack ships, ranging from a missile-armed nuclear sub to aircraft carriers packed with tomahawk cruise missiles and fleets of attack aircraft larger than most nation's entire air forces (and also with nuclear weapons).

Other things also point to an attack, most significantly the pushing out of Adm. William Fallon as Central Command chief, and now his replacement by Gen. David Petraeus, who is widely seen as a "political" general who is essentially a yes-man for Bush and Cheney. I would say the die is cast, and that it awaits only the pretext. There would be no melodramatic Congressional debate over the reasons for going to war against yet a third nation this time around. Thanks to the 2001 Authorization for Use of Military Force (AUMF) passed by Congress in October 2001 (and never subsequently rescinded) to authorize the attack on the Taliban and Al Qaeda in Iraq, which Bush and Cheney have illegally and outrageously interpreted as a declaration of a global and unending "War on Terror," the administration is claiming it has the right to attack any nation it defines as "terrorist" at any time, without authorization. Presidential candidate Hillary Clinton helped promote war against Iran a few months ago by backing a Senate resolution authored by Sens. Joe Lieberman and Jon Kyle that defined the Iranian Revolutionary Guard as a "global terrorist" organization. That was all Bush and Cheney needed, as Clinton, Lieberman and Kyle clearly knew.

In what has to be one of the understatements of the century, Adm. Mullen said he knew that conflict would be "extremely stressing" and "disastrous on a number of levels."

Indeed it would. Troops in Iraq are already on their fourth and even fifth rotation, and the "surge" troops in Iraq for the past year are being sent home, not because their job of "stabilizing" Baghdad is done (hardly! violence is increasing!), but because there's nobody left to replace them, and they've been there for 15 brutal months.

Worse yet, oil prices have hit a record $122/barrel and are causing a US and even a global recession--but that figure will be doubled the minute any US attack on Iran begins. This is because war with Iran would immediately bring all oil shipments through the Persian Gulf, which supplies 20-25 percent of the world's oil, to a halt. Even if not one tanker were sunk, no insurer would cover a tanker in that region. Moreover, Iranian sappers, and their allies in Iran, Turkey and Saudi Arabia, could be expected to take out vulnerable pipelines, refineries and even well-heads in retaliation to any attack.

So an attack on Iran would mean global economic collapse.

Hold on to your hats. I hope I'm proved wrong yet again, but I'm afraid we're in for a bumpy ride. Even if there is no attack, the level of threats against Iran now emanating from the White House and the Pentagon are sufficient to keep driving oil prices skyward.

Americans should look at those pump prices and see Bush's and Cheney's faces in the digital display.
They should also think of the gas they pump as blood, because it is going to be spilled in prodigious quantities if the US goes through with an attack. Not only would countless innocent Iranians be killed by US bombs and rockets and by any radiation released by attacks on Iran's nuclear facilities (the more so if the US or its Israeli ally use nuclear bombs in that attack), but the toll of US military casualties could be expected to soar, as Iran's Shia allies in Iraq predictably turn on American forces in support of Iran.
(http://www.opednews.com/articles/genera_dave_lin_080426_the_clock_is_ticking.htm)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:34:18 AM

New York Times

April 29, 2008
With Demand Slipping for Its Pickups and S.U.V.'s, G.M. Will Lay Off 3,550
By NICK BUNKLEY

DETROIT — General Motors said Monday that it would slash production of big trucks and sport utility vehicles by nearly 140,000 units this year, a move that would eliminate assembly shifts at four plants and cause about 3,550 workers to be laid off.
G.M., the world's largest automaker, has gradually slowed production of many vehicles because of declining demand, but this is the largest one-time cut in recent years.
G.M.'s need to make such a large cut, even after many of its truck and S.U.V. plants have been shut down for much of March and April because of a strike at a parts supplier, indicates how sharply sales of these vehicles have fallen.
Sales of G.M.'s full-size pickups, the Chevrolet Silverado and GMC Sierra, which were redesigned for the 2007 model year, fell 16 percent in the first quarter of this year, according to Autodata, which tracks industry statistics. Sales of G.M.'s large S.U.V.'s were down 28 percent in the same period.
The declines mirror overall decreases in those segments for the industry, but G.M., the top player in both segments, has been hurt the most by the rapid shift in consumers' preferences.
The announcement came on a day when the national average price of regular gasoline hit a high of $3.603 a gallon and a slumping housing market continued to cause a decline in demand for trucks.
"With rising fuel prices, a softening economy and a downward trend on current and future market demand for full-size trucks, a significant adjustment was needed to align our production with market realities," the president of G.M.'s North American operations, Troy Clarke, said in a statement.
"This is a difficult move," he said, "but we remain committed to retaining and growing our leadership position in the full-size truck market."
One of two shifts will be eliminated on July 14 at a plant in Janesville, Wis., that builds the Chevrolet Tahoe and Suburban and GMC Yukon S.U.V.'s and at a full-size pickup truck plant in the Detroit suburb of Pontiac, G.M. said. Also on July 14, one of three shifts will be cut at a plant in Flint, Mich., that builds heavy-duty pickup trucks, and a pickup plant in Oshawa, Ontario, will go to one shift from two on Sept. 8.
G.M. said the cuts would reduce truck production by 88,000 units, about 11 percent of its total full-size truck sales in 2007. The planned 50,000 cut in S.U.V. production represents about 15 percent of its sales last year in that segment.
Affected workers who do not leave the company voluntarily through an ongoing buyout program that offers them as much as $140,000 will continue receiving benefits and most of their pay under the automaker's "jobs bank" program, as part of the contract with the United Automobile Workers.
G.M.'s 74,000 hourly workers have about three more weeks to decide whether to take a buyout.

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:35:15 AM

Global Food Crisis Investing Special

Food riots across the world illustrate the degree to which the world is seeing a shift from cheap food to the early stages of a mega trend in the agricultural sectors that is set to continue for many years. This impact is not just limited to the developing world but people in the developed world have seen their food costs soar by as much as 50% over the last 12 months.

The primary driving forces for the agricultural commodities boom are -

* Bio-Fuels - As crude oil hits another all time high of $119, the world is seeing a dash towards bio-fuels such as ethanol, this shift in allocation of food production towards fuel is one of the primary forces for the surge in food prices and given that the trend in crude oil is unlikely to revert in the face of Peak Oil, the shift in production towards bio-fuels is expected to continue for many years if not decades.

* China and Indian Demand - The economic boom in China and India is resulting in increase in food consumption as the 2 billion plus consumers demand a more varied diet more in line with the developed world.

* Return of the Food Mountains - The 1980's were renowned for huge food mountains across Europe, as the European Community bought up excess supply so as to stop food prices from collapsing in the face of over production by the heavily over subsidised food industry. Now in the wake of food riots and shortages, many countries, including the key exporting countries are seeking to build up their own food mountains so as to counter the likelihood of short-term shortages. This has the effect of driving prices higher as supply is being taken out of the market which makes less available on the world market.

* Disruption of food production due to global warming - Global wheat stocks have fallen to 20 year lows as the trend towards global warming continues, so will the trend towards more expensive food production costs as the weather patterns change across the world resulting in the increase in poor harvests. Global warming means most countries will be losers such as the US, and Asian countries, but Russia and Canada are expected to reap a bumper harvest as more land is made feasible for agriculture use.

* Rising Inflation - The US subprime sparked credit crisis has resulted in the US Fed's abandonment of the Dollar towards attempts at averting a deep recession. The strategies deployed of cutting interest rates and increasing the money supply are highly inflationary. Other central banks across the world are following the US Fed's example by adopting similar inflationary policies.

* Investment & Speculation - Increasingly investment funds are being re-allocated towards the Foods sector in recognition of the expected out performance against weak sectors such as the Financials.

The easiest way for investors to gain a long-term exposure to the agricultural commodities boom is through the wide range of available Agri-Foods ETF's. For the rest of this report please subscribe to our FREE Weekly Newsletter

By Nadeem Walayat
(http://www.howestreet.com/articles/index.php?article_id=6305)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:35:54 AM

Media asleep regarding Energy and the Presidential Election
by Stan Moore
(Monday, April 28, 2008)

"An honest media and an informed public are the basic foundations of a real democracy. They are missing in action and the public is deceived, manipulated and will eventually be hung to dry because critical knowledge is withheld regarding the energy fate of the U.S. and of mankind."

It seems like the whole world knows about Peak Oil; except for the U.S. Presidential Candidates, that is. (And the American public). To hear Hillary Clinton and Barack Obama and John McCain speak, the high prices of oil are reversible with better U.S. policy. Food prices are not connected to petroleum prices. The whole situation is temporary and will be reversed by electing the new guy.
Alas, geology and history tell us otherwise. Oil is becoming more and more scarce while demand is rising around the world. The U.S., once the world's largest exporter of oil, is now the most dependant nation in the world on imports from other nations, but China is fast on our heels in demanding foreign sources of oil for their own rapidly expanding economy. India is introducing a very inexpensive automobile designed to introduce automotive ownership to millions and millions of Indians who have never owned an automobile before. Farmers need petroleum-based fertilizers, pesticides and fuels just to grow their crops and more fuel is required to process the crops into foods and get the food to market.
The world situation related to energy is unlike anything mankind has experienced before and we are entering the beginning of the end of the entire Petroleum Age for all of mankind.
And did you hear about this from the candidates? Did the media bring it up so that the candidates could address the public on these historic issues of vital interest to all the citizenry?
Did the media connect the dots between Peak Oil and the invasion of Iraq, the likely invasion of Iran? After all, there should be no secret that the Project for the New American Century laid all this out in detail even before George W. Bush and the neo-cons entered the White House. It should be old news but the public is still thinking that Iraq/Iran are threats due to weapons of mass destruction or other deceptions by the Prevaricator in Chief and his minions.
Perhaps the media wants to avoid panic. That is until good solutions are completely unavailable. When the panic comes, the media will surely report it, but fail to explain their own complicit role in the failure to problem-solve before the fact or to allow democracy to shape the American future according to the informed desires of the American people.
An honest media and an informed public are the basic foundations of a real democracy. They are missing in action and the public is deceived, manipulated and will eventually be hung to dry because critical knowledge is withheld regarding the energy fate of the U.S. and of mankind.
(http://usa.mediamonitors.net/content/view/full/51505)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:36:46 AM

Natural gas likely to follow oil in price hikes
By Leah Bower, Special to Gulf NewsPublished: April 29, 2008,

As if it wasn't bad enough that oil prices are staying high, natural gas prices are now going up.It probably should be little surprise, since all commodity prices are through the roof, but natural gas is beginning to ride on oil's coattails to ever higher prices.Unlike oil, however, the market fundamentals seem to be somewhat solid for natural gas.Analysts are predicting that gas is going to stay in the $11 to $12 per British thermal unit (BTU) range, as demand grows and reserves, especially in the United States, decline.The US's Energy Department said that natural gas inventories have only risen 24 billion cubic feet, to just over 1.2 trillion cubic feet, as of April 18, which Dow Jones called a much smaller increase than expected.Meanwhile, prices for natural gas have risen to their highest level in more than two years.
(http://www.gulfnews.com/business/Comment_and_Analysis/10209176.html)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:38:11 AM

Something amazing happened recently: there was actually a politician who had a fucking clue about energy policy:

Congressman Roscoe Bartlett on Peak Oil

http://www.youtube.com/watch?v=7lwkyqFB-34&feature=related

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:39:43 AM

Supply side to blame for high oil prices
Mikkal Herberg
Monday, April 28, 2008

Oil prices careened toward $117 this week, providing further, painful evidence of the virtual "perfect storm" of things gone wrong in global oil markets. Unfortunately, the long list of problems driving high oil prices shows few signs of letting up anytime soon.

A number of factors are at work in this latest run-up in prices, including increased demand, geopolitical problems in the key producing countries, speculative activity in futures markets, and investors' frantic efforts to hedge against dollar-based assets like oil.

These are important elements in today's painful price equation. But the real epicenter of this crisis is a slow-motion global oil supply shock that is now gathering pace.

Despite what many pundits say, oil demand is not really the central problem. True, there has been a huge shift in the sources of demand, away from the rich industrial countries and toward China, India, the Middle East and Russia. But the pace of aggregate demand growth in recent years has not changed significantly and, in fact, has slowed. In short, there has been no demand shock.
Rather, the real culprit is on the supply side. Unlike the sudden supply shocks of the 1970s, this crisis is the culmination of the gradual erosion in global capacity growth, which leaves oil demand chronically bumping up against stagnating production capacity.

The cause, however, is not insufficient reserves or any "peak oil" prophecy. Over the past decade, the world's proven conventional reserves have risen by 140 billion barrels, to 1.2 trillion barrels. If Canadian oil sands are included, the increase was 300 billion barrels. During that same period, the rise in world demand consumed only an incremental 45 billion barrels.

The core problems are underinvestment and political constraints. OPEC production capacity of roughly 32 million barrels per day has essentially stagnated over the past decade due to underinvestment. Non-OPEC production growth, which accounts for 60 percent of global oil output, and which has been the prime source of recent capacity increases, has slowed to a trickle.
Not only is new capacity not being developed fast enough, but at least 2 million to 3 million barrels per day of existing production capacity has recently been shut-in or lost permanently due to ethnic strife, war, or investment failures in Nigeria, Iraq, Venezuela, and Iran.

The net result has been that spare capacity to meet minor supply disruptions has collapsed. In 2000, the world consumed 77 million barrels per day and had an added spare cushion of 6 million. Daily demand today is 86 million barrels with a spare cushion of just 1 million to 2 million.

Essentially, the world's oil system is running flat out every day with new global capacity arriving just in time, which in turn aggravates fears of scarcity and shortages and drives the current frenzy of hedging and price speculation. As a result, prices jump sharply at every wild pronouncement by Venezuela's Hugo Chavez, every time the United States ratchets up the rhetoric toward Iran, and every time ethnic rebels in Nigeria force a shut-in of one of the country's oil fields.

Unfortunately, the prospects for increasing capacity over the next several years are bleak. Russian oil production, which accounted for the entire net increase in non-OPEC capacity since 2004, now appears to have leveled off and may actually decline due to old fields, combined with the crushing weight of Vladimir Putin's taxation and re-nationalization policies.

Saudi Arabia has just reduced its plans to expand long-term production capacity by 50 percent. Production is declining relentlessly in Mexico, Iran, Venezuela, Indonesia, and Nigeria due to years of investment restrictions, under-investment, and mismanagement. Cost increases are also sharply slowing Canada's future oil sands production growth.

Consequently, any chance for near-term price relief will depend on a substantial slowing in demand growth. But the odds on this are long. It's true that demand is now declining slightly in the rich industrial countries, and even the United States is likely to experience a small demand decline this year for the first time in 25 years in the face of unprecedented gasoline prices. The growing global economic slowdown will also reduce world oil demand growth.

However, continued strong economic conditions are likely to keep oil demand growing fast enough in China, India, the Middle East and Russia to maintain pressure on tight and uncertain supplies. So high oil prices are here to stay for at least the next few years.

Mikkal Herberg, formerly director of global energy and economics at ARCO, is an adjunct fellow at the Pacific Council on International Policy.

(http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/04/28/EDTF10BCUK.DTL)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:41:17 AM

Scotsman

Insight: What happens when we've used the last drop?

Published Date: 27 April 2008
By Christopher Harvie

SIXTY years ago the Orkney poet Edwin Muir wrote some lines which, in the panic surrounding the Grangemouth strike, feel like a premonition. They point to a world not too far in the future where our reliance on oil has become all too clear, and the way we live our lives all too fragile.
And then the thought confounds us with its strangeness.

The tractors lie about our fields; at evening

They look like dank sea-monsters crouched and waiting.

We leave them where they are and let them rust:

They'll molder away and be like other loam.

Something of his prediction seems to be forming itself. The petrol age, scarcely making much of an impact when he wrote, now seems hastening towards its end.

Around the year 2000, the Californian Delphi research institute was predicting the $15 oil barrel for about 2010. We are now over $100 and there's talk of a 'stabilisation price' as high as $300. This doesn't just reflect the problems of forecasting; once a commodity like oil is in crisis, any notion of expectations goes out of the window.

Every aspect of the use of oil is about to get argued or fought over. From the philosophical issue of whether the 'good' of individual mobility can be respected if it brings hellish climate change in its wake, to the sheer social disorientation of motorists – as at the moment – scrambling for dwindling supplies.

On the positive side there's just a chance that the Grangemouth strike is a timely warning, and that mounting scarcity and instability, along with opaque systems of control (what is Ineos, the Grangemouth firm, and who runs it?) make us ask whether we can plan a way out. An unlikely figure appears. In 1988 Margaret Thatcher seemed to sense that her 'great car economy' – with its unplanned exurbia, out-of-town shopping centres, retail parks, airports and Center Parcs, and their climatic consequences – was a potential menace.

She nailed global warming 18 years before Al Gore did. Her ministers Chris Patten and John Gummer took against sprawl and supermarkets, and so too, in his book Where There's Greed, did Gordon Brown. Let's call it unfinished business.

As we ponder our use of the car we have an unlikely role model. London boasts a sophisticated public transport catering for support workers, and only 31 cars per 100 people, compared with over 140 per 100 in the Scottish countryside.

But elsewhere the car exerts a powerful hold. 'Fordism', the joy of the open road, was the little guy's ideology as well as the name of his car. The question of how we survive past Peak Oil can be translated as: how do we survive as a society? We first of all sit on our own resources and watch their value grow. This means a deal with Norway on oil extraction from the North Sea, a commitment to low depletion and low consumption at home, and careful transport and social planning.

The car as a prime mover, dominating to-work journeys throughout the country, has major problems. Forget hybrids and forget widgetry; these are for expensive new cars and not our standard belching bangers. We have better things to spend our money on, such as carbon-free individual transport – bikes and walking – and public transport which is qualitatively superior and succeeds through speed, co-ordination and low cost. This involves distinguishing between the necessarily mobile 'useful drivers' – engineers, carers, traders, doctors, deliverers, etc – who have to get to a variety of destinations, and the commuting journeys better handled by collective transport.

There are problems with congestion charges since they are regressive; but into this Government can introduce local measures which separate the car as utility from the car as congestant. Rural areas could buy subsidised motoring by selling renewable energy, something that ought to win the approval of those motorists legitimately dependent on the car, and hit by roads clogged by inessential traffic. Systems of differential access rates, the socially equitable rationing of mobility, have a greater likelihood of public support than an unsubtle tax.

Big tranches of the population will tend anyway to give up private transport, and in the future they could steer policy. The under-26s and post-60s for a start, even now perhaps a majority of the population, could get statutory rights to cheap or free tickets and to adequate services, using German precedents which gave students and apprentices open access to town buses and trains for fifty quid a year.

The long decline of the buses – passengers are still down by over a third on 1985, and three-quarters on 1960 – can be reversed. Though when the flow back to public transport strengthens, their problems will show.

Engines and tyres depreciate completely every five years, accentuating the attraction of rail in general and electric light rail – the supertram – in particular. Timetabled, fast, predictable: the town of Karlsruhe, whose system has become the prototype for Europe, found that 40% of motorists would switch to it, compared with only 3% to a bus.

A bus may last five to 10 years before complete rebuilding. Vienna's trams and underground cars are over 40 years old. The current designs are now interchangeable with low-floor suburban trains. Lines must be laid out to facilitate this, and integrated with buses and suburban railways. If the law doesn't facilitate this, it must be changed, and fast. In this way, Princes Street could become Edinburgh's second train station.

Freight must be taken off the roads. With Deutsche Bahn taking over EWS railways and most UK rail freight, we can expect it to grow rapidly. But any real advance must come through a renaissance of sea transport. Water is still the most efficient means of bulk freight transport, though in comparison with Norway our coastal shipping is minimal, as is the use of sophisticated passenger craft such as hydrofoils, hovercraft and catamarans.

Bureaucracy and the business world must stop competing with one another in incompetence, and a new combination of enabling state and market-driven technology has to replace the extremes of Caledonian MacBrayne and Forth Ports, statist bureaucracy on one hand and a property company which regards docks as brownfield sites for speculative residential development on the other. The multiplication of uncoordinated maritime agencies: nearly 20 at the last count – must be curbed and rationalised.

This vision may be condemned as utopian or bureaucratic. But it works increasingly for Germany, Scandinavia and Switzerland. Given that the market alternatives are costly and inegalitarian, what is required is a big new European idea. There must be a Europe-wide transport executive, with coordinated control of arterial routes, with common powers and standards. The UK Ministry of Transport ought to be taken out of Whitehall control and its powers vested in a strategic planning body representing the regions and nations.

Changes are never absolute but fought over and negotiated. They also depend on icons and symbols. Three decades ago the Government was about to demolish London's St Pancras Station – now it stands for a rail renaissance. There is no reason why this crisis can't become a moment of hope, and spawn the will to produce a new and more advanced society in these islands.

• Professor Christopher Harvie is the author of Fool's Gold, a history of the North Sea oil industry. He is an SNP regional MSP for Mid Scotland and Fife
(http://news.scotsman.com/opinion/-Insight-What-happens-when.4024365.jp)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:41:52 AM

The major resource war currently underway involves the United States and its acolytes forcibly invading and taking control of those countries in the Mid-East that are not already client states, which the aim of completely controlling the Mid-Eastern oilfields. The invasion of Afghanistan, which does not have much oil, was a strategic geopolitical move. The invasion of Iraq was designed to secure a major prize, as Iraq is sat on the world's second largest oil reserves. That only leaves Iran, which will prove to be a tougher nut to crack, more about which later, and Syria, which will be a cakewalk, and doesn't have much oil and so is of limited interest anyway. A by-product of these military adventures is the elimination or at least neutering of Israel's enemies.

*** The War on Terror is a crude deception, a fig leaf, designed to provide a façade behind which to conduct a good old-fashioned war of colonial conquest. The only reason it is not questioned more in the mainstream media is that the government controls the mainstream media and they do as they are told. You had to have a reason for the War on Terror, something to lend it some credibility, and that reason was provided by the catastrophic events of September 11th 2001.
Turning now to Iran, this is the only remaining significant country in the Mid-East that is not already either a client state of the United States or big western oil multinationals, like Saudi Arabia or the Gulf states, or already subject to military occupation. It is not in compliance, and can therefore expect to be forcibly dealt with at some point in the future. If it had no oil, and was not perceived to be a potential threat to Israel, it would perhaps be left alone, but it does have oil and Israel, at least, perceives it to be a threat.
(http://www.marketoracle.co.uk/Article4484.html)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:42:52 AM

1. The resource wars of the 21st century are now well underway, with the US and Britain leading the charge in the Mid-East, behind the façade of the War on Terror. The goal is complete control of the Mid-East oilfields, which will be achieved by a combination of the already existing client states such as Saudi Arabia and the Gulf states, and the forcible acquisition of remaining oil rich countries. Logic dictates that the next country to be appropriated will be Iran, and although they would like to take in addition the oil rich countries around the Caspian Sea, an attempt to do so would result in a direct confrontation with Russia, so instead they will bide their time and likely attempt to subvert these countries politically.

2. Peak Oil is upon us, or very close at hand. The combination of rising population and strong increase in demand for oil from developing countries such as China and India, coupled with inelasticity in demand for oil, at least on the downside, is likely to force a continuing uptrend in the price of oil, although this may be mitigated once Iraq is brought on stream in a big way.

3. As the oil price is an underlying component of the price of food, the price of food is likely to continue to rise, a situation that will be exacerbated by the recently fashionable and rather bizarre practice of turning food into fuel. This can be expected to lead to widespread unrest and possible anarchy in many poorer countries.

4. The seizure of Iraq is widely perceived to be have been a blunder. From the strategic standpoint of the US elites it was no such thing. The oil reserves contained within Iraq are gigantic, and thus its acquisition was a major economic and security leap forward for the United States. In addition its central position within the region and the earlier acquisition of Afghanistan make the eventual appropriation of oil-rich Iran an almost foregone conclusion. In comparison with the US strategic planners, those in the European Union are hopelessly naïve and ineffectual - they can't even organize the trash collection in Naples .

5. The United States is desperately sick economically, with an economy lamed by gargantuan debt, outsourcing and rampant speculation, and yet somehow it manages to spend more on its military machine than every other country in the world combined. This is only possible because the dollar has been, up until now, the world currency, and because the US is living on the rest of the world's savings. The supreme irony is that the rest of the world is financing the US takeover of the Mid-East, and in a few years countries which have had, and have right now, the power to stop the US in its tracks by dumping dollars and Treasuries, but can't face the dire consequences of doing so, will have to kow-tow to the US for oil. Once that time arrives they won't dare dump US paper and face the retribution of having their oil supply cut off and their economies shut down.
At present the US is only militarily the greatest power on earth, but in a few years it looks set to assume comprehensive hegemony of the planet, as the massive oil revenues from the spoils of the Mid-East campaigns flow in and correct the careening deficits. China will then comply with US demands or the oil tap will be swiveled in the off direction. Russia, currently blessed by an abundant supply of oil and other natural resources, should do well, but will be surrounded and eventually forced into compliance as its resources dwindle and it becomes increasingly isolated. Britain, as the 1st officer of the US in its wars of acquisition, will enjoy a privileged place at the table in an increasingly resource starved world. Israel will look on with quiet satisfaction at all of this.

6. Now we crystallize the most important point of this article, which is what the whole thing has been leading up to. As we have already noted, the United States is widely perceived as an economic basket case on account of its astronomic debts and weakened domestic economy, but it is in the process of seizing control of the world's most important remaining oil reserves and bringing them on line. Once it has achieved this it will not just be the greatest military power on earth but will assume center stage as the greatest economic power on earth as well and be completely unassailable. By that time no other country will dare to, or perhaps even want to, dump dollars or US Treasuries. As we have observed on www.clivemaund.com in the recent past, the US stockmarket has refused to make new lows (apart from a fleeting intraday new low) for a couple of months now, despite all the doom and gloom flying around, and the volume internals of the market are bullish.
So it would appear that Smart Money is beginning to get a handle on what's cooking as set out here. If our evaluation of the situation is correct, and China continues to play ball by not dumping US dollars or Treasuries, despite the Tibet provocation in the western media, then the US stockmarket is poised for a powerful bull market advance, as the injection of massive amounts of newly created liquidity works its magic and eases the global financial crisis. This advance would initially take the market back to its highs, but should later continue on to new highs. The huge global increases in money supply are of course highly inflationary and should continue to fuel a robust bull market in commodities, including gold and silver, even if they get put on the back burner and continue to correct for a while as the focus shifts to the broad stockmarket. Right now the US stock markets are poised to break out above the crucial 1400 resistance level on the S&P500 index, an event that could easily trigger a 400 - 500 point up day on the Dow Jones Industrials.
(http://www.marketoracle.co.uk/Article4484.html)

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 11:44:39 AM

Bubble or fact of life: Where's the price of oil headed?

The Associated Press
Saturday, April 26, 2008

HOUSTON: Oil's meteoric rise to near $120 a barrel looks like more than just another economic bubble — growing demand and tighter supplies are likely to keep prices high. Some analysts say even $200 a barrel would not be out of the question.

The latest price surge — pushing crude to record heights in recent weeks, and to nearly double its level a year ago — has some key components of a classic bubble, when market prices climb far above their intrinsic value. The burst comes when investors realize the assets are overvalued.
But growing worldwide thirst for crude, in large part from the rapidly developing economies of China and India, means frustrated consumers probably won't get any relief.

"We can do our homework, but prices are going to go where they want to go at this point," said Jeff Spittel, an analyst at investment bank Natixis Bleichroeder Inc.

Americans who hoped to ride out temporarily high prices by carpooling or driving less may have to make those habits permanent. And because of the premium prices, oil companies may be willing to search out more oil in places they previously couldn't afford to explore.

Oil came close to $120 a barrel Friday on news that a ship under contract to the U.S. Defense Department fired warning shots at two boats in the Persian Gulf that may have been Iranian. The markets were also weighing the effects of a pipeline attack in Nigeria and a looming refinery strike in Scotland.

Retail gas prices, which at times rise in tandem with crude oil, moved further into record territory near $3.60 a gallon.

The Organization of Petroleum Exporting Countries — which supplies about 40 percent of the world's crude — insists it's supplying more than enough oil.

Instead, many observers blame speculative traders for bidding up the price as a hedge against inflation and as protection from the sinking U.S. dollar. Some see that as evidence of a bubble.
It's also becoming harder and more expensive for oil companies to find and tap new petroleum reserves — a troublesome scenario given forecasts that the world's energy needs will escalate by more than 50 percent in the next two decades.

Toss in the weak dollar and political instability in some oil-producing countries, and it seems unlikely that oil will fall below $100 a barrel anytime soon, if ever.

Widely watched oil price prognosticator Goldman Sachs has said oil could average $110 a barrel by 2010, up from a previous forecast of $80, and that a spike as high as $200 a barrel is possible in case of a major supply disruption.

Supply is at the heart of soaring prices, said John Moroney, a Texas A&M economics professor who just finished a book on energy production and consumption. He cites production declines in Mexico, an unstable oil industry in Venezuela and possible shrinking production capacity in the Middle East.
"I don't buy the bubble theory," he said.

Many analysts believe the weakness of the dollar is a bigger factor than supply and demand because the soft dollar draws investors worried about inflation into commodities such as oil and gold.
It also makes commodities less expensive for buyers operating in other currencies. Many investors see the dollar only heading lower if the Federal Reserve keeps cutting interest rates, which most analyst still expect it to do next week.

Some market-watchers say oil will probably keep rising until demand falls off, which they describe as the market's way of finding fair value for the commodity. For oil, some estimate that price as low as $60 or $70 a barrel.

"The fundamentals don't justify anywhere near these prices, even when you factor in geopolitical problems," said Michael Lynch, president of Strategic Energy & Economic Research Inc. in Cambridge, Mass.

He expects prices to fall as low as $80 this year and perhaps as low as $50 in the next three or four years as more global supply comes on line.

Demand already has begun to wane in the U.S., where fuel prices are causing turmoil in an economy already saddled with recession fears, a housing and credit crisis, and dismal retail sales.
Drivers have begun to cut back on gasoline consumption. Some people have taken to riding bikes to work or organizing car pools. The sale of gas-electric hybrid vehicles is up. Larger trucks and sport utility vehicles are selling slowly.

It's unclear how much a drop in oil prices could reduce gasoline prices. The prices do not always move together because they are subject to separate supply and demand forces. While oil prices have risen 80 percent in a year, gas prices climbed only 24 percent.

Trying to predict where prices are headed has devolved into a guessing game, some analysts said.
Two weeks ago, the Energy Department acknowledged "significant uncertainty" in its oil price projections, noting the threat of supply disruptions in oil-producing nations, unusual weather or refinery outages.

The major oil companies began reporting earnings for the first three months of the year this week, with ConocoPhillips saying it earned more than $4 billion, up 17 percent from a year ago. Exxon Mobil Corp. and Chevron Corp. are scheduled to report earnings Thursday and Friday.

The higher prices have allowed companies to extract oil from sources too expensive to tap only a few years ago, like the Canadian oil sands and deepwater sites in the Gulf of Mexico, said Gary Adams, who heads the U.S. oil and gas practice for Deloitte & Touche USA LLP. He expects the price of oil to settle at around $90 to $100 a barrel in the coming months.

Even if oil prices fall back to $60 or $70 a barrel, "the capacity of those businesses to do well and fund major projects will continue," said analyst Bernard Picchi of securities firm Wall Street Access. "These are great storehouses of value, and I don't think anyone can take that from them right now."
(http://www.iht.com/articles/ap/2008/04/26/america/Oil-at-120.php)

Title: Re: Meltdown
Post by: drogulus on April 29, 2008, 12:10:24 PM

You don't use the last drop. Long before that it becomes so expensive that replacements become feasible. That's happening now, but too slowly. Everything always happens too slowly when it involves a major reconfiguration of the entire world economy. And the old interests tend to frustrate the new ones until they can get a piece of the action for thenselves to cushion the blow.

Finally, I don't see how panicking about all this helps. The rich countries will come out all right in the end because they are...rich. Some poor countries will ride out the change pretty well, too. The biggest change that's going on now is that a substantial portion of the poor people on the planet are getting close to not being poor any more. This is happening at the same time as the food and energy prices are rising. So what is the net effect of the trends? I don't know, but it's far from clear that everything will just collapse. The world has huge untapped energy resources and high energy prices. It sounds like a good opportunity to me.

Title: Re: Meltdown
Post by: Sean on April 29, 2008, 03:17:40 PM

The problem is that there has never been 'another round of innovations' to wait for as the Herald Tribune put it this week. The fundamental point is that the economic base is the same as it was in the Iron age, or Stone age: we just dig this nasty sticky black sludge stuff, or other God-given fossile fuel, out of the ground and find that it burns very nicely.

Digging out of the ground is a profoundly simple and unsophisticated thing to do, and we've been seduced by the vast pyramid of development resting above this process.

Western modernity looks strong but isn't: the major energy problems have never been solved, and the opportunity to really address them with the availability of oil has been wasted. There's plenty of energy in the universe but accessing the fusion of the sun or the diffuse power of the tides is still on the same level as medieval alchemy.

There are no alternatives to oil that anybody knows of. This is what scares me- because I know how people ignore problems they don't know what to do about.

Title: Re: Meltdown
Post by: drogulus on April 29, 2008, 04:06:58 PM

Quote from: Sean on April 29, 2008, 03:17:40 PM

Digging out of the ground is a profoundly simple and unsophisticated thing to do, and we've been seduced by the vast pyramid of development resting above this process.

The vast pyramid of development seems like a good reason to dig it out of the ground, though it must have been somewhat sophisticated since we didn't start doing it until the 19th century.

Quote from: Sean on April 29, 2008, 03:17:40 PM

There are no alternatives to oil that anybody knows of.

Everyone knows the alternatives. Just pick up a magazine with the "End of Oil" cover on it.

The oil economy was not a permanent solution to the energy dilemma because there are no permanent solutions, just a succession of improvisations. That's not cheating, that's how it's done.

I don't think the world wants to live in a nice little Hobbit village just to assuage the guilty conscience of a tiny band of romantics. Besides, worldwide Hobbitization would support maybe 1/5th the present population, and it wouldn't be as clean and comfy as the movies.

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 04:33:29 PM

Quote from: drogulus on April 29, 2008, 12:10:24 PM
You don't use the last drop. Long before that it becomes so expensive that replacements become feasible. That's happening now, but too slowly. Everything always happens too slowly when it involves a major reconfiguration of the entire world economy. And the old interests tend to frustrate the new ones until they can get a piece of the action for thenselves to cushion the blow.

finally, I don't see how panicking about all this helps. The rich countries will come out all right in the end because they are...rich. Some poor countries will ride out the change pretty well, too. The biggest change that's going on now is that a substantial portion of the poor people on the planet are getting close to not being poor any more. This is happening at the same time as the food and energy prices are rising. So what is the net effect of the trends? I don't know, but it's far from clear that everything will just collapse. The world has huge untapped energy resources and high energy prices. It sounds like a good opportunity to me.

Drogulus,

The reason for "panic" is because the "peak oil" problem is utterly unprecedented in recorded history:

(1) Oil is completely unlike any other alternate energy source, whether in terms of its ease of extraction, abundance, efficacy, or efficiency. Oil is like a "magic bullet" of energy, for which there is no readily-available substitute.

(2) Because oil is exponentially superior to other alternate energy forms, the globe has increasingly dedicated its infrastructure to its exploitation. Indeed, man's reliance on oil has progressively intensified in recent times, to the point that man will wage war over its control. Without cheap oil, there would be no skyscrapers, apartment complexes, or large-scale highways/roadways. Without cheap oil, there would be no sprawling suburbs and McMansions.

(3) "Cheap oil" has allowed the planet to overpopulate by a factor of roughly seven (i.e., oil has allowed the planet's population to exceed its maximum carrying capacity by a factor of seven). It is only because of cheap oil that enough crops to feed seven billion people have been possible.

(4) Once the era of "cheap oil" ends, the era of "cheap food" ends. Once the era of "cheap food" ends, the realities of the planet's extreme overpopulation will have catastrophic consequences, and there will be massive famines. Add to this the droughts caused by climate change, you have the ingredients for virtual collapse of global society.

(5) Petroleum also permeates many fundamental aspects of our well-being (which I won't get into here), including medicine, fertilizer (agriculture), clothing, heating, yada yada .......

I wouldn't be concerned if the main problems were merely costly fuel for my Hummer, and high heating costs for my lake cabin. Rather, the oil crisis undermines the very foundational fabric of ALL of society. According to the Hirsch Report (funded by the US government), we needed to plan ahead by 10-20 years prior to peak oil in order to avoid total and utter chaos. Instead, our leaders opted to further entrench our focused reliance on oil by invading Iraq and pushing Congress to open up oil fields in Alaska.

We blew it.

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 04:38:35 PM

Quote from: drogulus on April 29, 2008, 04:06:58 PM
Everyone knows the alternatives. Just pick up a magazine with the "End of Oil" cover on it.

Highly paid scientists have been desperately trying to find substitutes for oil since the 1970's, and, apart from limited-use solar, wind, and tide energies, the best they've come up with is switchgrass, and some other lame biofuels.

Because uranium will be rendered scarce by around 2020, nuclear power has a limited lifespan.

So what are these alternate forms of energy?

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 04:43:29 PM

Quote from: Sean on April 29, 2008, 03:17:40 PM
There are no alternatives to oil that anybody knows of. This is what scares me- because I know how people ignore problems they don't know what to do about.

I agree.

Title: Re: Meltdown
Post by: Sean on April 29, 2008, 04:43:43 PM

No, all the talk about alternative energy sources is fantasy- they do not exist on the large scale. 99% of all transport in the world for instance is driven by oil, the truly amazing stuff that turns the wheels of a 50 tonne truck against the gradient of a hill. But this is an energy source we hardly earnt for ourselves- there's no real brain power gone into it, we just used what providence gave us.

The 9/11 and war on terror garbage (who still believes this stuff?) was just an excuse to invade the last of the world's oil rich regions: it's very obvious. And eveyone will know it soon as peak oil really starts to bite and those Iraq and Afghanistan pipelines are keeping Westerners from starvation.

Title: Re: Meltdown
Post by: bwv 1080 on April 29, 2008, 04:54:03 PM

One square meter of ground on captures 1000KHW of sunlight per hour. Right now, we are not very good at converting this energy into useful forms. However, solar cells are a semiconductor technology and there is no basic reason why the cost and effectiveness of solar cells are not subject to the same sort of exponential growth that drove the computer industry for the past 35 years.

All petrochemicals are biofuels - they just took a hell of a long time to create and we are consuming something like 10 million years of plant growth per year. The technology is there to convert living plant tissue to fuel (and not the boondoggle that is corn-based ethanol). Biodiesel and cellulose conversion to ethanol will deliver viable alternatives to petrochemicals, particularly when combined with improved efficiency and power storage technology.

Nothing rations a resource better than price. The US auto fleet is beginning to turn over - the resale values of SUVs are dropping and more efficient cars are replacing them. In the 1977-82 period the US dropped its oil consumption by 25%. This is easily repeatable over the next five years.

Title: Re: Meltdown
Post by: Sean on April 29, 2008, 05:15:25 PM

...10 million years plant growth consumed per year- interesting thought. And I hope you're right about solar power- but Hubbard was advocating that many decades ago, when something needed to be done, and not enough has.

bwv I hope you're right in your sentiments. But if oil is suddenly cut off or too expensive, what will happen? What will happen if oil prices right now continue to glide up a few dollars every day, month after month this year?

Title: Re: Meltdown
Post by: BachQ on April 29, 2008, 05:16:26 PM

Quote from: bwv 1080 on April 29, 2008, 04:54:03 PM
One square meter of ground on captures 1000KHW of sunlight. Right now, we are not very good at converting this energy into useful forms. However, there solar cells are a semiconductor technology and there is no basic reason why the cost and effectiveness of solar cells are not subject to the same sort of exponential growth that drove the computer industry for the past 35 years.

Although I'm very optimistic over the longterm about the potential of solar power, one gnarly problem that must be overcome is that the indium and gallium used for solar panels (solar cells) are becoming increasingly scarce (and these elements are, themselves, nearing a "peak" of extraction). However, there surely will be substitutes for these over time.

Also, with a global population pushing 6.5 billion, it will be tough to meet global energy demands with solar .........

Quote from: bwv 1080 on April 29, 2008, 04:54:03 PM
Nothing rations a resource better than price. The US auto fleet is beginning to turn over - the resale values of SUVs are dropping and more efficient cars are replacing them. In the 1977-82 period the US dropped its oil consumption by 25%. This is easily repeatable over the next five years.

Very good points. Supply/demand (price) works well when society is properly functioning. But if there's widespread famine such that society breaks down .........

Title: Re: Meltdown
Post by: Florestan on April 30, 2008, 05:26:29 AM

Quote from: Sean on April 29, 2008, 04:43:43 PM
But this is an energy source we hardly earnt for ourselves- there's no real brain power gone into it, we just used what providence gave us.

Yeah, right, no brain involved in petroleum engineering. Extracting oil at an end and getting usable fuel at another is so simple and straightforward that one wonders why we didn't do it in 5000 B.C.

Title: Re: Meltdown
Post by: BorisG on April 30, 2008, 08:50:27 AM

Quote from: Florestan on April 30, 2008, 05:26:29 AM
Yeah, right, no brain involved in petroleum engineering. Extracting oil at an end and getting usable fuel at another is so simple and straightforward that one wonders why we didn't do it in 5000 B.C.

If the Egyptians had combustion engines then, they would have done it. ;)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:16:51 AM

Good-Bye, Cheap Oil. So Long, Suburbia?

Author James Kunstler says the Automotive Age is almost history and deconstructs McMansion living
by Mara Der Hovanesian

(http://images.businessweek.com/story/08/370/0423_mz_goodbye.jpg)

The suburban landscape has been marred by foreclosures and half-built communities abandoned in the subprime aftermath. But James Howard Kunstler, author of a dozen books, including The Geography of Nowhere: The Rise and Decline of America's Man-Made Landscape, thinks there's a bigger threat to those far-flung neighborhoods: the scarcity of oil. As Kunstler sees it, oil wells are running dry and the era of cheap fuel is over. Given the supply constraints, he says the U.S. will have to rethink suburban sprawl, bringing an end to strip malls, big-box stores, and other trappings of the automotive era. Kunstler, 59, predicts a return to towns and cities centered around a retail hub—not unlike his hometown of Saratoga Springs, N.Y. But the shift to this new paradigm, he says, will be painful. (Kunstler could be off the mark; he predicted technological Armageddon after Y2K.) BusinessWeek writer Mara Der Hovanesian spoke with Kunstler about suburbia, which he calls "the greatest misallocation of resources the world has ever known."

Why has suburban life flourished?

The suburbs were largely products of industrialism. We had a huge supply of oil and cheap undeveloped land, and we decided to become a happy, motoring utopia. It had many practical benefits. The trouble is after a while it became a cartoon of country living.

Why is suburbia now threatened?

Cheap oil is what made suburbia possible. But we'll run into problems with spot shortages. As we get into trouble with these supplies, our economy will suffer. Major instabilities in the system will present themselves much sooner than we are led to believe. And by that I mean the way we produce food, the way we conduct commerce, and the way we move around.

When will all that happen?

The rise and fall of oil production is asymmetrical. In other words, it'll be a steeper, rockier tumble down than the steady increase going up. My own sense of things is that we will be in very serious trouble inside of five years.

Won't it help to cut back on gas?

I get people who come up to the podium after a speaking engagement to tell me they've just gotten a Prius, expecting brownie points. It's not that we're driving the wrong cars. It's that we're driving cars of any size, incessantly.

What about biofuels?

We will use all of them, probably. But we will be greatly disappointed by what they can do for us. We certainly aren't going to run Wal-Mart (WMT), Disney World (DIS), and the highway system on any combination of solar, wind, nuclear, ethanol, biodiesel, or used french-fry oil.
Isn't it a bit radical to declare game over for Wal-Mart?

It is part and parcel of the suburban predicament. How long can they maintain their warehouse-on-wheels as the price of motor fuels goes up?

How will the U.S. have to adapt?

Virtually anything organized on a grand scale is liable to fall into trouble—government, finance, corporate enterprise, agribusiness, schools. Our gigantic metroplex cities will prove to be inconsistent with the energy diet of our future. I think our smaller cities and towns will be reactivated. We are going to be a far less affluent society.

Does your lifestyle reflect all this?

I live in a classic Main Street town. I've always had a garden. It certainly doesn't provide for all my needs, but for all of my salad and salsa fresca needs, in season. I'm not a survival nut. I'm not squirreling away wheat berries in plastic tubs in the basement. I don't have an arsenal of firearms. I lead a pretty normal American small-town life. Of course, I'm a self-employed author and don't have to commute to work.
(http://www.businessweek.com/magazine/content/08_18/b4082056979063.htm?chan=top+news_top+news+index_dialogue+with+readers)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:17:25 AM

High Oil Prices? You Ain't Seen Nothing Yet

http://finance.yahoo.com/tech-ticker/article/11413/High-Oil-Prices-You-Ain't-Seen-Nothing-Yet?tickers=xom

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:20:29 AM

Rising prices spread fear at the pumps

Ken Gray
The Ottawa Citizen

Friday, May 02, 2008

You drive past the gas station in Orléans and the sign says your fill is going for $1.22 a litre. Blame it on Russia. The world's largest oil producer reported that its output decreased for the first time in 10 years. It delivered one per cent less oil than a year ago. What's disconcerting about this little-known fact, trumpeted recently on the front page of The Wall Street Journal but getting little play elsewhere, is that the scenario unfolding in Russia is being repeated the world over. Essentially, its Siberian oil fields are aging, becoming tired, the easy-to-reach oil declining. It is not alone. The world's great oil deposits -- the North Sea, Mexico's Cantarell deposit and Alaska's Prudhoe Bay -- are seeing their production diminish despite astronomical demand.

So what of production from the Organization of the Petroleum Exporting Countries? Its output is flat, in part due to declining fields. Usually the price of oil has an elastic effect on output. Higher prices stimulate increased production. Nevertheless with all-time-price highs being reached regularly, world production is flattening. And some experts are concerned that many countries have wildly over-estimated their reserves.
Over the past four years, the cost of a barrel of oil has risen from $30 to $111. And yet, there has not been a corresponding production response. It sounds very much like what experts in the field call peak oil. That is, the world is producing as much oil as it ever will and that production will gradually decline as time passes due to diminishing reserves. Those same experts are reluctant to say when peak oil will be reached. We're in the neighbourhood, though.

Think not? Well, recently, T. Boone Pickens, the billionaire energy investor, told Bloomberg News he doesn't expect world oil production to exceed 85 million barrels a day because of depleting existing wells. He thinks oil will reach $150 a barrel. And then what is the No. 1 priority of General Motors? Producing the Volt, an electric plug-in car with a gas generator that keeps the battery charged on long trips. T. Boone Pickens and General Motors adjusting to expensive oil -- it doesn't get much more establishment than that.
So what does this mean to the person driving past the gas station in Orléans? Higher prices. A different lifestyle, maybe a radically different lifestyle someday.

The American Automobile Association estimates that in the United States, driving habits will change at $3.50 a U.S. gallon, with the price now in the low $3 range. Food stores south of the border are offering $10 off in gas if you buy your groceries with them. Motels are handing guests $50 gas cards. But in Canada, we're driving with gas in the $4.62 a U.S. gallon range already, with taxes and all. Yet, our driving habits haven't altered much. But for how long and at what price will they change?
When that occurs, the adjustment will be massive. The suburbs could be hollowed out through demographics (who needs a big home when the youngsters have moved out and who wants to heat it?) and when residents finally discover that the cost in time and money for the SUV isn't worth the daily drives. Pity long-distance commuting towns such as Rockland, Carleton Place and Arnprior. They are in for a shock.

Ottawans will flock to transit (already, with $1.22-a-litre gas, ridership is up as much as 6.9 per cent year over year) but our system is petroleum-dependent and labour-intensive. City finances will be further battered by increased ridership on buses that are heavily subsidized by the municipality.
Ottawa City Council naively killed the workable electric north-south light-rail project (slated to finish next year at a remarkably low cost) and now the mayor and staff have produced two badly flawed transit proposals in the past two years.

City staff's latest plan doesn't even get electric light rail to Orléans, Barrhaven and Kanata by 2031, only halfway in fact. City council needs to realize our transportation problems are now, not in some far-off fanciful date 20, 30 or 40 years in the future. Peak oil won't wait for them. The latest rail plan is expensive and not good enough. Build one line, without transfers, to Barrhaven, Orléans or Kanata while adjusting bus and car traffic to accommodate a surface line through downtown. Forget the costly, time-wasting tunnel. Build one rail line while planning the next two routes.

Electric rail must be built quickly. If not, we're in trouble.
'
Ken Gray is the city editorial page editor and a Citizen editorial board member. His column runs on Fridays. E-mail: kgray@thecitizen.canwest.com
(http://www.canada.com/ottawacitizen/news/city/story.html?id=681c4a40-9894-470c-859a-1aecf01f5839)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:20:51 AM

High Oil Prices Crunch Airlines And Other Air Travel

http://www.youtube.com/watch?v=cnYbJmGIVpM

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:22:20 AM

///

Gas prices hurt Big 3's sales in April

Posted by Rick Haglund | Detroit Bureau May 01, 2008 18:49PM

AP PhotoFour used sport utility vehicles that were traded in are pictured at a car dealership Thursday in Danvers, Mass. General Motors Corp. said gas prices helped drag down its truck and SUV sales 27 percent.

DETROIT -- Skyrocketing gasoline prices sent sales by the Detroit Three automakers, which are heavily dependent on gas-guzzling trucks, spiraling downward last month.

General Motors Corp., Ford Motor Co. and Chrysler LLC all reported Thursday sharply lower April sales.
Most foreign automakers, which sell a higher percentage of fuel-efficient cars, saw sales increases.
"Smaller vehicles are going over big," said Toyota Motor Sales President Jim Lentz. "With oil prices at a record level, compact cars and hybrids continue to lead the way."

Although Asian brands fared better than domestic automakers, total industry sales were at recessionary levels last month.

GM officials said sales last month ran at a preliminary annualized rate of 14.7 million cars and trucks. That was the lowest rate since 1992, when the U.S. economy was in recession.

"What we did not count on was oil being almost $120 a barrel," said Mike DiGiovanni, GM's executive director of global markets and industry analysis.

GM's sales fell 16.2 percent last month from April 2007, while Ford's sales were off 12.2 percent. Chrysler's sales plunged 23 percent.

Toyota posted a 3.4 percent increase while Nissan Motor Co.'s sales jumped 6.6 percent. Mazda Motor Corp. sales rose 12.8 percent. Honda Motor Co.'s figures were unavailable because of technical problems, but the automaker expected sales to be up at least 6 percent.

Although truck sales plunged, the Detroit Three automakers said sales of their more fuel-efficient cars and crossover vehicles rose.

Ford reported sales of its newly-restyled Focus compact car rose 44 percent last month compared to April 2007.

Chrysler reported its new Dodge Journey small SUV is off to a strong start, having sold nearly 6,700 units last month.

GM reported sales of its heralded Malibu mid-sized car jumped 40 percent last month from the year-ago period.

"We've seen a definite switch from large vehicles to mid-size sedans," said Scott Ellsworth, chief operating officer of Saginaw-based Garber Automotive Group.

Garber owns Buick and Nissan-Hyundai dealerships in Saginaw and a Chevrolet dealership in Midland.
Automakers said record-high gas prices are resulting in a dramatic swing in consumer demand for cars and crossovers over truck-based SUVs. A year ago, GM's sales consisted of 35 percent cars and 45 percent trucks. Last month, DiGiovanni said 45 percent of GM's sales were passenger cars. Industrywide, DiGiovanni said the percentage of cars sold jumped 6 percentage points from April 2007 to last month.
It's not just individual buyers turning away from trucks. Building contractors and other businesses that buy pick-up trucks are staying out of the market, automakers said. "It's not so much people abandoning the (truck) segment. They're just delaying the purchase," said Mark LaNeve, GM's sales and marketing chief. GM executives think the motor vehicle market will improve in the sec ond half of the year because of interest-rate cuts and federal income tax rebate checks going out this month. "We think we're in the trough of the downturn," DiGiovanni said.
(http://www.mlive.com/news/index.ssf/2008/05/gas_prices_hurt_big_3s_sales_i.html)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:27:17 AM

The Peak Oil Crisis: The Half-Life For Air Travel
Written by Tom Whipple
Thursday, 01 May 2008

In recent weeks, airlines around the world have been reporting substantial losses, declaring bankruptcy or completely shutting down. So far the losses have been mostly of small airlines, but many of the large ones have started to thrash around for merger partners. At $3.71 a gallon, jet fuel is now the single largest expense an airline faces.

In 2000, the airlines fuel bill was $14 billion. It is now pushing $60 billion and climbing. Southwest, the most profitable carrier, recently announced that this year's fuel bill will be $500 million more than last year and equal to 2007 profits. During the first quarter of 2008 American airlines lost $328 million; Delta lost $274 million; United lost $537 million; Continental $80 million; Northwest $191 million; and US Airways $236 million. Only Southwest Airlines, which did a better job of hedging its fuel than the others, made a profit.

It is clear we are going to see major changes in air travel shortly.For some time now, airlines have been eliminating frills, raising prices, filling the planes and effecting whatever other economies come to mind. After the summer flying season ends next September, many airlines are planning to retire 5-10 percent of their least efficient aircraft, thereby reducing their flight schedules by a similar amount.Knowledgeable observers are expressing doubts these moves will be enough. People are starting to talk about $200 oil which implies that airline fuel costs will double again. Newer aircraft are more efficient, but the improvements are nowhere near what is necessary to keep up with surging fuel costs and, as Continental Airlines concluded this week, there is not enough financial benefit in a merger to keep up with costs.Airlines are continuing to raise fares -- the average ticket is up 10 percent over last year -- but at some price point the airlines will drive away discretionary travel and they will be left with only essential business and personal travel that is unlikely to fill many planes.

On top of the fuel prices is the current economic downturn which is likely to start impacting discretionary travel before the year is out. In short, airplanes simply can't make money while charging affordable fares at current, much less prospective, fuel prices. The era of 500 mph travel for most people is nearly over.There is no obvious way out of this dilemma unless there is a major breakthrough in the efficiency of aircraft. Fares will continue to rise. Flights will be cut. Smaller cities will lose their air service. Shorter trips will be eliminated as being too expensive. More seats are likely to be squeezed on planes and one manufacturer is even pondering seat-less planes in which passengers are strapped to boards during the flight. Ten or 15 years from now, air travel is likely to be significantly reduced; will be patronized by business travelers or the very wealthy; and will be limited to trans-oceanic or long-distance flights between major population centers.Consolidation of the major airlines and the demise of the smaller regional carriers has already started. After a number of rounds of consolidation, we will be down to only a handful of national or multi-national airlines probably subsidized by governments on "national security" grounds.While the demise of inexpensive discretionary air travel has ramifications for many industries, in the first instance tourism is likely to be hit the hardest.Ignoring for the minute the likely effects of $4 or $5 gasoline in California this summer, Las Vegas reports that nearly half of its tourists arrive by air. To make matters worse, resort operators have recently spent billions upgrading their facilities to the $300 a night places that are less likely to attract drive up customers. The same pattern can be repeated at air-dependent tourist attractions all over the world.There is still a remarkable amount of denial in the airline business. This week Airbus released a forecast showing that the number of large commercial aircraft will grow from 15,000 to 33,000 in the next 20 years and that the number of passengers will triple. If there is to be a long-term future for air travel, it is unlikely to be with liquid fuel powered turbines driving heavier than air devices. The U.S. Air Force is currently embarked on a campaign to convince the Congress to buy it a multi-billion dollar facility to convert coal to jet fuel and a couple of airlines are busy demonstrating that their planes will run on biofuels. While limited use of coal to liquid fuel or biofuels for aircraft may see limited use, neither of these replacements is likely to produce enough affordable fuel to keep Airbus's 33,000 large transport jets in the air 20 years from now.Over the longer run, the development of hydrogen powered aircraft might prove feasible or perhaps lighter-than-air dirigibles might be developed to the point where they can move people and goods efficiently over long distances. In any case, the day of the ubiquitous kerosene-powered jet transport which revolutionized travel for many of us in the second half of the 20th century is likely to be shorter than most realize.

(http://www.fcnp.com/national_commentary/the_peak_oil_crisis_the_half-life_for_air_travel_20080501.html)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:28:16 AM

Food troubles are here to stay

By Uri Gordon and Lucy Michaels

Tags: Israel
The government sends calming signals and says no dramatic shortages are expected. The Economist says do nothing, market forces will sort it all out. But as the global food-price crisis hit Israel this week, something told us we are not being told the whole story. Around the world food prices are soaring. Since January 2006, the price of rice has risen by 217 percent. Wheat, corn and soybean prices have more than doubled, and in several countries, milk and meat prices have also doubled. Food prices and falling wages have sparked riots in more than 30 countries from Bangladesh to Egypt to Haiti - where the prices of rice, beans, fruit and condensed milk have gone up 50 percent over a few months, while the price of fuel has tripled.

In January 1999, crude oil cost $8 a barrel. Today it costs $119. Oil is vital for every stage of industrialized agriculture: from synthetic-pesticide and fertilizer production, to fuel for farm machinery and international freight. All of these have seen steep price hikes, and not surprisingly, food prices have risen with them.

The reality is that we are effectively "eating oil." The shift to industrial agriculture over the last 60 years has left our food systems dependent on a nonrenewable resource. Now we are paying the price.

The rise in oil prices betrays a genuine market concern about "peak oil." Most geologists today agree that world oil production is reaching, or has already reached, its point of historical maximum. Like with any other nonrenewable resource, once the peak is passed, oil availability begins to decline and prices rise to reflect the growing scarcity.

Western governments don't publicly talk about peak oil, but they have been quietly and efficiently subsidizing the massive expansion of biofuels: converting the use of millions of acres of land from food to fuel crops, such as maize and canola, again contributing to rising food prices. Meanwhile, land previously used to grow food is increasingly converted to grow animal feed, as the globalization of the American diet results in an increasing demand for meat worldwide.

The United Nations Food and Agriculture Organization hopes that a projected 2.6-percent increase in world cereal production next year will ease the crisis. But this depends on favorable weather. This year, droughts in Australia and unseasonable rains in India caused crop failures that contributed to the crisis. If these events represent a new era of erratic and unpredictable weather patterns driven by global warming, the projections may fail to materialize.

Between peak oil and climate change, this may be the "perfect storm" that marks the beginning of the end of our civilization in hyperdrive. At the very least, the situation forces us to recognize that our modern industrial food system is extremely vulnerable and cannot be sustained on the current model.

The good news is that around the world, and in Israel, too, people are creating solutions that can make our future less precarious. Intelligent, small-scale and organic-farming methods, together with a resilient local economy, can help us weather the storm. This will require some serious transitions, but it is entirely possible.

Cuba survived its own version of peak oil with the collapse of the Soviet Union - its major source of food and oil imports. In response, the Cubans swiftly turned their gardens over for food production, and switched from industrialized agriculture to cooperatively owned organic farms.

Israel will also need to confront the challenge of self-sufficiency. Connecting the dots, the food and fuel crisis this year will only be exacerbated by the serious water crisis caused by the cold dry winter. Israel's clever "techno-fix" for the water crisis, desalinization, is not the solution, since it is hugely energy intensive. Breaking the addiction to oil is clearly a necessary step in a transition to a healthier and more sustainable society.

Dr. Uri Gordon teaches at the Arava Institute for Environmental Studies, and is the author of "Anarchy Alive!" (Pluto Press). Lucy Michaels is a doctoral environmental policy researcher at Ben- Gurion University.
(http://www.haaretz.com/hasen/spages/980076.html)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:28:50 AM

Doomsday

(http://www.building.co.uk/Pictures/436xAny/x/q/m/rob_hopkins_6140.jpg)

Rob Hopkins: Eco Worrier
2008 Issue 17
By Thomas Lane

The era of cheap oil is over and our economic system is doomed, believes environmentalist Rob Hopkins. So is he gloomy? Not a bit of it. It's such a tremendous opportunity.

2 May 2010. The world wakes up to news that the United States Air Force has started bombing Iran. With its country deep in recession, the US government needed something to divert attention from its domestic problems and Iran's rapidly developing nuclear programme provided the perfect opportunity. But the plan quickly starts to unravel. A furious Iran suspends all oil exports to the West, as does its ally Russia. Anti-US riots in Saudia Arabia force its government to follow suit, a pattern that is swiftly repeated across the Arab world.

The oil shortage sees prices rapidly quadruple to nearly $500 a barrel. The price of all basic commodities rocket and stabbings at garages become a daily occurrence in queues for rationed fuel. A protest lobby calls for fuel duty to be scrapped, then blocks motorways when the government says no. The resultant panic-buying clears supermarket shelves and thousands are left without food. As fear grips the nation, one person remains calm. His name is Rob Hopkins and he lives in Totnes, south Devon. After all, he's been expecting this for years.

This scenario may be fictional, but it has echoes of the 1973 oil shock. "There is a feeling we are coming to that time again," says Hopkins who, at 39, just about remembers it first time round.
And he is well prepared if we do run out of fuel. Already his office, above a shop on Fore Street in Totnes, is barely heated and he wears a thick woollen jumper to keep warm.

This office is the nerve centre of Transition Network, a movement pioneered by Hopkins to help communities prepare for "the end of cheap oil". Its message is that once the world hits peak oil production – that is, when there are no big reserves left to discover and supply is heading downhill – prices will rise uncontrollably, destroying in a stroke the foundations of the world's economy.

"I think we are certainly within 10 years of the oil peak. Some argue it's already happened. So we need to start thinking seriously about how we adapt," he says, speaking with quiet, firm conviction.

"Our starting point is to help communities design a vision of where they see themselves in 20 or 30 years, in a lower energy context," he says. The idea is to make communities resilient enough to withstand external shocks, be it food and materials shortage or economic mayhem.

The only way to do this is to produce as many things as possible locally, without relying on oil, says Hopkins. "Oil-reliant" products are generally manufactured on an industrial scale and shipped great distances. Post-oil building materials, in contrast, could include mud, straw, wood, cob, hemp and lime, grown, mined or processed by local people.

Post-oil buildings will vex tower-besotted architects. "We are probably at the peak of the age of enormous cement, steel and glass buildings," says Hopkins. "They're based on the idea of a continuing supply of cheap oil."

Hopkins has chosen a pertinent place to base his movement. Just up the road is Dartington Hall, where, in 1925, Leonard and Dorothy Elmhirst founded a trust to try to halt rural depopulation by setting up schools, farms and factories all run on principles deemed progressive. The "Dartington effect" permeates the area. Totnes High Street is peppered with shops selling crystals, organic food and homemade shoes.
Hopkins moved to Totnes from Ireland in 2005, where he had been teaching permaculture for nine years – a lifestyle based on creating sustainable human habitats in co-operation with nature. This is the philosophy that underpins the movement. Transition Towns Totnes, which he founded in 2006, is the first place in which Hopkins has put his ideas in practice.

He stresses that transition doesn't begin with all the answers. It's a starting point, a catalyst. A key part of the process is working out where the community wants to be when oil starts getting scarce and work backwards to see what needs doing along the way. Hopkins calls it a "community resilience plan" or an "energy descent plan". This will be developed over the next 18 months to decide what Totnes should look like in 2030. A private grant will enable someone to be appointed full time to manage the process.
So has Hopkins' movement instigated any change in Totnes, apart from a few nut trees being planted at the leisure centre? Indeed it has. Incredibly, Totnes has its own currency. Called the Totnes pound (pictured right), it has the same value as a pound sterling but can only be spent locally, keeping money in the local economy. It is accepted by 70 local shops and there are 7,000 notes in circulation. We're not talking Monopoly money here – each note is individually numbered and has UV marking to make it less susceptible to forgery. A community-based provident society called Totnes Currency is being set up to run the scheme. At the moment it only comes in denominations of a pound but Hopkins says a five pound note will be introduced this summer.

In terms of property, a redundant milk factory could be the first big scheme to adopt transition principles. The 8-acre site next to Totnes Station is up for grabs and a local trust wants to develop it along Hopkins' lines: a kind of post-oil mall with units for small businesses, food outlets, an arts and culture space and educational facilities. It would include housing to ensure the scheme stacks up financially and all the buildings would be constructed from local, low-impact materials where possible.

"It would be a fabulous thing for Transition Towns Totnes," says Hopkins. "We want to do something radically low-carbon and really exciting with it."

All these ideas have support from the local chamber of commerce, the town council and Devon council. Humphrey Temperley, executive member of the county council for economic regeneration, thinks it's great. "I really do think the transition movement is good for Devon and the South-west and I wish we had more of this going on," he says.

Hopkins' ideas have reached even farther afield. Fifty places, including Bristol, Brighton, Nottingham and the Isle of Wight, have formally signed up to Transition ideals. More than 700 others are considering signing up across the world. Not bad for an organisation that relies entirely on social philanthropists and community funding.

Hopkins isn't scared by the apocalyptic vision sketched above. "Our starting point is that it's a tremendous opportunity rather than a crisis," he says. "Implicit within it is the potential for the greatest social and economic renaissance we've ever seen."

Let's hope he's right about that.
(http://www.building.co.uk/story.asp?sectioncode=659&storycode=3112397&c=1)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:30:44 AM

Natural born survivors
(http://www.guardian.co.uk/society/2008/may/02/communities.fossilfuels)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:31:50 AM

The future of energy
(http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20080501/PUB03/805010520)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:32:23 AM

Peak oil expert also makes presentation at BCC
(http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20080501/PUB03/805010524)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:32:49 AM

U.S. Economy: Confidence Falls, House Prices Decline (Update1)
By Bob Willis and Shobhana Chandra

(http://www.bloomberg.com/apps/data?pid=avimage&iid=iJNkLJQueyqsc)

April 29 (Bloomberg) -- Confidence among Americans fell to a five-year low this month after home prices dropped by the most since at least 2001, signaling a deepening threat to consumer spending.
The Conference Board's confidence index fell to 62.3 in April, posting its biggest three-month slide since the last recession in 2001, the New York-based research group said today. House prices in 20 U.S. metropolitan areas dropped 12.7 percent in February from a year earlier, more than forecast and the most since S&P/Case-Shiller's records began seven years ago.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=agQQsnDV3HII&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:33:45 AM

Why is the US leadership so fundamentally fucked up?

Asked about peak oil and renewable energy research, Bush said, "[Y]ou say that people think we can't — there's not any more reserves to be found. Well, there are reserves to be found in ANWR; that's a given. I just told you that there's about 27 million gallons of diesel and gasoline that could be — from domestically produced crude oil that's not being utilized. And not only that, we can explore in environmentally friendly ways." Asked about possible steps the administration can take "in the short term," Bush said, "
pening up ANWR is not long term, it's intermediate term. But it sends a clear signal, is what it does."
(http://www.thecarpetbaggerreport.com/archives/15374.html)

Title: Re: Meltdown
Post by: BachQ on May 02, 2008, 10:34:46 AM

Independent.co.uk
Hamish McRae: We will never have cheap oil again (http://www.independent.co.uk/opinion/commentators/hamish-mcrae/hamish-mcrae-we-will-never-have-cheap-oil-again-818008.html)

Title: Re: Meltdown
Post by: Sean on May 02, 2008, 11:11:48 PM

Dm, I've had another read and listen today on this subject. Do you come across any other concrete forcasts for the present oil price surge? It's obviously volatile, but how volatile? I hardly believe in the world at all and know that the more serious something is the less people will really talk about it: is this the steep edge on the other side of the peak or just the start of a gentle slope?

Title: Re: Meltdown
Post by: Sean on May 02, 2008, 11:43:11 PM

As Kunstler says on vid4 of The Long emergency, governments' decision not to discuss these issues is itself a key sign of instability. And he doesn't really blame them, as indeed they can't be blamed in democracies, where they reflect the masses- who don't want to know because they're not the kind of people who could have any answers and should never have had any power in the first place.

Title: Re: Meltdown
Post by: Sean on May 02, 2008, 11:47:00 PM

http://www.youtube.com/watch?v=-uNkhUK9-KE&feature=related

What he's saying here is so right: the problem is outside of the context of most people's understanding of the world, so they just don't/ can't address it. People who even begin to think outside the paradigm are therefore conspiracists.

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:50:07 AM

Hi, Sean!

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:52:02 AM

Quote from: Sean on May 02, 2008, 11:11:48 PM
Dm, I've had another read and listen today on this subject. Do you come across any other concrete forcasts for the present oil price surge? It's obviously volatile, but how volatile? I hardly believe in the world at all and know that the more serious something is the less people will really talk about it: is this the steep edge on the other side of the peak or just the start of a gentle slope?

Sean, the debate of whether post-peak scenarios will be represented by a "fast crash" versus a "slow decline" was discussed

here:

http://www.energybulletin.net/43111.html

The conclusion? "Fast crash wins. And we're in it now." But no one really knows if it will be a fast crash.

BTW, "fast crash" doesn't mean on Monday things are great, and on Tuesday we're in the midst of doomsday. Rather, it means that "things simply fall apart at an astounding rate, faster than anyone could have predicted"

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:53:44 AM

Quote from: Sean on May 02, 2008, 11:47:00 PM
http://www.youtube.com/watch?v=-uNkhUK9-KE&feature=related

What he's saying here is so right: the problem is outside of the context of most people's understanding of the world, so they just don't/ can't address it. People who even begin to think outside the paradigm are therefore conspiracists.

Sean, that's way too much truth for the vast majority of the population to accept ....... People have defense mechanisms in place that will allow them to deny this until they are bitchslapped into reality ........ This is the "Outside Context Problem" (people cannot process this information and cannot conceive of any other way of life).

The American public is stuck in "the psychology of previous investment" (we have invested our national wealth in a deeply oil dependent economy "that has no future") ....... Our current oil-oriented regime represents "the greatest misallocation of resources in the history of the world."

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:54:34 AM

Oil is expensive because oil is scarce

By David Strahan

Last Updated: 12:01pm BST 03/05/2008

***All the evidence now suggests the world is rapidly approaching "peak oil", the point when global oil production goes into terminal decline for fundamental geological reasons. Annual discovery of oil has been falling for over forty years, and now for every barrel we find we consume three. Oil production is already shrinking in 60 of the world's 98 oil producing countries – including Britain, where output peaked in 1999 and has already plunged by more than half. When an individual country peaks it only matters for that country – Britain became a net importer of oil in 2006 – but when global supply starts to shrink the effects could be ruinous for everybody.

Analysts divide the oil producing world into two halves: OPEC and the rest. There is broad agreement that non-OPEC oil production will peak or at least plateau by about 2010. ExxonMobil chief executive Rex Tillerson said last year that non-OPEC production growth would be all over in "two to three years". That judgment now seems even more certain.

Since the turn of the century non-OPEC oil production has been sustained only by big increases in Russia, the world's largest producer, as the oligarchs that control the industry invested billions refurbishing fields that had been allowed to deteriorate after the collapse of communism. But now the easy gains have gone and growth rates have slumped. This month Leonid Fedun, a senior executive with Lukoil, Russia's second largest oil company, said the country's output had peaked and would never exceed current levels "in his lifetime".

So we now depend on OPEC as never before, and this explains the increasingly shrill pleas from Western officials for the cartel to raise production. But many suspect OPEC could not increase output even if it wanted to – at least not by much – and may also peak soon. There have long been doubts about the true size of OPEC's claimed reserves, which seem to have been falsely – and massively - inflated during the 1980s when members were vying for larger shares in the new quota system. And now there are growing concerns about some of OPEC's most significant producers.

Just last week Saudi Arabia, the world's largest oil exporter, announced that all plans to expand oil production capacity beyond 2009 had been shelved. The oil minister justified the decision by claiming that, given the economic outlook, there would be no demand for the additional oil – which is arguable but unlikely. Even the mildly skeptical will suspect the move was not entirely voluntary.

In Nigeria, Africa's biggest oil producer, output has already fallen 20% because of repeated attacks by militants in the Niger delta. But now a recent report by the government's energy advisers has concluded that even if investment is maintained at current levels "total oil and gas production will decline by 30 per cent from its current level by 2015".

The one OPEC member which undoubtedly has large untapped oil resources is Iraq, but here the continuing butchery and failure to agree a new law governing oil and gas production makes any early increase highly unlikely.

In these circumstances it is no surprise that the oil price has soared to record levels – almost $120 earlier this week – nor that many now predict a further pole-vault to $200, including the EU's Energy Commissioner, the President of OPEC, and city analysts Goldman Sachs. What is surprising is the number of apparently intelligent people who cleave to fanciful explanations for the oil price rise, such as speculation and the weakness of the dollar.

No doubt these factors play a part, but the simple fact is that global oil production – including non-conventional sources, biofuels and the kitchen sink - has remained essentially flat since early 2005. For three years the oil supply has been a zero sum game in which if one country consumes more, another has to consume less. Since so much of the demand growth comes from the developing world or OPEC members themselves, oil demand will probably continue to grow despite the gathering recession in the West. It is shortage that makes oil futures so attractive to investors.

And yet the British government's central forecast is that oil will cost $57 per barrel in 2010 and fall to $53 by 2020. This absurd prediction is incomprehensible until you consider the political realities: even more than climate change, peak oil demands that governments confront voters with uncomfortable truths that will impact living standards. In Whitehall, legs will remain crossed and buttocks clenched as politicians and officials pray it doesn't happen in their term of office, or before they draw their inflation-linked pension.

So Gordon Brown's website blithely proclaims "...the world's oil and gas resources are sufficient to sustain economic growth for the foreseeable future", despite all evidence to the contrary. Still, perhaps he can say this with some confidence; the way things are going, his foreseeable future is not all that long.
(http://www.telegraph.co.uk/opinion/main.jhtml?xml=/opinion/2008/05/03/do0311.xml)

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:55:16 AM

The Real Reason Why Bush Wants to Attack Iran
(http://www.opednews.com/maxwrite/diarypage.php?did=7240)

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:55:35 AM

James Howard Kunstler
(http://www.texasobserver.org/article.php?aid=2752)

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:56:56 AM

Ethanol loses halo but still has U.S. support
Fri May 2, 2008 2:07pm EDT
By Chris Baltimore

WASHINGTON (Reuters) - Soaring food prices have shaken U.S. politicians' love affair with ethanol, but lawmakers are unlikely to adjust mandates for a five-fold boost in biofuel until after the November presidential election.

Renewable fuels made from corn and other crops were once seen as the panacea for an impending U.S. energy crunch, both in Congress and the White House.

But cattle, hog and chicken farmers who have seen feed prices skyrocket, as well as grocery store chains and restaurants, have sought to cast the fuel as the political boogeyman for soaring prices at the supermarket.

Some U.S. politicians are now calling for Congress to rethink legislation it passed last year that would require U.S. gasoline supply to include 36 billion gallons of renewable fuels by 2022.
At least one U.S. senator, Kay Bailey Hutchison (R-Texas), is seeking to freeze the mandate at 2008 levels of 9 billion gallons.

That's after the governor of Texas -- whose state is the biggest U.S. cattle producer -- asked the federal government to waive half of its mandated ethanol requirement for 2008.

THE THIRD RAIL

After the election, lawmakers could become braver and water down the renewable fuel use mandates, analysts said. The Environmental Protection Agency, which has jurisdiction over the rules, could also exercise authority to waive requirements or even write new, less stringent rules.

But ethanol has become the "third rail" of U.S. election-year energy policy, and Congress is unlikely to fiddle with ethanol mandates during a presidential election year. Lawmakers are loath to alienate the 10 Corn Belt states that together control about one quarter of Electoral College votes. "The political support base for ethanol is a numbers game and it's one that no right-thinking national party planner can ignore," said Kevin Book, senior analyst at Friedman, Billings, Ramsey and Co Inc. And President George W. Bush, who has described himself as "an ethanol person," is unlikely to move much from his long-standing support for home-grown fuel supplies, analysts said. Bush sees ethanol as a welcome alternative to the oil imports that satisfy over 60 percent of daily U.S. consumption. "It makes sense for America to be growing energy," Bush told a crowd in St. Louis on Friday. Though the ethanol mandate has contributed to rising food prices, "I simply do not subscribe to the notion that it is the main cost driver for your food going up," he said.

INCREASED DISILLUSIONMENT

Powerful Corn Belt lawmakers are sure to fight vociferously to defend the so-called Renewable Fuels Standard, a boon to their farmers and big agribusiness concerns like Archer Daniels Midland (ADM.N: Quote, Profile, Research), Cargill Inc and Bunge Ltd (BG.N: Quote, Profile, Research).
But a growing coalition of anti-ethanol interests, including cattlemen, restaurateurs, grocery sellers and big poultry concerns like Perdue, could be enough to eventually tip the balance toward watering down the requirements, analysts say.

Analysts at Bernstein Research this week pointed to "increased disillusionment" with U.S. biofuel use and predicted that lawmakers will tweak the requirements before 2022. A more likely scenario would be for the EPA to issue a waiver of the rules, Bernstein said. Meanwhile, big ethanol producers pin the blame for soaring food prices squarely on the OPEC oil cartel and crude oil prices, which hit a record near $120 a barrel this week. "Attempts to jettison the still-growing biofuel industry because of misplaced blame would relegate America and the world to more of the same," said Bob Dinneen, president of the Renewable Fuels Association, which lobbies for big U.S. ethanol producers.

THE CORN FLAKES KID

At a news conference on Thursday, Republican Sen. Chuck Grassley of Iowa, the biggest U.S. corn-growing state, showed up armed with an ear of corn and a family-sized box of Corn Flakes which he said he had bought that morning for $5. Grassley, one of the primary authors of the renewable fuels plan, said farmers would only reap about a dime in profit from a box of cereal. "Don't be blaming the farmer and ethanol for the high price of food," Grassley said.
(http://www.reuters.com/article/reutersEdge/idUSN0219235420080502)

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:57:20 AM

Bush says food prices high because of energy
Fri May 2, 2008 1:19pm EDT

ST. LOUIS (Reuters) - Food prices have been rising as a result of soaring energy prices but the use of corn-based ethanol is not the main driver behind rising prices at the supermarket, U.S. President George W. Bush said on Friday. "The reason why food prices are high now is because, one, energy costs are high and if you're a farmer you're going to pass on your costs of energy in the products you sell otherwise you go broke," Bush said in response to a question after a speech to employees at a technology company.
(http://www.reuters.com/article/politicsNews/idUSWAT00942320080502)

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:57:57 AM

Families suffer as food prices jump: lawmakers
Thu May 1, 2008 5:44pm EDT
By Christopher Doering

WASHINGTON (Reuters) - Soaring food prices have forced U.S. families to cut back on fruits, vegetables and other items, as the poor and middle class spend more of their budgets at the grocery store, lawmakers said on Thursday. "Everywhere you go food prices are higher and higher and higher," Sen. Charles Schumer said at what has been billed as the first Congressional hearing with House and Senate lawmakers to discuss the impact of high food prices.
(http://www.reuters.com/article/domesticNews/idUSN0145310720080501)

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 10:59:25 AM

When Oil Prices Rise, So Does Just About Everything Else

The Dallas Morning News reports it simply for consumers: Higher oil prices are affecting the things we buy.
"When oil gets expensive, everything gets expensive. Everything.

Think about it: Almost everything we consume must be transported in boats, planes, trains or trucks that run on petroleum-based fuel. And a lot of consumer goods – and their packaging – are made of petroleum-based plastics or chemicals." Maybe tomorrow they'll report the sky is blue, the grass is green and the ocean is big.

But it's unusual that deep in oil country, a Texas paper is reporting such an easy-to-understand concept that the rest of America already understands. From the recent remarks by the US Ag Secretary to economic analysis, higher energy costs will continue to cause trouble for our economy. And its not just our food prices that are climbing due to higher energy costs.

So perhaps the ominous warning from the former CIA director that foreign oil poses our greatest threat to our security will help policymakers move us towards renewable fuels grown here in the USA.
(http://www.foodandfuelamerica.com/2007/10/dallas-morning-news-reports-when-oil.html)

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 11:01:48 AM

May 2, 2008
As Gas Costs Soar, Buyers Flock to Small Cars
By BILL VLASIC

(http://graphics8.nytimes.com/images/2008/05/02/business/02auto600.jpg)

DETROIT — Soaring gas prices have turned the steady migration by Americans to smaller cars into a stampede. In what industry analysts are calling a first, about one in five vehicles sold in the United States was a compact or subcompact car during April, based on monthly sales data released Thursday. Almost a decade ago, when sport utility vehicles were at their peak of popularity, only one in every eight vehicles sold was a small car. The switch to smaller, more fuel-efficient vehicles has been building in recent years, but has accelerated recently with the advent of $3.50-a-gallon gas. At the same time, sales of pickup trucks and large sport utility vehicles have dropped sharply. In another first, fuel-sipping four-cylinder engines surpassed six-cylinder models in popularity in April.
(http://www.nytimes.com/2008/05/02/business/02auto.html?em&ex=1209960000&en=17baf3618132bab3&ei=5087%0A)

Title: Re: Meltdown
Post by: BachQ on May 03, 2008, 11:02:46 AM

Housing Bubble Popped by Spike in Fuel Costs, New Analysis Shows Outlying Suburbs Hardest Hit With Devalued Real Estate

CHICAGO, May 2 /PRNewswire/ -- While predatory lending and sub-prime mortgages have taken the blame for the dramatic decrease in housing prices and the glut of foreclosures nationwide, a new analysis shows that rising fuel costs played a significant role in the collapse of America's housing bubble.

That's according to a new report released today by CEOs for Cities titled "Driven to the Brink: How the Gas Price Spike Popped the Housing Bubble and Devalued the Suburbs," by economist Joseph Cortright.
"The popular narrative on the collapse of housing prices has only blamed exotic lending practices," said Cortright, "but the much more important story is about how higher gas prices have re-drawn the map of urban real estate values. Vibrant central cities just got a whole lot more valuable."

The analysis found that while there is overall weakness in housing prices, price declines are generally far more severe in far-flung suburbs and metropolitan areas with weak central cities. The reason for this shift is rooted in the dramatic increase in gas prices over the past five years. Cities and neighborhoods that require lengthy commutes and provide few transportation alternatives to the private vehicle are falling in value more precipitously than more central, compact and accessible places, the study shows.

In fact, growth in housing prices was fueled by low and stable gas prices from 1990 through 2004. The rise in gas prices from less than $1.10 in early 2002 to more than $3 today has dealt a major blow to consumer purchasing power and weighs most heavily on those metropolitan areas and those suburbs where people have to drive the farthest. The decline in housing markets is strongly correlated with auto dependence.

As measured by the change in housing prices over the last year, distant suburbs have seen the largest declines, while values in close-in neighborhoods have held up better, and in some cases continued to increase.

The study looked at housing values in five cities in both close-in and distant neighborhoods and found that in each case, housing prices fared worse in the more distant neighborhood. For example, the average house in the 60618 zip code in Chicago (5.6 miles from the downtown loop) appreciated from $374,000 to $410,000 (an increase of $36,000) between the fourth quarter of 2006 and the fourth quarter of 2007. A house in suburban Buffalo Grove (60089) that sold for the same price in 2006, declined by $30,000 over the course of the year.

The run-up in gasoline prices has re-written the calculus of suburban housing economics in two key ways. First, there has been an income effect: suburban households spend more of their income on transportation and gas and have therefore taken the biggest hit to their budgets. As a result, they have less income to spend on housing. Second, there has been a price effect: because living in distant suburbs requires more driving, potential buyers are now willing to bid less for houses at the suburban fringe.

"These changes will not be short-lived, and they can't be addressed with short-term fixes," said Carol Coletta, President and CEO of CEOs for Cities, a national network of urban leaders, which commissioned the study. "Public policy must recognize the new realities by changing land use planning and investment to encourage re-use of existing urban land and less driving. In this new world of high gas prices, strengthening the urban core is not only a matter of civic pride. It makes financial sense for America's families."

The report concludes with five policy implications:

-- The relative decline in prices in sprawling suburbs is likely to
persist because of the continued high price of gas, and governments
should plan accordingly.

-- The market for higher density and redevelopment in close-in
neighborhoods is likely to grow stronger, and local land use plans
should accommodate this shift.

-- Government can help families save money by making it easy and
convenient to live in mixed-use, close-in neighborhoods served by
transit.

-- Reducing vehicle miles traveled not only saves families money,
households that drive less have more to spend on other things,
stimulating the local economy. Additionally, reducing oil consumption
not only cuts greenhouse gas emissions but lowers the trade deficit.

-- Many distant exurban developments may no longer be economical, and
propping up building and homeownership in these areas encourages
unsustainable settlement that makes families even more vulnerable to
future gas price increases.
(http://sev.prnewswire.com/workforce-management/20080502/AQF04702052008-1.html)

Title: Re: Meltdown
Post by: Sean on May 04, 2008, 01:00:45 AM

Thanks for those links Dm; I also though these were memorable lines-

QuoteThe American public is stuck in "the psychology of previous investment" (we have invested our national wealth in a deeply oil dependent economy "that has no future") ....... Our current oil-oriented regime represents "the greatest misallocation of resources in the history of the world."

Title: Re: Meltdown
Post by: BachQ on May 04, 2008, 07:18:51 PM

Who Really Pulled Off 9/11? - Watch both parts (http://www.youtube.com/watch?v=LLwBD59WTNY)

1/2http://www.youtube.com/v/LLwBD59WTNY

2/2http://www.youtube.com/v/YlEpEqsH-v0&feature=related

Title: Re: Meltdown
Post by: Lethevich on May 05, 2008, 12:50:28 AM

Quote from: Dm on May 04, 2008, 07:18:51 PM
Who Really Pulled Off 9/11? - Watch both parts (http://www.youtube.com/watch?v=LLwBD59WTNY)

This informative website details the information in a clear and unbiased manner. (http://www.encyclopediadramatica.com/index.php/JEWS_DID_WTC)

Title: Re: Meltdown
Post by: Daverz on May 05, 2008, 02:33:55 AM

Quote from: Dm on May 02, 2008, 10:16:51 AM
Virtually anything organized on a grand scale is liable to fall into trouble—government, finance, corporate enterprise, agribusiness, schools. Our gigantic metroplex cities will prove to be inconsistent with the energy diet of our future. I think our smaller cities and towns will be reactivated. We are going to be a far less affluent society.

I still don't get this thing Kunstler has about small towns. Why wouldn't fewer highly dense cities be more energy efficient? It does have to be the right kind of density (not L.A. kind of density).

I wonder how things are going to play out in my area (San Diego County), which is highly ex-urban. There's no way to make mass transit work here without changing the way everything is laid out.

Title: Re: Meltdown
Post by: BachQ on May 05, 2008, 04:13:15 AM

Sean, if you haven't already watched this ......... well ......... here it is:

Mega Disasters: Oil Apocalypse

http://www.youtube.com/v/nbWGoPEN9l8

MEGA DISASTERS explores the worst of what could happen.

"The oil that runs our world won't last forever. The gap between supply and demand is ever-growing. Even without increasing our current rate of consumption we will empty the Earth's large but finite reservoirs in a relatively short time. Will alternative energy save us or is it already too late? What would happen to the world as we know it when our oil dependent industries come to a grinding halt? A worldwide depression is a certainty but a power struggle for the basic necessities of life would be complete chaos."

-- Mega Disasters: Oil Apocalypse DVD available at History.com

Title: Re: Meltdown
Post by: BachQ on May 05, 2008, 04:14:02 AM

Gas spikes 15 cents in 2 weeks - survey

Retail gasoline prices climb to national average of $3.62 a gallon, according to Lundberg survey.
(http://money.cnn.com/2008/05/05/news/economy/gas_prices/index.htm?postversion=2008050503)

Title: Re: Meltdown
Post by: BachQ on May 05, 2008, 04:15:06 AM

Washington Times

Article published May 5, 2008
The coming crisis

May 5, 2008

By Daniel L. Davis - For more than a decade, English petroleum geologist Colin Campbell has been sounding the warning bell about the coming of peak oil and its disturbing ramifications for the world. Since 2005 Dr. Robert Hirsch has been giving specific warnings for the United States through a series of Department of Energy-sponsored reports outlining the dangers to America if the peak finds us unprepared. And in the past year, the GAO, the National Petroleum Council, and scores of other organizations and governments around the world have reported on the severe consequences the world might incur once the peak has been achieved.

The issue is not simply a concern that we will have to pay outrageous prices for a gallon of gas. If that were the worst of it, the situation would be difficult but manageable. The reality, however, goes deeper and is much more troubling. There are multiple problems affecting the world that are having a decidedly negative net effect: a global rise in demand for crude oil, the plateau in the production of crude oil (which may indicate the peak has already been reached) and continued global population growth. Together, these three factors are serving to shove the world into a crisis that has ominous possibilities.

When there isn't enough oil to satisfy global demand, the price obviously rises. Perhaps less obvious, however, is the effect this price increase has on the world's ability to produce food. Every stage of the food production cycle is affected by petroleum and a rise in the price of a barrel of oil has compounding effects: It costs more to run the farm machinery, more to buy the fertilizer, more to take it to market and more for processing. In the United States, this results in raised eyebrows at the grocery store. In parts of the world where upwards of 75 percent of a family's income goes to buying food, it results in social unrest and riots.

The United Nations estimates that global population is growing at the rate of 78 million people a year — roughly the equivalent of adding the population of Germany to the world every year. According to Energy Information Administration data released earlier this month, global petroleum production has been on a relatively level plateau for the past 44 consecutive months.

But at the same time, the economies of China and India have continued growing, which accelerates the consumption of petroleum-related products and increases the amount and quality of food each person eats. These three facts have conspired to produce a global shortage of crude oil which has exacerbated the world's inability to feed itself. If the world cannot produce significantly more barrels of oil per day, while at the same time the developing world's appetite continues to increase and the global population continues its climb, there won't be enough oil to go around or enough food for everyone to eat.

In just the past two weeks we have been given a foretaste of what that might mean as news organizations have reported rioting and social unrest in developing countries around the world as a result of food shortages; Canadian Bank analyst Jeff Rubin predicted oil prices will "soar to $225 a barrel by 2012." Many experts expect these twin afflictions to remain for the foreseeable future.

This is not the time for more talk and half-measures. Facts on the ground demand urgent, robust and sustained action at the highest levels of government. The America public gets it, as an April 20 poll by WorldPublicOpinion.org found that 76 percent of Americans "believe that their government should make long term plans to replace oil as a primary source of energy." With such a high percentage of the population agreeing with such a necessity, where are our national leaders on this issue? While our presidential candidates continue to be satisfied discussing such critical issues as what someone's pastor said, (who is bitter and who gets angry a lot), there has been not one substantive exchange regarding the most pressing issue facing our country.

Someone must step up and lead before a crisis of global proportions is thrust upon us and our only option is the implementation of draconian damage-control measures. Pray such a leader surfaces soon.
(http://washingtontimes.com/article/20080505/EDITORIAL/845942063/1013/editorial)

Title: Re: Meltdown
Post by: BachQ on May 05, 2008, 04:15:57 AM

It's the oil crisis of the Seventies back to haunt us

"The result [of Peak Oil] will be wage/price spirals, sharply rising unemployment as jobs are lost to countries that have better managed to control energy input costs, and governments adopting big spending policies that exacerbate inflation to avoid choking growth and risking depression. "
(http://www.independent.ie/opinion/analysis/its-the-oil-crisis-of-the-seventies-back-to-haunt-us-1366551.html)

Title: Re: Meltdown
Post by: BachQ on May 05, 2008, 04:16:32 AM

McCain calls for 700+ new nuclear plants (and 7 Yucca mountains) costing $4 trillion
(http://www.huffingtonpost.com/joseph-romm/mccain-calls-for-700-new_b_100053.html)

Title: Re: Meltdown
Post by: BachQ on May 05, 2008, 04:19:19 AM

Townsfolk prepare for life after oil

By Paul Willis for CNN

LONDON, England (CNN) -- Imagine a life where each morning you cycle to work, and come home at night to tend your allotment and eat a dinner of locally produced food. Maybe after your meal you take a walk down the car-free streets to the nearest bar where you buy a round of drinks with locally produced currency and settle down in a corner to watch a troupe of musicians play some local folk music.

It might sound like some kind of fairytale arcadia -- a return to the simple lives of our forefathers, before fossil fuels and consumer culture turned everything on its head. In fact this is how many people are beginning to envision our future -- a world where we come to terms with inevitable fuel shortages and work towards a less energy-dependent lifestyle. This vision has found a voice in the "transition initiative," a movement that encourages towns, villages and cities across the world to begin the process of preparing themselves for a carbon-free world.

The first so-called transition town was pioneered in the southwest English town of Totnes, by the inventor of the concept Rob Hopkins, 18 months ago. Since then almost 50 other places in Britain have signed up to the movement, as well as a smattering of towns in New Zealand and Australia.
Hopkins, 38, who lives with his family in Totnes, says people have seized upon the transition initiative because it offers an "empowering, inspiring" vision of the post-oil age. "It has grown into a vacuum -- there is nothing else that looks at ways to respond to peak oil and climate change that feels good," Hopkins says.

Hopkins' beliefs about the looming energy crisis are summed up by the title of American environmentalist writer Richard Heinberg's 2003 book on the subject -- "The Party's Over." Heinberg, who provides the foreword to a handbook Hopkins has recently published on the transition initiative, estimates we are very close to reaching a state of peak oil -- the point at which half of the world's oil reserves have been used up and thereafter supply goes into freefall. A lack of any viable alternative energy sources means human communities will have no choice but to cut back energy use, the book argues. Since governments and big business seem unable, or else unwilling, to deal with these problems head-on, Hopkins believes the change must come in the first instance from the grassroots.

"We have to be looking to break our oil dependence and get to being a zero carbon society within 20 years. We don't have any choice in this if we want our children to have any kind of lives.
"Of course, much of this needs to come from government level, but to make cuts of that nature will need a lot of things that don't tend to make governments very popular, such as carbon rationing.
"The idea with transition is to engage communities in pushing for these things, so as to take the fear out of making these decisions for politicians."

One way of doing this is through an "energy descent pathway," a step-by-step plan compiled by residents designed to wean the town away from a reliance on carbon fuels. Some transition towns are already beginning to implement the plan. Other initiatives trialed in Totnes include planting nut trees to provide emergency food supplies and the setting up of locally-run energy and construction companies to increase self-reliance.

Just over a year ago the town also introduced its own currency -- the Totnes pound. Accepted in 18 shops in the town and borrowing its design from an 1810 local banknote, Hopkins believes it is a sign of things to come. "Historically, when economies run into trouble, local currencies proliferate. In Argentina when the economy collapsed a few years ago, they appeared all over the country.
"They are inevitable because we will need currencies that are locally loyal, that make more things happen before they leave the economy than (pound) sterling does." To some this return to localism might sound like a step back. Although Hopkins acknowledges drawing inspiration from the past -- part of the transition process involves consulting with older members of the community to find out what life was like when people were more self-reliant -- he insists he's not being regressive, only realistic.
"The transition approach is not about convincing anyone to give up anything. It is about saying that many of the things we increasingly take for granted will become steadily more expensive and less and less dependable.

"We are entering a world where there will be a lot less energy available, and this will affect all aspects of our lives, and we need to start planning creatively now."

(http://edition.cnn.com/2008/WORLD/europe/04/30/transition.town/)

Title: Re: Meltdown
Post by: Sean on May 05, 2008, 04:25:14 AM

Good work Dm. Almost makes me want to relax, knowing things are always much much worse. I might join up with Hopkins if I was back in England.

And I liked the analogy of the Haiti food shortages as a canary cage in the oil mine- suitably ignored of course.

Title: Re: Meltdown
Post by: Florestan on May 05, 2008, 04:34:04 AM

Guys, has it ever crossed your mind that each time you use your computers or cd-players you use valuable energy produced by this most vile oil-based economy? How about drastically cutting internet surfing or listening to music, or stopping it altogether? A small step for mankind, of course, but a giant leap for you...

Title: Re: Meltdown
Post by: Sean on May 05, 2008, 05:03:57 AM

After the oil crash we will have community once again, and the computer will disappear.

Title: Re: Meltdown
Post by: (poco) Sforzando on May 05, 2008, 06:34:42 AM

Quote from: Florestan on May 05, 2008, 04:34:04 AM
Guys, has it ever crossed your mind that each time you use your computers or cd-players you use valuable energy produced by this most vile oil-based economy? How about drastically cutting internet surfing or listening to music, or stopping it altogether?

Or actually learn to play an instrument . . . .

Title: Re: Meltdown
Post by: Florestan on May 05, 2008, 06:42:23 AM

It is mind-boggling how some people use internet fora to vituperate against computers, or how some people who hate the industrial civilization use planes to go to exotic places, or how some people who take pride in having a huge CD collection can hardly wait for a time when they'll be completely useless. The human capacity for hypocrisy is inexhaustible.

Title: Re: Meltdown
Post by: BachQ on May 05, 2008, 01:54:52 PM

The End of Cheap Oil is Now

Never underestimate a politician's ability to pander. With gasoline prices nearing $4 a gallon and the summer driving season approaching, presidential candidates John McCain and Hillary Clinton have responded by calling for a consumer holiday from the federal gasoline tax. But both McCain and Clinton must know that blaming taxes for soaring gasoline prices is absurd. The tax hasn't changed. What has changed is the price of crude oil, which hit a record $119 a barrel in April.

Get used to it. Contrary to McCain and Clinton's feel-good simplifications, there's no easy answer to this problem. Gasoline prices are rising-and will continue to rise-because global demand is outstripping supply. Combine America's gas-guzzling ways with millions of new middle class consumers in China and India, and global demand is bound to increase for years to come (absent a global economic depression). Meanwhile, global oil supplies are essentially flat. This mismatch pushes up prices.

The real issue that McCain, Clinton and anyone truly serious about gas prices must confront is peak oil. Peak oil theorists do not suggest that the Earth will surrender its last drop of oil anytime soon. Rather, they contend that the world's oil supply has, or soon will, hit its upper limit, and then shrink. This, the end of abundant oil, spells the end of cheap oil. As limited supply confronts growing demand, the result will be volatile higher prices and shortages that could bring back the gas lines of the 1970s. And that's just for starters. The modern world needs cheap oil like the human body needs oxygen; remove it, and we could be headed for economic decline, resource wars and social chaos.

Conventional wisdom says the market will solve the problem: higher prices will call forth more supply. But a growing number of oil industry insiders are disputing that and instead backing the peak oil thesis. Though largely unnoticed by the media, a decisive moment in the debate came last September, when James Schlesinger declared that the "peakists" were right. You don't get closer to the American establishment than Schlesinger, who served as head of the CIA, Secretary of Energy, and adviser to oil companies. In a speech to a conference sponsored by the Association for the Study of Peak Oil, Schlesinger said, "It's no longer the case that we have a few voices crying in the wilderness. The battle is over. The peakists have won." Schlesinger added that many oil company CEOs privately agree that peak oil is imminent, but don't say so publicly.

One who does is Royal Dutch Shell CEO Jeroen van der Veer. Without using the term peak oil, he warned this year that, "After 2015, easily accessible supplies of oil and gas probably will no longer keep up with demand."

The United States, with its two hour commutes, three car families, atrophied mass transit and petroleum-based food system, is most vulnerable to an oil shock. But similar vulnerabilities exist in most industrial societies, not to mention China and other emerging economies that are only now getting a taste of oil-fueled modernity.
Ironically, peak oil could actually harm the environment, making climate change worse. One might think that less oil would mean less consumption and lower carbon dioxide emissions. But the modern world is addicted to oil. If peak oil arrives before the addiction is broken, societies will likely do whatever is necessary to keep their addictions fed. That is already happening in Canada, where Exxon-Mobil and others are mining so-called tar sands-a very dirty fuel that carries a much greater carbon footprint than conventional oil.

Luckily, there are smarter ways to fight both peak oil and climate change. The first step is a massive investment in energy efficiency-by far the quickest, cheapest way to reduce consumption. This will buy us time to deploy alternative fuels, reduce demand via better mass transit and less sprawl, and green our economies. Plug-in hybrid cars, for example, get over 100 miles per gallon-double what today's generation of hybrids achieves. And if plug-in hybrids rely on electricity generated by solar, wind or other green energy sources, they will fight both climate change and peak oil.

More encouraging news: some top government officials understand what needs to be done. For example, David Paterson, the new governor of New York state, has spoken in detail about peak oil and the necessity of investing in energy efficiency and alternative energy sources.

As it happens, Governor Paterson is a strong backer of Senator Clinton. Maybe they should talk. And they should invite McCain-and Senator Obama-to join them. Peak oil seems poised to become the next big idea commanding the attention of governments, businesses and citizens the world over. We need our presidential candidates to talk sense about it, not use it to make cheap political points.

Mark Hertsgaard (www.markhertsgaard.com) is the environment correspondent for The Nation and the author of many books, including Earth Odyssey: Around the World In Search of Our Environmental Future.
(http://www.pww.org/article/view/12998/)

Title: Re: Meltdown
Post by: BachQ on May 05, 2008, 01:56:19 PM

Financial Express

Quenching the world's growing thirst for oil
RS Sharma

Posted online: Tuesday , May 06, 2008 at 2203 hrs
Some 70 years ago on the eve of World War II, Winston Churchill made an historic decision: to use oil in place of coal to power British navy ships to make his fleets faster than those of the Germans. This heralded a tectonic shift—an energy transformation equivalent to the shift from wood to coal in the 17th century.

Unarguably, oil has shaped the 21st century, invading every facet of the economy, from agriculture to aviation. However, though it took millions of years for oil to form, we have managed to consume roughly half the globe's oil reserves in barely 150 years, and a bulk of them in the last 70 years.

The world today consumes 85 million barrels of oil a day and demand is growing exponentially, apparently unaffected by the onslaught of rampaging oil prices that have touched $120/bbl. The unfolding scenario is a far cry from that of barely a decade ago when oil was sold at $10/bbl.

The Association of Peak Oil is crying itself hoarse predicting that we have either reached, or are on the verge of, peak oil. From here onwards, the slide is imminent and production is bound to decline. On the other hand, Cambridge Energy Research Associates (Cera), contesting the peak oil theory, sees no evidence of a peak in oil production before 2030, with global production eventually following an undulating plateau for one or more decades before declining slowly.
However, there is no contesting the evidence that supply is becoming severely constrained with each passing day. Demand growth, fuelled by the booming economies of China and other developing nations, is one of the factors.

But the predominant factor is that supply has failed to keep pace with demand. The moot question now is: does the world have enough oil to feed the ever-growing demand of developed and developing countries—and for how long?

Jeremy Leggett in his article, Peak Oil: The Twilight Zone, in The Independent in April 2005, pointed out that no major oil province has been discovered since the 1970s, and that the 100 largest oil fields, which account for around half the global oil production, are more than 25 years old. We are consuming more than what we are discovering. Given the level of sophistication and the understanding reached by geosc-ientists of this age, it is very unlikely that a large major field has eluded their attention.

The oil industry is also coming to terms with the fact that 'easy oil' has been found and that future discoveries are likely to be in harsh and inhospitable environments. Today, the oil industry is spending substantial sums of money and using state-of-the-art technology to find new oil in areas like the Arctic and ultra-deep waters. This quest is further hampered by the lack of resources, particularly in oil field services, deepwater drilling rigs and even skilled manpower.

The decline in production, though, is not evident from global oil production figures, which went up by 9% in the last five years (up to year 2006) at a compounded annual growth rate (CAGR) of 1.7%. But this increase is largely attributable to former Soviet Union countries, which had a robust 41% growth with a CAGR of more than 7%. Compare this with the production decline of 9% in OECD countries and more alarming 27% decline of EU-25 countries over the same period. Some major producers like the US, Norway, Venezuela and UK all registered declines ranging from 10% to 34% during the same period.
For how long can the former Soviet Union countries and Opec bail the globe out? Not for long. Major oil fields worldwide are registering a declining trend. In a recent study of more than 800 oil fields, Cera concluded that the "aggregate global decline rate of the oil fields is 4.5%, rather than the 8% cited in many studies".

Even this lower decline rate is hardly comforting. These ominous signs have neither dampened the demand for oil nor impacted its prices that continue to chart a three-figure trajectory with each passing day. In fact, oil prices have risen a whopping 1,000% since December 1998 and by 300% from December 2003, the last time when it ruled below $30/ barrel (WTI spot prices).

The unfolding oil story suggests that prices are increasingly becoming divorced from market fundame-ntals. Though the traditional fundamentals of demand and supply continue to hold good, a few new factors appear to be driving current record highs.

Today, the weak dollar is just as important as the slim supply cushion and rising demand for oil in determining oil prices. The dollar fell 20% against the euro from March 21, 2007 (the last time oil reigned in $50s) to April 22, 2008. Showing a marked negative correlation, crude prices rose by 109% during the same period.

Oil field services costs, which have doubled over the last three years, coupled with the pressure of heavy fiscal terms on oil investments in the form of higher taxes are also cited as factors leading to higher oil prices.

Further, high prices are needed to support the development of new oil supplies through greenfield projects. The huge upswing in the overall commodities market and entry of speculators are other non-fundamental factors attributed to driving up oil prices.
(To be concluded)

(http://www.financialexpress.com/news/Quenching-the-world-s-growing-thirst-for-oil/305724)

Title: Re: Meltdown
Post by: BachQ on May 05, 2008, 01:58:18 PM

Oil Rockets $4 to Record Over $120
Mon May 5, 2008 3:34pm EDT
By Matthew Robinson

(http://www.reuters.com/resources/r/?m=02&d=20080505&t=2&i=4133513&w=&r=2008-05-05T180612Z_01_SYD32743_RTRUKOP_0_PICTURE0)

NEW YORK (Reuters) - Oil jumped more than $4 to a record high over $120 a barrel on Monday on the weaker U.S. dollar and supply concerns from OPEC members Nigeria and Iran.

U.S. crude settled up $3.65 at $119.97 after surging as high as $120.36. London Brent crude rose $3.43 to $117.99 in light trade due to a bank holiday in Britain, after hitting $118.58 a barrel.
"People are piling back up on crude oil due to the weakness of the dollar and production issues in Nigeria," said Phil Flynn, analyst at Alaron Trading in Chicago. "But it also looks like momentum play after Friday's positive reaction to the unemployment report."

U.S. government data released Friday that showed U.S. payrolls fell by 20,000 jobs in March, a quarter of the losses expected, helping to counter concerns that the weaker U.S. economy could drag down oil demand.

The dollar fell broadly on Monday, however, as forex investors decided the world's biggest economy was still struggling. A Monday report from the Institute for Supply Management showed the U.S. service sector grew unexpectedly in April.

Further support for oil came from Iran's announcement on Monday it would not consider any incentives offered by world powers that would constrain its right to nuclear technology.

The comments come just three days after major powers said they would make a new offer to convince the Islamic republic to halt its nuclear plans. The West believes Tehran wants to build nuclear weapons.
Iran's standoff with the West over its nuclear program added geopolitical concerns and fundamental tightness last year that sent crude to new highs.

Crude has kept surging since then, extending a six-year rally that has more than quintupled prices, on a wave of investment by speculators seeking to hedge against inflation and the weak dollar.

U.S. President George W. Bush, who has called upon oil cartel OPEC to increase output to help bring down prices, is expected to talk with officials from Saudi Arabia about the effects of high fuel prices on the U.S. economy on his trip to the world's top exporter later this month.

OPEC officials have rejected calls from consumer nations to ramp up production. They blame speculators for surging oil prices.

Additional supply worries came from Nigeria, where Royal Dutch Shell was forced to shut more of its production after militants on Saturday attacked a flowstation in the oil-rich Niger Delta.
Renewed clashes between Turkey and Kurdish rebels in northern Iraq also lent support to oil prices.
The Turkish army said on Saturday it killed more than 150 Kurdish PKK fighters in air strikes in northern Iraq last week, but the rebel group denied this and security forces in the region also expressed skepticism.

A Reuters poll of analysts forecast a weekly U.S. government report on inventories due out on Wednesday will show a 1.8-million-barrel build in crude stocks, a 1.1-million-barrel increase in distillate inventories, and a 100,000-barrel fall in gasoline stocks.
(http://www.reuters.com/article/hotStocksNews/idUSSYD3274320080505)

Title: Re: Meltdown
Post by: BorisG on May 06, 2008, 10:37:23 AM

Oil nears $123 on $200 oil prediction, supply concerns
Tuesday May 6, 1:23 pm ET
By John Wilen, AP Business Writer
Oil prices rise to record near $123 a barrel on prediction of $200 oil, supply concerns

NEW YORK (AP) -- Oil futures blasted to a new record over $122 a barrel Tuesday, gaining momentum as investors bought on a forecast of much higher prices and on any news hinting at supply shortages. Retail gas prices edged lower, but appear poised to rise to new records of their own in coming weeks.
A new Goldman Sachs prediction that oil prices could rise to $150 to $200 within two years seemed to motivate much of Tuesday's buying, although a falling dollar and increasing concerns about declining crude production in Mexico and Russia contributed, analysts say.

The Energy Department raised its oil and gasoline price forecasts, but also predicted that high prices will cut demand more than previously thought.

Light, sweet crude for June delivery jumped to a new record of $122.73 a barrel before retreating slightly to trade up $2.10 at $122.07 on the New York Mercantile Exchange.

Oil prices have nearly doubled from about $62 a barrel a year ago, which Goldman sees as a sign that the world is in the midst of a "super spike" in oil prices. Analyst Arjun Murti said in a research note released Monday that prices would ultimately force demand to fall sharply.

Not everyone shares Goldman's view. Tim Evans, an analyst at Citigroup Inc., countered Goldman's analysis with a note predicting that crude prices could as easily fall to $40 a barrel as rise to $200 over the next two years because supplies are, as Evans put it, comfortable.

James Cordier, president of Tampa, Fla., trading firms Liberty Trading Group and OptionSellers.com, said Goldman's prediction isn't necessarily new: "We've heard numbers like these out of Goldman Sachs, especially over the last 12 months."

Indeed, it's not the first time Murti has espoused a super spike theory; in an April 2005 note, he predicted the oil market was in the early stages of an unprecedented rally that would send prices from a then-record of about $57 a barrel to $105.

But some investors respond to such predictions by buying, Cordier said.

Meanwhile, in a monthly report, the Energy Department's Energy Information Administration predicted oil prices will average $110 a barrel this year, up $9 from last month's forecast. The EIA also said high prices will cut U.S. demand for petroleum products by 330,000 barrels a day this year; last month, the EIA predicted U.S. petroleum consumption would fall by 210,000 barrels a day.

But strong demand for oil from countries such as China, India, Russia, Brazil and in the Middle East will support high prices and keep global oil demand growing by about 1.2 million barrels a day this year, unchanged from last month's forecast, the EIA said.

A falling dollar on Tuesday also gave traders reason to buy. Investors often buy commodities such as oil as a hedge against inflation when the dollar falls, and a weaker greenback makes oil cheaper to investors overseas. Many analysts feel the dollar's protracted decline is the real reason oil prices have nearly doubled since last year.

Cordier said investors are also increasingly concerned about falling oil production in Russia and Mexico, which are both major oil producers. And prices are still supported by concerns about supply disruptions in Nigeria, where production at a Royal Dutch Shell PLC facility was cut after a weekend attack, and in Iraq, where Kurdish rebels warned they could launch suicide attacks against American interests to punish the U.S. for sharing intelligence with Turkey after Turkey bombed rebel bases in Iraq on Friday.

At the pump, meanwhile, the national average price of a gallon of regular gas slipped 0.1 cent overnight to $3.61, according to AAA and the Oil Price Information Service. Analysts are split over how high gas will go; while prices have slipped lower since May 1, leading some analysts to say gas is close to peaking, others predict the fuel will follow oil's upward surge.

"You're going to see new highs for gas prices, probably for the weekend," said Cordier, who predicts an average price of $4 a gallon in the coming weeks.

In its report, the EIA said gas prices will peak at a montly average of about $3.73 a gallon in June, about 13 cents higher than its previous forecast.

In other Nymex trading Tuesday, June gasoline futures rose 5.87 cents to $3.1116 a gallon after earlier setting a new trading record of $3.126. June heating oil futures rose 5.48 cents to $3.3613 a gallon after rising to their own trading record of $3.3634, and June natural gas futures rose 5.4 cents to $11.232 per 1,000 cubic feet.

In London, June Brent crude futures rose $2.35 to $120.48 on the ICE Futures exchange.

Title: Re: Meltdown
Post by: Al Moritz on May 06, 2008, 11:28:40 AM

Last week we switched our heating from oil to natural gas. We love it. I strongly assume our next winter will be cheaper.

Title: Re: Meltdown
Post by: BorisG on May 06, 2008, 11:59:08 AM

Quote from: Al Moritz on May 06, 2008, 11:28:40 AM
Last week we switched our heating from oil to natural gas. We love it. I strongly assume our next winter will be cheaper.

Is your oil tank above ground, or beneath?

Title: Re: Meltdown
Post by: Al Moritz on May 06, 2008, 12:59:25 PM

Quote from: BorisG on May 06, 2008, 11:59:08 AM
Is your oil tank above ground, or beneath?

Above ground. It's in the basement, and we'll have it removed in the next few months. We have used almost all of the oil.

Title: Re: Meltdown
Post by: drogulus on May 06, 2008, 03:17:04 PM

War, famine, and economic chaos is the usual way things are. I'll make a prediction: This oil crisis will be less severe than the '70s. The reason is there will be no price controls, so no lines at the pump.

Heating oil next winter will be the biggest problem here in New England.

Energy consumption as a percentage of GDP has been falling for decades, so it's hard to see how high prices can damage the economy to any great extent. We'll see a relatively rapid changeover to new energy sources, but electricity generation is dependant on coal, and manufacturing and most of the service economy is sensitive to the cost of electricity, which will go up but not as much.

There's no need to worry about a resurgence of community feeling, so we can all breathe a sigh of relief. _:)

Title: Re: Meltdown
Post by: Sean on May 06, 2008, 03:55:21 PM

Quote from: drogulus on May 06, 2008, 03:17:04 PM
We'll see a relatively rapid changeover to new energy sources...

I hope you're right. But billions of cars, lorries, buses, all aircraft, plus almost all shipping all have petrol and diesel engines in them: they only work on petrol and diesel. Understand?

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:00:46 PM

Quote from: Al Moritz on May 06, 2008, 11:28:40 AM
Last week we switched our heating from oil to natural gas. We love it. I strongly assume our next winter will be cheaper.

Al, before you go dancing in the streets to celebrate all the money you'll save by switching to natural gas, the historical trend has been that natural gas prices mirror/parallel crude oil prices. Thus, when crude oil prices double, so too do natural gas prices.

CLICK HERE (http://www.good-music-guide.com/community/index.php/topic,3519.msg175837.html#msg175837)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:01:26 PM

Oil rockets to new high
JOHN WILEN
The Associated Press
May 6, 2008 at 4:44 PM EDT

NEW YORK — Oil futures blasted to a new record near $123 (U.S.) a barrel Tuesday, gaining momentum as investors bought on a forecast of much higher prices and on any news hinting at supply shortages.
Retail gas prices edged lower in the United States, but appear poised to rise to new records of their own in coming weeks.

A new Goldman Sachs prediction that oil prices could rise to $150 to $200 within two years seemed to motivate much of the buying Tuesday, although a falling U.S. dollar and increasing concerns about declining crude production in Mexico and Russia contributed, analysts say.
The U.S. Energy Department raised its oil and gasoline price forecasts, but also predicted that high prices will cut demand more than previously thought.

Oil prices have nearly doubled from about $62 a barrel a year ago, which Goldman sees as a sign that the world is in the midst of a "super spike" in oil prices. Analyst Arjun Murti said in a research note released Monday that prices would ultimately force demand to fall sharply.

(http://www.theglobeandmail.com/servlet/story/RTGAM.20080506.woilprice0506/BNStory/energy/home)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:02:47 PM

Wall Street Journal
Tracking Saudi Oil From Space
Satellites Check
Big Field's Health;
Jitters Over Supply
By NEIL KING JR.
May 6, 2008; Page A15

At a time of high anxiety over soaring fuel prices and scarce supplies, oil analysts are resorting to satellite imagery to crack one of the industry's biggest unknowns -- whether Saudi Arabia's massive Ghawar field is slipping into depleted old age.

Saudi Arabia has long contended that its famed Ghawar field, responsible for around 7% of global supply, remains in fine shape and will continue to churn out around five million barrels a day for years.
But Saudi Arabia doesn't publish data to back that up. Skeptical analysts in the West insist the field is in decline, an event they say presages a peak in world oil production.

Analysts at Sanford C. Bernstein Ltd., a New York-based investment research firm, just spent months trying to resolve the debate. Their tools? Cameras fixed to satellites that hover miles above the Saudi desert.

Combing through dozens of high-resolution satellite images of Ghawar going back to 2001, the Bernstein team has concluded in a study sent to clients at the end of April that only part of the vast field "is suffering signs of old age." On the whole, Bernstein says, the field "is being properly managed" and is experiencing only "mild production-decline rates at worst."

Critics of the study, including some who have crunched their own overhead imagery, say the Bernstein study is insufficient and the debate over Ghawar's health is far from over. "This is junk science," says Houston investment banker Matthew Simmons, who insists that only detailed, on-the-ground records can speak to the field's real condition. Mr. Simmons's 2005 book, "Twilight in the Desert," cited technical papers to argue that Ghawar and Saudi Arabia's other giant fields were showing signs of increasing stress and would soon slip into decline. Mr. Simmons is a well-known proponent of the theory that world-wide oil production may already have hit its all-time peak.

This latest tiff over Ghawar comes as alarm grows on Wall Street and in Washington over whether the world's big crude producers can keep pace with the growing demand for oil in Asia and the Middle East. U.S. benchmark crude closed at a new high of $119.97 a barrel Monday on the New York Mercantile Exchange. The price of crude has risen 25% so far this year and has increased 95% from a year ago.
Many of the world's other mighty fields, including Mexico's Cantarell and Kuwait's Burgan, have lost their vitality recently and need serious help. Russia just recorded its first quarterly output drop in almost a decade, stoking fears that the world's second-largest oil producer after Saudi Arabia may have hit its own peak. The North Sea and Alaska's North Slope are already in steep decline.

All this has sharpened attention on the health of oil supplies in the Middle East, the world's most abundant crude repository. Put into production in 1951, Ghawar remains the greatest treasure of hydrocarbons ever found. The Saudis say the field, measuring about 20 miles wide and 175 miles long, spits out as much oil every day as all the oil wells in the U.S. combined. Its output accounts for around 60% of total Saudi production.
Yet no one outside of Saudi Arabia has any sound data on production rates at Ghawar, or the kingdom's other huge fields. The Saudi Arabian Oil Co., better known as Aramco, has long been secretive about data on the kingdom's oil holdings, as are most Organization of Petroleum Exporting Countries members whose economies are heavily dependent on oil revenue.

"The problem is that silence leads to speculation," says Neil McMahon, who led the Bernstein study as the firm's senior analyst. The motivation, he says, "was to confront the wBernstein has used satellites to probe other mysteries. It dug through overhead images of urbanization patterns in China last year to predict that demand for steel and other metals would hold strong before ebbing slightly around 2010. In 2005, it studied China's ports for evidence -- which it didn't find -- of whether the country was dramatically expanding its fuel-tank farms to hoard oil.

The Saudi study, Mr. McMahon says, was a lot more daunting. Theories of Ghawar's travails were fueled recently by reports that the number of drilling rigs in the kingdom tripled between 2004 and 2007. The spike led to speculation on peak-oil blogs that Aramco was conducting a wave of new drilling not just to add fresh capacity, but to stem rapid output declines in Ghawar and other fields.

Using images of Ghawar from 2004, Bernstein pinpointed more than 2,000 drilling or production sites, many of them old and abandoned. Satellite shots from 2007 found around 10% more drilling sites, mainly concentrated in areas of the field where Aramco was engaged in multibillion-dollar projects to bring on fresh production.

The satellite work also used overhead radar technology to determine whether the field showed any signs of surface collapse -- called "subsidence" in the industry -- that could indicate heavy depletion rates underground. Some of the world's most heavily produced fields in the North Sea and in Venezuela have shown sharp subsidence rates.

Instead, Mr. McMahon says, the radar found the northernmost part of the field, known as Shedgum, "was actually slightly uplifted." Bernstein attributed this rise to heavy water injection and what it surmised was Aramco's use of enhanced oil-recovery techniques, which boosted underground pressure enough to lift the ground level. Companies often turn to such elaborate extraction methods to nurse along fields in sharp decline.

Bernstein concluded that Shedgum, one of the oldest sections of Ghawar, was the only area facing serious challenges. Aramco declined to comment. The company's former head of reservoir management, Nansen Saleri, said he agreed with the overall conclusion that Ghawar remains largely healthy. But Mr. Saleri, who left Aramco last fall, disputed that Aramco was doing any enhanced recovery work at Ghawar. He said he was also skeptical that Bernstein "can really tell what is going on at Ghawar from overhead imagery." One skeptical sleuth doing similar work is a hobbyist in Seattle who keeps a Web site called Satellite O'er The Desert and works under the pseudonym of Joules Burn. Using detailed images from Google Earth, the Web site has chronicled what it calls a "remarkable" uptick in drilling across large swaths of Ghawar.

The Web site's assessment so far is that Aramco is engaged in a massive redrilling of Ghawaras part of a "constant struggle to maintain the field's current production level."
hole peak-oil thing with some real data."

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:04:12 PM

http://www.ibtimes.com/articles/20080505/peak-oil-review-may-5th-2008.htm
Peak Oil Review -- May 5th, 2008 By Tom WhipplePosted 05 May 2008 @ 11:09 pm EST

2. U.S. Politics

With 44 percent of Americans now saying that gasoline prices are a serious problem, food prices continuing to climb, and Detroit's sales plummeting, politicians of all stripes are speaking out in a effort to exploit the situation.President Bush attacked the Democrats in Congress for blocking his proposals to drill in ANWR and off the coasts, and to increase refining. Presidential candidate McCain joined 22 Republican senators in urging the EPA to lower corn-based ethanol rules that are now perceived as running up food prices. The US Federal Trade Commission said it will yet again investigate possible market manipulation of gasoline prices and Senate Republicans have filed another bill to authorize drilling in Alaska's ANWR and on the Outer Continental Shelf.The most controversial proposal of the week was the one put forward by John McCain, endorsed by Hillary Clinton, and opposed by Barack Obama to suspend the 18.4 cent federal gasoline tax during the coming summer. This proposal raised a storm of adverse commentary ranging from " gas taxes should be raised not lowered" through "the oil companies will keep the money," to "what will pay for road maintenance."Another proposal popular in the Congress is to suspend additions to the strategic petroleum reserve, a move opposed by the administration. One senator even claims a veto-proof majority for this measure.Throughout this furor, proposals that might do some good are few and far between. The trucking industry, realizing they have a big problem, is pushing for a national 65 mph speed limit for all vehicles. The Rockefeller family is pushing Exxon to acknowledge global warming and get moving on alternative fuels. Climate change legislation that would significantly reduce greenhouse gases is headed to a debate in the Senate. The EIA weighed in on this by pointing out that a widespread switch to nuclear power and carbon sequestration is still years away so that electric utilities would be forced into increased use of expensive natural gas leading to increased prices.Amidst the jockeying for political advantage, no one, with the possible exception of the truckers, is willing to recognize that a massive conservation program is the only short-term way to keep gasoline prices from climbing to un-affordability. Even corn-based ethanol has become such a sacred cow that the Administration and Congress seem unwilling to tackle the problem until after the fall elections.

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:05:36 PM

OTC: $100 trillion needed to rebuild energy infrastructure

Uchenna Izundu
International Editor

HOUSTON, May 5 -- The oil and gas industry will need to invest $50-100 trillion to rebuild its ageing infrastructure within the next 7 years and stave off a serious drop in oil and gas production, Matt Simmons, chairman of Simmons & Co. International, told OGJ May 5 at the Offshore Technology Conference in Houston.

In a worst-case scenario, Simmons said, oil and gas output could fall by 10-20% by 2013 if industry does not replace its rusting, corroded assets. Spare capacity also has run out because formerly cheap prices for oil and gas precluded upgrading and construction of new facilities . The average age of offshore rigs is 25 years, and oil companies have ignored the problem for the past few decades because of the low energy prices, which meant that maintenance has been expensive. However, the upward trend in prices can help pay for the rebuilding of the energy system, Simmons stated. "There is no blueprint in place, and this is a global problem. The longer the blueprint is postponed, the more acute the crisis will get," he said.
The reconstruction problem is compounded by the shortage of skilled engineers to carry out the work and the scarcity of raw materials.

"No census has been carried out on the age of the infrastructure," he said. "The industry's tool kit for corrosion is old, and painting over rust creates an illusion. Few parts of oil infrastructure have been replaced." Leaks, stains, oil streaks, metal fatigue, and brittle steel are all signs of ageing pipelines, platforms, wells, and other assets. Simmons said the industry's focus had been on declining production, which was important, but it failed to recognize that declining oil fields are also accelerating rust on oil equipment. "Peak oil is a reality. In 2005 we had peak production and this fell by 265,000 b/d in 2007. There is a high likelihood that production will continue to fall."

Simmons forecasts that oil prices could hit $200/bbl as global demand increases. He pointed out that the industry had previously sold its best-quality grade of oil at $15/bbl and flared natural gas because it was too costly to develop. "That was a mistake," he concluded.
(http://www.ogj.com/display_article/327833/7/ONART/none/GenIn/1/OTC:-$100-trillion-needed-to-rebuild-energy-infrastructure/)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:06:56 PM

City of Swiss-style hill villages envisioned here
Soaring food and fuel prices will make current planning model obsolete, architect says
Doug Ward, Vancouver Sun
Published: Tuesday, May 06, 2008

(http://a123.g.akamai.net/f/123/12465/1d/media.canada.com/idl/vasn/20080506/106223-35211.jpg)

METRO VANCOUVER - Sky-high fuel and food prices will eventually make Metro Vancouver's current planning model of suburban communities linked by gas-guzzling highways economically obsolete.
So says Vancouver architect Richard Balfour who believes the region's future should resemble Switzerland rather than Los Angeles.

Balfour argues that Metro Vancouver should begin creating Swiss-style hill villages linked by rail rather than towns on flood plains and valleys connected by pavement.

This is what regional sustainability will require in the coming era of escalating oil prices, climate change and mass migration, says Balfour, a member of the Metro Vancouver Planning Coalition, an ad-hoc group of people concerned about urban issues.

"What is suggested here is the need for a radical rethink of all we take for granted," Balfour said in a report entitled Metro Hill Towns for Sustainable Futures, which he recently presented to Metro Vancouver's land use and transportation committee.

"The recommendation in this rethinking is not based on wishful thinking but on the need to carry out strategic sustainable planning to achieve a new workable pattern of community for a post-oil age."
Balfour's futuristic vision of rail networks and eco-towns on hillsides is also outlined in a new book, Strategic Sustainable Planning: A Civil Defense Manual for Cultural Survival.

Balfour, a former member of the Vancouver City Planning Commission, belongs to the Vancouver Peak Oil Executive, a group of people convinced that sky-high oil prices will force an end to suburban development as we know it.

Peak oil is the point when the maximum rate of global oil production is reached, after which the rate of production enters its terminal decline, causing prices to spike to escalating levels. Balfour's theories may strike some as pessimistic quackery, but others may view them as prophetic, given this month's headlines about dramatic increases in oil and food prices around the world. Central to Balfour's regional revamp is his view that oil prices are going to soar to the point where it will become too expensive for Metro Vancouver to import food from southern regions. Currently, Metro Vancouver produces about 48 per cent of the food it consumes, Balfour said. But this level of eating locally produced food will have to rise in the future when oil prices make it uneconomic to import food from the tropics, he adds.

Southwest B.C.'s low-lying farmland needs to be protected and turned into a "green commons" for food production to serve nearby urban areas, Balfour argues. This strategy should include the clawback of Agricultural Land Reserve land lost in the past two decades to urban development or industry, he said.
"The move to the hill towns has to start now, not another generation from now, as we do not have the time to delay," he said in his report. "This means not following the current oil-age planning criteria or automobile engineering standards."

Balfour predicted that migration and population shifts mean that southwest B.C. and Washington state will have to absorb about another 20 million people, more than half the number of people now living in Canada or California. The Vancouver architect argued that the region should include the Fraser Valley, the Sunshine Coast and Whistler, plus the adjacent Coast Mountain range in its overall planning area.
"The mountains are not a barrier but part of the ecological basin and a place . . . for new ecological communities," Balfour said.
(http://www.canada.com/vancouversun/news/westcoastnews/story.html?id=d907027c-a7d8-4f58-ad89-b9f6539458b4)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:07:37 PM

White House: Bush to warn Saudis of soaring oil prices

WASHINGTON, May 5 (Xinhua) -- U.S. President George W. Bush will express American concerns about soaring oil prices when he visits Saudi Arabia next week, White House spokesman Scott Stanzel said Monday. "Whenever the president has discussions with leaders in the region, he talks about the impacts that high oil prices do have on our economy and the impact that then has on the world economy," Stanzel told reporters. Bush is due to visit Israel, Egypt and Saudi Arabia from May 13-18 in a new effort to push forward the Middle East peace process. Saudi Arabia is a key ally of the United States in the Middle East. During his trip to the kingdom in January, Bush urged the Organization of Petroleum Exporting Countries to increase production to bring down soaring oil price. Crude oil futures reportedly pass 120 U.S. dollars a barrel for the first time on supply concerns, which aroused worries about inflation.
(http://news.xinhuanet.com/english/2008-05/06/content_8111305.htm)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:08:06 PM

The Great Depression of the 2010s
Economics is not rocket science. Neither is power
Darryl Robert Schoon
May 6, 2008
(http://www.321gold.com/editorials/schoon/schoon050608.html)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:08:55 PM

It's a recession to 4 out of 5 Americans

A CNN/Opinion Research poll shows that the nation is becoming more convinced the economy is in a nosedive.

By Catherine Clifford, CNNMoney.com staff writer
Last Updated: May 6, 2008: 1:19 PM EDT

NEW YORK (CNNMoney.com) -- A new poll shows that more Americans than ever before think the economy is in a recession. A national CNN/Opinion Research Corp. poll released Tuesday found that 79% of respondents - nearly 4 out of 5 - believe the economy is now in a recession. That is up from 74% of Americans in March, 66% in February and 46% just a half-year back.
(http://money.cnn.com/2008/05/06/news/economy/recession_poll/index.htm?postversion=2008050613)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:09:44 PM

Gas may soar in June: Government

Energy Department forecasts an 11-cent jump in gas prices in June; expects crude oil to average $110 a barrel, a $9 rise.

May 6, 2008: 1:11 PM EDT

WASHINGTON (AP) -- The government on Tuesday again raised its short-term price forecasts for crude oil and gasoline -- trends that are expected to tamp down demand. The Energy Department predicts average monthly gasoline prices should peak at $3.73 a gallon in June, an increase of about 11 cents from last month's estimate. Regular-grade gasoline is expected to average $3.52 a gallon in 2008, 71 cents above last year's average. Diesel fuel prices are projected to average $3.94 per gallon this year, up from $2.88 per gallon in 2007.

At the pump, gas prices dipped slightly overnight to remain at a national average of $3.61 a gallon Tuesday, and are well above the year-ago average of $3.04 a gallon, according to AAA and the Oil Price Information Service. Diesel prices remained at about $4.24 a gallon, and both were within about a penny of record highs set last week. EIA expects average daily oil consumption in the U.S. will fall by about 190,000 barrels this year because of the economic slowdown and high prices. That is more than double last month's forecast of a 90,000 barrel per day decrease.

Increase in barrel price

West Texas Intermediate crude is expected to average $110 a barrel this year compared with $72.32 a barrel last year, according to EIA. The latest estimate is a $9 a barrel increase compared with last month.
Light, sweet crude for June delivery broke $122 a barrel for the first time during Tuesday trading on the New York Mercantile Exchange. Also Tuesday, Sens. Jack Reed of Rhode Island and Carl Levin of Michigan asked President Bush to create a federal task force "to investigate whether speculators are driving up prices in energy commodity markets through manipulative or deceptive practices."
The Democrats asked that the group include the Secretary of the Treasury, Attorney General, and the chairmen of the Securities and Exchange Commission, Commodities Future Trading Commission, Federal Trade Commission and Federal Energy Regulatory Commission.
(http://money.cnn.com/2008/05/06/news/economy/fuel_outlook.ap/index.htm?postversion=2008050613)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:10:46 PM

Analyst: $200 oil could be ahead

Goldman Sachs analyst predicts crude could rise by another $80 this year, citing short supply; says energy crisis 'may be coming to a head.'

Last Updated: May 6, 2008: 10:46 AM EDT

NEW YORK (AP) -- A Goldman Sachs analyst predicts that oil prices could reach $150 to $200 a barrel over the next 6 months to two years, but said that how far prices could climb still "remains a major uncertainty." "We believe the current energy crisis may be coming to a head, as the lack of adequate supply growth is becoming apparent," analyst Arjun N. Murti wrote in a client note.

Oil for June delivery hit a record $122 a barrel Tuesday in electronic trading on the New York Mercantile Exchange. Murti said his highest forecast prices represent the possible culmination of a "super spike" - the steady rise in oil prices the analyst first called for three years ago. At the time of his prediction in April 2005, the forward crude contract settled at $57.01 a barrel. Murti saw prices ascending as high as $105 - saying that was the price at which it might be necessary to pull back significantly on energy consumption. One contrarian analyst called that figure "laughable." That analyst, Citi Investment Research's Tim Evans, asserted in a client note Tuesday that oil prices have the same potential to fall by $40 to $50 per barrel over the next 6 months to two years as to rise like Murti predicts. "The fundamental premise behind the latest calls seems thin at best," Evans said. But soaring oil prices have already squeezed the profits of companies from truckers and railroads to airlines - who mark fuel as their highest cost. The effects have also trickled down to consumers, as gas prices follow suit.
(http://money.cnn.com/2008/05/06/news/economy/200_dollar_oil.ap/index.htm?postversion=2008050610)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:11:53 PM

Feldstein Says U.S. Economy `Sliding' Into Recession (Update1)
By Anthony Massucci and Kathleen Hays

May 6 (Bloomberg) -- Harvard University economist Martin Feldstein, a member of the committee that charts the American business cycle, said the U.S. economy is ``sliding into a recession.'' ``This is a weakening economy,'' Feldstein, president of the National Bureau of Economic Research, said in a Bloomberg Television interview in New York. ``If you compare where the economy is now, with where it began at the beginning of the year, just about every indicator is down.''

The comments by Feldstein, a Republican, go farther than anyone in the Bush administration has gone in publicly characterizing the severity of the U.S. slowdown. Treasury Secretary Henry Paulson in an interview last week said the economy is ``still growing, albeit modestly.'' In Frankfurt today, Deutsche Bank AG Chief Executive Officer Josef Ackermann said ``we don't expect a recession in the U.S.'' and the financial crisis stemming from the collapse of the U.S. subprime market may be nearing an end.
Federal Reserve Chairman Ben S. Bernanke, seeking to end the worst housing slump in a quarter century, urged the government and mortgage lenders in a speech yesterday to intensify efforts to avoid foreclosures. Foreclosure filings rose 57 percent in March from a year earlier, according to Irvine, California-based RealtyTrac Inc. Feldstein, 68, said the biggest risk to the economy is a sharper downturn in housing.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aLkqZ.fSIOdY&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 06, 2008, 06:12:45 PM

High Oil Prices Won't Cut Demand, IEA Economics Chief Says
By Jim Kennett

May 6 (Bloomberg) -- Oil prices pushing well past $100 a barrel will do little to stop worldwide demand, the economics chief for the International Energy Agency said. Subsidies in China, India and oil-producing countries will combine with strong economic growth in those areas to support demand even with rising prices, Fatih Birol, chief economist at the IEA, told a panel at the energy industry's Offshore Technology Conference in Houston. That runs counter to history, which saw demand fall about 2 percent during the high prices of 1973 to 1974, and more than 7 percent from 1979 to 1981, he said.

``We shouldn't expect too much from the price, in terms of bringing demand down,'' he said. ``China and India are transforming the energy markets by the sheer size of their populations.'' Crude prices have soared in the past year, with futures touching a record $122.73 a barrel today on the New York Mercantile Exchange, amid rising demand from emerging-market economies. China alone will import 13 million barrels of oil by 2030, nearing the level of U.S. imports, as the number of drivers rises from 20 out of 1,000 people to 140 out of 1,000, Birol said. That compares to 860 out of every thousand residents in the U.S.

``We have no right whatsoever to blame China and India,'' he said. ``They are only doing what the rich countries, the OECD countries, did.'' That inherent right to supplies means the Organization for Cooperation and Development, which includes the U.S. and European governments, must work hard to include incentives for China and India to increase efficiencies and cut greenhouse-gas emissions, Birol said.

(http://www.bloomberg.com/apps/news?pid=20602099&sid=atnKZqzKxfoM&refer=energy)

Title: Re: Meltdown
Post by: Al Moritz on May 06, 2008, 06:40:25 PM

Quote from: Dm on May 06, 2008, 06:00:46 PM
Al, before you go dancing in the streets to celebrate all the money you'll save by switching to natural gas, the historical trend has been that natural gas prices mirror/parallel crude oil prices. Thus, when crude oil prices double, so too do natural gas prices.

CLICK HERE (http://www.good-music-guide.com/community/index.php/topic,3519.msg175837.html#msg175837)

Of course prices are going up for natural gas too, but not in a linear fashion with oil. The prices for natural gas have doubled since 1991, whereas prices for home heating fuel have risen five-fold.

You keep posting all those warning posts, and when someone actually does something about it, then your only answer is another doom prophecy, instead of acknowledging the effort.

How pathetic. What is the purpose of this thread then? (Not that I converted to natural gas because of your posts by any means.)

Title: Re: Meltdown
Post by: Florestan on May 07, 2008, 02:14:11 AM

Wait a minute! Do you guys in US heat your homes with oil?! :o :o :o

Title: Re: Meltdown
Post by: BachQ on May 07, 2008, 03:29:03 AM

Quote from: Al Moritz on May 06, 2008, 06:40:25 PM
You keep posting all those warning posts, and when someone actually does something about it, then your only answer is another doom prophecy, instead of acknowledging the effort.

Your "solution" might seem sensible for a few years, but once natural gas extraction peaks (estimated to be around 2010 in US; 2018 globally), its costs will escalate progressively. That is a fact of life. I have natural gas heating in my home, and I'm frightened to death with the inescapable likelihood that the cost will soar in a few years. It really sucks (but it's true that heating oil would be worse).

Quote from: Al Moritz on May 06, 2008, 06:40:25 PM
How pathetic.

There is no question that natural gas is CURRENTLY a better value than heating oil (which is essentially a form of diesel oil, the prices for which have been skyrocketing). So you made a wise move in the short-term. But at the end of the day, you're substituting one non-renewable fossil fuel for another non-renewable fossil fuel, both of which are destined to soar in costs once their extractions have peaked.

Quote from: Al Moritz on May 06, 2008, 06:40:25 PM
What is the purpose of this thread then?

The age of fossil fuels is coming to an end, and substituting one fossil fuel for another might buy you some short-term relief, but in the long-term, it merely substitutes one vanishing commodity for another vanishing commodity.

Title: Re: Meltdown
Post by: Al Moritz on May 07, 2008, 05:11:14 AM

Quote from: Dm on May 07, 2008, 03:29:03 AM
Your "solution" might seem sensible for a few years, but once natural gas extraction peaks (estimated to be around 2010 in US; 2018 globally), its costs will escalate progressively. That is a fact of life. I have natural gas heating in my home, and I'm frightened to death with the inescapable likelihood that the cost will soar in a few years. It really sucks (but it's true that heating oil would be worse).

There is no question that natural gas is CURRENTLY a better value than heating oil (which is essentially a form of diesel oil, the prices for which have been skyrocketing). So you made a wise move in the short-term. But at the end of the day, you're substituting one non-renewable fossil fuel for another non-renewable fossil fuel, both of which are destined to soar in costs once their extractions have peaked.

The age of fossil fuels is coming to an end, and substituting one fossil fuel for another might buy you some short-term relief, but in the long-term, it merely substitutes one vanishing commodity for another vanishing commodity.

So, instead of whining around, what are your solutions to the home heating problem?

Title: Re: Meltdown
Post by: BachQ on May 07, 2008, 09:52:37 AM

Quote from: Al Moritz on May 07, 2008, 05:11:14 AM
So, instead of whining around, what are your solutions to the home heating problem?

For the record, you are whining about my whining ..........

Title: Re: Meltdown
Post by: Al Moritz on May 07, 2008, 11:05:41 AM

Quote from: Dm on May 07, 2008, 09:52:37 AM
For the record, you are whining about my whining ..........

So you are whining about my whining about your whining? And, what's the solution that I asked for? No whining, please.

Title: Re: Meltdown
Post by: drogulus on May 07, 2008, 01:11:25 PM

Quote from: Sean on May 06, 2008, 03:55:21 PM
I hope you're right. But billions of cars, lorries, buses, all aircraft, plus almost all shipping all have petrol and diesel engines in them: they only work on petrol and diesel. Understand?

Fuel economy rose rapidly after the '70s energy crisis, partly as a result of government action, but mostly because people relaced gas guzzlers with more economical cars. Cars last longer today, so it will take longer to change over. It will happen, though. You will get a mix of responses: smaller, lighter vehicles, plugin hybrids, fuel cell electrics, hydrogen and CNG based engines and multiple fuel cars.

Long term I'd like to see a predominantly electric energy economy with local (hydrogen fuel cell based) generation, clean coal and nuclear plants providing the bulk of power generation along with solar, wind and geothermal.

Title: Re: Meltdown
Post by: Sean on May 07, 2008, 04:41:49 PM

Sure drogulus, I hope this sort of thing happens. I'm a cynic in some ways but have a few life plans of my own I'd like to carry out before the energy crisis really bites, if indeed it's going to.

However the literature on this will point out that humanity just has not, for whatever reason, succeeded in securing large scale renewable energy supplies for itself. The modern world can look strong, but isn't: Western forces aren't in the middle east because of terrorism, that's just psychological fodder for the democratic masses who don't have the minds to think through these things and want a cushioned normative world view.

The 'transition' that people casually talk about simply doesn't look like happening- no one knows of anything to replace the ease of pumping out oil. Energy is the most serious and complex of questions- it's not a transition to a new soap powder.

Most of history's wars have been fought for energy resources: it's simple logic- if you kill or control the people over there, you can have more of what you want over here. Morality doesn't really enter into it, and it certainly looks like the major players today, US, China, Iran, are gearing up for war.

By the way high grade nuclear fuel is also peaking. The best bet might have been solar...

Title: Re: Meltdown
Post by: Daverz on May 07, 2008, 09:01:15 PM

Quote
Tired of paying through the nose, Americans try praying at the pump

by Karin Zeitvogel

[snip...]
"Lord, come down in a mighty way and strengthen us so that we can bring down these high gas prices," Twyman said to a chorus of "amens".
"Prayer is the answer to every problem in life... We call on God to intervene in the lives of the selfish, greedy people who are keeping these prices high," Twyman said on the gas station forecourt in a neighborhood of Washington that, like many of its residents, has seen better days."Lord, the prices at this pump have gone up since last week. We know that you are able, that you have all the power in the world," he prayed, before former beauty queen Rashida Jolley led the group in a modified version of the spiritual, "We Shall Overcome"."We'll have lower gas prices, we'll have lower gas prices..." they sang.
[...]

Kind of shortsighted. Why not pray for workable fusion power and more efficient batteries for electric cars?

http://news.yahoo.com/s/afp/20080505/lf_afp/usreligionpovertyenergyoil

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:12:34 AM

Squeezed airlines clip wings

Citing fuel prices, carriers cut back on flights - and entire routes in some cases
By Nicole C. Wong, Globe Staff | May 7, 2008

Several US airlines, roiled by unrelenting fuel costs, disclosed this week that they are winnowing daily flights to certain destinations, eliminating entire routes, and in some cases withdrawing from airports - and this is just the beginning. A Goldman Sachs report issued yesterday indicated such cuts will not be enough to compensate for the cost of fuel.

"We expect carriers to explore any and all options - capital raises, foreign capital infusions, strategic transitions, asset sales, alliances - in an attempt to bolster their positions financially and strategically in this quickly deteriorating environment," wrote analyst Christopher Cuomo. "But in a world of sustained $100-plus oil, we are not convinced these actions can provide enough relief to offset the challenges that lie ahead."

Record-high fuel prices this week prompted US Airways to cut 10 routes from its Las Vegas hub effective Aug. 19 and American Airlines Inc. to say it would cease serving Oakland International Airport in California, where it only operated three daily flights, on Sept. 3. In Boston, American will reduce the frequency of flights to Dallas/Fort Worth International Airport from 10 a day to nine a day, and to San Juan from three a day to two a day, on Sept. 3 as part of the 5 percent cut in domestic capacity already slated for this year's fourth quarter.

And JetBlue Airways Corp. is back-pedaling on the plan to set up shop at Los Angeles International Airport revealed in February. LAX was to be the launching point for three daily nonstop flights to New York's John F. Kennedy International Airport and one to Boston's Logan International Airport slated to begin May 21, but the move "is being postponed indefinitely," said airline spokesman Sebastian White.
(http://www.boston.com/business/articles/2008/05/07/squeezed_airlines_clip_wings/)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:13:08 AM

Sean, here's an excellent two part excerpt from the ABC's "Catalyst".

PART I http://www.youtube.com/watch?v=xT-ZpYgaHgc

PART II http://www.youtube.com/watch?v=l0MWDQ6JPTo

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:13:56 AM

Top News May 7, 2008, 12:01AM EST text size: TT
Hedging Against $200 Oil

For the financial whizzes of Southwest Airlines, it just gets more expensive to buy protection as oil prices keep climbing
by Moira Herbst

Oil is getting pricier by the minute. A barrel of the benchmark West Texas Intermediate crude hit a record of $122.73 in intraday trading May 6, before settling at $121.84. And look out: The same day, investment bank Goldman Sachs (GS) said oil prices could hit $200 within the next two years as limited supply growth and rising demand causes a "super spike".

That's not welcome news for airlines. Rising jet fuel prices—one of the industry's biggest costs—have helped send seven airlines into bankruptcy this year, and more could follow. One exception to the sea of red ink so far is Southwest Airlines (LUV), which has saved billions since 2000 by successfully hedging against increases in oil prices. But with each rise in oil prices, that strategy gets more and more expensive.

Rich Payoff

"We would like to see more coverage, and we're reviewing our options," says Scott Topping, treasurer of Southwest and manager of its hedging program. "The fundamentals still point to the risk of higher prices; we feel we need to [hedge]."

A hedge is a financial instrument that allows investors to lock in certain prices to act as insurance against the possibility that the open-market, or spot, price of that commodity will rise. If the price then rises, the company gets a financial payoff that cushions the blow of higher prices. In this way, investors can actually make money using hedging as insurance, giving them an advantage over competitors in the marketplace.

Southwest is currently the only major airline with most of its fuel costs hedged at lower prices, largely because it is the only large carrier with the cash flow to do so. For 2008, 70% of its fuel needs are hedged at $51 a barrel. That means that while competitors have to contend with spot prices hovering around $120 a barrel, Southwest can buy oil at less than half that. Access to this discounted price means Southwest feels less pressure to pass on higher costs to customers, which could afford it more market share as competitors hike ticket prices.
(http://www.businessweek.com/bwdaily/dnflash/content/may2008/db2008056_075377.htm?chan=top+news_top+news+index_news+%2B+analysis)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:14:44 AM

Bankruptcies on the Rise

Tighter credit, rising commodity prices, and slipping sales aren't slamming just Wall Street;
now small businesses are getting hit

(http://images.businessweek.com/story/08/600/0506_bankruptcy2.jpg)

More businesses filed for bankruptcy in April, 2008, than in any month since new bankruptcy laws took effect in 2005, according to a company that tracks federal court filings. The numbers show a 49% increase in commercial bankruptcies over last year, with an average of 235 daily filings last month compared to 158 in April, 2007, according to data compiled by Jupiter eSources, an Oklahoma City company that runs a database called Automated Access to Court Electronic Records(AACER). More than 5,000 firms filed for bankruptcy in April, 2008, the most in any month since the new laws took effect in 2005.
(http://www.businessweek.com/smallbiz/content/may2008/sb2008056_484858.htm)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:16:12 AM

Published on Wednesday, May 7, 2008 by ASPO-USA / Energy Bulletin
Ignoring the elephant in the room

The disconnect between peak oil concerns and the presidential race is almost total. As prices at the pump rise, each candidate is now talking about their so-called solutions to the problem. Despite clear new warning signs from Russia, Saudi Arabia, Mexico, and Nigeria that peak oil is nigh, the candidates remain unwaveringly oblivious to the true causes of rising fuel prices, preferring instead to dwell on irrelevant—actually, counterproductive—measures like suspending the federal gas tax during the summer months or taxing Big Oil. This is akin to putting a band-aid on a melanoma.

Our nation's capital is a self-reinforcing bastion of ignorance about the longer term oil supply issues, [Roscoe] Bartlett (R, Md) and a few others excepted. The candidates and their energy advisers are full-fledged members of the "Washington Insiders" club, a group that only talks to each other and gets all of its information from inside the Beltway or pollsters. A brief example suffices to demonstrate the problem. Everybody in our nation's capital reads the Washington Post. If you want to "know" what's going on, it's in the Post. Here are the results of a Google advanced search survey of references to the exact phrase "peak oil" in four newspapers.

(http://www.energybulletin.net/43824.html)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:16:37 AM

Award winning economist says America has bankrupted itself with the Iraq war
Transcript

TONY JONES: Now to our best and Joseph Stiglitz is one of America's leading economists and one of the most pessimistic. He recently predicted that the subprime mortgage crisis which has burst the US housing bubble and fiercely shaken the debt ridden domestic economy would result in the worst downturn since the great depression. On top of that, he says future administrations will struggle to pay off the massive burden of debt used to fund the war in Iraq. In his latest book 'The Three Trillion Dollar War' Stiglitz sets out the hidden costs of George Bush's Middle East adventure. Stiglitz won the Noble Prize in economics in 2001. Before that he was the chief economist at the World Bank and before that, the chairman of President Clinton's council of economic advisers. He's a Professor of economics at the Columbia School of Business and we caught up with him in Rome earlier this evening. Joe Stiglitz, thanks for joining us.
(http://www.abc.net.au/lateline/content/2007/s2236161.htm)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:18:03 AM

Oil price hike 'could hit recovery'

1 day ago

High oil prices could "snuff out" any recovery in the UK economy during the coming two years, economists have warned.

The Ernst & Young Item Club said the modest upswing in economic growth it was predicting for 2009 and 2010 was predicated on the price of oil remaining below 100 US dollars (£51) per barrel.
But it warned that if the cost of oil increased to 120 US dollars (£61) per barrel or 150 US dollars (£76) per barrel in the long-term, it would have serious implications for the strength of the wider economy.
It added that if the cost hit 200 US dollars (£102) per barrel, as one Opec minister recently predicted, then "all bets may well be off".

The group said if oil prices climbed to 150 US dollars per barrel it would trim its forecast for economic growth for 2009 from its current prediction of 1.5% to a weak 1.1%. It said the following year, when many commentators had pencilled in a strong recover in GDP growth to 2.7%, high oil prices could dampen growth to less than 2%. A long-term price of 200 US dollars per barrel for oil would cut economic growth even further to just 0.9% for 2009 and 1.2% in 2010. It warned that such high oil prices would have an impact across the whole economy, adding that one of the main factors driving the predicted recovery in 2010 was increased consumption as high street spending picked up. But it said if oil prices did hit 200 US dollars per barrel next year, consumption would turn negative and there would be only a modest improvement in 2010.

Hetal Mehta, an economist at the Ernst & Young Item Club, said: "Our predictions don't take into account the impact on public confidence that this type of oil price increase would have and how that would feed back into the economy, so we may well be underestimating the potential downside."

The end (http://ukpress.google.com/article/ALeqM5hR2QAwq3g_1MkBMOPPl9pnJ3h11Q)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:19:24 AM

Here's a snippet for Al Moritz

Natural Gas in New York Advances as Crude Oil Rises to Record
By Reg Curren
May 7 (Bloomberg) -- Natural gas in New York advanced to the highest since December 2005 as crude oil rose to a record.

Oil touched $123.80 a barrel, the highest price since futures began trading in 1983. Gas touched $11.387 per million British thermal units, the highest since $11.88 per Btu on December 29, 2005.
``Gas has been tracking crude more than not of late,'' said Eric Wittenauer, an energy analyst at Wachovia Securities in St. Louis.

Natural gas for June delivery rose 17.7 cents, or 1.6 percent, to settle at $11.327 per million British thermal units at 3:11 p.m. on the New York Mercantile Exchange. Gas has gained 51 percent this year.
Crude oil for June delivery rose $1.69, or 1.4 percent, to settle at $123.53 a barrel in New York. Futures have more than doubled in the past year.

Oil stockpiles rose 1.8 percent to 325.6 million barrels last week, the highest since August, an Energy Department report today said. Oil traded at $122.04 a barrel before the release of the report at 10:30 a.m. in Washington. Gas also advanced amid speculation a government report tomorrow may show stockpiles rose less than the average for this time of year.
(http://www.bloomberg.com/apps/news?pid=20602099&sid=a6_Y4DPdxEdY&refer=energy)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:20:24 AM

Energy Markets Not Manipulated, U.S. Regulator Says (Update1)
By Tina Seeley

May 7 (Bloomberg) -- Energy markets aren't being manipulated and speculators aren't a ``major factor'' in record prices, the head of the U.S. Commodity Futures Trading Commission said. ``We have a high degree of confidence that people are not manipulating the market,'' Commission Chairman Walter Lukken said today at a Senate hearing.

Crude oil futures contracts today touched a record $123.80 a barrel on the New York Mercantile Exchange. It closed today at $123.57 a barrel, up more than double a year ago. The commission regulates trading on Nymex and other commodity and options markets. Trading on the markets it regulates increased about 27 percent last year, Lukken said.

``We have not seen that speculators are a major factor in driving these prices,'' Lukken said at a Senate Appropriations subcommittee hearing. Market fundamentals ``largely support where prices are at today,'' he said. Senator Dick Durbin, an Illinois Democrat, questioned Lukken about the effects of raising the margin requirements for oil trades. Senator Byron Dorgan, a North Dakota Democrat, has voiced support for increasing the amount of money traders must have on hand to participate in oil markets, in an effort to dissuade speculators. ``There would be migration off exchanges,'' Lukken said of the idea. ``It would be a tax on a type of trader.'
(http://www.bloomberg.com/apps/news?pid=20602099&sid=aX0iaEd9bOMU&refer=energy)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:21:38 AM

NYMEX crude nears intraday record, in sight of $124
Wed May 7, 2008 8:29pm EDT

TOKYO, May 8 (Reuters) - U.S. crude oil futures continued to rise on Thursday, past Wednesday's record settlement price, and near an intraday high reached earlier in the session on increasing fears about tight world supplies of diesel fuel.
(http://www.reuters.com/article/rbssEnergyNews/idUST903120080508)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:22:31 AM

For UK, 40% RISE ON GAS AND ELECTRIC BILLS
Thursday May 8,2008
Louise Barnett

HOUSEHOLD energy bills will soar by up to 40 per cent this winter as oil prices continue to rise.

Families could be paying a quarter more for their gas as early as this summer, experts have warned.

Wholesale gas prices are already at a record high for this time of year. As investment bank Goldman Sachs predicts crude oil will rise to $200 a barrel from the current high of $123, household budgets look set to feel the strain.

It will heap pressure on families already struggling with average increases of around 15 per cent by the big energy firms since January.

Aamir Baloch of energyhelpline.com said: "If the predicted 67 per cent increase in crude oil prices does happen, wholesale gas prices will increase substantially too, as there's a strong link between the two.

"This will add pressure to domestic energy prices. Annual bills will reach new heights, at £1,300 for a typical home."

Joe Malinowski of TheEnergyShop.com said: "I think we could be seeing another 30 to 50 per cent on the price of a domestic bill. It would be catastrophic."

He predicts householders will see a 25 per cent increase in their gas prices and 10 per on electricity as early as summer.

Rob Laughlin, energy broker at MF Global, said crude rises "would have a severe effect on every consumer". And Tim Wolfenden of uSwitch.com said high wholesale prices would mean domestic gas bills rising by around 25 per cent this winter.

"We will see price increases earlier than predicted this year, maybe September and maybe another in the first quarter of next year," he said. "I think it will add up to 25 per cent overall."

Wholesale gas prices are closely linked to wholesale oil costs – partly because they are often produced from the same reservoir. Electricity bills suffer as well as gas bills because around one-third of Britain's power generation is gas-fired.

Centrica, parent company of the UK's biggest energy firm British Gas, said wholesale gas prices for the coming winter were now at an average 85 pence per therm.

That price is up 77 per cent on last winter's average and a 26 per cent hike from January's 61p per therm. "These are the highest prices the UK has seen in the run-up to winter," a Centrica spokesman said.

Centrica warns that the UK is increasingly reliant on gas imports from Europe and further afield because North Sea gas is running out.

"We're having to import from Europe, where there is almost no competition in gas and power markets to drive prices down, and this is pushing UK prices up," the spokesman added. Wholesale gas prices make up around half suppliers' costs. Transport, billing and other company costs make up the rest.

Energy information provider Platts said wholesale gas prices in the UK are up 41.8 per cent since the start of 2008. This relates to current prices rather than the forward-looking winter prices quoted by Centrica.

Crude oil has surged in price because investors are putting their money into commodities while the dollar is weak. Concerns about supply disruptions in Nigeria and the Middle East plus demand from fast-growing nations such as China and India have sent oil prices soaring to record levels on the global markets. Crude hit 123 US dollars per barrel yesterday before dropping back.

Oil prices are now up more than 25 per cent from the start of the year and have nearly doubled from about $62 a barrel a year ago.

Goldman Sachs analyst Arjun Murti wrote in a report the world was in the midst of a "super spike" in oil prices that will ultimately force demand to fall sharply. "We believe the current energy crisis may be coming to a head. A 'super-spike' endgame may be in the early stages of playing out," he wrote.

Britain imports 20 per cent of its gas supplies. This is predicted to rise to around 75 per cent by 2015 due to dwindling North Sea reserves, making domestic fuel bills even more sensitive to global wholesale prices.
(http://www.dailyexpress.co.uk/posts/view/43761)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:23:59 AM

High oil prices seen spurring alternative fuel shiftWed May 7, 2008 6:10pm EDT
By Chris Baltimore

WASHINGTON (Reuters) - Record U.S. crude oil futures near $124 a barrel have reached a "break point" that will spur a shift away from an oil-centric transportation sector toward alternatives, energy analyst Daniel Yergin said on Wednesday.

Yergin, chairman of Cambridge Energy Research Associates, told Reuters that U.S. crude oil prices -- which hit a record $123.93 a barrel on Wednesday -- will hasten the adoption of cellulosic biofuels made from switchgrass and woodchips, as well as battery-powered cars and fuels derived from coal.
Crude prices have doubled in a year and risen sixfold since 2002 on rising demand from China and other developing countries, adding pressure to consumer economies already hard hit by a housing and credit crunch.

Yergin countered the notion that global demand for gasoline, jet fuel and other transportation fuels is chiseled in stone because drivers have few current alternatives. "Price really matters," Yergin said. "It doesn't happen overnight but the laws of economics have not been abolished." A sagging U.S. dollar .DXY that has lost half its value against the euro since 2002 and a 350 percent surge in crude oil contract trading on the New York Mercantile Exchange have been the prime engine behind the oil price rise, Yergin said.

With scant global spare oil production capacity, further dollar weakness could send oil prices to $150 a barrel in coming years, he said. CERA's prediction came the day after investment bank Goldman Sachs said oil prices could scale $200 a barrel in the next two years as part of an ongoing "super spike" in the market. The combination of supply outages in Nigeria, sagging production in Venezuela and Iraq's inability to boost output has spurred a significant "aggregate disruption" of oil supply, Yergin said.
"When you add it all up, it's an aggregate disruption that has taken a few million barrels per day out," he said. "People have underestimated the importance of Nigeria in particular."
Despite the end last week of a strike that halted Exxon Mobil (XOM.N: Quote, Profile, Research) output in the West African country, traders remain concerned about supply disruptions in Nigeria.
(http://www.reuters.com/article/reutersEdge/idUSN0729188220080507)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:24:45 AM

Published on Wednesday, May 7, 2008 by The Oil Drum
The U. S. electric grid: will it be our undoing?
By Gail E. Tverberg

Quite a few people believe that if there is a decline in oil production, we can make up much of the difference by increasing our use of electricity--more nuclear, wind, solar voltaic, geothermal or even coal. The problem with this model is that it assumes that our electric grid will be working well enough for this to happen. It seems to me that there is substantial doubt that this will be the case.

From what I have learned in researching this topic, I expect that in the years ahead, we in the United States will have more and more problems with our electric grid. This is likely to result in electrical outages of greater and greater durations.

The primary reason for the likely problems is the fact that in the last few decades, the electric power industry has moved from being a regulated monopoly to an industry following more of a free market, competitive model. With this financing model, electricity is transported over long distances, as electricity is bought and sold by different providers. Furthermore, some of the electricity that is bought and sold is variable in supply, like wind and solar voltaic. A substantial upgrade to the electrical grid is needed to support all of these activities, but our existing financing models make it very difficult to fund such an upgrade.

If frequent electrical outages become common, these problems are likely to spill over into the oil and natural gas sectors. One reason this may happen is because electricity is used to move oil and natural gas through the pipelines. In addition, gas stations use electricity when pumping gasoline, and homeowners often have natural gas water heaters and furnaces with electric ignition. These too are likely to be disrupted by electrical power outages.
(http://www.energybulletin.net/43823.html)

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 03:25:25 AM

Retail gas prices soar to fresh record
With nationwide prices at an all-time high of $3.645 a gallon, drivers now pay 20% more than they did last year.
Last Updated: May 8, 2008: 6:28 AM EDT

NEW YORK (CNNMoney.com) -- Retail gasoline prices have jumped to new record high, auto group AAA's Web site showed Thursday. The national average price for a gallon of regular unleaded gasoline rose to $3.645, surpassing the previous record set May 1. Gas prices have been marching steadily higher since the start of the year. Drivers now pay 20% more than they did a year ago, when a gallon of gas cost on average $3.034. The price of gas has been pushed up by record high crude prices. Crude futures closed at an

Title: Re: Meltdown
Post by: ezodisy on May 08, 2008, 04:12:27 AM

looking good.

Title: Re: Meltdown
Post by: BachQ on May 08, 2008, 04:36:06 AM

Quote from: ezodisy on May 08, 2008, 04:12:27 AM
looking good.

Yeah, things are looking rosy. Bush has performed so many economic miracles that I wouldn't be surprised if he won the Nobel Prize in Economics for his outstanding work .........

Title: Re: Meltdown
Post by: ezodisy on May 08, 2008, 05:47:57 AM

focus on the positive side and exploit it while you can. things will crash sooner or later anyway

Title: Re: Meltdown
Post by: Al Moritz on May 08, 2008, 08:16:22 AM

Quote from: Dm on May 08, 2008, 03:19:24 AM
Here's a snippet for Al Moritz

Natural Gas in New York Advances as Crude Oil Rises to Record
By Reg Curren
May 7 (Bloomberg) -- Natural gas in New York advanced to the highest since December 2005 as crude oil rose to a record.

Oil touched $123.80 a barrel, the highest price since futures began trading in 1983. Gas touched $11.387 per million British thermal units, the highest since $11.88 per Btu on December 29, 2005.
``Gas has been tracking crude more than not of late,'' said Eric Wittenauer, an energy analyst at Wachovia Securities in St. Louis.

Natural gas for June delivery rose 17.7 cents, or 1.6 percent, to settle at $11.327 per million British thermal units at 3:11 p.m. on the New York Mercantile Exchange. Gas has gained 51 percent this year.
Crude oil for June delivery rose $1.69, or 1.4 percent, to settle at $123.53 a barrel in New York. Futures have more than doubled in the past year.

Oil stockpiles rose 1.8 percent to 325.6 million barrels last week, the highest since August, an Energy Department report today said. Oil traded at $122.04 a barrel before the release of the report at 10:30 a.m. in Washington. Gas also advanced amid speculation a government report tomorrow may show stockpiles rose less than the average for this time of year.

(http://www.bloomberg.com/apps/news?pid=20602099&sid=a6_Y4DPdxEdY&refer=energy)

I don't think the big picture for natural gas is what you interpret it to be. Of course prices do rise (ever heard of inflation?), and a 1.6 % increase is not much. Certainly, if that happens each month it's a different story, but if I compare last year's lock-in price of $ 2.19 for a gallon of heating oil from our (now former) oil company to the current lock-in price of $ 3.69, then natural gas has ways to go in matching price increases.

Title: Re: Meltdown
Post by: BorisG on May 08, 2008, 09:37:13 AM

Gunbattles break out in Beirut

May 8, 2008

BEIRUT, Lebanon (CNN) -- Gunfire broke out in downtown Beirut Thursday after Hezbollah leader Hassan Nasrallah said recent government actions amount to "a declaration of open war."

"Just in the past few minutes ... things have gotten a lot worse," CNN's Cal Perry reported from downtown Beirut. The sound of automatic gunfire and rocket-propelled grenades could be heard throughout his live reports.

Perry, who took cover with the Lebanese army, said government forces have not yet reacted to the violence.

The gunbattles were taking place between Shiite and Sunni neighborhoods in the capital, near CNN's Beirut Bureau. Watch Perry call in through gunfire »

The Lebanese army, which is charged with trying to keep peace in the capital, is in a precarious position, Perry explained.

"When you're talking about this much gunfire, when you're talking about RPG fire, it's absolutely ludicrous to think that the army will put themselves between these two factions," he said.

Video of the scene showed tanks and armored personnel carriers moving through empty streets past shuttered stores.

The violence erupted shortly after Hezbollah leader Hassan Nasrallah said the government's attempts to halt Hezbollah's use of a telecommunications system amounts to "a declaration of open war."

"We believe the war has started and we believe that we have the right to defend ourselves," Nasrallah said in a televised speech. "We will cut the hand that will reach out to the weapons of the resistance no matter if it comes from the inside or the outside."

At the same time, Nasrallah called for dialogue, saying, "We are ready, whoever wants a compromise, we are here and ready."

"Those who have taken decisions leading to war, let them withdraw their decisions and there would be no war," he said.

"Am I declaring war? Not at all. I am declaring oppression and self-defense."

Lebanese Communications Minister Marwan Hamadi said Nasrallah's speech "is a direct threat of assassinating us."

"We are not scared of the threat," Hamadi told al-Arabiya. " 'Cutting off the hands' is a direct threat of assassination.

"He says it is a new phase; we say it is a new phase, too. We are determined to keep what is left of the Lebanese government."

Many Lebanese politicians who have opposed Syria's influence in their country have been assassinated in recent years, including former Prime Minister Rafik Hariri and four members of parliament.

The latest tensions between Lebanon's U.S.-backed government and Hezbollah were sparked Monday when the government sacked airport security chief Brig. Gen. Wafik Shoukeir. Watch what touched off the fighting »

The government believes Hezbollah was using the equipment to keep tabs on the movement of its opponents in the government.

Nasrallah defended Hezbollah's use of the monitoring equipment, saying it is the right of "any militia during war."

"This wired network is the most important weapon in the battle," he said.

Nasrallah accused the government of trying to make the Beirut airport "a base for the CIA, FBI and the Mossad," the Israeli secret police.

"That's why they wanted to suspend Brig. Gen. Wafik Shoukeir. ... They want to bring a loyal subject that will serve them at the airport."

In a rare display of anger toward Hezbollah, the highest Sunni Muslim spiritual authority in Lebanon accused the group of taking advantage of a labor strike on Wednesday by using it as a political opportunity, and of fomenting violence in Beirut.

The strike quickly escalated into a flashpoint over Lebanon's 17-month-old political crisis.

Hezbollah supporters continue to block all the roads leading to Beirut's airport, forcing the cancellation of nearly all flights. Watch soldiers, burned cars in streets »

Gunbattles were reported Thursday in Beirut's seaport district of Corniche al-Mazraa. Tires continued to burn in Beirut, particularly in the downtown area, where a Hezbollah sit-in continues around the government buildings.

There were reports of clashes and gunfire in the Bekaa Valley overnight and Thursday morning.

Clashes in Beirut on Wednesday took on a sectarian tone, between Beirut's Sunni and Shiite neighborhoods.

Hezbollah is a Shiite militant group, backed by Syria and Iran, with political representation in Lebanon's government.

Members of Lebanon's other major Shiite party, Amal, also participated in Wednesday's strike.

Lebanon's political crisis began in late 2006, when Hezbollah pulled several ministers out of the government of U.S.-backed Prime Minister Fouad Siniora in an effort to destabilize his government.

The move happened as Siniora's government voted to support an international tribunal to investigate the 2005 killing of Hariri, which U.N. investigators have linked to Syria.

The country has been without a president since Emile Lahoud -- who was pro-Syrian -- left office after his term ended in November and parliament was unable to agree on a replacement.

Title: Re: Meltdown
Post by: Lethevich on May 08, 2008, 10:08:49 AM

More damage to the economy: doooooommm!

http://www.ajc.com/metro/content/metro/atlanta/stories/2008/04/25/skittles_0426.html

Title: Re: Meltdown
Post by: ezodisy on May 08, 2008, 11:23:11 AM

CNNmoney

Speculators are often blamed for artificially inflating crude prices, but some experts say high prices are needed to cut demand and develop new resources.
By Steve Hargreaves, CNNMoney.com staff writer
Last Updated: May 8, 2008: 12:30 PM EDT

NEW YORK (CNNMoney.com) -- With $120 oil not seeming to follow the fundamental law of supply and demand many are wondering if the market is broken.

The Federal Reserve has been cutting interest rates, saving Wall Street but sinking the dollar and driving up food and fuel prices. Investors, also called "speculators" by some, have been pouring money into commodities of all sorts, artificially driving prices higher in an attempt to squeak out healthy profits in the face of falling stock values.

But to many, all the financial voodoo is merely a distraction. The fundamental reality of oil - and the thing that makes it so attractive to investors in the first place - is that we are using ever more and finding ever less. High prices are necessary if we are to reduce demand, find new oil, and develop alternative technologies.

"The market is starting to send a signal: You got to get your alternative in line," said Robert Kaufmann, director of Boston University's Center for Energy and Environmental Studies. "Societies that ignore this kind of signal do so at their own peril."

Kaufmann isn't promoting the so-called "peak oil" theory - he doesn't think the world is quickly running out of oil.

The problem, he says, is new discoveries of crude in non-OPEC areas like the United States, the North Sea, and Russia have not kept pace with the oil being removed from those places. OPEC, which holds two thirds of the world's crude oil reserves, has seen no drop in global demand despite $120 oil and has little incentive to increase output.

It's this supply problem that prompted analysts at Goldman Sachs to reaffirm their prediction of a so-called "super spike" in oil prices - which could usher in $200-a-barrel crude in the next 6 to 24 months.

"We believe the current energy crisis may be coming to a head, as a lack of adequate supply growth is becoming apparent," Goldman analysts wrote in a research note Tuesday.

That's the supply side of the equation. The demand side is a familiar story - developing regions like China, India and the Middle East are using more and more oil. It's not that this wasn't known last year - when oil was half as expensive as it is now - it's just that the world is moving closer to that tipping point where demand will exceed supply.

'It's a finite resource," said Brian Hicks, co-manager of the Global Resources Fund at U.S. Global Investors, a San Antonio-based mutual fund. "The rest of the world wants to live like we do, and there aren't enough resources to keep everyone happy."

It's become popular to blame speculators - which would include mutual funds, pension funds, some banks, and anyone else who doesn't ultimately take delivery of a barrel of oil - for the run up in price. Congressman have recently spoken of an "orgy of speculation" in the commodities markets, and have held hearings into the matter.

But most analysts say investors are simply looking at these underlying supply and demand trends and buying oil because they see it going up on its own accord.

After all, they can't really be influencing the price of crude, the argument goes, as they generally don't take delivery of the oil and must sell whatever contracts they have at the end of each month. Ultimately, they don't take any oil off the market.

"Nobody at Goldman Sachs wants to see a fuel truck pull up and say "Ok, here's your 60,000 gallons of gasoline,'" said Michael Cosgrove, president of the commodities brokerage Amerex Brokers, which handles transactions for both banks and end users of oil like refineries. "Ultimately, it's the consumer."

Which is one reason why $120 oil is necessary - to limit demand in a supply-constrained world.

"I think the market is working," said Joseph Stanislaw, an independent energy adviser at the consulting firm Deloitte & Touche. "It forces us to make decisions as individual consumers that will change our behavior. It needs to be done."

Government regulators at the Commodity Futures Trading Commission have also said their studies have produced no evidence that oil speculators are significantly driving up the price of crude.

The argument that speculators aren't unduly influencing oil prices is by no means universally accepted.

"I think the market is totally insane," said Fadel Gheit, a senior energy analyst at the investment firm Oppenheimer. "Somebody is playing a game, and we're all paying for it."

Gheit said demand has fallen in developed countries, and there is plenty of energy supply - mostly in the form of natural gas - available right here in the United States,if only the oil companies had access to it.

Some analysts and politicians have called for increasing the nations oil production by drilling in areas that are currently off limits - like the Arctic National Wildlife Refuge, sections of the Rocky Mountains and off the east and west coasts.

"If we opened access to gas in this country, we wouldn't need oil in five years," he said.

Both sides in this debate make concessions.

The "market-is-working" types agree that the discovery of oil as an investment class is probably driving up prices somewhat - perhaps by as much as $30 a barrel - although they maintain the long-term price trend would be little changed absent these speculators.

And Gheit agrees that higher prices do provide much-needed incentive to limit demand.

"I've long said maybe the best thing that could happen to this country is to have $6 gasoline," he said. To top of page
First Published: May 8, 2008: 10:24 AM EDT

Find this article at:
http://money.cnn.com/2008/05/07/news/economy/120_oil/index.htm

Click Here to Print
    SAVE THIS | EMAIL THIS | Close
Check the box to include the list of links referenced in the article.

© 2007 Cable News Network LP, LLP.

Title: Re: Meltdown
Post by: Sean on May 08, 2008, 08:35:17 PM

Quote from: Dm on May 08, 2008, 03:13:08 AM
Sean, here's an excellent two part excerpt from the ABC's "Catalyst".

PART I http://www.youtube.com/watch?v=xT-ZpYgaHgc

PART II http://www.youtube.com/watch?v=l0MWDQ6JPTo

Thanks Dm- will have a look this afternoon.

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:12:00 AM

Quote from: Sean on May 08, 2008, 08:35:17 PM
Thanks Dm- will have a look this afternoon.

Hi Sean!!

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:12:54 AM

Oil Soars to Record $125
By Grant Smith

(http://www.bloomberg.com/apps/data?pid=avimage&iid=iLJ9XF5yk22I)

May 9 (Bloomberg) -- Oil rose to a record above $125, set for the biggest weekly gain since March last year, as concern violence in Nigeria will cut supply spurred speculative buying. Assaults in Africa's biggest producer have increased this month as U.S. demand for the country's crude starts to peak before the start of this summer's motoring season. OPEC said yesterday it doesn't need to increase supplies, even as its president warned prices may reach $200 a barrel.

``In the last couple of weeks attacks in Nigeria have been getting worse,'' said Andy Sommer, an analyst with HSH Nordbank in Hamburg. ``Also, the view that oil can go to $200, even though everyone knows it's not the base-case scenario, is bringing in investor flows.'' Crude oil for June delivery climbed as much as $1.43, or 1.3 percent, to $125.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract was at $125.05 at 11:27 a.m. London time. Oil has risen 7.4 percent this week, the biggest weekly gain since March 23, 2007. Prices have doubled in the last year.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=armYFIWZS8V0&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:16:05 AM

Oil surpasses $125 per barrel ahead of US driving season
By PABLO GORONDI –

Oil prices surged past $125 per barrel Friday on the eve of the U.S. driving season as a weakening U.S. dollar drove investors to snap up commodities. Light, sweet crude for June delivery rose as high as $125.12 a barrel in electronic trading on the New York Mercantile Exchange at midday before falling back to $124.86 by early afternoon in Europe. On Thursday, the contract rose to a record close of $123.69 a barrel. In London, Brent crude contracts also hit record highs before slipping and traded up $1.13 on the day at $123.97 a barrel on the ICE Futures exchange. Earlier Friday, Brent had reached $124.25 before falling back.

On Friday, The Wall Street Journal published a report that suggested closer ties between Venezuelan President Hugo Chavez and rebels attempting to overthrow Colombia's government, heightening chances that the U.S. could impose sanctions on one of its biggest oil suppliers as a state sponsor of terror. Chavez has been linked to Colombian rebels previously, but the paper reported it had reviewed computer files indicating concrete offers by Venezuela's leader to arm guerillas.

Comments Thursday from European Central Bank president Jean-Claude Trichet signaling that the bank was unlikely to consider interest rate cuts helped strengthen the euro against the U.S. currency. By midday in Europe, the euro stood at $1.5466 compared to $1.5404 in late trading Thursday night in New York. The dollar was also weaker Friday against the British pound and the Japanese yen. Investors view commodities such as oil as a hedge against inflation, and some analysts think the dollar's protracted decline is the main reason behind oil prices doubling from a year ago. Also, a weaker dollar makes oil cheaper to investors overseas.

A prediction by analysts at Goldman Sachs seeing oil rising as high as $150 to $200 a barrel within two years also has boosted prices. Analysts, however, struggled to explain the continued rise of oil futures after a larger-than-expected build in crude oil stocks reported Wednesday in the United States. Some pointed to a small decline in distillate stocks, which include diesel and heating oil and normally drive prices during the Northern Hemisphere winter; others said speculation and computer-generated buying was keeping oil prices high.

"Crude oil is currently held up in a tug-of-war between the Goldman reality and the physical reality," said Olivier Jakob of Switzerland's Petromatrix in a research note, adding that the investment bank's prediction made for "a great story to support pension funds piling more into commodities." Mark Pervan, senior commodity strategist at ANZ Bank in Melbourne, Australia, said it may be a combination of continued wariness over potential supply disruptions as well as prospects for a strengthening in crude demand heading into the U.S. summer driving season.

"U.S. gasoline stocks have certainly dropped quite sharply over the last month," he said. "What'll happen in the near term is that we may likely see an uptick in U.S. refining capacity to rebuild gasoline stocks and we may see a short-term build in crude demand as a result." Computer files retrieved from the laptop of a top guerrilla suggested broader and deeper ties between Venezuela's leader and the Revolutionary Armed Forces of Colombia than has been reported in the past, The Wall Street Journal reported Friday.

Ties between the U.S. and Venezuela are already strained. Chavez has said the computer files are fakes.
Prices may also be getting a boost from comments Thursday by the OPEC secretary general. Abdalla Salem El-Badri on Thursday reiterated his position that oil supplies are adequate. He said several Organization of Petroleum Exporting Countries oil projects are coming on line, but he noted that several member countries are having a hard time finding buyers for their additional supplies. In other Nymex trading, June gasoline futures rose 1.92 cents to $3.1570 a gallon, while heating oil futures rose 3.02 cents to $3.54 a gallon. Natural gas futures rose 5.1 cents to US$11.314 per 1,000 cubic feet.
(http://ap.google.com/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB-tAD90I2OVO0)

Title: Re: Meltdown
Post by: ezodisy on May 09, 2008, 03:23:45 AM

Did you read my post? And please get rid of that picture of the stock exchange, it is really unhealthy.

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:31:28 AM

Quote from: ezodisy on May 09, 2008, 03:23:45 AM
Did you read my post? And please get rid of that picture of the stock exchange, it is really unhealthy.

Hi, EZ.

Yes, I did read it, and the reality is that a multitude of factors go into the price of oil futures; speculation is certainly a part of it. The most important factor, however, is the anticipation of the FUTURE SUPPLY and DEMAND for oil. We know that supply is contracting (peak oil), and demand is skyrocketing (Asia, Middle East, South America). Oil is also viewed alongside gold as a "safe haven" commodity.

It's worth pointing out that the price of oil has risen over the past two weeks EVEN THOUGH THE DOLLAR HAS GAINED STRENGTH. Think about that.

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:32:17 AM

Food Price Hikes
http://www.youtube.com/watch?v=3k--jorhh4Q

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:32:55 AM

Warnings over a 'perfect storm' of hunger heard at Holyrood Palace

Food security moved higher up the political agenda at Holyrood this week when Conservative opposition spokesman for Rural Affairs and the Environment, Ayr MSP John Scott, led a debate on the subject.
He told Holyrood: "From 1988 to 2008 we have had, in an almost biblical way, 20 years of plenty, but the situation has now changed. Once again the spectre of food shortages has emerged, with world grain prices rising by 60% in the first three months of this year and China buying land in Russia and South America to feed its growing population.

"The problems that we are contemplating today have come about for three main reasons. First, oil - unexpectedly - has reached $120 a barrel, largely because of the growing awareness that oil is a finite resource and because of concerns about peak oil. That has encouraged farmers worldwide to grow crops for biofuel production on land that was previously used for food. In Brazil, for example, 90% of new cars now run on ethanol.

"Secondly - and again unexpectedly - global warming is taking more and more land out of agricultural production both north and south of the equator. Australia has suffered a seven-year drought and much of southern Europe and North Africa is a virtual desert in terms of food production. Sea levels are beginning to rise too.

"Although no-one can tell us by how much they will rise, we know that a one metre rise in sea levels - a distinct possibility within the next 100 years - would reduce by a third the land that is available to feed an already hungry world.

"The third reason for the problems that we are examining today is population growth and rising standards of living. Man has been the most successful species since the dinosaurs and the world's population is heading towards nine billion by 2050.

"Increased living standards, especially in China, India and Japan, have resulted in those countries moving to Western styles of food consumption, based on consumption of meat rather than rice or grain. That has put still more pressure on grain growing, so that animals can be raised for human food consumption."
Scott warned MSPs that "the perfect storm is emerging, due to rising oil prices, global warming and world population growth. Today, we must acknowledge those facts and start to consider what we in Scotland can do to help feed a daily more hungry world".
(http://www.theherald.co.uk/business/farming/display.var.2258380.0.Warnings_over_a_perfect_storm_of_hunger_heard_at_Holyrood.php)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:34:31 AM

Oil Rally May Stall Rebound By US Economy, Stocks
OIL PRICES, GAS PRICES, OIL, ECONOMY, STOCK MARKET
By Jeff Cox,
Special to CNBC.com
CNBC.com

| 07 May 2008 | 02:20 PM ET

The continued surge in oil prices is starting to cut into economic growth--and with it, the slowly recovering stock market. So far, the economy and stocks have taken the unprecedented rise in energy costs in stride. But that's beginning to change. Higher oil costs already are curbing some discretionary spending by consumers, which could slow the economic recovery. The stock market, in turn, could see its recent rally stall on worries about oil's impact on inflation and economic growth. That's largely what happened in the market on Wednesday.

And if stocks fall back, investors are likely to put more money in oil and other commodities, pushing prices up even more. In total, analysts paint a complicated and somewhat dour picture of the far-ranging effects of the oil bubble. "The relatively bad economy is going to continue through the summer, which is going to put a damper on things," says Michael D. Cohn, of Atlantis Asset Management. "That's partially a result of the ridiculously high oil prices, so I think it's going to affect the market this summer."
Cohn and others are somewhat baffled in particular at the disconnect between the dollar and oil. Traditionally a stronger dollar means weaker oil and vice versa. But as the dollar has picked up 2 percent against the euro since last week's Federal Reserve Rate cut, oil prices have jumped about 10 percent.
It's a trend that could be troublesome for the economy, though there is belief that the pattern could go back to normal should the Fed indicate a long-term intention to defend the dollar.

"The price of oil is a tax on the economy," says Brian Battle, an analyst at Performance Trust Capital. "There's a dollar problem, and maybe one of the things we can do to address oil is start getting footing back under the dollar and start putting the dollar back in the forefront and start making the dollar more valuable by stop lowering interest rates."
(http://www.cnbc.com/id/24504145)

Title: Re: Meltdown
Post by: ezodisy on May 09, 2008, 03:36:52 AM

Quote from: Dm on May 09, 2008, 03:31:28 AM
Hi, EZ.

Yes, I did read it, and the reality is that a multitude of factors go into the price of oil futures; speculation is certainly a part of it. The most important factor, however, is the anticipation of the FUTURE SUPPLY and DEMAND for oil. We know that supply is contracting (peak oil), and demand is skyrocketing (Asia, Middle East, South America). Oil is also viewed alongside gold as a "safe haven" commodity.

It's worth pointing out that the price of oil has risen over the past two weeks EVEN THOUGH THE DOLLAR HAS GAINED STRENGTH. Think about that.

I hear you loud and clear: lots of money to be made right now, looking good ;)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:39:30 AM

Barclays Raises 2008 Crude Oil Forecast to $116.90 (Update2)
By Christian Schmollinger and Sophie Tan

May 8 (Bloomberg) -- Barclays Capital raised its forecast for U.S. crude oil prices this year by 16 percent, citing stronger demand from China and the Middle East and declines in production at non-OPEC countries.
Barclays increased its average estimate for West Texas Intermediate, the physical grade for oil futures traded on the New York Mercantile Exchange, to $116.90 a barrel from its previous prediction of $100.80.

Supply Response

The supply response from oil-producing nations outside of the Organization of Petroleum Exporting Countries has been weak, with Russia ``having been added to the already-significant list of supply disappointments,'' the report said. The drop in oil demand in the 30 developed nations, including the U.S., Japan and Germany, represented by Paris- based Organization for Economic Cooperation and Development ``has not been consistently large enough to bring global demand growth much below 1 million barrels a day,'' the report said.

``Non-OECD demand growth remains robust, most particularly China, Middle East and India,'' Horsnell said. ``The decline in OECD demand started in 2005 hasn't accelerated significantly.'' Alternative energy sources aren't being developed fast enough to stop fossil fuel prices from going higher and Barclays estimates the new investment flow into commodity indexes during the first quarter is $2 billion, which has gone mostly into agriculture and precious metals, not energy, the report said. ``Biofuels look set to be smashed against political rocks, oil sands lack scale and are being enveloped in carbon and other issues,'' the report said. ``There is no evidence for the price rise this year being due to speculation, exchange rates or flows of funds into commodities.'' The push to increase biofuel usage as a means to reduce carbon emissions has driven prices for staple foods such as rice and wheat to records as farmers convert more land to grow palm and soy beans to benefit from government subsidies.

Global food prices rose 57 percent in March from a year earlier, according to the United Nations. The World Bank says civil disturbances may be triggered by rising food prices in 33 countries. Rice, the food staple for half the world, has more than doubled in the past year.
(http://www.bloomberg.com/apps/news?pid=20602099&sid=antCHNDlIF6Q&refer=energy)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:40:55 AM

May 8, 2008
Peak Exports and Our Economic Future
by Tam Hunt

As bad as peak oil will be for the globe, "peak exports" is an even more serious problem for oil-importing countries like the U.S. In the peak exports analysis, global supply and demand is not as important as global net oil exports. The U.S. imports about two-thirds of its oil, making it extremely vulnerable to global oil markets. U.S. oil production peaked in 1971 and has steadily declined since then (falling from 9.6 million barrels per day to 5.1 million in 2007). The availability of oil exports will have an impact on our future economy that will be rivaled by no other single factor.

Jeffrey Brown and Samuel Foucher have conducted extensive analyses of the top five oil exporting countries' past and future production. These countries are generally growing fast and consuming more oil domestically, at the same time as they are producing less oil. Brown and Foucher conclude that these countries - Saudi Arabia, Iran, Russia, Norway and the United Arab Emirates — will probably have literally zero oil to export by about 2030. Again: the top five oil exporters, accounting currently for half of all exports, will, under this analysis, have literally zero oil to export by about 2030. The importance of this conclusion cannot be underestimated.

If the top five exporters go to zero exports over the next twenty years or so, it is highly likely that the U.S. and other oil-importing countries will be forcibly weaned from oil over that same period (U.S. domestic oil production will continue its 37-year decline). The question then becomes: will we follow normal crisis planning — taking action after the crisis occurs — or will we bring alternatives online quickly enough to allow for a "soft landing."

A peer-reviewed 2006 analysis by Roger Stern, published in the Proceedings for the National Academy of Sciences, found that Iran's exports would, under current trends, decline to zero by 2013. A 2007 Canadian Investment Bank Corporation report found that oil exports would decline precipitously over the next five years. These reports support the more far-reaching analysis performed by Brown and Foucher.

(http://www.renewableenergyworld.com/rea/news/recolumnists/story?id=52355)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:42:04 AM

Portrait of an Oil-Addicted Former Superpower: How Rising Oil Prices Are Obliterating America's Superpower Status

(http://baltimorechronicle.com/2008/050808Klare.shtml)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:42:43 AM

City of Vallejo to declare bankruptcy
By Sarah Rohrs
Bay Area News Group
Article Launched: 05/08/2008 01:37:31 AM PDT

Vallejo has become the first city of its size in California to seek bankruptcy protection.

The decision to file for bankruptcy came in a unanimous vote by the city council Tuesday night as hundreds of residents watched.

The dramatic vote came despite a last-minute appeal by state Sen. Pat Wiggins, D-Santa Rosa, and an aide for Assemblywoman Noreen Evans for the city to avoid bankruptcy.

Mayor Osby Davis said he had "turned over every rock he could find to find a solution" but none came and there is no longer an ability for the city to pay its debts.

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:44:10 AM

Maine's Electric Utility threatening to disconnect 46,000 past-due customers in Bangor alone
By Nok-Noi Ricker

Thursday, May 08, 2008 - Bangor Daily News

BANGOR, Maine - Knowing their electricity wouldn't be cut off in the winter, local residents Lana and Jon Courtright chose to buy food and gasoline instead of paying their electric bill. The bill was placed on the back burner and now "we're just behind," Lana Courtright said on Wednesday, adding the couple received a disconnection notice from Bangor Hydro-Electric Co. a couple of days ago for the $400 past due bill.
"What are you going to do," she said. "You need those two [gas and groceries] to pay the other one."
The disconnection notice is just one of approximately 46,000 the electric company has issued this year to its 118,000 customers, Kim Wadleigh, senior director of customer operations at Bangor Hydro, said Wednesday.

The company has unpaid customer bills totaling $3.6 million. Most of the disconnection notices were sent to residential purchasers, she said. More customers have been issued past-due notices this year and the average past-due amount also is more than last year, Wadleigh said. "The average balance owed per disconnect order for 2008 is $393, as compared to last year which was $352," she said. She added later, "We've been looking at this since 2005 and there is an upward trend."

Central Maine Power, which has 600,000 residential and business customers in Maine, declined to provide current disconnect notice figures, but in 2007 disconnected 18,553 customers for unpaid bills, according to Maine Public Utilities Commission figures. The PUC is the agency that protects residents from disconnection in the cold winter months, CMP spokeswoman Gail Rice said Wednesday. "The PUC rules, known as the winter disconnect rule, basically state that between Nov. 15 and April 15 residential disconnections need PUC approval," she said. "This applies to all utilities" not just electric companies.
"Generally, you don't see disconnections between those months," Rice said. Rice added that if customers make an effort to make payments, they generally will not be disconnected. "Customers who do get a disconnection notice can call us," she said. "We can work together [and] we are very successful in negotiating with customers to avoid disconnection."

The disconnection notices give customers one month to pay the bill or make payment arraignments. The key to keeping electricity connected is not avoiding the bill, Wadleigh said. "If they can just pay something" it shows effort, she said. "We understand it's the cost of living in Maine. You only have so much money going around and you have to have heat, [so] we sometimes have to go on the back burner during the winter." Jon Courtright added that this year's jump in gasoline prices has really put his family in a pinch. "We're dishing out $40 [a week] for gas," he said. "Times that by four and that's the electric bill right there."
(http://bangornews.com/news/t/city.aspx?articleid=164067)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:45:05 AM

Gas prices pack punch

SPECIAL REPORT: Pain at the pumpsBy NORMAN DE BONO

At a Canadian Tire gas bar, Wally walks to a big Pontiac sedan after filling up with $1.23 a litre gas and shrugs. "It's fatalism," he says. "I can't do anything about it. Maybe you can buy it for me."
If it is fatalism, it seems the fates are conspiring these days against drivers who like big cars and long rides. Jeff Rubin, chief economist at CIBC, predicts gasoline will rise at the pumps this summer to about $1.40 a litre. By 2012, he predicts oil at $200 a barrel, with gas hitting $2.25 a litre. "There will not be much growth in world oil supply for the next five years and demand is increasing," Spencer Knipping, oil adviser with the Ontario Energy Ministry, said of Rubin's theory. "There will be a shortfall, a period of unprecedented scarcity."
(http://lfpress.ca/newsstand/Business/2008/05/09/5515521-sun.html)

Title: Re: Meltdown
Post by: Lethevich on May 09, 2008, 03:45:26 AM

Quote from: ezodisy on May 09, 2008, 03:23:45 AM
And please get rid of that picture of the stock exchange, it is really unhealthy.

Yeah it made me dizzy :-\

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:46:12 AM

Gas prices rattle Americans
By Judy Keen and Paul Overberg, USA TODAY

Record high gas prices are prompting Americans to drive less for the first time in nearly three decades, squeezing family budgets and causing major shifts in driving habits, federal data and a USA TODAY/Gallup Poll show. As prices near — or in some places top — $4 a gallon, most Americans say they are cutting back on other household spending, seriously considering buying more fuel-efficient cars and consolidating their daily errands to save fuel.

Americans worry that steep gas costs are here to stay: eight in 10 say they doubt today's high prices are temporary, the poll finds. It's the first time such a large majority sees pricey gas as a long-term problem.
The $4 mark, compounded by a sagging economy, could be a tipping point that spurs people to make permanent lifestyle changes to reduce dependence on foreign oil and help the environment, says Steve Reich, a program director at the Center for Urban Transportation Research at the University of South Florida.
"This is a more significant shift in behavior than I've seen through other fluctuations in gasoline prices," he says. "People are starting to understand that this resource ... is not something to be taken for granted or wasted."

The average price of a gallon of gas nationwide is $3.65 — the highest ever, adjusted for inflation. California's average: $3.90 a gallon. The federal Energy Information Administration (EIA) expects a $3.66 per-gallon average this summer.
(http://www.usatoday.com/money/industries/energy/2008-05-08-gasprices_N.htm)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:47:12 AM

Forecast on oil price: Aiming for the sky

As far as commodity prices go, it seems that the only limit on the upside is what customers can afford to pay

breakingviews.com | Edward Hadas

Oil is going to $150 a barrel. No, make that $200. It's time for wild and crazy forecasts in the commodity world. And why not? The oil price already bears no relation to the cost of production, while the supply is increasing a little too slowly to keep up with even modest demand growth, although that market shortage may have been abetted by speculative inventory-building.

As far as commodity prices go, it seems that the only limit on the upside is what customers can afford to pay. And for the moment, the money spigots haven't closed on oil buyers. So Goldman Sachs, which was the first big investment bank to call for $100-oil, could be proven right again in its latest $200 forecast. Anyone for $1,000?

But Goldman's forecast could also go the way of so many other bull market enthusiasms. The count of oil rigs, a harbinger of future production, is at an all-time record. Economic growth is slowing. And even if higher inflation is here to stay, easy money will not keep the price of oil massively above the cost of production forever.

Optimistic experts agree that the price will fall, but they keep increasing their post-bubble price forecasts. Goldman just pushed its 2012 price up from $60 to $75. That target may seem cautious now, but markets often turn sharply. Oil could fall much further, much faster. If oil slips below, say, $40 in the next few years, the peak-oil predictors will yield headlines to a new crop of experts, who will provide models explaining why $25 oil is inevitable. Of course, fewer of those commodity experts will be employed at investment banks.
(http://www.livemint.com/2008/05/08223322/Forecast-on-oil-price-Aiming.html)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 03:47:39 AM

Gas Prices Could Top $5 A Gallon In Bad Economy
(http://cbs2chicago.com/consumer/gas.prices.oil.2.719683.html)

Title: Re: Meltdown
Post by: ezodisy on May 09, 2008, 05:40:29 AM

Quote from: Lethe on May 09, 2008, 03:45:26 AM
Yeah it made me dizzy :-\

lots of space being used up by the man here. Not quite sure what the point is. Dm, why are you doing all this anyway?

Title: Re: Meltdown
Post by: ChamberNut on May 09, 2008, 06:29:12 AM

I don't see what the big deal is Ezodisy ???

Why not ignore the thread if it bothers you so much?

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 06:34:26 AM

Quote from: ezodisy on May 09, 2008, 05:40:29 AM
Dm, why are you doing all this anyway?

Dunno.

Title: Re: Meltdown
Post by: ezodisy on May 09, 2008, 06:48:13 AM

Quote from: ChamberNut on May 09, 2008, 06:29:12 AM
I don't see what the big deal is Ezodisy ???

Why not ignore the thread if it bothers you so much?

the only thing that bothers me is the negative perspective ;)

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 07:54:30 AM

Quote from: ezodisy on May 09, 2008, 06:48:13 AM
the only thing that bothers me is the negative perspective ;)

Ummmm ..... This thread is titled "Economic Chaos", so a "negative perspective" should be expected. More importantly, the vast majority of sources relied on are highly reputable (NYT, Reuters, Bloomberg) ....... So I'm just a messenger conveying what I believe to be fundamentally important news as promulgated by top-calibre news sources.

Title: Re: Meltdown
Post by: BorisG on May 09, 2008, 07:58:33 AM

Gas jumps above $3.67, oil passes $126 on Venezuela concerns

Friday May 9, 11:00 am ET

By John Wilen, AP Business Writer

Gas pushes above $3.67 a gallon, while oil passes $126 on Venezuela supply concerns

NEW YORK (AP) -- Oil rose above $126 a barrel for the first time Friday, bringing its advance this week to nearly $10, as investors questioned whether a possible confrontation between the U.S. and Venezuela could cut exports from the OPEC member. Gas prices, meanwhile, rose above an average $3.67 a gallon at the pump, following oil's recent path higher.
On Friday, The Wall Street Journal published a report that suggested closer ties between Venezuelan President Hugo Chavez and rebels attempting to overthrow Colombia's government. Chavez has been linked to Colombian rebels previously, but the paper reported it had reviewed computer files indicating concrete offers by Venezuela's leader to arm guerillas. That appears to heighten the chances that the U.S. could impose sanctions on one of its biggest oil suppliers.

"If we put on sanctions, I'm sure Chavez would threaten to cut off our oil supply," said Phil Flynn, an analyst at Alaron Trading Corp. "Obviously that would have a major impact on oil prices."

Light, sweet crude for June delivery vaulted to a new record of $126.20 in morning trading on the New York Mercantile Exchange before retreating to trade up $1.09 at $124.78 a barrel.

Even if Chavez cut oil shipments to the U.S., Venezuelan oil would still make its way to the U.S. via middle men, who would buy it from Venezuela and resell it to the U.S., Flynn said. But that new layer in the supply chain would bump up costs.

Oil prices also were boosted Friday by the dollar, which declined against the euro. The European Central Bank said it was unlikely to consider interest rate cuts to cool the strong euro against the slumping dollar. Investors often buy commodities such as oil as a hedge against inflation when the greenback falls. A weaker dollar also makes oil less expensive to overseas investors.

Many analysts believe the doubling in oil prices since this time last year has much to do with the dollar's protracted decline. Another school of thought thinks tight global supplies of oil, driven by growing demand in countries such as China, Brazil and India, is the primary factor driving oil higher.

Oil's surge is pushing retail gas prices higher. The national average price of a gallon of regular gas jumped 2.6 cents overnight to a record $3.671 a gallon according to a survey of stations by AAA and the Oil Price Information Service. The Energy Department expects prices to peak at a monthly average of $3.73 in June, though many analysts say national average prices could rise as high as $4. Consumers in many regions, including parts of California and Hawaii, are already paying that much.

Demand for diesel fuel is also growing worldwide, but supplies of distillates, which include diesel and heating oil, fell unexpectedly last week, the Energy Department said Wednesday. That's pushing U.S. diesel prices to record highs and inflating heating oil prices in the futures market; heating oil futures are often viewed as a proxy for diesel.

Heating oil for June delivery rose 7 cents to $3.5798 on the Nymex after earlier setting a trading record of $3.6125. At truck stops, retail diesel prices rose 1.8 cents overnight to a record national average of $4.269 a gallon,

Diesel is used to move most of the world's food, consumer and industrial goods via truck, ship and rail. Skyrocketing diesel prices are part of the reason food and consumer goods prices are so high.

In other Nymex trading Friday, June gasoline futures rose 3.72 cents to $3.175 a gallon, and June natural gas futures rose 13.2 cents to $11.395 per 1,000 cubic feet.

In London, June Brent crude futures rose $1.79 to $124.63 a barrel on the ICE Futures Exchange.

Associated Press Writer Pablo Gorondi in Budapest and AP Business Writer Thomas Hogue in Bangkok, Thailand, contributed to this report.

Title: Re: Meltdown
Post by: BachQ on May 09, 2008, 08:13:34 AM

Quote from: BorisG on May 09, 2008, 07:58:33 AM
NEW YORK (AP) -- Oil rose above $126 a barrel for the first time Friday,

I won't be happy until it reaches $130. >:D :P

Title: Re: Meltdown
Post by: ezodisy on May 09, 2008, 08:20:15 AM

come on $2!

Title: Re: Meltdown
Post by: BorisG on May 10, 2008, 09:09:07 PM

KansasCity.com

Posted on Sat, May. 10, 2008

Pro-Con: Should Congress regulate oil company profits? YES

U.S. Rep. Paul E. Kanjorski, Pennsylvania Democrat:

In 2007, the Big Five oil companies reported record profits, with Exxon Mobil making over $40 billion. A windfall tax would help discourage these industries from consistently increasing their prices.

I am pleased to introduce a bill that would tax oil and gas companies for their excessive profits while encouraging them to decrease the prices for their products.

I am appalled by the spiraling prices at the gas pump and in home heating fuel. I am working to change the sharp contrast between the industries' growing profits and Americans' increasing inability to pay for oil and gas.

H.R. 5800 would tax such industries for their windfall profits. The bill would set up a Reasonable Profits Board to determine when these companies' profits are in excess, and then tax them on those windfall profits.

Democratic senator calls for GOP to alter energy policy

By WILL LESTER, May 10, 2008

WASHINGTON (AP) — The public must pressure Republicans in the White House and Congress to change directions in the country's energy policies, which have pushed oil and gas prices to record highs, a Democratic lawmaker said Saturday.

Sen. Debbie Stabenow said the rising price of oil, fostered by President Bush and Vice President Dick Cheney's close ties to the oil industry, is no longer just a burden.

"Now it is a crisis for every American family," the Michigan senator said in the Democrats' weekly radio address. She called the current energy situation "a crisis that doesn't just affect us at the pump, but also raises the prices of groceries, increases our home heating bills and squeezes small businesses trying to keep their heads above water."

Oil rose above $126 a barrel for the first time Friday and gasoline prices rose above an average $3.67 a gallon at the pump.

"Republicans want more drilling, more consumption and more tax giveaways for the big oil companies," she said. "Democrats say that those are exactly the policies that got us into this mess to begin with."

She promoted the Democratic proposals for changing energy policy. Those call for:

_ Ending billions of dollars in tax breaks for big oil companies.

_ Forcing the oil companies to do their part by investing some of their profits in clean and affordable alternative energy.

_ Protecting the American people from price gougers and greedy oil traders who manipulate the market.

_ Temporarily stopping the diversion of oil to the national Strategic Petroleum Reserve, which is already 97 percent full.

_ Standing up to the Organization of Petroleum Exporting Countries and other oil-producing nations that are working together to keep oil prices high.

"This fight won't be easy," Stabenow said, urging the public to pressure the GOP. "The President and his oil buddies have gotten used to the spoils of plunder, and they won't give up without a fight."

Republican National Committee spokeswoman Amber Wilkerson said, "The Democrats clearly don't understand the economy and the devastating burden that their proposed tax increases would impose on families and businesses across America."

Title: Re: Meltdown
Post by: Sean on May 11, 2008, 03:13:03 AM

Surely the oil companies are making large profits because their customers are having to pay more simply because of shortages: the customers compete and pay more because the oil companies cannot provide as much as they want, not because there's a sinister cartel between them. Increasing oil profits is what you'd expect from a peak oil situation?

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:16:04 AM

Hi, Sean ! !

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:16:42 AM

Posted on: Friday, May 9, 20087

High gas prices hurt government services
Some cities, counties shut street lights, limit car use, forgo projects
· Drivers near 'tipping point' as Hawaii gas prices climb

In Wethersfield, Conn., a city of 26,000 outside Hartford, city manager Bonnie Therrien expects a 36 percent increase in fuel costs in next year's budget, which may mean shutting off one-third of the city's street lights at night and forgoing some maintenance projects. "It's really come down to what vehicles are necessary and what we can do without," Therrien says. "We have to take a look at the list of services we provide and whittle it down. We can't afford it."
(http://www.honoluluadvertiser.com/apps/pbcs.dll/article?AID=/20080509/NEWS01/805090378/1001/LOCALNEWSFRONT)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:17:03 AM

BOOK REVIEW: Bad Money: Reckless Finance, Failed Politics, and the Global Crisis of American Capitalism by Kevin Phillips
(http://www.atimes.com/atimes/Global_Economy/JE10Dj02.html)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:17:51 AM

Gas costs cause SUV values to plummet

By Chris Woodyard, USA TODAY
High fuel prices are causing the value of used SUVs to plummet, often below what's listed in the buying guides many shoppers use to negotiate with dealers.
(http://www.usatoday.com/money/autos/2008-05-08-suvs-resale-value_N.htm)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:18:33 AM

The price of crude marches higher and higher, and the question remains, how high will it go?
By Catherine Clifford, CNNMoney.com staff writer
May 9, 2008: 10:40 AM EDT

NEW YORK (CNNMoney.com) -- Oil leaped into unchartered territory Friday, soaring past the $126-a-barrel mark for the first time, and leaving analysts and investors wondering how high the price will go. U.S. light crude futures for June delivery hit an intraday record $126.20 in electronic trading, backing off to $124.7784 at 10:39 a.m. ET. That was still $1.08 above Thursday's record closing settlement of $123.69 a barrel. The price of a barrel of crude oil has more than doubled in the past year. On May 9, 2007, the active contract settled at $61.55 a barrel.
(http://money.cnn.com/2008/05/09/markets/oil_records/index.htm?postversion=2008050910)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:19:35 AM

Families in west running on empty
Jano Gibson Urban Affairs Reporter
May 10, 2008

SOARING fuel prices are carving into the budgets of car-dependent households in western Sydney, exacerbating problems of insufficient public transport options and long distances to workplaces. With fuel prices at about $1.50 a litre, households in the city's outer western ring - many of which are struggling with mortgage repayments - are sacrificing more than 6 per cent of their gross household income on petrol.
(http://www.smh.com.au/news/national/families-in-west-running-on-empty/2008/05/09/1210131264181.html)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:19:59 AM

FedEx cuts profit forecast due to fuel prices
(http://www.reuters.com/article/ousiv/idUSWNAS339020080509)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:21:43 AM

Friday, May. 09, 2008
Playing the Iraq Oil Card
By Robert Baer

If anyone had any doubt that Iraq was a lot about oil, they shouldn't after the recent Capitol Hill appearance by our ambassador to Baghdad, Ryan Crocker. In a closed House hearing, Crocker put the fear of god in Congress. His message: If we leave Iraq, Iraq will destabilize the Gulf, and a destabilized Gulf equals unstable oil prices.

With oil bumping pushing past $120 a barrel, you can bet you could hear a pin drop in the room. But what exactly was he talking about? Iraqi Shi'a militias invading Kuwait and Saudi Arabia, burning their oil fields, driving the price of gasoline up to $10 a gallon and us into a depression? Crocker wouldn't elaborate on his vague warnings, preferring to leave it at a sense of dread.

There was a time when we could count on Saudi Arabia to make up a shortfall in oil when something like Iraq came up. During the Gulf war Saudi Arabia boosted its production by 3.1 million barrels a day to make up for the 5.1 million barrels a day of Kuwaiti and Iraqi production that was taken off markets. Oil prices rose relatively little. Today, Saudi Arabia either refuses or can't increase its production. The peak oil Cassandras are convinced the Saudis can't. Saudi Arabia's mega fields like Ghawar are depleted, they say. And we'd better get used to gasoline at $4 a gallon and up.

But Crocker wasn't all bad news. He said that if we were to stabilize Iraq, and attract investors to the oil sector, Iraq could become the largest producer in the world, surpassing Saudi Arabia. Crocker didn't put it in terms this baldly, but he might as well have said: We keep an army in Iraq, and we go back to the days of cheap oil. Anyone can afford to drive an SUV if they want one. Crocker assured Congress that we are making progress. The Iraqi government retook the port of Basra that week, Iraq's main export terminal. And now that the government is in full control of Iraq's oil infrastructure things will get better.

What Crocker didn't talk about was Iran — and its plans for Iraq's oil. Months before retaking Basra, the Iraqi government started talks with Iran about running an oil pipeline to Abadan, Iran's main export terminal. Iran also has said that it will have a say in Iraq's mega field Majnun, which may contain 30 billion barrels of oil — a rival to Saudi Arabia's larger field. I suspect, though, if he'd been asked about Iran, Crocker would have said it is simply one more reason we should stay in Iraq, to keep Iran at bay.
Crocker could be right. We have no idea what is on the mind of the populist Shi'ite cleric Moqtada al-Sadr. If Sadr were allowed control of the Basra oil terminal would he shut down Iraq's oil exports? Shell Kuwait fields?

Nobody really knows, which is just what the Bush administration is counting on. They got us into this mess in the first place by preying on people's fears, and now they are continuing to do so. And $10 a gallon for gasoline is his equivalent of an economic WMD.
(http://www.time.com/time/world/article/0,8599,1738883,00.html)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:23:02 AM

Up, Up, and Away?

Two years ago, oil sold for just $70 per barrel. If you asked energy analysts back then what circumstances would lead to oil prices hitting $125 per barrel, they would have told you that only a catastrophe could lead to such unprecedented high oil prices such as a terrorist attack in the Saudi oil fields. Yet this week oil closed at $124 per barrel without horrific events occurring. And this price climb could just be beginning. A Goldman Sachs analyst predicts that prices of "$150-$200 per barrel seems increasingly likely over the next six to 24 months."

What is going on here? A confluence of events, including the low value of the dollar, increased demand, instability in some oil producing states, and speculation, have created a perfect petroleum storm that continues to drive prices up, squeezing low- and middle-income families in an oil vise that grips tighter every day. To ease price pressure on families, a series of measures have been proposed in the Senate that would shift tax incentives from big oil to clean renewable energy and reign in speculators, gougers, and OPEC. It would also stop filling the Strategic Petroleum Reserve, which would instantly provide 70,000 barrels per day of additional supply.
(http://www.americanprogress.org/issues/2008/05/up_away.html)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:23:55 AM

OP ED: 'Peak oil' is here. Now what?

(http://www.scindependent.com/articles/2008/05/09/opinion/doc482207c45f400292790082.txt)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:24:29 AM

Oil: Something Has Got To Give

LONDON - Crude oil's rise is seemingly unstoppable, with supply worries triggering a fresh record of $126 per barrel on Friday. Without a major intervention to tackle either one of the two main causes--tight supply or the U.S. dollar's weakness--it does not look like anyone is going to call a top to the price of oil.

"Something has to give," said Edward Meir, analyst with MF Global, who warned that it simply was "not healthy" to see oil now comfortably above $120 per barrel and heading for $200. He told Forbes.com that on the supply side, there would now be even more pressure on the oil exporters of OPEC to turn on the taps and relieve market pressures.
(http://www.forbes.com/home/2008/05/09/oil-record-opec-markets-equity-cx_ll_0509markets18.htm)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:25:39 AM

Natural Gas Advances as Crude Hovers Near Record, Dollar Falls
By Reg Curren
May 9 (Bloomberg) -- Natural gas advanced as crude oil surged to a record and the euro climbed against the U.S. dollar.

Oil touched $126.25 a barrel, the highest since futures began trading in 1983. The 15-nation currency versus the dollar today extended its gain from an eight-week low. Returns from investing in commodities have surged this year, led by natural gas, as investors sought alternatives to stocks.
``The natural gas move is 100 percent crude-price related,'' said Peter Linder, an analyst and senior adviser with Calgary- based DeltaOne Energy Fund. The fundamentals for gas are also ``very strong'' amid an outlook for reduced supplies. (http://www.bloomberg.com/apps/news?pid=20602099&sid=a9s8E4zT_odE&refer=energy)

Title: Re: Meltdown
Post by: Sean on May 11, 2008, 04:26:02 AM

Thanks Dm. I've just been looking briefly for thoughts on where the present daily increases may be going- let us know of anything you come across. At this rate, peak oil is happening before us right now and we're all in big trouble- and it looks like it: demand isn't going to fall and supply isn't going to increase.

I mean, this is a serious problem that's been with us for decades but is materializing now, but how serious is it? Most people will ignore a problem that can't be solved until it affects them personally, or can we ignore things for a bit longer?

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:27:08 AM

Coal Price in U.S. East Climbs to Record $98 on Rising Exports
By Christopher Martin

May 9 (Bloomberg) -- Coal in Eastern U.S. spot markets climbed to a record for a fifth consecutive week as European power producers sought additional supplies and domestic utilities began replenishing inventories.
Coal for delivery at the Big Sandy River, a benchmark for supplies from the Appalachian states, rose $2, or 2.1 percent, to $98 a short ton, according to data compiled by Bloomberg. It was the highest price in at least 24 years.

Coal has surged to records around the world this year as storms and power shortages reduced exports from the largest producing regions, including South Africa, China and Australia. In the U.S., coal generates more than half of the power supply and utility stockpiles are declining.

``Global coal inventories remain low, U.S. exports are accelerating and new coal-fueled generation is being built in 75 nations around the globe,'' Peabody Energy Corp. Chief Executive Officer Gregory Boyce said in a statement. Peabody, the largest U.S. producer, forecast profit will nearly double this year because of rising prices.

U.S. miners are increasing production to meet the surge in global demand. Coal production climbed to 22.6 million tons last week, up 4.5 percent from a year earlier, according to the U.S. Energy Department.
Record Prices

Coal in Pennsylvania, which has higher energy content and more sulfur than grades from other U.S. regions, gained 50 cents, or 0.5 percent, to a record $97.50 a ton.
Coal in the West, which is cheaper than Eastern coal because it costs more to ship to power plants and export terminals and typically contains less energy, also rose.
(http://www.bloomberg.com/apps/news?pid=20602099&sid=av37CGSju_LA&refer=energy)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:27:52 AM

Gas Prices Send Surge of Riders to Mass Transit

By CLIFFORD KRAUSS
Published: May 10, 2008
DENVER — With the price of gas approaching $4 a gallon, more commuters are abandoning their cars and taking the train or bus instead.
(http://www.nytimes.com/2008/05/10/business/10transit.html?_r=2&th=&adxnnl=1&oref=slogin&emc=th&adxnnlx=1210428056-09Ypw/Zs8nIhKnRqjmhc6Q)

Title: Re: Meltdown
Post by: Sean on May 11, 2008, 04:28:29 AM

Thanks. Reading the Heinberg article now. I wish I was a cobbler by the way.

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:29:27 AM

Electricity, Baby!

If we want any chance at continued prosperity in the future, we will need to free ourselves from oil.
In order to break our addiction to this admittedly awe-inspiring substance, we will need a swift economy-wide fuel shift toward an energy resource that is domestic, efficient, economic and clean. Despite the hype around biofuels, the only fuel that truly meets these needs is electricity.

Not only does electricity meet the needs of the transportation sector — it triumphs over both biofuels and gasoline in all relevant metrics. To begin with, electricity is the fuel that most efficiently makes use of the limited resources available to us. Unlike petroleum, which will eventually be depleted, electricity can be generated renewably from the sun. Of course, the biofuels "solution" also utilizes solar energy. But given an acre of switchgrass, and an acre of solar panels, you could drive 70 times farther in an electric vehicle (EV) than you could running on cellulosic ethanol. If we covered all sun-facing roof space in the United States with solar panels, we could meet our entire transportation energy demand with solar power. Alternatively, an area in the desert one-fortieth the size of Nevada would do. Cellulosic ethanol would require us to plant a crop of switchgrass over an area the size of Colorado and Wyoming combined.

With the option of solar power available to us, electricity is also the cleanest transportation fuel we have (black bars in the figure). While the average U.S. gasoline car emits more than four tons of carbon dioxide each year, along with various other pollutants, a solar-powered electric car would have zero emissions. Current biofuels have repeatedly been shown to reduce carbon emissions very little, if at all, and the research of Stanford professor Mark Jacobson has suggested that widespread use of ethanol could increase emissions toxic to human health.

But what if the source of electricity is not the sun? Even charging the car with power from the average U.S. electricity grid — half of which comes from coal — the yearly carbon emissions would be one and a half tons, significantly less than gasoline's four. Even in the wildly unreasonable scenario that an electric car was charged with one hundred percent coal-fired electricity, emissions would be two and a half tons per year, still less than corn ethanol's three. Regardless of its source, electricity is the cleanest transportation fuel.
(http://daily.stanford.edu/article/2008/5/8/positiveSustainabilityElectricityFuelOfTheFuture)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:30:26 AM

Democrats eyeing major oil changes
Published: May 10, 2008 at 2:57 PM

WASHINGTON, May 10 (UPI) -- U.S. Sen. Debbie Stabenow, D-Mich., said Saturday the Democratic Party has proposed wholesale changes to current federal oil policies.

Stabenow said during the weekly Democratic Radio Address that congressional Democrats introduced a plan aimed at stopping the escalating cost of gasoline through major oil policy changes.

Among the changes proposed in the Democratic plan are ending all tax breaks for large oil companies and forced investments in alternative energy by those companies.
(http://www.upi.com/NewsTrack/Top_News/2008/05/10/democrats_eyeing_major_oil_changes/2614/)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:31:13 AM

Oil could soon hit $200 a barrel: Iranian oil minister

TEHRAN (RIA Novosti) - The price of oil could reach $200 per barrel if current market conditions persist, Iran's oil minister said on Thursday. "If the current conditions remain the same, a period when oil is supplied at $200 a barrel is not out of the question," Gholamhossein Nozari told the IRNA news agency.
(http://www.tehrantimes.com/index_View.asp?code=168213)

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:35:50 AM

Quote from: Sean on May 11, 2008, 04:26:02 AM
Thanks Dm. I've just been looking briefly for thoughts on where the present daily increases may be going- let us know of anything you come across.

Well, on the supply side, according to Matt Simmons, the cost of oil extraction becomes increasingly expensive as oil fields age and oil-extraction equipment obsolesces. The cost of replacing equipment, much of which is over 25-years old, is soaring. Once the easy oil is pumped out of an oil field, costs of extraction skyrocket.

Whatever is left over ends up as profit to oil companies.

Title: Re: Meltdown
Post by: BachQ on May 11, 2008, 04:38:52 AM

Quote from: Sean on May 11, 2008, 04:26:02 AM
At this rate, peak oil is happening before us right now and we're all in big trouble- and it looks like it: demand isn't going to fall and supply isn't going to increase.

It appears that we have effectively reached peak oil. We won't actually know when "peak" is/was until roughly one year after the fact.

Quote from: Sean on May 11, 2008, 04:26:02 AM
I mean, this is a serious problem that's been with us for decades but is materializing now, but how serious is it? Most people will ignore a problem that can't be solved until it affects them personally, or can we ignore things for a bit longer?

It is the most serious problem we as a society have ever faced, primarily because we have invested trillions of dollars on an infrastructure that becomes worthless once oil is no longer cheap.

We are fucked.

Title: Re: Meltdown
Post by: BorisG on May 11, 2008, 10:53:52 AM

Gas prices knock bicycle sales, repairs into higher gear

Sunday May 11, 1:07 PM EDT

BISMARCK, N.D. (AP) — Four-dollar-a-gallon gas is good for business — if you run a bike shop. Commuters around the country are dusting off their old two-wheelers — or buying new ones — to cope with rising fuel prices, bicycle dealers say.

"Everyone that comes in the shop is talking about the gas prices," said Barry Dahl, who opened Barry's Bikes in Bismarck in April. He sold more than 50 bicycles in the first month, double the projections in his business plan.

Teacher Joyce McCusker of Herndon, Va., owns a bicycle for the first time in years. She bought it last month and uses it to make the eight-mile trip home from work. A friend drives her pickup to take McCusker's daughter home from school.

"I'm still using fossil fuel," she said. "In two years, my goal is to ride both ways, every day through the year."

About 18 million bicycles have been sold annually in the U.S. over the past few years, accounting for about $6 billion in annual sales, said Fred Clements, executive director the National Bicycle Dealers Association in Costa Mesa, Calif.

Bicycle shops across the country are reporting strong sales so far this year, and more people are bringing in bikes that have been idled for years, he said.

"People are riding bicycles a lot more often, and it's due to a mixture of things but escalating gas prices is one of them," said Bill Nesper, spokesman for the Washington. D.C.-based League of American Bicyclists.

"We're seeing a spike in the number of calls we're getting from people wanting tips on bicycle commuting," he said.

The League of American Bicyclists is promoting Bike-to-Work Week this week and Bike-to-Work Day on May 16. Nesper said he expects a record number of people will be pedaling this year.

There's almost nowhere for the numbers to go but up: The group says less than one-half of 1 percent of Americans ride a bike to work.

Mark Krenz, 48, is giving it a try. The Bismarck auto-parts store manager recently spent $750 on the 24-speed bike and is building up his mileage to prepare for his hilly commute.

"In this business, everybody is constantly talking about how to save gas," Krenz said. "I bought a bike because I figure it's a good way to save money, get in shape and save wear and tear on my pickup."

Rocky Schell, owner of Val's Cycle in Minot, said this may be one of the best years in the history of the shop, started by his father in 1960.

It's seeing a spike in the number of tuneups and repairs, which had been declining for the past 15 years. Schell said he's also selling lots of bike trailers designed to haul children — customers are using them for groceries instead.

A big percentage of Schell's customers haven't been on a bike in decades.

"I'm seeing more people my age or older coming in," said Schell, 51. "The college-age kids to 30-year-olds aren't the ones coming in. They still want to drive."

Dahl, the Bismarck bike shop owner, said he's worked several on "dusty and rusty" bicycles that hadn't been ridden in at least 25 years. He said many families have told him that that they intend to go on a bicycle tour this summer instead of driving somewhere for vacation.

"Millions of people have bicycles hanging in the garage and they're getting them down and riding them," said Rebecca Anderson, advocacy director for Trek Bicycle Corp. "People are looking at the bicycle as more than just a toy."

The Waterloo, Wis.-based company last year started a program called One World, Two Wheels to promote bicycles for transportation and recreation. Anderson said that about 40 percent of trips by car are 2 miles or less — "a habit for some people to get in a car and drive just a few blocks."

Clive Greenberg, a salesman at Metro Bicycles in New York City, said spin cycling classes at health clubs, where people use stationary bikes for a workout, also are spurring bicycle sales.

"It's pretty interesting, a good majority of middle-age people involved in that spinning craze at the gym used to come in and buy cycling shoes," he said. "Now they are getting on real bikes."

Engineer Dale Heinert said he's been seeing more fellow bicycle commuters on his daily trek to work in downtown Bismarck.

Heinert, 56, started cycling to work when the price of gas began skyrocketing — in 1973. But that isn't the only reason for choosing pedal power: "It's a stress-reliever," he said.

Steve Stelton, 47, of Bismarck, was inspired by Greg LeMond's 1986 Tour de France victory and has been commuting year-round ever since. He said he's physically fit because of it and has saved "a ton of money on gas."

Stelton, a printer, doesn't let North Dakota's cold, windy weather slow him down. He said he's ridden to work on snow-covered roads when the wind chill temperature was 40-below zero.

"If you waited for a bluebird day to ride to work in North Dakota," he said, "you'd never do it."

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:51:05 AM

From The Times
May 12, 2008
King Oil will turf out Gordon Brown
Market rules: it doesn't matter who is leader, the Government is finished at $200 a barrel
William Rees-Mogg

All serious political analysis has a Marxist element. The core discovery of Karl Marx as a political philosopher was the dominance of economic change in shaping the history of political society. In the last fortnight, exciting events have been happening in Britain, including the Conservative victories in London and the local elections. Yet much more important events have been occurring in the global economy.

It is interesting that Boris Johnson has been elected Mayor of London; that is coup de théâtre for his party that will turn votes as well as heads in other political contests. But, with all respect to Boris Johnson, the peak price for West Texas Intermediate Crude Oil, which closed on Friday in London at $125.81 a barrel, is a far more important event. Boris may preside in London, but the price of oil rules the world.

The oil price has doubled in the last year; some oil traders are already betting that it will eventually reach $200 a barrel. As oil is involved in almost every economic activity, the price rise that has occurred already is the greatest shock to hit the world economy for 30 years. Obviously this changes the economic relationship of the oil-producing countries with the oil-consuming nations.

*** Perhaps the most damaging consequence will be the rise in the price of food. In the 20th century, global agriculture became dependent on oil, not only for transport or cultivation but also for fertilisers and the treatment of crops. Food production is a global industry based on petrochemicals.

*** The big economic news is that this benign process has gone into reverse. The price of oil will go on rising; voters will feel poorer; governments will be turned out. If oil does go to $200 a barrel, it will not matter who is leading the Labour Party - the Labour Government will be kaput. On this Marx was correct. Politics is based on economics. But he could not have known that the future of economics would be based on oil.
(http://www.timesonline.co.uk/tol/comment/columnists/william_rees_mogg/article3912642.ece)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:51:32 AM

World begins to smart from oil's too rapid rise
Fri May 9, 2008 7:15am EDT
By Barbara Lewis and Peg Mackey - Analysis

LONDON (Reuters) - From the poorest of Africa to the United States and big business, a breakneck rally that could take oil to $200 a barrel is likely to inflict pain on everyone.
The world was remarkably resilient to a series of record prices in 2007, but a roughly 30 percent rise since the end of last year, with predictions of more to come, is harder to absorb.
"The key issue is the rate of change. The recent exponential rise is unhealthy for everyone," a senior executive from a major oil company said. He declined to be named.
(http://www.reuters.com/article/reutersEdge/idUSL0818364020080509)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:52:01 AM

India's green revolutionary is back in spotlight
Sun May 11, 2008 10:07pm EDT
By Mayank Bhardwaj and Jonathan Leff

This year's near trebling in the price of rice -- the main staple for most of the world's poor -- has driven the issue home. It has triggered riots in Haiti and raised the risk of starvation for the hundreds of millions who depend on subsidized foods. With anxiety over food supply running higher than anytime since the 1960s, the former Cambridge scholar is busier than ever, just as passionate and in high demand.
(http://www.reuters.com/article/worldNews/idUSDEL15494620080512)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:52:23 AM

Technical analysis for crude oil - 5/12/2008
Friday, another all time record high for crude oil as it records $126.27 per barrel on unrest and militants attacking oil company infrastructure in Africa's largest crude producer, Nigeria.
(http://www.ibtimes.com/articles/20080512/technical-analysis-for-crude-oil-5-12-2008.htm)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:52:57 AM

Who can stop the raising oil?
Posted 10 May 2008 @ 03:32 pm EST

In the last business week the Crude Oil set new trading record every day. Five days in the week with five new records. The crude oil jumped with $10 a week. This is an extraordinary week with so huge price jump. At this moment we can ask the following question: Who can stop the raising oil prices? At the same time Scott Brown energy expert in World-Signals.com answer: No one, but there are many people and events that could push the oil for new records. OPEC is almost at the top of the technology production capacity. There is oil but there is not technology to supply the oil in fast and cheaper method. The raising consummation from China and developing world making the production daily oil not enough. At the same time United States buy oil in huge volumes making new extra oil stores. We are close to the time when China will do the same and we are close to the time when the oil production would not be enough to supply the world economy. The describing scenario of Scott Brown is too black. The oil prices can jump to $200 much faster than our first forecast for the end of 2008. We can see the oil prices above $200 these summer's months said Mr. Brown energy expert in World-Signals.com
(http://www.ibtimes.com/articles/20080510/who-can-stop-the-raising-oil.htm)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:53:45 AM

From Times OnlineMay 12, 2008

British Gas to raise prices as profits slump
James Rossiter

Millions of homeowners face a second rise in the gas and electricity bills this year as British Gas owner Centrica grapples with a slump in its profits. British Gas customers were dealt a 15 per cent rise in their energy bills in January as the company struggled to deal with the near doubling in the cost of buying gas in the wholesale markets.

That price rise did not go far enough for Centrica however as a trading update revealed that as the continued rise in wholesale gas prices "has caused profit margins in British Gas in the first half of the year to be squeezed to levels below our long run expectations."

British Gas has lost 100,000 customers since the January price rises, leaving total customer base at 15.9 million the company reported today. The group had 17.7 million British Gas customers at the start of 2005. The loss in customers however will not stop Brtish Gas from hiking its prices again shortly. Centrica warned today in a statement to the stock exchange: "While the current outlook for gas prices does create a challenging environment for energy suppliers, we will take the necessary action to deliver reasonable margins in the retail business."
(http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article3915042.ece)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:54:36 AM

New York Times
May 12, 2008
Op-Ed Columnist
The Oil Nonbubble
By PAUL KRUGMAN

*** All through oil's five-year price surge, which has taken it from $25 a barrel to last week's close above $125, there have been many voices declaring that it's all a bubble, unsupported by the fundamentals of supply and demand. So here are two questions: Are speculators mainly, or even largely, responsible for high oil prices? And if they aren't, why have so many commentators insisted, year after year, that there's an oil bubble?

*** The only way speculation can have a persistent effect on oil prices, then, is if it leads to physical hoarding — an increase in private inventories of black gunk. This actually happened in the late 1970s, when the effects of disrupted Iranian supply were amplified by widespread panic stockpiling. But it hasn't happened this time: all through the period of the alleged bubble, inventories have remained at more or less normal levels. This tells us that the rise in oil prices isn't the result of runaway speculation; it's the result of fundamental factors, mainly the growing difficulty of finding oil and the rapid growth of emerging economies like China. The rise in oil prices these past few years had to happen to keep demand growth from exceeding supply growth.

Saying that high-priced oil isn't a bubble doesn't mean that oil prices will never decline. I wouldn't be shocked if a pullback in demand, driven by delayed effects of high prices, sends the price of crude back below $100 for a while. But it does mean that speculators aren't at the heart of the story.

Why, then, do we keep hearing assertions that they are? Part of the answer may be the undoubted fact that many people are now investing in oil futures — which feeds suspicion that speculators are running the show, even though there's no good evidence that prices have gotten out of line.

But there's also a political component. Traditionally, denunciations of speculators come from the left of the political spectrum. In the case of oil prices, however, the most vociferous proponents of the view that it's all the speculators' fault have been conservatives — people whom you wouldn't normally expect to see warning about the nefarious activities of investment banks and hedge funds.

The explanation of this seeming paradox is that wishful thinking has trumped pro-market ideology. After all, a realistic view of what's happened over the past few years suggests that we're heading into an era of increasingly scarce, costly oil.

(http://www.nytimes.com/2008/05/12/opinion/12krugman.html?hp)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:55:08 AM

From The Sunday Times
May 11, 2008
Why high oil prices are not squeezing us more
Economic Outlook
David Smith

*** Ray Barrell, an economist with the institute, said the big change is that economies are less directly sensitive to oil prices than they used to be. The "energy intensity" of growth – the amount of oil, coal and gas needed to produce an increase in gross domestic product – has halved since the 1970s, reflecting greater energy efficiency and the shift away from heavy manufacturing. Labour markets have also become more flexible, said Barrell, so workers accept temporary reductions in real wages when energy prices rise, while in the past they would have demanded compensation. The wage-price spiral used to mean expensive oil led to inflation, unemployment or both. Central banks now are under less pressure to act to head off the "second round" inflationary effects of dearer oil.
(http://business.timesonline.co.uk/tol/business/columnists/article3908053.ece)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:55:46 AM

From The Times
May 9, 2008
Repossession orders at record high as homeowners struggle
Frances Gibb, Legal Editor

Home repossession orders are at an all-time high, according to figures to be released by the Ministry of Justice today. The Times understands that the court figures for the first quarter of this year will show that such orders have soared with the credit crunch. The new court figures are predicted to be up by at least 25 per cent on the same period last year, traditionally a heavy time for mortgage repossessions as lenders avoid Christmas. Mortgage possession claims issued by landlords could exceed 40,000, compared with 33,715 for the first quarter of 2007, and actual possession orders made by the courts could reach 30,000, compared with nearly 22,000.
(http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article3897521.ece)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:56:13 AM

Gas prices hit 5th straight record
The price for a gallon of gas sets a new record high at $3.718, according to AAA.
May 12, 2008: 6:20 AM EDT

NEW YORK (CNNMoney.com) -- Retail gasoline prices increased for the sixth straight day and hit their fifth consecutive record, auto group AAA's Web site showed Monday. The national average price for a gallon of regular unleaded gasoline rose to a new all-time high of $3.718, up 1 and one-tenth of a cent from the previous day. Drivers now pay 21% more for a gallon of gas than they did a year ago, when a gallon of gas cost on average $3.064, according to AAA.
(http://money.cnn.com/2008/05/12/news/economy/gas_prices/?postversion=2008051206)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:57:24 AM

Record Gas and Oil Prices Drive Sales for ZAP, Electric Car Orders Grow to $6.8 Million

Record gas prices are driving more consumers to seek electric transportation, says industry pioneer ZAP. The Northern California Company reported that as of April 8, 2008 it had $6.8 million in backlog orders for the Xebra electric sedan and pickup from auto-dealer purchase contracts. The $6.8 million backlog in dealer purchase contracts surpasses ZAP's sales for all of 2007 and are based on a delivery schedule over a 12-month period. The backlog for ZAP's consumer products on the same date was $712,000, including sales for the Zapino and ZAPPY3 scooters, ATVs, Recharge-It-All battery systems and others.

ZAP designed the Xebra as a simple alternative to the growing demand for electric cars. The vehicle is suitable for city-speed driving, commuting and fleet use, situations where electric vehicles can be more economical than gasoline cars.

"As I researched more into the EV market I found that the ZAP Xebra was the only production electric vehicle available that could obtain such speeds and actually be driven on regular roads contrary to the governed LSV," writes electric car dealer Jonathan Ortiz of Foreign Affairs Auto in West Palm Beach, Florida. "I began to understand there are literally hundreds of ideal applications and usages that the XEBRA could fill."
(http://money.cnn.com/news/newsfeeds/articles/marketwire/0395848.htm)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 03:57:44 AM

"The prices we pay today for oil, natural gas, gasoline, and heating oil are shocking. But they are nothing compared to what is coming in the very near future."
(http://www.canada.com/ottawacitizen/news/letters/story.html?id=f9bec8de-b8ef-4b96-a86f-fec089cc2032)

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 04:00:42 AM

Post-Petroleum Transportation Identifies Five Alternative Fuel Myths

MYTH #1
The first myth asserts we have plenty of oil, and that discussion of depleting supplies is not a serious matter.

REALITY

Oil production in the United States actually peaked in 1971, and ever since we have been making up for shortfalls in domestic production by importing oil from other countries. But when the world oil production peaks, if it hasn't already, there is no other location from which we can import oil to make up the difference. This situation is so serious that the US Department of Defense has categorized "peak oil" as a serious threat to the nation. Competition for depleting supplies has already been a major factor in several military actions around the world.

MYTH #2
The second myth states that nothing much is going to change for decades, that people will continue to consume petroleum-based motor fuels the way they have been for the foreseeable future.

REALITY
Even the oil majors such as Exxon-Mobil are having trouble finding more oil, and they admit it. A new report published by Exxon-Mobil, entitled The Outlook For Energy: A 2030 View, predicts a plateau in non-OPEC oil production in the next five years. Because oil companies are now engaged in extraordinary efforts to bring more oil to market (such as drilling at depths of over 10,000 feet below the sea), the peaking of world production will be temporarily extended into the future. But world oil supplies will soon thereafter rapidly drop off because these extraordinary technical efforts have only postponed the inevitable realization that there is not enough oil to meet increasing world demand. Future supplies available to countries that import oil will be further squeezed because the oil producing nations like Saudi Arabia will use increasing percentages of their oil for domestic consumption.

MYTH #3
The third myth is that oil companies are seriously working on the problem of peak oil, will soon produce viable and cost-competitive solutions, and that a technology fix will save the day.

REALITY
Many of the most promising alternatives to petroleum do not come from the oil companies. For example, electric cars, which look like one of the long-term winners in the competing technology area, are not researched, developed, tested, or offered by oil companies. It is more logical to assume that oil companies want to continue to sell oil for as long as they can while discouraging alternative fuel technologies, because these technologies would lower the demand for oil. There will be no silver-bullet solution to the oil crisis; we will instead have silver-buckshot solutions tailored to specific situations. Beyond electric vehicles, these solutions include ethanol, methanol, butanol, di-methyl either (DME), bio-diesel, straight vegetable oil, bio-methane, hydrogen, natural gas, propane, and synthetic liquid fuel.

MYTH #4
The fourth myth says we can convert to alternative fuels only after we make massive investments in infrastructure. This myth holds that only after our current transportation system is retooled can we benefit from alternative fuels.

REALITY
While massive infrastructure changes may be needed to support certain types of hydrogen vehicles (those that burn hydrogen in internal combustion engines), these investments are unnecessary with many other technologies. Rather than creating a brand new infrastructure, the energy distribution infrastructure for electricity already exists, and only needs inexpensive metering facilities to sell electricity to consumers driving electric vehicles. Meanwhile, bio-methane, and other energy alternatives not based on fossil fuel, can now be manufactured on a relatively small-scale basis from trash, animal waste, agricultural waste, and other biomass sources. Several new technologies can be adopted on a household or organizational basis, and do not need to have additional supporting infrastructure.

MYTH #5
The fifth myth insists alternative fuels are too costly, and more R&D is needed before they can be widely used.

REALITY
The fact is that many alternative fuels are now ready for widespread use, and the pressing peak oil situation means that we will soon be forced to use them. All electric cars, available now, can be used for commutes and deliveries; ethanol and natural gas are already widely used for municipal transportation. Many of these vehicles are less expensive to operate than comparable petroleum-fueled vehicles. Supporting this, a three-year study conducted by the Energy Management Institute concluded that alternative fuels are now cost-competitive with hydrocarbon-based competitors.

"It's time for the nation and the world to evolve beyond petroleum, but not just for peak oil reasons," explains Wood. "Such a shift is called for by recent climate change research, and it will also help us reduce our dependence on foreign countries that may be hostile to the US. With just a little effort, you can learn the facts that will help you convert to sustainable transportation technology." Charles Cresson Wood is a green management consultant with Post-Petroleum Transportation, based in Sausalito, California. His latest book is entitled Kicking The Gasoline & Petro-Diesel Habit: A Business Manager's Blueprint For Action. He can be reached via www.kickingthegasoline.com.
(http://www.prweb.com/releases/alternative-fuel/peak-oil/prweb933784.htm)

Title: Re: Meltdown
Post by: BorisG on May 12, 2008, 10:02:04 AM

AIRLINE STOCKS
Airline shares get a fresh wind as oil prices fall

By Christopher Hinton, MarketWatch
Last update: 12:27 p.m. EDT May 12, 2008
NEW YORK (MarketWatch) -- A drop in benchmark oil prices supplied e wind beneath the wings of airline shares Monday.
The Amex Airline Index (XALamex airline index xal
News, chart, profile, more

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
XAL) rose 1.6% at last check to 22.23 points, with all but two of its 14 components trading higher.
In energy trading, crude for June delivery dropped 56 cents to $125.40 a barrel on the New York Mercantile Exchange. The benchmark for jet fuel prices had a record-breaking run last week, peaking at $126.25.
Airline stocks are highly susceptible to changes in future oil prices as crude represents what carriers will end up paying for jet fuel. This is evident by comparing the index to the U.S. Oil Fund LP (USOunited states oil fund lp units
News, chart, profile, more

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
USO) , an a exchange traded security designed to track the movement in sweet crude.
Climbing higher were shares of AMR Corp. (AMRAMR Corporation
News, chart, profile, more

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
AMR) , up 4.5% to $8.56, as well as Northwest Airlines (NWAnorthwest airls corp com
News, chart, profile, more

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
NWA) , up 1.1% to $8.70, and Continental Airlines (CALContinental Airlines Inc
News, chart, profile, more

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:

CAL) up about 1% to $17.55. AMR Corp. is the parent of American Airlines.
Major U.S. carriers have been badly bruised by skyrocketing fuel prices that have caused some long-term liquidity concerns. One of the ways the airlines have responded is by consolidating to cut out capacity, trim costs and raise fares.
On Sunday, the Chicago Tribune reported that UAL Corp. (UAUAual corp com new
News, chart, profile, more

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
UAUA) and U.S. Airways Group (LCCUS Airways Group Inc
News, chart, profile, more

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
LCC) are close to signing a merger deal that would keep the surviving entity headquartered in Chicago. UAL Corp. is the parent of United Airlines.
Citing a person familiar with the negotiations, the newspaper also said that U.S. Airways Chief Executive Doug Parker and its president, Scott Kirby, would hold the top jobs in the merged carrier.
If United were to merge with Phoenix-based U.S. Airways, it would create the second-largest airline in the country. The carrier to grow out of the proposed merger of Delta Air Lines (DALdelta air lines inc del com new
News, chart, profile, more

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
DAL) and Northwest would be slightly larger.
Shares of UAL Corp. rose 2% to $13.98 and U.S. Airways added 2.8% to $7.28.
Shares on the descent incuded Brazil's Tam SA (TAMtam sa sp adr rep pfd
News, chart, profile, more

Delayed quote dataAdd to portfolio
Analyst
Create alertInsider
Discuss
Financials
Sponsored by:
TAM) , off about 1.5% to $21.77, and Delta, down a fraction to $7.62.

Christopher Hinton is a reporter for MarketWatch based in New York.

Title: Re: Meltdown
Post by: BachQ on May 12, 2008, 10:57:43 AM

MONDAY: Crude hits new record above $126.40, then falls back
By STEVENSON JACOBS – 1 hour ago

NEW YORK (AP) — Oil prices briefly spiked to a new record above $126.40 a barrel Monday but later retreated as investors cashed in profits and a massive earthquake in China raised the possibility of a drop in demand. Retail gas prices, meanwhile, rose to another record above $3.70 a gallon, again following crude's recent path higher.

Oil futures have set new records for six straight sessions, driven by a weaker U.S. dollar and growing concerns about declining crude production in Mexico, Russia and elsewhere, analysts say. Goldman Sachs said in a report last week that crude prices could rise to $150 to $200 within two years.

"What's really circulating now is the possibility that world oil production has peaked. There's an idea that we can't change supply but we can change demand, and the only way to do that is to rally the market higher," said James Cordier, founder of OptionSellers.com, a Tampa, Fla., trading firm.

Light, sweet crude for June delivery jumped to a new record of $126.40 a barrel on the New York Mercantile Exchange before falling back to $124.50, down $1.19. The contract first rose above $126 on Friday, and many analysts said they expected the market to ease some.

"It looks like we're seeing a little bit of a correction. We put in the highs last week so we're seeing some profit-taking," said Tom Bentz, analyst at BNP Paribas Commodity Futures in New York.

Also pressuring oil slightly were concerns that a massive earthquake Monday in central China may temporarily slow demand. The 7.8-magnitude quake killed more than 7,600 people, toppled buildings and knocked out power lines.

"We know that some power and electricity plants are off-line, so that could have a negative impact on demand," said Phil Flynn, analyst at Alaron Trading Corp. in Chicago. "But obviously the market is still showing strength so it has a lot of bounce in it."

Oil's surge is pushing retail gas prices higher. The national average price of a gallon of regular gas rose 1.1 cents overnight to a record $3.718 a gallon according to a survey of stations by AAA and the Oil Price Information Service. The Energy Department expects prices to peak at a monthly average of $3.73 in June, though many analysts say national average prices could rise as high as $4. Consumers in many regions, including parts of California and Hawaii, are already paying that much.

Demand for diesel fuel is also growing worldwide, but supplies of distillates, which include diesel and heating oil, fell unexpectedly earlier this month. That's pushing U.S. diesel prices to record highs and inflating heating oil prices in the futures market; heating oil futures are often viewed as a proxy for diesel.

Diesel is used to move most of the world's food, consumer and industrial goods via truck, ship and rail. Skyrocketing diesel prices are part of the reason food and consumer goods prices are so high. At truck stops, retail diesel prices rose 3.1 cents overnight to a record national average of $4.361 a gallon.

Also leading crude lower Monday was a drop in heating oil prices, anaysts said. Heating oil for June delivery fell 6.10 cents to $3.5750 a gallon on the Nymex.

"Any weakness in heating oil is going to be bearish for crude on a fundamental level and also psychologically," said Andrew Lebow, senior vice president at Man Financial Inc. in New York.

In other Nymex trading Monday, June gasoline futures fell 1.47 cents to $3.1865 a gallon, and June natural gas futures fell 9.1 cents to $11.4441 per 1,000 cubic feet.

In London, June Brent crude futures fell $.187 to $123.53 a barrel on the ICE Futures Exchange.
(http://ap.google.com/article/ALeqM5i5TtajgUpSm7KY5jf-lCJGHBB-tAD90K7QJ80)

Title: Re: Meltdown
Post by: BorisG on May 12, 2008, 08:47:49 PM

Oil falls below $124 after bearish Chinese data

Reuters, Tuesday May 13 2008 By Maryelle Demongeot

SINGAPORE, May 13 (Reuters) - Oil fell below $124 a barrel on Tuesday as a year-on-year fall in China's April oil imports, the first time in 18 months, raised questions over demand in the world's second largest oil consumer.

U.S. light crude for June delivery was down 65 cents at $123.58 a barrel by 0247 GMT, having settled a hefty $1.73 lower on Monday after a new intraday record high of $126.40.
London Brent crude was down 47 cents to $122.44.

"When news like the Chinese imports comes out, it makes sense to take profit. But is demand really killed or only rationed? It will take a lot of damage to revise the overall trend," said Tony Nunan, risk management executive with Tokyo-based Mitsubishi Corp.

China's April crude oil imports fell by 3.9 percent from a year ago to 3.47 million barrels per day (bpd), and were also down from March's record 4.07 million bpd imports,according to official Chinese data.
The market has kept a close watch on oil demand in China and India, whose economic booms have helped send prices up six-fold since 2002.

But analysts said the dip may just be a one-off adjustment as refiners ran down stocks after unusually high March purchases.

Following quick growth in the first quarter, year-to-date imports are still up 9.8 percent on a year earlier.
Supply disruptions in the North Sea and a weak dollar helped push oil prices up by more than 10 percent since the beginning of the month, while a still weak dollar has sent investors scurrying for dollar-denominated commodities such as oil.

Weekly U.S. inventory data to be released on Wednesday will provide further direction to the market after an unexpected fall in distillates stocks, which include heating oil and diesel fuel, pushed prices to new highs last week.

U.S. crude oil inventories are expected to have risen for a fourth straight week, by an average 1.9 million barrels on an uptick in imports, while products stocks would also be up, helped by an increase in refinery utilisation, according to a preliminary Reuters poll of analysts on Monday. Distillate supplies were expected to have risen 1.0 million barrels. Gasoline stocks were seen posting a small increase of 300,000 barrels. (Editing by Michael Urquhart)

Title: Re: Meltdown
Post by: Sean on May 12, 2008, 10:38:35 PM

Let's hope the looting of Iraq's oil now underway with recently completed pipelines to Europe and America can control the gradient of the oil peak downslope, so that as demand massively overshoots while supply goes into reverse, the effects are cushioned and not catastrophic- at least in the short term. I hope so: where's the morality in all this? (Plenty of papers on this on the net.)

Title: Re: Meltdown
Post by: ezodisy on May 13, 2008, 06:34:47 AM

Herewith the official oil -- get up, get on up-- theme song

http://www.youtube.com/v/WUgIQej9SMg

Title: Re: Meltdown
Post by: BorisG on May 13, 2008, 07:30:19 AM

FUTURES MOVERS
Oil futures edge down as U.S. dollar rallies

By Polya Lesova, MarketWatch

Last update: 9:13 a.m. EDT May 13, 2008

NEW YORK (MarketWatch) -- Crude-oil futures dropped Tuesday, extending their decline from the previous session, as strength in the U.S. dollar pressured energy prices.
Crude oil for June delivery fell 31 cents to $123.92 a barrel in electronic trading on the New York Mercantile Exchange.

The U.S. dollar rallied against other major currencies after the Commerce Department reported better-than-expected retail sales. The dollar index, which tracks the performance of the greenback, rose 0.6% to 73.39. See Currencies.

Dollar strength typically put pressure on dollar-denominated commodities, such as gold and crude oil, because it makes them more expensive for holders of other currencies.

U.S. retail sales fell for the third time in the past five months in April, led by a big decline in auto sales. Retail sales fell 0.2% on a seasonally adjusted basis after a 0.2% gain in March. However, sales were slightly stronger than the 0.3% drop expected by economists surveyed by MarketWatch. See Economic Report.

On Monday, crude futures dropped $1.73 to finish at $124.23 a barrel, breaking a long winning streak that saw oil surge more than $13 to an all-time high of $126.25.

"In our view, energy markets still lack a major bearish headline to change the current mind-set," said Edward Meir, an analyst at MF Global, in a research note.

"Until then, the best the bears could hope to see are limited corrections punctuating still-undamaged uptrend lines," Meir said.

IEA lowers global oil product demand view

The International Energy Agency lowered its view on global oil product demand to 86.8 million barrels of oil equivalent a day, or a 1.2% rise from 2007 levels. That's down 390,000 barrels from the IEA forecast last month and the revision comes from downward revisions to preliminary data in the first quarter.

Oil product demand in OECD North America turned out to be much weaker than expected, providing further evidence of the effects of the economic slowdown and high prices, the IEA said. In OECD Europe, both diesel and residual fuel deliveries were also much lower than anticipated across the continent.

In OECD Pacific, a larger-than-expected contraction in Japanese gasoline offset continued strong demand for residual fuel oil and direct crude for power generation.

Also on the Nymex, June reformulated gasoline was flat at $3.16 a gallon and June heating oil gained 5 cents at $3.61 a gallon.

June natural gas futures fell 5 cents to $11.25 per million British thermal units.

Elsewhere on the commodity markets, gold futures fell sharply, pressured by dollar strength. See Metals Stocks.

Polya Lesova is a MarketWatch reporter based in New York.

Title: Re: Meltdown
Post by: ezodisy on May 13, 2008, 07:43:32 AM

BBC NEWS
South Downs oil drilling approved

An oil company has been given permission to drill in an area of ancient woodland under the South Downs.

Northern Petroleum was granted temporary three-year consent to test for oil in Markswell Wood in the village of Forestdale, near Chichester.

West Sussex County Council's planning committee approved the application with only one abstention from the vote.

The Woodland Trust has objected to the proposal because it considers the site to be "irreplaceable".

Natural beauty

Council officers told the committee there was a "clear and overriding need" for oil exploration and that the development accords with the National Minerals Policy.

Drilling will mean the loss of about one hectare of ancient woodland in a site which falls inside the proposed South Downs National Park, and is designated an area of outstanding natural beauty.

Northern Petroleum, an operator of both onshore and offshore projects, could seek permission for further testing or extraction if its 36m (118ft) drilling rig finds oil.

Chichester District Council, South Downs Joint Committee and Friends of the Earth have also said they are against the plan, but Natural England and the Environment Agency have not objected.

Drilling is expected to take place 24 hours a day over a four to five-week period.

We wish to be a good neighbour in the community and good custodians of the environment
Northern Petroleum spokesperson

In a statement, Northern Petroleum said the site would be an extension of the nearby Horndean oilfield.

The company carried out an "extensive evaluation of potential sites locally" that would fulfil the technical requirements and environmental issues and minimise visibility, noise, road access and other impacts to the local community.

After the abandonment of the well, the site would be cleared, replanted with trees and shrubs, and undergo a five-year scheme of aftercare when failing planting would be replaced.

A spokesperson for Northern Petroleum said: "We wish to be a good neighbour in the community and good custodians of the environment."
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/england/sussex/7398509.stm

Published: 2008/05/13 14:27:34 GMT

© BBC MMVIII

10p rise today!

Title: Re: Meltdown
Post by: BachQ on May 13, 2008, 08:20:37 AM

Posted on Tue, May. 13, 2008
Iran rumor pushes oil to new record of $126.71, gas jumps above $3.73
By JOHN WILEN
AP Business Writer

Oil prices shot to a new record near $127 a barrel Tuesday on reports that Iran is planning to cut crude oil production. Gas prices, meanwhile, rose to a new record over $3.73 a gallon Tuesday, and their advance shows little sign of slowing with Memorial Day weekend, the traditional start of the summer driving season, just 10 days away. Light, sweet crude for June delivery rose as high as a record $126.71 a barrel in midday trading on the New York Mercantile Exchange before retreating slightly to trade up $2.24 at $126.47.

Title: Re: Meltdown
Post by: BachQ on May 13, 2008, 08:22:06 AM

Richard Heinberg interview

Nothing governments can do about rising oil prices: oil expert Richard Heinberg

CLICK HERE FOR VIDEO FEED: :D http://www.abc.net.au/reslib/200805/r249542_1023823.asx

Here's the entire transcript (http://www.abc.net.au/lateline/content/2007/s2242621.htm)

--- "But really, the situation we're seeing now mostly has to do with the fundamentals of supply and demand. We have more countries every year in the category of oil importing nations and fewer countries every year that are able to export oil. That's the nub of the issue." ... "And like Great Britain and Norway. Great Britain has now become a net oil importing country again after 30 years of being an exporter."

--- "[T]he problem is oil is getting harder and harder get out of the ground. We've used the cheap, easy stuff. We've used the oil we could get from Texas and Oklahoma and even the North Sea and now what we're finding are oilfields in ultra deep water and places that are extremely difficult to access from a technical standpoint. We're also starting to get more from places like the Canadian tar sands where there's an enormous amount of resource in place, but it's not liquid oil. It's the stuff that has to be converted into synthetic fuel using enormous amounts of water and natural gas. Very resource intensive and environmentally ruinous process. So the easy glory days of the oil industry are over and just about everybody in the industry would agree with that statement."

--- "Well, what we're seeing is not just a likely decline in total oil production, but especially a decline in available oil exports, because as I mentioned earlier the oil exporting countries are seeing such rapidly increasing domestic demand. So the amount available on the global export market could decline by up to half just within the next 10 to 15 years. That's going to put enormous pressure on major oil importing countries like the United States and China. The US is the world's foremost oil importer, China is the world's second foremost oil importing countries. These two countries are going to head to head for access to supplies in central Asia, Africa, in the Middle East, and it's difficult to envision a situation in which that competition would not become very, very intense."

TONY JONES: Not so long ago, there were some senior neo conservative thinkers in Washington who were actually advocating the United States taking over Saudi Arabian oilfields. The implications of that are extraordinary, of course. Could you imagine ever reaching the point where that became seriously part of the administration's agenda?

RICHARD HEINBERG: Absolutely, yes. If there were to be a revolution in Saudi Arabia and the country were to be taken over by any political party or group that was not friendly to America's interest, then I think it's very likely that the US would invade.

Title: Re: Meltdown
Post by: BachQ on May 13, 2008, 08:22:39 AM

"The peak oil era is happening and we need to prepare our country to win in this economy. This is vital for success in the 21st century and for that we need a Liberal government with a good vision."
(http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20080513/dion_tories_080513/20080513?hub=Canada)

Title: Re: Meltdown
Post by: BachQ on May 13, 2008, 12:18:40 PM

Bush prepares to press Saudis on skyrocketing price of oil
17 hours ago

WASHINGTON (AFP) — As he travels to the Middle East this week, President George W. Bush is expected to press US ally Saudi Arabia to do more to contain runaway oil prices which threaten to depress both the US and world economies.

(http://afp.google.com/media/ALeqM5jPUrVSnbi0log2-Tnd0n78Pidx1A?size=m)

*** "I think that if there was a magic wand, and say, okay, drop price, I'd do that," Bush said last month. "But there is no magic wand to wave right now."
(http://afp.google.com/article/ALeqM5i6Ps38VS-I4bmQahLTkdRiUmj4Gw)

Title: Re: Meltdown
Post by: BachQ on May 13, 2008, 12:19:58 PM

Oil could hit $200 before demand gets hit
Tue May 13, 2008 11:08am EDT
By Santosh Menon

LONDON (Reuters) - The price of oil could rise to $200 a barrel in the next two years before it starts to seriously hit demand, fund manager Tim Guinness said on Tuesday. "I am increasingly comfortable with the analysis which says the oil price is going to have to go to $200 before demand is dampened enough," Guinness, who is the chief investment officer of Guinness Atkinson Funds, told Reuters in an interview. Guinness, a highly-rated fund manager who was the chairman of Investec Asset Management for four years before retiring in 2002, said he expected the spike to $200 to happen in 2010 and predicted the average price that year at around $160 a barrel. Investment bank Goldman Sachs issued a similar prediction last week, saying oil could shoot up to $200 within the next two years as part of a "super spike" driven by poor growth in oil supplies
(http://www.reuters.com/article/GCA-Oil/idUSL1392338020080513)

Title: Re: Meltdown
Post by: ezodisy on May 14, 2008, 02:18:21 AM

some good news for all of you doom-mongers: it seems that companies which are manufacturing and distributing solar panels are having one hell of a great time right now. So you don't need to feel bad about making money off oil -- you can do so with some of the solar boys instead.

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 03:53:14 AM

Oil: Why it's different this time
(http://www.moneyweek.com/file/47033/oil-why-its-different-this-time.htm)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 03:54:11 AM

UK inflation woe 'set to worsen'

Bank of England governor Mervyn King

The outlook for UK inflation has "deteriorated markedly", the Bank of England governor Mervyn King has said. Government figures on Tuesday showed that the rate of consumer inflation reached its highest level in 13 months driven by high food and fuel costs. Mr King said inflation would probably stay above the government target of 2% for two years, hampering the economy. He added that house prices were set to fall further, though no one could be certain how far they would decline.

Mr King also spoke of the difficult balancing act the Bank had in juggling a slowing economy and accelerating inflation. "The balancing act faced by the Monetary Policy Committee (MPC) is even more challenging than it was in February," he said as the Bank presented its latest quarterly inflation report.
"The MPC is facing its most difficult challenge yet. For the time being at least, the nice decade is behind us."

Consumer squeeze

Mr King said that external factors, such as high food and fuel prices, and problems in the global financial markets and the subsequent credit crunch, were hitting the UK and would have a noticeable impact on the economy. "The central projection is for growth to slow sharply in the near term," he said.
(http://news.bbc.co.uk/2/hi/business/7400074.stm)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 03:55:03 AM

High oil prices rekindle oil production in Missouri
By MARCUS KABEL,
AP
Posted: 2008-05-14 01:41:30

DEERFIELD, Mo. (AP) - Pumpjacks, the oil rigs that resemble those thirsty bird toys, are going up in Missouri for the first time in two decades, the latest region to revive a long-faded industry as crude nears $130 a barrel. The sky-high price of oil has turned extraction methods recently considered cost-prohibitive into cash cows. Bright blue pumpjacks stand over a 10-acre site near the Missouri-Kansas border where MegaWest Energy Corp., a Canadian company, is attempting to draw heavy oil - as thick as molasses, and requiring better technology and extra effort to pull from the ground. The domestic oil revival is taking place in smaller oil fields that require new technology, said Fred Lawrence, vice president of economics and international affairs at the Independent Petroleum Association of America.

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 03:55:29 AM

OPEC's Days are Numbered

Once peak oil arrives and all available production is less than actual demand there will no longer be any need to have quotas or restrictions on production.
(http://www.rightsideadvisors.com/public/commentary.go/rsa/commentary/comm-energy/20080513_032411_msg.html/OPECs-Days-Are-Numbered.html)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 03:55:52 AM

The New Peak Oil: Peak Demand

"In this article I shed some light on how high oil prices are resulting in a dramatic change in the energy industry and politics. High oil prices are accelerating the adoption of alternative energy resources and may signal the emergence of a new kind of peak oil fever: Peak Demand."
(http://seekingalpha.com/article/77183-the-new-peak-oil-peak-demand)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 03:56:43 AM

Foreclosure filings hit record in April
Survey sees more than 243,000 filings, up 65% from a year earlier, creating problems for local governments.

By Kenneth Musante, CNNMoney.com staff writer
May 14, 2008: 5:03 AM EDT

NEW YORK (CNNMoney.com) -- U.S. foreclosure filings reached a record high in April, rising almost 65% over the previous year and putting municipalities at risk by putting into the value of taxed property, according to a study released Wednesday.
(http://money.cnn.com/2008/05/14/real_estate/foreclosure_rates/index.htm?postversion=2008051405)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 03:58:02 AM

Economic 'misery' more widespread

Some experts argue that true inflation and unemployment -- the components of the economy's 'Misery Index' -- are higher than the government's official figures.

By Chris Isidore, CNNMoney.com senior writer
Last Updated: May 14, 2008: 4:41 AM EDT

NEW YORK (CNNMoney.com) -- Americans are feeling a lot more economic pain than the government's official statistics would lead you to believe, according to a growing number of experts. They argue that figures on unemployment and inflation are being understated by the government. Unemployment and inflation are typically added together to come up with a so-called "Misery Index."

The "Misery Index" was often cited during periods of high unemployment and inflation, such as the mid 1970s and late 1970s to early 1980s. And some fear the economy may be approaching those levels again.
The official numbers produce a current Misery Index of only 9, not far from the low of 6.1 seen in 1998.
But using the estimates on CPI and unemployment from economists skeptical of the government numbers, the Misery Index is actually in the teens. Some worry it could even approach the post-World War II record of 20.6 in 1980. "We're looking at government numbers that are really out of whack," said Kevin Phillips, author of the book "Bad Money."

No inflation if you don't eat or drive

According to the government's most recent Consumer Price Index, a key inflation reading, consumer prices rose 4% in the 12 months ending in March. The April CPI report will be released Wednesday morning and economists expect no change from March, despite record gas prices. But Phillips argues that consumer prices are probably up at least 5% and perhaps more than 10%.
(http://money.cnn.com/2008/05/13/news/economy/misery/index.htm)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 03:58:47 AM

Home prices continue sharp descent
Steep drops in West. Heartland prices stabilize. Bottom line: 7.7% decline in first quarter.

By Les Christie, CNNMoney.com staff writer
Last Updated: May 13, 2008: 2:40 PM EDT

NEW YORK (CNNMoney.com) -- Single-family home prices dropped 7.7% in the first quarter in the largest year-over-year decline since the National Association of Realtors began reporting prices in 1982.
The median sales price fell to $196,300, down 4.8% compared with the last three months of 2007.
(http://money.cnn.com/2008/05/12/real_estate/Q12008_home_prices/index.htm?postversion=2008051314)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 03:59:26 AM

The new realities of record oil

SHAWN MCCARTHY
From Wednesday's Globe and Mail
May 13, 2008 at 9:00 PM EDT

OTTAWA — Emerging economies are contributing to record oil prices by subsidizing demand in their home markets as they seek to shelter their populations from the impact of crippling fuel costs, the International Energy Agency says in a new report. ... In China, the government recently entrenched its subsidy program – which could cost as much as $87-billion (U.S.) – in order to end its frequent bouts of embarrassing fuel shortages in time for this summer's Olympic Games.
(http://www.reportonbusiness.com/servlet/story/RTGAM.20080513.wchinaoil0513/BNStory/energy/home?cid=al_gam_mostview)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 04:00:08 AM

Natural Gas Advances as Heating Oil, Crude Surge to a Records
By Reg Curren

May 13 (Bloomberg) -- Natural gas in New York advanced as heating oil and crude surged to records. Heating oil, which competes with gas in some markets, gained after supplies of the fuel declined, according to a report from the International Energy Agency, the energy adviser to 27 nations. Oil climbed on signs refiners may not meet demand. ``The rise in heating oil is keeping a bottom under natural gas,'' said Carl Neill, an energy analyst at Risk Management Inc. in Chicago. ``There seems to be a rush to secure energy supplies at any price.''
(http://www.bloomberg.com/apps/news?pid=20602099&sid=aeA21aF4AjSc&refer=energy)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 04:01:04 AM

Oil's Murky Math

(http://images.businessweek.com/story/08/600/0514_oil_workers.jpg)

Where are we headed: Up to $200 a barrel? Down to $80? With little good data on supply or demand, oil's next price move is anyone's guess

by Peter Coy

At around $125 a barrel, crude oil has more than doubled in price since the end of 2006. How is it possible that the vast majority of government forecasters, stock analysts, economists, traders, and journalists who follow the oil market failed to foresee this? Moreover, how can it be that even today, the bulls and bears on oil are extremely far apart, disagreeing not only on the oil outlook but even the present situation? The answer is simple. You can't predict what oil prices are going to do even in the short-to-medium term unless you have a good handle on the forces of supply and demand. And that requires thorough and reliable data—which don't exist. Regrettably, the world oil market is no more transparent than a fragrant barrel of extra-heavy Orinoco crude. And the situation is getting worse because the world's fastest-growing oil consumer is also one of the most opaque: China.
(http://www.businessweek.com/bwdaily/dnflash/content/may2008/db20080513_734146.htm?chan=top+news_top+news+index_top+story)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 04:01:52 AM

Documentary; The Middle East & The Oil Crisis
http://www.youtube.com/v/SL4ErT2DSXU

from "A Crude Awakening: The Oil Crash."

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 04:02:30 AM

Oil Futures – Snippets of Varying Opinions
http://www.youtube.com/v/qMbw9BrOlFQ

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 04:03:38 AM

Times Online
May 13, 2008
Soaring inflation sends FTSE diving

Robert Lindsay
A sharp jump in inflation and more grim news on house sales and mortgage lending sent the FTSE 100 diving for cover today. Mortgage lenders took the biggest hit. Sentiment was also depressed by fears that the housing news means no rapid drop in interest rates. A June cut was being priced in after rates were held this month at 5 per cent.
(http://business.timesonline.co.uk/tol/business/markets/article3922725.ece)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 04:04:47 AM

DoE: U.S. can hit 20 percent wind by 2030
Published: May 13, 2008 at 3:22 PM

WASHINGTON, May 13 (UPI) -- Wind power is capable of becoming a major contributor to America's electricity supply, a report released by the U.S. Department of Energy says. The report suggests that wind could supply 20 percent of the nation's energy by 2030. The report, "20 Percent Wind Energy by 2030: Increasing Wind Energy's Contribution to U.S. Electricity Supply," looks closely at one scenario for reaching the 20 percent goal by 2030 and contrasts it with the scenario of no new wind power.

"DoE's wind report is a thorough look at America's wind resource, its industrial capabilities and future energy prices, and confirms the viability and commercial maturity of wind as a major contributor to America's energy needs, now and in the future," said Andy Karsner, assistant secretary of energy efficiency and renewable energy. The report suggests that achieving the target could reduce carbon dioxide emissions from electricity generation by 25 percent in 2030, reduce natural gas use by 11 percent, reduce water consumption by 4 trillion gallons by 2030, increase annual revenues to local communities to more than $1.5 billion by 2030 and support roughly 500,000 jobs.

(http://www.upi.com/International_Security/Energy/Briefing/2008/05/13/doe_us_can_hit_20_percent_wind_by_2030/1298/)

Use of wind energy expected to grow dramatically
By H. JOSEF HEBERT 05.13.08, 4:23 PM ET

WASHINGTON -
Two decades from now Americans could get as much electricity from windmills as from nuclear power plants, according to a government report that lays out a possible plan for wind energy growth.
The report, a collaboration between the Energy Department research labs and industry, concludes wind energy could generate 20 percent of the nation's electricity by 2030, about the same share now produced by nuclear reactors.

(http://www.forbes.com/feeds/ap/2008/05/13/ap5004625.html)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 04:06:17 AM

Ditch that car, hop a train
As the price of gas soars, more and more commuters are leaving their cars in the garage and boarding the train.
By Allan Chernoff, CNN senior correspondent

Last Updated: May 13, 2008: 11:32 AM EDT

NEW YORK (CNN) -- The soaring price of gas has convinced New Jersey resident Eric Scott to trade the comfort of his car for a seat on the train every morning after 17 years of driving to the office.
"It's a huge savings," said Scott., "In today's economy, you know, every penny counts so I'm just glad I made that switch." Scott, a Senior Trust Administrator with Merrill Lynch in Hopewell, NJ, is saving more than $300-a-month by taking the train instead of driving the 72-mile roundtrip from his home in Willingboro, NJ. His monthly New Jersey Transit train pass costs $77, less than 1/4 of the $400 he had been spending on gas each month. "I wish I would have done this sooner, it would have been savings in my pocket," said Scott.
(http://money.cnn.com/2008/05/12/news/economy/dumping_the_gas_pump_chernoff/index.htm?postversion=2008051311)

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 04:07:03 AM

May 13, 2008, 4:41PM
Texas' sweet sorghum farmers tap new ethanol source
By BETSY BLANEY
Associated Press

LUBBOCK — Sweet sorghum is grown in the U.S. for cooking and as livestock feed. But the tall plant also has a juicier benefit. A sugary sap inside the plant's stalk, which can grow as tall as 12 feet, can be turned into a potent biofuel, and experts and companies are studying its potential with hopes that farmers will want to plant more of it. Ethanol made from the stalk's juice has four times the energy yield of the corn-based ethanol, which is already in the marketplace, unlike sweet sorghum. It produces about eight units of energy for every unit of energy used in its production. That's about the same as sugarcane but four times more than for corn.
(http://www.chron.com/disp/story.mpl/business/5776829.html)

Title: Re: Meltdown
Post by: BorisG on May 14, 2008, 07:13:34 AM

Inflation pressures ease despite food price jump
Wednesday May 14, 10:59 am ET
By Martin Crutsinger, AP Economics Writer
Inflation pressures ease in April despite biggest jump in food prices in 18 years

WASHINGTON (AP) -- Inflation pressures eased a bit in April despite the biggest jump in food prices in 18 years.
The Labor Department reported Wednesday that consumer prices edged up 0.2 percent last month, compared to a 0.3 percent rise in March.

The lower inflation reflected a flat reading for energy, which helped offset a 0.9 percent jump in food costs as prices climbed for many basic items, from bread and milk to coffee and fresh fruits.

The unchanged reading for energy reflected a big 4.8 percent jump in natural gas prices, offset by a 2 percent decline in gasoline costs.

The reported drop in gasoline prices reflected the government's accounting process, which discounts expected seasonal price changes.

Since gasoline prices normally rise significantly in April, the 5.6 percent rise in prices for the month turned into a 2 percent drop after the government adjusted for normal seasonal changes. That was little comfort for motorists now paying record prices at the pump, which are nearing $4 per gallon.

Core inflation, which excludes food and energy, showed prices well behaved in April, rising by just 0.1 percent, compared to a 0.2 percent gain in March.

The 0.2 percent reading for the overall Consumer Price Index was slightly lower than the 0.3 percent rise that economists had been expecting and the 0.1 percent rise in core inflation was below the 0.2 percent reading that had been expected.

Those better-than-expected performances should ease concerns at the Federal Reserve that the sharp increase in food and energy prices this year would lead to broader inflation problems. However, economists cautioned that the recent surge in oil prices to record levels near $127 per barrel has yet to be felt at the consumer level.

Ian Shepherdson, chief U.S. economist at High Frequency Economics, said that the weak economy was starting to show up in lower prices in some areas. He noted that the price of hotel rooms dropped for a third straight month, falling by 1.9 percent in April, a reflection of cutbacks in business and vacation travel.

The Fed, fighting against a severe credit crunch and spreading economic weakness, has cut interest rates seven times since last September in an effort to keep the country from toppling into a recession.

However, last month it signaled that it might take a pause in the rate cuts, with some Fed officials expressing worries that further reductions in interest rates could trigger unwanted inflation. The central bank is expected to keep rates unchanged when officials next meet June 24-26.

So far this year, overall inflation is rising at an annual rate of 3 percent, down from a 4.1 percent increase for all of 2007. Core inflation, excluding energy and food, is up at an annual rate of 1.8 percent in the first four months of this year, compared with a 2.4 percent increase for all of 2007.

Even with the slowdown in price increases so far this year, workers' wages are not keeping up. A separate Labor Department report showed that average weekly earnings for nonsupervisory workers dropped by 1 percent in April compared with a year ago, after adjusting for inflation. It was the seventh straight month that inflation-adjusted wages were down compared to a year ago.

The combination of rising food and energy costs, weak wage gains and falling home prices have left households feeling squeezed, with consumer confidence readings plunging to recessionary levels.

While many economists believe the country is in a recession, other analysts contend that the country may be able to avoid a full-blown downturn, especially if consumers spend a sizable portion of the 130 million economic stimulus payments that the government is now sending out.

The overall surge in food prices of 0.9 percent was the largest one-month increase since food prices climbed 1.5 percent in January 1990.

Gasoline prices, even with the decline in April, were 20.9 percent higher than a year ago.

Clothing prices rose by 0.5 percent in April, even though discount stores reportedly engaged in heavy discounting in an effort to spur lagging sales.

New car prices fell by 0.2 percent last month, reflecting the trouble automakers are having with sagging demand in the face of a weak economy and soaring gasoline costs. Airline ticket prices, which had been surging because of more expensive jet fuel, fell by 0.5 percent last month but are still up significantly from a year ago.

Title: Re: Meltdown
Post by: BorisG on May 14, 2008, 08:39:25 AM

US foreclosure filings surge 65 percent in April

Wednesday May 14, 9:42 AM EDT

LOS ANGELES (AP) — More U.S. homeowners fell behind on mortgage payments last month, driving the number of homes facing foreclosure up 65 percent versus the same month last year and contributing to a deepening slide in home values, a research company said Tuesday.

Nationwide, 243,353 homes received at least one foreclosure-related filing in April, up 65 percent from 147,708 in the same month last year and up 4 percent since March, RealtyTrac Inc. said.

Nevada, Arizona, California and Florida were among the hardest hit states, with metropolitan areas in California and Florida accounting for nine of the top 10 areas with the highest rate of foreclosure, the company said.

Irvine, Calif.-based RealtyTrac monitors default notices, auction sale notices and bank repossessions.

One in every 519 U.S. households received a foreclosure filing in April. Foreclosure filings increased from a year earlier in all but eight states.

The combination of weak housing sales, falling home values, tighter mortgage lending criteria and a slowing U.S. economy has left financially strapped homeowners with fewer options to avoid foreclosure. Many can't find buyers or owe more than their home is worth and can't get refinanced into an affordable loan.

Efforts by government and the mortgage industry to stem the tide of foreclosures aren't keeping up with the rising number of troubled homeowners.

The April data show nearly half of the properties received an initial notice of default, suggesting many homes were new entrants to the foreclosure process.

"We're still sitting at roughly the same percentage of loans handled in any way successfully as we were a year ago, and the volume (of foreclosure filings) still keeps going up," said Rick Sharga, RealtyTrac's vice president of marketing. "It's apparent that what they've tried so far isn't working."

The U.S. House passed a bill last week that would offer government insurance on $300 billion in new mortgages to refinance loans for an estimated half-million borrowers facing foreclosure, particularly those who now owe more than their houses are worth because of declining values.

House lawmakers also passed a bill that would send $15 billion to states to buy and fix foreclosed homes.

Still, should the homeowner aid package clear the Senate, it faces a potential hurdle in the White House, which has threatened to veto the plan, arguing it's too risky and amounts to a lender bailout.

Even if a legislative compromise is reached, it could come too late for homeowners with adjustable-rate mortgages scheduled to reset to higher rates this month and the next.

More than 1 million home foreclosures are forecast for 2008.

"It doesn't look like the volume is going to slow down any time soon," Sharga said.

More than 54,500 properties were repossessed by lenders nationwide in April. In all, about 2 percent of U.S. households were in some stage of foreclosure during the month, RealtyTrac said.

Still, as foreclosed properties pile up, they add to the inventory of homes on the market and can drag down home prices. The impact is felt mostly in regions where foreclosures are concentrated, such as Southern California, the Las Vegas area, South Florida and parts of Arizona.

Nevada posted the worst foreclosure rate in the nation, with one in every 146 households receiving a foreclosure-related notice last month, nearly four times the national rate.

The number of properties with a filing jumped 95 percent versus April last year but declined 5 percent from March.

California had the most properties facing foreclosure at 64,683, an increase of 112 percent from April 2007. The number of properties declined less than 1 percent from March.

The state posted the second-highest foreclosure rate in the country, with one in every 204 households receiving a foreclosure-related notice.

California metro areas accounted for six of the 10 U.S. metropolitan areas with the highest foreclosure rates, led by Merced, with one in every 66 households receiving a foreclosure notice.

Arizona had the third-highest foreclosure rate, with one in every 224 households reporting a foreclosure filing in April. A total of 11,620 homes reported at least one filing, up nearly 181 percent from a year earlier and up 26 percent from the previous month.

Like Las Vegas and inland regions in California, areas of Arizona saw a sharp run-up in speculator-driven home prices and new home construction during the housing boom.

Florida had 35,264 homes reporting at least one foreclosure filing last month, a 146 percent jump from a year earlier and a 17 percent hike from March. That translates into a foreclosure rate of one in every 242 households, the fourth-highest in the nation.

The other states among the 10 with the highest foreclosure rates in April were Colorado, Maryland, Georgia, Ohio, Michigan and Massachusetts.

———

On the Net:

RealtyTrac Inc.: http://www.realtytrac.com

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 10:49:46 AM

Quote from: BorisG on May 14, 2008, 07:13:34 AM
Inflation pressures ease despite food price jump

The government's inflation figures are the biggest pile of shit .......... They're a fraud and an insult to our intelligence.

Title: Re: Meltdown
Post by: BachQ on May 14, 2008, 10:51:45 AM

Price of Oil is all about SUPPLY & DEMAND (http://www.energybulletin.net/44192.html)

Title: Re: Meltdown
Post by: BorisG on May 14, 2008, 04:08:13 PM

Scant oil price relief if US stops filling reserve

Reuters, Wednesday May 14 2008 By Richard Valdmanis

NEW YORK, May 14 (Reuters) - A move to stop filling the U.S. emergency oil reserve will do little to slow the record spike in fuel prices that is intensifying an economic slowdown in the world's biggest energy consumer.

U.S. lawmakers voted overwhelmingly this week on bills to suspend adding oil to the Strategic Petroleum Reserve until oil prices slip back to $75 a barrel from current levels around $125 -- a proposal that the White House has consistently opposed.

The move would redirect an estimated 70,000 barrels of crude oil per day into the market -- supply that would otherwise have been shipped to the reserve.

"How many knots would a cruise ship gain if you threw off a deck chair? That's how insignificant this would be," said Peter Beutel, president of oil consultancy Cameron Hanover.

The United States consumes about 20.5 million barrels of crude oil per day, representing roughly a quarter of world demand.

Oil prices have risen six-fold since 2002, hitting a record near $127 a barrel on Tuesday, as surging energy needs in China and other developing nations squeeze available supply. The surge has added pressure to the U.S. economy, already hard-hit by a credit crisis and housing crunch.

Lawmakers, who want to get a final bill to the White House this month to halt SPR deliveries, have said the move could help pull down gasoline prices by 5 to 25 cents a gallon.
But energy experts are skeptical.

"This is a relatively limited flow of oil we're talking about, so I'm not expecting this move would immediately override the volume of investor buying on the energy futures market," said Tim Evans, energy analyst for Citi Futures Perspective.

He said the U.S. government's best lever for stemming the energy price spike would be to release oil from the reserve, not just halt adding barrels.

"A release of oil from the SPR would send a message that traders would have to respect the possibility that government can take real action to supply the market," he said.

"At the moment, the prevailing assumption is that there will be no release of oil from the SPR, that the oil goes in and it never comes out. To the extent that's true, the SPR is the equivalent of a price support program."

The White House said earlier this week it would not sell oil from the stockpile.

The reserve was created by Congress in 1975 in response to the Arab oil embargo which cut U.S. oil supplies and caused long lines at the gasoline pumps, and is designed for use during supply shocks.
The White House has said current conditions do not justify a release from the reserve, which currently holds 703 million barrels or just more than a month of nationwide usage at current rates.

"We should have stopped (filling the SPR) $50 ago. But it is such a small percentage of overall demand it won't have much of an effect right now," said Tom Bentz, analyst at BNP Paribas Commodity Futures Inc.
"We're in a bull market and even though every drop helps, a small amount like this will probably be ignored by the trading community."

While analysts said that even though the additional oil is unlikely to affect prices that much, it at all, Democratic Rep. Edward Markey said, "Every little bit helps." (Reporting by Richard Valdmanis and Matthew Robinson, editing by Matthew Lewis)

Title: Re: Meltdown
Post by: BorisG on May 15, 2008, 03:32:39 AM

Oil rises as dollar weakens, Chinese diesel demand seen rising UPDATE

05.15.08, 6:53 AM ET

LONDON (Thomson Financial) - Oil bounced from yesterday's lows to trade higher as the dollar weakened against the euro and amid expectations increased demand from China in the wake of Monday's earthquake will tighten the distillates market.

The dollar wilted against the euro this morning as the single currency soared on news that Germany, Europe's largest economy, had posted its highest quarterly GDP in 12 years. A weaker greenback making dollar-priced crude cheaper for holders of other currencies.

Meanwhile reports that Monday's earthquake in China has disrupted natural gas output, increasing demand for diesel as an alternative source of fuel for power generation, is pushing distillate prices higher, 'which is also pulling up crude oil', Societe Generale analyst Mike Wittner said.

At 10:33 a.m., New York-traded West Texas Intermediate crude for June delivery was up 60 cents at $124.82 a barrel.

In London, Brent crude for June delivery was up 54 cents at $122.40.

Investors are also taking advantage of yesterday's slide in prices to buy into the market, analysts said.

The oil market slipped by 1.3 percent yesterday in New York as U.S. crude and distillate stocks rose, the dollar strengthened marginally, and Iran repudiated claims it was considering cutting output for political reasons.

However prices have made up some ground this morning, as institutional investors buy into the market amid expectations prices will rise again.

'After what we believe has been seven straight sessions of record highs, crude oil markets are still quite overextended, and thus ripe for a further move to the downside,' said MF Global analyst Ed Meir.

'However, we believe that a likely $5-$10 setback from here would be used as a buying opportunity by the funds, as the markets simply have not been able to stay down in the wake of prior downswings,' he added.

The supply and demand fundamentals of the market are expected to remain firm, amid tentative signs that the outlook for the U.S. economy is improving and with oil supply -- particularly from non-OPEC countries -- struggling to keep up with consumption.

'The perceived fragility of the supply situation continues to exert a susceptibility to price hikes,' said the Bank of Ireland (nyse: IRE - news - people )'s Paul Harris. 'The current dip in prices may well yet prove to be an opportunity for traders to re-establish long positions ahead of a move through the $127.30 region.'

Title: Re: Meltdown
Post by: BorisG on May 15, 2008, 03:36:00 AM

Don't hope for gas prices to drop, says oil economist

By Ángel González, Seattle Times business reporter, May 15, 2008

John Felmey, of the American Petroleum Institute
Most drivers think $4 per gallon of gasoline is too much to pay in a weakening economy. Sales for sport-utility vehicles are plummeting. And people are actually driving less.

But don't expect prices to fall anytime soon despite slackening domestic demand, American Petroleum Institute chief economist John Felmy said Wednesday. The API, based in Washington, D.C., represents the U.S. oil and gas industry.

Gasoline prices are driven by the high cost of crude oil, which surpassed $125 a barrel on Wednesday. That's in large part because the slowdown in U.S. oil demand is being offset by growing consumption in China, India and the Middle East, said Felmy, who came here for a speech to the Seattle Economics Council.

"You have 2 billion people who want cars," he said.

The thirst for oil is growing faster than the world's capacity to produce it — at least 600,000 barrels a day faster, according to Energy Information Administration data.

In the short term, supply disruptions and the imminent arrival of summer could lift prices further. Not only are millions of Americans expected to hit the road, but hurricanes will threaten rigs and refineries in the Gulf of Mexico.

"It's a cloudy crystal ball," Felmy said.

Goldman Sachs analyst Arjun Murti made headlines and encountered skeptics in 2005 when he predicted that oil prices would hit $100 a barrel. Last week, Murti declared that crude is likely to hit $150 to $200 over the next six to 24 months.

The "super-spike" is the market's way of rationing a scarce commodity, and will lead to a "sharp correction" in oil demand, especially in the U.S., which accounts for a quarter of global oil consumption, Murti wrote in a report.

Only such a drop in how much the U.S. consumes is likely to restore the balance between supply and demand that kept oil cheap in the 1990s. "U.S. demand will likely have to stay weak if global oil markets are to stay in balance," Murti said in the report.

A sharp fall in demand helped bring prices down after the oil boom of the late 1970s, said Felmy, but it's unlikely that that will happen soon.

Proportionately, U.S. consumers aren't spending as much on gas as they were in the last oil crunch. In 1981, 6.9 percent of their income went to gasoline; now it's about 5 percent, he said.

Felmy said that U.S. refiners are being squeezed as much as consumers, because the price of their raw material — crude oil — is soaring, while demand for their product is dropping rapidly.

Of course, half of the refiners are also profitable oil producers — big companies like Shell, Chevron, and Exxon Mobil — and they have been able to profit from the run-up in crude prices.

Recently proposed windfall-profit taxes on Big Oil won't help bring energy prices down, said Goldman's Murti, who considers the oil industry's profits, while above historical average, are "hardly excessive."

"Higher taxes do not stimulate additional investment to grow supply," Murti said in the report.

Title: Re: Meltdown
Post by: BachQ on May 15, 2008, 09:08:22 AM

T. Boone Pickens orders 667 GE wind turbines: report
Thu May 15, 2008 8:05am EDT

NEW YORK (Reuters) - T. Boone Pickens' Mesa Power LLP placed a $2 billion order for 667 wind turbines with General Electric to build the world's largest wind farm in the Texas Panhandle, the Dallas Morning News reported Thursday. A spokesman for Mesa Power declined to comment on the article. Mesa Power plans to announce the deal later Thursday, according to the newspaper. The wind farm would produce 1,000 megawatts of electricity, enough to power about 300,000 homes. By 2014, Pickens has said he wants to have 4,000 MW of wind power.
(http://www.reuters.com/article/ousiv/idUSN1520050620080515)

Title: Re: Meltdown
Post by: BachQ on May 15, 2008, 09:09:50 AM

Get Ready to Spend $6,000 a Year on Gas
By Mark Clayton, Christian Science Monitor
Posted on May 14, 2008, Printed on May 15, 2008

Two years ago a leading economist published a study provocatively titled: "What would $120 oil mean for the global economy?" Answer: a global recession, if the price stayed there for a year. Now the future has arrived, with the United States and other nations getting a double whammy from both the mortgage crisis and oil futures hovering at $120 per barrel. If oil prices stay stratospheric, the cost of fueling cars and planes could slash US economic growth up to 2.3 percent and global growth by 3.6 percent, says Robert Wescott, former chief economist of the president's council of economic advisers and author of the $120 oil report.

While many energy-security experts worry about a terrorist attack that suddenly crimps global oil supplies and hammers the US economy, Dr. Wescott and other experts say a terror attack is hardly the only, or even the worst, oil threat the nation now faces. "What we are seeing today is more of a slow-motion, rolling oil crisis rather than a sharp shock, yet ultimately we end up with the same sorts of impacts [as a terror attack]," says Wescott, now president of Keybridge Research, a Washington economic-consulting firm.

Unlike the 1970s, when an oil embargo left Americans waiting in long lines at gasoline stations and paying higher prices, today's oil crisis has been stealthy. Its economic impact has been masked by consumers tapping credit cards and home equity to cover the rising cost of energy and some consumer goods.
"We're having a replay of the 1970s without the Arab oil embargo part, so it's been hard for many people to see," says Amy Myers Jaffe, an energy scholar at the Baker Institute at Rice University in Houston.

[THIS ARTICLE IS CONTINUED ..... CLICK HERE ]

[OR CLICK HERE]

[OR CLICK HERE]
(http://www.alternet.org/story/85280/?page=entire)

Title: Re: Meltdown
Post by: BorisG on May 15, 2008, 11:44:37 AM

Does not a doubling of oil prices need a fitting response?

K. VENUGOPAL, Hindu Business, May 16, 2008

If the pace of petroleum consumption growth in 2007-08 is sustained in the current year, its impact on the economy will not be inconsequential. There are reforms outside the petroleum sector that can take the pressure off petroleum use, says K. VENUGOPAL.

The rail uses just one-sixth the energy that road transport does to move every tonne of cargo — A. Roy Chowdhury.

If the price of beans doubles, most shoppers at the local vegetable market will have no hesitation to switch to the cheaper green vegetable and will tell the vendor so in no uncertain terms. If the price of staples such as potato or onion doubles, they may be as unequivocal; nevertheless they will buy smaller quantities.

Vegetable market economics do not seem to apply that easily to crude oil. Over the past year the price of crude oil in the international market has doubled. This should have evoked either of two responses. One, consumers would have tried their best to reduce consumption or two, producers would have stepped up their production to cash in on rising prices. In this rapid run up in crude prices, neither has occurred in any significant sense. Petroleum products are demonstrating their price inelasticity.

Rising consumption

True, consumers have protested round the world; some car owners in the US have taken to public transport to save on petrol, and airlines are even cutting down on the food and water they serve on board to lighten their planes and, consequently, their fuel burn.

Yet oil consumption in the US, which accounts for a fourth of the world's use, is still rising, not falling. In the four weeks ended May 2, consumption rose 0.1 per cent over the previous year. World oil demand this year is expected to rise to an average of over 87 million barrels a day from 86 million a day in 2007.

True, global oil majors are on a desperate hunt for new oil and gas resources in very many parts of the earth, from the Arctic permafrost and the desolate Sakhalin islands to the depths of the Krishna Godavari basin offshore. Existing wells are being coaxed into delivering more, but many of them have left their productive years behind. The result is that the market is barely getting what it needs for now.

Take India's domestic output of crude oil, which hit a rousing 0.7 million barrels a day in 1995-96. Despite several thousand crores of investment since then in exploration and development, it has not seen that level again; output in 2007-08 averaged 0.68 million barrels a day.

Natural gas output has also been virtually stagnant over the past five years. When the promised flows from the Krishna Godavari basin start later this year, they will only first make up for the shortfall in servings from offshore fields in Mumbai High that are showing signs of going into terminal decline.

Never mind the flat domestic output; never mind the doubling of crude oil prices; retail prices of petrol and diesel in India have been put up by only 3.2 per cent and 4.4 per cent over the year. The rest of the inflation in crude oil prices has been absorbed by government through a lowering of taxes or by the oil marketing companies through a paring of profit. There has therefore been little financial pressure on consumers to reduce consumption.

Growth-induced penalties

On the contrary, a growing economy has imposed its own penalties, exaggerating the demand for petroleum products. Congestion at airports has caused extraordinary delays forcing aircraft to burn more fuel than before.

Increased traffic on the road has made intra-city commuting times longer and more energy guzzling. Shortage of electricity on the grid has forced more people more of the time to switch to their captive gensets fuelled by diesel or furnace oil. Widening affluence is bringing LPG, the clean cooking fuel, into more kitchens displacing dung and wood. Its consumption is growing, helped along by the fact that there has been no change in the selling price.

As a result, petroleum consumption in 2007-08 grew at about 8 per cent, its highest rate for the last several years. If that pace is sustained in the current year and prices too remain around the current $116 a barrel, the oil import bill, net of earnings from export of refined products, will exceed $90 billion as against $64 billion in 2007-08. Its impact on the economy will not be inconsequential.

Any mitigation can come about with reduced consumption. The question is how that can happen if consumers do not get the relevant price signals. If the government is wary of the political consequences of using price increases to alter the consumption pattern, surely it must change policies to produce an equivalent effect on consumption. Starkly there has been no policy moves to alter favourably the demand curve.

Infrastructure deficiencies

On the other hand, there are some long-standing deficiencies in infrastructure that conspire to raise petroleum use. Diesel pumpsets stay busier than ever because canal irrigation has not expanded to as much of the country as the continuing investments in projects would suggest. And in places where only groundwater can irrigate, the lack of an electricity line makes diesel pumpsets carry the burden. Rural electrification takes but a fitful course; in any case even where the transmission lines exist, erratic supply in most supply makes recourse to the diesel pumpset inevitable. About 20 per cent of diesel consumed is in the farm sector.

Poor implementation of electricity generation projects over the past five years has not helped reduce pressure on petroleum fuels. Of 40,000 MW of new capacity that ought to have been commissioned, only 20,000 MW were added to the grid, making the overall shortage worse and consumers more dependent on captive generation. Indeed, many State grids themselves are bolstered by petroleum fuel based power plants.

India is certainly not the largest consumer of crude oil in the global sense, its 2.4 million barrels a day is a third of China's and one-eighth of the US. Incremental consumption running at about 4-6 per cent each year for the past five years did not constitute a significant proportion of the global increment. Yet the strong growth of the past year indicates that it will begin to influence the global supply-demand equation significantly.

The question policymakers have to ask themselves is whether India should follow the petroleum-intensive route to power economic growth. Petroleum consumption growth rates in the Tiger economies of South-East Asia during the 1980s were higher than their economic growth rates. India so far has gone light on energy growth: till 2007-08, growth in petroleum consumption was half that of the economy over the past five years. In all the hullabaloo over global warming and increased carbon emissions it was a heartening performance.

The changing demand curve of the past several months must therefore be of concern. Who will bear the extra $34 billion (Rs 1,36,000 crore) on the oil import bill?

If government orders prices to remain muted and consumers do not pay the difference, the oil companies will have to take the hit which will bleed them bankrupt or the governments at the Centre and the States will need to forgo some if not all the taxes they levy on petro products.

Conservation, the key

The Dr Rangarajan Committee on Pricing and Taxation of Petroleum Products had estimated that duties on petroleum fetched the Centre and the States a total of Rs 1,20,946 crore in 2004-05. Even if the tax collections have increased in subsequent years, the oil bill's burden on the budget will be immense.

Conservation of petroleum products is therefore a virtue that begs for policy intervention. The options are not limited to making vehicles, captive power gensets and diesel pumpsets more efficient. Indeed there are actually reforms outside the petroleum sector that can take the pressure off petroleum use.

If incandescent bulbs in the 50 million homes which have electricity in the country are all replaced by either fluorescent or LED lamps, power shortages will be reduced enough to rest a substantial number of diesel or furnace oil consuming captive gensets. Some 4,000 MW of electricity demand, equal to half the shortage during peak hours, can be saved by this move. Investment in the higher priced compact fluorescent lamps can be recovered in less than a year.

If cumbersome regulations are smoothed to make coastal shipping easier, cross-country bulk cargo movement will take the more energy-efficient ocean route. For instance, Maruti cars are soon slated to move by sea from Mundra port in Gujarat to outlets in Kerala instead of the road.

If the Railways can draw new customers to its parcel carrying service by spinning it off into a separate aggressively-run entity just as it did the container movement, a substantial part of the road movement will gravitate to the rail, which uses just one-sixth the energy that road transport does to move every tonne of cargo.

Energy savings can be had in very many other ways. Yet it will be interesting to see how a government that is unwilling to send the right price signals to consumers will be able to persuade them to adopt any of the methods.

Title: Re: Meltdown
Post by: bwv 1080 on May 15, 2008, 11:51:12 AM

Camel demand soars in India
By Jo Johnson in New Delhi

Published: May 2 2008 19:05 | Last updated: May 2 2008 19:05

Farmers in the Indian state of Rajasthan are rediscovering the humble camel.

As the cost of running gas-guzzling tractors soars, even-toed ungulates are making a comeback, raising hopes that a fall in the population of the desert state's signature animal can be reversed.

EDITOR'S CHOICE
Saudis put off longer-term oil capacity rise - Apr-20Capacity warning for oil producers - Apr-21Russia paying price of oil strategy - Apr-20Oil breaks $115 after US stocks fall - Apr-17In depth: Commodities boom - Apr-05Oil majors rebuked for lack of openness - Apr-27"It's excellent for the camel population if the price of oil continues to go up because demand for camels will also go up," says Ilse Köhler-Rollefson of the League for Pastoral Peoples and Endogenous Livestock Development. "Two years ago, a camel cost little more than a goat, which is nothing. The price has since trebled."

The shift comes not a moment too soon for a national camel population that has fallen more than 50 per cent over the past decade, to about 450,000, according to government figures.

Market prices for these "ships of the desert", which crashed with the growing affordability of motorised transport, are rising again as oil prices soar.

A sturdy male with a life expectancy of 60-80 years now fetches up to Rs40,000 ($973), compared to Rs5,000-Rs10,000 three years ago, according to Hanuwant Singh of the Lokhit Pashu-Palak Sansthan, a non-profit welfare organisation for livestock keepers. Entry-level tractors cost around $4,000.

Title: Re: Meltdown
Post by: bwv 1080 on May 15, 2008, 11:52:35 AM

Afghanistan swaps heroin for wheat
Posted by Con Coughlin on 08 Apr 2008 at 10:38
Tags: Afghanistan, Heroin, Wheat, Gulab Mangal
Good news at last from the front line in the war on terror, where I am spending a few days as the guest of British forces responsible for security in Helmand province.

I've just come from a meeting with the newly appointed Afghan governor Gulab Mangal where it emerged that for the first time since British forces deployed to the region two years ago local farmers are not concentrating all their energies on producing heroin.

Poppy eradication was flagged up as one of the main British priorities when former defence secretary John Reid first announced Britain's deployment two years ago.

But this part of the mission has not exactly been a glorious success. Last year poppy production actually increased.

But now it seems the message is finally getting through. In parts of Helmand Afghan farmers are this year sowing wheat instead of poppy - not because they have suddenly been converted to the argument that producing heroin is not in the national interest.

Market forces have been the deciding factor - with wheat prices doubling in the past year, and the street price of heroin falling, it is now more cost effective to grow wheat.
http://blogs.telegraph.co.uk/politics/threelinewhip/april08/afghanistanswapsheroinforwheat.htm

Title: Re: Meltdown
Post by: Peregrine on May 15, 2008, 09:29:25 PM

A rather sobering and ultimately depressing read on the 'beeb', this morning:

'Wildlife populations 'plummeting'

Between a quarter and a third of the world's wildlife has been lost since 1970, according to data compiled by the Zoological Society of London.

Populations of land-based species fell by 25%, marine by 28% and freshwater by 29%, it says.

Humans are wiping out about 1% of all other species every year, and one of the "great extinction episodes" in the Earth's history is under way, it says.

Pollution, farming and urban expansion, over-fishing and hunting are blamed.

The Living Planet Index, compiled by the society in partnership with the wildlife group WWF, tracks the fortunes of more than 1,400 species of fish, amphibians, reptiles, birds and mammals, using scientific publications and online databases.

It said numbers had declined by 27% in the 35 years from 1970 to 2005.

Some of the worst hit are marine species which saw their numbers plummet by 28% in just 10 years, between 1995 and 2005.

Populations of ocean birds have fallen by 30% since the mid 1990s, while land-based populations have dropped by 25%.

Among the creatures most seriously affected have been African antelopes, swordfish and hammerhead sharks.

Another, the baiji - or Yangtze River Dolphin - may have been lost altogether.

The findings were released ahead of a meeting of the Convention on Biodiversity in the German city of Bonn.

The convention was signed in 1992 with the aim of stabilising the loss of species. In 2002, member states pledged to achieve a "significant reduction" in the current rate of biodiversity loss by 2010.

But the Zoological Society said governments had since failed to put in place policies necessary to achieve that goal.

It said that while species' decline does appear to have flattened off in recent years, it is "very unlikely" that the 2010 target will be reached.

The WWF said that over the next 30 years, climate change was also expected to become a significant threat to species.

Colin Butfield, head of campaigns at WWF UK, said: "Biodiversity underpins the health of the planet and has a direct impact on all our lives, so it is alarming that despite an increased awareness of environmental issues we continue to see a downward trend."

The charity also warned that a failure to stop biodiversity loss would have a direct impact on humans.

Director general James Leape said: "Reduced biodiversity means millions of people face a future where food supplies are more vulnerable to pests and disease and where water is in irregular or short supply.

"No-one can escape the impact of biodiversity loss because reduced global diversity translates quite clearly into fewer new medicines, greater vulnerability to natural disasters and greater effects from global warming."

The WWF is calling on governments meeting in Bonn to honour their commitments to put in place effective protected areas for wildlife and to adopt a target to achieve net annual zero deforestation by 2020.

http://news.bbc.co.uk/1/hi/uk/7403989.stm

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 05:26:17 AM

Quote from: Peregrine on May 15, 2008, 09:29:25 PM
A rather sobering and ultimately depressing read on the 'beeb', this morning:
'Wildlife populations 'plummeting'

Very scary. Bees are also in serious trouble (not that they constitute "wildlife").

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 05:26:56 AM

May 15, 2008, 12:05PM
Airbus, Honeywell developing jet biofuel
Associated Press

WASHINGTON — Plane maker Airbus and diversified manufacturer Honeywell International today said they are developing a biofuel that by 2030 could satisfy nearly a third of the worldwide demand from commercial aircraft, without affecting food supplies. Along with JetBlue Airways Corp. and International Aero Engines, they plan to produce fuel from vegetation and algae-based oils that do not compete with existing food production or land and water resources. Currently, commercial airlines run their planes on kerosene, though some alternative fuels are being tested.
(http://www.chron.com/disp/story.mpl/business/5782422.html)

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 05:27:24 AM

Gov. proposes to give Alaskans $100 a month for gas
Thu May 15, 2008 10:11pm EDT
By Yereth Rosen

ANCHORAGE, Alaska (Reuters) - Faced with some of America's highest energy costs, Alaska Gov. Sarah Palin proposed a plan on Thursday to provide state residents with special debit cards good for $100 of fuel every month. The Republican governor said the money will come from the state's treasury, fattened by record oil prices. "It's really atrocious the situation that Alaskans are in today, where we, as the owners of the energy resources, are paying outrageous prices for the use of those resources," Palin said at a news conference.
(http://www.reuters.com/article/newsOne/idUSN1535472320080516)

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 05:27:57 AM

Obesity contributes to global warming: study
Thu May 15, 2008 7:03pm EDT
By Michael Kahn

GENEVA (Reuters) - Obesity contributes to global warming, too.

Obese and overweight people require more fuel to transport them and the food they eat, and the problem will worsen as the population literally swells in size, a team at the London School of Hygiene & Tropical Medicine says. This adds to food shortages and higher energy prices, the school's researchers Phil Edwards and Ian Roberts wrote in the journal Lancet on Friday. "We are all becoming heavier and it is a global responsibility," Edwards said in a telephone interview. "Obesity is a key part of the big picture."
(http://www.reuters.com/article/newsOne/idUSL1572011320080515)

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 05:29:06 AM

Tackle obesity like smoking: researcher
Wed May 14, 2008 10:32am EDT
By Michael Kahn

GENEVA (Reuters) - Tackling the global obesity epidemic will require governments to take similar action to that many used to curb smoking, a top researcher said on Wednesday. This could include regulations that restrict how companies market "junk" food to children and requirements for schools to serve healthy meals, said Professor Boyd Swinburn, a public health researcher who works with the World Health Organisation.

"The brakes on the obesity epidemic need to be policy-led and governments need to take centre stage," Swinburn, a researcher at Deakin University in Australia, told Reuters at the 2008 European Congress on Obesity. "Governments have to lead the way they did with the tobacco epidemic. We need hard-hitting messages." Action is urgent because, aside from sub-Saharan Africa, nearly every country has suffered a dramatic rise in the number of obese people in the past 30 years. That increase has likely been a tripling in many industrialized nations, he said. The World Health Organisation classifies around 400 million people around the world as obese, 20 million of them children under the age of five.
(http://www.reuters.com/article/healthNews/idUSL1481626820080514)

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 05:30:12 AM

The Peak Oil Crisis: Diesel
Written by Tom Whipple
Thursday, 15 May 2008

The evidence is mounting that the U.S. might just encounter the first real crisis of the oil depletion age before the year is out.The crisis at first will be one of spiraling prices for diesel and heating oil, followed by actual shortages here in the United States. In the last two weeks, the wholesale price of heating oil has moved up by nearly 70 cents a gallon and no end is in sight. Many observers are starting to note that what they call "a tight market for distillates" –- the industry's term for diesel and heating oil – may be what is driving up the price of crude and consequently gasoline.The reasons for this surge in distillate prices are easy to understand. Conventional oil production, from which distillates are made, has been flat for the last three years while demand from Asia and the Middle East oil producers has been rising rapidly. The trend into higher-mileage diesel powered cars in Europe and other places, which has been underway for many years, is having a major impact. In some European countries, diesels now account for over 70 percent of new car registrations. This change in demand is leaving Europe and a few Asian refiners with a surplus of gasoline but not diesel. The overseas refiners are happy to sell their surplus gasoline to America which still wants prodigious quantities of the stuff. This, believe it or not, helps keep gasoline prices lower than the price of crude suggests it should be, as unusual quantities of gasoline keep arriving at our shores.

(http://www.fcnp.com/national_commentary/the_peak_oil_crisis_diesel_20080515.html)

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 05:30:50 AM

Tesla Electric Car

http://uk.youtube.com/watch?v=kRd7ER7u-KU

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 06:35:05 AM

Oil prices gain more than $3 to set a new record high at $127.43 a barrel.
Last Updated: May 16, 2008: 8:32 AM EDT

BANGKOK, Thailand (AP) -- Oil prices spiked up to set a new record high price Friday morning after a whipsaw overnight session which saw the expiration of options and a mix of news. Light, sweet crude for June delivery was up $3.31 to $127.43 a barrel in electronic trade on the New York Mercantile Exchange in early morning trading. Oil has since retreated below $127.
(http://money.cnn.com/2008/05/16/markets/oil.ap/?postversion=2008051606)

Title: Re: Meltdown
Post by: ezodisy on May 16, 2008, 06:46:16 AM

Sefton Resources up 18.8% today Dm. You missed out :'(

http://www.seftonresources.com/

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 07:34:28 AM

Quote from: ezodisy on May 16, 2008, 06:46:16 AM
Sefton Resources up 18.8% today Dm. You missed out :'(

http://www.seftonresources.com/

Assuming that you invested, congratulations on your foresight 8) (although it is pretty much a no-brainer).

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 07:35:08 AM

What if gas cost $10 a gallon?
Forget pizza delivery. And cheap airfares. And bottled water. In fact, forget a way of life that looks much like today's. But would that be so bad?

By Shirley Skeel

Editor's note: This is one in an occasional series of financial what-ifs.

In four years, U.S. gas prices have doubled to more than $3.70 a gallon, and crude oil has tripled to around $125 a barrel. Allowing for inflation, that's higher than prices were during the 1978–83 oil shock that triggered a recession and sky-high interest rates. But . . .

What if gas cost $10 a gallon?

Thousands of truckers would go bankrupt. Airplanes would sit idle in hangars. Restaurants and stores would shut down. Car-pooling, hybrid vehicles, scooters and inline skates would swing into vogue. And telecommuting, rooftop vegetable gardens, home cooking and recycling would proliferate.
(http://articles.moneycentral.msn.com/SavingandDebt/SaveonaCar/WhatIfGasCost10DollarsAGallon.aspx)

Title: Re: Meltdown
Post by: BachQ on May 16, 2008, 07:36:24 AM

New York Times

May 17, 2008
Bush in Saudi Arabia to Make Oil Plea
By SHERYL GAY STOLBERG

RIYADH, Saudi Arabia — With the price of oil hitting record highs, President Bush will use a private visit to King Abdullah's ranch here Friday to make a second attempt to persuade the Saudi government to increase oil production so that American consumers can get some relief at the gasoline pump. "Clearly, the price of gas is too high for Americans and it is causing a hardship for families with low income," the White House press secretary, Dana Perino, told reporters aboard Air Force One on the way here from Jerusalem.
"We do count on the OPEC countries to keep adequate supplies out there so the president will talk with the again with the king about that," she said.

When Mr. Bush was last here in January, a similar request caused him some embarrassment. The president asked the Saudi oil minister to increase production, and was publicly rebuffed. He then took up the matter with the king, but the conversation did not get very far. The president has little choice but to try again. Back in Washington, Democrats like Senator Charles E. Schumer of New York are pressing for sanctions against Saudi Arabia. Mr. Schumer wants to limit arms sales to the kingdom, saying he wants them to "cooperate and not strangle American consumers." The Bush White House opposes such methods. But with gasoline nearing $4 a gallon, clearly Mr. Bush is looking for some cooperation.

In an interview with CBS Radio before leaving Washington, Mr. Bush was asked what he would tell the king this time that he did not say when he was here last. "That I didn't say last time?" he asked, adding, "The price is even higher."
(http://www.nytimes.com/2008/05/17/world/middleeast/17prexy.html?_r=1&hp&oref=slogin)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:50:09 AM

Chicago Tribune

$4 a gallon not the end of rising gas prices
'It's not going to be a 1-year blip and go away'
By Joshua Boak and Greg Burns | Tribune reporters
May 18, 2008

*** The new world order for petroleum markets has some analysts predicting far higher prices ahead. Gas at the pump in the U.S. could reach $7 a gallon because more drivers in India and China will hit the road even as American oil consumption retreats, the Canadian Imperial Bank of Commerce predicts. "Millions of new households will suddenly have straws to start sucking at the world's rapidly shrinking oil reserves," wrote CIBC analyst Jeff Rubin.

The forces behind the oil boom include the emergence of China and India as economic powers, exhausted fields controlled by nationalized companies and market speculation that could be pushing prices higher than supply and demand can justify. While industry insiders dispute how much each of these factors contribute to oil prices, many expect the high prices to last for years. "It's not going to be a one-year blip and go away like the Internet bubble," said Joseph Dancy, who manages the LSGI Venture Fund in Texas. "This is a matter of economics, and it's going to take a decade to work through."
(http://www.chicagotribune.com/news/nationworld/chi-sun-gas-prices-no-letup-may18,0,6879387.story)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:51:03 AM

Connecticut Post

Peak Oil: Everything is going to change
STATE REP. TERRY BACKER
Article Last Updated: 05/16/2008 08:07:22 PM EDT

*** In an election year, members of Congress are beating the bushes trying to escape the fallout of their years of dozing in their seats. They point at speculation, greedy profit takers or big oil companies, perhaps all true to one extent or another. However, despite the rising chorus of voices pointing out rising demand coinciding with falling or flat production, they seem to be ignoring the 800-pound gorilla in the room that is "Peak Oil" production. Just a few years ago, Mexico, Russia, Norway, England and Indonesia were producing vast amounts of oil for the world market. Today, England and Indonesia are net importers of oil, Russia's production is flat, Norway's production is falling and Mexico has informed us that their giant oil field, Canterall, is in terminal decline and may not be able to export after 2015. **** Connecticut broke out of the pack this month to become the first state in the country to make a major step forward in planning for the increasingly high cost and reduced availability of petroleum. With only 15 minutes remaining until the end of the 2008 General Assembly session, the state Senate approved by unanimous consent and sent to Gov. M. Jodi Rell the "Energy Scarcity and Security" bill.

The measure requires the state to develop a planning scenario model that will predict impacts based on the price of oil. The model will predict future impacts on heating, transportation, food cost, road paving, fleet operations, education, public health I think you get the idea. The outputs of the model will guide us in formulating Plans B, C and D for the state.

The model won't make more oil or cheaper oil; it will reveal to us the impacts on our citizens and our state before they happen. It will allow the Legislature and municipal governments to reprioritize what is possible and what is not.

Thanks to the members of the Connecticut Legislative Peak Oil and Natural Gas Caucus, state government opened its eyes for a quick peek into the future. A small awareness has begun in the Legislature, but it is not an understanding. The public now must educate itself about the issues of oil supply and help lead its government to make the changes that will surely be painful, but needed.
(http://www.connpost.com/ci_9286142?source=most_viewed)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:51:48 AM

IRELAND: Diesel prices in 'phenomenal' rise
Friday, 16 May 2008 14:33

A survey by the Automobile Association of Ireland has found that prices for both petrol and diesel continued to rise in the last month. The survey found that the average price of diesel now costs 132.4 cent, which represents a 7.8 cent increase in the last month alone, while petrol now costs 124.9 cent on average, up 3.8 cent.

The price of diesel usually drops as summer approaches, but that trend has been bucked this year with price rises that AA public affairs manager Conor Faughnan describes as 'phenomenal'. 'We have never seen prices rise so fast or reach so high. It is having a major impact on diesel motorists and also on the cost of haulage and the costs for many businesses. It's bad news for the consumer's pocket and the economy as a whole,' he said. 'We can understand oil prices pushing up the cost of fuel,' he explained. 'But that does not explain why diesel is affected so much worse than petrol,' he added.
(http://www.rte.ie/business/2008/0516/petrol.html)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:52:21 AM

CNN Video about running out of gas

http://www.cnn.com/video/#/video/world/2008/05/14/sesno.out.of.gas.cnn

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:53:04 AM

Record oil may hold stocks hostage
Fri May 16, 2008 5:33pm EDT
By Kristina Cooke

NEW YORK (Reuters) - Stocks will face major obstacles to extending their gains next week if the price of oil continues to break records, as fears about inflation and the discretionary spending power of the embattled American consumer are forced into the spotlight. The gyrating price of oil has been a significant factor in the price of stocks in the past week. Oil rose to a record $127.82 a barrel on Friday, after Goldman Sachs, the most active investment bank in energy markets, forecast a continued spike in prices through the end of the year, due to thin supply. "The idea that oil could rise a lot further before it reaches a tipping point is really slipping into investors' psyche," said Bucky Hellwig, senior vice president at Morgan Asset Management, in Birmingham, Alabama.
(http://www.reuters.com/article/ousiv/idUSN1642400520080516)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:57:12 AM

Digging a Hole
James K. Galbraith | May 16, 2008 | Books & the Culture

Bad Money is a short book by a practiced artist who specializes in identifying the defining trends of American life. Here Kevin Phillips takes on financial practice in the age of Robert Rubin, Henry Paulson, and the global rule of Goldman, Sachs. It's not meant to be pretty, and it isn't. Phillips argues that financial recklessness, combined with peak oil and the rise of Asian economic power, will doom—has already doomed—American world leadership and our standard of living, which depend on the value of the dollar. The leading edge of collapse, in the form of the subprime mortgage and banking crises, is already on us, and the consequences will make future imperial adventures untenable, in Iraq and elsewhere.

There are three steps on the path to doom. The first is "hedging," when agents expect to service their debts with income. The second is "speculation," when borrowers enter into debts they know they must later refinance. The third is "Ponzi," when debts start piling up faster than they can be handled, and collapse becomes inevitable. Minsky saw the 1980s as a transition in the U.S. from a hedge to a speculative position. The Bush era saw the move into Ponzi finance, which we recognize only now, as the scheme unravels. Inflation is one symptom of the unraveling. Prices of housing, college, health care, food, and fuel have soared. But Phillips calls attention to what is practically a conspiracy, in his view, to keep much of this information from turning up in official data.
(http://www.texasobserver.org/article.php?aid=2762)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:57:47 AM

Bush Says Saudi Oil Boost `Not Enough' to Ease Prices (Update1)
By Hans Nichols and Janine Zacharia

May 17 (Bloomberg) -- President George W. Bush said Saudi Arabia's decision to raise oil output 300,000 barrels a day is ``not enough'' to ease U.S. energy prices and that more domestic oil exploration and refining capacity are needed. ``It's not enough, it's something but it doesn't solve our problem,'' Bush told reporters in Sharm el-Sheikh, Egypt today when asked about the Saudi decision, taken May 10 and announced yesterday, to increase crude production. ``Our problem in America gets solved when we aggressively go for domestic exploration,'' Bush said after meeting Afghan President Hamid Karzai ahead of a World Economic Forum conference. ``Our problem gets solved if we expand our refining capacity, promote nuclear energy and continue our strategy for the advancement of alternative energy as well as conservation.'' Saudi Arabia, the world's largest oil exporter, said yesterday, while Bush was in Riyadh, that the country's daily output will rise to 9.45 million barrels a day in June. Saudi Oil Minister Ali al-Naimi told reporters the kingdom took the step in response to demands from customers.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aGupBedhGP5w&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:58:56 AM

Dollar Falls Most Against Euro in Seven Weeks on Sentiment, Oil
By Ye Xie and Bo Nielsen

May 17 (Bloomberg) -- The dollar fell the most against the euro since March as a drop in consumer confidence and record crude oil prices raised concern U.S. economic growth will slow. The dollar's second consecutive weekly decline against the euro pared its increase from the all-time low reached last month to 2.7 percent. ``The economic backdrop in the U.S. argues against the continuing gains in the dollar,'' said Nick Bennenbroek, head of currency strategy at Wells Fargo Bank in New York. The dollar fell 0.6 percent to $1.5577 per euro this week, from $1.5482 on May 9. It touched the record low of $1.6019 per euro on April 22. The yen declined 1.2 percent to 104.04 per dollar this week, from 102.87. Japan's currency fell 1.8 percent to 162.27 per euro, from 159.21, the biggest decline since the week ended April 18.
Crude oil rallied to the all-time high of $127.82 a barrel yesterday as Goldman Sachs Group Inc. raised its forecast for the second half of this year to an average of $141 a barrel, citing supply constraints. The correlation coefficient between oil and the euro-dollar exchange rate has been 0.95 for the past year, indicating they have moved in the same direction 95 percent of the time. The correlation is calculated based on the price changes of oil and the currencies. *** ``There is no fresh catalyst to mount a successful rally in the U.S. dollar,'' said Michael Woolfolk, a senior currency strategist in New York at Bank of New York Mellon Corp. ``Oil prices are significantly higher.'' The Australian dollar increased 1.1 percent this week and touched 95.60 U.S. cents yesterday, the highest level since 1984, on higher commodity prices. Exports of raw materials, such as iron ore, account for 17 percent of Australia's economy. The Brazilian real rose to the nine-year high of 1.6402 versus the dollar, while Mexico's peso appreciated to 10.3912 the strongest in almost five years.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aStrypsZY6js&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:59:25 AM

http://www.cnbc.com/id/24664918

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 04:59:49 AM

German beehives hit by die-off
(http://www.businessweek.com/globalbiz/content/may2008/gb20080512_795081.htm?chan=globalbiz_europe+index+page_top+stories)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 05:00:42 AM

Solar photovoltaic set to grow
OXFORD ANALYTICA
Globe and Mail Update
May 12, 2008 at 6:43 AM EDT
SUBJECT: The solar photovoltaic (PV) industry.
SIGNIFICANCE: Supported by favourable subsidy regimes, the solar PV industry is expected to maintain its current rate of rapid growth, raising its long-term potential to contribute substantively to world energy supply.

The solar photovoltaic (PV) industry has expanded rapidly over the past six years as supply-side concerns have eased, particularly supply of solar grade silicon: Worldwide total installed PV capacity was 6,500 mwp (megawatts peak) at end-2006, compared with 1,200 mwp at end-2000, according to the European Photovoltaic Industry Association (EPIA). Installed capacity increased by 1,467 megawatts (mw) in 2006, compared with 1,320 mw in 2005.
(http://www.theglobeandmail.com/servlet/story/RTGAM.20080512.woxfordanal0512/BNStory/energy/home)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 05:01:54 AM

Nymex April Volume Rises 22 Percent on Surging Energy (Update1)
By Matthew Leising

May 16 (Bloomberg) -- The New York Mercantile Exchange, the world's largest energy market, said daily volume rose 22 percent last month as oil and gasoline prices reached records.
(http://www.bloomberg.com/apps/news?pid=20602099&sid=a7w8Qj9MraKE&refer=energy)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 05:03:20 AM

U.S. Economy: Confidence Slumps, Single-Family Home Starts Fall
By Courtney Schlisserman

May 16 (Bloomberg) -- U.S. consumer confidence was the weakest this month since Jimmy Carter was president, and single- family home construction fell to a 17-year low in April.

(http://www.bloomberg.com/apps/data?pid=avimage&iid=iqnJf1CDTTlI)

The Reuters/University of Michigan preliminary index of consumer sentiment dropped to 59.5, compared with an average reading of 85.6 in 2007. Builders broke ground on 692,000 single-family homes at an annual rate, the Commerce Department said today in Washington. Total housing starts unexpectedly rose because of an increase in condominium construction.

The figures show that consumers see more pain ahead, even as Wall Street executives proclaim that the worst of the credit crisis is over. The rout in housing is depressing home values, a threat to the consumer spending that accounts for more than two- thirds of gross domestic product. ``We are in the neighborhood of zero'' growth, Jan Hatzius, chief U.S. economist at Goldman Sachs Group Inc. in New York, said in a Bloomberg Television interview. Consumer sentiment is also being hurt by the increase in energy costs, which ``will weigh on consumer spending,'' he said.

Treasuries rallied after the confidence figure fell more than forecast. Yields on benchmark 10-year notes fell to 3.78 percent at 11:37 a.m. in New York from 3.82 percent late yesterday. The Standard & Poor's 500 Index dropped 0.5 percent to 1,420.41. Total housing starts jumped 8.2 percent to 1.032 million as construction of multifamily units rose 36 percent following a 35 percent drop in March, the Commerce figures showed. ``There may be signs that we are getting close to a bottom but we don't think we're there yet,'' said Adam York, an economist at Wachovia Corp. in Charlotte, North Carolina. ``The housing market still has a ways to go towards working off its problems.''
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aLlZUqsbxyjc&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 05:04:16 AM

Saudi Arabia Says It Will Boost Oil Output in June by Only 300,000 bbl/day (Update3)
By Janine Zacharia

May 16 (Bloomberg) -- Saudi Arabia, the world's largest oil exporter, will increase crude production next month in response to rising demand from its customers and a request by U.S. President George W. Bush to ease the strain of record oil prices. The country will raise output by 300,000 barrels a day to 9.45 million barrels a day in June, Saudi Oil Minister Ali al- Naimi said in Riyadh today, following a meeting between Bush and Saudi Arabia's King Abdullah. Earlier today, U.S. National Security Adviser Stephen Hadley said the Saudi policy was to supply extra oil only if customers needed it.

``On May 10 we increased our response to our customers by 300,000 barrels because they asked for it,'' al-Naimi said. ``So our production for June will be 9.45 million barrels per day. This is the request of about 50 customers worldwide.'' Crude oil futures traded in New York rose to a record about one hour after Bush landed in Saudi Arabia today. They later climbed as high as $127.82 a barrel, and last traded at $125.99.
``It's just a token increase but it shows that the Saudis realize just how important it is for the president to not come back empty handed,'' said Peter Beutel, president of Cameron Hanover Inc. in New Canaan, Connecticut. ``This is about a lot more than oil, the special relationship between the countries is at stake.''
(http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=aooZDkdUXJvo)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 05:05:03 AM

UK: Mortgage lending hits 33-year low
Mortgage lending to home buyers has hit its lowest level for 33 years, according to figures from the Council of Mortgage Lenders (CML).

Just 47,000 such mortgages were lent in March, taking the total for the first three months of the year to 142,000. This was the lowest quarterly total since the first three months of 1975. The CML predicted lending and house sales would fall even further in the next few months because of the credit crunch affecting the banking system. "House purchase transaction volumes will continue to deteriorate in the coming months as recent approvals data from the Bank of England has shown," said Michael Coogan, director general of the CML. The figures chime with the latest survey from the Royal Institution of Chartered Surveyors, which said that falls in house prices were now more widespread than at any time since 1978. ***

First-time buyers

The number of mortgages for house purchase has now fallen by 40% over the past year. And first-time buyers are continuing to be squeezed out even more than before. There were 17,800 first-time buyer loans in March, the lowest monthly level on record since monthly figures were first compiled in 2002. That took the number of first-time buyer mortgages in the first quarter of 2008 to 53,700, which was the lowest quarterly figure since the start of 1975.
(http://news.bbc.co.uk/2/hi/business/7397788.stm)

Title: Re: Meltdown
Post by: BachQ on May 18, 2008, 05:07:43 AM

Friday, May 16, 2008
Innovation
Peel & Stick and Tile Solar Panels More Pleasing To The Eye
Donna Fuscaldo
FOXBusiness

We have peel-and-stick floor tiles, so why not solar panels? Lumeta, a unit of DRI, the Irvine, California-based commercial and residential construction and roofing company, is gearing up to unveil lightweight solar panels that can be installed on a flat commercial roof simply by peeling and sticking. The company will also launch solar panel tiles for the residential market that will meld with tile roofs made of concrete and clay, which Lumeta said makes them more aesthetically pleasing. Lumeta, which put together a team of solar experts to develop and manufacture the new form factors for solar panels, is addressing the movement toward more sustainable energy. With oil above $125 a barrel, corporations and individuals are looking for ways to save on energy costs. Called PowerPly, the peel-and-stick solar panels use advanced solar-panel technology but reduce the weight of the panel by close to 50%. Lumeta replaced the traditional glass front plate of the solar panel with a Teflon-based transparent sheet made by DuPont (DD: 49.63, +0.11, +0.22%) that has the same transparency properties of glass. The sheet is reinforced with fiberglass on the back to give it the needed rigidity. The result: a solar panel that weighs 1.8 pounds per square foot. Traditional solar panels weigh 2.8 pounds per square foot, said Torres.

(http://www.foxbusiness.com/story/markets/innovation/peel--stick-solar-panels-protect-integrity-roof/)

Title: Re: Meltdown
Post by: BachQ on May 19, 2008, 05:54:08 AM

Goldman Sachs Raises 2008 Oil Price Forecast to $141/bbl
AFX News Limited 5/16/2008
URL: http://www.rigzone.com/news/article.asp?a_id=61995

Goldman Sachs today raised its average oil price forecast for the second half of 2008 to $141 a barrel from $107 a barrel, arguing that global GDP growth is outstripping production increases, forcing long-dated future contracts higher. "To balance trend global GDP growth of 3.8 percent against trend supply growth of 1.0 percent, prices need to rise on average 14 percent from here in the second half of 2008," the bank said in a research note, adding that 'resource protectionism' by many oil producing countries was curbing supply growth. Goldman Sachs, the most active investment bank in energy markets, was one of the first to call for oil prices to touch $100 a barrel back in 2005. Earlier this month, Goldman Sachs analyst Arjun Murti predicted prices could hit between $150 and $200 a barrel over the next two years.

Title: Re: Meltdown
Post by: BachQ on May 19, 2008, 05:54:44 AM

Gas prices hit 12th straight record
The price for a gallon of gas sets new all-time high at $3.794, according to AAA.
May 19, 2008: 7:51 AM EDT

NEW YORK (CNNMoney.com) -- Retail gas prices hit record highs for the twelfth day in a row on Monday, according to motorist group AAA.

Title: Re: Meltdown
Post by: BachQ on May 19, 2008, 05:56:02 AM

Prince Charles: Eighteen months to stop climate change disaster
By Andrew Pierce
Last Updated: 1:08PM BST 18/05/2008

(http://www.telegraph.co.uk/telegraph/multimedia/archive/00671/charlesclimate404_671956c.jpg)

The Prince of Wales has warned that the world faces a series of natural disasters within 18 months unless urgent action is taken to save the rainforests.
(http://www.telegraph.co.uk/news/newstopics/theroyalfamily/1961719/Prince-Charles-Eighteen-months-to-stop-climate-change-disaster.html)

Title: Re: Meltdown
Post by: BachQ on May 19, 2008, 05:56:40 AM

U.S. says it will help Saudis protect oil
Reuters
May 16, 2008 at 8:40 AM EDT

RIYADH — The United States said on Friday it had agreed to co-operate to protect Saudi Arabia's oil and will help the world's top crude exporter to develop peaceful nuclear energy. The White House announced the agreements as President George W. Bush flew into Saudi Arabia on Friday to renew his appeal for the kingdom to help lower record oil prices. Saudi Arabia pumps over a tenth of global oil output and severe damage to its infrastructure would have far-reaching effects. Al Qaeda has vowed more strikes on oil facilities after a failed attack on the world's largest oil processing plant at Abqaiq in February 2006. "The United States and Saudi Arabia have agreed to co-operate in safeguarding the kingdom's energy resources by protecting key infrastructure, enhancing Saudi border security, and meeting Saudi Arabia's expanding energy needs in an environmentally responsible manner," a White House statement said.
(http://www.reportonbusiness.com/servlet/story/RTGAM.20080516.wsaudioil0516/BNStory/energy/home?cid=al_gam_mostview)

Title: Re: Meltdown
Post by: BachQ on May 19, 2008, 05:58:22 AM

GOING HUNGRY: WHY BIOFUELS ARE BAD FOR PEOPLE, PROSPERITY, AND THE PLANET

by Bradley Doucet

(http://www.quebecoislibre.org/08/biofuel08b.jpg)
"Biofuels, it turns out, are bad for people, bad for prosperity, and bad for the planet."
(http://www.quebecoislibre.org/08/080515-11.htm)

Title: Re: Meltdown
Post by: BachQ on May 19, 2008, 05:58:56 AM

High Steel Prices: A Preview of Peak Oil
by: Jim Kingsdale posted on: May 16, 2008

"Relentless increases in the price of steel are halting or slowing major construction projects world-wide and investments in shipbuilding and oil-and-gas exploration."
(http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=4727)

Title: Re: Meltdown
Post by: BachQ on May 19, 2008, 05:59:20 AM

CLICK ON IMAGE BELOW

(http://www.forexhound.com/ArticleImages/Large/Financial%20Armageddon.jpg)
(http://www.forexhound.com/article.cfm?articleID=99418)

Title: Re: Meltdown
Post by: BachQ on May 19, 2008, 06:00:25 AM

Oil, food and agrotherapy
By Shepherd Bliss
(http://www.energybulletin.net/44334.html)

Title: Re: Meltdown
Post by: BachQ on May 20, 2008, 04:53:30 AM

Core Producer Prices in U.S. Rose More Than Forecast in April
By Courtney Schlisserman

May 20 (Bloomberg) -- Prices paid to U.S. producers excluding food and fuel rose more than forecast in April, reflecting gains in automobile and furniture costs and indicate inflationary pressures will continue to be a concern. The 0.4 percent gain in so-called core prices was twice as big as anticipated and followed a 0.2 percent increase in March, the Labor Department said today in Washington. A drop in energy costs and unchanged food expenses held overall prices to a 0.2 percent gain. Soaring raw material costs may force companies to raise prices to protect profits. The increases may heighten concern among Federal Reserve policy makers that prior increases in food and fuel costs will filter through the economy even as growth slows.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aD6mH.yd_w5E&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 20, 2008, 04:54:01 AM

Oil Crisis Stagflation Spiral Special

. . . [The 96% rise of crude oil prices] is creating a spiraling stagflationary environment, as on its own the western economies could have coped with the oil crisis, but having been hit with the triple whammy of deflating housing markets that itself triggered the bursting of the credit bubble that continues to deepen as banks fail to report the true extent of the crisis on the interbank LIBOR market. *** [Because of surging demand, peak oil, and dollar devaluation], the price of crude oil is not falling despite attempts to increase supply as witnessed by the pressure put upon Saudi Arabia to increase its output that resulted in Friday's announcement of an additional 300,000 barrels of day of Saudi output, which given the market reaction was seen as insignificant. The clear consequences of a stagflationary environment are most evident in the decline of real interest rates, where even the discredited official inflation measures such as the CPI are unable to offer a positive return to savers. US CPI stands at 2.3% against a Fed Funds rate of 2% and therefore a negative yield on short-term treasury bills. The longer end of the yield curve is much harder to manipulate than the short-end and is correctly discounting higher inflation and the need for rate rises to combat this and hence the 30 Year Bond is yielding 4.375%.
(http://www.marketoracle.co.uk/Article4771.html)

Title: Re: Meltdown
Post by: BachQ on May 20, 2008, 04:55:07 AM

Major-Airline Bankruptcy: It's When, Not If, Says J.P. Morgan
May 19, 2008: 10:46 AM EST

NEW YORK (Dow Jones) -- J.P. Morgan downgraded Continental Airlines to underweight from neutral Monday, citing the stock's valuation. The investment bank lifted its rating on Alaska Air and JetBlue to neutral from underweight, citing their lower risks of bankruptcy due to record-high jet- fuel prices and their ability to withstand a "war of attrition." *** Bankruptcy -- even among the so-called legacy carriers -- a question of when rather than if. "There will be blood," wrote analyst Jamie Baker in the research report, forecasting a 2008 operating loss for the industry of $7.2 billion, wider then a prior forecast of a loss of $4.6 billion. That would be an all-time record for the industry, he noted.
J.P. Morgan also listed the airlines it thinks are at Chapter 11 risk, from lowest to highest: Southwest Airlines (LUV), Alaska Air Lines (ALK), Delta Air Lines (DAL), AirTran (AAI), Continental (CAL), JetBlue (JBLU), American Airlines parent AMR Corp. (AMR), United Airlines parent UAL Corp. (UAUA), Northwest Airlines (NWA), and U.S. Airways (LCC
(http://money.cnn.com/news/newsfeeds/articles/djhighlights/200805191046DOWJONESDJONLINE000355.htm)

Title: Re: Meltdown
Post by: BachQ on May 20, 2008, 04:55:41 AM

Bush to Arab nations: You're running out of oil

Published Date: 19 May 2008
By TRISTAN STEWART-ROBERTSON AND MIKE THEODOULOU

PRESIDENT George Bush yesterday told leaders of the oil-rich states of the Middle East that they must face up to a future without their precious hydrocarbons. In a stark warning, he said their supplies were running out and urged them to reform and diversify their economies. The outgoing United States president told the World Economic Forum, meeting in the Egyptian resort of Sharm el-Sheikh, that it was time to "prepare for the economic changes ahead". *** He told the conference: "The rising price of oil has brought great wealth to some in this region, but the supply of oil is limited, and nations like mine are aggressively developing alternatives to oil. Over time, as the world becomes less dependent on oil, nations in the Middle East will have to build more diverse and more dynamic economies."
(http://thescotsman.scotsman.com/latestnews/You39re-running-out-of-oil.4095858.jp)

Title: Re: Meltdown
Post by: BachQ on May 20, 2008, 04:56:10 AM

U.S. food price rise to be largest in 18 years: USDA
Mon May 19, 2008 3:40pm EDT
By Charles Abbott

WASHINGTON (Reuters) - U.S. food prices will rise by 5 percent this year, the largest increase since 1990 and propelled by sharply higher prices for bread, cookies and other bakery products, the Agriculture Department said on Monday.
(http://www.reuters.com/article/newsOne/idUSN1955070920080519)

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:04:46 AM

Hirsch on CNBC: Peak oil problem "as massive as one can possibly imagine"
Posted by Super G on May 20, 2008 - 12:21pm

Robert Hirsch, author of Peaking of World Oil Production: Impacts, Mitigation, and Risk Management (a.k.a. the Hirsch Report), appeared on CNBC this morning. He said flat out that new technologies and new drilling won't solve the peak oil problem, and that we should expect $12-15/gallon gasoline followed by rationing. (http://www.theoildrum.com/node/4019)

Hirsch video : http://www.cnbc.com/id/15840232?video=747947551

T Boone video : http://www.cnbc.com/id/15840232?video=747990771

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:05:17 AM

From The TimesMay 20, 2008

America must face the harsh realities over oil.
Gerard Baker: American view

*** inexorably rising oil prices are starting to generate something approaching panic in America. The Republicans, already battered by the weak economy and the seemingly intractable Iraq war, are ripe targets for yet more opprobrium for failing to rein-in oil companies as they heartlessly exploit the poor Americans who find themselves unable to drive their five-litre engined cars very far this summer.

*** Higher energy costs are here to stay. You don't have to buy Goldman Sachs's headline-grabbing forecast this month that crude will reach $200 a barrel. *** These higher prices will have enormous implications for geopolitics.
(http://business.timesonline.co.uk/tol/business/columnists/article3964339.ece)

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:05:52 AM

Wall St. Journal: PAUL B. FARRELL
Megabubble waiting for new president in 2009
'Numbers racket' exposes potential disaster for economy, markets
By Paul B. Farrell, MarketWatch
Last update: 10:13 a.m. EDT May 20, 2008

Be forewarned: No matter who's elected president, America will soon see a massive statistical curtain pulled back, exposing a con game of historic proportions. And when that happens, you and I will suffer another ear-splitting global meltdown, bigger than today's housing-credit crisis, dragging us deep into a recession and bear market for years. *** "Based on the criteria in place a quarter century ago, today's U.S. unemployment rate is somewhere between 9% and 12%; the inflation rate is as high as 7% or even 10%; economics growth since the recession of 2001 has been mediocre, despite the surge in wealth and incomes of the superrich, and we are falling back into recession."

*** The biggest of all lies is with inflation. Understating inflation "hangs over our heads like a guillotine," says Phillips. Yet if Washington told us the truth "it would send interest rates climbing and thereby would endanger the viability of the massive buildup of public and private debt (from less than $11 trillion in 1987 to $49 trillion last year) that props up the American Economy." So we keep sipping the Kool-Aid. "Were mainstream interest rates to jump into the 7% to 9% range -- which could happen if inflation were to spur new concern -- both Washington and Wall Street could be walking on quicksand," warns Phillips. "The make-believe economy of the past two decades, with its asset bubbles, massive borrowing, and rampant data distortion, would be in serious jeopardy."
(http://www.marketwatch.com/news/story/governments-numbers-racket-about-blow/story.aspx?guid=%7bF91A0843-69B4-4C0C-92CE-B835D9907945%7d&dist=TNMostRead&print=true&dist=printTop)

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:06:19 AM

James Howard Kunstler: "Far From Normal"

*** Personally, my theory has been that the specter of peak oil pretty clearly implies the inability of industrial economies to continue producing real wealth in the customary way. In the face of this, either consciously or at a more mystical level, the worker bees in banking recognize that, in order to maintain their villas in the Hamptons, money has to be loaned into existence some other way (than in the service of industrial productivity).

We've tried just about everything else. There was the so-called service economy, an attempt to replace manufacturing with hamburger sales. Then there was the information economy, in which work would be replaced with knowing about stuff. Then there was the tech thing, which was about bringing internet companies that existed only on the back of cocktail napkins to the initial public offering stage of capitalization -- which allowed a few-hundred-or-so thirty-year-old smoothies to retire to vineyards in the Napa Valley, while hundreds of thousands of retirees lost half the value of their investment portfolios. Then there was the housing boom, which was all about the creation of more suburban sprawl under the theory that houses (or "homes" in the jargon of the realtors) represent an obvious sort of wealth, and therefore that using houses as collateral would allow humongous sums of money to be loaned into existence -- along with massive fees for structuring the loans into bundles of bond-like thingies. ***
(http://www.jameshowardkunstler.typepad.com/)

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:06:55 AM

FINANCIAL TIMES: Shortage fears push oil futures near $140
By Carola Hoyos and Javier Blas in London
Published: May 20 2008 19:06 | Last updated: May 21 2008 00:52

Fears of a shortage within five years propelled long-term oil futures prices to almost $140 a barrel on Tuesday, further stoking inflationary pressures in the global economy. Investors rushed to buy oil futures contracts as far forward as December 2016, pushing their prices as high as $139.50 a barrel, up more than $9.50 on the day. The spot price hit a record $129.60 a barrel. Veteran traders said they had never seen such a jump and said investors were increasingly betting that oil production would soon peak because of geopolitical and geological constraints. Neil McMahon, of Sanford Bernstein, said: "Peak oil views – regardless of whether right or wrong – are seeping into the market and supporting high prices." *** "concerns over future oil supplies are fast moving into the mainstream and influencing investors."

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:07:48 AM

Oil price 'contango' may signal market is heading much higher

By Edmund Conway, Economics Editor

Last Updated: 12:23am BST 21/05/2008

Investors are betting that oil prices will continue rocketing for years to come, it emerged as the crude price hit a new record high.

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/21/cnoil121.xml

Long-term oil future prices have jumped at an unprecedented rate in a sign that investors are buying up stocks of oil en-masse almost a decade in advance. The situation is highly unusual, since futures prices are almost always lower than today's oil prices. It follows a handful of forecasts from major analysts that oil prices could soar towards $200 (£100) a barrel in the coming years. Kevin Norrish, commodities analyst at Barclays Capital, said: "This really is very rare. "The speed at which the back end has moved up is unprecedented. "The market's expectation of a long-term equilibrium in prices in oil is moving up quickly. Oil production has peaked in a number of parts of the world. The North Sea is one, Mexico is another, and production is falling in Russia now – don't underestimate that."

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:08:31 AM

Defying the experts
By Roger Howard
Tuesday, May 20, 2008

At a time of rapid price increases, our natural resources seem ever more precious and their future more uncertain. In particular, the arguments of advocates of "peak oil," who assert that global oil production has now climaxed and will start to decline, appear increasingly plausible.
(http://www.iht.com/articles/2008/05/20/opinion/edhoward.php)

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:08:58 AM

Dollar Falls on Oil Surge, Speculation ECB Will Keep Rates High
By Bo Nielsen and Ye Xie

May 20 (Bloomberg) -- The dollar fell the most in more than a month against the euro as the price of oil rose above $129 for the first time and speculation increased that the European Central Bank will keep interest rates high. .... The dollar slid 1 percentage point, the most since April 16, to $1.5658 per euro at 4:26 p.m. in New York, from $1.5510 yesterday. The currency declined to 103.72 yen, from 104.33. The euro was at 162.40 yen, from 161.81. *** ``The data is worrisome from the inflation perspective,'' said Stephen Malyon, a currency strategist at Scotia Capital Inc. in Toronto. ``The stagflation situation is not good for the economy and the dollar.''
(http://www.bloomberg.com/apps/news?pid=20601087&sid=akv1rKgQNSkA&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:09:22 AM

Fears of longer credit crisis set to hit Wall St
By Jeremy Lemer in New York
Tuesday May 20 2008 08:25

*** According to Meredith Whitney and a team of analysts from Oppenheimer, the extended credit crisis will results in "multi-billion dollar revenue reversals" and further significant writedowns and loan loss provisions. "We believe the real harrowing days of the credit crisis are still in front of us and will prove more widespread in effect than anything yet seen," Ms Whitney said.
(http://us.ft.com/ftgateway/superpage.ft?news_id=fto052020080934150607&referrer_id=yahoofinance)

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:09:43 AM

When the last oil well runs dry (http://news.bbc.co.uk/2/hi/science/nature/3623549.stm)

Title: Re: Meltdown
Post by: BachQ on May 21, 2008, 08:10:11 AM

Monday, May 19, 2008 - 1:41 PM EDT
Oil prices top list of concerns for senior executives
Baltimore Business Journal - by TIERNEY PLUMB Contributor

The price of oil tops the list of woes for senior executives, according to a new survey from law firm DLA Piper. More than half (53 percent) of DLA Piper's 100 top corporate clients have a pessimistic view of the U.S. economy for the second half of 2008, according to the survey conducted by the law firm's Washington, D.C-based government affairs practice. For 55 percent of respondents, the price of oil has been a serious problem for their business this year. Even more (59 percent) said they anticipate the price of oil will continue to be a concern well into 2009.
(http://www.bizjournals.com/baltimore/stories/2008/05/19/daily2.html)

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 07:03:32 AM

VIDEO: Who Killed The Electric Car?

CLICK HERE FOR ALL 9 RELATED VIDEOS: http://www.youtube.com/watch?v=FXSppyTbSyA

Who Killed the Electric Car? is a 2006 documentary film that explores the birth, limited commercialization, and subsequent death of the battery electric vehicle in the United States, specifically the General Motors EV1 of the 1990s. The film explores the roles of automobile manufacturers, the oil industry, the US government, batteries, hydrogen vehicles, and consumers in limiting the development and adoption of this technology.

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 07:05:38 AM

Oil to soar to $1,000/bbl

I don't know why everybody is pussyfooting around about this. I think it's safe to say that, with oil blasting up to $200-a-barrel sometime soon, another inexorable millstone suddenly sails into view. I want to be the first to say it. Remember where you read it first. The hell with $200-a-barrel oil. That's so 2008. By 2010, we're going to see crude oil reach $1000-per-barrel.

(http://stanleybing.blogs.fortune.cnn.com/2008/05/21/you-read-it-here-first-1000-a-barrel-crude/)

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 07:06:08 AM

Oil Rises Above $135 on U.S. Supply Drop, Bank Price Forecasts
By Mark Shenk

May 21 (Bloomberg) -- Crude oil rose to a record above $135 a barrel as U.S. stockpiles unexpectedly dropped and banks raised price forecasts because of supply constraints and demand growth. ``What we have here is a situation where essentially higher prices aren't generating any more supply,'' Paul Sankey, an analyst at Deutsche Bank Securities in New York said in an interview with Bloomberg radio. ``What we have to do is keep pricing the commodity higher until demand starts falling,'' which ``is around $150 a barrel.''
(http://www.bloomberg.com/apps/news?pid=20601087&sid=ahUZOqX4Dxyg&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 07:08:03 AM

IEA Acknowledges Peak Oil and Will Slash Estimate Of World's Supply of Crude
By Neil King Jr. and Peter Fritsch
Word Count: 1,215

The world's premier energy monitor is preparing a sharp downward revision of its oil-supply forecast, a shift that reflects deepening pessimism over whether oil companies can keep abreast of booming demand.

The Paris-based International Energy Agency is in the middle of a large study of the condition of world's top oil fields. Its findings won't be released until November, but the bottom line is already clear: Future crude-oil supplies could be far tighter than previously thought. The IEA has predicted for several years that crude-oil supplies will arc gently upward to keep pace with rising demand, topping 116 million barrels a day by 2030, up from around 87 million barrels a day now. But the agency is now worried that aging oil fields and diminished investment mean that companies could struggle to break beyond 100 million barrels a day over the next two decades. .... The IEA is now trying to shed light on some of the industry's best-kept secrets through a study of the world's top 400 oil fields. With behind-the-scenes assistance from major oil companies, oil-field-service companies, energy ministries and consultants, the agency hopes to assess the overall health of major fields scattered from Venezuela and Mexico to Saudi Arabia, Kuwait and Iraq. The fields supply more than two-thirds of daily world production.

The study, employing the efforts of a team of 25 analysts, marks a sea change in the IEA's efforts to peer into the future. In the past, the agency focused mainly on assessing future demand and then looked at how much non-OPEC countries were likely to produce to meet that demand. Any gap, it was assumed, would then be met by big OPEC producers such as Saudi Arabia, Iran or Kuwait.
(http://online.wsj.com/article/SB121139527250011387.html?mod=hpp_us_whats_news)

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 07:09:10 AM

American Airlines to cut capacity
Wed May 21, 2008 12:37pm EDT
By Kyle Peterson

FORT WORTH, Texas (Reuters) - American Airlines will cut jobs, retire old planes and start charging passengers to check bags in a move to counter record fuel prices and a weak U.S. economy, the company said on Wednesday. The world's largest airline, owned by AMR Corp (AMR.N: Quote, Profile, Research), said it would reduce domestic capacity by 11 percent to 12 percent in the fourth quarter, its biggest service cutback since the attacks of September 11, 2001. AMR shares fell 15.5 percent to $6.93 on the New York Stock Exchange, as all the major airline stocks dipped. The company plans to charge $15 for many passengers' first checked bag starting in mid-June, an unprecedented move by a major U.S. airline as it tries to claw back more of its extra fuel costs. Rivals are considering following suit. Crude oil futures hit $130 on Wednesday, more than twice the price a year ago, which severely threatens airlines' survival. "The airline industry as it is constituted today was not built to withstand oil prices at $125 a barrel, and certainly not when record fuel expenses are coupled with a weak U.S. economy," AMR Chief Executive Gerard Arpey said in a statement. "The industry will not and cannot continue in its current state," Arpey told shareholders at the company's annual meeting in Fort Worth, Texas on Wednesday.
(http://www.reuters.com/article/newsOne/idUSWNAS489020080521)

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 07:09:44 AM

House passes bill to sue OPEC over oil prices
Tue May 20, 2008
By Tom Doggett

WASHINGTON (Reuters) - The House of Representatives overwhelmingly approved legislation on Tuesday allowing the Justice Department to sue OPEC members for limiting oil supplies and working together to set crude prices, but the White House threatened to veto the measure. The bill would subject OPEC oil producers, including Saudi Arabia, Iran and Venezuela, to the same antitrust laws that U.S. companies must follow.
(http://www.reuters.com/article/newsOne/idUSWAT00953020080520)

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 07:11:06 AM

Oil exec: Prices driven by 'fundamentals'
Judiciary Committee to seek answers for rising oil prices on day crude crosses $130 a barrel.
http://money.cnn.com/2008/05/21/news/economy/oil_hearing/index.htm?cnn=yes

NEW YORK (CNNMoney.com) -- *** "The fundamental laws of supply and demand are at work," said Hofmeister. The market is squeezed by exporting nations managing demand for their own interest and other nations subsidizing prices to encourage economic growth, he said.

In addition, Hofmeister said access to resources in the United States has been limited for the past 30 years. "I agree, it's not a free market," he said.

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 07:12:38 AM

Oil Companies Struggle to Find & Extract New Oil

May 19 (Bloomberg) -- Never have so many oil and gas companies spent so much to produce so little. ... Costs more than quadrupled since 2000 as explorers targeted challenging reservoirs and demand rose for labor and material. *** ``The future is going to be very trying for the international oil companies,'' said Robert Ebel, chairman of the energy program at the Center for Strategic and International Studies in Washington. ``There's no more easy oil for them. Kashagan is a shining example of the problems they face bringing new oil into play.''
(http://www.bloomberg.com/apps/news?pid=20601085&sid=axUZLDnNnHgM&refer=europe)

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 03:54:32 PM

Sweden plans to be world's first oil-free economy· 15-year limit set for switch to renewable energy

Biofuels favoured over further nuclear power

John Vidal, environment editor The Guardian, Wednesday February 8 2006

Sweden is to take the biggest energy step of any advanced western economy by trying to wean itself off oil completely within 15 years - without building a new generation of nuclear power stations. The attempt by the country of 9 million people to become the world's first practically oil-free economy is being planned by a committee of industrialists, academics, farmers, car makers, civil servants and others, who will report to parliament in several months. The intention, the Swedish government said yesterday, is to replace all fossil fuels with renewables before climate change destroys economies and growing oil scarcity leads to huge new price rises. "Our dependency on oil should be broken by 2020," said Mona Sahlin, minister of sustainable development. "There shall always be better alternatives to oil, which means no house should need oil for heating, and no driver should need to turn solely to gasoline."

(http://www.guardian.co.uk/environment/2006/feb/08/frontpagenews.oilandpetrol)

GO SWEDEN ! ! ! !

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 03:55:28 PM

Gov't home price index posts largest drop in History
By ALAN ZIBEL, AP Business Writer1 hour, 24 minutes ago

U.S. home prices posted their sharpest first-quarter decline since the government began tracking the data 17 years ago. The Washington-based Office of Federal Housing Enterprise Oversight said Thursday that home prices fell 3.1 percent in the first quarter compared with last year. The index also fell 1.7 percent from the fourth quarter of 2007 to the first quarter of 2008, the largest quarterly price drop on record. "The large overhang of real estate inventory awaiting sale continues to force price declines in many areas, but particularly in places that had seen very sharp appreciation," Patrick Lawler, the agency's chief economist, said in a prepared statement. Prices fell in 43 states, with California and Nevada showing the biggest declines. Home prices dropped by more than 8 percent in those states.
(http://news.yahoo.com/s/ap/20080522/ap_on_bi_ge/home_prices)

Title: Re: Meltdown
Post by: BachQ on May 22, 2008, 03:56:46 PM

Gas over $3.83 as early holiday travelers hit road
By JOHN WILEN, AP Business Writer 35 minutes ago

Americans getting an early start on the Memorial Day weekend found that gasoline prices again sprinted to a new record high overnight, reaching a national average above $3.83 a gallon. Some analysts predict gas will break past $4 as early as next week. Oil prices, meanwhile, fluctuated Thursday after setting a new record of $135.09 in overnight trading. A stronger dollar gave some investors reason to sell oil futures to lock in profits from crude's record run. But concerns about falling supplies and rising demand are expected to keep propelling prices higher in the days and weeks to come. Oil's surge is contributing directly to the pain consumers feel every time they fill up. At the pump, the average national price of a gallon of regular gas rose 2.4 cents overnight to $3.831, according to a survey of stations by AAA and the Oil Price Information Service. Prices are 61 cents higher than a year ago.
(http://news.yahoo.com/s/ap/20080522/ap_on_bi_ge/oil_prices;_ylt=AqhmDMeJPP.sszvCh0skeT9v24cA)

Title: Re: Meltdown
Post by: greg on May 23, 2008, 06:44:50 AM

let's move to Sweden, Dm

Title: Re: Meltdown
Post by: BachQ on May 23, 2008, 09:47:59 AM

Quote from: GGGGRRREEG on May 23, 2008, 06:44:50 AM
let's move to Sweden, Dm

Denmark is looking pretty good too .......... 20% wind energy in Denmark!

Title: Re: Meltdown
Post by: greg on May 23, 2008, 09:57:19 AM

Quote from: Dm on May 23, 2008, 09:47:59 AM
Denmark is looking pretty good too .......... 20% wind energy in Denmark!

and Holland, too, i bet, right?

Title: Re: Meltdown
Post by: bwv 1080 on May 23, 2008, 10:13:20 AM

Quote from: Dm on May 23, 2008, 09:47:59 AM
Denmark is looking pretty good too .......... 20% wind energy in Denmark!

how does that get your car to move?

The US is 25% hydro, nuclear and renewable BTW in terms of electricity generation (which is what the 20% refers to in Denmark)

Title: Re: Meltdown
Post by: greg on May 24, 2008, 03:35:44 PM

Quote from: bwv 1080 on May 23, 2008, 10:13:20 AM
how does that get your car to move?

they don't need cars..... they just jump up, flap their arms and fly everyone- everyone knows that.... ::)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:26:07 PM

Pressure grows on airlines as fuel suppliers demand cash in advance

Airlines are being forced to pay cash in advance for jet fuel as the major oil companies tighten the screws on an industry that is being crushed by an extraordinary surge in the price of crude oil. Sources within the airline industry indicate that credit is being denied to most of the leading American carriers and the practice is moving to Europe and Asia. So uncertain is the cash solvency of the industry that jet fuel suppliers insist on prepayments into special bank accounts. *** The credit crunch is likely to worsen and a number of financial institutions will fail ...
(http://business.timesonline.co.uk/tol/business/industry_sectors/transport/article4004371.ece)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:26:43 PM

From The Sunday TimesMay 25, 2008

George Soros: The economy's doomed
George Soros, the financier who predicted the credit crunch, tells John-Paul Flintoff there is even more pain to come

Welcome to global economic meltdown. Petrol prices are shooting up and you can barely do the weekly shopping without an overdraft extension - if only you could find a bank still willing to lend you the money. However, Soros, the Hungarian-born speculator whose name still causes central banks and governments to tremble, seems to be enjoying what he calls the worst financial crisis since the Great Depression. *** "I think it's going to be pretty bad," he confirms. "You have a housing bubble in the UK. Household debts are higher than in the US. The banking and financial industry is much bigger as a proportion of the economy in this country, and that's been badly affected. Also, taxation of foreigners has come at the wrong time, so there is a small exodus. You face higher prices for food and energy, and the budget allows little room for fiscal growth." *** "The period of the US consumer acting as the motor of the global economy has come to an end," he says, with finality.
(http://business.timesonline.co.uk/tol/business/economics/article3997518.ece)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:27:14 PM

May 25, 2008
EVERYBODY'S BUSINESS
Running Out of Fuel, but Not Out of Ideas
By BEN STEIN

Now, imports supply nearly two-thirds of our daily needs, according to the United States Energy Information Administration. Most of this oil comes from countries that are either unstable (Nigeria) or whose leaders or people dislike us (Venezuela, Saudi Arabia). Even in Canada, long our best friend on earth, and an immense oil supplier to us, there is an active movement of environmentalists who believe it best not to develop Canada's vast oil sands and send the oil to us. That movement has recently had some frightening success.
What are we going to do? If there were another oil embargo, we would be in real trouble. If Mexico fell into chaos, if Venezuela stopped sending us oil, there would be extreme hardship. *** But the long run is terrifying. If we are at or past peak oil, if oil states stop or even hesitate to send us the juice, if Canada decides not to fill our needs, we are in overwhelming trouble.
(http://www.nytimes.com/2008/05/25/business/25every.html?_r=1&bl&ex=1211860800&en=bd602c42bf4daa1e&ei=5087%0A&oref=slogin)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:27:54 PM

U.S. not yet half way through home mortgage trouble: Seidman
Fri May 23, 2008 3:58pm EDT
(William Seidman is the former chairman of the Resolution Trust Corp., the agency Congress set up in the 1980s to clean up the savings-and-loan lending mess. He's also a former chairman of the FDIC. He spoke with Reuters this week on the housing rescue plan taking shape in Congress and on the state of banking in the United States.)

Generally banks start to fail about a year after the events which cause the trouble. We're probably about seven or eight months down that year. So before the end of the year, we'll probably see a number of bank failures, particularly in Florida, Texas, California, Nevada, where the housing boom was. *** I think there are a lot more loans that are going to go bad and that have not yet reached the foreclosure stage... I don't think we've seen as much of the trouble in the home mortgage area yet as we're going to see. I don't think we're even half way through that.
(http://www.reuters.com/article/reutersEdge/idUSBAU37100520080523)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:29:14 PM

T. Boone Pickens' prediction: Oil production is reaching its peak

Sunday, May 25, 2008
By ELIZABETH SOUDER / The Dallas Morning News
esouder@dallasnews.com

When T. Boone Pickens talks, oil traders listen.

The legendary oilman, who runs a multibillion-dollar commodities hedge fund in Dallas, appears frequently on "I think you're going to see $150 before the end of the year," Mr. Pickens told CNBC viewers Tuesday. Sure enough, oil futures ended the day 1.6 percent higher at $129.07 a barrel, another record. Mr. Pickens is one of several Texans who are pushing the Peak Oil theory of oil scarcity into the mainstream. He believes humans will soon use up half the oil they can extract, and oil production rates will drop, never to recover. (http://www.dallasnews.com/sharedcontent/dws/bus/industries/energy/stories/050508dnbusoilsidebar.3b519e7.htm)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:29:51 PM

Buffett sees "long, deep" U.S. recession
Reuters - Sat May 24,

BERLIN (Reuters) - The United States is already in a recession and it will be longer as well as deeper than many people expect, U.S. investor Warren Buffett said in an interview published in German magazine Der Spiegel on Saturday
(http://news.yahoo.com/s/nm/20080524/bs_nm/buffett_us_recession_dc;_ylt=AjvYwfW76snVXnllY2omr46yBhIF)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:30:37 PM

Oil shock threatens lasting changes to economy
Fri May 23, 2008 1:53pm EDT
By Emily Kaiser and Matt Daily - Analysis

WASHINGTON/NEW YORK (Reuters) - Oil's relentless price rise has pushed U.S. drivers off the road, curbed consumers' appetite for expensive goods, forced airlines into their deepest cuts in years and threatened car makers with a flood of red ink. It all points to a dramatic shift in the U.S. economy as oil's surge above $130 per barrel forces already cash-strapped households and companies to rethink business as usual, and the changes are likely to be lasting, even if energy prices retreat. "The weakness in the United States economy in housing, that we have read about for over a year, with the mortgage crisis and credit crunch, was one blow. But oil is another blow, and it's probably one blow too many," Dow Chemical (DOW.N: Quote, Profile, Research) Chief Executive Andrew Liveris told Reuters.
(http://www.reuters.com/article/reutersEdge/idUSN2320596920080523)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:30:57 PM

"I don't think there's any doubt that supply/demand scenarios are extremely tight. For the first time ever you see a significant decline in production out of Russia for this year and you see the Middle East frankly struggling to maintain, let alone, increase its production. Put that against the backdrop of an average decline rate across the world of the world's oilfield of about 11 per cent and there is no doubt that the fundamentals of supply and demand will remain tight. I do believe that we are going to struggle to continue to materially increase production based on an outlook for demand growth. ... unless there are significant discoveries around the world and there are people and money and time to develop those discoveries which I think will be a struggle, certainly there will be continued pressure in the medium and long term on oil prices. ... I genuinely believe that [Saudia Arabia has] no capacity to [increase production]. Based on our information out of the Middle East and from where we work ourselves, they're struggling."
(http://www.businessspectator.com.au/bs.nsf/Article/KGB-INTERROGATION-Peter-Botton-EW7PK?OpenDocument)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:31:20 PM

Seismic Shifts in Oil Commodities Market
By Sean Kelleher, Special to Gulf News
Published: May 25, 2008

***"If I had to average out the oil researchers", says Stan Lock at Brewin Dolphin in London, "I would guess that the market is confident of prices rising to $200 a barrel. Although such a result might be driven in the short term by speculators, it's also fair to say that I don't see too many people calling the price down below $90 a barrel in the short term". *** Eric Sprott of Sprott Asset Management has given his name and 10 per cent of the monies towards an energy fund driven by what he calls the "oil peak" story: "we are believers for a number of years (that) we are in the peak oil scenario where the prices will rise essentially forever because the world needs more oil than it can possibly produce and, in fact, production will go lower".
(http://www.gulfnews.com/business/Markets/10215835.html)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:31:44 PM

USA 2008: The Great Depression

Food stamps are the symbol of poverty in the US. In the era of the credit crunch, a record 28 million Americans are now relying on them to survive – a sure sign the world's richest country faces economic crisis

By David Usborne in New York
Tuesday, 1 April 2008

We knew things were bad on Wall Street, but on Main Street it may be worse. Startling official statistics show that as a new economic recession stalks the United States, a record number of Americans will shortly be depending on food stamps just to feed themselves and their families.
Dismal projections by the Congressional Budget Office in Washington suggest that in the fiscal year starting in October, 28 million people in the US will be using government food stamps to buy essential groceries, the highest level since the food assistance programme was introduced in the 1960s.
(http://www.independent.co.uk/news/world/americas/usa-2008-the-great-depression-803095.html)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:32:05 PM

Wake Up, America. We're Driving Toward Disaster (Washington Post) (http://www.washingtonpost.com/wp-dyn/content/article/2008/05/23/AR2008052302456.html)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:32:20 PM

Cheap oil is history. But why? (Telegraph.co.uk) Until recently, the notion that international production was about to reach its limits - the so-called "peak oil" theory - was the preserve of cranks and crackpots.
(http://www.telegraph.co.uk/news/uknews/2021948/Cheap-oil-is-history.-But-why.html)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:32:35 PM

Driven to despair (Scotsman) "US economy analyst Ed Yardeni says "peak oil' theory, once on the fringe, has gone mainstream in the past few weeks as oil prices have soared to levels that only the peak oil theorists anticipated."
(http://business.scotsman.com/business/Driven-to-despair.4118168.jp)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:32:56 PM

Analyst urges search for oil alternatives (Sunday Business Post, Ireland) ''Arguments about peak oil are now very persuasive. The jumbo fields in the Middle East are now past their peak and there aren't enough new discoveries coming on stream," Harris said.
(http://www.sbpost.ie/post/pages/p/story.aspx-qqqt=IRELAND-qqqm=news-qqqid=33175-qqqx=1.asp)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:33:29 PM

Google, Chevron Build Mirrors in Desert to Beat Coal With Solar
By Greg Chang

May 23 (Bloomberg) -- Along a dusty two-lane highway in California's Mojave Desert, 550,000 mirrors point skyward to make steam for electricity. Google Inc., Chevron Corp. and Goldman Sachs Group Inc. are betting this energy will become cheaper than coal. The 1,000-acre plant uses concentrated sunlight to generate power for as many as 112,500 homes in Southern California. Rising natural gas prices and emissions limits may make solar thermal the fastest-growing energy source in the next decade, say backers including Vinod Khosla, the founder of computer maker Sun Microsystems Inc. Costs for the technology will fall below coal as soon as 2020, the U.S. government estimates.
(http://www.bloomberg.com/apps/news?pid=20601109&sid=a_TUtlIwV7Fw&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:34:07 PM

Oil: A global crisis

The Iraq War means oil costs three times more than it should, says a leading expert. How are our lives going to change as we struggle to cope with the $200 barrel? Geoffrey Lean reports

Sunday, 25 May 2008

The invasion of Iraq by Britain and the US has trebled the price of oil, according to a leading expert, costing the world a staggering $6 trillion in higher energy prices alone.
The oil economist Dr Mamdouh Salameh, who advises both the World Bank and the UN Industrial Development Organisation (Unido), told The Independent on Sunday that the price of oil would now be no more than $40 a barrel, less than a third of the record $135 a barrel reached last week, if it had not been for the Iraq war.
He spoke after oil prices set a new record on 13 consecutive days over the past two weeks. They have now multiplied sixfold since 2002, compared with the fourfold increase of the 1973 and 1974 "oil shock" that ended the world's long postwar boom.
(http://www.independent.co.uk/environment/green-living/oil-a-global-crisis-834023.html)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:34:37 PM

New York Times
May 23, 2008
Italy Plans to Resume Building Atomic Plants
By ELISABETH ROSENTHAL
ROME — Italy announced Thursday that within five years it planned to resume building nuclear energy plants, two decades after a public referendum resoundingly banned nuclear power and deactivated all its reactors. "By the end of this legislature, we will put down the foundation stone for the construction in our country of a group of new-generation nuclear plants," said Claudio Scajola, minister of economic development. "An action plan to go back to nuclear power cannot be delayed anymore." The change is a striking sign of the times, reflecting growing concern in many European countries over the skyrocketing price of oil and energy security, and the warming effects of carbon emissions from fossil fuels. All have combined to make this once-scorned form of energy far more palatable. "Italy has had the most dramatic, the most public turnaround, but the sentiments against nuclear are reversing very quickly all across Europe — Holland, Belgium, Sweden, Germany and more," said Ian Hore-Lacey, spokesman for the World Nuclear Association, an industry group based in London.

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:34:57 PM

Peak Oil Greatest Threat in American History

The Peak Oil Crisis: The Secretary of Transition
Written by Tom Whipple
Thursday, 22 May 2008

*** Congress, in the main, is detached from reality. Someday soon, however, the Administration and Congress will realize that we have a real problem on our hands. This problem will dwarf any that our currently active politicians have ever known and will rival that faced by our leaders during the American Revolution, the Civil War, the great Depression and World War II. *** We have to appreciate the scope of the problem we face. Oil permeates everything we do and use 24 hours a day. We are going to have to stop doing and using a lot of things within the next ten years. Decisions by the tens then the hundreds and finally the millions will have to be made. Obviously we as a nation, and world for that matter, could just sit back and let the "markets" make the choices for us and there will be an element of this in what is to come.
(http://www.fcnp.com/national_commentary/the_peak_oil_crisis_the_secretary_of_transition_20080522.html)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:35:58 PM

SALON: Wall Street Journal Publishes Most Pessimistic Peak Oil Outlook Yet

As crude prices set another record, the Journal publishes its gloomiest assessment yet of the oil market
Andrew Leonard
May. 22, 2008 | Page A1: The Wall Street Journal, Thursday, May 22, 2008:
A growing number of people in the industry are endorsing a version of the "peak-oil" theory: that oil production will plateau in coming years, as suppliers fail to replace depleted fields with enough fresh ones to boost overall output. All of that has prompted numerous upward revisions to long-term oil-price forecasts on Wall Street.

How the World Works has been closely following the [Wall Street Journal's] coverage of oil-related issues for several years -- today's front page story is the most pessimistic piece I've seen the newspaper publish. Two years ago (when a barrel of oil cost a mere $75), the phrase "peak oil" was more likely to be accompanied by the modifier "so-called" or to be ridiculed in a headline like, "Poking at Peak Oilers." But new record-setting prices nearly every day have a way of focusing the mind (in trading Thursday, crude oil futures broke $135). The International Energy Agency is getting gloomier by the minute, reports the Journal.

The Paris-based International Energy Agency is in the middle of its first attempt to comprehensively assess the condition of the world's top 400 oil fields. Its findings won't be released until November, but the bottom line is already clear: Future crude supplies could be far tighter than previously thought..
"This is a dangerous situation," Fatih Birol, the IEA's chief economist and the leader of the study, told the Journal.
(http://www.salon.com/tech/htww/2008/05/22/wall_street_journal_peak_oil/)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:36:47 PM

Peak oil hits new heights and the view is not pretty

May 24, 2008

... Oil demand in China and other developing countries is growing so fast, and the international market is so stretched, that international oil prices smashed through to new records this week. Sydney petrol stations were charging as much as $1.60 a litre, but there may be much worse to come. Australian petrol refineries are yet to receive oil that was bought at the new record prices. On Thursday the world benchmark oil price hit $US135 a barrel. It has more than doubled in a year and is now higher than during the oil supply shocks of 1974 and 1980, even after adjusting for inflation. *** In 2003 China overtook Japan to be the world's second largest oil consumer. China now consumes 50 per cent more oil than Japan. Chinese consumption has risen by more than 7 per cent a year since 1990. At this growth rate, China would equal America's current oil consumption by 2020 and double it by 2030. About 1200 new cars are being added every day in Beijing alone. And yet only 3.3 in every 100 Chinese people own cars, compared with 77 in the United States. Chinese citizens consume one-third as much oil as Mexicans and one-twelfth as much as Americans. The country's thirst for oil is at its early stages, and India is close behind.
(http://www.smh.com.au/news/world/peak-oil-hits-new-heights-and-the-view-is-not-pretty/2008/05/23/1211183102727.html)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:37:19 PM

"Fuel Rustling" Reaching Epidemic Proportions
Huge rise in cost of diesel increases fuel thefts
By Cahal Milmo
Friday, 23 May 2008

Business is good for John Leighton. His company, which makes anti-theft devices for the diesel tanks of lorries and buses, has seen sales increase by 45 per cent so far this year amid warnings of an upsurge in "fuel rustling" sparked by sharply rising forecourt prices. While petrol prices have risen inexorably in recent weeks to about 114p per litre, diesel – a fuel that could once be relied upon to undercut the cost of petrol – is now on average 12p per litre more expensive, which is causing financial difficulties for heavy users such as the haulage industry.

The result has been a spate of thefts of domestic heating fuel oil and cheap agricultural "red" diesel – so-called because of the red dye put in it to stop it being resold at service stations. It has also led to a sharp rise in calls to Mr Leighton's business, Dipstop, based in Shropshire. He said: "We are now constantly getting calls from companies and individuals saying they've had their fuel tank broken into and the diesel siphoned off. It is rife. People are pretty disgusted with the rate at which they are losing their fuel." Police have warned that heating fuel and red diesel are being targeted to feed a growing black market and urged homeowners and farmers to lock tanks where possible.
(http://www.independent.co.uk/news/business/news/huge-rise-in-cost-of-diesel-increases-fuel-thefts-832838.html)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:37:42 PM

$135 and rising ... has cheap oil gone for ever?
·   Larry Elliott, economics editor
·   The Guardian,
·   Saturday May 24 2008

Graham Turner, of London-based consultancy GFC Economics, said: "Oil prices are on a moon-shoot, with peak oil and a global shortage taking centre stage. Many of the concerns about long term supplies are valid and it is impossible to know how far prices will climb in the coming weeks and months. However, if calls for $150 per barrel are realised by the summer, it will do little to help a world economy struggling with a slide in housing markets across much of the industrialised west."
(http://www.guardian.co.uk/business/2008/may/24/oil.commodities)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:38:01 PM

Dr. Robert L. Hirsch Keynote Speech - EXCLUSIVE VIDEO

http://www.theautochannel.com/news/2008/05/23/087923.html

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:38:33 PM

Record oil prices signal 'new world'
Markets confounded by new class of investors making long-term bets on crude; rare trading patterns mark shift in sentiment
SHAWN MCCARTHY
From Thursday's Globe and Mail
May 22, 2008 at 3:39 AM EDT

OTTAWA — Investors are placing huge bets that today's record crude prices are headed sharply higher in the coming years, essentially gambling that scarce resources and a weak U.S. dollar will trump the age-old law of supply and demand. As crude for near-term delivery shot past $133 (U.S.) a barrel yesterday, many analysts were more focused on the stunning price increases in futures contracts covering oil deliveries for the next eight years. Amid "peak oil" warnings of scarce supply and a permanently weakened U.S. dollar, traders have driven future prices well above current levels, a rare pattern in oil markets known as contango. "It seems that we're living in a completely new world," said Peter
(http://www.theglobeandmail.com/servlet/story/RTGAM.20080522.wiboil22/BNStory/Front)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:38:50 PM

British Airways warns oil surge will put a rash of airlines out of business

By Alistair Osborne in Houston

Last Updated: 8:53am BST 23/05/2008

Willie Walsh, BA's chief executive of British Airways warned that, with the oil price topping $130 a barrel, the entire aviation industry was heading into uncharted territory and predicted a rash of airline failures. Fares would also have to rise.
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/05/23/cnoil123.xml)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:39:07 PM

Glenn Beck: 'The Future of Energy' according to Boone Pickens

"Understand one thing: Production currently is at 85 million barrels a day. So we have 85 million barrels. He said, the demand is at 87 million barrels a day. So we are two million barrels short every single day. He said, since those two lines have crossed, it is supply and demand. That's why it's going up."
(http://www.glennbeck.com/content/articles/article/198/10382/)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:39:38 PM

Ford's trouble: $4 gas is here to stay
Gas prices are causing consumers to shun pickups and SUVs, leading to losses at the car maker's North American auto unit.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: May 22, 2008: 2:40 PM EDT

NEW YORK (CNNMoney.com) -- Ford Motor Co. executives say they believe that $4 gas is here to stay, resulting in a fundamental consumer shift away from gas-guzzling SUVs and pickups and causing continued losses at its core North American auto unit.
(http://money.cnn.com/2008/05/22/news/companies/ford/index.htm?postversion=2008052214)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:40:34 PM

The Nation: Second Great Depression Coming

Since the last Big One, the Great Depression of the 1930s, we have had eleven small to medium recessions, lasting an average of ten months. The most severe - two back-to-back downturns that began in 1979 - drove price increases and the unemployment rate to double digits. We're not at those levels yet. But the structural supports underneath our shop-till-we -drop economy are considerably weaker. For starters, we have a historic depression in the housing market. But it is not the squeeze on homeowners that is giving our central bankers nightmares. It is the blowback of housing deflation on the country's massively overleveraged financial markets . . .
(http://www.thenation.com/doc/20080414/faux)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:40:58 PM

Yes this is a REAL crisis
Yes this is a REAL crisis, admits minister as latest oil price surge piles £700 onto the average family's fuel bill
By James Chapman, Ray Massey and Sean Poulter
Last updated at 1:16 AM on 23rd May 2008

Warning: Trade minister Baroness Vadera has admitted Britain is in the grip of an economic crisis

Britain is in the grip of an economic crisis, a senior minister admitted last night as oil prices hit a record high. In just 24 hours the cost of a barrel of crude rocketed by $5 to $135, raising the prospect of £700 a year being piled on to the average family's fuel bills. Trade minister Baroness Vadera conceded that Britain was facing a 'very testing period' and said it was the 'first real economic crisis of globalisation'. Her remarks came as soaring fuel costs triggered alarm on a number of fronts.
(http://www.dailymail.co.uk/news/article-1021109/Yes-REAL-crisis-admits-minister-latest-oil-price-surge-piles-700-average-familys-fuel-bill.html)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:41:45 PM

U.S. Economy: Home Resales Decline, Inventories Jump (Update2)
By Shobhana Chandra

May 23 (Bloomberg) -- Sales of previously owned homes in the U.S. fell in April and the supply of unsold properties reached a record, signaling no let-up in the 27-month housing slump. ``There is no indication that things are improving,'' said Christopher Low, chief economist at FTN Financial in New York, who forecast sales would drop to a 4.9 million pace. ``Inventories will stay out of balance at least until the end of 2009 and prices will keep falling.'' Defaults on subprime mortgages have prompted lenders to restrict credit, while falling property values have given buyers who are still able to get financing reason to delay purchases. The slide in home values may hurt consumer spending, which accounts for more than two-thirds of the economy.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=amCt0FoZgzKY&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:42:06 PM

Detroit automakers at the brink as oil surges
Fri May 23, 2008
By David Bailey and Kevin Krolicki - Analysis

with oil prices surging, the U.S. auto market bumping along at near-decade lows and ever more Americans defecting from trucks and sport utility vehicles, a new risk looms for Detroit: the future may be slipping out of its control. ... If the U.S. auto market fails to bottom out in 2008 or if oil prices rise unabated, the threat of failure grows in an industry struggling with a third straight year of lower sales. "We saw a real change in the industry demand for pickup trucks and SUVs in the first two weeks of May," Ford Chief Executive Alan Mulally said. "It seemed to us that we reached a tipping point where customers began shifting away from these vehicles at an accelerated rate."
(http://www.reuters.com/article/GCA-Oil/idUSN2234470220080523)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:42:29 PM

March driving down for 1st time since 1979: government
Fri May 23, 2008 11:52am EDT
By Chris Baltimore

WASHINGTON (Reuters) - In a sign that Americans are curbing their driving in the face of record-high gasoline prices, data released on Friday showed highway miles driven in March fell 4.3 percent from a year earlier, the first March decline since the last major oil shock in the late 1970s. According to the Department of Transportation, Americans drove 11 billion miles less in March 2008 than a year earlier, the first time estimated travel on public roads fell in March since 1979. The data marks the sharpest year-on-year drop for any month in the history of the agency's reporting, which dates back to 1942. Record-high oil prices above $135 a barrel are pushing average pump prices closer to the crucial $4 a gallon level. Pump prices in seven U.S. states, including California, Illinois and New York, already average above $4 a gallon. Signs are mounting that U.S. consumers -- who use more oil than any other country -- are finally curbing their energy use in the face of a widening U.S. economic downturn.
(http://www.reuters.com/article/newsOne/idUSWBT00904320080523)

Title: Re: Meltdown
Post by: BachQ on May 26, 2008, 05:42:56 PM

Stubbornly high food prices threaten worse hunger
Thu May 22, 2008 12:05pm EDT
By Robin Pomeroy and Brian Love

ROME/PARIS (Reuters) - High food prices are here to stay for the foreseeable future, potentially forcing millions more people into hunger, two reports from the United Nations and the OECD showed on Thursday. A surge in commodity prices in the last year was not a blip and prices will remain at or above current levels for at least the next decade as some of the main underpinning factors -- demand for a richer diet, the rise of biofuels and high oil prices -- will remain, one of the reports said. "Food is no longer the cheap commodity that it once was," said Hafez Ghanem, assistant director-general of the U.N. Food and Agriculture Organization (FAO). "Rising food prices are bound to worsen the already unacceptable level of food deprivation suffered by 854 million people. We are facing the risk that the number of hungry will increase by many more millions of people," he said. In a 10-year look-ahead at likely food price scenarios, to be published next week, the FAO and the Organization for Economic Co-operation and Development saw no return to pre-crisis levels. "On average over the coming 10-year period, nominal prices for cereals, rice and oilseeds are expected to be 35 percent to 65 percent higher than on average in the past 10 years," said a summary of the Agricultural Outlook report seen by Reuters. "Prices in real terms are projected to be 10 percent to 35 percent higher than in the past decade."
(http://www.reuters.com/article/worldNews/idUSL2241020220080522)

Title: Re: Meltdown
Post by: BachQ on May 27, 2008, 04:39:38 PM

Sean, please come back to GMG!

Title: Re: Meltdown
Post by: ezodisy on May 29, 2008, 06:45:22 AM

Quote from: Dm on May 26, 2008, 05:38:33 PM
Record oil prices signal 'new world'

And what a lovely world it is :)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:00:44 AM

WSJ
Oil Exporters Are Unable To Keep Up With Demand

The world's top oil producers are proving unable to put more barrels on thirsty world markets despite sky-high prices, a shift that defies traditional market logic and looks set to continue. Fresh data from the U.S. Department of Energy show the amount of petroleum products shipped by the world's top oil exporters fell 2.5% last year, despite a 57% increase in prices, a trend that appears to be holding true this year as well ... aging fields and sluggish investments have caused exports to drop significantly in Mexico, Norway and, most recently, Russia. The Organization of Petroleum Exporting Countries also cut production early last year and didn't move to boost supplies again until last fall.
(http://online.wsj.com/article/SB121200725158327151.html?mod=hpp_us_whats_news)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:01:48 AM

An outlook on fuel prices, with Matthew Simmons,
VIDEO: http://www.cnbc.com/id/15840232?video=756480032&play=1%E2%80%9D

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:02:26 AM

U.S. airlines running out of options as oil bites
Wed May 28, 2008 8:55am EDT
By Mark McSherry - Analysis

NEW YORK (Reuters) - U.S. airlines have raised fares, added new fees and surcharges, cut jobs and reduced services -- and still find themselves running out of options to counter record fuel prices threatening their survival. Even mergers, long considered an integral component to the airlines' long-term survival, seem less likely now than they did a few months ago. While Delta Air Lines Inc (DAL.N: Quote, Profile, Research) has agreed to acquire Northwest Airlines Corp (NWA.N: Quote, Profile, Research), merging may not be an option for other carriers as cash becomes king in a battle for survival. "Even at current oil levels of $130 a barrel, the airlines are involved in a massive survival game," said Julius Maldutis, president of consulting firm Aviation Dynamics.
(http://www.reuters.com/article/reutersEdge/idUSN2737676420080528)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:03:17 AM

MarketWatch
Bank failures to surge in coming years
IndyMac, Corus, UCBH under pressure as credit crunch slows economy
By Alistair Barr, MarketWatch
Last update: 6:27 p.m. EDT May 23, 2008
SAN FRANCISCO (MarketWatch) -- By April, Gary Holloway was almost three years into retirement.

At least 150 banks will fail in the U.S. during the next two to three years, according to a projection by Gerard Cassidy and his colleagues at RBC Capital Markets. If the current economic slowdown deteriorates into a recession on the scale of those from the 1980s and early 1990's, the number of failures will be much higher this time around -- probably as high as 300 of them, by RBC's reckoning. That's a massive surge compared to the recent boom years of the credit and real estate markets. From the second half of 2004 through end of 2006 there were 10 consecutive quarters without a bank failure in the U.S. -- a record length of time, Cassidy notes. "This downturn will trigger a significant amount of bank failures relative to the past five years," he said. "There has been excessive loan growth and some banks won't be able to access capital markets to replace the money that will disappear as credit losses rise."
(http://www.marketwatch.com/news/story/bank-failures-surge-credit-crunch/story.aspx?guid=%7B2FCA4A0C%2D227D%2D48FE%2DB42C%2D8DDF75D838DA%7D&dist=TNMostRead)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:04:07 AM

Der Spiegel: American Dream in Dire Threat
By Gabor Steingart in Washington

The dollar is in a tailspin, the trade deficit is growing and a recession is on the horizon. The American way of life is in serious danger. But the head of the Federal Reserve keeps on pumping easy credit into the system -- a crazy policy that will worsen the crisis. The credit-financed consumer boom of recent years is coming to a painful end. Today's American Way of Life has no chance of surviving the coming years undamaged. The virus will continue to ravage its way through the financial system. The property crisis is likely to spread to credit card providers soon and will then probably infect car manufacturers, furniture makers and all the other firms that owe their sales increases to the growth in credit finance. "The virus will keep on infecting the system," one management board member from a large bank said, requesting anonymity in return for the candour of his analysis. His argument is that banks that grant mortgages to home buyers virtually unable to pay their bills are unlikely to be especially scrutinizing when it comes to lending cash to the buyers of fridges, cars and furniture. Indeed, a furniture store in Miami recently tried to lure consumers with the following offer: buy now, pay your first credit installment in three years, and no need for a down-payment. The credit-financed way of life is typical of the US these days. Many people resort to credit to plug the gap between the lifestyle they have become accustomed to and their declining wages.
(http://www.spiegel.de/international/business/0,1518,druck-547317,00.htm)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:05:38 AM

GORDON BROWN: World Faces a "Great Oil Shock"

Britain's Prime Minister Gordon Brown warned Wednesday that the world faced a "great oil shock" that could only be addressed by urgent action on a global scale. Amid worldwide concern and unrest over soaring oil prices -- and their knock-on effect on food costs -- Brown said domestic action alone could not cut the high fuel bills resulting from tight global oil supplies, keen energy demand and the weak US dollar.

"The global economy is facing the third great oil shock of recent decades," he wrote in the The Guardian newspaper. "As every country faces increased costs, it is now understood that a global shock on this scale requires global solutions." Brown said the creation of global strategy should top the economic agenda at July's G8 summit in Japan. "The way we confront these issues will define our era," he said.
(http://www.breitbart.com/article.php?id=080528102400.047kthb6&show_article=1&catnum=0)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:06:12 AM

Gas Thieves Puncture Tanks to Steal Gas

By JEFF KAROUB, AP Business Writer
Tue May 27, 5:37 PM ET

[http://news.yahoo.com/s/ap/20080527/ap_on_bi_ge/punctured_gas_tanks]

DETROIT - Dale Fortin is getting a new kind of customer at his Detroit auto repair shop, customers who have not just been in a fender-bender or had a windshield smashed by a rock. The soaring price of crude oil has turned gas tanks into a cache of valuable booty, and Fortin has replaced several tanks punctured or drilled by thieves thirsting for the nearly $4-a-gallon fuel inside. "That's the new fad," said the co-owner of Dearborn Auto Tech in Detroit. "I'd never seen it before gas got up this high." ... "What made this particular method so dangerous and concerning for us was the way in which they were doing it — using cordless drills to puncture holes in these tanks," he said of the rash of cases his department has investigated this spring. "The heat, friction generated could have easily sparked a fire. It just made for a dangerous situation for the suspects and the community."

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:06:53 AM

IEA probes fears that oil will run outInquiry will examine 'narrow margin' in 2012
Richard Wachman The Observer, Sunday May 25 2008

The International Energy Agency has ordered an inquiry into whether the world could run out of oil, The Observer has learnt. It will consider whether fears about global shortages are real. Observers say that the IEA, which provides authoritative research to OECD countries, is concerned that the supply of oil could fail to keep up with demand driven by the fast-industrialising economies of China and India. The investigation comes at a time of mounting concern that the sky-high price of oil could derail the global economy and plunge the world into recession. Oil hit $135 a barrel last week, the highest price on record, forcing airlines to cut back on flights to save fuel and pushing up the cost of living around the globe.
(http://www.guardian.co.uk/business/2008/may/25/oil)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:07:23 AM

Los Angeles Times
Relentless Oil Prices: Economy near Tipping Point

After years of increases, some fear a tipping point has finally been reached.
By Peter G. Gosselin
Los Angeles Times Staff Writer

May 24, 2008

"We may finally have crossed the line where the price of crude actually matters for most companies," said Peter Boockvar, equity strategist at New York financial firm Miller Tabak & Co. "The stock market has been in la-la land when it comes to oil, but they got a pretty good dose of reality the last few days." The ill effects of the latest price hikes would not be so surprising if it were not for the fact that the nation's economy and financial markets remained blissfully unruffled by oil's upward march during most of the last five years. Until this week. "The economic outlook has been taken hostage by the relentless surge in oil prices," said Robert V. DiClemente, chief U.S. economist at Citigroup in New York. "We're seeing an inexorable increase, and it doesn't seem like anybody's in charge or can do anything about it," added Bank of America senior economist Peter E. Kretzmer.
(http://www.latimes.com/business/la-fi-econ24-2008may24,0,6841046,full.story)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:07:46 AM

UK: Great Petrol Revolt Begins (http://www.dailyexpress.co.uk/posts/view/45684)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:08:35 AM

Spain's drought: a glimpse of our future?
Barcelona is in the grip of a climate crisis on a scale never seen before in modern-day Europe. And now this parched city is being forced to import supplies from France
By Elizabeth Nash
Saturday, 24 May 2008

*** A resource that most Europeans have grown up taking for granted now dominates conversation. Nearly half of Catalans say water is the region's main problem, more worrying than terrorism, economic slowdown or even the populists' favourite – immigration. The political battles now breaking out here could be a foretaste of the water wars that scientists and policymakers have warned us will be commonplace in the coming decades. The emergency water-saving measures Barcelona adopted after winter rains failed for a second year running have not been enough. The city has had to set up a "water bridge" and is shipping in water for the first time in the history of this great maritime city.
(continued)
(http://www.independent.co.uk/news/europe/spains-drought-a-glimpse-of-our-future-833587.html)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:09:01 AM

US Driving in March: Steepest Plunge Since 1942

The Department of Transportation said figures from March show the steepest decrease in driving ever recorded. Compared with March a year earlier, Americans drove an estimated 4.3 percent less -- that's 11 billion fewer miles, the DOT's Federal Highway Administration said Monday, calling it "the sharpest yearly drop for any month in FHWA history." Records have been kept since 1942.
(http://www.cnn.com/2008/US/05/26/gas.driving/index.html)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:09:42 AM

S&P/Case-Shiller U.S. Home-Price Index Falls 14.4% (Update1)
By Bob Willis

May 27 (Bloomberg) -- Home prices in 20 U.S. metropolitan areas fell in March by the most in at least seven years, pointing to continued weakness in the housing market that will further drag on the economy.
The S&P/Case-Shiller home-price index dropped 14.4 percent from a year earlier, more than forecast and the most since the figures were first published in 2001. The gauge has fallen every month since January 2007. Prices continue to slide as record foreclosures put more homes on the market and stricter lending standards make it harder to get loans. Falling home values are slowing consumer spending, threatening to halt the six-year expansion.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=ajojnweWQjfE&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:10:56 AM

Silverjet Stops Service

More than 10,000 passengers face travel chaos after luxury airline Silverjet grounds flights

By Daily Mail Reporter
Last updated at 4:01 PM on 30th May 2008

'

More than 10,000 passengers have been hit after business class-only airline Silverjet grounded its flights today after becoming the latest airline to fall victim to rising oil prices. Passengers left stranded in Dubai and New York have been advised to try and make alternative arrangements after the airline announced it was ceased operations today. The carrier, which started in January last year and flew from Luton to New York and Dubai, said it failed to secure a vital new funding package.
(http://www.dailymail.co.uk/news/article-1023025/More-10-000-passengers-face-travel-chaos-luxury-airline-Silverjet-grounds-flights.html)

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:11:22 AM

Inflation outlook makes consumers' mood grim
Fri May 30, 2008 4:42pm EDT
By Burton Frierson
http://www.reuters.com/article/ousiv/idUSN3031617020080530
NEW YORK (Reuters) - U.S. consumer confidence fell to a 28-year low in May, a survey showed on Friday, as soaring prices for food and fuel soured sentiment and pushed long-term inflation expectations to the highest in more than a decade. "Consumers are running scared. These price data are bad for consumers and businesses," said David Wyss, chief economist at Standard & Poor's Ratings Services in New York.
"We are not going to see the economy getting better any time soon. We are still in the early stages of the recession."

Title: Re: Meltdown
Post by: BachQ on May 31, 2008, 05:11:54 AM

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:37:21 AM

Economic depression in America: Evidence of a withering economy is everywhere
by
Mike Whitney

Global Research, June 2, 2008
Information Clearing House

Look around. The evidence of a withering economy is everywhere. In "good times" consumers shun the canned meat aisle altogether, but no more. Today, Spam sales are soaring; grocery stores can't keep it on the shelves. Everyone is looking for cheaper ways to feed their families. The Labor Dept. assures us that core-inflation is only 4 per cent, but everybody knows it's load of malarkey. Food prices are going through the roof. White bread is up 13 percent, bacon is up 7 percent and peanut butter is up 9 percent. Inflation is rampant and there's no end in sight. The dollar is closing in on the peso and working people are struggling just to get by. The bottom line is that more and more people in "the richest country on earth" are now surviving on processed pig-meat. That says it all.
(http://www.globalresearch.ca/index.php?context=va&aid=9162)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:37:57 AM

Could 50% of All Homes End Up in Foreclosure?
(June 3, 2008)

Charles Hugh Smith

Just how bad could the housing bust get? How about half of all urban homes being in foreclosure? As stunning or unbelievable as that may sound, it already happened once in the U.S., in the Great Depression ...The only "missing ingredient" to a full-blown depression is job loss/income contraction, and many of us foresee a long, painful wave of lay-offs and downsizing on a global scale just beginning.
(http://www.oftwominds.com/blogjun08/foreclosure6-08.html)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:38:29 AM

Villains in the Mortgage Mess? Start at Wall Street. Keep Going.
By Kathleen Day
Sunday, June 1, 2008; B01

But make no mistake: Today's crisis dwarfs the S&L fiasco. The eventual cost to taxpayers of this scandal is likely to make yesteryear's culprits look like pikers. The short version of how we got here: Lenders, fat with money made cheap by the federal government, aggressively coaxed millions of borrowers to take out unaffordable mortgages. They lent this money without assessing whether borrowers could repay it. They assumed, in fact, that most wouldn't be able to and would have to refinance into new, equally unaffordable loans. This process would produce an endless cycle of fees for the lenders -- but only if home prices rose, fairy-tale-like, forever. On what planet would that be an acceptable business plan?
(continued)
(http://www.washingtonpost.com/wp-dyn/content/article/2008/05/30/AR2008053002568.html?referrer=emailarticle&ref=patrick.net)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:39:12 AM

WSJ
After Mortgage Mess, Construction Crisis

By LINGLING WEI
June 3, 2008; Page C1

*** Analysts expect a sharp increase in bad construction loans partly because many of them were made with "interest reserves," pools of money developers set aside to pay interest while projects get built. Once they burn through those reserves, developers of troubled projects can't pay debt service, forcing banks to classify the loans as nonperforming. Because of their size, banks could face substantial losses if many go bad at once. "It's no question construction loans are going to show increases in losses in the coming quarters," said stock analyst Dick Bove at Ladenburg Thalmann & Co., speaking about Wachovia.
(continued)
(http://online.wsj.com/article/SB121245454516740039.html?mod=todays_us_money_and_investing)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:39:45 AM

GM to Close Four Truck Plants, Shift Output to Cars (Update5)
By Jeff Green and Bill Koenig

June 3 (Bloomberg) -- General Motors Corp., struggling to return to profit amid record gasoline prices, said it will close four truck plants, make more small cars, and may drop its Hummer brand of large sport-utility vehicles. Gasoline exceeding $4 a gallon represents ``a structural change, not just a cyclical change,'' Rick Wagoner, the largest U.S. automaker's chief executive officer, told reporters today before its annual shareholders' meeting in Wilmington, Delaware.
(http://www.bloomberg.com/apps/news?pid=20601103&sid=a_HL22tswTWE&refer=us)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:40:10 AM

What happens when oil runs out?
Sunday, June 01, 2008
By Garret M. Ellison
The Grand Rapids Press

GRAND RAPIDS -- The collapse of cities, a return to rail transportation, famine and a worldwide depression are but a few outcomes predicted by energy industry insiders and believers in the peak oil theory who gathered this weekend at Calvin College. "We will have a different civilization, to be sure," said David Goodstein, a vice provost and professor of physics at the California Institute of Technology (Caltech). Goldstein wrote the book, "Out of Gas: The End of the Age of Oil." He joined dozens of speakers at the International Conference on Peak Oil and Climate Change.
(http://www.mlive.com/news/grpress/index.ssf?/base/news-42/1212300955258630.xml&coll=6)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:40:44 AM

The great rice crisis: Rationing at UK supermarkets as world prices soar 70 per cent
By Christopher Leake
Last updated at 2:40 AM on 01st June 2008
By CHRISTOPHER LEAKE

Supermarkets are rationing rice in some stores after panic-buying by customers worried about a global shortage. Retailers including Tesco, Asda, Morrisons and Lidl have introduced quotas for the staple food, which has increased in price worldwide by 70 per cent in a year.
(http://www.dailymail.co.uk/news/article-1023362/The-great-rice-crisis-Rationing-UK-supermarkets-world-prices-soar-70-cent.html#)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:41:06 AM

Shocked! How the oil crisis has hit the world
By Andy McSmith, Jerome Taylor and Nigel Morris
Saturday, 31 May 2008

British pensioners who cannot afford to heat their homes. European hauliers and fishermen whose livelihoods are under threat. Palestinians forced to fill up their cars with olive oil. Americans asked to go down to a four-day week. All around the world, in a multitude of ways, the soaring price of oil is hurting rich and poor alike. For the lucky ones, it is simply a matter of changing their lifestyle. But those most vulnerable to the price of oil have been driven on to the streets in angry protests, which raise a fundamental question: what can we do to survive in a world where a barrel of oil costs $127 (£64)?
The number of Britons in "fuel poverty" – 10 per cent of their income goes on energy – is thought to have reached four million. The average annual household bill for heat and light is now more than £1,000.
(http://www.independent.co.uk/environment/green-living/shocked-how-the-oil-crisis-has-hit-the-world-837477.htm)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:41:53 AM

Telegraph UK
US staring at double-dip recession as calls for higher interest rates grow
6 June 2008

By slashing interest rates in the face of rising price pressures, has the world's most important central bank sowed the seeds of a new inflationary era? It's an alarming idea, but one gaining currency all the time. Since the sub-prime crisis broke last summer, America's Federal Reserve has dropped rates by 325 basis points - all the way down to 2 per cent. But looser money, along with sky-high oil and food prices, has cranked up US inflation, which now stands at 3.9 per cent. In real terms, American borrowing costs are firmly in negative territory. No wonder the markets are wondering if Ben Bernanke, Fed chairman, has made a grave error.
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/01/ccliam101.xml)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:42:14 AM

Banks' credit crisis solutions have echoes of 1929 Depression

'We are in the midst of the worst financial crisis since the 1930s," warns the eminent financier George Soros in his latest book, The New Paradigm for Financial Markets. It's a rather extreme view, but the man who broke the Bank of England is not alone in his dark funk. At a recent event, one banker laced Soros's sentiment with a little gallows humour, ruefully predicting "10 years of depression followed by a world war".
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/01/cccrisis101.xml&CMP=ILC-mostviewedbox)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:43:55 AM

Auto sales plunge in face of $4 gas
With gas at record highs, buyers stay away from SUV and pickup models, hitting May sales at GM, Ford and Toyota.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: June 3, 2008: 2:12 PM EDT

NEW YORK (CNNMoney.com) -- U.S. auto sales tumbled in May as buyers fled from pickups and sport utility vehicles in the face of average gas prices that are now just shy of $4 a gallon. GM reported that overall sales plunged 27.5% in the month, far worse than the 19% drop forecast by sales tracker Edmunds.com. The declines were led by the 37% tumble in the sales of light trucks, such as pickups and SUVs.But even sales of cars fell 14% during the month. Ford, the nation's No. 3 automaker reported that overall U.S. sales were down 16 percent, even worse than the forecast of a 9% drop from Edmunds.com. Sales of light truck models tumbled more than 25%. And Toyota reported a 4% drop in combined sales of its Toyota and luxury Lexus brands. Edmunds was forecasting a 3% decline. Sales of light trucks fell 12%. "We've never seen this big of a change in the product mix, this fast," said Jesse Toprak, chief industry analyst for Edmunds.
(http://money.cnn.com/2008/06/03/news/companies/autosales/index.htm)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:44:27 AM

Collapse in Demand For Large SUVs Leaves Owners in a Bind
Tumbling Values on Trade-ins, Used Vehicles
Means Many Loans Are 'Underwater'
June 2, 2008; Page D2

The market for large, second-hand SUVs is going through its own version of the mortgage market's meltdown -- and for some of the same reasons. ... Gasoline at $4 a gallon has burst the super-sized American lifestyle. ...
(http://online.wsj.com/article/SB121217059017133283.html?mod=loomia&loomia_si=t0:a31:g2:r1:c0.209914)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:45:06 AM

UK: House price falls at new record
UK house prices have recorded their largest monthly fall since 1991, says the Nationwide building society.

Prices have fallen by 2.5% during May, according to its latest monthly survey. The lender said prices were now 4.4% lower than a year ago, a drop of £8,000, which has taken the average UK house price down to £173,583. The Nationwide, the UK's second-largest lender, said seasonally adjusted price falls were now accelerating and had continued for seven months in a row. "The pace of house price falls accelerated in May as more weak economic news added to the gathering momentum of negative sentiment about the housing market," said Fionnuala Earley, the Nationwide's chief economist. "At seven months, this is also the longest consecutive period of monthly falls since 1992," she added.
(http://news.bbc.co.uk/1/hi/business/7424309.stm)

Title: Re: Meltdown
Post by: BachQ on June 04, 2008, 03:45:38 AM

Fuel prices' toll on U.S. economy
By Ron SchererTue May 27, 4:00 AM ET

Every $10 increase in the price of a barrel of oil lowers America's output of goods and services (known as the gross domestic product) by about 0.2 percent, economists calculate. This means that the economy has lost 1.6 percent in the past year due to the rise in oil prices. Since January, oil prices are up nearly $40 a barrel, or 0.8 of the GDP. The fiscal stimulus package passed by Congress was intended to add about 1 percent to GDP.
(http://news.yahoo.com/s/csm/20080527/ts_csm/ahurting)

Title: Re: Meltdown
Post by: Lethevich on June 04, 2008, 06:09:05 AM

Quote from: Dm on June 04, 2008, 03:44:27 AM
Collapse in Demand For Large SUVs Leaves Owners in a Bind
Tumbling Values on Trade-ins, Used Vehicles
Means Many Loans Are 'Underwater'

Haha :P I'm getting some entertainment from this thread, at least.

Title: Re: Meltdown
Post by: Lethevich on June 04, 2008, 04:58:13 PM

Oil, Gasoline Fall After U.S. Fuel Supplies Rise, Demand Drops

June 4 (Bloomberg) -- Crude oil fell more than $2 a barrel and gasoline dropped the most in two months on a larger-than- expected U.S. fuel-supply gain and signs demand will weaken because of increasing prices. (http://www.bloomberg.com/apps/news?pid=20601087&sid=afM3KOfPAXkE&refer=home)

Title: Re: Meltdown
Post by: BachQ on June 05, 2008, 01:00:44 PM

Quote from: Lethe on June 04, 2008, 04:58:13 PM
Oil, Gasoline Fall After U.S. Fuel Supplies Rise, Demand Drops

June 4 (Bloomberg) -- Crude oil fell more than $2 a barrel and gasoline dropped the most in two months on a larger-than- expected U.S. fuel-supply gain and signs demand will weaken because of increasing prices. (http://www.bloomberg.com/apps/news?pid=20601087&sid=afM3KOfPAXkE&refer=home)

Hey, that's terrific news.

Oil crisis averted!

Whew!

Title: Re: Meltdown
Post by: BachQ on June 05, 2008, 01:02:11 PM

Or ........ Wait ........ This just in:

Oil surges more than $5; Biggest gain in 2 months
Thu Jun 5, 2008 4:05pm EDT
By Matthew Robinson

NEW YORK (Reuters) - Oil jumped more than $5 to nearly $128 a barrel on Thursday, rebounding from a sharp two-day sell-off as the dollar slid on signals the European Central Bank could raise interest rates this year. U.S. crude settled up $5.49, or 4.5 percent, at $127.79 a barrel -- the biggest percentage gain in more than two months. London Brent settled $5.44 higher at $127.54 a barrel. The surge reverses most of a nearly $6 slide this week that had been triggered by worries that high prices were starting to eat into global demand.
(http://www.reuters.com/article/GCA-Oil/idUSREE06478120080605)

Title: Re: Meltdown
Post by: ezodisy on June 05, 2008, 01:29:50 PM

Quote from: Dm on June 05, 2008, 01:02:11 PM
Or ........ Wait ........ This just in:

Oil surges more than $5; Biggest gain in 2 months

HA HA HA HA I am laughing all the way to retirement

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:41:58 AM

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:42:26 AM

UK Telegraph: Water crisis to be biggest world risk

By Ambrose Evans-Pritchard

Last Updated: 12:57am BST 06/06/2008

A catastrophic water shortage could prove an even bigger threat to mankind this century than soaring food prices and the relentless exhaustion of energy reserves, according to a panel of global experts at the Goldman Sachs "Top Five Risks" conference.
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/05/ccwater105.xml)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:42:51 AM

Credit-Card Use Is Surging, Risking Another Debt Crisis
(http://www.cnbc.com/id/24948627)
"Right now what we're seeing is the US consumer losing their disposable income as they have to spend more and more on necessities because of higher prices for gas and food," says Ron Ianieri, a market strategist and co-founder of the Options University investor education center. "Normally when you have a certain budget and you can't keep up with the budget one of the easy steps is to extend that budget using credit." One of the main problems with that is US consumers—and their counterparts in Europe as well—already are delinquent on their credit card payments in numbers not seen in six years. The Federal Reserve last week said credit card delinquencies hit 4.86 percent in the first quarter in 2008, while revolving debt—or the type used in credit purchases—hit $957.2 billion in March, a 7.9 percent increase.

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:43:21 AM

End of the road for Hummer after sales of 'world's most anti-environmental car' dive

Loathed by environmentalists, military-style Hummers have survived years of vandalism, arson and abuse. But the lumbering American gas-guzzling vehicles have met their match in the rocketing cost of filling a tank with petrol. Alarmed by a slump in demand for vehicles that consume vast quantities of fuel, Hummer's owner, General Motors, is reviewing the future of the Hummer brand which was originally a civilian version of the US military's armoured Humvee. The struggling Detroit-based carmaker said it was considering off-loading the business - and with US sales plunging, its prospects are cloudy.
(http://www.guardian.co.uk/business/2008/jun/04/automotive.carbonemissions)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:43:39 AM

UK Telegraph: California faces water rationing due to drought

By Catherine Elsworth in Los Angeles

Last Updated: 9::01am BST 5 /06/2008

Californians could face mandatory water rationing unless they drastically reduce consumption because of a state-wide water crisis, governor Arnold Schwarzenegger has said.

(http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2008/06/05/eadrought105.xml)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:44:21 AM

UK Telegraph: Europe faces severe slowdown as central bank signals it may raise rates. (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/06/bcnecb306.xml)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:45:06 AM

UK housing market falling faster than last recession, says Bellway

By Angela Monaghan

Last Updated: 10:59am BST 06/06/2008

The housing market is deteriorating at a much faster rate than it did during the recession of the early 1990s, Bellway said, as expectancy grew in the City that some UK housebuilders could be forced to raise capital to shore up their balance sheets. Bellway said that the spring season - traditionally a strong sales period for housebuilders - failed to take off and a restricted supply of mortgages was exacerbating the problem. It now expects volumes to fall by 10pc-15pc this year.
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/06/cnbellway106.xml&CMP=ILC-mostviewedbox)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:45:33 AM

Americans $1.7 trillion poorer
Americans' net worth falls for the second straight quarter as home and stock prices decline, but it may not hurt consumer spending, experts say.
By Tami Luhby, CNNMoney.com senior writer
Last Updated: June 5, 2008: 4:12 PM EDT

NEW YORK (CNNMoney.com) -- Americans saw their net worth decline by $1.7 trillion in the first quarter - the biggest drop since 2002 - as declines in home values and the stock market ravaged their holdings. Meanwhile, the amount of equity people have in their homes fell to 46.2%, the lowest level on record. The net worth of U.S. households fell 3% to $56 trillion at the end of March, according to the Federal Reserve's flow of funds report, which was released Thursday. The value of real estate assets owned by households and non-profits declined by $305 billion, while financial assets fell by $1.3 trillion, led mainly by a $556 billion drop in stocks and a $400 billion decline in mutual funds The first quarter's decline follows a $530 billion drop in wealth in the fourth quarter of 2007. Until then, net worth had been rising steadily since 2003, climbing nearly 31% over those five years. During the bear market of 2000 through 2002, household's net worth dropped 6.2%.
(http://money.cnn.com/2008/06/05/news/economy/fundflows/index.htm)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:45:47 AM

Oil prices bounce back over $130

Crude futures traded up $8 form the middle of the week as the dollar weakened against the euro because of comments made by the head of the European Central Bank. ... Late afternoon in Singapore, the contract was up $2.64 at $130.43 a barrel in electronic trading.
(http://money.cnn.com/2008/06/06/markets/oil_ap.ap/index.htm)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:46:50 AM

Business Bankrupticies Rocket 46%

Nearly 250 bankruptcy filings every day; more where that came from June 3, 2008

Reuters)—U.S. commercial bankruptcies soared 46% in May from a year ago and many more are expected as the slowing economy chokes consumers and businesses, according to a bankruptcy management firm. There were some 5,233 commercial bankruptcy cases last month, up from 3,589 in the year-ago period, according to AACER, a database of U.S. bankruptcy statistics.

(http://www.financialweek.com/apps/pbcs.dll/article?AID=/20080603/REG/701124426/1015/INVESTORRELATIONS)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:47:15 AM

10% of Homeowners Face Loan Problems
By MICHAEL M. GRYNBAUM

Nearly 1 in 10 American homeowners with a mortgage faced foreclosure or fell behind in their payments in the first three months of the year, according to a report released Thursday, a figure that offers a look into the toll caused by the collapse of the housing market.

link (http://www.nytimes.com/2008/06/06/business/06mortgage.html?hp)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:47:33 AM

Homes in foreclosure top 1 million
Mortgage bankers report hits grim a benchmark in first quarter, showing a record number of homes in jeopardy.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: June 5, 2008: 2:09 PM EDT

NEW YORK (CNNMoney.com) -- More than one million homes are now in foreclosure, the highest rate ever recorded, according to a trade group which warned Thursday that number will continue to climb. The Mortgage Bankers Association's first quarter report showed that a record 2.5% of all loans being serviced by its members are now in foreclosure, which works out to about 1.1 million homes. That's up from the 2% of loans, or about 938,000 homes, that were in foreclosure at the end of 2007. The report also showed that 448,000 homes, or about 1% of loans being serviced, began the foreclosure process during the first quarter. That's up from about 382,000 homes, or 0.83%, that entered foreclosure in the last three months of 2007. The seasonally-adjusted rate of homeowners behind on their mortgage payments also hit a record high. Nearly 3 million home loans, or 6.4%, have missed at least one payment, while about 737,000 are at least three months past due, but not yet in foreclosure.
(http://money.cnn.com/2008/06/05/news/economy/foreclosure/index.htm)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:48:03 AM

U.S. Mortgage Delinquencies, Foreclosures Rise to 29-Year High (http://www.bloomberg.com/apps/news?pid=20601087&sid=ahEcmuOjgr4U&refer=home)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:48:18 AM

CNBC: Continental Airlines to slash 3,000 jobs (http://www.cnbc.com/id/24982048/for/cnbc/)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:48:37 AM

Reuters: After decades of contentious debate over nuclear power, a consensus is emerging: nuclear energy is making a comeback (http://www.reuters.com/article/reutersComService4/idUSL0425441220080604)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:48:49 AM

Peak Oil, Peak Food, Peak Everything Else (http://www.dailyreckoning.com.au/peak-oil-peak-food-peak-everything-2/2008/06/04/)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:49:00 AM

Americans Are in for a Crude Awakening (http://www.redorbit.com/news/business/1416777/americans_are_in_for_a_crude_awakening/)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:49:15 AM

Guardian UK: Biofuels (http://www.guardian.co.uk/commentisfree/2008/jun/04/thebiofuelsolution)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:49:46 AM

Climate change will add to food, utility bills
Thu Jun 5, 2008 6:43am EDT
By Gerard Wynn - Analysis

Climate measures inflate energy costs by putting a price on burning fossil fuels and also stoke food bills by using farmland and crops to produce renewable fuels. Now near-record oil and food prices coupled with a global economic slowdown have triggered unrest in several countries and demands to ease taxes on fuels and free up farmland for food. "This important part of the global economy, food and energy, has been grossly distorted due to under-pricing of water and (carbon-free) air," Nobel Laureate economist Joseph Stiglitz told Reuters.
(http://www.reuters.com/article/ousiv/idUSL0549221920080605)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:50:00 AM

The Price of Peak Oil (http://www.abc.net.au/science/articles/2008/06/05/2265274.htm?site=science&topic=lates)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:50:16 AM

No stopping runaway fuel price as pressure on supplies increase (http://www.dispatch.co.za/article.aspx?id=209742)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:50:36 AM

OECD warning of sharper slowdown
By Steve Schifferes Economics reporter, BBC News, at the OECD in Paris

The Organisation for Economic Co-operation and Development (OECD) has warned that the global economic slowdown may last longer than expected. It added that the UK economy was headed for a significant downturn that put government spending plans in danger.
(http://news.bbc.co.uk/2/hi/business/7430616.stm)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:51:09 AM

'We're Only at the Beginning' of the Food Crisis

*** SPIEGEL ONLINE: What is the main reason for food production no longer keeping up with demand?

Müller: Various factors, including very significantly the rising oil price. Traditional agriculture is itself very energy intensive: It needs oil for fertilizer, pesticides, tractors and transport. To get away from that, many governments are promoting fuels made from agricultural products. This is turn links the price of bread to the price of oil.

SPIEGEL ONLINE: Has the food crisis reached its peak?

Müller: Quite the opposite, we're only at the beginning. Unchecked climate change would lead to farmland drying out or becoming flooded. New animal and plant diseases are emerging; yields could fall. We have to produce 40 percent to 60 percent more food, while there is a marked reduction in the land available for cultivation in the south.
(http://www.spiegel.de/international/world/0,1518,557147,00.html)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:51:29 AM

Already Stunned by Gas Prices, Shockingly High Electricity Prices May Await Americans This Summer
Posted: June 4, 2008

Americans may pay a lot more for electricity this summer, federal energy officials and the spot power market indicate. Worst hit could be the Northeast, especially the area from Boston to New York City, where forward prices from the InterContinental Exchange for July-August 2008 have been running up to 75% and higher over year-ago levels. *** Higher power prices due to higher fuel costs aren't just an American phenomenon. Officials in countries from Great Britain to Australia have warned that rising costs will force their electricity rates to rise as well.
(http://energytechstocks.com/wp/?p=1289)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:51:46 AM

Rising Prices, Falling Dollar Stoke Memories of the '70s
By Neil Irwin
Washington Post Staff Writer
Wednesday, June 4, 2008; Page A01

Prices have been soaring long enough and fast enough, economists say, that the nation is at risk of a self-reinforcing cycle of inflation like that experienced in the 1970s. It is a risk Federal Reserve Chairman Ben S. Bernanke highlighted in a speech yesterday, saying that the falling value of the dollar can feed into inflation expectations, and that rapid price escalation, if sustained, "might lead the public to expect higher long-term inflation rates, an expectation that ultimately could become self-confirming."
(http://www.washingtonpost.com/wp-dyn/content/article/2008/06/03/AR2008060301061.html?nav=rss_email/components)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:52:04 AM

U.S. home builders face off with foreclosures
Wed Jun 4, 2008

By Julie Haviv and Ilaina Jonas - Analysis

NEW YORK (Reuters) - U.S. home builders, struggling under sinking demand and a credit crisis, now face a fresh obstacle: competition from a flood of homes in foreclosure. Grappling with the worst U.S. housing market downturn since the Great Depression, home builders have curbed their building activities. They've also been slicing through their inventories of unsold homes by slashing prices even at the expense of profits, all to pay off their own debt and keep afloat. Now, in addition to higher mortgage rates, skittish buyers and competition from other builders, they face a rising number of homes whose owners are unable to sustain their mortgage payments. "In some regions, the supply coming to the market from home builders is now smaller than the supply coming from foreclosures," Deutsche Bank senior economist Torsten Slok said. The situation in the housing market remains gloomy, and the home builders seem to be waiting for the foreclosure "tsunami" to pass, Slok said. But many say it may get worse as delinquency risk is likely to rise over the next 18 months, according to First American CoreLogic, which tracks and analyzes real estate data. "This is the central issue for housing in 2008 and maybe for 2009 as well," said Buck Horne, Raymond James analyst. The rate of mortgages with payments more than 90 days late rose to 4 percent of all U.S. residential mortgages in April, up from 2.1 percent last year, according to First American CoreLogic. The rate of loans in the process of foreclosure rose to 0.7 percent from 0.4 percent in April 2007. The number of homes that have been repossessed rose to 660,000 in April, according to First American CoreLogic.
(http://www.reuters.com/article/newsOne/idUSN0337373120080604)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:52:19 AM

United Airlines to slash its domestic capacity by 14 percent

CHICAGO (Reuters) - United Airlines said it would slash its domestic capacity by 14 percent in the fourth quarter, remove 100 planes from its fleet and cut up to 1,600 jobs as it grapples with soaring fuel costs and a weakening U.S. economy.
(http://www.reuters.com/article/newsOne/idUSN0342147920080604)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:52:51 AM

Bank Woes Likely to Worsen
By Liz Capo McCormick

June 4 (Bloomberg) -- Interest-rate derivatives traders are betting banks' difficulties obtaining cash to fund holdings and shore up balance sheets will worsen. The difference, or spread, between the three-month dollar London interbank offered rate, or Libor, and the overnight index swap rate, traded forward three months, is greater than similar spreads expiring this month, according to data tracked by Credit Suisse Holdings Inc. ``The movement in the forward Libor-OIS spreads is telling you that the market is concerned that things can get even worse before they get better,'' said Carl Lantz, an interest-rate strategist in New York at Credit Suisse. ``Until all banks' balance sheets are cleaned up and they've re-capitalized, there is going to be funding pressure.''
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aTtt1lSMsiWs&refer=home)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:53:07 AM

Fliers in for pain as airlines pack it in

By Marilyn Adams, Barbara De Lollis and Barbara Hansen, USA TODAY

*** The Air Transport Association says air service has been eliminated in 60 communities that had some in 2007, and 37 more will lose all service later this year. For fliers, fall will bring fewer daily flights on some busy routes, especially less-popular early-morning and late-night flights. There'll be fewer non-stop choices, especially from cities that are not airlines' hub airports. Many travelers accustomed to flying non-stop from their local airports will be forced to drive to a distant airport for the flight they need or will have to use connecting flights. Where airlines quit flying, reduced competition will allow the remaining carriers to push up fares. "The good times are about to end for consumers," says airline consultant Mo Garfinkle of GCW Consulting. "They've had it too good, with low fares, for too long. These cuts are just the first step; we will see more this fall."
(http://www.usatoday.com/travel/flights/2008-06-03-airlines-cuts-flights-fares_N.htm)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 03:53:24 AM

Heating oil sticker shock to hit New England
By CLARKE CANFIELD, Associated Press WriterSun Jun 1, 1:57 PM ET

*** Retail heating oil prices have risen to more than $4.50 a gallon, nearly double what they were last year at this time. Some oil dealers have delayed rolling out their payment plans for next winter as the world oil markets continue their wild ride. Consumers — already on edge with rising gasoline and food prices — will probably be outraged when they calculate their oil bills for next winter, said Jamie Py, president of the Maine Oil Dealers Association. "There'll be sticker shock," Py said. "Nobody knows what the price will do. It could go up or the bubble could burst and it could come crashing back down." The angst over heating oil prices is particularly acute in New England, where a higher proportion of people use oil as their primary heating source than any other region, ranging from more than 75 percent in Maine to about 40 percent in Massachusetts. Of the 7.7 million U.S. households that heat with oil, nearly 70 percent reside in the Northeast, according to the U.S. Department of Energy.
(http://news.yahoo.com/s/ap/20080601/ap_on_bi_ge/heating_oil_prices_2;_ylt=Ak36Vh0Ywq7PrSNV7jP_eyaAsnsA)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 06:00:41 AM

Gas hoarding leads to fire (http://www.cnn.com/2008/US/06/06/gas.fire.ap/index.html)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 06:01:23 AM

U.S. Unemployment Rate Climbs to 5.5%, Most in 20 Years

June 6 (Bloomberg) -- The U.S. lost jobs in May for a fifth month and the unemployment rate rose by the most in more than two decades, signaling the world's largest economy is stalling. Payrolls fell by 49,000, a smaller decline than forecast, after a 28,000 drop in April that was more than initially reported, the Labor Department said today in Washington. The jobless rate increased to 5.5 percent from 5 percent, the biggest jump since February 1986. *** ``We've never seen a run of negative payroll numbers like this without the economy being in a recession,'' Avery Shenfeld, senior economist at CIBC World Markets in Toronto, said before the report. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ6VzqO8N1Ag&refer=home)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 06:02:01 AM

Foreclosures hit a record high — and more coming
By JEANNINE AVERSA, AP Economics WriterThu Jun 5, 4:30 PM ET

The foreclosure hammer is hitting ever harder. People lost their homes at the highest rate on record in the first three months of the year, and late payments soared to a new high, too — an alarming sign that the housing crisis and its damage to the national economy may only get worse. Dumping more empty homes on an already glutted market also is likely to put a further drag on home prices — extending a vicious cycle. Slumping home values are being blamed in large part for the rising tide of foreclosures. Troubled borrowers are left owing more to the bank than their homes are worth. They can't sell without taking a huge financial hit, so they just walk away. In fact, Americans' equity in their homes — usually their single biggest asset — now has dropped to the lowest level on record in figures going back to the end of World War II. Homeowners' portion of equity fell to 46.2 percent, which means the amount of debt tied up in their homes exceeds the equity they have built up. ... "The economy is treading water, and the housing market is one of the undercurrents trying to pull it down," said Stuart Hoffman, chief economist at PNC Financial Services Group. (http://news.yahoo.com/s/ap/20080605/ap_on_bi_ge/home_foreclosures;_ylt=ApxQFljsgF7aGpXgLQ4vpyeyBhIF)

Title: Re: Meltdown
Post by: BachQ on June 06, 2008, 06:02:24 AM

Morgan Stanley Says Crude May Reach $150 by July
By Nesa Subrahmaniyan

June 6 (Bloomberg) -- Morgan Stanley, the second-biggest U.S. securities firm, said current shipping patterns suggested that U.S. benchmark West Texas Intermediate crude oil may reach $150 a barrel by July 4. Middle East oil shipments are similar to the end of the third quarter last year, when Morgan Stanley had predicted an ``oil price spike'' based on projections of inventory draws in the Atlantic Basin, Ole Slorer, the bank's analyst wrote in a research note today on commodity shipping. ``That same pattern is now again upon us, and we are making an identical call,'' Slorer wrote. This time ``we are starting from a much tighter Atlantic Basin inventory backdrop.''
(http://www.bloomberg.com/apps/news?pid=20602099&sid=aDTcV34vBOrU&refer=energy)

Title: Re: Meltdown
Post by: mn dave on June 06, 2008, 06:03:01 AM

You sure are the cheerful sort, Dm. :-\

Title: Re: Meltdown
Post by: Gurn Blanston on June 06, 2008, 06:37:32 AM

I find it interesting that Morgan Stanley, a financial company with a huge stake in speculation on oil prices, is also in a position to predict that prices will rise still further. Interesting in the sense that they can easily make this a self-fulfilling prophecy. To my admittedly dim way of thinking, the conflict of interest involved in all this should be stirring the interest of the regulators of the markets, whose job, after all, is to limit the potential for massive scale fraud. Which is exactly what this speculation is. There is no shortage of resources, there is manipulation of the market. And after the economy is wrecked from it, in the aftermath, all of the 20/20 hindsighters will be whining "how could the government have let this happen?

The fact that this thread keeps on bemoaning this situation as though it is real and not manufactured makes me despair of our collective will to control our own destinies, as opposed to allowing the manipulations of a greedy few do our thinking for us. There is little consolation in knowing that the paper money they are so busily raking in will be totally worthless by the time they sit back to count it. >:D

8)

Title: Re: Meltdown
Post by: bwv 1080 on June 06, 2008, 09:19:12 AM

Quote from: Gurn Blanston on June 06, 2008, 06:37:32 AM
I find it interesting that Morgan Stanley, a financial company with a huge stake in speculation on oil prices, is also in a position to predict that prices will rise still further. Interesting in the sense that they can easily make this a self-fulfilling prophecy. To my admittedly dim way of thinking, the conflict of interest involved in all this should be stirring the interest of the regulators of the markets, whose job, after all, is to limit the potential for massive scale fraud. Which is exactly what this speculation is. There is no shortage of resources, there is manipulation of the market. And after the economy is wrecked from it, in the aftermath, all of the 20/20 hindsighters will be whining "how could the government have let this happen?

The fact that this thread keeps on bemoaning this situation as though it is real and not manufactured makes me despair of our collective will to control our own destinies, as opposed to allowing the manipulations of a greedy few do our thinking for us. There is little consolation in knowing that the paper money they are so busily raking in will be totally worthless by the time they sit back to count it. >:D

8)

The situation is real, that some cabal could manufacture this is beyond any reasonable credulity.

I do not think that Morgan has that much of a stake in oil prices - certainly nothing like the stake they had in Internet and Telecom stocks in 1999. Manipulation is not a correct term, as no one can deliberately manipulate the price of a global commodity like oil. Spot oil prices are set in the futures markets and certainly there is a case that there is something like a short squeeze going on that has exacerbated the price increases. But ultimately it comes down to supply and demand - and global demand - thanks to China and India - is growing faster than supply. In a few years there are substantial new projects - Canadian Oil Sands, the Deepwater Brazilian reserves, etc that will help, but this is still oil that costs something like $70 / bbl to extract.

Ultimately price is the only effective rationing mechanism and it is causing quite significant changes in behavior. Personally, I hope oil stays at this level as the sooner alternatives are developed the better

Title: Re: Meltdown
Post by: Gurn Blanston on June 06, 2008, 09:39:34 AM

Quote from: bwv 1080 on June 06, 2008, 09:19:12 AM
In a few years there are substantial new projects - Canadian Oil Sands, the Deepwater Brazilian reserves, etc that will help, but this is still oil that costs something like $70 / bbl to extract.

Ultimately price is the only effective rationing mechanism and it is causing quite significant changes in behavior. Personally, I hope oil stays at this level as the sooner alternatives are developed the better

But note; the projects that you mention as being in development are all foreign. We have over a trillion barrels in our own country just in oil shale, which is greater than the proven reserves of Saudi Arabia. Is there any possibility of a project to recover it? Hell no! Not as long as the environmental lobby via their meat puppets in Congress steps on every suggestion of any plan to move towards any kind of energy independence.

I agree with you, I would like to see alternatives developed, but there is the meantime to consider. Without continued use of the energy fixed plant that we have now, at least as long as it needs to be done, we will never get to the point of developing an alternative. And right now, the economy is in the stranglehold of what I will continue (until proven wrong) to call a manipulated energy shortage. Yes, I am aware of global increases in consumption. What I am not convinced of is that we are anywhere near to exhaustion of potential hydrocarbon sources. Neither am I convinced that nuclear energy is not a viable source that we are entirely pushing aside, based on the superstitious beliefs of an influential cadre of anti-technology, anti-progressive voodoo practitioners. Until we can get ourselves past letting the inmates run the asylum, we are going absolutely nowhere.

8)

Title: Re: Meltdown
Post by: M forever on June 06, 2008, 06:26:41 PM

http://en.wikipedia.org/wiki/List_of_civilian_nuclear_accidents

Title: Re: Meltdown
Post by: Gurn Blanston on June 06, 2008, 06:49:55 PM

Quote from: M forever on June 06, 2008, 06:26:41 PM
http://en.wikipedia.org/wiki/List_of_civilian_nuclear_accidents

Yes, and how many terawatts of electricity produced during that time? Just like saying "look at all the plane crashes" without noting that millions of passenger miles are flown annually with no problem at all.

8)

----------------
Listening to:
Tokyo String Quartet - Bia 436-3 Op 59 #3 Quartet #9 in C for Strings 1st mvmt - Introduzione: Andante con moto - Allegro vivace

Title: Re: Meltdown
Post by: M forever on June 06, 2008, 06:51:56 PM

When a plane crashes, even with several hundred poor souls on board, that is still a fairly minor disaster compared to what can happen when a nuclear accident occurs.

Title: Re: Meltdown
Post by: BachQ on June 07, 2008, 07:11:02 AM

Quote from: Gurn Blanston on June 06, 2008, 09:39:34 AM
Yes, I am aware of global increases in consumption. What I am not convinced of is that we are anywhere near to exhaustion of potential hydrocarbon sources.

It is an unassailable fact that hydrocarbon extraction is becoming increasingly expensive. Our global economy is founded upon the notion of "cheap oil." When "cheap oil" runs out, the current economic infrastructure will become increasingly constrained, and increasingly susceptible to collapse.

It makes little difference that the USA has 1 trillion barrels of oil shale locked away in the ground ....... If it is economically unfeasible to extract it, then it might as well be 100 trillion barrels. Even without tapping into oil rock, experts predict that the price of gasoline will rise to $12-$15 / gallon (see, e.g., comments by renowned expert Robert Hirsch). Imagine what the price of gas would be if oil were extracted from hard-to-reach oil rocks!

Ultimately, I have no doubt that every drop of commercially extractable oil will be sucked from every terrestrial orifice until it simply is too expensive to rape the planet further. Given human nature, this WILL happen.

Canada is in the process of extracting oil from its massive tar sand reserves. But when the easily attainable oil is extracted, the remaining oil will remain locked away until a commercially feasible method of extraction technology is developed. At some point (and Canada may have already reached this point), turning tar sands into oil will be like turning gold into lead: it will not be commercially viable, and all of the commercial investments will run dry.

Title: Re: Meltdown
Post by: BachQ on June 07, 2008, 07:15:22 AM

Quote from: Gurn Blanston on June 06, 2008, 09:39:34 AM
Neither am I convinced that nuclear energy is not a viable source that we are entirely pushing aside, based on the superstitious beliefs of an influential cadre of anti-technology, anti-progressive voodoo practitioners.

Problem: we're running out of uranium (like any other earthly resource, the planet has a limited amount of this rare element). Global uranium extraction will peak within a few decades. The UK recently did a study on nuclear power, and concluded that it is, at best, a short-term solution (because of limited supplies of uranium).

Instead, our attention must turn to fully renewable sources of energy, like solar, wind, algae (and switchgrass), hydro-electric, and fusion. So far, none of these approaches being a viable substitute for fossil fuels. Technology may change that ......... but it's a long way off.

Title: Re: Meltdown
Post by: BachQ on June 07, 2008, 07:21:00 AM

Quote from: Gurn Blanston on June 06, 2008, 09:39:34 AM
Until we can get ourselves past letting the inmates run the asylum, we are going absolutely nowhere.

One thing is clear: governments are much more apt to screw things up than they are to improve things. If we have to rely upon the government, we are f#cked. For example, current world leadership has done more to set back the transition to a petroleum-free economy than any known force in the universe. With Iraq alone, Congress will spend $3 trillion to further entrench our dependence on foreign oil.

We are addicted to oil. But cheap oil is running out.

Title: Re: Meltdown
Post by: Gurn Blanston on June 07, 2008, 07:24:54 AM

D,
In reply to both of your posts, I need to clarify my stand, since I am not saying that these things are a permanent solution, I am saying that we need to exploit some of them (the low-hanging fruit, if you will) at least until other technologies are available. Hydrogen cars (which I think will be the ultimate solution) are a long enough way off that we can't continue to support our oil habit by buying from our enemies. 25-30 years, which is what it will take to perfect the technology and get it distributed, is way too long to spend not being self-reliant. We have huge reserves of coal, huge reserves of oil (albeit locked up in shale or sands), and enough uranium to last for a century or 2 if need be. A cogent plan for developing alternative technologies has to include "what the hell are we going to do in the meantime?".

8)

----------------
Listening to:
Pablo Casals (Cello) / Rudolf Serkin (Piano) - Bia 444 Op 69 Cello Sonata #3 in A 1st mvmt - Allegro ma non tanto

Title: Re: Meltdown
Post by: BachQ on June 07, 2008, 07:30:58 AM

Quote from: Gurn Blanston on June 07, 2008, 07:24:54 AM
D,
In reply to both of your posts, I need to clarify my stand, since I am not saying that these things are a permanent solution, I am saying that we need to exploit some of them (the low-hanging fruit, if you will) at least until other technologies are available. Hydrogen cars (which I think will be the ultimate solution) are a long enough way off that we can't continue to support our oil habit by buying from our enemies. 25-30 years, which is what it will take to perfect the technology and get it distributed, is way too long to spend not being self-reliant. We have huge reserves of coal, huge reserves of oil (albeit locked up in shale or sands), and enough uranium to last for a century or 2 if need be. A cogent plan for developing alternative technologies has to include "what the hell are we going to do in the meantime?".

I agree completely. How we as a species weather this transition from an oil-centric world to an oil-free world will determine how many billions of people will die when cheap oil runs out. It's a very serious problem, especially when you consider that our global food supply has heretofore depended upon the availability of CHEAP OIL ....... and when CHEAP OIL runs out, food production will plummet.

The transition will be brutal. Meanwhile, let's grab all the low-hanging fruit we can! :D

Title: Re: Meltdown
Post by: Anne on June 07, 2008, 11:59:38 AM

Grab the low-hangin' fruit but while you're at it, plant a garden. In our area (Northern Michigan US) it is planting time right now.

Title: Re: Meltdown
Post by: drogulus on June 07, 2008, 01:59:50 PM

Nuclear accidents are listed by decade, and you've never heard of them. Nor do you need to. Only one accident has had consequences, and that one was a 1940's design run in a manner that wouldn't happen anywhere else. I'm not interested in what can happen, only what will happen give or take the usual best case/worst case scenarios. IOW, 3 Mile Island without Jane Fonda histrionics. Even that is unlikely with the new reactors. Unlikely in this case means impossible, because a mound of nuclear fuel the size of Cheops wouldn't go critical.

Quote from: Dm on June 07, 2008, 07:30:58 AM
I agree completely. How we as a species weather this transition from an oil-centric world to an oil-free world will determine how many billions of people will die when cheap oil runs out. It's a very serious problem, especially when you consider that our global food supply has heretofore depended upon the availability of CHEAP OIL ....... and when CHEAP OIL runs out, food production will plummet.

The transition will be brutal. Meanwhile, let's grab all the low-hanging fruit we can! :D

Oil won't run out. The cure is being applied now, and it's brutally effective. I'm not a Dr. Pangloss, so I don't buy the conservative line that what the market decrees is good because....it's the market. The government could have and should have seen what was needed 20 years ago (actually, they did) and gradually ramped up automotive fuel standards, supported energy research and development and taxed carbon when prices were low. In politics foresight isn't rewarded very well since what makes it foresight means most people don't even recognize that a problem exists. Or they just blab on about energy independence or some postage stamp-sized field in Alaska (what do they call it? The Arctic National Wedge Issue?). Let them eat symbolism.....

Title: Re: Meltdown
Post by: M forever on June 07, 2008, 04:39:01 PM

Quote from: Anne on June 07, 2008, 11:59:38 AM
Grab the low-hangin' fruit but while you're at it, plant a garden. In our area (Northern Michigan US) it is planting time right now.

What's the weather like in the area right now? M will be flying to Detroit tomorrow night.

Title: Re: Meltdown
Post by: bwv 1080 on June 07, 2008, 04:58:15 PM

Quote from: drogulus on June 07, 2008, 01:59:50 PM

I'm not a Dr. Pangloss, so I don't buy the conservative line that what the market decrees is good because....it's the market. The government could have and should have seen what was needed 20 years ago (actually, they did) and gradually ramped up automotive fuel standards, supported energy research and development and taxed carbon when prices were low. In politics foresight isn't rewarded very well since what makes it foresight means most people don't even recognize that a problem exists. Or they just blab on about energy independence or some postage stamp-sized field in Alaska (what do they call it? The Arctic National Wedge Issue?). Let them eat symbolism.....

But don't you see that the market has done in 12 months what government failed to do in 20 years?

The government, (like any private corporation) only acts based on the incentives of the individual politicians and bureaucrats within it. These incentives all revolve around placating key interest groups. So obviously no one was going to mess with carbon taxes or fuel economy standards - there is no lobby for it. If conservatives are naiive in believing the markets never error, then liberals are doubly so for believing that there are these wise, imparital people in government that will act selflessly and wisely when given the power to interfere with markets. Its little more than a benevolent dictator fantasy. In truth, the primary purpose of any economic regulation is the protection of entrenched interests from competition, the protection of the consumer a distant secondary consideration.

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:25:09 AM

Water crisis to be biggest world risk
By Ambrose Evans-Pritchard
Last Updated: 11:56pm BST 06/06/2008

A catastrophic water shortage could prove an even bigger threat to mankind this century than soaring food prices and the relentless exhaustion of energy reserves, according to a panel of global experts at the Goldman Sachs "Top Five Risks" conference. underground aquifers could run dry at the same time as melting glaciers play havoc with fresh supplies of usable water. "The glaciers on the Himalayas are retreating, and they are the sponge that holds the water back in the rainy season. We're facing the risk of extreme run-off, with water running straight into the Bay of Bengal and taking a lot of topsoil with it,"
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/05/ccwater105.xml)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:25:34 AM

Gasoline rises above $4 a gallon for first time
Sun Jun 8, 2008 6:24pm EDT
By Bernard Woodall

LOS ANGELES (Reuters) - The U.S. average price for a gallon of regular gasoline topped $4 for the first time, a survey issued on Sunday by the travel group AAA showed. AAA's survey showed a national average price of $4.005 per gallon, up from $3.67 a month ago and $3.10 a year ago.
(http://www.reuters.com/article/newsOne/idUSN0643890320080608)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:25:51 AM

Peak oil: Are we there yet? (http://www.theage.com.au/opinion/peak-oil-are-we-there-yet-20080608-2niz.html)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:26:07 AM

VIDEO: http://www.fogcityjournal.com/wordpress/2008/06/08/peak-oil-and-the-end-of-sweet-suburbia/

This is a short version of "The End of Suburbia: Oil Depletion and the Collapse of The American Dream," a documentary about the end of the age of cheap oil.

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:26:41 AM

Scramble for oil as price continues to rise
Robin Pagnamenta: Analysis

There is no doubt that global oil production - at about 87 million barrels a day - is sputtering. The real question is: why? Is it, as advocates of the "peak oil theory" claim, because there is simply not enough oil left in the ground? Or is it because of other reasons, such as a lack of investment in new fields and production?
(http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4092178.ece)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:26:54 AM

T. Boone Pickens Says Peak Oil Reached, Plans World's Largest Wind Farm (http://cleantechnica.com/2008/06/08/t-boone-pickens-says-peak-oil-reached-plans-worlds-largest-wind-farm/)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:27:17 AM

OPEC sees no need to pump more after price surge
Sun Jun 8, 2008 11:04am EDT
By Simon Webb
[http://www.reuters.com/article/ousiv/idUSL0832567120080608]
DUBAI (Reuters) - OPEC members saw no need on Sunday to pump more oil in response to last week's double-digit surge in oil prices to over $139 a barrel that top exporter Saudi Arabia described as unjustified. More pain was coming for consuming economies hurting from record fuel costs as prices were likely to climb further, officials from the Organization of the Petroleum Exporting Countries (OPEC) said. ... "I think there is enough oil in the market," Shokri Ghanem, head of OPEC member Libya's National Oil Corporation, told Reuters in a telephone interview. Top oil exporter Saudi Arabia is the only OPEC member with capacity to boost output quickly and significantly. (...continued ...)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:27:37 AM

CBS NEWS predicts $6 gas this summer: (http://www.cbsnews.com/sections/i_video/main500251.shtml?id=4162109n)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:27:54 AM

REUTERS:As energy costs soar, America looks to solar
Fri Jun 6, 2008 5:50am EDT
By Jason Szep

After decades on the fringe, solar power is closing in on America's mainstream as surging fossil fuel prices and mounting concern over climate change spur states, businesses and homeowners into a quickening embrace with alternative energy. *** After decades on the fringe, solar power is closing in on America's mainstream as surging fossil fuel prices and mounting concern over climate change spur states, businesses and homeowners into a quickening embrace with alternative energy. (...continued ...)
(http://www.reuters.com/article/environmentNews/idUSN0342345720080606)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:28:16 AM

Soaring Oil Price `Dangerous' for Growth, Steinbrueck Says
By Ellen Pinchuk and Alex Nicholson

June 7 (Bloomberg) -- Soaring oil and food prices will spur inflation and could imperil economic growth, German Finance Minister Peer Steinbrueck said. ``We are facing a very dangerous situation caused by these tremendously increasing prices for commodities, food and oil,'' Steinbrueck said today at the St. Petersburg International Economic Forum. Inflation in the European Union, which the European Central Bank aims to keep just under 2 percent, accelerated to a 16-year high of 3.6 percent in May. Germany's economy is losing momentum as oil prices push up inflation and crimp company and household spending power, just as a surging euro weighs on exports. ``Spill-over effects'' on the real economy from the global financial crisis have only been felt to ``a little extent,'' in Germany, he said. ``But I can't exclude, for example, that the economic growth will scale down during the next year, 2009, with a delay or a little time lag in comparison to the recession in the united states,'' he said. Industrial production in Germany, Europe's largest economy, unexpectedly declined 0.8 percent in April ... (continued)
(http://www.bloomberg.com/apps/news?pid=20601087&sid=a60KS2M9obNQ&refer=home)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:28:35 AM

NYT: Oil Prices Raise Cost of Making a Range of Goods
By LOUIS UCHITELLE 3:26 PM ET

Companies that make hard goods using raw materials derived from oil, like tires, toiletries, plastic packaging and computer screens, are watching their costs skyrocket, and they find themselves forced into unpleasant choices: Should they raise prices, shift to less costly procedures, cut workers, or all three?
*** No business in America produces more of the oil-based ingredients that go into the nation's products than the Dow Chemical Company . Indeed, paint, computer and television screens, mobile phones, light bulbs, cushions, paper, mattresses, car seats, carpets, steering wheels and polyesters are all made with ingredients that Dow and other chemical companies refine from oil and natural gas. Dow normally raises prices piecemeal. Last month, though, the surge in the cost of oil and natural gas, the company's principal raw materials, produced a rare across-the-board price increase of as much as 20 percent. *** Dow's sweeping price increases will probably have a domino effect, resulting in higher prices or, more likely, shrinking profits, analysts say. Constrained by the weak economy and fewer wage earners among their customers, the nation's retailers have so far not been able to pass on to consumers much of the rising cost of products that depend on oil. The Consumer Price Index, minus food and energy, is barely rising.
(http://www.nytimes.com/2008/06/08/business/08oil.html?hp)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:28:51 AM

World powers voice 'serious concern' over oil price
Posted 5 hours 26 minutes ago
Updated 4 hours 33 minutes ago

The United States and Asia's four largest economies have voiced "serious concerns" about oil prices in a joint statement, after the cost of crude spiked to a record high.

"We share serious concerns over the current level of oil prices," said the statement signed by energy ministers of the United States, Japan, China and South Korea, along with a senior Indian official. "These prices are unprecedented and against the interest of both consuming and producing countries. They pose a great burden - particularly on resource-scarce developing countries," it said. Ahead of the full G8 plus three gathering on Sunday, the ministers are meeting in Aomori, northern Japan with energy conservation at the top of the agenda. *** "We affirm the need to maximise investment in our own domestic production and we call on other oil producing countries to increase investment to keep markets well supplied in response to rising world demand," the statement said.
(http://www.abc.net.au/news/stories/2008/06/07/2268168.htm)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:29:07 AM

VIDEO: Oil sets record (http://www.abc.net.au/reslib/200806/r258629_1072645.asx)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:29:36 AM

June 7, 2008
NYT: Oil Prices Take a Nerve-Rattling Jump Past $138
By JAD MOUAWAD

The rise in oil prices turned into a stampede on Friday with futures jumping a staggering $11 a barrel to set a record above $138 a barrel. The unprecedented surge came as the dollar fell sharply against the euro and a senior Israeli politician once again raised the possibility of an attack against Iran. Friday's jump capped a second day of strong gains on energy markets, and fed suspicions that commodities might be caught in an investment bubble. Oil prices have doubled in the last 12 months, and are up 42 percent since the beginning of the year. Oil futures surged $10.75, or 8 percent, to $138.54 a barrel on the New York Mercantile Exchange, their biggest jump since contracts began trading in 1983. The record rise brought a two-day jump of more than $16 a barrel, after Thursday's 5.5 percent gain.
(http://www.nytimes.com/2008/06/07/business/07oil.html)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:29:54 AM

Gas prices skyrocket overnight across Canada
Canwest News Service
Published: Saturday, June 07, 2008

Gas prices across Canada shot up as much as six cents on Saturday morning as the cost of oil continued its record-setting ascent. According to gasbuddy.com, a website that tracks gas prices across North America, pumps in Toronto hit $1.359 a litre early Saturday morning, up from $1.299 on Friday.
(http://www.canada.com/cityguides/winnipeg/info/story.html?id=de49501d-a050-4203-a7b5-3a079eb58e30)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:30:49 AM

NYT: June 7, 2008
NYT: Job Losses and Surge in Oil Spread Gloom on Economy
By PETER S. GOODMAN

The unemployment rate surged to 5.5 percent in May from 5 percent — the sharpest monthly spike in 22 years — as the economy lost 49,000 jobs, registering a fifth consecutive month of decline, the Labor Department reported Friday. The weak jobs report, coupled with a staggering rise in the price of oil — up a record $10.75 a barrel to more than $138 — unleashed a feverish sell-off on Wall Street, sending the Dow Jones industrial average down nearly 400 points. The dollar plunged against several major currencies.
Investors' recent hopes that the United States might yet skirt a recession sank swiftly in the face of gloomy indications that the economy is gripped by a slowdown and pressured by record fuel prices.
For tens of millions of Americans struggling to pay bills, the jobs report added an official stamp of authority to a dispiriting reality they already know: A deteriorating labor market is eliminating paychecks just as they are needed to compensate for the soaring cost of food and fuel, and as the fall in house prices hacks away at household wealth and access to credit.

(http://www.nytimes.com/2008/06/07/business/07econ.html?hp)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:31:32 AM

Business Week top story: The Year's Ugliest Day for Stocks

A record surge in crude prices and a jump in the May jobless rate fueled declines of nearly 3% for each of the major indexes Friday

(http://www.businessweek.com/investor/content/jun2008/pi2008066_003270.htm?chan=top+news_top+news+index_top+story)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:31:51 AM

Corporate America is getting nervous
By Paul R. La Monica, CNNMoney.com editor at large
Last Updated: June 6, 2008: 10:42 AM EDT

NEW YORK (CNNMoney.com) -- Businesses, like consumers, are starting to get much more nervous about the economy. The significant spike in the unemployment rate in May, coupled with another month of job losses, is a certain indication that businesses are feeling the need to cut costs. What's more, two separate reports about the health of Corporate America released today provide even more somber news about business confidence. According to a survey of nearly 2,400 chief executive officers of small and mid-sized businesses by executive coaching firm Vistage International, CEO confidence is at an all-time low. "It is clear the state of the economy is factoring into stress levels for CEOs as more and more companies adjust their business plans in the United States to survive," said Rafael Pastor, Vistage's chairman and CEO in the report. "CEOs are telling us they are more stressed." But what's worrisome is how CEOs are dealing with this stress. According to the survey, only 43% of the CEOs said they now plan to increase their headcount in the next year. That's down from 57% a year ago. And one in six CEOs said they planned to cut jobs this year.
(http://money.cnn.com/2008/06/06/markets/thebuzz/index.htm)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:32:27 AM

More dip early into funds for retirement
Hardship withdrawals can cause long-term jeopardy
By Ross Kerber, Globe Staff | June 6, 2008

Record numbers of Americans are raiding their retirement savings as the economy has soured, threatening their long-term financial security to make their mortgage payments, pay medical bills, and cope with rising food and fuel costs. Three decades ago, individually controlled retirement plans like 401(k)s barely existed. Most Americans counted on a pension, with funds contributed and managed by their employer, to provide for retirement along with Social Security payments. But today, workers have accumulated $3 trillion in 401(k) accounts - up from $1.6 trillion in 2002 - making them a tempting target for households looking to get through tough times. The three largest administrators of 401(k)s - Fidelity Investments, CitiStreet, and Vanguard Group Inc. - report a growing number of early withdrawals from the plans in the past year as saving for retirement has taken a backseat to mortgage payments, medical bills, and rising food and fuel costs.
(http://www.boston.com/business/articles/2008/06/06/more_dip_early_into_funds_for_retirement/)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:32:48 AM

U.S. has few options as oil nations tighten grip
Fri Jun 6, 2008 3:32pm EDT
By Chris Baltimore - analysis

WASHINGTON (Reuters) - Resource nationalism in oil producing countries is cordoning off valuable supplies and the United States has precious few options to battle the trend amid a looming supply crunch. ... International firms have found themselves faced with tougher terms and shut out of the globe's most promising oil basins, a trend known as "resource nationalism." The United States -- the world's biggest oil consumer -- stands mostly powerless as national oil companies like Venezuela's PDVSA and Russia's Gazprom block access to key oil reserves and demand a larger share of the profits in exchange for allowing international oil companies to drill. "There are few good foreign policy options because oil really is our economic jugular," said Anne Korin, co-director of the Institute for the Analysis of Global Security, a nonprofit energy think tank.
(http://www.reuters.com/article/reutersEdge/idUSN0642853020080606)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:34:02 AM

Oil Crisis: Your Primer on the Great "Peak Oil" v "Speculators" Debate

...In case you haven't been watching CNBC lately, there's a Great Oil Debate going on. On one side is the "Peak Oil" crowd, who believe that the world has now reached its maximum daily oil output and that increasing demand--which is already outpacing supply--will now drive oil prices into the stratosphere. On the other side is the "Evil Speculator" crowd, which argues that big energy traders are "gaming" the energy markets and adding at least a $30-$40 speculation premium to each barrel. Who's right? The truth is no one knows (and anyone who confidently asserts that they do is fooling themselves). Part of the problem is that no one knows exactly how much oil the world is producing, or what the world's actual daily consumption is. What's more, no one knows what the "intrinsic" value is of a barrel of oil. ***
(http://www.huffingtonpost.com/henry-blodget/oil-crisis-your-primer-on_b_105690.html)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:34:20 AM

NYT: Oil Prices Skyrocket, Taking Biggest Jump Ever

"Oil prices had their biggest gains ever on Friday, jumping nearly $11 to a new record above $138 a barrel, after a senior Israeli politician raised the specter of an attack on Iran and the dollar fell sharply against the euro. The unprecedented gains on Friday capped a second day of strong gains on energy markets, and fueled suspicions that commodities might be caught in a speculative bubble. "
(http://www.nytimes.com/2008/06/07/business/07oil.html?hp)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:34:55 AM

Cairn says peak oil fears may have fuelled rally
Fri Jun 6, 2008 2:39pm BST

LONDON (Reuters) - Oil's spurt to a record above $135 last month from around $100 at the start of 2008 may have been influenced by a growing feeling that oil supplies might be peaking, the head of oil explorer Cairn Energy said. Cairn's Chief Executive Bill Gammell told the Reuters Global Energy Summit on Friday that there was growing awareness in the market about "peak oil", a theory which says that global production is near an apex after which it will decline sharply. "The move from $100 to $130 was actually a period when people started to look at and wonder more a bit about the peak oil theory," Gammell said.
(http://uk.reuters.com/article/businessNews/idUKL0653324220080606)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:35:17 AM

Oil price rise: Bracing for a global meltdown
Deborah Feyerick
CNN

Skowhegan (Maine): If there's anything in the United States of America that's taking more news space than the presidential race, it's global oil prices. With oil prices soaring, there's a group of people in the US who are bracing for a global meltdown. Iver Lofving is convinced the world is running out of oil. He's spent the last 10 years getting ready for that day. He is a mainstream survivalist, chopping his own wood, installing solar panels, growing vegetables and even driving a solar-powered-car. All of it geared to becoming self-sufficient. "Call me crazy, but I'm crazy like a fox, this house makes half its own energy.
Two thirds the hot water, half the heat, a small part of the electricity, half the gasoline," Lofving says.
(http://www.ibnlive.com/news/oil-price-rise-bracing-for-a-global-meltdown/66720-2.html)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:35:52 AM

Libya: Crude may rocket to $140 in June
By Maher Chmaytelli

June 6 (Bloomberg) -- Crude oil may reach $140 a barrel this month and possibly $150 before the end of summer because of speculation on commodities prices and the fluctuating value of the dollar, Libya's top oil official Shokri Ghanem said. ``The market is well supplied, OPEC doesn't need to boost production,'' Ghanem, who chairs state-run National Oil Corp., said in a telephone interview from Tripoli. ``What's causing prices to fluctuate is the speculators. Over the past few days they cashed profit sending prices down $12. Now it's up again and I expect it to reach $140 before the end of the month.''
(http://www.bloomberg.com/apps/news?pid=20602099&sid=aSY2lLV7lm7Q&refer=energy)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:36:19 AM

New York Times
June 4, 2008
Economic Scene
Big Vehicles Stagger Under the Weight of $4 Gas
By DAVID LEONHARDT

*** If gas remains near $4 a gallon, as many analysts expect, a big vehicle like the F-250 will cost $100,000 for an owner who keeps it for a typical amount of time (five years) and drives it a typical amount (15,000 miles a year). The gas alone would cost about $30,000, up from about $10,000 in the 1990s. No wonder, then, that Americans are changing their driving habits so quickly. With sales plummeting, General Motors said Tuesday that it would stop making pickup trucks and sport utility vehicles at four of its North American plants. ***
(http://www.nytimes.com/2008/06/04/business/04leonhardt.html?_r=1&hp=&oref=slogin&pagewanted=print)

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:36:57 AM

GM, Ford, Chrysler Lose 1 Million in Truck, SUV Sales
By Doron Levin

http://www.bloomberg.com/apps/news?pid=20601109&sid=anJRR5DUv.fQ&refer=home
``For the last 20 years, pickups and sport utilities have more than made up for losses on all Detroit's other vehicles,'' Casesa said. ``It's unbelievable to watch a whole way of doing business change so drastically.'' In the face of $4 a gallon gasoline, ever bigger, ever more luxurious pickup trucks and large sport-utility vehicles no longer capture the imaginations or disposable incomes of American consumers. Should this year's sales trend continue, GM, Ford and Chrysler would sell 1 million fewer of these truck- based vehicles annually, forgoing as much as $10 billion in pretax profit

Title: Re: Meltdown
Post by: BachQ on June 09, 2008, 06:37:51 AM

UK: Shutdowns and plunging profits cast doubt on nuclear future
Industry on the defensive as report says it will always need subsidy
Mark Milner and Terry Macalister The Guardian, Thursday May 29 2008 Article history

British Energy, the nuclear power group, reported a sharp fall in profits yesterday - the same day
a series of mishaps at its stations left more than 60% of its capacity out of action.

The problems come as a report today into the failings of the UK nuclear industry casts doubt on
British Energy's prospects and is likely to alarm foreign power firms preparing to launch multibillion-pound
bids for it. The study, published by Friends of the Earth and written by former Guardian journalist
Paul Brown, claims the company could be forced to shut down some plants because the
reprocessing facility at Sellafield is running out of storage space. "Employing more than 10,000 people, the Sellafield nuclear complex is in crisis. Its reprocessing works and plutonium fuel plant are all failing at a massive cost - annually already £100 each for every taxpayer in this country - and this is rising," he says
(http://www.guardian.co.uk/business/2008/may/29/britishenergygroupbusiness.nuclear)

Title: Re: Meltdown
Post by: ezodisy on June 09, 2008, 01:58:22 PM

So Dm, if you can take a moment from copy-pasting articles on our moribund world, I'd like to know just what you're doing to improve it (naturally informing others about it doesn't count).

Title: Re: Meltdown
Post by: mn dave on June 10, 2008, 05:03:30 AM

http://enews.earthlink.net/article/top?guid=20080610/484dfc40_3ca6_1552620080610-1977261644

Title: Re: Meltdown
Post by: BachQ on June 10, 2008, 05:47:15 AM

Quote from: ezodisy on June 09, 2008, 01:58:22 PM
I'd like to know just what you're doing to improve it (naturally informing others about it doesn't count).

Personally? I'm building an ark to house myself, and various flora and fauna. I will head to whatever small piece of real estate remains after humans have raped and plundered this planet, and waged war against each other ......

Title: Re: Meltdown
Post by: BachQ on June 10, 2008, 05:48:28 AM

UK Telegraph
UK: Standard of living to fall to 1970s level
By Harry Wallop and Edmund Conway
Last updated: 6:59 PM BST 09/06/2008

Families should brace themselves for drop in the standard of living not seen since the oil shocks of the 1970s, economists warned after official figures showed the price of oil and food had hit a record high.

WARNING: The price of food, clothes, petrol and other goods are set to climb far faster than most salaries – leading to a severe downturn in families' standard of living.
(http://www.telegraph.co.uk/news/majornews/2100048/Cost-of-living-to-keep-rising-as-oil-and-food-hit-record-highs.html)

The warning came after the Office of National Statistics released "absolutely horrendous" factory inflation figures, which showed that prices last month increased at the fastest rate since records began 22 years ago, and most probably since 1976. ***The price of food ingredients, oil, energy, chemicals and metals have all soared over the last month, with factories having to pay 27.9 per cent more for their goods than a year ago, according to the Office for National Statistics.

Title: Re: Meltdown
Post by: BachQ on June 10, 2008, 05:49:11 AM

Wealth Evaporates as Gas Prices Clobber McMansions
By Rich Miller and Matthew Benjamin

June 9 (Bloomberg) -- Sky-high gasoline prices aren't just raising the cost of Eugene Marino's 120-mile (193-kilometer) round-trip to his job in the Washington area. They're reducing his wealth, too. House prices in his rural subdivision beyond the Blue Ridge Mountains in Charles Town, West Virginia, have plunged as commuting expenses have soared. A four-bedroom home down the street from his is listed for $239,000, after selling new for $360,000 five years ago. Homeowners in the exurbs aren't the only ones whose assets have taken a hit because of the surge in energy costs. Companies such as General Motors Corp. are writing off billions of dollars in plants and equipment that are no longer viable in an age of dearer oil. The destruction of wealth and capital will weigh on U.S. growth for years to come .``Our whole economy reflects the relative costs of energy: the cars we drive, the houses we occupy, the kinds of factories we have and the equipment in them,'' says Dana Johnson, chief economist at Comerica Bank in Dallas. ``I'm expecting relatively large changes in all of these things.'' The loss of wealth could be a double whammy for the U.S. economy. In the short run, it depresses demand as homeowners save more and spend less, and companies fire workers. Longer run, it curbs productivity growth, as firms shift their focus from increasing worker efficiency to reducing energy costs. (continued) (http://www.bloomberg.com/apps/news?pid=20601109&sid=aFc9HNAhHrPc&refer=home)

LINK: http://www.bloomberg.com/apps/news?pid=20601109&sid=aFc9HNAhHrPc&refer=home

Title: Re: Meltdown
Post by: BachQ on June 10, 2008, 05:49:52 AM

Fuel prices halt 3 French naval missions (http://news.yahoo.com/s/ap/20080609/ap_on_re_eu/fuel_cutbacks;_ylt=ArLMoElsGTyj4_fEBYW37elw24cA)

Title: Re: Meltdown
Post by: BachQ on June 10, 2008, 05:50:20 AM

Experts warn fuel crisis will get worse

"As soon as the production starts to decline, oil prices will skyrocket," predicted Cliff Wirth of Peak Oil Associates.
(http://wnyt.com/article/stories/S471625.shtml?cat=300)

Title: Re: Meltdown
Post by: BachQ on June 10, 2008, 05:50:52 AM

Peak oil gathers steam

Peter Botten: For the first time ever, you see a significant decline in production out of Russia for this year and you see the Middle East, frankly, struggling to maintain, let alone increase its production. Put that against the backdrop of an average decline rate across the world of the world's oilfields of about 11 per cent and there is no doubt that the fundamentals of supply and demand will remain tight.

Robert Gottliebsen: So you believe that the reason OPEC is refusing to lift production is simply that they can't do it?

Peter Botten: I genuinely believe they have no capacity to do it. Based on our information out of the Middle East and from where we work ourselves, they're struggling.
(http://www.businessspectator.com.au/bs.nsf/Article/Peak-oil-gathers-steam-FF4HD?OpenDocument)

Title: Re: Meltdown
Post by: BachQ on June 10, 2008, 05:51:30 AM

UK economy is hostage to oil, warns expert

Simon Snowden said: "Unless we completely cut our dependence on oil, we could see years of almost non-existent growth for the UK economy. Any recovery will be short-lived and at ever-lower levels. The cost of goods will rise even more sharply and the economy could stagnate into a recession for several years. We need to invest in alternative forms of energy and transport but changing our economy in such a fundamental way will take years so in this sense a recession is inevitable
(http://www.physorg.com/news132239710.html)

Title: Re: Meltdown
Post by: mn dave on June 10, 2008, 05:52:03 AM

How dare you smother my fishing monkey news!

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:52:10 AM

Bush Impeachment Moving Forward

Obama Florida Co-Chair Signs On to Bush Impeachment
June 10, 2008 10:57 PM

Congressman Robert Wexler, D-Fla. -- the Florida co-chair for the presidential campaign of Sen. Barack Obama, D-Ill. -- today announced that he has signed on to support the Articles of Impeachment against President George W. Bush, introduced this week by Rep. Dennis Kucinich, D-Ohio. "President Bush deliberately created a massive propaganda campaign to sell the war in Iraq to the American people and the charges detailed in this impeachment resolution indicate an unprecedented abuse of executive power," Wexler said. "A decision by Congress to pursue impeachment is not an option, it is a sworn duty. It is time for Congress to stand up and defend the Constitution against the blatant violations and illegalities of this Administration. Our Founding Fathers bestowed upon Congress the power of impeachment, and it is now time that we use it to defend the rule of law from this corrupt Administration." Wexler previously ran a nationwide campaign to hold impeachment hearings for Vice President Dick Cheney.

Kucinich's 35 Articles of Impeachment include: "Article II -- Falsely, Systematically, and with Criminal Intent Conflating the Attacks of September 11, 2001, With Misrepresentation of Iraq as a Security Threat as Part of Fraudulent Justification for a War of Aggression; ... Article IX -- Failing to Provide Troops With Body Armor and Vehicle Armor; ... Article XXII -- Creating Secret Laws; ... Article XXX -- Misleading Congress and the American People in an Attempt to Destroy Medicare; ... Article XXXII -- Misleading Congress and the American People, Systematically Undermining Efforts to Address Global Climate Change."
(http://blogs.abcnews.com/politicalpunch/2008/06/congressman-rob.html)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:52:39 AM

Russia's Gazprom predicts $250 oil soon
Tue Jun 10, 2008 9:18am EDT
By Tom Bergin

DEAUVILLE, France (Reuters) - Russia's Gazprrom, the supplier of a quarter of Europe's natural gas, expects the price of crude oil to almost double by 2009, taking gas prices with it. "We think it will reach $250/bbl in the foreseeable future," Chief Executive Alexei Miller told reporters at a presentation in France. Officials said the prediction was for 2009.
(http://www.reuters.com/article/GCA-Oil/idUSL1058567720080610)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:52:56 AM

Robert Hirsch

http://www.youtube.com/watch?v=oGebjoQJHho

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:53:11 AM

Matt Simmons (repeat from earlier posting – but hey, it's MATT SIMMONS)

http://www.youtube.com/watch?v=XHzifv6DhnU

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:53:58 AM

Global food supply is a growing problem

Last Updated: 12:32am BST 09/06/2008
Page 1 of 3

Retailers and politicians are seeking ways to keep the global food crisis from hitting the UK, writes James Hall

Food riots. Scores of panicked people protesting, burning effigies and chanting. Shops being ransacked, supplies running out as soon as they come in, and stricken communities stockpiling rice, bread and water for fear of going without. These have happened in Haiti and Egypt in recent months as the price of scarce food has soared. ... There are four trends driving global food scarcity: global population growth (it is expected to grow from 6.7bn to 9bn by 2042), the increasing use of crops for fuel rather than food, the Westernisation of diets in the Far East, and a diminishing bank of farming land due to urbanisation and climate change. Market speculation is also mooted as a factor.
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/08/ccration108.xml&CMP=ILC-mostviewedbox)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:54:25 AM

Spain's truck drivers begin national strike over fuel prices

MADRID (Thomson Financial) - Spanish truck drivers began a national strike on Friday to protest rising fuel prices, joining the country's fishermen, which began industrial action May 30.
Spokesman for the organizing group, "Platform for Defence of the Merchandise Transportation Sector," Antonio Llano, told Thomson Financial News that the strike is indefinite and could eventually involve up to 300,000 vehicles across Spain.
(http://www.cnbc.com/id/25004029/for/cnbc)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:54:55 AM

San Francisco Chronicle: The price of oil soars, with no limit in sight

As the Bush gang continues to spend recklessly on its illegal war in Iraq and its aimless "war on terror" caper in Afghanistan, while at the same time borrowing billions of dollars a day to keep the U.S. government afloat, the price of oil is sky-rocketing. In response to some increasingly ominous indicators, including newly announced job losses during the month of May (Globe and Mail), the Bush gang has shown little interest in helping to fix the ailing U.S. economy or to put the government's financial affairs in order. Meanwhile, the horde of defense-contractor corporations that have scored big from the Bush-Cheney wars realize that the time they have left for unrestricted profiteering from the war biz - their unlimited dipping into a shrinking supply of American-taxpayer dollars - could soon be over.
(http://www.sfgate.com/cgi-bin/blogs/sfgate/category?blogid=15&cat=1674)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:55:34 AM

June 8, 2008, 9:26AM

Houston Chronicle: Higher cost of oil will cause massive domino effect
By BRETT CLANTON

Already facing $4 gasoline prices, U.S. consumers may soon be paying more for a list of other petroleum-based products, from tires to deodorant, as new chemical price hikes trickle down to store shelves. In recent days, Dow and other major chemical makers, including several Houston firms, said they will boost chemical prices by as much as 25 percent to offset rising energy and raw material costs.
The move will increase the cost of making hundreds of everyday consumer products, and may, in turn, pressure manufacturers of those products to respond with price increases of their own.
(http://www.chron.com/disp/story.mpl/front/5825332.html)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:56:30 AM

(http://www.independent.co.uk/independent.co.uk/editorial/p1Images/20080611_p1_small.jpg)
An ominous warning that the rapid rise in oil prices has only just begun
By Danny Fortson, Business Correspondent
Wednesday, 11 June 2008

The chief executive of the world's largest energy company has issued the most dire warning yet about the soaring the price of oil, predicting that it will hit $250 per barrel "in the foreseeable future". ... His comments were the most stark to be expressed by an industry executive and come just days after the oil price registered its largest-ever single-day spike, hitting $139.12 per barrel last week amid fears that the world's faltering supply will be unable to keep up with demand. [His] prediction ... stoked an already febrile atmosphere of growing public anger across Europe over a soaring fuel cost that is wreaking havoc at nearly every level of the economy. The British Government was urging motorists yesterday not to panic-buy petrol in anticipation of a strike on Friday by lorry drivers who deliver petrol to forecourts for Royal Dutch Shell, assuring motorists that contingency plans would ensure sufficient supplies. ... Philip Shaw, an economist at Investec Securities, warned that oil at that level would exert an extraordinary drag on the economy at a time when it is already decelerating at a rapid rate. ... The price of everything from food to energy would see significant price rises. Household electricity and gas bills are particularly vulnerable.
(http://www.independent.co.uk/news/uk/home-news/an-ominous-warning-that-the-rapid-rise-in-oil-prices-has-only-just-begun-844217.html)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:57:14 AM

(http://images.dailyexpress.co.uk/img/covers/257x330front/2008-06-11.jpg)

PETROL IS BOUND TO RUN OUT IN STRIKE

Petrol stations will run dry over the weekend causing havoc for motorists if a tanker drivers' strike goes ahead. About 1,000 Shell garages – one in 10 of all filling stations – will be hit by the four-day walkout due to start on Friday. The strike would be a disaster for motorists because fuel shortages could push record petrol prices even higher. With non-Shell outlets braced for a rush of extra customers, Gordon Brown and the petrol industry urged motorists not to panic buy. In an attempt to prevent the chaos spiralling out of control, the Government yesterday moved to reassure the public by invoking emergency measures to try to safeguard petrol supplies. But, despite the frantic preparations behind the scenes to minimise disruption, some forecourts will inevitably run out of fuel.
(http://www.dailyexpress.co.uk/posts/view/47827)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:57:47 AM

Telegraph.uk: Petrol sales fall 20pc as drivers feel the pinch
By Ambrose Evans-Pritchard and Robert Winnett Last Updated: 12:55am BST 11/06/2008

Petrol retailers have disclosed that fuel sales dropped sharply over the past few weeks and the latest figures appear to show that demand for petrol in Britain has slumped by as much as 20 per cent over the past 12 months.
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/11/npetrol111.xml)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:58:45 AM

Telegraph.uk:'House prices to fall until 2010': the options for buyers and sellers

Homeowners are being warned to brace themselves for three years of falling house prices, writes Paul Farrow...The number of houses changing hands has also "collapsed" to the lowest level in 30 years. The fall in sales far exceeds the depths of the last housing crash in the 1990s and is the lowest since records began in 1978.
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/10/cmhouseprices110.xml&CMP=ILC-mostviewedbox)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 04:59:19 AM

KUNSTLER: A Harsh Season (http://jameshowardkunstler.typepad.com/)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 05:00:05 AM

Florida at the Precipice of Depression
" Banks cannot afford to take 50-75% hits on mortgages, and that is exactly what is happening. The precipice is here, and we are on it. Recent reports about home sales rebounding are insignificant, because no one is accurately describing the growing inventory build-up. Banks simply don't have the margins to deal with this crisis. And for that reason, we will see massive bank failures and this will snowball into a complete economic meltdown. If you have an argument against this scenario, I'd love to debate you on a live conference call. We deal with the banks. We know what is going on before the numbers show up at the Fed or any analysts desks. We deal with the public, so we hear the desperation at all levels. I listen to grown men cry about how to explain to their families that they are losing everything. I listen to people that I fear are on the verge of suicide. I read about people committing crimes simply to put food on the table. Spend a week with me, and you'll understand why there is no feasible way to avoid a Depression. "
(http://www.activerain.com/blogsview/538147/Florida-at-the-Precipice)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 05:00:36 AM

Diesel thieves wreak havoc on California farmers

BAKERSFIELD, California (CNN) -- Standing in a field of organic tomatoes, farmer Pete Belluomini says the ground-cracking drought and unrelenting insects make it difficult enough to make a living on the land. But they are the least of his concern these days as a new menace haunts farmers in Bakersfield, California: diesel thieves. Sgt. Walt Reed of the Kern County Sheriff's Department and a member of California's Rural Crimes Task Force said that more than $300,000 worth of diesel fuel was stolen in Kern County in the past three months. "It's an epidemic, gigantic problem," Reed said. "In Kern County alone, we're getting reports of five to seven diesel thefts from farms a week. It's happening in other parts of the San Joaquin Valley, too." The crooks work around the clock, searching during the daytime for irrigation pumps run by diesel engines and supply tanks filled with diesel or gasoline, police and farmers say. They return at night, with their headlights off, to steal hundreds of gallons of fuel at a time.
(http://edition.cnn.com/2008/US/06/05/stealing.fuel/#cnnSTCText)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 05:01:03 AM

$5 gas may hit California soon
David R. Baker, Chronicle Staff WriterSunday, June 8, 2008

... San Francisco drivers now pay, on average, $4.42 for a gallon of regular. In Oakland, the average is $4.39. In San Jose, $4.40.
(http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/06/08/MN2S114T46.DTL)

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 05:01:24 AM

Texas Steps In to Curb Electricity-Price Rises
BY REBECCA SMITH
Word Count: 699 | Companies Featured in This Article: Texas Power, PNM Resources
Texas took urgent action to quell electricity-price spikes that have struck its wholesale market just as the season of highest energy usage begins. Consumers could face record prices this summer reflecting both wholesale-market gyrations and rising fuel costs for power generators.

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 05:01:52 AM

The Federal Reserve's rescue has failed
By Ambrose Evans-Pritchard, International Business Editor
Last Updated: 2:15am GMT 07/03/2008Page 1 of 2

The verdict is in. The Fed's emergency rate cuts in January have failed to halt the downward spiral towards a full-blown debt deflation. Much more drastic action will be needed. Yields on two-year US Treasuries plummeted to 1.63pc on Friday in a flight to safety, foretelling financial winter. *** The debt markets are freezing ever deeper, a full eight months into the crunch. Contagion is spreading into the safest pockets of the US credit universe. Sub-prime debt is plumbing new depths. A-rated securities issued in early 2007 fell to a record 12.72pc of face value on Friday. The BBB tier fetched 10.42pc. The "toxic" tranches are worthless. Why won't it end? Because US house prices are in free fall. The Case-Shiller index for the 20 biggest cities dropped 9.1pc year-on-year in December. The annualised rate of fall was 18pc in the fourth quarter, and gathering speed. ...US households are only halfway through the tsunami of rate resets - 300 basis points upwards - on teaser loans. (... continued ...)
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/03/03/ccview103.xml)

Title: Re: Meltdown
Post by: DavidRoss on June 11, 2008, 05:02:46 AM

Whether this is the beginning of the end or just another bump in the road to eventual meltdown, the insanity and probable outcome of an exploding global population dependent on a finite, non-renewable energy supply has been painfully obvious for half a century.

Title: Re: Meltdown
Post by: Lethevich on June 11, 2008, 07:04:25 AM

Quote from: Dm on June 11, 2008, 05:00:36 AM
Diesel thieves wreak havoc on California farmers

BAKERSFIELD, California (CNN) -- Standing in a field of organic tomatoes, farmer Pete Belluomini says the ground-cracking drought and unrelenting insects make it difficult enough to make a living on the land. But they are the least of his concern these days as a new menace haunts farmers in Bakersfield, California: diesel thieves. Sgt. Walt Reed of the Kern County Sheriff's Department and a member of California's Rural Crimes Task Force said that more than $300,000 worth of diesel fuel was stolen in Kern County in the past three months. "It's an epidemic, gigantic problem," Reed said. "In Kern County alone, we're getting reports of five to seven diesel thefts from farms a week. It's happening in other parts of the San Joaquin Valley, too." The crooks work around the clock, searching during the daytime for irrigation pumps run by diesel engines and supply tanks filled with diesel or gasoline, police and farmers say. They return at night, with their headlights off, to steal hundreds of gallons of fuel at a time.
(http://edition.cnn.com/2008/US/06/05/stealing.fuel/#cnnSTCText)

This is the US - all that needs to happen is a few thieves get their heads blown off by someone "defending their property", and the problem will be lessened :P

Title: Re: Meltdown
Post by: uffeviking on June 11, 2008, 09:35:18 AM

My Dear DM, member of the classical music forum, and prolific poster of 'copy-paste' newspaper and periodical articles: Has it ever occurred to you that your fellow members of GMG are adequately educated in reading and writing, and in all probability have read already the news posted by you? ???

Title: Re: Meltdown
Post by: bwv 1080 on June 11, 2008, 01:01:33 PM

Maybe we could lock it with this:

Special Reports WITH ALL THE TALK ABOUT PEAK GLOBAL OIL SUPPLY, WHAT ABOUT PEAK OIL DEMAND
June 11, 2008
Despite the pullback over the past two days, crude oil prices continue to trade about 50% above their recent levels of less than US$90 per barrel in February 2008. In addition to the falling U.S. dollar, the market has cast its attention on a host of supply-side factors, including slowing growth in non-OPEC supply, rising production costs, and fears about further output disruptions in Nigeria, Iran, Iraq and Venezuela. Meanwhile, the global push to develop alternative fuel sources has encountered some potholes, notably the "food versus fuel" debate surrounding ethanol.
Still, as prices move higher and higher, investors should be wary about trading patterns that resemble a proverbial hockey stick - especially at a time when market supply/demand fundamentals are visibly beginning to slacken. Put simply, as we move into the summer driving season, world crude supply growth is exceeding that of demand and U.S. and global inventories are healthy. Spare production capacity within the OPEC cartel increased to 3 million barrels per day in April, up from a low in 2005 of 1 million barrels per day.
What about peak demand?
The market has recently rallied in large part on slowing growth in non-OPEC supply. These concerns are indeed well-founded. Despite the lure of high prices over the past few years, the global output response has been meagre, with non-OPEC supply essentially flat on a Y/Y basis in the first four months of 2008. This year's slowdown in non-OPEC output growth has added credence to the view that world oil production is set to peak earlier than some forecasters had projected.
That being said, there are two parts to the equation: supply and demand. And in our view, the market has largely been turning a blind eye to developments on the demand front. Overall, crude oil consumption so far in 2008 has softened to a paltry 0.4%, in line with non-OPEC supply gains and well below overall total world production growth. The culprit has been an outright decline in consumption within the OECD, led by a 3% drop in the United States and a 1% decline in Western Europe. This downtrend is almost certain to accelerate. In particular, stay tuned for data on summertime fuel consumption in the U.S. and Europe, which are likely to show high fuel prices putting a growing damper on driving activity.
The prevailing view in the crude oil market is that demand growth in the non-OECD countries (i.e., China, India, OPEC and other developing regions) has been taking up the slack. This is only partly true. So far this year, growth in non-OECD demand is up a solid 3.1%, spearheaded by a gain of more than 6% in China. However, in order to have kept overall world oil consumption growth running at last year's 1.2% rate so far this year, growth of 5% would have been required. Moreover, there are early signs that non-OECD consumption growth may have peaked.
Going forward, we would expect non-OECD demand growth to slacken further, as anemic U.S. demand increasingly weighs on emerging-market GDP growth through the export channel. A related downside risk to oil consumption is the likelihood that central banks around the world will need to tighten their monetary settings in response to rising inflation risks. There is also a growing number of countries announcing reductions in fuel subsidies, which tend to weaken consumption. Recently, India, Malaysia, Taiwan, Sri Lanka and Thailand, have announced moves to raise retail gasoline prices. There is also speculation that China may follow suit, albeit after the hosting of the Summer Olympics.
The bottom line
The trends witnessed so far this year indicate that elevated prices are beginning to put a damper on global consumption of crude oil and refined products. And evidence of demand destruction is almost certain to become even more visible in the months ahead as the price spike this spring likely provokes an accelerated behavioural response. In our view, it is only a matter of time before these emerging fundamental trends begin to catch up to the crude oil market, sending prices substantially lower. Our current forecast profile has prices settling at about US$100 on average in 2009, although this assumes that prices have reached a peak. To the extent that crude oil prices continue to soar to new records in the coming weeks, next year's correction could be even more dramatic.

Derek Burleton
AVP & Director of Economic Studies
416-982-2514
Dina Cover, Economist
416-982-2555

http://www.td.com/economics/special/db0608_oil.jsp

Title: Re: Meltdown
Post by: BachQ on June 11, 2008, 02:55:57 PM

Quote from: uffeviking on June 11, 2008, 09:35:18 AM
My Dear DM, member of the classical music forum, and prolific poster of 'copy-paste' newspaper and periodical articles: Has it ever occurred to you that your fellow members of GMG are adequately educated in reading and writing, and in all probability have read already the news posted by you? ???

I been bad bad boy ........

(http://freepages.genealogy.rootsweb.com/~elkridge/spanking.jpg)

I go pee pee in my pants now ........

Title: Re: Meltdown
Post by: uffeviking on June 11, 2008, 04:05:30 PM

Title: Re: Meltdown
Post by: uffeviking on June 11, 2008, 06:07:52 PM

DM: When you posted - many articles ago! - about the coming water crisis, had you read the book by Chris Wood:

http://www.bychriswood.com/

The title Dry Spring should peek your interest! :)

Title: Re: Meltdown
Post by: BachQ on June 13, 2008, 10:24:45 AM

Quote from: uffeviking on June 11, 2008, 06:07:52 PM
DM: When you posted - many articles ago! - about the coming water crisis, had you read the book by Chris Wood:

http://www.bychriswood.com/

The title Dry Spring should peek your interest! :)

Thanks, Uffe ....... Many pundits believe that the coming water crisis will become the most important (and divisive) issue of modern times.

It may even eclipse the global oil crisis.

Fun, fun times. :D

Title: Re: Meltdown
Post by: BachQ on June 13, 2008, 10:28:35 AM

Peak Oil is here - 2008 Oil shock - Part 1
Art Bell interviewing Matt Savinar

http://www.youtube.com/v/opYeVsvRj6w

Peak Oil is here - 2008 Oil shock - Part 2

http://www.youtube.com/v/_-_F5-FOlQc

Title: Re: Meltdown
Post by: drogulus on June 13, 2008, 01:19:13 PM

Quote from: bwv 1080 on June 07, 2008, 04:58:15 PM
But don't you see that the market has done in 12 months what government failed to do in 20 years?

The government, (like any private corporation) only acts based on the incentives of the individual politicians and bureaucrats within it. These incentives all revolve around placating key interest groups. So obviously no one was going to mess with carbon taxes or fuel economy standards - there is no lobby for it. If conservatives are naiive in believing the markets never error, then liberals are doubly so for believing that there are these wise, imparital people in government that will act selflessly and wisely when given the power to interfere with markets. Its little more than a benevolent dictator fantasy. In truth, the primary purpose of any economic regulation is the protection of entrenched interests from competition, the protection of the consumer a distant secondary consideration.

I guess it's really too late to reply, but that won't stop me.... :)

bwv 1080, I generally think conservatives are correct in pointing out the errors that liberals like me make when they advocate government action. I just wish they wouldn't think that it stops there. You still have to decide when to start correcting for what markets won't do. Unless you really believe all government action (including inaction) is stupid because it's the government. If that were true then inaction would always be right. The record shows that govenments frequently do the right thing, or at least right enough, and inaction is not always the best choice.

The fuel economy measures of the '70s were correct, and the conservative program of inaction in the decades since incorrect. This has been known all along, and saying that politicians were too stupid to do the right thing just begs the question of why the opposition managed to get it right. These "government is always wrong/right" disputes are fruitless, because the question is never answered at the ideological level. It's who has the sense to come up with a good fix, regardless of liberal/conservative inclinations. We should be looking for what government can and should accomplish rather than trying to answer these questions with cookie-cutter formulations.

The current situation is not an illustration of the joys of free-marketeering, it's a demonstration of the preposterousness of that very approach, which we've been captive to for nearly 30 years! I don't think we should wait for the market to decide that we are dinosaurs who don't deserve to survive. If we do, that will be the markets judgment, and as we perish the conservatives can say "well, it was a fair cop". Ughh...what a dismal point of view that is! Why conservatives, who are supposed to believe in free will, are invested in economic predestination (against the evidence) is a mystery to me. _???

Title: Re: Meltdown
Post by: bwv 1080 on June 13, 2008, 01:42:51 PM

Quote from: drogulus on June 13, 2008, 01:19:13 PM
I guess it's really too late to reply, but that won't stop me.... :)

bwv 1080, I generally think conservatives are correct in pointing out the errors that liberals like me make when they advocate government action. I just wish they wouldn't think that it stops there. You still have to decide when to start correcting for what markets won't do. Unless you really believe all government action (including inaction) is stupid because it's the government. If that were true then inaction would always be right. The record shows that govenments frequently do the right thing, or at least right enough, and inaction is not always the best choice.

The fuel economy measures of the '70s were correct, and the conservative program of inaction in the decades since incorrect. This has been known all along, and saying that politicians were too stupid to do the right thing just begs the question of why the opposition managed to get it right. These "government is always wrong/right" disputes are fruitless, because the question is never answered at the ideological level. It's who has the sense to come up with a good fix, regardless of liberal/conservative inclinations. We should be looking for what government can and should accomplish rather than trying to answer these questions with cookie-cutter formulations.

The current situation is not an illustration of the joys of free-marketeering, it's a demonstration of the preposterousness of that very approach, which we've been captive to for nearly 30 years! I don't think we should wait for the market to decide that we are dinosaurs who don't deserve to survive. If we do, that will be the markets judgment, and as we perish the conservatives can say "well, it was a fair cop". Ughh...what a dismal point of view that is! Why conservatives, who are supposed to believe in free will, are invested in economic predestination (against the evidence) is a mystery to me. _???

I am suprised you could find this post :)

The point being that while we can postulate what government ideally should do (say with fuel economy standards), actually getting government to implement the desired policy in a way that is not so compromised with concessions to politically powerful special interests that it retains the ability to accomplish the desired goal without creating further problems and unintended consequences worse than the intended benefits is no easy task. Furthermore there is the risk that the desired policy may simply be flawed in its design, regardless of how it is implemented (like the windfall profits taxes or price fixing of the 70s), or that the there are unintended consequences that have worse effects than the benefits of the policy (like food prices and ethanol). It is easy to look back and say, if only the fuel standards had been raised to whatever higher level, things would be better now, but it presumes that doing so would have been politically viable 10, 15 or 20 years ago. Would the Unions that back the Democratic party have been in favor of it? Probably not. Very few politicians would have found it in their career interests to back this policy (other than perhaps some rhetoric to appease the Sierra club).

But after all , the market has not given us such a bad outcome. We had 20 years of cheap oil, which helped spur alot of economic growth and directed investment away from energy into information technology, medical products and services, etc. Now that it has become expensive again, the market is creating incentives for investment in energy and there was something like $150 billion in private investment in clean energy last year. For example, a good part of everything learned in the past 30 years in making semiconductors cheaper and more productive has direct applications to photovoltaic cells. Had the government spent billions on R&D in solar chips in the 80s there was a good chance that it would have been wasted, as developments in other areas were necessary.

Certainly one should not be dogmatic about private or public choice. But the risks and tradeoffs need to be understood. The market contains feedback and self correction mechanisms that are lacking in government policy. Bad businesses go broke, bad policies get entrenched by special interests.

Title: Re: Meltdown
Post by: drogulus on June 14, 2008, 08:09:57 AM

I think the "real" nonpanic nonspeculative price of oil is about $70-80/barrel. Not that I believe in real prices, it's just that I think that's where it's headed after all the screaming stops. Then it will go back up, but more slowly this time.

bwv 1080, that's an interesting article you posted. It sounds about right. Demand isn't really going up now, it's flat, and the trend is down for the immediate future.

Title: Re: Meltdown
Post by: BachQ on June 18, 2008, 09:47:48 AM

(http://www.otcnet.org/2005/images/speakers/MattSimmons_hi.jpg)

Matt Simmons Says Raised Saudi Oil Output Is `Drop in Bucket'

http://www.youtube.com/v/0YRu6bqKPjM

Matt Simmons on Bloomberg. He talks about peak oil, oil prices, and whether demand destruction/recession can lower the cost of gas.

Title: Re: Meltdown
Post by: BachQ on June 18, 2008, 07:13:35 PM

June 18, 2008

Bush: Let's drill in the outer continental shelf for 18 billion bbls of oil (10 years' worth). Drill drill drill, baby!

Matt Simmons: "It's something we should have done .... but We're out of oil rigs ... and it will take 5-10 years to build new oil rigs" "We're out of time"

http://www.youtube.com/v/hNpnNRQtMQU

IOW: You can't drill without rigs; we're out of rigs, and our newest rig is 25 years old; it takes 5-10 years to build a new rig. At current oil prices, the economy won't last another 5 years. Ergo: We're royally screwed. We are out of time.

(http://www.aspousa.org/assets/images/Matt_Simmons_ASPO_2005_200.jpg) (http://www.bongonews.com/StoryImages/bush_energy_policy_2005-05-04.JPG)

Title: Re: Meltdown
Post by: BachQ on June 19, 2008, 05:19:14 AM

Telegraph.uk: http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/06/18/cnbank118.xml

Things will get worse, warns Bank of England governor Mervyn King: "The coming months represent the biggest challenge for the economy for two decades," Mervyn King said, adding that some households will find them "particularly difficult". In his most sombre message yet, Mr King said families were being squeezed hard by higher electricity and food prices on the one hand and slowly-increasing wages on the other.

Title: Re: Meltdown
Post by: BachQ on June 19, 2008, 05:20:10 AM

6/19/2008

Richard Heinberg: The End of the Petroleum Age in Australia

(Kerry O'Brien speaks with Richard Heinberg, renowned educator and author of a number of books about the end of the petroleum age.)

Broadband: http://www.abc.net.au/reslib/200806/r263136_1097231.asx

Dialup: http://www.abc.net.au/reslib/200806/r263136_1097232.asx

LINK to general page: http://www.abc.net.au/7.30/content/2007/s2280200.htm

"The fundamentals are driving the speculation"

"This is not a temproary blip .... This is a fundamental and permanent change in the global energy economy.... "

Title: Re: Meltdown
Post by: BachQ on June 19, 2008, 05:20:33 AM

Spain's violent fuel protests

http://www.youtube.com/v/9Kj090Nhl1M

Title: Re: Meltdown
Post by: BachQ on June 19, 2008, 05:21:07 AM

http://features.csmonitor.com/environment/2008/06/18/pickens-oil-production-has-peaked/

Pickens: "I do believe you have peaked out at 85 million barrels a day globally," T. Boone Pickens told the Senate Energy and

Natural Resources Committee Tuesday, according to Reuters.

Title: Re: Meltdown
Post by: BachQ on June 19, 2008, 05:56:55 PM

LA Times: Investment in U.S. commercial real estate falls 70% (http://www.latimes.com/business/la-fi-commre19-2008jun19,0,2024625.story)

Title: Re: Meltdown
Post by: BachQ on June 19, 2008, 05:58:40 PM

Ominous rumblings from interesting places.

"A startling press release hitting the media this morning. The Royal Bank of Scotland warning investors of an imminent stock market crash between now and September. . . adding to the Bank of International Settlements warning of a second Great Depression (June 9). . . plus Morgan Stanley reissuing an older warning of a crash in equity markets."

--James Howard Kunstler 6/18/2008

Title: Re: Meltdown
Post by: BachQ on June 25, 2008, 03:12:31 AM

(http://www.theoildrum.com/files/Alistair_Darling_wco.png)

Quote..We are now in the early stages of a full blown global energy crisis. The focus is currently on oil but this will soon turn to concerns over natural gas and coal supplies. *** Here are a few pointers to what I think we can expect in the next 18 months:

* Forever rising energy import bills will pressure Sterling which will continue to fall, pushing up the cost of energy, food and consumer goods even more.

* Public sector workers, no longer able to borrow to supplement income will begin to strike once they discover that 3% wage increases do not come close to covering the rise in the cost of living (the great inflation lie will be found out).

* Unemployment will begin a steady rise as financial services, banks, building sector, airlines, airports, leisure and retail come under severe pressure. They will be joined by public service workers as the government struggles to fund public services with falling tax receipts, spiraling debt and a falling pound. (already happening in Aberdeen with deep cuts in education spending across the city and teacher numbers being slashed).

* I won't go into the spiraling and compounding nature of this on the property market since this is an article about energy.

* The elderly and poor will really struggle this winter to pay their energy and food bills. If the weather is cold, the grid might fail and the vulnerable will begin to die from cold and starvation.

TheOildrum Europe (http://europe.theoildrum.com/node/4188#more)

Title: Re: Meltdown
Post by: BachQ on June 26, 2008, 10:45:05 AM

Thursday, 26 June 2008

CNN: Oil Rockets to $140/bbl for the 1st Time
(http://money.cnn.com/2008/06/26/markets/oil/index.htm?postversion=2008062614)

Title: Re: Meltdown
Post by: bwv 1080 on June 26, 2008, 11:31:46 AM

Gentlemen, Start Your Plug-Ins
How does 500 miles a gallon sound to you?
by R. JAMES WOOLSEY
Wall Street Journal
Monday, January 1, 2007 12:01 a.m. EST

An oil and security task force of the Council on Foreign Relations recently opined that "the voices that espouse 'energy independence' are doing the nation a disservice by focusing on a goal that is unachievable over the foreseeable future." Others have also said, essentially, that other nations will control our transportation fuel--get used to it. Yet House Democrats have announced a push for "energy independence in 10 years," and in November General Motors joined Toyota and perhaps other auto makers in a race to produce plug-in hybrid vehicles, hugely reducing the demand for oil. Who's right--those who drive toward independence or those who shrug?

Bet on major progress toward independence, spurred by market forces and a portfolio of rapidly developing oil-replacing technologies.

In recent years a number of alternatives to conventional oil have come to the fore--oil sands, oil shale, coal-to-diesel and coal-to-methanol technologies. But their acceptability to a new Congress, quite possibly the next president, and a public increasingly concerned about global warming will depend on their demonstrating affordable and effective methods of sequestering the carbon they produce or otherwise avoiding carbon emissions.

Ethanol's appeal rose a few years ago when it became clear that genetically modified biocatalysts could break down the cellulose in biomass and thus enable ethanol's production from a wide range of plant life. This means that, compared with corn, little fossil fuel is needed during biomass cultivation and land use presents much less of a problem. Indeed two years ago the National Energy Policy Commission (NEPC), making reasonable assumptions about improved vehicle efficiency and biomass yields over the next 20 years, estimated that just 7% of U.S. farmland (the amount now in the Soil Bank) could produce enough biomass to provide half the fuel needed by U.S. passenger vehicles, and that production costs for cellulosic ethanol were headed downward toward around 70 cents per gallon. Further, conversion of only a portion of industrial, municipal and animal wastes--using thermal processes now coming into commercial operation--appears to be able to yield an additional several million barrels a day of diesel or, with some processes, methanol.

But in spite of the technological promise of alternative liquid fuels, skeptics rightly point out that it will take time to build production facilities and learn the practicalities of operating biorefineries and shifting industry from hydrocarbons to carbohydrates. Most of all there is a sense of investor caution, driven by memories of the mid-'80s and the late '90s when sharp drops in oil prices, driven in part by increased production from Saudi reserves, bankrupted such undertakings as the Synfuels Corporation. Also, industry support for moving away from oil dependence has long been weak outside agribusiness, and consumers see little immediate savings from using alternative liquid fuels.

All this is likely to change decisively, because electricity is about to become a major partner with alternative liquid fuels in replacing oil.
The change is being driven by innovations in the batteries that now power modern electronics. If hybrid gasoline-electric cars are provided with advanced batteries (GM's announcement said its choice would be lithium-ion) having improved energy and power density--variants of the ones in our computers and cell phones--dozens of vehicle prototypes are now demonstrating that these "plug-in hybrids" can more than double hybrids' overall (gasoline) mileage. With a plug-in, charging your car overnight from an ordinary 110-volt socket in your garage lets you drive 20 miles or more on the electricity stored in the topped-up battery before the car lapses into its normal hybrid mode. If you forget to charge or exceed 20 miles, no problem, you then just have a regular hybrid with the insurance of liquid fuel in the tank. And during those 20 all-electric miles you will be driving at a cost of between a penny and three cents a mile instead of the current 10-cent-a-mile cost of gasoline.

Utilities are rapidly becoming quite interested in plug-ins because of the substantial benefit to them of being able to sell off-peak power at night. Because off-peak nighttime charging uses unutilized capacity, DOE's Pacific Northwest National Laboratory estimates that adopting plug-ins will not create a need for new base load electricity generation plants until plug-ins constitute over 84% of the country's 220 million passenger vehicles. Further, those plug-ins that are left connected to an electrical socket after being fully charged (most U.S. cars are parked over 20 hours a day) can substitute for expensive natural gas by providing electricity from their batteries back to the grid: "spinning" reserves to help deal with power outages and regulation of the grid's voltage and amperage.

Once plug-ins start appearing in showrooms it is not only consumers and utility shareholders who will be smiling. If cheap off-peak electricity supplies a portion of our transportation needs, this will help insulate alternative liquid fuels from OPEC market manipulation designed to cripple oil's competitors. Indian and Chinese demand and peaking oil production may make it much harder for OPEC today to use any excess production capacity to drive prices down and destroy competitive technology. But as plug-ins come into the fleet low electricity costs will stand as a substantial further barrier to such market manipulation. Since OPEC cannot drive oil prices low enough to undermine our use of off-peak electricity, it is unlikely to embark on a course of radical price cuts at all because such cuts are painful for its oil-exporter members. Plug-ins thus may well give investors enough confidence to back alternative liquid fuels without any need for new taxes on oil or subsidies to protect them.

Environmentalists should join this march with enthusiasm. Replacing hydrocarbons with fuels derived from biomass and waste reduces vehicles' carbon emissions very substantially. And replacing gasoline with electricity further brightens the environmental picture. The Environmental and Energy Study Institute has shown that, with today's electricity grid, there would be a national average reduction in carbon emissions by about 60% per vehicle when a plug-in hybrid with 20-mile all-electric range replaces a conventional car.

Subsidizing expensive substitutes for petroleum, ignoring the massive infrastructure costs needed to fuel family cars with hydrogen, searching for a single elegant solution--none of this has worked, nor will it. Instead we should encourage a portfolio of inexpensive fuels, including electricity, that requires very little infrastructure change and let its components work together: A 50 mpg hybrid, once it becomes a plug-in, will likely get solidly over 100 mpg of gasoline (call it "mpgg"); if it is also a flexible fuel vehicle using 85% ethanol, E-85, its mpgg rises to around 500.
The market will likely operate to expand sharply the use of these technologies that are already in pilot plants and prototypes and heavily reduce oil use in the foreseeable future. And given the array of Wahhabis, terrorists and Ahmadinejad-like fanatics who sit atop the Persian Gulf's two-thirds of the world's conventional oil, such reduction will not be a disservice to the nation.

Mr. Woolsey, co-chairman of the Committee on the Present Danger, was director of central intelligence from 1993 to 1995.

Title: Re: Meltdown
Post by: drogulus on June 26, 2008, 11:40:38 AM

bwv 1080 , The main source for hydrogen would probably be natural gas. Maybe coal could be used some day if we could solve the carbon problem, but at what cost? My bet is on a new generation hybrids and eventually all electric cars. Electrical generation doesn't depend on one source, so we can use several of them.

Title: Re: Meltdown
Post by: bwv 1080 on June 26, 2008, 11:49:30 AM

Quote from: drogulus on June 26, 2008, 11:40:38 AM
bwv 1080 , The main source for hydrogen would probably be natural gas. Maybe coal could be used some day if we could solve the carbon problem, but at what cost? My bet is on a new generation hybrids and eventually all electric cars. Electrical generation doesn't depend on one source, so we can use several of them.

Absolutely, that is basically what the article is saying. If you can get 500 miles per gallon of gasoline on plug-in hybrids burning (cellulosic-derived) E85, ISTM the need for something like hydrogen is questionable.

Title: Re: Meltdown
Post by: ezodisy on June 26, 2008, 12:49:57 PM

Oil hits record over $140
Thu Jun 26, 2008 4:04pm EDT

By Matthew Robinson

NEW YORK (Reuters) - Oil prices surged nearly 4 percent to a record over $140 a barrel on Thursday after Libya said it was studying possible options to cut output in response to potential U.S. actions against producer countries.

U.S. crude settled up $5.09 at $139.64 a barrel, after hitting an all-time high of $140.39 earlier, eclipsing the previous record of $139.89 a barrel hit on June 16. London Brent crude settled up $5.50 at $139.83 a barrel.

"The crude oil market spiked sharply higher in early trading after Libyan National Oil Company chief Shokri Ghanem said that Libya was considering a production cut," said Tim Evans of Citi Futures Perspective.

Ghanem, Libya's most senior oil official, said he was studying the possibility of reducing production in response to a bill before the U.S. Congress that would empower the Justice Department to sue members of the Organization of Petroleum Exporting Countries for limiting oil supplies.

"We are studying all the options," Ghanem told Reuters. "There are threats from the Congress and they are taking OPEC to court, extending the jurisdiction of the U.S. outsidethe U.S."

Libya pumped about 1.71 million barrels per day (bpd) of oil in May, according to a Reuters survey, out of total OPEC output of 32.12 million bpd.

U.S. President George W. Bush has said he would veto the legislation if it were passed by Congress. The House of Representatives passed the bill in May, but the Senate has yet to schedule a vote on the measure.

Oil prices have rallied over the past six years, supported by surging demand from emerging economies like China.

Rising flows of cash into commodities from investors seeking to hedge against inflation and the weak dollar have added to gains this year.

The dollar fell broadly on Thursday after the Federal Reserve held interest rates steady on Wednesday and dashed expectations of an imminent rate hike.

ECONOMIC STRESS

Oil's gains helped push down U.S. stocks on Thursday, with the Dow falling to its lowest level since September 2006 on recession worries.

Rising fuel costs have strained economies and spurred protests around the globe, prompting OPEC kingpin Saudi Arabia to pledge to hike output during a meeting between producer and consumer nations over the weekend.

OPEC President Chakib Khelil said in an interview Thursday that prices could reach $170 a barrel in the coming months, and he reiterated the cartel's position that speculation -- not a supply problem -- was driving oil to new highs.

"I forecast prices probably between $150 and $170 during this summer. That will perhaps ease towards the end of the year," Khelil told France 24 television, according to a text of the interview released by the station.

Oil prices fell on Wednesday after U.S. government data showed a surprise build in the crude inventories of the world's top consumer as demand continued to drop.

Nigerian oil workers met with Chevron management and the OPEC country's oil minister on Thursday in an effort to avert an all-out strike that could cut output.

Title: Re: Meltdown
Post by: BachQ on June 26, 2008, 01:34:13 PM

U.S. Stocks Tumble, Sending Dow to Worst June Since Great Depression
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aT.gUZndgG7k&refer=home)

Title: Re: Meltdown
Post by: bwv 1080 on June 26, 2008, 04:35:40 PM

DAY by day it becomes more evident that the Coal we happily possess in excellent quality and abundance is the mainspring of modern material civilization. As the source of fire, it is the source at once of mechanical motion and of chemical change. Accordingly it is the chief agent in almost every improvement or discovery in the arts which the present age brings forth. It is to us indispensable for domestic purposes, and it has of late years been found to yield a series of organic substances, which puzzle us by their complexity, please us by their beautiful colours, and serve us by their various utility.

I.1
And as the source especially of steam and iron, coal is all powerful. This age has been called the Iron Age, and it is true that iron is the material of most great novelties. By its strength, endurance, and wide range of qualities, this metal is fitted to be the fulcrum and lever of great works, while steam is the motive power. But coal alone can command in sufficient abundance either the iron or the steam; and coal, therefore, commands this age—the Age of Coal.

I.2
Coal in truth stands not beside but entirely above all other commodities. It is the material energy of the country—the universal aid—the factor in everything we do. With coal almost any feat is possible or easy; without it we are thrown back into the laborious poverty of early times.

I.3
With such facts familiarly before us, it can be no matter of surprise that year by year we make larger draughts upon a material of such myriad qualities—of such miraculous powers. But it is at the same time impossible that men of foresight should not turn to compare with some anxiety the masses yearly drawn with the quantities known or supposed to lie within these islands.

I.4
Geologists of eminence, acquainted with the contents of our strata, and accustomed, in the study of their great science, to look over long periods of time with judgment and enlightenment, were long ago painfully struck by the essentially limited nature of our main wealth. And though others have been found to reassure the public, roundly asserting that all anticipations of exhaustion are groundless and absurd, and "may be deferred for an indefinite period," yet misgivings have constantly recurred to those really examining the question. Not long since the subject acquired new weight when prominently brought forward by Sir W. Armstrong in his Address to the British Association, at Newcastle, the very birthplace of the coal trade.

I.5
This question concerning the duration of our present cheap supplies of coal cannot but excite deep interest and anxiety wherever or whenever it is mentioned: for a little reflection will show that coal is almost the sole necessary basis of our material power, and is that, consequently, which gives efficiency to our moral and intellectual capabilities. England's manufacturing and commercial greatness, at least, is at stake in this question, nor can we be sure that material decay may not involve us in moral and intellectual retrogression. And as there is no part of the civilized world where the life of our true and beneficent Commonwealth can be a matter of indifference, so, above all, to an Englishman who knows the grand and steadfast course his country has pursued to its present point, its future must be a matter of almost personal solicitude and affection.

I.6
The thoughtless and selfish, indeed, who fear any interference with the enjoyment of the present, will be apt to stigmatise all reasoning about the future as absurd and chimerical. But the opinions of such are closely guided by their wishes. It is true that at the best we see dimly into the future, but those who acknowledge their duty to posterity will feel impelled to use their foresight upon what facts and guiding principles we do possess. Though many data are at present wanting or doubtful, our conclusions may be rendered so far probable as to lead to further inquiries upon a subject of such overwhelming importance. And we ought not at least to delay dispersing a set of plausible fallacies about the economy of fuel, and the discovery of substitutes for coal, which at present obscure the critical nature of the question, and are eagerly passed about among those who like to believe that we have an indefinite period of prosperity before us.

I.7
The writers who have hitherto discussed this question, being chiefly geologists, have of necessity treated it casually, and in a one-sided manner. There are several reasons why it should now receive fuller consideration. In the first place, the accomplishment of a Free Trade policy, the repeal of many laws that tended to restrain our industrial progress, and the very unusual clause in the French Treaty which secures a free export of coals for some years to come, are all events tending to an indefinite increase of the consumption of coal. On the other hand, two most useful systems of Government inquiry have lately furnished us with new and accurate information bearing upon the question; the Geological Survey now gives some degree of certainty to our estimates of the coal existing within our reach, while the returns of mineral statistics inform us very exactly of the amount of coal consumed.

I.8
Taking advantage of such information, I venture to try and shape out a first rough approximation to the probable progress of our industry and consumption of coal in a system of free industry. We of course deal only with what is probable. It is the duty of a careful writer not to reject facts or circumstances because they are only probable, but to state everything with its due weight of probability. It will be my foremost desire to discriminate certainty and doubt, knowledge and ignorance—to state those data we want, as well as those we have. But I must also draw attention to principles governing this subject, which have rather the certainty of natural laws than the fickleness of statistical numbers.

I.9
It will be apparent that the first seven of the following chapters are mainly devoted to the physical data of this question, and are of an introductory character. The remaining chapters, which treat of the social and commercial aspects of the subject, constitute the more essential part of the present inquiry. It is this part of the subject which seems to me to have been too much overlooked by those who have expressed opinions concerning the duration of our coal supplies.

I.10
I have endeavoured to present a pretty complete outline of the available information in union with the arguments which the facts suggest. But such is the extent and complexity of the subject that it is impossible to notice all the bearings of fact upon fact. The chapters, therefore, have rather the character of essays treating of the more important aspects of the question; and I may here suitably devote a few words to pointing out the particular purpose of each chapter, and the bearings of one upon the other.

I.11
I commence by citing the opinions of earlier writers, who have more or less shadowed forth my conclusions; and I also quote Mr. Hull's estimate of the coal existing in England, and adopt it as the geological datum of my arguments.

I.12
In considering the geological aspects of the question, I endeavour to give some notion of the way in which an estimate of the existing coal is made, and of the degree of certainty attaching to it, deferring to the chapter upon Coal Mining the question of the depth to which we can follow seams of coal. It is shown that in all probability there is no precise physical limit of deep mining, but that the growing difficulties of management and extraction of coal in a very deep mine must greatly enhance its price. It is by this rise of price that gradual exhaustion will be manifested, and its deplorable effects occasioned.

I.13
I naturally pass to consider whether there are yet in the cost of coal any present signs of exhaustion; it appears that there has been no recent rise of importance, but that, at the same time, the high price demanded for coals drawn from some of the deepest pits indicates the high price that must in time be demanded for even ordinary coals.

I.14
A distinct division of the inquiry, comprising chapters vi. vii. and viii., treats of inventions in regard to the use of coal. It is shown that we owe almost all our arts to continental nations, except those great arts which have been called into use here by the cheapness and excellence of our coal. It is shown that the constant tendency of discovery is to render coal a more and more efficient agent, while there is no probability that when our coal is used up any more powerful substitute will be forthcoming. Nor will the economical use of coal reduce its consumption. On the contrary, economy renders the employment of coal more profitable, and thus the present demand for coal is increased, and the advantage is more strongly thrown upon the side of those who will in the future have the cheapest supplies. As it is in a subsequent chapter on the Export and Import of Coal conclusively shown that we cannot make up for a future want of coal by importation from other countries, it will appear that there is no reasonable prospect of any relief from a future want of the main agent of industry. We must lose that which constitutes our peculiar energy. And considering how greatly our manufactures and navigation depend upon coal, and how vast is our consumption of it compared with that of other nations, it cannot be supposed we shall do without coal more than a fraction of what we do with it.

I.15
I then turn to a totally different aspect of the question, leading to some estimate of the duration of our prosperity.

I.16
I first explain the natural principle of population, that a nation tends to multiply itself at a constant rate, so as to receive not equal additions in equal times, but additions rapidly growing greater and greater. In the chapter on Population it is incidentally pointed out that the nation, as a whole, has rapidly grown more numerous from the time when the steam-engine and other inventions involving the consumption of coal came into use. Until about 1820 the agricultural and manufacturing populations increased about equally. But the former then became excessive, occasioning great pauperism, while it is only our towns and coal and iron districts which have afforded any scope for a rapid and continuous increase.

I.17
The more nearly, too, we approach industry concerned directly with coal, the more rapid and constant is the rate of growth. The progress indeed of almost every part of our population has clearly been checked by emigration, but that this emigration is not due to pressure at home is plain from the greatly increased frequency of marriages in the last ten or fifteen years. And though this emigration temporarily checks our growth in mere numbers, it greatly promotes our welfare, and tends to induce greater future growths of population.

I.18
Attention is then drawn to the rapid and constant rate of multiplication displayed by the iron, cotton, shipping, and other great branches of our industry, the progress of which is in general quite unchecked up to the present time. The consumption of coal, there is every reason to suppose, has similarly been multiplying itself at a growing rate. The present rate of increase of our coal consumption is then ascertained, and it is shown that, should the consumption multiply for rather more than a century at the same rate, the average depth of our coal-mines would be 4,000 feet, and the average price of coal much higher than the highest price now paid for the finest kinds of coal.

I.19
It is thence simply inferred that we cannot long continue our present rate of progress. The first check to our growing prosperity, however, must render our population excessive. Emigration may relieve it, and by exciting increased trade tend to keep up our progress; but after a time we must either sink down into poverty, adopting wholly new habits, or else witness a constant annual exodus of the youth of the country. It is further pointed out that the ultimate results will be to render labour so abundant in the United States that our iron manufactures will be underbid by the unrivalled iron and coal resources of Pennsylvania; and in a separate chapter it is shown that the crude iron manufacture will, in all probability, be our first loss, while it is impossible to say how much of our manufactures may not follow it.

I.20
Suggestions for checking the waste and use of coal are briefly discussed, but the general conviction must force itself upon the mind, that restrictive legislation may mar but cannot mend the natural course of industrial development. Such is a general outline of my arguments and conclusions.

I.21
When I commenced studying this question, I had little thought of some of the results, and I might well hesitate at asserting things so little accordant with the unbounded confidence of the present day. But as serious misgivings do already exist, some discussion is necessary to set them at rest, or to confirm them, and perhaps to modify our views. And in entering on such a discussion, an unreserved, and even an overdrawn, statement of the adverse circumstances, is better than weak reticence. If my conclusions are at all true, they cannot too soon be recognised and kept in mind; if mistaken, I shall be among the first to rejoice at a vindication of our country's resources from all misgivings.

I.22
For my own part, I am convinced that this question must before long force itself upon our attention with painful urgency. It cannot long be shirked and shelved. It must rise by degrees into the position of a great national and perhaps a party question, antithetical to that of Free Trade. There will be a Conservative Party, desirous, at all cost, to secure the continued and exclusive prosperity of this country as a main bulwark of the general good. On the other hand, there will be the Liberal Party, less cautious, more trustful in abstract principles and the unfettered tendencies of nature.

I.23
Bulwer, in one of his Caxtonian Essays, has described, with all his usual felicity of thought and language, the confliction of these two great parties. They have fought many battles upon this soil already, and the result as yet is that wonderful union of stability and change, of the good old and the good new, which makes the English Constitution.

I.24
But if it shall seem that this is not to last indefinitely—that some of our latest determinations of policy lead directly to the exhaustion of our main wealth—the letting down of our mainspring—I know not how to express the difficulty of the moral and political questions which will arise. Some will wish to hold to our adopted principles, and leave commerce and the consumption of coal unchecked even to the last; while others, subordinating commerce to purposes of a higher nature, will tend to the prohibition of coal exports, the restriction of trade, and the adoption of every means of sparing the fuel which makes our welfare and supports our influence upon the nations of the world.

I.25
This is a question of that almost religious importance which needs the separate study and determination of every intelligent person. And if we find that we must yield before the disposition of material wealth, which is the work of a higher Providence, we need not give way to weak discouragement concerning the future, but should rather learn to take an elevated view of our undoubted duties and opportunities in the present

Title: Re: Meltdown
Post by: greg on June 26, 2008, 04:53:40 PM

Oil (January January January 31 January 31 31 31, 1937 1937 1937 31 January 1937 31 31 1937 – ) is a Doom; Oil is a composer of Doom music, who once worked as a Hearse driver. Oil is a composer of Doom music, who once worked as a Hearse driver; Oil is a composer of Doom music, who once worked as a Hearse.

Oil Doom Oil Doom Doom Doom Oil Oil Doommmmmmm had Kryptonite for a fare once had Kryptonite for a fare once had Kryptonite for a fare once had Kryptonite for a fare once and Kryptonite got off and didn't melt him, didn't, didn't, didn't melt melt melt melt melt melt.

His earliest Doom was a short chainsaw which he subsequently repeated; his earliest Doom was a short chainsaw which he subsequently repeated; subsequently repeated; repeated; short chainsaw which he subsequently repeated; repeated over and over; repeated over and over and over; repeated over and over and over and over and over and over.

Knock Knock. Who's there? Oil. Oil Who? Who's there? Oil. Oil Who? Who's there? Oil. Oil Who? Who's there? Oil. Oil Who? Who's there? Oil. Oil Who? Oil and Doom.

Oil was a Doom oom oom oom Oil is a Doom oom oom oom Oil is a Doom oom oom oom. Death in raping fiery Hades Wadeys Woo Woo.

Oil Oil Oil Doom, Oil Doom, Oil Doom Doom had a friend a friend a friend of Oil Doom Doom Oil Doom. The friend the friend of Oil friend the Doom Doom Doom is none other none other one other than "GWB GWB GWB GWB GWB GWB GWB GWB GWB GWB GWB GWB GWB GWB GWB GWB GWB GWB ". GWB Oil-GWB Doom was a friend a friend, was a friend a one two three four.

One two three four. One two three four. One two three four. One two three four. One two three four five six seven eight. One two. One two.

Oil is a Doom of Gloom that repeats, then Oil is a Doom of Gloom of Gloom that repeats, then Oil is a Doom of Gloom of Gloom that repeats, then Oil is a Doom of Gloom of Gloom that repeats, then oIl aNd dOoM is a Doom of Gloom that repeats, then does a lot of Sean.

Oooooh-ah. Ooooooh-ah. Short Doom.

Two Glooms sat on a on a on a park bench, their parts bench bench bench touching each other, holding Dooms in the moonlight in the moonlight in the moonlight.

Eins zwei drei vier. One. Two. One two three four. One two three

same Doom. same Doom. different Doom? nope, same one.

Title: Re: Meltdown
Post by: M forever on June 26, 2008, 06:47:05 PM

Burning too much oil is not the reason for global warming. We have been told that for many years, but recent research has uncovered the real reason for global warming:

(http://polarbearnews.com/wp-content/uploads/2007/04/file19524.GIF)

Title: Re: Meltdown
Post by: greg on June 26, 2008, 06:52:06 PM

Wait, how'd that penguin make it to the North Pole?
Or maybe those are just Antarctican Eskimos dressed up as Polar Bears in the South Pole, that'd be a more logical answer.

Title: Re: Meltdown
Post by: BachQ on June 27, 2008, 03:53:44 AM

Shares of General Motors hit their lowest level since 1955 yesterday ...... and GM might run out of cash by the end of the year, yet GM seeks to increase car prices by 3.5% for 2009 models.

Yikes.

[CLICK HERE FOR ARTICLE]

(http://www.reuters.com/resources/r/?m=02&d=20080626&t=2&i=4920321&w=&r=2008-06-26T160716Z_01_N26451117_RTRUKOP_0_PICTURE0) (http://www.reuters.com/article/businessNews/idUSN2645111720080626)

Title: Re: Meltdown
Post by: DavidRoss on June 27, 2008, 05:08:59 AM

Per the US Census Bureau, world population is now 6.7 billion and still growing. This causes most of our problems and makes the rest impossible to solve.

Title: Re: Meltdown
Post by: BachQ on June 27, 2008, 10:27:33 AM

Quote from: DavidRoss on June 27, 2008, 05:08:59 AM
Per the US Census Bureau, world population is now 6.7 billion and still growing. This causes most of our problems and makes the rest impossible to solve.

Yes, and what causes overpopulation? Human nature and political shortsightedness. How does one address that?

Title: Re: Meltdown
Post by: BachQ on June 27, 2008, 10:28:36 AM

http://www.cnbc.com/id/25411119/for/cnbc

According to a Reuters/University of Michigan index, consumer sentiment fell for the fifth consecutive month to its lowest level in almost three decades -- is the lowest level since May 1980.

Title: Re: Meltdown
Post by: greg on June 27, 2008, 01:50:00 PM

Quote from: Dm on June 27, 2008, 10:27:33 AM

Yes, and what causes overpopulation? Human nature and political shortsightedness. How does one address that?

As I always say, people should stop having sex.

Title: Re: Meltdown
Post by: drogulus on June 27, 2008, 01:53:25 PM

Quote from: bwv 1080 on June 26, 2008, 04:35:40 PM
DAY by day it becomes more evident that the Coal we happily possess in excellent quality and abundance....

I think I understand your point, but even if Jevons and the Malthusians are wrong about both population and resource depletion (mostly they have been, largely because the crisis as it looms changes behavior and spurs innovation) the damage that's already been done is considerable. I'm worried about the future mostly because I'm worried about the present. You're entirely right that civilization is unlikely to collapse, but the change is wrenching now, and it will get worse before it gets better.

Title: Re: Meltdown
Post by: BachQ on June 27, 2008, 02:45:32 PM

Quote from: GGGGRRREEG on June 27, 2008, 01:50:00 PM
As I always say, people should stop having sex.

OK. You first.

You must promise to stop having sex.

Title: Re: Meltdown
Post by: BachQ on June 27, 2008, 02:47:17 PM

Charles Biderman, writing for Forbes Magazine, predicts "financial disaster" for the US economy. (http://www.forbes.com/finance/2008/06/23/crude-biderman-margin-pf-etf-in_tt_0623trimtabs_inl.html) Noting that the U.S. consumes 21 million barrels of oil per day, at $135/bbl, the U.S. will spend $1.0 trillion per year on oil, which equates to 15% of the $6.8 trillion in take-home pay of everyone who pays taxes. "If oil prices rose to $200 per barrel, the U.S. would spend $1.5 trillion per year on oil, which would be equal to 22% of take-home pay. Moreover, those percentages of 15% and 22% do not even include the cost of coal or natural gas. In other words, the U.S. will be broke long before oil prices hit $200 per barrel, and the rest of the world would be sure to follow."

Title: Re: Meltdown
Post by: greg on June 27, 2008, 02:51:27 PM

Quote from: Dm on June 27, 2008, 02:45:32 PM
OK. You first.

You must promise to stop having sex.

I've never started.
How about everyone else? Stop it, and the world won't have such problems!

(like i expect everyone to do this) ::)

Title: Re: Meltdown
Post by: BachQ on June 27, 2008, 03:38:15 PM

According to an article in the WSJ dated 26 June 2008, (http://blogs.wsj.com/environmentalcapital/2008/06/26/oil-shock-analyst-predicts-7-gas-mass-exodus-of-us-cars/), Jeff Rubin at Canadian brokerage CIBC World Markets opines that we can expect $200 oil in 2010, with gasoline at $7 a gallon. More specifically, "Over the next four years, we are likely to witness the greatest mass exodus of vehicles off America's highways in history."

Which means we'll be seeing a lot more of this:

(http://openlearn.open.ac.uk/file.php/3071/T207_1_021i.jpg)

Elgar on a bike!

Title: Re: Meltdown
Post by: BachQ on June 27, 2008, 03:41:41 PM

Deutsche Bank has announced that: declining Russian oil production could lead to $200 oil and "global recession" (http://www.moneymorning.com/2008/06/25/declining-russian-oil-production-could-lead-to-200-oil-and-global-recession-says-deutsche-bank/). Keith Fitz-Gerald, Money Morning's Investment Director, posits that "We are burning through supplies at a rate that's four times to five times faster than we're discovering new reserves .... Throw in a few [surprises]... perhaps a terrorist event... and add in the accelerating use of oil and gasoline in Third World countries, and we have the recipe for far higher prices."

Title: Re: Meltdown
Post by: BachQ on June 28, 2008, 07:30:27 PM

Vancouver Sun reports: "The new millennium has brought the end of cheap oil, and civilization is suddenly teetering on the edge of collapse." (http://www.canada.com/vancouversun/news/story.html?id=2eeece50-285f-4c4b-bb37-2d053d04d4e8)

Title: Re: Meltdown
Post by: BachQ on June 28, 2008, 07:31:56 PM

Christian Science Monitor reports: America's aviation system could be at risk of collapsing by the beginning of next year. (http://www.csmonitor.com/2008/0626/p01s06-usgn.html)

Title: Re: Meltdown
Post by: BachQ on June 28, 2008, 07:33:09 PM

According to Business Week, a toxic brew of bad bets on ultra-risky debt, a weak economy, and plunging home prices have raised concerns that the U.S. could see a wave of bank failures in the next year. Of the roughly 8,500 US banks, Ben Steveman believes that the most vulnerable are local banks in regions devastated by the real estate meltdown (e.g., Florida, Arizona, Nevada, and California).

LINK: http://www.businessweek.com/investor/content/jun2008/pi20080625_766234.htm?chan=patrick.net

Title: Re: Meltdown
Post by: BachQ on June 28, 2008, 07:34:19 PM

According to statistics from the Associated General Contractors of America, construction costs have been increasing at more than twice the level of overall consumer prices. As such, a combination of soaring global demand and high energy prices has caused construction material prices to explode for both commercial and residential builders. (http://www.dallasnews.com/sharedcontent/dws/bus/stories/062708dnbusconstructioncosts.3fcfe3f.html)

Title: Re: Meltdown
Post by: BachQ on June 30, 2008, 09:01:10 AM

TimesOnline.uk Interviews MATT SIMMONS

http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4237886.ece

(http://www.crisisenergetica.org/staticpages/berlin2004/simmons_closeup.jpg)

Title: Re: Meltdown
Post by: BachQ on June 30, 2008, 08:21:55 PM

Matt Simmons says: "It is not beyond the pale of imagination to see oil at $300, $400, $500 or even $600 a barrel within a relatively short time, much less than 20 years. It is not speculators who are driving oil prices. It's simply about supply and demand." (http://www.pressandjournal.co.uk/Article.aspx/711224/?UserKey=0)

Title: Re: Meltdown
Post by: BachQ on June 30, 2008, 08:24:26 PM

After having reviewed several recent studies addressing resource depletion, one scholar predicts chaos, stating that: "the current ruthless competition between energy and food markets, amplified by international speculation in commodities and agricultural land, is only a modest portent of the chaos that could soon grow exponentially from the convergence of resource depletion, intractable inequality, and climate change. The real danger is that human solidarity itself, like a West Antarctic ice shelf, will suddenly fracture and shatter into a thousand shards."
(http://www.tomdispatch.com/post/174949/mike_davis_welcome_to_the_next_epoch)

Title: Re: Meltdown
Post by: BachQ on July 01, 2008, 07:50:06 AM

CNBC: Jeff Rubin predicting gas @ $7/gallon, oil @ 200/bbl

http://www.youtube.com/v/EhOml2QApjg

Title: Re: Meltdown
Post by: BachQ on July 02, 2008, 12:53:07 PM

July 2 (Bloomberg) -- U.S. stocks tumbled, sending the Dow Jones Industrial Average into a bear market, after oil rose to a record and steelmakers and coal producers retreated on concern the economic slump will worsen.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aF4fDOUXmP2k&refer=home (http://www.bloomberg.com/apps/news?pid=20601087&sid=aF4fDOUXmP2k&refer=home)

Title: Re: Meltdown
Post by: BachQ on July 03, 2008, 11:12:14 AM

July 2 (Bloomberg) -- New foreclosures almost quadrupled in Los Angeles and doubled in Miami in the second quarter, with as much as $5 billion worth of loans going bad in L.A. alone ..... (http://www.bloomberg.com/apps/news?pid=20601087&sid=aYchgMdpnpC8&refer=worldwide)

Title: Re: Meltdown
Post by: mn dave on July 03, 2008, 11:15:43 AM

I wonder which will die first: The world or this thread. ;D

Title: Re: Meltdown
Post by: Florestan on July 03, 2008, 11:13:34 PM

Quote from: Mn Dave on July 03, 2008, 11:15:43 AM
I wonder which will die first: The world or this thread. ;D

Dave, thank you for starting my day with a big ROFTL! :D :D :D

The best post in this thread ever!

Title: Re: Meltdown
Post by: mn dave on July 04, 2008, 05:20:08 AM

Quote from: Florestan on July 03, 2008, 11:13:34 PM
Dave, thank you for starting my day with a big ROFTL! :D :D :D

The best post in this thread ever!

0:) ;D

Title: Re: Meltdown
Post by: DavidRoss on July 04, 2008, 05:37:46 AM

Here's something to cheer you up, D:

(http://www.elgar.org/6bpcott2.jpg)

The Elgar Birthplace Cottage

Title: Re: Meltdown
Post by: bwv 1080 on July 04, 2008, 03:06:05 PM

World Death Rate At 100 Percent
\
GENEVA, SWITZERLAND—World Health Organization officials expressed disappointment Monday at the group's finding that, despite the enormous efforts of doctors, rescue workers and other medical professionals worldwide, the global death rate remains constant at 100 percent.

Enlarge Image
Death rates since 1992
Death, a metabolic affliction causing total shutdown of all life functions, has long been considered humanity's number one health concern. Responsible for 100 percent of all recorded fatalities worldwide, the condition has no cure.

"I was really hoping, what with all those new radiology treatments, rescue helicopters, aerobics TV shows and what have you, that we might at least make a dent in it this year," WHO Director General Dr. Gernst Bladt said. "Unfortunately, it would appear that the death rate remains constant and total, as it has inviolably since the dawn of time."

Many are suggesting that the high mortality rate represents a massive failure on the part of the planet's health care workers.

"The inability of doctors and scientists to adequately address this issue of death is nothing less than a scandal," concerned parent Marcia Gretto said. "Do you have any idea what a full-blown case of death looks like? Well, I do, and believe me, it's not pretty. In prolonged cases, total decomposition of the corpse is the result."

"What about the children?" the visibly moved Gretto added.

"At this early date, I don't want to start making broad generalizations," Citizens for Safety's Robert Hemmlin said, "but it is beginning to seem possible that birth—as well as the subsequent life cycle that follows it—may be a serious safety risk for all those involved."

Death, experts say, affects not only the dead, but the non-dead as well.

Enlarge Image
Death has long been considered humanity's number one health concern. Responsible for 100 percent of all recorded fatalities worldwide, the condition has no cure.
"Those who suffer from death can be highly traumatized by it, often so severely that it kills them," noted therapist Eli Wasserbaum said. "But it can also be very traumatic for the still-living who are left behind. The sudden cessation of metabolic activity characteristic of terminal cases of death often leaves the dead person in a position where they are unable to adequately provide for the emotional needs of their loved ones."

In the most serious cases of death, Wasserbaum explained, the trauma inflicted upon these still-living victims of death may continue throughout their entire lives, until their own deaths. "Thus," Wasserbaum said, "the 'vicious cycle' of death trauma continues indefinitely."

"Everybody talks about death," Sen. Pete Domenici (R-NM) said, "but nobody seems to actually be doing anything about it. I propose we stop molly-coddling death, not to mention the multi-billion-dollar hospital, mortuary, funeral and burial industries that reap huge profits from it."

Under Domenici's new bill, all federal funds will be withheld from the medical industry until it "gets serious and starts cracking down on death."

Consumer rights advocate and staunch anti-death activist Ralph Nader agreed with Domenici.

"Why should we continue to spend billions of dollars a year on a health care industry whose sole purpose is to prevent death, only to find, once again, that death awaits us all?" Nader said in an impassioned address to several suburban Californians. "That's called a zero percent return on our investment, and that's not fair. Its time the paying customer stood up to the HMOs and to the so-called 'medical health professionals' and said: 'Enough is enough. I'm paying through the nose here, and I don't want to die.'"

Title: Re: Meltdown
Post by: BachQ on July 04, 2008, 03:35:53 PM

Quote from: DavidRoss on July 04, 2008, 05:37:46 AM
Here's something to cheer you up, D:

(http://www.elgar.org/6bpcott2.jpg)

The Elgar Birthplace Cottage

I tried to save it .........

(http://kirby-associates.net/yahoo_site_admin/assets/images/house-fire1m1.302144459_std.jpg)

Title: Re: Meltdown
Post by: BachQ on July 04, 2008, 03:36:29 PM

AP: Ray Neidl, an analyst with Calyon Securities, said "The Airline industry is moving into survival mode and has entered uncharted territory with fuel costs well above $140 a barrel." (http://biz.yahoo.com/ap/080703/american_airlines_jobs.html?.v=6)

Title: Re: Meltdown
Post by: BachQ on July 04, 2008, 03:37:01 PM

CHRISTIAN SCIENCE MONITOR: Shares of General Motors are trading at prices last seen in the 1950s, their value cut in half in just eight weeks. Ford and Chrysler are in even worse shape, analysts say. The sobering implication: The Big Three may have to become the Big Two, and even survivors will have a very tough road ahead.
(http://www.csmonitor.com/2008/0702/p01s08-usec.html)

Title: Re: Meltdown
Post by: BachQ on July 04, 2008, 03:37:29 PM

THE ECONOMIST: Figures released this week show that sales of cars and light trucks in America in June fell by 18% compared with the same period a year earlier. Chrysler's sales were down by a stunning 36%, pushing its market share below 10% for the first time in decades. Ford dropped by 28%. (http://www.economist.com/business/displaystory.cfm?story_id=11670623)

Title: Re: Meltdown
Post by: BachQ on July 04, 2008, 03:37:59 PM

THE ECONOMIST: Share prices are suffering because of the outlook for four forces that impel stockmarkets: economic growth, profits growth, interest rates and inflation (see article). At the moment, the first two seem to be slowing while the last two are rising. That is the worst possible combination. Soaring oil and food prices are stoking inflation. Oil closed at another peak of $144.14 a barrel on July 2nd .... (http://www.economist.com/finance/displaystory.cfm?story_id=11670925)

Title: Re: Meltdown
Post by: BachQ on July 04, 2008, 03:38:33 PM

WASHINGTON POST:Yesterday's report that 62,000 jobs were lost brought the total for the first half of the year to 438,000 jobs. Meanwhile, the Institute for Supply Management reported that its measure of the service sector had declined in June. Stock markets, flirting with a bear market, finished another losing week. Oil pushed to a record high. Inflation and foreclosures are up, consumer confidence is down, and administration forecasts for a "strong pace of growth" in the second half of 2008 are look increasingly absurd. (http://www.washingtonpost.com/wp-dyn/content/article/2008/07/03/AR2008070303317.html)

Title: Re: Meltdown
Post by: DavidRoss on July 04, 2008, 04:44:46 PM

Quote from: bwv 1080 on July 04, 2008, 03:06:05 PM
World Death Rate At 100 Percent

'bout time we got some good news around here!

Title: Re: Meltdown
Post by: BachQ on July 05, 2008, 04:25:51 PM

SYDNEY MORNING HERALD: In years to come, it's quite probable we will look back at 2008 as the year in which everything changed. And most of the changes being wrought upon us relate to energy, our use of it and its cost. (http://business.smh.com.au/the-year-everything-changed-20080704-31u6.html)

Title: Re: Meltdown
Post by: BachQ on July 05, 2008, 04:27:03 PM

TELEGRAPH.UK: One in eight homeowners who took out a home loan since the start of last year are already in negative equity, with tens of thousands now exposed to financial trouble from falling house prices. An estimated 145,000 homeowners owe more than their houses are worth. (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/05/cnnegeq105.xml)

Title: Re: Meltdown
Post by: ezodisy on July 06, 2008, 03:53:05 AM

Quote from: Dm on July 05, 2008, 04:27:03 PM
TELEGRAPH.UK: One in eight homeowners who took out a home loan since the start of last year are already in negative equity, with tens of thousands now exposed to financial trouble from falling house prices. An estimated 145,000 homeowners owe more than their houses are worth.
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/05/cnnegeq105.xml)

charts of some of the major UK housebuilders over the past 12 months

Title: Re: Meltdown
Post by: Lethevich on July 06, 2008, 09:01:57 AM

Quote from: ezodisy on July 06, 2008, 03:53:05 AM
charts of some of the major UK housebuilders over the past 12 months

Good, haha. Cowboys, all of them :P

Title: Re: Meltdown
Post by: BachQ on July 06, 2008, 03:10:24 PM

Where will Las Vegas be when oil surpasses $200/bbl?

Here's a glimpse:

independent.co.uk: Local bankruptcies [in Las Vegas] have quadrupled. The property market, which rode the wave of a boom for most of the past decade is now below its peak by anything from a quarter to a third (depending on whose figures you believe), while Nevada now boasts, if that is the right word, the nation's highest foreclosure rate. The number of empty homes has caused a health scare after it emerged that mosquitoes – possibly carrying the killer West Nile virus – are breeding in abandoned swimming pools. "With the high oil prices, people don't have much disposable income to spend on gaming and entertainment. So we are looking at a short-term slump, certainly. In the longer term, everything depends on what's going to happen to oil prices." (http://www.independent.co.uk/news/world/americas/down-and-out-in-las-vegas-860513.htm)

Title: Re: Meltdown
Post by: BachQ on July 06, 2008, 03:11:48 PM

Quote from: ezodisy on July 06, 2008, 03:53:05 AM
charts of some of the major UK housebuilders over the past 12 months

I don't see a trend ......... Is there supposed to be a trend, like a downward slope or something?

Title: Re: Meltdown
Post by: BachQ on July 06, 2008, 04:05:09 PM

Where has our beloved George W. Bush been the past 8 years?

NYT: Over the last 25 years, opportunities to head off the current oil crisis were ignored, missed or deliberately blocked, according to experts ... What's more, for all the surprise at just how high oil prices have climbed, and fears for the future, this is one crisis we were warned about. Ever since the oil shortages of the 1970s, one report after another has cautioned against America's oil addiction. (http://www.nytimes.com/2008/07/06/business/06oil.html?pagewanted=1&ref=business)

Title: Re: Meltdown
Post by: DavidRoss on July 06, 2008, 06:27:21 PM

Quote from: Dm on July 06, 2008, 04:05:09 PM
Where has our beloved George W. Bush been the past 8 years?

NYT: Over the last 25 years, opportunities to head off the current oil crisis were ignored, missed or deliberately blocked, according to experts ... What's more, for all the surprise at just how high oil prices have climbed, and fears for the future, this is one crisis we were warned about. Ever since the oil shortages of the 1970s, one report after another has cautioned against America's oil addiction.
(http://www.nytimes.com/2008/07/06/business/06oil.html?pagewanted=1&ref=business)

Over the past 25 years? We studied the obvious coming oil shortage in high school in the '60s. 1973 made it so effing obvious--and obvious that it was a national security issue as well--that even Texans were dumping their gas guzzlers. There is no crisis we face--domestic or global--that could not have been averted or minimized if only we were an intelligent species.

Title: Re: Meltdown
Post by: BachQ on July 08, 2008, 04:34:37 AM

Mexico's Cantarell oil field, the 3rd largest in the world, is in steep decline, and epitomizes the "poster child" for peak oil. Mexico is in serious, serious trouble.

BLOOMBERG, 7 Jul 08: Crude output from Mexico's Cantarell, the world's third-largest oil field, is falling at the fastest pace in 12 years ... Production at the Gulf of Mexico development dropped 34 percent in May from a year earlier, the biggest decline since October 1995, according to data compiled by the government and Bloomberg. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aQF381AACFAI&refer=home)

Title: Re: Meltdown
Post by: BachQ on July 08, 2008, 04:36:16 AM

Telegraph.uk 8 July 2008: In a dire warning, the British Chambers of Commerce said the economic outlook for the UK business sector was "grim and ominous" and the downturn could be "longer and nastier" than previously expected. (http://www.telegraph.co.uk/money/main.jhtml?%3Cbr%20/%3Eview=DETAILS&grid=&xml=/money/2008/07/08/nborrow708.xml)

Title: Re: Meltdown
Post by: BachQ on July 08, 2008, 05:06:36 AM

Wall Street Journal 7 July 2008: Oil's historic ascent from $100 to nearly $150 a barrel in just six months is lending weight to a far grimmer prediction: Crude could reach $200 a barrel by the end of the year. Oil at that price would wreak deeper havoc on the world's airlines and automobile industries. In the U.S., $200 crude would push the price of gasoline to well over $6 a gallon .... (http://online.wsj.com/article/SB121538739112131075.html?mod=fpa_whatsnews)

Title: Re: Meltdown
Post by: drogulus on July 08, 2008, 12:49:19 PM

I don't think it's obvious when you should change over to a new fuel from an old one in a fluctuating price environment. Even now it makes sense to use gasoline in cars. There are hundreds of millions of them and you can't junk them all right now. What you can do is accelerate the replacement of current ones with more efficient new ones. We could have had the foresight to gradually increase efficiency standards (in fact many did have that foresight but they lost the political battle). Even if we had done that the economy would still be dependent on oil to a large degree. You just can't get around the fact that oil, coal, and natural gas are vitally important to our energy system and would be even if we had done everything right.

The main reason we use so much oil is that until recently it was relatively cheap. Let me emphasize this: Planning for the future aside, it was correct to use it. We didn't plan the transition because we could not agree on how to do it, or what new energy mix would be planned for, or what other goals besides maximum efficiency were to be pursued. For instance, we used to think that nuclear was environmentally bad, when in comparative terms it's quite good. The "no nukes" mania almost killed energy planning in this country, forcing us back onto fossil fuels to an even greater degree.

The silver lining of this crisis is that now we can go back to pre-"China Syndrome" energy planning and take a realistic look at what role nuclear power generation will play. I think the larger role it plays the easier the rest of the transition will go. All those plug-in hybrids we hope to see will need electricity to charge them, and nuclear is just the thing for that.

Title: Re: Meltdown
Post by: BachQ on July 08, 2008, 05:19:04 PM

TELEGRAPH.UK, 7 Jul 08: The great oil shock of 2008 is bad enough for us. It poses a mortal threat to the whole economic strategy of emerging Asia. The manufacturing revolution of China and her satellites has been built on cheap transport over the past decade. At a stroke, the trade model looks obsolete. No surprise that Shanghai's bourse is down 56pc since October, one of the world's most spectacular bear markets in half a century. (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/07/ccview107.xml&CMP=ILC-mostviewedbox)

Title: Re: Meltdown
Post by: BachQ on July 08, 2008, 05:20:27 PM

Telegraph.UK Bridgewater Associates has issued an apocalyptic warning to clients that bank losses from the worldwide credit crisis may reach $1,600bn (£800bn), four times official estimates and enough to pose a grave risk to the financial system. ... "We are facing an avalanche of bad assets. We have big doubts as to whether financial institutions will be able to obtain enough new capital to cover their losses. The credit crisis is going to get worse..." (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/08/cnbridge108.xml)

Title: Re: Meltdown
Post by: BachQ on July 08, 2008, 06:15:32 PM

Telegraph.uk 8 July 2008 German industrial output fell at the fastest rate for a decade in May, raising concerns that Europe's economic powerhouse is succumbing to the twin effects of the oil and credit shocks. In Italy, Fiat announced plant closures and temporary layoffs at factories in Turin, Melfi, Imola and Sicily in order to face an economy "in crisis". Car sales in Italy have fallen by almost 20pc over each of the past two months. (http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/07/08/cnger108.xml)

Title: Re: Meltdown
Post by: drogulus on July 09, 2008, 01:28:53 PM

_:P Hey, this is fun! _:P

How Oil Prices Could Collapse

July 6, 2008 - by Youssef M. Ibrahim

Do you think $140 a barrel is insane? Last week the president of OPEC Chakib Khelil predicted $170 a barrel by summer's end. More sobering, this week the U.S. Energy Information Administration forecast world energy use to grow fifty percent by 2030.

If that pans out, it would mean the world will need to burn more than 120 million barrels of oil that day. We have it, but can we afford it? Nope, and that is why the oil domain is crumbling.

Hundred of thousands of hybrid cars are being disgorged from Japan to Europe, deeply cutting gasoline use. Those who dismissed solar energy a decade ago as esoteric now embrace it. Fly over entire countries like Israel and Cyprus and much of southern Europe, all with plenty of sun but no oil, and watch millions of solar panel reflectors stare back at you.

And that big bad wolf of energy, nuclear, will come back. It has already saved Europe's economies from successive ravages of oil. Massively adopted forty years ago as the energy solution by France, the world's fifth ranking economy, nuclear today produces seventy percent of that country's electricity and huge exports to Europe.

There will be a monopoly for oil until we invent something else that can move the car engine. But even General Motors is hard at work on an alternative engine because at $5 a gallon money talks.

Efforts redoubled elsewhere into coal and wind, with these giant wind energy columns now peppering landscapes across Europe and even in oily Texas.

As it happened before, alternatives will crack this energy gig. Right now the world of oil is split among new provinces like America, Canada, and the North Sea — which have given much of what they have — and old provinces like OPEC, Saudi Arabia, and Venezuela, where the rest of the stuff lies.

This is where the rubber is hitting the asphalt and producing mind-boggling prices. As we run out of the "secure" province supplies located under Western control, we are falling to oil controlled by potentates and failed regimes.

The North Sea oil, for example, was discovered in the 1960s between the UK and Norway. Oil companies under international contracts flung that territorial sea wide open, taking it all the way up to a peak of six million barrels a day in 1999 from virtually zero in 1970. They worked under universal rules of law. These are not the rules by which Saudi Arabia and OPEC play.

The same oil companies working in Saudi Arabia discovered all that oil in the 1930s and 1940s and set up production until nationalized and kicked out as partners in the 1970s. They now work there only as hired hands. As a result potential production of millions of barrels is locked down. The same goes for OPEC.

To be sure readers of this column have argued these are capitalist rules — their oil, their move. But globalization demands leveled playing fields, not monopolies. What is sure is that the time for an alternative to oil is now.

And it can break the bank as it did before. Back in 1973 Arab oil producers led by Saudi Arabia imposed a cutoff of oil to the USA and Europe. Prices shot up to the equivalent of $100 a barrel in today's dollars and we were familiarized with what is known as the global oil crisis. While some menaced war, oil companies took off looking for new provinces and found them — like the North Sea, which started pumping from zero in 1971 all the way up to its six million barrel a day peak of 1999. So much new oil was found elsewhere that OPEC's share of world supplies dropped to forty percent from nearly sixty percent.

And prices collapsed as a result, until they resumed their climb two years ago.

Wanda knew it and said it too often. That's the legendary Wanda Jablonski, whose life as a prescient journalist, business editor, and publisher is being grandly celebrated this week with a new book properly titled Queen of the Oil Club (http://www.amazon.com/gp/product/080707277X/ref=cm_cr_pr_product_top), by Anna Rubino.

Reading the book, it becomes clear that we heard it all before but did not pay attention. Although Wanda had a weakness for those oilmen who run the business, she always posed the alternate question. She was so insistent a voice in raising questions about oilmen and their world that they had a less flattering moniker than "queen of their club," giggling that she was a "buster" of a delicate part of male anatomy.

As you read Wanda's story and that of the oil she singlehandedly turned from a simple commodity into "black gold" and the stuff of global crises and wars, you can pick up the message: look for the alternative, now.

(http://img378.imageshack.us/img378/7112/clipboard01uv2.jpg)

Title: Re: Meltdown
Post by: BachQ on July 09, 2008, 03:40:13 PM

Quote from: drogulus on July 09, 2008, 01:28:53 PM
Do you think $140 a barrel is insane? Last week the president of OPEC Chakib Khelil predicted $170 a barrel by summer's end. More sobering, this week the U.S. Energy Information Administration forecast world energy use to grow fifty percent by 2030. If that pans out, it would mean the world will need to burn more than 120 million barrels of oil that day. We have it, but can we afford it? Nope, and that is why the oil domain is crumbling.

Sorry, the planet does not have 120 million bbl/day of oil. We peaked out at 87 million bpd, and as oil extraction becomes increasingly expensive, with demand becoming increasingly ravenous and unquenched, oil prices will go SKY HIGH.

I have no doubt that many alternatives to fossil fuel will become prevalent, but meanwhile the transition away from oil is going to be VERY UGLY.

Title: Re: Meltdown
Post by: BachQ on July 09, 2008, 03:42:23 PM

Int'l Herald Tribune (Reuters): Britain's economy is coming unglued quickly: Britain, one of the big winners from the free flow of capital and services globally in the last decade, is rapidly becoming one of globalization's losers because of its reliance on property and finance. With financial services contracting and the international flow of capital that financed a debt binge in an almost total freeze, the British economy, housing and financial markets are in a headlong race lower. (http://www.iht.com/articles/2008/07/08/business/col09.php)

Title: Re: Meltdown
Post by: BachQ on July 09, 2008, 03:44:28 PM

Guardian.uk: Buckle your seat belts - the housing crisis has not yet run its course, and the recession will continue well into next year. ... In short, when it comes to bad news on the US economy, we're just at the beginning. (ttp://www.guardian.co.uk/commentisfree/2008/jul/07/useconomicgrowth.housingmarket?ref=patrick.net)

Title: Re: Meltdown
Post by: drogulus on July 09, 2008, 04:20:16 PM

Quote from: Dm on July 09, 2008, 03:40:13 PM
Sorry, the planet does not have 120 million bbl/day of oil. We peaked out at 87 million bpd, and as oil extraction becomes increasingly expensive, with demand becoming increasingly ravenous and unquenched, oil prices will go SKY HIGH.

I have no doubt that many alternatives to fossil fuel will become prevalent, but meanwhile the transition away from oil is going to be VERY UGLY.

That was a guy I quoted, not me. Peak oil is properly applied to individual oil fields, not oil in general, though all the easy to pump fields were developed long ago. Peak oil in general is a more fuzzy concept because new fields come on line as old ones decline. The new ones are on average smaller and more expensive to pump, but that is more a long term affair than the steep curve that's associated with individual fields like the Saudi Ghawar field, the worlds largest, which has been in decline for the last few years.

I don't believe in the "ravenous and unquenched" demand that you fear, except to the extent that it describes the present situation. Prices will go up, and then come down as demand tapers off, which will happen due to worldwide slowdown and the usual substitution that happens in these cases. As the rapid changes in the auto market situation show, some changes really are quite rapid once they get going. Factor in changes in consumer driving habits and you have a very different picture from even one year ago, when the SUV was still dominant.

Title: Re: Meltdown
Post by: BachQ on July 09, 2008, 07:01:37 PM

Quote from: drogulus on July 09, 2008, 04:20:16 PM
Peak oil is properly applied to individual oil fields, not oil in general, though all the easy to pump fields were developed long ago.

The concept of peak oil can also be applied to the aggregate of known oil reserves/oil extraction. For example, the graph below shows that oil extraction has peaked (in the aggregate) for non-OPEC nations:

(http://upload.wikimedia.org/wikipedia/en/4/41/Hubbert_world_2004.png)

Again, even powerhouse oil fields like Mexico's Cantarell are experiencing declines (see above post). We need to divorce ourselves from oil as soon as possible.

Title: Re: Meltdown
Post by: BachQ on July 09, 2008, 07:04:37 PM

NYT: On Tuesday, IndyMac, one of the nation's largest independent mortgage lenders, faced what amounted to a run on the bank. As depositors rushed to withdraw money, IndyMac's share price, already in a free fall, spiraled even lower. (http://www.nytimes.com/2008/07/09/business/09lend.html?ref=business)

Title: Re: Meltdown
Post by: Florestan on July 09, 2008, 11:39:37 PM

Quote from: Dm on July 09, 2008, 07:01:37 PM
We need to divorce ourselves from oil as soon as possible.

Fine. Get yourself a ~~life~~ bike and ride it in the woods. This way you'll modestly contribute to saving the planet and certainly spend your time much more pleasantly than copy-pasting all day long. ;D

Title: Re: Meltdown
Post by: Teresa on July 10, 2008, 03:10:08 AM

Quote from: Florestan on July 09, 2008, 11:39:37 PM
Fine. Get yourself a ~~life~~ bike and ride it in the woods. This way you'll modestly contribute to saving the planet and certainly spend your time much more pleasantly than copy-pasting all day long. ;D

I know this is directed at DM but the last time I filled up my car it was almost $50 and I said NO MORE and sold my car. Now I either walk (which is healthy) or ride the bus (let's me catch up on my reading). I should have done this eight years ago when gasoline went from 99 cents to $1.50 a gallon! Now it's almost $5.00 a gallon and I've heard it's going higher, much higher, totally insane! I say just say "I'm mad as hell and I ain't going to give my money to the oil companies and the oil sheiks any more."

Freedom is nice!

Title: Re: Meltdown
Post by: drogulus on July 10, 2008, 12:13:33 PM

Quote from: Dm on July 09, 2008, 07:01:37 PM
The concept of peak oil can also be applied to the aggregate of known oil reserves/oil extraction. For example, the graph below shows that oil extraction has peaked (in the aggregate) for non-OPEC nations:

(http://upload.wikimedia.org/wikipedia/en/4/41/Hubbert_world_2004.png)

Again, even powerhouse oil fields like Mexico's Cantarell are experiencing declines (see above post). We need to divorce ourselves from oil as soon as possible.

Peak oil applies to all fields, just as the chart shows. So there will be an overall decline even when you factor in the newer fields that aren't on the chart. I'm saying that total decline will be slower than a decline from peak of the mature fields. It will still be a decline, though. There won't be a new Ghawar.

What I don't understand is the idea of divorcing ourselves from oil. The more painful it is to use this expensive resource the easier it is to make the long deferred decision to switch. Very soon I expect to hear that the largely mythical nuclear waste disposal problem has been miraculously solved. Oil will take up less and less space in the mix (which will ease the price pressure). There won't be a divorce. There will still be cars using gas 20 years from now, more efficient and cleaner burning ones. They'll be outnumbered by pure electrics and ethanol-electric hybrids and maybe a few fuel cell models. Diesel fuel will be made from non-petroleum sources, so we'll have those, too. Diesel/electric hybrids.....back to the future. _:)

(http://img.qj.net/uploads/articles_module2/76796/uboatU-boat_qjpreviewth.gif)

Title: Re: Meltdown
Post by: Daverz on July 10, 2008, 12:18:32 PM

Quote from: Teresa on July 10, 2008, 03:10:08 AM
I know this is directed at DM but the last time I filled up my car it was almost $50 and I said NO MORE and sold my car. Now I either walk (which is healthy) or ride the bus (let's me catch up on my reading). I should have done this eight years ago when gasoline went from 99 cents to $1.50 a gallon! Now it's almost $5.00 a gallon and I've heard it's going higher, much higher, totally insane! I say just say "I'm mad as hell and I ain't going to give my money to the oil companies and the oil sheiks any more."

Freedom is nice!

You can find the "walkability" of a neighborhood here:

http://www.walkscore.com

According to this, I'm moving from a neighborhood that has a score of 55/100 to one that has a score of 45/100. Nothing here in San Diego is very walkable until you get to downtown, or uptown neighborhoods like Hillcrest (neither of which I can afford).

Unfortunately here in San Diego the bus system sucked before; now with the recent budget troubles they cut back what was already mediocre service and it really, really sucks. This area needs to bite the bullet and start spending on light rail and a better bus system, and also start zoning for more walkable neighborhoods.

Title: Re: Meltdown
Post by: mn dave on July 10, 2008, 12:23:01 PM

Quote from: Daverz on July 10, 2008, 12:18:32 PM
You can find the "walkability" of a neighborhood here:

http://www.walkscore.com

According to this, I'm moving from a neighborhood that has a score of 55/100 to one that has a score of 45/100. Nothing here in San Diego is very walkable until you get to downtown, or uptown neighborhoods like Hillcrest (neither of which I can afford).

Unfortunately here in San Diego the bus system sucked before; now with the recent budget troubles they cut back what was already mediocre service and it really, really sucks. This area needs to bite the bullet and start spending on light rail and a better bus system, and also start zoning for more walkable neighborhoods.

Interesting site, Daverz. My neighborhood is 62/100.

Title: Re: Meltdown
Post by: bwv 1080 on July 10, 2008, 12:43:02 PM

22 but only because it counted some neighbor with a catering business from their home address as a restaurant and a crappy hole-in-the wall Christian bookstore as both the local bookstore and coffee shop

Title: Re: Meltdown
Post by: drogulus on July 10, 2008, 12:51:14 PM

Boston might expand it's MBTA significantly.

Here it is today:

(http://img181.imageshack.us/img181/4587/mbtamapds6.jpg)

Here's what it would look like if they did everything proposed:

(http://img89.imageshack.us/img89/4769/24355825508725cdbb25sb5.jpg)

Title: Re: Meltdown
Post by: BachQ on July 11, 2008, 04:07:18 AM

11 July 2008

Oil sets new record= 147.27

http://www.iht.com/articles/ap/2008/07/11/business/EU-Oil-Prices.php

Title: Re: Meltdown
Post by: BachQ on July 11, 2008, 04:23:19 AM

THE ECONOMIST: Matt Simmons, the high priest of peak oil, declares that global oil output can now only decline

(http://media.economist.com/images/20080712/2808WB0.jpg) (http://www.economist.com/people/displayStory.cfm?source=hptextfeature&story_id=11702995)

Title: Re: Meltdown
Post by: BachQ on July 11, 2008, 04:25:29 AM

Independent.co.uk: A near-collapse of international investors has resulted in a 30.9 per cent plummet of the Bucharest Stock Exchange in 2008

http://www.independent.co.uk/news/business/analysis-and-features/global-markets-feel-the-strain-865075.html (http://www.independent.co.uk/news/business/analysis-and-features/global-markets-feel-the-strain-865075.html)

Title: Re: Meltdown
Post by: BachQ on July 11, 2008, 06:14:31 AM

Foreclosures Rose 53% in June, Bank Seizures Tripled

http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=abT98mv4UtNI

Title: Re: Meltdown
Post by: BachQ on July 12, 2008, 04:08:06 AM

Meltdown: The Economy & Oil

Coast to Coast AM radio

Matt Savinar pt 1 http://www.youtube.com/watch?v=OACeWIolqTU&feature=related

Title: Re: Meltdown
Post by: BachQ on July 12, 2008, 04:10:27 AM

Time to wake up, and stop the witch hunt.

MATT SIMMONS ON CNBC: http://www.youtube.com/v/zdFkv3OyEZk

Title: Re: Meltdown
Post by: BachQ on July 12, 2008, 04:53:58 AM

CNN: The AMEX Airline Index plunged to the lowest point in its 13-year history, dropping at one point on Friday by more than 7% to 13.7 points. That's 69% below its level in January 1995, when the index (XAL) - a composite of U.S.-based and overseas carriers - was created. (http://money.cnn.com/2008/07/11/news/companies/airline_index/index.htm?postversion=2008071117)

Title: Re: Meltdown
Post by: ezodisy on July 12, 2008, 10:52:41 AM

Quote from: Dm on July 12, 2008, 04:10:27 AM
Time to wake up, and stop the witch hunt.

MATT SIMMONS ON CNBC: http://www.youtube.com/v/zdFkv3OyEZk

This is absolutely hilarious. Just look at their faces as the guy on the phone gives his opinion about what might occur. In my opinion a programme like this one, caled Fast Money, is nothing but sheer entertainment (great host by the way).

While people are spreading news of record oil prices and housing crashes, I'd like to point out that even companies which logically might prosper in these trying times are very close to going under, at least if Tanfield, a UK-based world leader in zero emission electric vehicles and aerial lifts, is anything to go by. It appears close to going under after last week's negative trading update and the concomitant shorter attack. Chances are it'll survive, and if worse comes to worst the government with its ostensibly aggressive green policy might bail it out. My only point in bringing it up is that things are even worse than they appear ;)

Title: Re: Meltdown
Post by: drogulus on July 12, 2008, 02:01:48 PM

Quote from: ezodisy on July 12, 2008, 10:52:41 AM

While people are spreading news of record oil prices and housing crashes, I'd like to point out that even companies which logically might prosper in these trying times are very close to going under, at least if Tanfield, a UK-based world leader in zero emission electric vehicles and aerial lifts, is anything to go by. It appears close to going under after last week's negative trading update and the concomitant shorter attack. Chances are it'll survive, and if worse comes to worst the government with its ostensibly aggressive green policy might bail it out. My only point in bringing it up is that things are even worse than they appear ;)

If the gov't doesn't support it, it will sell for pennies on the dollar or pound or whatever. If they have any worthwhile technology and/or process expertise it will help someone else.

I don't understand the gloom. Which things are worse? Are we going to have a long downturn or a short one? I really don't know. We have high commodity prices and a burst financial bubble. They need to work their way through, which could take maybe 2 more years. IOW, it could be as bad as the early '80s or the early '90s. Oh, and from 1966 to 1982 the Dow was flat. Is it going to be that bad? No, it will not be that bad, it won't be nearly that bad.

Title: Re: Meltdown
Post by: ezodisy on July 12, 2008, 02:23:52 PM

Energy independence is the wrong goal. Here is a plan Americans can stick to. (http://www.american.com/archive/2008/july-august-magazine-contents/our-electric-future)

Title: Re: Meltdown
Post by: BachQ on July 13, 2008, 05:00:19 AM

There will be "spectacular casualties" in the airline industry over the next 12 months, billionaire Richard Branson, the owner of Britain's No. 2 long-haul airline Virgin Atlantic, said. "The financial state of the world is just about the worst I've ever known it," Branson said. (http://www.christiantoday.com/article/branson.predicts.spectacular.airline.casualties/20434.htm)

Title: Re: Meltdown
Post by: BachQ on July 14, 2008, 03:09:27 AM

Quote from: drogulus on July 10, 2008, 12:13:33 PM
What I don't understand is the idea of divorcing ourselves from oil.

More properly, perhaps: "divorced from our dependence on oil"

Title: Re: Meltdown
Post by: BachQ on July 14, 2008, 03:10:45 AM

British factory gate inflation hit double digits for the first time; and manufacturers' costs jumped by a record 30% on the year in June, official data shows today. The Office for National Statistics said that the 10% annual rise in output prices was "the highest rate since 1986"; Also, input prices rose a seasonally adjusted 2.1%, taking the annual rate up to 30% - also the highest since the series began in 1986 as food and fuel prices rocketed. (http://www.rte.ie/business/2008/0714/britain.html)

Title: Re: Meltdown
Post by: BachQ on July 14, 2008, 03:12:04 AM

The lights will go out across the UK in seven years if the Planning Bill coming up for review this week is rejected in the House of Lords, according to the CBI, which estimates UK needs £100bn of investment in major energy plants by 2020. (http://www.independent.co.uk/news/business/news/lights-will-go-out-by-2015-if-lords-rejects-planning-bill-866957.html)

Title: Re: Meltdown
Post by: BachQ on July 15, 2008, 04:19:25 AM

Daily Mail (UK): House prices in UK are falling at a rate not witnessed since records began in the 1950s & the price of the average home in Britain has plunged by £17,000 since January. (http://www.dailymail.co.uk/news/article-1035271/House-prices-falling-fastest-rate-records-began-50-years-ago.html)

Title: Re: Meltdown
Post by: BachQ on July 15, 2008, 04:20:08 AM

timesonline.co.uk: Home sales in UK fall to lowest level in 30 years (http://business.timesonline.co.uk/tol/business/money/property_and_mortgages/article4333754.ece)

Title: Re: Meltdown
Post by: BachQ on July 15, 2008, 04:20:54 AM

timesonline.co.uk: Inflation in UK reaches ten-year high (http://business.timesonline.co.uk/tol/business/economics/article4335732.ece)

Title: Re: Meltdown
Post by: BachQ on July 15, 2008, 04:22:29 AM

telegraph.co.uk: The eurozone is tipping into a deeper downturn than America itself despite the tremors in the US mortgage industry, and may already be in full recession for the first time since the launch of the single currency. "It is a very ugly picture: we're on maximum alert," Spain is now spiralling into the worst crisis since the Franco dictatorship. "The economy is in dire straits," said Dominic Bryant, Spain expert at BNP Paribas. (http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/07/15/ccspain115.xml)

Title: Re: Meltdown
Post by: BachQ on July 15, 2008, 04:22:52 AM

Richard Heinberg: Calm before the Storm: http://www.youtube.com/v/AgZ_Ua6jtWM

Title: Re: Meltdown
Post by: M forever on July 15, 2008, 04:48:47 PM

Quote from: Apollo on July 10, 2008, 12:23:01 PM
Interesting site, Daverz. My neighborhood is 62/100.

My neighborhood walkscore is 89/100. Plus I can walk to work (7 minutes).

Title: Re: Meltdown
Post by: BachQ on July 16, 2008, 04:04:31 AM

CNN: According to a report on the nation's top airlines released by Fitch Ratings Tuesday, record fuel costs and weak cash flow may lead to "multiple bankruptcies and liquidation" for major U.S. airlines in 2009. "The industry's current structure is unsustainable in the current fuel environment," said William Warlick, a senior director at Fitch and author of the report. (http://money.cnn.com/2008/07/15/news/economy/airlines/index.htm?postversion=2008071518)

Title: Re: Meltdown
Post by: BachQ on July 16, 2008, 04:05:25 AM

US inflation roars ahead WASHINGTON - The U.S. economic downturn gained steam Tuesday, with a report of the highest inflation since the early 1980s, more bad news for banks and automakers and a suggestion by the Federal Reserve chief that worse days are ahead. ... The Labor Department said wholesale inflation, driven by skyrocketing gas and food costs, rose by 9.2 percent for the 12 months ending in June — the fastest pace since the summer of 1981, during another energy crunch (http://news.yahoo.com/s/ap/20080715/ap_on_bi_go_ec_fi/economy)

Title: Re: Meltdown
Post by: BachQ on July 16, 2008, 04:06:33 AM

BBC: Forests to fall for food and fuel "Arguably, we are on the verge of a last great global land grab," said RRI's Andy White, co-author of the major report, Seeing People through the Trees. "It will mean more deforestation, more conflict, more carbon emissions, more climate change and less prosperity for everyone." (http://news.bbc.co.uk/2/hi/science/nature/7503304.stm)

Title: Re: Meltdown
Post by: BachQ on July 16, 2008, 04:07:32 AM

Meltdown: The Economy & Oil on Coast to Coast AM radio

Matt Savinar pt 2 http://www.youtube.com/v/fREcjPjLYJU&feature=related

Title: Re: Meltdown
Post by: ezodisy on July 17, 2008, 01:33:52 PM

well Dm, if crude falls any further this thread might just go into foreclosure.

Title: Re: Meltdown
Post by: Florestan on July 17, 2008, 10:34:31 PM

Quote from: ezodisy on July 17, 2008, 01:33:52 PM
well Dm, if crude falls any further this thread might just go into foreclosure.

There are two never-ending things: the Universe and this thread. And I'm not sure about the Universe. ;D

Title: Re: Meltdown
Post by: BachQ on July 18, 2008, 08:44:25 AM

WASHINGTON (CNN) -- Per Al Gore: the USA must become carbon-free in 10 years: "The survival of the United States of America as we know it is at risk ... I don't remember a time in our country when so many things seemed to be going so wrong simultaneously ... the answer is to end our reliance on carbon-based fuels." (http://www.cnn.com/2008/POLITICS/07/17/gore.energy/index.html)

Title: Re: Meltdown
Post by: BachQ on July 18, 2008, 08:46:25 AM

AP: WASHINGTON – The nation's leaders are running out of answers to America's economic crisis. The Federal Reserve has no more practical room to push interest rates lower; there's only so much taxpayer money for shoring up housing, and if depositors lose confidence there's little officials can do to stop a run on banks. ... ''I fear that we're sitting on a financial powder keg,'' Bernanke was told by Sen. Richard Shelby of Alabama, senior Republican on the Banking Committee. (http://www.ohio.com/business/25495714.html)

Title: Re: Meltdown
Post by: BachQ on July 18, 2008, 08:48:14 AM

Energy tsunami coming, ex-policymakers warn WASHINGTON (AP) — A bipartisan group of 27 elder statesmen is sending an open letter to both presidential candidates and every member of Congress saying the country faces "a long-term energy crisis" that threatens the security and prosperity of future generations if swift action isn't taken. The group includes Henry Kissinger, Colin Powell and six other former secretaries of state or defense, former senators of both parties and a half dozen former senior White House advisers and other Cabinet officers for both Republican and Democratic presidents. (http://ap.google.com/article/ALeqM5hiir4RiaOoe6dOg9zReYKuQa4G2gD91UI8JG0)

Title: Re: Meltdown
Post by: ezodisy on July 18, 2008, 10:09:01 AM

Markets been flying past 3 days, even the Dow is holding today on the back of Merrill Lynch's $4b write downs

Title: Re: Meltdown
Post by: BachQ on July 18, 2008, 11:13:53 AM

Quote from: ezodisy on July 17, 2008, 01:33:52 PM
well Dm, if crude falls any further this thread might just go into foreclosure.

In the past 12 months, crude oil has averaged $100.10 a barrel, up 58 percent from a year earlier. This catastrophic increase has caused "demand destruction;" for example, U.S. fuel consumption has declined 3% in the 1st Half 2008, according to the American Petroleum Institute, "the biggest decline for the period in 17 years, as high prices and a slowing economy curbed demand ... " (http://www.bloomberg.com/apps/news?pid=20601072&refer=energy&sid=aRdwmWuI0e6U)

Title: Re: Meltdown
Post by: BachQ on July 18, 2008, 11:15:27 AM

Quote from: Florestan on July 17, 2008, 10:34:31 PM
There are two never-ending things: the Universe and this thread. And I'm not sure about the Universe. ;D

Correction ...... There are 3 never-ending things:

1. This thread;
2. The Universe;
3. Internet trolls ......... including those at GMG!

Title: Re: Meltdown
Post by: BachQ on July 19, 2008, 09:06:05 AM

J.P. Morgan's "Graph of Doom"(http://www.housingwire.com/uploadpics/JPM_Q2_30DQ_prime.gif)

"Losses in JP Morgan's prime mortgage book could triple in the foreseeable future as the credit mess moves out of subprime and into Alt-A and jumbo loans." (http://www.housingwire.com/2008/07/17/jp-morgans-dimon-prime-mortgages-look-terrible/)

Title: Re: Meltdown
Post by: BachQ on July 19, 2008, 09:07:06 AM

UK energy bills could rise by more than 60% within the next few years "This report signals the significant change which the UK will go through over the next few years ..." "The gas spot market has risen very, very sharply in the past year ..." "Britain is ... much more exposed to the global energy markets than ever before," said ERA chief executive Duncan Sedgwick. "It looks like the era of cheap energy is over." (http://news.bbc.co.uk/2/hi/business/7512971.stm)

Title: Re: Meltdown
Post by: BachQ on July 19, 2008, 09:08:10 AM

BLOOMBERG: Matt Simmons Sees Oil Climbing on `Unbelievably' http://www.youtube.com/v/v3MJgky2k-A

Title: Re: Meltdown
Post by: BachQ on July 19, 2008, 09:08:57 AM

http://www.alternet.org/environment/91757/

According to a study published in Science last year, the Southwest region of the United States will enter permanent drought by 2050, and that's being optimistic. The seven states dependent upon the Colorado River Basin -- Colorado, Wyoming, Utah, Nevada, New Mexico, Arizona and California -- will most likely war over what remains of its diminishing water resources. The region's thirsty population will also be beset by rampant firestorms, as portions of the snowpack that remains bypass the liquid stage and evaporate into thin, dry air.

Title: Re: Meltdown
Post by: BachQ on July 20, 2008, 08:50:15 AM

McClatchy: Commercial bankruptcies soar, reflecting widening economic woes
(http://www.mcclatchydc.com/227/story/44717.html)

Title: Re: Meltdown
Post by: BachQ on July 20, 2008, 08:51:24 AM

(http://media.economist.com/images/20080719/CFN631.gif)

The Economist: America's deeply flawed system of housing finance (http://www.economist.com/finance/displayStory.cfm?source=hptextfeature&story_id=11751139)

Title: Re: Meltdown
Post by: BachQ on July 20, 2008, 08:52:08 AM

SOLUTION: (http://www.eia.doe.gov/kids/energy_fungames/energyslang/images/wind-farm.jpg)

Title: Re: Meltdown
Post by: ezodisy on July 20, 2008, 10:37:47 AM

Quote from: Dm on July 20, 2008, 08:51:24 AM
(http://media.economist.com/images/20080719/CFN631.gif)

The Economist: America's deeply flawed system of housing finance
(http://www.economist.com/finance/displayStory.cfm?source=hptextfeature&story_id=11751139)

Well the powers-that-be are doing what they can to aid these 2 as they've actually curbed shorting their stock for the time being. I'm sure some of the more conscientious investors will be pleased to see this and will hope that shorting in general is stopped (which of course it won't be).

http://latimesblogs.latimes.com/money_co/2008/07/its-bear-huntin.html

Title: Re: Meltdown
Post by: BachQ on July 20, 2008, 11:43:24 AM

(http://i.cdn.turner.com/money/2008/07/07/technology/woody_solar.fortune/woody_SOL21_graphic.gif)

A solar land rush is rolling across the desert Southwest ... [whereupon] speculators ... are scrambling to lock up hundreds of thousands of acres of long-worthless land now coveted as sites for solar power plants. The race has barely begun - finished plants are years away - but it's blazing fastest in the Mojave, where the federal government controls immense stretches of some of the world's best solar real estate right next to the nation's biggest electricity markets.

(http://www.hormiga.org/fondosescritorio/wallpapers/La-Era-espacial/el-sol/Blazing-Sun.jpg) (http://money.cnn.com/2008/07/07/technology/woody_solar.fortune/index.htm)

Title: Re: Meltdown
Post by: BachQ on July 21, 2008, 10:45:05 AM

Good article in the Telegraph titled: The Global Economy is at the Point of Maximum Danger

CLICK HERE

(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/21/ccview121.xml)

Title: Re: Meltdown
Post by: BachQ on July 21, 2008, 10:45:54 AM

timesonline.co.uk: "The days of the international oil companies are coming to a glorious end because their reserves are declining and they will have difficulty accessing new reserves," said Dr Fatih Birol, chief economist of the International Energy Agency (IEA). "In future we expect most of the new oil to come from a very small number of national oil companies." (http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4368523.ece)

Title: Re: Meltdown
Post by: BachQ on July 21, 2008, 10:47:35 AM

Sydney Morning Herald: We have to rebuild our energy infrastructure with zero emissions renewable energy; upgrade homes, offices and factories to get the same or more output using half as much energy; redesign cities around fast, convenient mass transit and cycleways; and retrain all those workers and communities who currently rely on coal, oil and native forest logging. But Government is paralysed with fear - fear of what they think will be the short-term political consequences of taking bold action (http://www.smh.com.au/news/opinion/climate-wont-wait-mr-rudd/2008/07/19/1216163231976.html)

Title: Re: Meltdown
Post by: BachQ on July 21, 2008, 10:48:26 AM

telegraph.co.uk: Ernst & Young issued its starkest warning yet over the state of the UK economy, concluding that UK's total unemployment will rise by 25% to its highest level since July 1997. It describes the current economic climate as a "horror movie" at risk of turning into a "disaster movie". (http://www.telegraph.co.uk/money/main.jhtml;jsessionid=SEGRAQCJAYYUTQFIQMFCFFOAVCBQYIV0?%3Cbr%20/%3Exml=/money/2008/07/21/nemploy121.xml)

Title: Re: Meltdown
Post by: BachQ on July 21, 2008, 01:32:58 PM

OregonLive.com

(http://blog.oregonlive.com/environment_impact/2008/07/large_windmore.jpg)

Utilities and independent developers are poised to more than quadruple the amount of wind power in the Northwest, a huge increase that underscores the region's push for renewable energy. "It's phenomenal," said Elliot Mainzer, a transmission manager with the federal Bonneville Power Administration. "It's more than we expected." (http://www.oregonlive.com/environment/index.ssf/2008/07/rush_of_wind_power_to_hit_the.html)

Title: Re: Meltdown
Post by: BachQ on July 22, 2008, 11:55:18 AM

LA Times: With gasoline and oil costing once-unthinkable barrels of cash, the notion that things in our petroleum-addicted world soon will get worse -- maybe much, much worse -- is spreading fast. ... But behind today's oil mania lies a deeper dread: that the world has found all the easy-to-reach oil, and the daily supply of the essential black goo will fall further and further behind escalating global demand."As much as you're uncomfortable with today's oil prices, these are going to be the good old days," oil expert Robert L. Hirsch told a recent Santa Barbara gathering of policymakers and environmentalists. "We're talking about pain here that is unimaginable." (http://www.latimes.com/business/la-fi-peakoil22-2008jul22,0,4040165.story)

Title: Re: Meltdown
Post by: BachQ on July 22, 2008, 11:56:09 AM

TIME: Wachovia Corp. said Tuesday it lost $8.86 billion in the second quarter, slashed its dividend and announced 6,350 job cuts after losses tied to mortgages soared ... (http://www.time.com/time/business/article/0,8599,1825378,00.html)

Title: Re: Meltdown
Post by: BachQ on July 22, 2008, 11:57:18 AM

"Mortgage Famine" hits UK (http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/07/21/nhomes121.xml)

Title: Re: Meltdown
Post by: BachQ on July 22, 2008, 11:58:02 AM

UK's June "middle-class" inflation rises to 7.4%, the highest rate for at least a decade. :o (http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/07/21/nflation121.xml)

Title: Re: Meltdown
Post by: BachQ on July 22, 2008, 11:58:47 AM

"The downturn in [UK's] residential and commercial property markets is intensifying, underlining the growing risk of Britain entering its first recession in almost two decades" (http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/07/21/cnprop121.xml)

Title: Re: Meltdown
Post by: greg on July 22, 2008, 04:21:42 PM

You look even more majestic than ever, Dmitri. Have you polished your crown?

Title: Re: Meltdown
Post by: BachQ on July 23, 2008, 04:49:18 AM

Quote from: GGGGRRREEG on July 22, 2008, 04:21:42 PM
You look even more majestic than ever, Dmitri. Have you polished your crown?

I don't need to polish my crown ....... my loyal subjects do it for me!

Title: Re: Meltdown
Post by: BachQ on July 23, 2008, 04:50:17 AM

Fuel thefts soar 6-fold in Wellington, NZ http://www.youtube.com/v/igUMOgVRUIU

Title: Re: Meltdown
Post by: BachQ on July 23, 2008, 04:51:03 AM

NZ: Car use plunges 9% in June http://www.youtube.com/v/pXuVhWSmkbk

Title: Re: Meltdown
Post by: BachQ on July 23, 2008, 04:53:27 AM

http://www.cbsnews.com/stories/2008/07/20/sunday/main4275831.shtml?source=related_story

Although the economy shows small signs of growth, that's little comfort: "It's kind of like the guy who jumps out the window of a 60-story building, and he passes the 30th floor and he says, 'Everything's okay, so far.'"

Title: Re: Meltdown
Post by: BachQ on July 23, 2008, 04:54:03 AM

MSN: Today's financial meltdown defies comprehension because so much of it is packaged into exotic derivatives, such as collateralized debt obligations and structured investment vehicles. These were bundles of risky loans such as subprime mortgages put together and sold by institutions eager to spread risk and keep lending. Now, they embrace $2-$3 trillion of indebtedness. The marketplace for these exotic bundles has seized up. Meanwhile, other asset-backed securities are plunging because defaults are rising amid the sickened economy. More and more homeowners and consumers simply can't repay their loans. (http://articles.moneycentral.msn.com/Investing/MutualFunds/WhyAndHowToBetAgainstBanks.aspx)

Title: Re: Meltdown
Post by: BachQ on July 23, 2008, 04:54:40 AM

According to Financial Times, the number of companies facing "critical problems" surged by 29% between the first and second quarter of 2008; Year-on-year comparisons show a near eightfold rise in financially troubled companies in the second quarter of 2008. (http://us.ft.com/ftgateway/superpage.ft?news_id=fto072120081806521065)

Title: Re: Meltdown
Post by: BachQ on July 23, 2008, 09:58:01 AM

Oil prices fell to 6-week low as US energy demand falls: US light sweet crude fell as low as $125.63 a barrel, well off its 11 July peak above $147 a barrel. Petrol consumption in the US is 2.2% below last year's levels, according to a MasterCard survey, suggesting that higher prices are hitting demand. But oil prices are still almost 30% above their level at the start of 2008. (http://news.bbc.co.uk/2/hi/business/7520670.stm)

Title: Re: Meltdown
Post by: ezodisy on July 23, 2008, 11:08:51 AM

Hey Dm, you want to read something really frightening? Gazprom will have Europe by the balls soon enough, all of us assuming Ukraine's nickname of Little Russia. First today's announcement:

MOSCOW, July 23 (Reuters) - Gazprom's state-controlled board of directors
approved a 51.78 billion rouble ($2.22 billion) increase in 2008 capital
expenditures on Wednesday to speed up development of new fields and pipelines,
the company said. Total spending will amount to 821.66 billion roubles ($35.23 billion), including 531.2 billion roubles for capital spending. The budget for long term financial investments increased by 59.75 billion roubles to 290.46 billion roubles.

Which makes you wonder a bit....Then news from two weeks ago, which makes you go "uh huh............well here they come."

MOSCOW (Reuters) - Russian gas export monopoly Gazprom said on Wednesday it met Libyan leader Muammar Gaddafi and was looking at buying all of the North African country's oil and gas exports.

"Libya positively evaluated Gazprom's proposition to buy all future volumes of gas, oil and LNG (liquefied natural gas) designed for export at market price," Gazprom said in a statement after its chief executive Alexei Miller had talks with Gaddafi in Libya.

Gazprom did not give further details on volumes or timing of its proposal.

The world's largest gas firm is also planning a joint refining venture with Libya's National Oil Corporation (NOC), the statement said, and the construction of pipelines.

"(The two) sides agreed to create a joint venture which will involve both modernising existing refineries and also creating new refineries," it said.

Gazprom also accepted Libya's offer to build pipelines to Europe from the North African state, and said that a second, possible joint venture is also being looked at, focusing on gas and oil exploration and development.

Gazprom and Italian energy major Eni formed a strategic partnership in 2006, which allowed for energy asset swaps, including those Eni has in Libya.

Gazprom's interest further cemented in April, when it signed a memorandum of cooperation with NOC in Tripoli. At the time it said it wanted to develop infrastructure including pipelines.

The North African country aims to become a major gas producer and expand production to 3 billion cubic feet per day (bcfd) by 2010, with a potential for 3.8 bcfd by 2015 versus 2.7 bcfd now.

Title: Re: Meltdown
Post by: ezodisy on July 23, 2008, 01:04:55 PM

Dm, some good news perhaps?

Wednesday, July 23 2008
Britain set to become electric car capital of Europe if Brown seals deal with General Motors

By Ray Massey

Britain will be the 'electric car capital of Europe' within the next decade, it was claimed yesterday.

The world's biggest car company, General Motors, wants to build 220,000 revolutionary plug-in hybrids here every year by 2015.

Bosses from the firm yesterday met Gordon Brown to push for a deal with the Government.

In return for creating up to 500 jobs, the company wants a pledge from the Prime Minister that he will order public charging points for electric cars to be installed on thousands of British streets.

Under the proposals, workers at GM's plant in Ellesmere Port, Cheshire, would build enough hybrid Vauxhall Flextremes to supply the whole of Europe.

Between 20,000 and 30,000 of the cars would be produced by around 2012, and this would rise to 220,000 by 2015. Some 40,000 a year would be sold in the UK.

An insider at Vauxhall, which is owned by GM, said: 'Britain could become the electric car capital of Europe.'

The manufacturer hopes to make one in ten of the cars it sells in Europe an electric version.
New Lotus Elise SC at the 2008 British International Motor Show

Note the sleek curves and rounded bodywork on the new Lotus Elise SC at the 2008 British International Motor Show

The Flextreme is known as a plug-in hybrid because it can be connected to a mains power supply.

The batteries cost £5,000 - in a car that will sell for around £20,000.

GM wants its efforts to go green to be recognised by the European Union.

It has asked the Government to champion giving car makers extra 'credit' towards meeting tough CO2 emissions targets if they produce hybrid cars.

Mr Brown yesterday inspected the Flextreme on a visit to the British International Motor Show in East London.

He told car makers that he wants them to build more electric cars to cut pollution.

He had a 40-minute meeting with Carl-Peter Forster, president of General Motors Europe, where the Flextreme was discussed. Mr Forster said: 'The UK could take a leading role in the future of this car.

'We could have a fruitful discussion with the British Government about building it in the UK.

'It has a lot of parts in common with a car being built at the Ellesmere Port factory... the Astra.'

Whitehall officials later said GM's plan 'was of interest' and 'struck a chord' with Government thinking.
flextreme

Mr Forster added that ministers need to 'kick-start' the electric car market by putting in the infrastructure for drivers to charge their cars in their streets.

He said: 'People will charge their electric cars like they charge their mobile phones.'

A Downing Street spokesman said: 'The Government is committed to working with industry to make advanced low-carbon and electric cars widely available.

'The Prime Minister held a very constructive meeting today with key manufacturers, large energy providers, research engineers and vehicle designers to hear their views.'

Find this story at www.dailymail.co.uk/news/article-1037317/Britain-set-electric-car-capital-Europe-Brown-seals-deal-General-Motors.html

Title: Re: Meltdown
Post by: ezodisy on July 23, 2008, 01:14:25 PM

Following on from my post above about Gazprom, here is a rather absurd and sad report. Note the line that "Switzerland gets much of its crude oil supply from Libya, through a company run by Hannibal Gaddafi."

BBC NEWS
Swiss protest Libyan 'reprisals'

The Swiss foreign ministry has protested to Libya over what it called retaliatory measures for the arrest of Muammar Gaddafi's youngest son.

The ministry said Swiss companies ABB and Nestle have been ordered to close their Libya offices and Swiss staff there have been arrested.

Geneva police held Hannibal Gaddafi for two days last week after he and his wife allegedly hit two of their staff.

Demonstrators in Libya have called for oil shipments to Switzerland to be cut.

The demonstrators, from Libya's influential people's committees, also called for Libya to withdraw its deposits from Swiss banks if an apology for the arrest is not forthcoming.

The protesters, outside the Swiss embassy in Tripoli, shouted their demands as well as putting them in a note handed to the embassy.

Switzerland gets much of its crude oil supply from Libya, through a company run by Hannibal Gaddafi.

'Worrying measures'

The Swiss foreign ministry said Libya began retaliating for Mr Gaddafi's arrest when he was released on 17 July.

Flights between Libya and Switzerland have been reduced, Libya has stopped issuing visas to Swiss citizens and Tripoli has recalled some of its diplomats from Bern, the Swiss foreign ministry said in a statement.

"Since July 17, the Libyan authorities have taken a number of worrying retaliatory measures," the statement said.

The ministry also said it had sent a delegation to Libya to explain Mr Gaddafi's arrest and "prevent a crisis between the two countries".

It has advised Swiss citizens not to travel to Libya until further notice.

It is a row that could prove costly to both countries, says the BBC's Imogen Foulkes in Geneva.

Switzerland imports at least half its crude oil from Libya but Libya owns a large oil refinery in Switzerland.

Hannibal Gaddafi and his wife, who is heavily pregnant, were taken into custody on 15 July after the alleged incident at a luxury hotel in Geneva.

The couple face charges of bodily harm, threatening behaviour and coercion. They have denied any wrongdoing.

It is not Mr Gaddafi's first brush with the law.

In 2005 he was convicted by a court in France of assaulting his girlfriend.
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/world/europe/7522549.stm

Published: 2008/07/23 19:44:59 GMT

Title: Re: Meltdown
Post by: BachQ on July 24, 2008, 08:07:47 AM

Quote from: ezodisy on July 23, 2008, 11:08:51 AM
Hey Dm, you want to read something really frightening? Gazprom will have Europe by the balls soon enough, all of us assuming Ukraine's nickname of Little Russia.

The natural gas situation in Europe could become dire. Currently, Russia accounts for roughly 23% of Europe's natural gas imports. Germany imports about 40% of its gas from Russia, while Italy and France rely on Russia for around 30% of their gas (Finland = 100% !!!). And alternative sources of supply in the North Sea (60% of Europe's imports) and Algeria (10% of Europe's imports) are depleting.

Could get very scary.

Title: Re: Meltdown
Post by: BachQ on July 24, 2008, 03:30:54 PM

July 24 (Bloomberg) Financial and banking shares tumbled to their worst drop in eight years, after home sales slid more than forecast and investor Bill Gross predicted the housing slump will cost banks and brokerages $1 trillion. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aL7_a_Vf5JHE&refer=home)

Title: Re: Meltdown
Post by: BachQ on July 24, 2008, 03:31:26 PM

July 24 (Bloomberg) Sales of previously owned U.S. homes fell in June to the lowest level in a decade as tumbling real- estate prices and consumer confidence signaled no end in sight to a housing recession now in its third year. (http://www.bloomberg.com/apps/news?pid=20601087&sid=a55J7k2L8u3A&refer=home)

Title: Re: Meltdown
Post by: BachQ on July 24, 2008, 03:32:08 PM

telegraph.uk: France and Spain may now be in the first throes of recession, economists warned after a raft of data suggested European economic growth has slumped sharply in recent months. The German Ifo business confidence index suffered its biggest fall since the recession of 2001, dropping from 101.2 in June to 97.5 in July. (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/24/bcneurope124.xml)

Title: Re: Meltdown
Post by: BachQ on July 24, 2008, 03:33:28 PM

telegraph.uk Over 40% of UK house sales are collapsing in some areas as buyers back out or fail to get a mortgage, the Bank of England has disclosed. (http://www.telegraph.co.uk/money/main.jhtml?%3Cbr%20/%3Exml=/money/2008/07/24/bcnhouse124.xml)

Title: Re: Meltdown
Post by: BachQ on July 24, 2008, 05:02:46 PM

Fannie & Freddie

(http://www.google.com/pfetch/dchart?s=FNM) (http://www.google.com/pfetch/dchart?s=FRE)

Title: Re: Meltdown
Post by: BachQ on July 26, 2008, 10:39:20 AM

NEW YORK (CNNMoney.com) -- US Foreclosure filings up 120%: As foreclosures continue to soar, 220,000 homes were lost to bank repossessions in the second quarter ... [which is] nearly triple the number from the same period in 2007. (http://money.cnn.com/2008/07/25/real_estate/foreclosure_figures_up_again/index.htm?%3Cbr%20/%3Epostversion=2008072508)

Title: Re: Meltdown
Post by: BachQ on July 26, 2008, 10:41:23 AM

Average Brit is 52 days from ruin CLICK HERE (http://itn.co.uk/news/79551b47b139d248379c098c74ab78c3.html)

Title: Re: Meltdown
Post by: BachQ on July 26, 2008, 10:44:15 AM

Uk's Retail sales last month suffered their biggest slump in more than 20 years

CLICK HERE (http://itn.co.uk/news/43f9acf347ae12822b4dc4f959364063.html)

Title: Re: Meltdown
Post by: BachQ on July 26, 2008, 10:45:06 AM

(http://images.mirror.co.uk/upl/m4/jul2008/6/9/550E4F7C-F673-AE06-0FF84B81D50E0B82.jpg)

How solar energy could cut your bills
(http://www.mirror.co.uk/news/more-news/money-business/2008/07/24/how-solar-energy-could-cut-your-bills-115875-20669197/)

Title: Re: Meltdown
Post by: BachQ on July 26, 2008, 10:45:35 AM

telegraph.co.uk:UK Recession looms as economy shrinks (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/25/bcngdp325.xml)

Title: Re: Meltdown
Post by: BachQ on July 26, 2008, 10:49:38 AM

The Economist: After the subprime crisis, there may soon be a "superprime" one ... "With property prices tumbling, unemployment rising and consumer confidence at a 16-year low, even 'longer term, superprime card members' are feeling the pinch ... " (http://www.economist.com/finance/displaystory.cfm?story_id=11793164)

Title: Re: Meltdown
Post by: BachQ on July 27, 2008, 06:59:18 PM

Meltdown: The Economy & Oil on Coast to Coast AM radio

Matt Savinar pt 3 http://www.youtube.com/v/fT2AT5inB3I&feature=related

(parts 1 and 2 are supra)

Title: Re: Meltdown
Post by: BachQ on July 28, 2008, 05:40:14 PM

Merrill Lynch, the investment banking giant that has lost more than $40bn (£20.1bn) on its mortgage investments since the start of the credit crisis, shocked Wall Street last night with plans to raise $8.5bn in new shares. As part of a sweeping financial restructuring, the company is dumping most of its remaining holdings in risky mortgage derivatives and tapping the Singapore government for an emergency $3.4bn cash infusion.

(http://www.independent.co.uk/news/business/news/merrill-shocks-wall-street-with-85bn-share-sale-879499.html)

Title: Re: Meltdown
Post by: BachQ on July 28, 2008, 05:40:56 PM

Ryanair shares dive as profits drop 85% Shares in Ryanair plunged more than 20% in Dublin today as the airline reported an 85% fall in first-quarter profit as its fuel bill rocketed. It also warned it could make a full-year loss of up to €60m if oil prices stayed high and fares fell. After diving as much as 25% shortly after the market opened this morning, the shares closed down 73 cent (22.6%) at €2.50. Ryanair said adjusted profit after tax for the three months to the end of June came to €21m, down from a figure of €139m the same time last year and compared with analysts forecasts of €48.8m. (http://www.rte.ie/business/2008/0728/ryanair.html)

Title: Re: Meltdown
Post by: BachQ on July 28, 2008, 05:41:35 PM

The Economist: "The bubble has burst. I think my generation [will be] the last to see a great America."

(http://media.economist.com/images/20080726/CUS658.gif) (http://www.economist.com/world/na/displayStory.cfm?source=hptextfeature&story_id=11792366)

Title: Re: Meltdown
Post by: BachQ on July 28, 2008, 05:42:22 PM

telegraph.uk: Australia Bank (NAB), which owns Clydesdale and Yorkshire banks in the UK, shocked the market by hiking up provisions for losses on US subprime loans. Australia's largest bank booked A$830m (£400m) in losses, and said the move could wipe A$600m off profits this year. NAB, which is run by John Stewart, former chief executive of Woolwich, said the write-off was based on a worst-case scenario of what it said was a "meltdown" of the US mortgage market. NAB's shares fell as much as 15pc. (http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/07/26/cnnab126.xmlNational)

Title: Re: Meltdown
Post by: BachQ on July 28, 2008, 05:42:50 PM

NY POST: ALBANY - Gov. Paterson, convinced the state faces its worst fiscal crisis since the mid-1970s, will deliver the grim news in an unprecedented special address to New Yorkers as soon as tomorrow night, The Post has learned. The governor's address - which his aides hope will be televised by public and cable news stations - will say that plunging state revenues will force painful cuts in state services, necessitate a reduction in the state work force, possibly through layoffs, and require other difficult economic measures, source said. (http://www.nypost.com/seven/07282008/news/regionalnews/that_70s_woe_in_rerun_121880.htm)

Title: Re: Meltdown
Post by: Lethevich on July 29, 2008, 06:49:30 AM

Quote from: Dm on July 28, 2008, 05:40:56 PM
Ryanair shares dive as profits drop 85% Shares in Ryanair plunged more than 20% in Dublin today as the airline reported an 85% fall in first-quarter profit as its fuel bill rocketed. It also warned it could make a full-year loss of up to €60m if oil prices stayed high and fares fell. After diving as much as 25% shortly after the market opened this morning, the shares closed down 73 cent (22.6%) at €2.50. Ryanair said adjusted profit after tax for the three months to the end of June came to €21m, down from a figure of €139m the same time last year and compared with analysts forecasts of €48.8m.
(http://www.rte.ie/business/2008/0728/ryanair.html)

Best news I've heard in ages - almost worth an oil crisis to put the fear into Ryanair's little rat of an owner :D

Title: Re: Meltdown
Post by: PerfectWagnerite on July 29, 2008, 06:55:31 AM

Quote from: Dm on July 28, 2008, 05:42:50 PM
NY POST: ALBANY - Gov. Paterson, convinced the state faces its worst fiscal crisis since the mid-1970s, will deliver the grim news in an unprecedented special address to New Yorkers as soon as tomorrow night, The Post has learned. The governor's address - which his aides hope will be televised by public and cable news stations - will say that plunging state revenues will force painful cuts in state services, necessitate a reduction in the state work force, possibly through layoffs, and require other difficult economic measures, source said.
(http://www.nypost.com/seven/07282008/news/regionalnews/that_70s_woe_in_rerun_121880.htm)

Good riddance ! It's about time they reduce the size of the government. How much damn money are they going to squander paying people to sit around and do nothing. Thank god it is finally happening.

Title: Re: Meltdown
Post by: BachQ on July 29, 2008, 10:08:22 AM

BBC.UK: Demand fears knock crude prices .... Oil prices have slipped, responding to a strengthening US dollar and signs of weaker demand for crude. (http://news.bbc.co.uk/2/hi/business/7531502.stm)

Title: Re: Meltdown
Post by: BachQ on July 29, 2008, 10:09:15 AM

AP: U.S. home prices drop record 16% .... NEW YORK — Home prices tumbled by the steepest rate ever in May, according to a closely watched housing index released Tuesday, as the housing slump deepened nationwide. (http://www.reportonbusiness.com/servlet/story/RTGAM.20080729.wushomeprices0729/BNStory/Business/home)

Title: Re: Meltdown
Post by: BachQ on July 29, 2008, 10:10:13 AM

The meltdown in the UK mortgage market is set to continue until 2011, prompting a rise in repossessions, an influential review of the mortgage market said today. CLICK HERE (http://business.timesonline.co.uk/tol/business/economics/article4421993.ece)

Title: Re: Meltdown
Post by: BachQ on July 29, 2008, 10:11:56 AM

UK Mortgage approvals fall to lowest level ever recorded ... The number of new mortgages is down to the lowest level ever recorded, according to Bank of England figures. The Bank's figures for June show a drop of almost 70% in new home loans compared with a year ago. It is the clearest indicator yet of how the credit crunch is affecting the housing market and comes as an independent review of the mortgage market commissioned by the Treasury warns the credit crunch could last another two years or more. (http://www.channel4.com/news/articles/business_money/mortgage+approvals+fall+to+lowest+level+ever+recorded+/2365577)

Title: Re: Meltdown
Post by: BachQ on July 29, 2008, 10:12:36 AM

Poll shows that 1 in 3 blame Gordon Brown for high fuel prices CLICK HERE (http://www.mirror.co.uk/news/more-news/money-business/2008/07/28/1-in-3-blame-gordon-brown-for-high-fuel-prices-115875-20674466/)

Title: Re: Meltdown
Post by: Lethevich on July 29, 2008, 10:17:48 AM

Quote from: Dm on July 29, 2008, 10:12:36 AM
Poll shows that 1 in 3 blame Gordon Brown for high fuel prices CLICK HERE
(http://www.mirror.co.uk/news/more-news/money-business/2008/07/28/1-in-3-blame-gordon-brown-for-high-fuel-prices-115875-20674466/)

The voting population are not known for their intelligence...

Title: Re: Meltdown
Post by: ezodisy on July 29, 2008, 11:33:39 AM

Quote from: Lethe on July 29, 2008, 06:49:30 AM
Best news I've heard in ages - almost worth an oil crisis to put the fear into Ryanair's little rat of an owner :D

But what an owner. All that trouble and he's slashed ticket prices even more! What a guy!!!!

Title: Re: Meltdown
Post by: ezodisy on July 29, 2008, 11:43:01 AM

What a bloody idiot this woman is.

BBC NEWS
America's house price time bomb
By Michael Robinson
BBC World Service

With the American housing market in its worst crisis since the Great Depression of the 1930s, President Bush is expected to sign into law a massive new government intervention designed to slow the slide.

The intervention would come as a little known quirk of US law threatens to drive down house prices even faster.

Faced with seemingly never-ending falls in the value of their properties, some American home-owners are taking radical action; they are choosing to walk away from homes and their mortgages.

In May 2006, at the height of the housing boom, Karen Trainer bought a $500,000 apartment in California - with money borrowed from her bank.

By this year, Karen still owed $500,000 on her mortgage, but her apartment was worth $200,000 less.

So she was deep in negative equity and, to make matters worse, the interest rate on her loan was about to increase.

"I thought 'this is crazy'," Ms Trainer says. "It just does not make financial sense."

Take the hit

   Is the bank going to pay for my retirement because I was a good girl and paid my mortgage
Karen Trainer

As a successful professional, Karen could comfortably have managed the higher mortgage payments her bank demanded.

Instead, she decided to stop her mortgage payments altogether and let her bank repossess her apartment.

Her credit record will be badly damaged by the decision, but Ms Trainer expects this to recover soon.

"Generally speaking, within 5 years you are about back where you were, so my husband and I decided we'll take the hit and live with it."

Over to the bank

In California and much of the rest of America, there is a powerful incentive for homeowners such as Ms Trainer to walk away from their mortgage obligations.

   The dangers are extraordinary
Professor Susan Wachter, Wharton School of Business

Though banks can repossess and sell the homes of borrowers who stop paying their mortgages, under a legal quirk originating in the Great Depression of the 1930s, banks cannot easily pursue borrowers for any balance outstanding on the main mortgage on their homes.

Consequently, by walking away from her apartment, Ms Trainer has also walked away from the $200,000 loss on her property.

Her bank gets stuck with that.

Unthinkable option

Traditionally in America there is a social stigma attached to those who default on their debts, which should be a deterrent to walking away from your home.

But according to Susan Wachter, professor of real estate and finance at Wharton School of Business, in the depth of this crisis the social attitudes to such actions are changing.

"This is the kind of conversation that's going on at cocktail parties, at swimming pools," Professor Wachter says. "And suddenly this option which was truly unthinkable in the past becomes thinkable."

Worrying development

Ms Trainer says she feels no moral obligation to go on paying a loan on a property that is going to go on losing her money. She says her friends support her decision.

   It's a business decision for their family that the smartest thing they can do is walk away from their home
Kevin Morgan, estate agent

"I think people are taking a more cold-hearted look at it," she says.

"Is the bank going to pay for my retirement because I was a good girl and paid my mortgage, even though legally I didn't have to?"

Professor Wachter believes that, to date, most people have had their homes repossessed because they could not manage the repayments.

The trend of people now positively choosing to walk away because it makes financial sense to do so is a worrying new development.

"The dangers are extraordinary," Professor Wachter says.

"If all that is needed is that the house value is less than the mortgage value, there is a large number of homeowners in the United States who are in that situation".

No renegotiation

In the city of Stockton - the foreclosure, or repossession, capital of the US for 2007 - estate agent Kevin Morgan sells repossessed houses on behalf of the banks that now own them.

   This is becoming a tsunami of voluntary defaults
Professor Nouriel Roubini, New York University

According to him, walking away has become commonplace.

"I would say it's probably 70% of the volume of our foreclosures right now," he says.

"It's a business decision for their family that the smartest thing they can do is walk away from their home."

As a sign of the changing times, some 60% of borrowers do not even bother to contact their banks to attempt a renegotiation of their loan, Mr Moran explains.

"They stop paying and they stop talking," he says. "They just plain walk away."

Total disaster

It is impossible to know for sure how many of the people who are now walking away from their homes could have gone on paying their mortgages.

But Professor Nouriel Roubini of New York University, one of the first economists to warn of the dangers of the American house price boom, believes the number of people positively choosing to walk away is growing rapidly.

"This is becoming a tsunami of voluntary defaults," Professor Roubini says.

"The losses for the financial system from people walking away could be of the order of one trillion dollars when the entire capital of the US banking system is only $1.3 trillion.

"You could have most of the US banking system wiped out, so this is a total disaster."

Which is why it is not just US policymakers who are hoping America's new, multi-billion dollar initiative to stabilise the housing market will succeed in its aims and thus make walking away less attractive.

Because if it fails, the economic fallout could be felt far beyond America's shores.

Michael Robinson's two-part series "The Trouble with Money" is broadcast on 30 July and 6 August on BBC World Service. You can hear the programmes online by going to:
Story from BBC NEWS:
http://news.bbc.co.uk/go/pr/fr/-/1/hi/business/7529277.stm

Published: 2008/07/29 08:29:55 GMT

© BBC MMVIII

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:48:57 PM

NEW YORK (Reuters): Oil rose more than $4 a barrel on Wednesday after U.S. government data showed an unexpected drop in gasoline stocks as suppliers facing weak consumer demand cut production and imports. U.S. crude settled up $4.58 at $126.77 a barrel (http://www.reuters.com/article/newsOne/idUST14048520080730)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:49:46 PM

Billion-dollar bankruptcies highest since 2003 (Reuters): Billion-dollar bankruptcies are at their highest in five years only half way through 2008, according to bankruptcy filing tracker BankruptcyData.com. A total of seven U.S. companies with more than a billion dollars in assets have filed for bankruptcy protection so far this year, it said. (http://www.reuters.com/article/ousiv/idUSN2935365120080729)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:50:14 PM

CNN: Credit Card Companies in Panic Mode as Americans Cut Back (http://www.cnn.com/2008/LIVING/personal/07/30/credit.cardusedown/index.html)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:50:55 PM

Write-downs of largest banks reach $274bn ..... CLICK HERE (http://www.guardian.co.uk/business/2008/jul/29/creditcrunch)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:51:20 PM

UK faces massive negative equity crisis ....... CLICK HERE (http://www.guardian.co.uk/global/2008/jul/30/housingmarket.property)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:52:17 PM

Ireland unemployment surges 'Ireland has not witnessed such a rapid deterioration in the labour market since 1975,' said IBEC Senior Economist Fergal O'Brien said.

(http://www.rte.ie/business/2008/0730/jobless.html)

DUBLIN (Dow Jones)-- Irish unemployment worsened in July as the live register for benefit payments spiked 39% on the year, the biggest jump in over 30 years, pushing the unemployment rate to 5.9%, the government statistics office said Wednesday. With the rapid slowdown in construction, the number of people signing on the live register hit 226,000 in June, the highest level in 10 years, from 162,400 in June 2007 and up 3.9% from 217,400 in June 2008, the CSO said. (http://www.fxstreet.com/news/forex-news/article.aspx?StoryId=f87881c8-b5ce-4d6f-b1ca-31c9ec8b82a0)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:52:53 PM

U.S. inflation to hit 6%: Heavily subsidized energy in the Middle East will help drive the inflation rate in the United States to 6 per cent within six months, and prompt the U.S. Federal Reserve Board to go on a rate-hiking frenzy, CIBC chief economist Jeff Rubin predicts. (http://www.reportonbusiness.com/servlet/story/RTGAM.20080730.wcibcrubin0730/BNStory/Business/home)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:53:39 PM

So, why is civilization teetering on collapse? First, peak oil has arrived. There is no better signal than the price of oil, which has skyrocketed past $130 and shows no sign of slowing. ... From now on the supply of oil will diminish each year, but population and demand will continue to grow. This is truly frightening because our modern industrial society is built on and totally dependent on this versatile fuel. It is the foundation for transportation, industry, agriculture, fishing and much more. As the gap between what economies and nations need and what they can get widens, bidding wars will erupt (they already have) and then shooting wars (one already has). (http://www.canada.com/vancouversun/news/story.html?id=2eeece50-285f-4c4b-bb37-2d053d04d4e8)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:54:59 PM

telegraph.UK: British Gas customers hit with biggest price rise ever

(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/30/bcngas330.xml)

timesonline.uk: British Gas raises energy bills by 35% (http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article4429951.ece)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:55:43 PM

Bloated U.S. budget deficits may mean higher interest rates: WASHINGTON – Uncle Sam's bloated budget deficits – should they persist – could over time lead to higher interest rates on mortgages, car loans, student loans, business loans and other types of borrowing. The White House's budget office on Monday estimated that next year's budget deficit will hit a record $482 billion – and that doesn't even account for some $80 billion in war costs. (http://www.signonsandiego.com/news/business/20080728-1404-deficit-risks.html)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:56:14 PM

No funds to lend to 40,000 students: The Massachusetts Educational Financing Authority yesterday said it will not be able to provide student loans this fall for the first time in its 26-year history, leaving more than 40,000 families without an important source of tuition funds just weeks before college classes begin. (http://www.boston.com/business/personalfinance/articles/2008/07/29/no_funds_to_lend_to_40000_students/)

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 12:56:44 PM

IMF sees no end in sight to credit crisis: Global financial markets are "fragile" and indicators of systemic risk remain "elevated" almost a year into the credit crisis, the International Monetary Fund said on Monday. (http://www.ft.com/cms/s/0/a3deb7da-5caf-11dd-8d38-000077b07658.html)

Title: Re: Meltdown
Post by: drogulus on July 30, 2008, 01:19:46 PM

I'm not sure what all this is supposed to mean, Dm. Are you predicting a 1930's style economic collapse on a world-wide scale? Or is this just a panic response to every negative indicator you can find? It seems like the latter, since many of your posts about oil and the need for new energy sources point just as well to the solutions that are arriving now (slowly as always, but faster now than a year ago) as they do to the end of the world scenario that seems to be implied by the general approach you take throughout the thread.

So, is this an expression of worry about the future and how disruptive and unsettling it will be? In that case I think you're right to be upset about all these developments and agree that it's maddening to see how little intelligent foresight about the problems, which has been available for many years now, manages to work its way into the mix until things get much worse than they need to get.

Or is it a prediction of imminent collapse? In that case I don't think any of the trends you're tracking amounts to a good case. You would need to show that there's no solution for the energy, food, and water problems we'll be seeing soon, for which the present circumstances merely amount to a foretaste. But I don't think this is likely to be true. The last world depression was a consequence of war, economics and politics. We didn't run out of anything. I see no reason why running out of things won't give an impetus to the kind of innovation that's happened in the past. It's worrisome but not anything to panic about.

Title: Re: Meltdown
Post by: BachQ on July 30, 2008, 01:55:18 PM

Quote from: drogulus on July 30, 2008, 01:19:46 PM
I'm not sure what all this is supposed to mean, Dm. Are you predicting a 1930's style economic collapse on a world-wide scale? Or is this just a panic response to every negative indicator you can find? It seems like the latter, since many of your posts about oil and the need for new energy sources point just as well to the solutions that are arriving now (slowly as always, but faster now than a year ago) as they do to the end of the world scenario that seems to be implied by the general approach you take throughout the thread.

So, is this an expression of worry about the future and how disruptive and unsettling it will be? In that case I think you're right to be upset about all these developments and agree that it's maddening to see how little intelligent foresight about the problems, which has been available for many years now, manages to work its way into the mix until things get much worse than they need to get.

Or is it a prediction of imminent collapse? In that case I don't think any of the trends you're tracking amounts to a good case. You would need to show that there's no solution for the energy, food, and water problems we'll be seeing soon, for which the present circumstances merely amount to a foretaste. But I don't think this is likely to be true. The last world depression was a consequence of war, economics and politics. We didn't run out of anything. I see no reason why running out of things won't give an impetus to the kind of innovation that's happened in the past. It's worrisome but not anything to panic about.

Hey, drogulus.

I will prepare a thoughtful response when I have the time (later today, hopefully).

Title: Re: Meltdown
Post by: drogulus on July 30, 2008, 04:15:40 PM

You'd better hurry, because someone told me the world is coming to an end. _:)

http://www.youtube.com/v/VXeT-yHNcFI

Title: Re: Meltdown
Post by: greg on August 02, 2008, 03:29:44 PM

Quote from: drogulus on July 30, 2008, 04:15:40 PM

You'd better hurry, because someone told me the world is coming to an end. _:)

http://www.youtube.com/v/VXeT-yHNcFI

let's just say we're about to crash into Mars and then send all the gay people to Uranus.

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:38:52 PM

independent.co.uk: The UK housing market is falling at more than 10 per cent year on year, the most dramatic collapse in the sector's recorded history, the Halifax mortgage bank will reveal this week. Even in the 1990s, Britain did not face double-digit annual falls in house values (http://www.independent.co.uk/news/business/news/halifax-british-house-prices-slump-by-10-883632.html)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:39:19 PM

United States economy shrinks for first time since 2001 CLICK HERE (http://www.guardian.co.uk/business/2008/jul/31/useconomy.growth.recession)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:39:39 PM

British Air chief: 'Airlines will go bust' CLICK HERE (http://www.guardian.co.uk/business/2008/aug/01/theairlineindustry.britishairwaysbusiness)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:40:37 PM

timesonline.co.uk: Royal Bank of Scotland poised for biggest loss in UK banking history (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4449834.ece)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:41:05 PM

BBC: The US unemployment rate climbed to 5.7% in July, its highest in more than four years, official data shows. (http://news.bbc.co.uk/2/hi/business/7537463.stm)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:41:26 PM

Der Spiegel: Bad News Keeps Coming for the European Economy The bad news just keeps coming for Europe's economy. With oil prices still rising and job cuts growing, the German economy also looks like it may soon be in trouble. The country's dependence on exports has made its economy particularly vulnerable. (http://www.spiegel.de/international/business/0,1518,569534,00.html)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:42:37 PM

The Vancouver Star: "I think it's inevitable GM will file for Chapter 11 (bankruptcy protection) in the U.S. ... said Buzz Hargrove, head of the Canadian Auto Workers. (http://www.thestar.com/Business/article/471472)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:42:55 PM

http://www.nytimes.com/2008/08/02/business/yourmoney/02money.html?8dpc

Total S.U.V. sales were down 43.3 percent this July from a year ago, according to Autodata ... the price of the Ford Excursion was down 27 percent, Hummers fell 25 percent, while Suburbans dropped 24 percent.

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:43:13 PM

http://www.theaustralian.news.com.au/story/0,25197,24115289-601,00.html

KEVIN Rudd has warned Australians to brace for tough economic conditions as he refused to rule out a recession driven by what he described as the most uncertain global financial conditions in three decades.

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:44:06 PM

July 31 Bloomberg: ``Australia is headed for a once-in-100-year real-estate slump ... I have never seen the convergence of so many negatives.'' John Edwards, CEO of of Residex Ltd., a Sydney company that tracks property prices, said. (http://www.bloomberg.com/apps/news?pid=20601109&sid=aBCuyixr8nJE&refer=exclusive)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:44:52 PM

guardian.co.uk: More airlines will go bankrupt this year as rising fuel costs and weak consumer confidence ravage the industry, the chief executive of British Airways warned today. Willie Walsh said carriers that struggled to make a profit during the recent sales boom will not survive the "worst ever" trading environment the industry has seen. The downturn has put 25 airlines out of business this year, including Luton-based business carrier Silverjet. "You are going to see more airlines go bust. If you look around there are a lot of airlines out there that have not been profitable in the past few years. Those guys will not survive," he said. (http://www.guardian.co.uk/business/2008/aug/01/theairlineindustry.britishairwaysbusiness)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:45:18 PM

http://www.reuters.com/article/newsOne/idUSN3136385320080801

DETROIT (Reuters) - General Motors Corp reported a $15.5 billion quarterly loss on Friday as North American sales dropped by 20 percent and resale prices for SUVs coming off lease plunged. This is the third-worst quarterly performance in the company's nearly 100-year history.

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:46:06 PM

British Airways CEO: "Worst trading environment ever"
(http://www.spectator.co.uk/business/trading-floor/871761/worst-trading-environment-ever.thtml)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:46:31 PM

(http://newsimg.bbc.co.uk/media/images/44859000/gif/_44859895_us_house_prices_gr466.gif)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:47:02 PM

The European Gas Market

(http://www.theoildrum.com/files/Europe_OECD_gas_forecast2.png) (http://europe.theoildrum.com/node/4361#more)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:47:51 PM

Guardian.uk:
Spain has launched an ambitious plan to reduce energy consumption and save millions of euros on oil imports by cutting the speed limit to 50mph and handing out millions of low-energy use light bulbs. With the introduction of a broad swathe of measures between now and 2014, Spain's socialist government hopes to reduce Spain's oil imports by 10% per year, cutting consumption by 44m barrels and saving €4.14bn (£3.25bn). During the country's sweltering summers, air conditioning systems in public buildings will be set no lower than 26C (79F). In winter, Spaniards will be allowed to turn the heating no higher than 21C (70F), with hospitals being the only exception. Street lighting is to be reduced by up to 50% and the metro system in many cities will stay open later at weekends to encourage people to leave the cars at home. The government is also to introduce a pilot project for the manufacture of 1m electric or hybrid cars.
(http://www.guardian.co.uk/environment/2008/jul/30/energyefficiency.travelandtransport)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:48:57 PM

Mainstream Dutch analysts foresee oil supply constrained world: Until recently, the oil price was largely underpinned by the marginal cost of the last barrel needed to match demand, with some political and economic conjuncture mark-ups or -downs. This currently puts a structural floor of $110 a barrel under the oil price (WTI). The largest part of the $110 a barrel floor (about 70-75%) is determined by the marginal cost of supply, currently around $80 (building block 1). The remaining $30 a barrel (or 25-30%) is determined by supply-demand fundamentals, a short-term risk premium, and long term scarcity and policy (building blocks 2, 3 and 4). (http://europe.theoildrum.com/node/4358#more)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:49:28 PM

Huge writedowns forecast for banks after Merrill Lynch's cut-price sale of debt: Freddie Mac and Fannie Mae, the financial groups that underpin America's housing market, will be hit worst as they are forced into a combined writedown of about $100 billion, the Egan Jones Ratings Company believes. ..."This sends a loud and clear signal that the issue with CDOs is not liquidity in the market but problems with the value of their underlying assets," Sean Egan said. (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4425782.ece)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:50:24 PM

Britain's retailers have suffered their grimmest month in a quarter of a century as deep price cuts in the summer sales failed to entice wary consumers into the shops, the CBI said today.

CLICK HERE (http://www.guardian.co.uk/business/2008/jul/29/retail.sales)

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 04:50:58 PM

Financial Times: The US budget deficit will widen to a nominal record of $482bn next year, as a slumping economy takes a further toll on the federal government's fiscal position, the White House projected on Monday. Driven by dwindling tax receipts caused by the economic downturn and the payment of more than $100bn (£50bn) in stimulus cheques to US consumers, the figure was higher than the Bush administration's previous estimate of a $407bn gap for the 2009 fiscal year starting in October.

Title: Re: Meltdown
Post by: BachQ on August 02, 2008, 05:50:06 PM

Quote from: drogulus on July 30, 2008, 01:19:46 PM
I'm not sure what all this is supposed to mean, Dm. Are you predicting a 1930's style economic collapse on a world-wide scale? Or is this just a panic response to every negative indicator you can find? It seems like the latter, since many of your posts about oil and the need for new energy sources point just as well to the solutions that are arriving now (slowly as always, but faster now than a year ago) as they do to the end of the world scenario that seems to be implied by the general approach you take throughout the thread.

So, is this an expression of worry about the future and how disruptive and unsettling it will be? In that case I think you're right to be upset about all these developments and agree that it's maddening to see how little intelligent foresight about the problems, which has been available for many years now, manages to work its way into the mix until things get much worse than they need to get.

Or is it a prediction of imminent collapse? In that case I don't think any of the trends you're tracking amounts to a good case. You would need to show that there's no solution for the energy, food, and water problems we'll be seeing soon, for which the present circumstances merely amount to a foretaste. But I don't think this is likely to be true. The last world depression was a consequence of war, economics and politics. We didn't run out of anything. I see no reason why running out of things won't give an impetus to the kind of innovation that's happened in the past. It's worrisome but not anything to panic about.

Drogulus,

You have asked me, in effect, what my various posts in this thread have in common, and what these posts, viewed as an integrated whole, are trying to demonstrate. Basically, my thesis is that the escalating depletion of oil extraction and oil reserves (coupled with growing demand and attendant price increases) have a systemic, pervasive, all-encompassing effect on society. This relates to the interconnectedness of the economic system and infrastructure, and predicts that if one part fails, other parts are also likely to fail. (http://www.theoildrum.com/node/4303#more)

Below is a graphic depiction of this systemic interrelatedness. When one foundation fails, this effects a whole host of related and interconnected systems.

(http://www.theoildrum.com/files/house_of_cards.jpg)

In short, because of the central, pivotal role of oil in our global society, once oil extraction has peaked such that the price of oil skyrockets, this will have a cascading effect on ALL other interrelated systems, such as:

1. Loan defaults & bankruptcies;
2. Bank failures;
3. Credit/housing crisis;
4. Stock market stagnation, decline, and eventual collapse;
5. Inflation (and eventual hyperinflation);
6. Devaluation of the dollar;
7. Unemployment;
8. Soaring national debt and increasing interest rates;
9. Food & fuel shortages;
10. Insurance availability, cost, and coverage;
11. Healthcare costs & infrastructure;
12. GDP (gross domestic product) and ensuing systemic, longterm depression
13. Resource wars escalate (Iraq / Iran)
14. Drastically reduced standard of living (i.e., life as we know it nosedives);
15. Reserved

Cheap oil is the lynchpin of modern capitalism; when cheap oil falters, capitalism falters.

Title: Re: Meltdown
Post by: drogulus on August 02, 2008, 07:15:05 PM

Thanks for the explanation, Dm. As you can tell, I'm a little sceptical of the idea that the economy will cascade like that. But in fact the Depression of the 1930's wasn't foreseen, and there's no guarantee that a different set of stimuli couldn't trigger the next one. So it could happen, though it probably won't, and if I was forced to say why(_{:P ???}) I'd make up something about how the economy doesn't really depend on oil as much as it used to and that energy has been falling as a percentage of GDP for decades until recently.

The proper comparison would not be with the Depression (which really was a cascade), but with other recent recessions like the S&L crisis of the late '80's or maybe the stagflation of the late '70's. In fact we aren't even officially in recession yet, though I'm betting we will be next year. We've lost 20% off the high so far. It looks like a typical recession to me, maybe a little worse eventually but nothing unprecedented or even very scary.

It's hard to have a depression in a world which no longer believes in autarky, which trades freely, and in which governments use deficit spending as a countercyclical boost. Just the size of of government sectors compared to the '30's makes it much harder to tip over. Now if we allowed the banks to fail (we won't), boosted tariffs to protect jobs (not a chance), and cut spending to balance the budget (hah!) then we'd have a Depression. That's a big part of what happened in the '30's. After that it became much harder for advanced countries, Keynesians all, to throw themselves off the bridge. You really have to do everything wrong in a modern economy to fail really badly. Doing most things wrong isn't enough. _:D

Title: Re: Meltdown
Post by: drogulus on August 03, 2008, 04:48:03 AM

Quote from: Dm on August 02, 2008, 04:50:58 PM
Financial Times: The US budget deficit will widen to a nominal record of $482bn next year, as a slumping economy takes a further toll on the federal government's fiscal position, the White House projected on Monday. Driven by dwindling tax receipts caused by the economic downturn and the payment of more than $100bn (£50bn) in stimulus cheques to US consumers, the figure was higher than the Bush administration's previous estimate of a $407bn gap for the 2009 fiscal year starting in October.

That's part of what I mean. Deficits expand to fill the gap. The ghosts of Hamilton and Keynes are smiling. _:)

However, this would tend to support the Dm thesis:

Shipping Costs Start to Crimp Globalization (http://www.nytimes.com/2008/08/03/business/worldbusiness/03global.html?_r=1&hp&oref=slogin)

From the article:

"If we think about the Wal-Mart model, it is incredibly fuel-intensive at every stage, and at every one of those stages we are now seeing an inflation of the costs for boats, trucks, cars," said Naomi Klein, the author of "The Shock Doctrine: The Rise of Disaster Capitalism."

"That is necessarily leading to a rethinking of this emissions-intensive model, whether the increased interest in growing foods locally, producing locally or shopping locally, and I think that's great."

But the emphasis in that is wrong. What will be localized is assembly and some parts manufacture to avoid shipping costs:

Many economists argue that globalization will not shift into reverse even if oil prices continue their rising trend. But many see evidence that companies looking to keep prices low will have to move some production closer to consumers. Globe-spanning supply chains — Brazilian iron ore turned into Chinese steel used to make washing machines shipped to Long Beach, Calif., and then trucked to appliance stores in Chicago — make less sense today than they did a few years ago.

To avoid having to ship all its products from abroad, the Swedish furniture manufacturer Ikea opened its first factory in the United States in May. Some electronics companies that left Mexico in recent years for the lower wages in China are now returning to Mexico, because they can lower costs by trucking their output overland to American consumers.

Because energy costs have fallen as a production input, and all stages of the production process can be opportunistically located where the overall costs are lowest, the doomsday scenario is less likely than it once might have been.

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:07:10 AM

Global warming could lead to four degrees temperature increase: One of the government's top scientific advisors has warned that we should prepare for a world that could be four degrees hotter. (http://www.channel4.com/news/articles/society/environment/global%20warming%20could%20lead%20to%20four%20degrees%20temperature%20increase/2384402)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:08:17 AM

Vancouver Sun: The laws of economics still at play in the oil market: Forecasters failed to foresee demand for oil would fall as prices rose despite long-standing evidence to show that would happen (http://www.canada.com/vancouversun/news/editorial/story.html?id=cb27b4eb-52b0-4028-8095-6804ffba7b64)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:09:17 AM

Overpopulation: the real crisis: People are finally awakening to some of the many consequences of overpopulation, such as global warming and peak oil. ... Now, soils are eroding tens to hundreds of times faster than they develop, oceans are warming and acidifying, coral reefs are dying, biodiversity is imploding, natural gas and petroleum are being depleted, atmospheric carbon dioxide levels are a third higher than in pre-industrial times, and climate is going into convulsions, as indicated by more ferocious storms. All these phenomena are symptoms with one fundamental underlying cause: too many people. If we continue to go on with this steadfast refusal to recognize limits in a finite world, it will be our undoing. Current global economic systems based on perpetual expansion of capital require population growth to increase markets and cheap labor. Coupling such growth-crazy economic systems with human greed will ultimately result in the collapse of civilization. (http://media.www.dailytexanonline.com/media/storage/paper410/news/2008/08/07/Opinion/Overpopulation.The.Real.Crisis-3397398.shtml)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:10:17 AM

guardian.co.uk: Let's face it, there's simply not enough oil and gas to go around (http://www.guardian.co.uk/commentisfree/2008/aug/07/oil.energy)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:10:50 AM

New Zealand: Global warming: the real danger is not taking action ..... With peak oil now upon us, it makes sense that this country puts in place renewable alternatives as quickly as possible, as the longer we wait the more it will cost and the more difficult it will be to actually access renewable energy generation ... (http://www.odt.co.nz/opinion/opinion/16593/global-warming-real-danger-not-taking-action)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:11:18 AM

Solar power plants on the rise ..... A new report by Environment Colorado shows that developing solar power plants will reduce global warming pollution from US electricity generation (http://www.thecherrycreeknews.com/content/view/3253/2/)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:11:43 AM

UN OBSERVER: Peak Oil theorists such as Richard Heinberg, James Howard Kunstler, Matthew Simmons, and others turn out to be correct. Petroleum supplies are declining as demand increases. This unfolding trend will radically change human habitation on the Earth. Among the consequences will be the drastic reduction of food and fresh water available to people, not only in poorer parts of the globe, but throughout the planet. (http://www.unobserver.com/layout5.php?id=5013&blz=1)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:12:05 AM

timesonline.uk: UK's largest mortgage lender says the annual drop in house prices accelerated from 6.1% to 8.8% in a month
(http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article4476625.ece)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:13:24 AM

Quote from: drogulus on August 02, 2008, 07:15:05 PM
Thanks for the explanation, Dm. As you can tell, I'm a little sceptical of the idea that the economy will cascade like that. But in fact the Depression of the 1930's wasn't foreseen, and there's no guarantee that a different set of stimuli couldn't trigger the next one. So it could happen, though it probably won't, and if I was forced to say why(_{:P ???}) I'd make up something about how the economy doesn't really depend on oil as much as it used to and that energy has been falling as a percentage of GDP for decades until recently.

The proper comparison would not be with the Depression (which really was a cascade), but with other recent recessions like the S&L crisis of the late '80's or maybe the stagflation of the late '70's. In fact we aren't even officially in recession yet, though I'm betting we will be next year. We've lost 20% off the high so far. It looks like a typical recession to me, maybe a little worse eventually but nothing unprecedented or even very scary.

It's hard to have a depression in a world which no longer believes in autarky, which trades freely, and in which governments use deficit spending as a countercyclical boost. Just the size of of government sectors compared to the '30's makes it much harder to tip over. Now if we allowed the banks to fail (we won't), boosted tariffs to protect jobs (not a chance), and cut spending to balance the budget (hah!) then we'd have a Depression. That's a big part of what happened in the '30's. After that it became much harder for advanced countries, Keynesians all, to throw themselves off the bridge. You really have to do everything wrong in a modern economy to fail really badly. Doing most things wrong isn't enough. _:D

Stagflation Cometh *** Until now, three critical factors helped the world weather soaring oil prices. First, China, with its enormous productivity increases - based on resting on high levels of investment, including investments in education and technology - exported its deflation. Second, the US took advantage of this by lowering interest rates to unprecedented levels, inducing a housing bubble, with mortgages available to anyone not on a life-support system. Finally, workers all over the world took it on the chin, accepting lower real wages and a smaller share of GDP.

That game is up. China is now facing inflationary pressures. What's more, if the US convinces China to let its currency appreciate, the cost of living in the US and elsewhere will rise. And, with the rise of biofuels, the food and energy markets have become integrated. Combined with increasing demand from those with higher incomes and lower supplies due to weather-related problems associated with climate change, this means high food prices - a lethal threat to developing countries.
(http://www.guardian.co.uk/commentisfree/2008/jan/02/stagflationcometh)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:13:53 AM

After the Bubble, Ghost Towns Across America
(http://online.wsj.com/article/SB121763228998406131.html?mod=todays_us_page_one)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:14:12 AM

UK House building grinds to a halt CLICK HERE (http://www.guardian.co.uk/business/2008/aug/03/construction.houseprices)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:14:54 AM

UK company administrations soar 60%: The number of companies that have been placed in administration in the past three months has jumped 60pc compared with last year, official insolvency statistics reveal. Business recovery experts said the dramatic rise was a sign that the economic slowdown was taking hold. (http://www.telegraph.co.uk/money/main.jhtml?view=DETAILS&grid=&xml=/money/2008/08/01/bcninsolvency101.xml)

Title: Re: Meltdown
Post by: BachQ on August 09, 2008, 03:15:26 AM

Australia faces worse crisis than America ..... The world's financial storm has swept through Australia and New Zealand this week amid mounting signs of contagion across the Pacific region. Australia now faces a worse crisis than America Many fear the economic party in Australia will end badly. Financial shares were pummelled in Sydney on Tuesday after investor flight forced National Australia Bank (NAB) to slash a £400m bond sale by two thirds. The retreat comes days after the Melbourne lender shocked the markets by announcing a 90pc write-down on its £550m holdings of US mortgage debt, an admission that it AAA-rated securities are virtually worthless. In New Zealand, Guardian Trust said it was suspending withdrawals from its mortgage fund owing to "liquidity difficulties in the market". (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/07/30/cnoz130.xml)

Title: Re: Meltdown
Post by: Henk on August 09, 2008, 03:27:27 AM

I think some people who are concerned about our future are to much focused on a longer term, say more then 40 years. Who know what's going to happen in that time? I think great discoveries will be done, I suspect a lot from the field of mathematics and logic, which can make possible even a new kind of human.
In the remaining time we have to cope with our current situation. We can always produce more nuclear energy, so I don't expect a big crisis to happen. Or is this a too simple explanation?
What concerns me most is the increase of natural disasters. I think that's the biggest problem nowadays, because we are more or less responsible for that.

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:13:59 AM

Guardian: UK: Inflation surges to 15-year high

(http://www.guardian.co.uk/business/2008/aug/12/inflation.creditcrunch)

BLOOMBERG: U.K. Inflation Reaches 4.4%, More Than Double Target --- House prices fell in July and retail sales dropped as Britain veered closer to a recession, reports showed today. Record oil and food costs have kept inflation above the target for 10 months, prompting Bank of England Governor Mervyn King and his colleagues to refrain from interest-rate reductions since April. (http://www.bloomberg.com/apps/news?pid=20601087&sid=a.avcDKOqWUs&refer=home)

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:14:42 AM

Sydney Morning Herald: Business gloom worsens to 2001 levels - - - Business conditions slumped in July to levels not seen since the aftermath of the 2001 US terrorist attacks as demand across many industries wilted. (http://business.smh.com.au/business/business-gloom-worsens%20-to-2001-levels-20080812-3tvm.html)

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:15:12 AM

WorleyParsons' billion-dollar solar plan --- WorleyParsons, Australia's biggest engineering company, is studying the construction of the world's biggest project producing power from the sun's heat, tapping incentives for renewable energy generation. (http://business.smh.com.au/business/worleyparsons-billiondollar-solar-plan-20080812-3u3u.htm)

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:15:35 AM

UK: House sales slump 40% amid loan crunch [click here]
(http://www.thisismoney.co.uk/mortgages/house-prices/article.html?%20in_article_id=449605&in_page_id=57&ct=5)

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:16:14 AM

Who owns US debt?

(http://www.leap2020.eu/photo/grande-965331-1200522.jpg?ibox)

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:16:48 AM

MIT researchers attain solar 'nirvana' (http://features.csmonitor.com/environment/2008/08/01/mit-researchers-attain-solar-nirvana/)

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:17:37 AM

Manufacturers's confidence has fallen in every region of UK as companies struggle with soaring costs, CBI survey shows (http://business.timesonline.co.uk/tol/business/economics/article4453867.ece)

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:18:50 AM

iht.com --- The first wave of Americans to default on their home mortgages appears to be cresting, but a second, far larger one is building with alarming speed.The percentage of mortgages in arrears in the category of loans one rung above subprime, so-called alternative-A, or alt-A, mortgages, quadrupled to 12 percent in April from a year earlier. Delinquencies among prime loans, which account for most of the $12 trillion market, doubled to 2.7 percent in that time. (http://www.iht.com/articles/2008/08/03/business/mortgage.php)

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:19:19 AM

OIL SHOCK
This Time, It's Different
Global Pressures Have Converged to Forge a New Oil Reality (http://www.washingtonpost.com/wp-dyn/content/article/2008/07/26/AR2008072601025.html)

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:20:53 AM

Crude oil @ 30%/yr incr: (http://farm4.static.flickr.com/3212/2741726929_26755beb20.jpg?v=0)

http://europe.theoildrum.com/node/4399

Title: Re: Meltdown
Post by: BachQ on August 12, 2008, 03:21:54 AM

Oil Equivalency Chart

(http://www.spectrum.ieee.org/images/jan07/images/ncmo01.gif)

Title: Re: Meltdown
Post by: ezodisy on August 13, 2008, 11:13:47 AM

Reuters
UPDATE 1-U.S. Jan-June oil demand falls most since 1982-EIA
Tue Aug 12, 2008 10:46pm IST

WASHINGTON, Aug 12 (Reuters) - U.S. oil demand during the first half of 2008 fell by an average 800,000 barrels per day compared to the same period a year ago, the biggest volume decline in 26 years, the Energy Information Administration said on Tuesday.

In its latest monthly energy forecast, the EIA said the huge drop in demand was due to slower U.S. economic growth and the impact of high petroleum prices.

The drop in U.S. oil demand helped offset a 1.3-million-barrel-per-day increase in petroleum consumption in nonindustrial countries during the first half of the year.

As a result, preliminary data shows that global oil consumption rose by 500,000 barrels a day in the 6-month period, the EIA said.

High gasoline prices have cut into U.S. demand, but the EIA expects lower pump costs through December than previously forecast.

However, U.S. consumers will be hit with much higher heating fuel costs this winter, the agency warned.

The average residential price for heating oil during the upcoming heating season, which runs from October through March, is forecast to be $4.34 a gallon, up 31 percent from last winter.

Households that use natural gas as their heating fuel will pay an average $15.58 per thousand cubic feet of gas, about 22 percent more than last winter, the EIA said. (Reporting by Tom Doggett; Editing by Christian Wiessner)

© Thomson Reuters 2008. All rights reserved. Users may download and print extracts of content from this website for their own personal and non-commercial use only. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters and its logo are registered trademarks or trademarks of the Thomson Reuters group of companies around the world.
Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.

Title: Re: Meltdown
Post by: ezodisy on August 13, 2008, 11:18:34 AM

Reuters
Oil to resume climb above $150: analyst
Tue Aug 12, 2008 12:39pm BST

By Chikako Mogi

TOKYO (Reuters) - Oil prices are likely to top $150 a barrel this year despite their recent slide on the dollar's rise against the euro and concerns that high prices may hurt growth in big economies, a Japanese commodity and energy expert said.

A slowdown in U.S., euro zone and Japanese economies may dampen growth in China and other emerging markets, but underlying demand for oil from rapidly developing nations remains solid as they seek to catch up with developed countries, Akio Shibata, director at the Marubeni Research Institute, told Reuters.

"This is a transition period as China and other emerging countries move towards becoming developed nations, and their underlying demand will persist at least in the next 15 to 20 years to keep upward pressure on energy costs," Shibata said.

Shibata provides regular updates to Japanese Ministry of Finance officials on the situation in commodities markets, and has been on several government panel on food and energy issues.

While a global economic slowdown may hit China and India, both nations are expected to grow relatively fast, and a drop in oil prices would only reinforce their demand, he said.

"It's unlikely that oil prices will fall back to double digits. Demand in these countries has not fallen to levels a year ago, and as long as they grow, there will be fresh demand for resources each year and that accumulative demand will keep supply tight."

Also, the cost of exploiting oil has risen while the supply of oil which can be removed cheaply is peaking out, Shibata said. The dollar also remains vulnerable as the U.S. housing market has yet to hit a bottom and credit market jitters persist.

"It looks unclear if the dollar will keep rising above 110 yen. If the dollar reverses its course and falls, oil will resume its climb and get back on a rising trend again," Shibata said.

Speculative and investor money will continue to flow into the oil market given the prospect for tight supply. Oil also remains vulnerable to concerns about supply disruptions and hurricanes.

"I think $200 is a possibility. Players see tight supply both in light of current and future fundamentals, which will draw money from speculative funds," Shibata said.

U.S. crude fell to a three-month low this week, dropping more than $30 in a month after hitting a record high $147.27 on July 11.

Oil prices have risen seven-fold since the start of 2002 amid surging demand from China and other emerging markets, and jumped 50 percent this year alone.

The rise in oil prices to a record peak highlights the limit to the industrial structures of developed countries that have relied on an assumption energy costs will remain relatively low the way they did until around 2000, Shibata said.

"It's a message from the market that developed countries are not doing enough to tackle the issue of global warming, or invest in innovations to save energy and boost efficiency in the use of energy and resources," Shibata said.

The recent steep drop in oil prices may delay action to tackle the urgent issue of global warming and seek alternatives to energy resources which are becoming scarce, Shibata said.

"Since swift action is not taken to change the industrial structure of developed countries that had been supported by cheaply available resources, the latest price drop is likely to be a temporary adjustment," he said.

(Additional reporting by Risa Maeda; Editing by Clarence Fernandez)

© Thomson Reuters 2008. All rights reserved. Users may download and print extracts of content from this website for their own personal and non-commercial use only. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters and its logo are registered trademarks or trademarks of the Thomson Reuters group of companies around the world.
Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.

Title: Re: Meltdown
Post by: ezodisy on August 13, 2008, 11:26:31 AM

NEW YORK (MarketWatch) - Oil services shares snapped back and rallied after key weekly data showed a drop in oil and gasoline supplies, with traders also keeping an eye out for fresh developments involving BP's pipelines affected by the war in Georgia.

U.S. petroleum supplies fell by 400,000 barrels verses the expectation for a flat reading and gasoline stocks declined by 6.4 million barrels, greater than the expectation of 1.8 million barrels. Refinery utilization declined to 85.9% from 87%.

In energy trading, September crude rose $2.84 to close at $115.85 a barrel on the New York Mercantile Exchange.

Component BP fell 1% to $59.53. The oil giant said it would be unable to meet its contractual obligations on its Baku-Supsa oil pipeline, blaming the military action between Russia and Georgia. BP, which is the largest shareholder in Baku-Supsa, closed the 150,000-barrel-a-day pipeline on Tuesday.

Meanwhile, the BP-operated Baku-Tbilisi-Ceyhan pipeline that carries more than 1 million barrels a day was knocked out of action last week because of a fire, according to reports. Russia agreed to halt the war over disputed territories along the frontier with Georgia, but fresh reports surfaced that tanks have been moving deeper into Georgian territory.

The company also denied reports that it has reached an agreement with the Russian shareholders of TNK-BP Ltd. on key issues to settle their dispute over the oil joint venture.

On another front, negotiations over oil contracts in Iraq continue to draw headlines.

Anadarko Petroleum said it wouldn't pursue additional oil contracts in Iraq after reports surfaced that the country terminated negotiations with a group led by Anadarko. Shares rose 5% to $57.48.

The Wall Street Journal reported that difficulties are rising in the foreign oil negotiations because Royal Dutch Shell are requesting payments in oil for consulting work.

The companies also want preferential treatment for future oil-exploration deals. Specific details are expected to be spelled out in an upcoming Iraq oil law, which has been held up for a year and a half.

Steve Gelsi is a reporter for MarketWatch in New York.

Title: Re: Meltdown
Post by: ezodisy on August 13, 2008, 11:40:24 AM

China Raises Taxes on Large Cars to Cut Fuel Usage (Update1)

By Tian Ying

Aug. 13 (Bloomberg) -- China's finance ministry said it will raise taxes on large automobiles while cutting rates for smaller cars in an effort to spur demand for fuel-efficient vehicles in the world's second-largest oil-consumer.

The government will double the tax rate to 40 percent for automobiles with engines larger than 4 liters in capacity starting Sept. 1, the finance ministry said on its Web site. The tax on vehicles between 3 liters and 4 liters in engine size will be raised to 25 percent from 15 percent, the ministry said.

Automobiles account for about half of China's total oil consumption, and this may rise to 60 percent by 2020, according to the Development Research Center of the State Council. China, the world's second-largest auto market, raised the price of gasoline, diesel and other fuels in June to cool its economy and reduce energy use.

``The move is part of government's efforts of cutting energy consumption,'' said Yu Bing, an analyst with Pingan Securities Co. in Shanghai. ``It will help increase sales of small cars and damp demand for bigger vehicles.''

Cars with engines of 1 liter capacity or less will become cheaper, with a 1 percent tax rate instead of the current 3 percent, the finance ministry said.

Sedans with engines between 3 and 4 liters were the fastest- selling models last year in China, with sales rising almost six- fold to 12,100 units, according to the China Association of Automobile Manufacturers. Sales of cars with engines less than 1 liter fell 31 percent to 251,700 units last year.

Title: Re: Meltdown
Post by: ezodisy on August 13, 2008, 11:53:31 PM

Not that Merrill Lynch need ezodisy's opinion on financial matters--though there is an argument in favour of this on the back of their current write-downs--but if they had asked, they would have been told the same thing they reported yesterday and was published today in The Times. Expect a well-deserved rebound in oil and gas stocks later this month and in September following this sector-related correction. The retrace has been overdone, and to show just how far it's gone I've included graphs of some of the stronger oil companies on the LSE including, at top, the FTSE 350 Oil & Gas Index chart for the past 5 years. More misery to come, Dm, which'll keep both of us busy.

From The Times
August 14, 2008
Swing back to bank stocks is overdone, says Merrill Lynch
Patrick Hosking, Banking and Finance Editor

The fashionable investment tactic of the past month - buying bank stocks while selling energy companies - could already have gone too far, Merrill Lynch, the financial management group, warned clients yesterday.

In mid-July, hedge funds, pension funds and other institutional investors dramatically reversed their enthusiasm for energy stocks and loathing for financials in an abrupt about-turn that sent bank shares soaring and oil and gas companies sinking.

But Merrill said yesterday that the unwinding of the classic bet of the credit crunch may already have been overdone, giving warning that banks across Europe could still be forced to raise between $70 billion (£37 billion) and $120 billion in new equity on top of the $120 billion already raised. Barclays and HBOS looked most vulnerable among UK banks to having to go back to their shareholders for more equity on top of the £4.5 billion and £4 billion, respectively, already raised.

Merrill said that the rush to buy back into banks may already have gone too far after it stress-tested their balance sheets. It also said that fears over the sliding energy price were being overplayed.

The passion for oils and other raw material stocks and the shunning of financials has been the overwhelming investment story of the credit crunch, a sectoral play on a par with the push out of tobacco and other defensive stocks into technology in the ill-fated boom of 1997 to 2000.

Since last summer, tens of billions of dollars have been pulled from financials and sunk into energy companies but in the past four weeks the sliding price of crude and Banco Santander's opportunistic bid for Alliance & Leices-ter triggered an abrupt rethink. Since mid-July until yesterday, banks have outperformed the market by 10 per cent and energy companies underperformed by 10 per cent. "A lot of people will have been caught out by the brutal nature of that reverse," David Bowers, a consultant to Merrill, said.

Merrill's own monthly survey of fund managers showed that the net number saying they were overweight in oil and gas fell from 52 per cent last month to 11 per cent. The return to financials was more modest, with the net number of investors underweight in banks slipping from 57 per cent to 40 per cent.

Bank shares were punished yesterday, with Barclays and HBOS each falling 7 per cent. Royal Bank of Scotland and Lloyds TSB fell 6 per cent.

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:21:40 AM

Quote from: ezodisy on August 13, 2008, 11:13:47 AM
Reuters
UPDATE 1-U.S. Jan-June oil demand falls most since 1982-EIA
Tue Aug 12, 2008 10:46pm IST

WASHINGTON, Aug 12 (Reuters) - U.S. oil demand during the first half of 2008 fell by an average 800,000 barrels per day compared to the same period a year ago, the biggest volume decline in 26 years, the Energy Information Administration said on Tuesday.

In its latest monthly energy forecast, the EIA said the huge drop in demand was due to slower U.S. economic growth and the impact of high petroleum prices.

The drop in U.S. oil demand helped offset a 1.3-million-barrel-per-day increase in petroleum consumption in nonindustrial countries during the first half of the year.

As a result, preliminary data shows that global oil consumption rose by 500,000 barrels a day in the 6-month period, the EIA said.

High gasoline prices have cut into U.S. demand, but the EIA expects lower pump costs through December than previously forecast.

However, U.S. consumers will be hit with much higher heating fuel costs this winter, the agency warned.

The average residential price for heating oil during the upcoming heating season, which runs from October through March, is forecast to be $4.34 a gallon, up 31 percent from last winter.

Households that use natural gas as their heating fuel will pay an average $15.58 per thousand cubic feet of gas, about 22 percent more than last winter, the EIA said. (Reporting by Tom Doggett; Editing by Christian Wiessner)

© Thomson Reuters 2008. All rights reserved. Users may download and print extracts of content from this website for their own personal and non-commercial use only. Republication or redistribution of Thomson Reuters content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters. Thomson Reuters and its logo are registered trademarks or trademarks of the Thomson Reuters group of companies around the world.
Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests.

Good catch!

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:23:19 AM

CNN: 25% of home sales result in loss --- More homeowners than ever are selling at a loss, propelling the real estate market deeper into crisis. In the 12 months that ended June 30, nearly 25% of all homes sold nationwide fetched less than sellers originally paid, according to real estate Web site Zillow.com. While the nation's double-digit decline in home prices has been well documented, the new report underscores the economic force of those price declines. Homeowners are walking away with much less in their pocket when they sell. And that affects more than the real estate market. "It's stunning what's happening out there; The numbers are the worst we've seen and it's not just the magnitude of the problem but the scope - so many markets are affected." said Stan Humphries.... Nationwide, nearly a third of all homeowners who bought since 2003 owe more on their homes than the homes are worth. (http://money.cnn.com/2008/08/13/real_estate/sellers_suffering_huge_losses/index.htm?postversion=2008081317)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:23:55 AM

Bloomberg: Credit Crisis Still `Far From Over,' Merrill Says --- The credit crisis is ``broad, deep, and global'' and ``far from over'' for financial companies even after they reported $500 billion in writedowns and credit losses, Merrill Lynch & Co.'s chief investment strategist said. ``Investors are significantly underestimating both the scope and the extent of the credit bubble and the consequences of its subsequent deflation,'' Richard Bernstein wrote in a note to clients. ``The problems are not confined to large institutions that are overexposed to U.S. subprime loans.'' The lingering effects of the crisis mean banks and brokerages need ``massive'' consolidation because of the glut of lending capacity worldwide, Bernstein said.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=akRFGVR.BYUs&refer=worldwide)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:24:33 AM

Wall Street Journal: Moody's downgrades GM to 'Caa1'; outlook negative --- SAN FRANCISCO (MarketWatch) -- Moody's Investors Service on Wednesday lowered General Motors Corp.'s corporate family rating to Caa1 from B3 with a negative outlook. ... Caa-grade ratings are viewed as poor quality with a possiblity of default by ratings agencies.... (http://www.marketwatch.com/news/story/moodys-%3Cbr%20/%3Edowngrades-gm-caa1-outlook/story.aspx?guid=%7B35C14451%2D5276%2D44DD%2DAB1C%2DEE460EC67313%7D&dist=hplatest)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:25:39 AM

Foreclosure fallout:

Houses go for a $1

(And it still took 19 days to find a buyer) (http://www.detnews.com/apps/pbcs.dll/article?AID=/20080813/METRO/808130360/&imw=Y)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:26:42 AM

UK unemployment jumps most in 16 years --- Unemployment rose the most in almost 16 years in July and wage growth was the weakest for five years as companies cut jobs and held down pay. The number of people claiming benefits in July rose for the sixth month in a row to 20,100, nearly 15pc above forecasts, to 864,700, the Office for National Statistics reported. (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/13/bcnjobs113.xml)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:28:05 AM

UK interest rates have fallen below the cost of living for the first time in 27 years: In a landmark moment for the Bank of England, Britain now has negative real interest rates, news which will heighten calls for the Monetary Policy Committee to raise borrowing costs. (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/13/cncpi113.xml&CMP=ILC-mostviewedbox)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:28:37 AM

US junk-bond defaults may quadruple (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4454248.ece)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:29:39 AM

Oil Prices, Global GDP, and Net Oil Exports

(http://bp2.blogger.com/_otfwl2zc6Qc/SI0h3o9ZxqI/AAAAAAAAFOw/zQLim1H7Ceg/s400/worldoil.bmp)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:30:17 AM

SUVs and Trucks Plunge in Trade-In Value

(http://images.businessweek.com/story/08/600/0725_trade_in_prices.jpg) (http://www.businessweek.com/lifestyle/content/jul2008/bw20080725_510059.htm?chan=top+news_top+news+index_news+%2B+analysis)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:31:06 AM

Matt Simmons (Jun 25, 2008) :
http://video.google.com/videoplay?docid=-3462555843300983140&q=matthew+simmons&ei=xumISOmXK4uGrgPWheC4CA

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 04:31:41 AM

In the UK, the number of homes changing hands has nearly halved during the past year: Just 77,000 homes costing more than £40,000 were sold during June, 45 per cent fewer than during the same month of 2007, according to HM Revenue & Customs. (http://itn.co.uk/news/89d5491841b899bbab0aa7da7255d555.html)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 06:52:38 AM

U.S. inflation rises at highest pace in 17 years ... The United States government says consumer prices shot up in July at twice the expected rate, pushed higher by surging energy and food costs. The latest surge leaves inflation running at the fastest pace in 17 years. The U.S. Labor Department reported Thursday that consumer prices rose by 0.8 per cent last month, twice the 0.4 per cent gain that economists had been expecting. It marks the third straight month of oversized inflation increases following jumps of 0.6 per cent in May and 1.1 per cent in June. And it leaves inflation rising by 5.6 per cent over the past year, the biggest 12-month gain since January, 1991. (http://www.reportonbusiness.com/servlet/story/RTGAM.20080814.wuscpi0814/BNStory/Business/home)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 06:53:46 AM

REUTERS: Pound hits 22-month low against the dollar ... The pound slid to a 22-month low against the dollar and was on track for its steepest monthly drop in over 11 years on Thursday as negative sentiment mounted on the economy, raising expectations for a rate cut. The Bank of England's quarterly inflation report on Wednesday gave a gloomy prognosis for the economy, and said inflation would fall below the central bank's 2 percent target in two years if interest rates were held at 5 percent. Inflation at more than double the Bank's target had kept expectations of rate cuts on the back-burner despite data showing the economy in poor shape and heading towards a possible recession. (http://uk.reuters.com/article/businessNews/idUKLE70836520080814)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 06:54:24 AM

TELEGRAPH.UK: European economy contracts for first time since euro launch ... Europe's economy contracted in the second quarter - the first time it has shrunk since the launch of the euro almost a decade ago. Gross domestic product fell by 0.2pc in the eurozone, which comprises the 15 nations that subscribe to the single currency, official statsistics showed today. The fall compared with GDP growth of 0.7pc in the first quarter, and provides further evidence that the worst of the slowdown in the global economy may not yet be behind us. (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/14/bcneuro114.xml)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 06:55:01 AM

GUARDIAN.UK: Eurozone economy shrinks for first time in more than a decade ... Europe looks headed for recession with France and Germany leading the way down. (http://www.guardian.co.uk/business/2008/aug/14/europe.economicgrowth)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 06:55:37 AM

Bank of England: Britain is heading for recession ... The Governor of the Bank of England, Mervyn King, did not utter the "R-word" yesterday, but his message could not be clearer. (http://www.independent.co.uk/news/business/news/bank-of-england-britain-is-heading-for-.htmlssion-894511.html)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 06:56:06 AM

UK House Sales Collapsing ... Housebuilder Bellway said the number of property sales agreed over June and July plunged 45pc and may continue to fall at the same rate for the rest of the year. Alistair Leitch, finance director at Bellway, said: "Since Easter we've had an avalanche of cancellations - particularly in the last two months." (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/14/bcnbell114.xml)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 06:57:13 AM

Barclays battered on write-down fears (By Ambrose Evans-Pritchard) ... Barclays, HBOS, and other British banks may have to raise new capital to cover escalating losses on toxic debt and meet fresh needs if the economy slides into recession, according to analysts at Merrill Lynch. The US investment bank said the European banking sector as a whole had yet revealed the full damage from US mortgage debt, warning that lenders across the region may face another $120bn in write-downs. Barclays, HBOS, and other British banks may have to raise new capital to cover escalating losses on toxic debt and meet fresh needs if the economy slides into recession, according to analysts at Merrill Lynch. The US investment bank said the European banking sector as a whole had yet revealed the full damage from US mortgage debt, warning that lenders across the region may face another $120bn in write-downs. (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/14/bcnbarc114.xml)

Title: Re: Meltdown
Post by: BachQ on August 14, 2008, 06:57:36 AM

The credit crunch: why there's far worse to come ... The Senior Loan Officer Opinion Survey on Bank Lending Practices is one of the most useful economic indicators and suggests that the "impact of the credit crunch is still intensifying", says Capital Economics, "and has become even more broad based. Banks intend to tighten lending criteria further in the third quarter for nearly every conceivable type of loan, as what started initially as a squeeze on mortgage lending is now affecting all forms of borrowing." (http://www.moneyweek.com/news-and-charts/economics/the-credit-crunch-why-theres-far-worse-to-come-43333.aspx)

Title: Re: Meltdown
Post by: ezodisy on August 14, 2008, 10:08:32 AM

U.S. Economy: Consumer Prices Rise More Than Forecast (Update1)

By Shobhana Chandra

Aug. 14 (Bloomberg) -- U.S. consumer prices rose at the fastest pace in 17 years in July, limiting the ability of the Federal Reserve to lower interest rates as economic growth slows.

The cost of living climbed 5.6 percent in the year ended in July, the Labor Department said today in Washington. It was up 0.8 percent from the previous month, twice as much as anticipated. So-called core prices, which exclude food and energy, also advanced more than projected.

The surge last month reflected energy prices that have since declined, signaling July may represent the peak in inflation. Still, increases went beyond food and fuel, including gains in clothing, airline fares and education, likely intensifying discussions among Fed policy makers about how quickly to shift toward raising rates.

``What we are seeing is a lot of commodity-price spillover'' into other items, said Richard DeKaser, chief economist at National City Corp. in Cleveland, who correctly forecast the increase in core prices. ``Numbers like this increase the hand of hawks'' at the Fed who argue that rates need to rise to quell inflation, he said.

Commodity costs have retreated since mid-July. Crude oil futures dropped as low as $112 a barrel this week after topping $147 last month. Regular gasoline, which reached a record $4.11 a gallon on July 17, has fallen about 8 percent, according to AAA.

``We're probably looking in the rearview mirror with respect to the worst part of inflation,'' said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York. ``Energy prices have declined sharply in the last month.''

Treasuries, Stocks

Treasuries rose, with benchmark 10-year note yields falling to 3.92 percent at 10:45 a.m. in New York, from 3.94 percent late yesterday. The Standard & Poor's 500 Stock Index advanced 0.5 percent to 1,292.06.

Separate reports today reinforced evidence of a weakening job market and continued slump in housing.

The Labor Department reported that 450,000 Americans, more than anticipated, filed first-time claims for jobless benefits last week. Claims averaged 321,400 last year.

The median price for a single-family home in the U.S. dropped 7.6 percent in the second quarter as bank sales of foreclosed homes caused values to tumble in three-quarters of U.S. cities, the National Association of Realtors said.

Sales of single-family houses and condominiums fell 16 percent to 4.913 million at an annualized pace, a 10-year low, the realtors group also said.

Economists' Estimates

Consumer prices were forecast to rise 0.4 percent, according to the median estimate of 78 economists in a Bloomberg News survey. Projections ranged from gains of 0.1 percent to 0.7 percent.

Costs excluding food and energy increased 0.3 percent for a second month, exceeding the 0.2 percent median forecast of economists surveyed.

The core rate increased 2.5 percent from July 2007, the most since January, after a 2.4 percent year-over-year increase the prior month.

Energy expenses jumped 4 percent, after a 6.6 percent gain in the prior month, today's report said. Gasoline prices increased 4.1 percent.

Procter & Gamble Co. was among businesses that responded to the surge in oil earlier this year. The world's largest consumer- products company charged more for Cascade dishwashing detergent, Iams pet food and Gillette razors to offset some of the jump in packaging costs. McDonald's Corp., the world's largest restaurant company, raised prices as ingredient expenses surged.

McDonald's Costs

``Beef and cheese are up, but we've been able to mitigate that cost,'' Chief Executive Officer James Skinner said in an interview in Beijing last week.

The consumer price index is the government's broadest gauge of costs for goods and services. Almost 60 percent of the CPI covers prices consumers pay for services ranging from medical visits to airline fares and movie tickets.

Today's report ``raises the general trajectory'' of interest rates, reducing the chance of cuts and bringing forward the likelihood of increases, William Poole, the former St. Louis Fed president, said in an interview with Bloomberg Television. Poole is a Bloomberg contributor.

Food prices, which account for about a fifth of the CPI, gained 0.9 percent after a 0.8 percent increase in June.

The increases went beyond food and fuel. Clothing expenses jumped 1.2 percent, the most since 1998. The cost of an airline ticket rose 1.3 percent and education expenses climbed 0.5 percent for a second month.

Rent Costs

Rents, which make up almost 40 percent of the core CPI, cooled. A category designed to track rental prices rose 0.1 percent, compared with a 0.3 percent gain in June.

The rate-setting Federal Open Market Committee last week kept its benchmark rate at 2 percent for a second straight meeting. In their statement, policy makers said they expect ``inflation to moderate later this year and next year, but the inflation outlook remains highly uncertain.''

Dallas Fed President Richard Fisher dissented in favor of raising rates, and others have indicated concern about leaving borrowing costs unchanged for a prolonged period. Minneapolis Fed chief Gary Stern and Charles Plosser of the Philadelphia Fed said last month the central bank may need to raise rates even before the housing market stabilizes.

Thomas Hoenig of Kansas City said July 16 the current level of rates ``almost certainly raises the risk of higher inflation.''

Wages Drop

Today's figures also showed wages decreased 0.8 percent after adjusting for inflation following a 0.9 percent drop in June. They were down 3.1 percent over the last 12 months, the biggest year-over-year decline since 1990. The drop in buying power is one reason economists forecast consumer spending will slow.

Higher gasoline bills and tighter credit reduced automobile purchases in July, causing retail sales to drop for the first time in five months, government figures showed yesterday.

A jump in the cost of imported goods may also give American companies leeway to charge more, economists said. Prices of products made overseas soared 22 percent in the year ended in July, the most since at least 1982, the Labor Department reported yesterday.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aoOKMz5QYK9w&refer=home#

Title: Re: Meltdown
Post by: ezodisy on August 14, 2008, 10:10:18 AM

U.S. Home Sales Fall to 10-Year Low as Prices Tumble (Update2)

By Kathleen M. Howley and Dan Levy

Aug. 14 (Bloomberg) -- Existing U.S. home sales fell to a 10-year low in the second quarter and the median price for a single-family house dropped 7.6 percent as the real estate recession deepened.

The median price tumbled to $206,500 from $223,500 a year earlier, the Chicago-based National Association of Realtors said today. Sales of single-family houses and condominiums fell 16 percent to 4.913 million at an annualized pace.

Prices are declining with the U.S. on the brink of a recession, consumer prices rising and 30-year fixed mortgage rates at a six year high last month. A third of all sales in the quarter were foreclosures or ``short sales,'' in which lenders take a loss on a property, the Realtors said. Bank repossessions almost tripled in July from a year earlier, RealtyTrac Inc., a seller of foreclosure data, said in a separate report today.

``It's getting worse,'' Rick Sharga, RealtyTrac's executive vice president for marketing, said in an interview. ``The number of properties that have been foreclosed on by the banks and still haven't sold is the highest we've ever seen.''

U.S. economic growth slowed to 1.8 percent in the second quarter as unemployment rose. Forecasters say home values will drop more. The S&P/Case Shiller home price index that tracks 20 cities may tumble as much as 12 percent this year, McLean, Virginia-based Freddie Mac, the No. 2 mortgage buyer, said in an Aug. 11 report.

California Prices

The biggest declines reported by the Realtors today were in Sacramento, the capital of California, with a 36 percent drop, followed by the metropolitan area around Cape Coral and Ft. Myers, Florida, down 33 percent.

Riverside and San Bernardino, California, tumbled 32.7 percent, and Los Angeles dropped 30 percent, according to the report. The metropolitan New York area, including parts of northern New Jersey and Long Island, fell 5.3 percent, and Boston dropped 11 percent.

Bank seizures of properties in default rose 184 percent to 77,295 in July, according to RealtyTrac. That was the steepest increase since the Irvine, California-based company began reporting data in January 2005.

More than 272,000 properties, or one in 464 U.S. households, got a default notice, were warned of a pending auction or were foreclosed on, RealtyTrac said. Nevada, California and Florida had the highest rates, RealtyTrac said.

Foreclosures Spur Sales

``In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values,'' Richard Gaylord, president of the Realtors' trade group, said in the report.

Price discounts are spurring buyers in some areas of the country, according to the Realtors report. One quarter of the states had price increases in the second quarter when compared with the prior three months.

``Once the inventory is drawn down, price pressure will return because the costs of construction are rising,'' Gaylord said.

There were 4.49 million U.S. homes for sale at the end of June, the highest in a year, according the Realtors' association. At the current sales pace, that represented 11.1 months' worth, up from 10.8 months' worth at the end of May, the trade group said in a July 24 report.

Foreclosures are depressing home prices, contributing to job losses and weakening consumption as fewer people borrow against the value of their home, New York-based analysts at Lehman Brothers Holdings Inc. said Aug. 7.

Banks Take Property

U.S. home prices fell 15.8 percent in May, the most since at least 2001, according to S&P/Case-Shiller. One-third of home sellers in the second quarter lost money, Zillow.com, a Seattle- based provider of home valuations, reported this week.

Bank seizures, known as real estate-owned or REO properties, are the ``fastest growing segment of foreclosure activity,'' James Saccacio, chief executive officer of RealtyTrac, said in the statement. The REO properties in the company's database represent about 17 percent of the inventory of existing homes reported in June by the National Association of Realtors, he said.

Default notices in July increased 53 percent from a year earlier and auction notices rose 11 percent, RealtyTrac said.

Foreclosures could put 8.4 percent of total U.S. homeowners, or 12.7 percent of homeowners with mortgages, out of their homes, according to New York-based analysts at Credit Suisse. About 53 percent of subprime borrowers, those with poor or incomplete credit histories, will have negative equity in their homes this year, and that percentage will rise to 63 percent next year, the analysts said in an April 23 report.

National legislation is designed to help up to 400,000 homeowners refinance their adjustable-rate mortgages into fixed- rate loans. That bill, backed by the Federal Housing Administration, may help borrowers who take advantage of the state relief. Almost one-third of homeowners who bought in the last five years owe more on their mortgages than their houses are worth, Zillow reported.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aYkPC_mF5MwI&refer=home#

Title: Re: Meltdown
Post by: ezodisy on August 14, 2008, 02:14:49 PM

The EIA's short-term energy outlook published here: http://www.eia.doe.gov/emeu/steo/pub/contents.html?featureclicked=1&

Title: Re: Meltdown
Post by: ezodisy on August 15, 2008, 12:07:02 AM

lol!

Merrill Books Losses Through U.K., Can Offset Taxes (http://www.bloomberg.com/apps/news?pid=20601087&sid=aONZ6mYLFBog&refer=home)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 05:58:50 AM

Quote from: ezodisy on August 15, 2008, 12:07:02 AM
lol!

Merrill Books Losses Through U.K., Can Offset Taxes (http://www.bloomberg.com/apps/news?pid=20601087&sid=aONZ6mYLFBog&refer=home)

That is funny. :D I can't believe that accounting rules would allow for that. Here's another article: "Merrill Lynch might not pay any corporation tax for the next 60 years, after it emerged the bank plans to dump sub-prime losses on its UK arm..."
(http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=449915&in_page_id=3&ct=5)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 05:59:52 AM

Two Large Solar Plants Planned in California

Companies will build two solar power plants in California that together will put out more than 12 times as much electricity as the largest such plant today, the latest indication that solar energy is starting to achieve significant scale. The plants will cover 12.5 square miles of central California with solar panels, and in the middle of a sunny day will generate about 800 megawatts of power, roughly equal to the size of a large coal-burning power plant or a small nuclear plant. A megawatt is enough power to run a large Wal-Mart store. (http://www.nytimes.com/2008/08/15/business/15solar.html?_r=1&ref=business&oref=slogin)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 06:00:30 AM

Pound Declines 11th Day Versus Dollar, Sliding for Fourth Week ... Aug. 15 (Bloomberg) --

The pound slid for an 11th day against the dollar, the longest run of declines in at least 37 years, on speculation a recession will force the Bank of England to cut interest rates. The U.K. currency was headed for its biggest weekly drop since March 1995 after Bank of England Governor Mervyn King said two days ago there was a ``chill in the economic air'' and a report showed unemployment climbed in July by the most in almost 16 years. Growth is being hurt as tourism flags and tax receipts fall. The pound tumbled 6.5 percent since July 31. ``These are ferocious moves,'' said Simon Derrick, chief currency strategist in London at Bank of New York Mellon Corp. ``There has been a fundamental shift in thinking.'' (http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=al1ai6ZJ.K3g)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 06:01:07 AM

UK Home owners are 'living in fear' ... Home repossessions up 24pc on last year ... Experts said thousands of home owners were living in fear of losing their home and that more repossessions were imminent as home owners struggled to meet the rising cost of living.
(http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/15/bcnhome115.xml)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 06:01:51 AM

UK Families will not cope with new gas price hikes ... Millions of families will be unable to cope with the price rises that gas companies have introduced this summer, according to a survey which makes clear that many are already struggling to pay soaring utility bills. More than a third of all households - 39 per cent, equating to 10 million households - said they were unable to afford paying a penny extra on their gas and electricity bills. (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/08/15/cngas115.xml)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 06:02:16 AM

Wind turbine-maker powers ahead A surge in demand for renewable energy leads to a large order backlog for the world's biggest wind turbine-maker, Vestas. (http://news.bbc.co.uk/2/hi/business/7562847.stm)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 06:02:53 AM

The SUV Market Has Collapsed ... The market for sport utility vehicles is starting to look a lot like the housing market, spreading pain to consumers, automakers and dealers. Even the vocabulary is sadly familiar. (http://www.cnbc.com/id/26170799)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 06:03:58 AM

American housing mkt = TICKING TIME BOMB -- OPTIMISTS, look away now. Prices in America's housing market may have slumped, but the pain for a significant subset of homeowners has barely begun. Barclays' Nicholas Strand says that roughly 1.4m households, most of them in California, hold a particularly nasty type of adjustable-rate mortgage called the "option ARM". Although the overall value of option ARMs is lower than that of subprime loans—some $500 billion, according to Mr Strand, compared with about $1 trillion in subprime loans—their sting is more venomous. (http://www.economist.com/finance/displaystory.cfm?story_id=11921871)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 06:04:45 AM

The next wave of mortgage defaults NEW YORK (CNNMoney.com ) ... More borrowers with good credit are defaulting on their home loans, and that's going to make it even harder for the staggering housing market to recover. Prime mortgages are starting to default at disturbingly high rates - a development that threatens to slow any potential housing recovery. The delinquency rate for prime mortgages worth less than $417,000 was 2.44% in May, compared with 1.38% a year earlier.
(http://money.cnn.com/2008/08/12/real_estate/prime_defaults_price_drops/index.htm?ref=patrick.net)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 06:05:14 AM

Pound continues swift decline against dollar -- Sterling fell to its lowest level against the dollar in 18 months today, after 11 days of decline against the US currency left the pound valued at $1.86... (http://www.thisismoney.co.uk/news)

Title: Re: Meltdown
Post by: BachQ on August 15, 2008, 06:05:48 AM

Eurozone teeters on the edge of first-ever recession ... The eurozone economy is on the verge of its first-ever recession after the economies of Germany, France and Italy all shrank in the second quarter of this year. (http://www.independent.co.uk/news/business/news/eurozone-teeters-on-the-edge-of-firstever-.htmlssion-897609.html)

Title: Re: Meltdown
Post by: ezodisy on August 19, 2008, 11:00:53 PM

LONDON, Aug 20 (Reuters) - Online retail sales in Britain rose by 11.3
percent in July compared to the month before as wet weather boosted online
clothing sales while electrical sales also soared, a report said on Wednesday.
The IMRG Capgemini e-Retail Sales Index showed Britons spent over 4.8
billion pounds ($8.97 billion) online in July, the equivalent of 79 pounds for
every person in the UK.
The survey showed shoppers continued to shop online despite pressures on
disposable income. The figures were in sharp contrast to recent data from the
British Retail Consortium, showing high street sales in July were down 0.9
percent on June.
"Gloomy market conditions have not dampened consumers' appetite for shopping
online. Online sales continue to show strong growth, particularly when compared
to the tough trading conditions on the high street," said Mike Petevinos, Head
of Consulting for Retail at Capgemini UK.
Clothing sales increased by 23 percent during the month. However, alcohol
sales showed slower year-on-year growth with less barbecue-related demand.
The electrical sector experienced its highest growth this year, boosted by
demand for the new AppleiPhone 3G and flat screen televisions ahead of the
Olympics.
Capgemini has forecast that between 30 percent and 50 percent of all retail
sales will be online in the next five years.

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on August 20, 2008, 08:30:16 AM

I haven't owned a car since 2001. ;D

I intend to keep it that way. 8)

Title: Re: Meltdown
Post by: Sarastro on August 20, 2008, 01:53:29 PM

Quote from: Spitvalve on August 20, 2008, 08:30:16 AM
I haven't owned a car since 2001. ;D

I intend to keep it that way. 8)

Because you are in Europe. :P

I live in California but do not own a car, just managed to. 0:) And this is so nice - no gas, no insurance, no maintainance, no tickets, no stress. 0:) Anyway, I have to renew my driver's license in a year.

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:26:49 PM

Fannie, Freddie shares dive on bailout fears -- NEW YORK (Reuters) - Investors dumped shares of Fannie Mae and Freddie Mac, driving them to their lowest levels in more than 18 years on mounting fears of a government bailout that would wipe out the stock value of the two U.S. housing finance giants. Investors panicked that a bailout may be imminent after The Wall Street Journal reported that Freddie Mac executives would meet with Treasury officials on Wednesday, possibly to get clarity about how the government will support the company. Anxiety about the companies has risen in recent days following a weekend report in Barron's newspaper that government officials may have no choice but to effectively nationalize Fannie and Freddie. (http://www.reuters.com/article/ousiv/idUSN2039370620080820)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:27:28 PM

NYT: Higher Costs Are Taking a Toll on Business -- Prices for goods purchased by American businesses surged more than expected in July and have jumped by nearly 10 percent over the last year — the sharpest increase since 1981. (http://www.nytimes.com/2008/08/20/business/economy/20econ.html?ref=business)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:27:58 PM

Mortgage applications near 8-year low -- A drop in the refinancing of existing mortgages spurs a downturn in applications. (http://money.cnn.com/2008/08/20/news/economy/mortgage_apps.ap/index.htm?postversion=2008082010)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:28:17 PM

Lehman Brothers 'facing further $3bn write-down' (http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4576133.ece)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:28:42 PM

Weak tax revenue fuels public finance fears City economists issue fresh warnings that the Chancellor is set to plunge deep into the red as downturn deepens (http://business.timesonline.co.uk/tol/business/economics/article4573095.ece)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:29:47 PM

Worst is yet to come in US warns Rogoff -- ONE of the US's giant banks is set to fail within the next few months, a former International Monetary Fund chief economist predicted yesterday. Kenneth Rogoff, who is an economics professor at Harvard University, also warned that the worst of the global financial crisis has yet to come. Rogoff told a conference in Singapore: "The US is not out of the woods. I think the financial crisis isADVERTISEMENTat the halfway point, perhaps. "I would even go further to say 'the worst is to come'." (http://business.scotsman.com/business/Worst-is-yet-to-come.4406371.jp)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:31:13 PM

FORTUNE: The next credit crunch (Our easy access to plastic is about to dry up - and with it our ability to fake living the good life)

(http://i.l.cnn.net/money/2008/08/18/news/economy/Colvin_next_credit_crunch.fortune/fortune_COL08_graphic.gif) We made it through the bursting of the Internet bubble and now the bursting of the real estate bubble. Next we may be approaching the end of the most worrisome bubble of all: the standard-of-living bubble. That conclusion comes from the latest data on credit card debt. It's growing fast, but the problem is bigger than that - and to understand what it means, we have to take a few steps back. *** But a big crunch is coming - and here's why. Credit card debt, like mortgage debt, gets bundled, securitized, and sold off by banks. Citigroup (C, Fortune 500), one of America's largest credit card lenders, just reported that it lost $176 million in the second quarter through securitizing such debt. That happens when the buyers of those securities observe rising delinquency rates and rising interest rates, and decide the debt is worth less than Citi thought. More generally, the amount of credit card debt that is securitized nationwide has plunged by more than half in the past five months because it's getting riskier. That means credit card issuers will be charging customers higher interest rates, and since the banks can't offload as much of the debt as before, they'll have less money to lend to cardholders

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:32:31 PM

BOSTON GLOBE: Tight Credit puts Brakes on Major Boston Building Redevelopment Project -- The $650 million redevelopment of the historic Filene's building - which Mayor Thomas M. Menino envisions as the new center of downtown Boston - is struggling because the developers have been unable to raise financing. An executive with knowledge of the project's financing said developers John B. Hynes III and Vornado Realty Trust have been battling an extremely tight credit market since they won city approvals to undertake the massive project almost one year ago. (http://www.boston.com/business/articles/2008/08/20/hole_in_the_funding/)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:33:31 PM

(http://img520.imageshack.us/img520/4909/wheel5do7.gif)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:34:29 PM

NYT: Dr. Doom -- On Sept. 7, 2006, Nouriel Roubini, an economics professor at New York University, stood before an audience of economists at the International Monetary Fund and announced that a crisis was brewing. In the coming months and years, he warned, the United States was likely to face a once-in-a-lifetime housing bust, an oil shock, sharply declining consumer confidence and, ultimately, a deep recession. He laid out a bleak sequence of events: homeowners defaulting on mortgages, trillions of dollars of mortgage-backed securities unraveling worldwide and the global financial system shuddering to a halt. These developments, he went on, could cripple or destroy hedge funds, investment banks and other major financial institutions like Fannie Mae and Freddie Mac. The audience seemed skeptical, even dismissive. As Roubini stepped down from the lectern after his talk, the moderator of the event quipped, "I think perhaps we will need a stiff drink after that." (http://www.nytimes.com/2008/08/17/magazine/17pessimist-t.html?_r=1&em=&oref=slogin&pagewanted=print)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:35:23 PM

U.S. Producer Prices Surge More Than Forecast in July -- Aug. 19 (Bloomberg) -- Prices paid to U.S. producers rose twice as much as economists had forecast in July, reflecting the jump in energy and commodity costs that has since started to wane. The 1.2 percent increase in the producer price index followed a 1.8 percent increase the prior month, the Labor Department said today in Washington. Costs were up the most in 27 years from a year before. So-called core prices that exclude fuel and food rose 0.7 percent after a 0.2 percent gain in June. (http://www.bloomberg.com/apps/news?pid=20601068&sid=aPdyhfUOdwaE&refer=economy)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:36:02 PM

London housing prices fall £21k in a month ... House sellers in London are finally coming to terms with the credit crunch, dramatically slashing the value of their homes ... (http://www.thisismoney.co.uk/mortgages/house-prices/article.html?in_article_id=450129&in_page_id=57&ct=5)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:37:18 PM

UK: Surge in repossession orders clogging up the courts ...
Courts are having to delay adoption hearings and personal injury claims to deal with a surge in mortgage repossessions. County courts in England and Wales issued 28,658 repossession orders between April and June as banks and building societies clamped down on borrowers who fell behind with mortgage payments. The volume of repossessions, up 24 per cent on the same period last year to the highest level since 1992, at the end of the last recession, has alarmed judges. On a single day this week, Judge Stephen Gerlis, a district judge at Barnet County Court, in North London, heard 45 repossession cases. His court has appealed for additional part-time judges to help with the caseload. "The only way that extra cases can be accommodated is by squeezing out less urgent ones," Judge Gerlis told The Times. "They have been steadily increasing for at least the past two years and are now accelerating at an alarming rate." (http://www.timesonline.co.uk/tol/money/property_and_mortgages/article4543323.ece)

Title: Re: Meltdown
Post by: BachQ on August 20, 2008, 02:37:57 PM

UK: Home repossessions rise 24% to 15-year high House repossession actions have soared to the highest level since the last recession, reflecting the increased burden placed on British borrowers as the cost of living soars. The number of mortgage repossession orders posted by courts in England and Wales between April and June this year rose by 24 per cent to 28,658, compared to the second quarter last year (http://business.timesonline.co.uk/tol/business/economics/article4538545.ece)

Title: Re: Meltdown
Post by: ezodisy on August 20, 2008, 02:46:03 PM

Quote from: Dm on August 20, 2008, 02:33:31 PM
(http://img520.imageshack.us/img520/4909/wheel5do7.gif)

haha there is a company called Wachovia? lol! That is exactly like one of the humourous company names my uncle used to make up and use for several of his slightly less-than-kosher businesses.

Quote from: Dm on August 20, 2008, 02:36:02 PM
London housing prices fall £21k in a month ... House sellers in London are finally coming to terms with the credit crunch, dramatically slashing the value of their homes ...
(http://www.thisismoney.co.uk/mortgages/house-prices/article.html?in_article_id=450129&in_page_id=57&ct=5)

It should drop further over the next 6-12 months too. Will be interesting to look into repossessions some time next year.

Title: Re: Meltdown
Post by: ezodisy on August 21, 2008, 12:50:15 AM

A new University of Michigan simulation shows that carbonaceous nanoparticles emitted by diesel engines and other combustion sources can get trapped in the lungs and inhibit the function of lung surfactant—a fluid that facilitates breathing. (http://www.greencarcongress.com/2008/08/unregulated-nan.html)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:43:57 AM

Quote from: ezodisy on August 21, 2008, 12:50:15 AM
A new University of Michigan simulation shows that carbonaceous nanoparticles emitted by diesel engines and other combustion sources can get trapped in the lungs and inhibit the function of lung surfactant—a fluid that facilitates breathing. (http://www.greencarcongress.com/2008/08/unregulated-nan.html)

"There is mounting evidence that very small particles have a greater negative impact on health than larger particles. Nanoparticles emitted by diesel engines and other combustion sources are a health concern because of both their size and the carcinogens with which they are associated. This problem is exacerbated by the fact that there is currently no effective regulatory control of these nanoparticles."

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:44:21 AM

Oil surges above $120 as tensions rise ... Oil prices vaulted beyond $120/bbl amid mounting geopolitical strains after Russia responded angrily to a missile shield agreement between the US and Poland and continuing tensions following the war in Georgia -
(http://www.ft.com/cms/s/0/3eb07042-6f6a-11dd-986f-0000779fd18c.html)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:44:49 AM

Banks face new wave of credit crisis pain ... Credit rating agency Standard & Poor's has warned that the return of a stable banking industry is at least a year away... (http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=450585&in_page_id=3&ct=5)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:45:10 AM

Housing collapse takes toll on Persimmon with first-half profits down 64% ... Housebuilder Persimmon reported a 64 percent fall in profits on Thursday and reduced its dividend to 5 pence per share from 18.5 pence due to tough first half trading and very difficult housing market conditions. (http://ibtimes.co.uk/articles/20080821/persimmon-first-half-profits-results.htm)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:46:05 AM

The Misery Index is set to make a comeback ... Life is not going to get much brighter in Britain any time soon. UK inflation is heading for 5% and expectations for future inflation are the highest in 16 years. Unemployment could top two million. David Stevenson explains how the 'Misery index' could reach its highest level since the middle of the early 1990s recession. (http://www.moneyweek.com/news-and-charts/economics/uk/britain-is-facing-a-bull-market-in-misery-22771.aspx)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:46:29 AM

Economic downturn means boost for Scotland's insolvency experts ...
ACCOUNTANTS and insolvency experts are recruiting extra staff to deal with the expected rise in the number of firms failing to cope with financial strictures induced by the credit crunch. (http://business.scotsman.com/bankinginsurance/Economic-downturn-means-boost-for.4402582.jp)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:47:14 AM

Texas Church hits natural gas in urban drilling frenzy ... Bishop Kenneth Spears always thought gifts from God came from above. He never imagined that the gifts would be hiding under his church in Fort Worth, Texas -- in the form of natural gas. There's an urban drilling bonanza here. Many are cashing in; others say it should never be allowed in cities: "We're guinea pigs." (http://www.cnn.com/2008/LIVING/wayoflife/08/20/urban.drilling/index.html)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:47:59 AM

Russia: There Is Life After Peak Oil

(http://europe.theoildrum.com/files/moscow2008_500.jpg)

Now, with market prices going up again, Russian oil has become immensely more valuable than it used to be at the time of the fall of the Soviet Union. The revenues in foreign currency could be used to rebuild the Russian economic infrastructure. The salaries of scientific researchers are back and even the Russian army has regained its former status of world power, as the recent events in Georgia show. *** And in the long run? The second oil peak is likely to be the final one. This time, another economic contraction such as the one of the 1990s wouldn't be enough to revitalize the old wells once again. Russia has also to worry about climate change: while it might mean that Russians can save on fur coats and hats, global warming may spell disaster for those Russian cities built mostly on permafrost. (http://europe.theoildrum.com/node/4366)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:48:34 AM

Lehman Brothers Struggling for Survival ... NEW YORK (Aug. 20) -The pressure is increasing on Lehman Brothers Holdings Inc. to come up with a plan to restore itself to financial health -- or possibly face the worst-case scenario of selling itself off in pieces and at bargain prices. The nation's fourth-biggest investment house is considered the most vulnerable amid the financial sector's continuing losses from the credit crisis. This week, Lehman has been the subject of analyst downgrades and projections that it will lose $4 billion in the third quarter. (http://money.aol.com/news/articles/_a/bbdp/lehman-brothers-struggling-for-survival/142489)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:50:09 AM

Lehman Bros, the 4th largest investment bank

(http://uk.reuters.com/charts/cr/?symbol=LEH.N&display=mountain&width=172&height=124&frequency=1day&duration=1year)

Lehman outlook darkens on failed sale report- LONDON (Reuters) -

The outlook for Lehman Brothers Holdings Inc darkened further on Thursday as a newspaper reported that an intended asset sale had collapsed and a Citigroup analyst forecast big losses for the group. The fourth-largest U.S. investment bank has taken a $7 billion hit from credit-related writedowns and losses since the start of the global crisis and is forecast to write down more. Lehman is concerned its capital cushion is not enough to absorb losses, and people close to the matter said this week it is considering selling at least a part of its asset management business. The Financial Times said Lehman's talks with China's biggest brokerage, CITIC Securities and state-owned Korea Development Bank (KDB) on a sale of up to half its shares had failed, fuelling speculation about the U.S. bank's efforts to raise more capital.

(continued) (http://www.reuters.com/article/ousiv/idUSLL72046220080821)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 10:50:55 AM

UK firms hike energy costs nearly 30 pct ... Scottish and Southern Energy is to increase its gas prices by 29.2 percent and E.ON is set to hike its gas prices 26 percent from Monday
(http://uk.reuters.com/article/businessNews/idUKLL09370320080821)

Title: Re: Meltdown
Post by: ezodisy on August 21, 2008, 10:54:36 AM

Quote from: Dm on August 21, 2008, 10:45:10 AM
Housing collapse takes toll on Persimmon with first-half profits down 64% ... Housebuilder Persimmon reported a 64 percent fall in profits on Thursday and reduced its dividend to 5 pence per share from 18.5 pence due to tough first half trading and very difficult housing market conditions.
(http://ibtimes.co.uk/articles/20080821/persimmon-first-half-profits-results.htm)

Yeah I read that this morning but funnily enough the share price rose almost 10% today. That's been happening a lot lately with the release of such reports as the horror is already factored in to the sp so when the results are announced it actually bounces. Lots of difficult times ahead though, definitely no resurgence yet.

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 11:39:57 AM

Quote from: ezodisy on August 21, 2008, 10:54:36 AM
That's been happening a lot lately with the release of such reports as the horror is already factored in to the sp so when the results are announced it actually bounces.

Exactly. Investors had been expecting a total evisceration of profits, but instead they are surprised by the less-than-catastrophic results.

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 11:40:41 AM

Foreclosures smack home prices - down 29.3% -- Cut-rate foreclosed homes being unloaded by banks wreaked havoc on the Bay Area's median price in July, sending it down nearly 30 percent to a level not seen in more than four years. A third of all existing homes sold in the nine-county region in July were foreclosed properties, the real estate research firm MDA DataQuick of San Diego reported Tuesday. A year earlier, just 4.2 percent of existing-home sales were foreclosed properties. The brisk business in bank-owned homes buoyed sales volume, especially in counties with a glut of foreclosures. "There is deep discounting in inland markets that have been slammed by foreclosures," said Andrew LePage, an MDA DataQuick analyst. (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/19/BUPK12DR3G.DTL&tsp=1&ref=patrick.net)

Title: Re: Meltdown
Post by: BachQ on August 21, 2008, 11:41:56 AM

Pemex July Oil Output Falls 12% as Cantarell Declines ... Aug. 21 (Bloomberg) -- Petroleos Mexicanos, the third- largest supplier of oil to the U.S., said production fell 12 percent in July from a year earlier as output declined at Cantarell, the world's largest offshore field. July's daily output fell to 2.782 million barrels, from 3.166 million barrels in the same month last year, the state- owned company, known as Pemex, said today on its Web site. In June, Pemex produced 2.839 million barrels.
(http://www.bloomberg.com/apps/news?pid=20601086&sid=ai6dbfOBvt.c&refer=news)

Title: Re: Meltdown
Post by: greg on August 22, 2008, 07:11:39 AM

Quote from: ezodisy on August 20, 2008, 02:46:03 PM
haha there is a company called Wachovia? lol! That is exactly like one of the humourous company names my uncle used to make up and use for several of his slightly less-than-kosher businesses.

It should drop further over the next 6-12 months too. Will be interesting to look into repossessions some time next year.

Wachovia is not nearly as bad as the bank "Fifth Third."

Title: Re: Meltdown
Post by: ezodisy on August 22, 2008, 09:06:40 AM

Quote from: Dm on August 21, 2008, 11:39:57 AM
Exactly. Investors had been expecting a total evisceration of profits, but instead they are surprised by the less-than-catastrophic results.

Persimmon up another 10% today. Anymore bad reports like this and it might just reach breakout ;D

It looks like Lehman could be taken out. In fact this is an excellent time for any sound company to acquire one of the many strugglers. Iceland, a fairly large UK supermarket, has put forth a bid for Woolworth's, a large UK chain retailer. The latter is in the shits at present and looks likely to be acquired. Blinkx likewise have made an opportunistic bid for Miva, another seemingly moribound business. There's quite a lot of this going around. I am waiting for someone to come in and scoop up Tanfield, the UK's leading manufacturer of electric vehicles and powered access platforms, which has lost some 95% of its share price of a year ago.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQdrdFsp.lQ4&refer=home

Title: Re: Meltdown
Post by: BachQ on August 22, 2008, 12:57:24 PM

Britain now home to more pensioners than children for first time ... Britain is now home to more pensioners than children for the first time in the country's history, official population figures have disclosed. (http://www.telegraph.co.uk/news/uknews/2598088/Britain-now-home-to-more-pensioners-than-children-for-first-time.html)

Title: Re: Meltdown
Post by: BachQ on August 22, 2008, 12:58:13 PM

Economy at its weakest since 1992 LONDON (Reuters) - The UK economy failed to expand in the second quarter of this year for the first time since the slump of the early 1990s and reinforcing expectations interest rates will have to fall to avoid a painful recession.
(http://uk.reuters.com/article/topNews/idUKLM52871020080822)

Title: Re: Meltdown
Post by: BachQ on August 22, 2008, 12:58:44 PM

Personal debt exceeds Britain's GDP ... "If the property market and economy continue to weaken, the current levels of personal debt will become unsustainable and there will be a marked increase in personal insolvencies." (http://itn.co.uk/news/b7276faa0a92618f97aedfeb8c37fc05.html)

Title: Re: Meltdown
Post by: BachQ on August 22, 2008, 12:59:35 PM

The Economist: Still bleeding... The lifeblood of financial institutions—confidence—is in short supply. Five months after the Bear Stearns debacle, and a month after America's Treasury unveiled unprecedented steps to support the mortgage market, some whose share prices had only recently hinted at recuperation are again looking dangerously anaemic.
(http://www.economist.com/finance/displaystory.cfm?story_id=11985948)

Title: Re: Meltdown
Post by: sound67 on August 22, 2008, 01:04:08 PM

Dm, based on your avatar, you're a natural bleeder.

Thomas

Title: Re: Meltdown
Post by: BachQ on August 22, 2008, 01:04:45 PM

http://www.ogfj.com/display_article/336436/82/ARTCL/none/none/1/Matt-Simmons-working-on-energy-solutions/

Matt Simmons working on energy solutions

(http://images.pennnet.com/articles/ogfj/cap/cap_mattsimmons01.jpg)

EDITOR'S NOTE: Matthew R. Simmons is chairman and CEO of Simmons & Company International, one of the largest investment banks serving the energy industry. He is also a prominent oil industry insider, having served as energy adviser to President George W. Bush, and is a member of the National Petroleum Council and the Council on Foreign Relations. In 2005, he authored the book Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, which examined oil reserve decline rates and the unreliability of Middle East oil reserves. Simmons recently sat down with Oil & Gas Financial Journal to discuss some of his ideas on energy.

OIL & GAS FINANCIAL JOURNAL: As an oil industry insider, you shocked the world with your book about declining oil reserves and the crisis you believe we are headed towards. Now, it seems more people are coming around to your view that oil production either has peaked or soon will. What do you say to those who believe we have plenty of oil and gas to meet demand for the foreseeable future?

MATT SIMMONS: Well, I hope they're right and I'm wrong, but our research suggests otherwise. Many industry analysts are overly optimistic about how long existing fields will last and the prospects for new discoveries. They also have the view that technology will somehow extend the life of old fields and open up new sources of production – oil shale and tar sands, for example. In time this may indeed happen, but it is doubtful that technology will advance quickly enough to offset current production declines.

OGFJ: Is there anything on the horizon that could replace hydrocarbons as a primary fuel source?

SIMMONS: To answer your question properly, you really need to break it down into three parts. Is there anything to replace oil, is there anything to replace natural gas, and are there new ways to generate electricity? Those are literally three totally different problems. That's like asking your doctor if there's anything to combat cancer and asthma and tuberculosis.

OGFJ: Would you like me to rephrase the question then?

SIMMONS: No, no. It's a damn good question, but the answer has three parts. On the oil front, when we strip the natural gas liquids out of oil, you are left with black crude. This effectively creates a little bit of asphalt at the bottom of the barrel. This can be refined into 98% of the liquids we use for transportation. So in answer to your question about a replacement for this, the easy and simple answer is no.

We now have a terrible tragedy on our hands with this love affair we have with ethanol. It is one of the most cruel and vicious scams you can imagine. It's a very energy-intensive product to create, and what you end up with is a very poor source of energy. In the future, if historians go back and look at all the snake-oil energy sources we created in this era, ethanol will be right at the top.

OGFJ: But what about ethanol from sugar cane? Haven't the Brazilians had a lot of success with this?

SIMMONS: Sugar cane works as long as you have refineries right next to the fields, and you have labor coming in by foot, and you use machetes to whack off the cane. As long as you don't use more energy harvesting and refining the sugar cane than you create with the ethanol, you're okay. The minute you start plowing under the sugar cane to grow a new crop, you're in dangerous territory.

But there is some interesting work being done with other forms of energy, such as fuel from recycling centers, which is a polite term for garbage dumps. And what they're finding is that when they sort all this stuff out, they're really creating some good, sustainable fuels. But, at the rate the world is using energy, we could go through a hundred years of garbage in no time at all. Still, there is some excellent research going on with creating energy from switchgrass, wood chips, and a lot more. You need a certain type of enzyme to break down the cellulosity, and each of those requires a different enzyme. So DuPont and Monsanto and others are really working hard to find out how to create the right enzymes. But, for years I've had a cardinal rule and that rule is not to invest in a new invention until it's been invented. So I don't think we should bank on a great new energy source that's yet to be invented.

OGFJ: What about other transportation fuels?

SIMMONS: Toyota recently sold its one-millionth Prius [the hybrid gasoline/battery-powered car]. That is remarkable. However, it took Toyota 10 years to sell a million Priuses, and it took them 10 years to create the Prius. And there has never been anybody in the automobile business that's been more innovative or efficient than Toyota. But we have 900 million vehicles on the road today. If it took Toyota a decade to put just one million on the road, we have a problem. Don't hold your breath that this is the answer either.

OGFJ: Don't you think that things are changing more rapidly today though? General Motors recently announced it is closing down three plants that primarily build pickup trucks and large SUVs. Auto dealers have a huge inventory of these vehicles that they can't sell even with deep discounts. People who once might have purchased a Suburban or an Expedition are now buying smaller more fuel-efficient models. All this seems to have happened as the retail price of gasoline has approached $4 a gallon.

SIMMONS: That's true, but I think it's going to take a long, long time before that makes a significant difference in our fuel consumption. Plus, the Chinese are now buying SUVs as a symbol of their prosperity.

We don't have a lot of time to debate what we're going to do because our supply of oil has either flattened out or is going flat. We have very little cushion left in our gasoline and diesel supplies around the United States. And if you've been noticing the aftermath of the tragedy in China [the deadly earthquake in Sichuan province], there have been massive fuel shortages, mostly in rural areas and outlying provinces. There is no cushion in China either, and lately they've gotten real serious about conserving energy. Most of the big stations that service trucks in Beijing, for instance, are only open two hours a day. We may not like to think about it, but this could happen in the United States, too.

OGFJ: So that's the situation for oil. What about natural gas and electricity?

SIMMONS: This summer, they're going to have some problems with electricity outages in the Middle East because they're having trouble getting the infrastructure built. With all the construction going on, particularly in the Gulf states, and the need for air conditioning, they're burning an awful lot of oil. They use oil for power generation and air conditioning, which is not a very efficient use of oil. That is going to take as much as a million barrels per day off the market. That is oil that won't be exported, and nobody seems to be paying much attention to this change in the market.

(continued) CLICK HERE

(http://images.pennnet.com/articles/ogfj/cap/cap_mattsimmons02.jpg) (http://www.ogfj.com/display_article/336436/82/ARTCL/none/none/1/Matt-Simmons-working-on-energy-solutions/)

Title: Re: Meltdown
Post by: BachQ on August 25, 2008, 04:02:07 PM

Mortgage Delinquencies for Loans in Securities Soar, S&P Says ...Aug. 21 (Bloomberg) -- Late payments on U.S. home loans underlying private mortgage bonds from 2005, 2006 and 2007 continue to soar, according to Standard & Poor's. (http://www.bloomberg.com/apps/news?pid=20601206&sid=ahO6nANYU7hM&refer=realestate)

Title: Re: Meltdown
Post by: BachQ on August 25, 2008, 04:02:41 PM

Arizona Public Service Co. is introducing a new loan program that would allow customers to install solar panels on their houses at virtually no up-front charge. (http://www.azcentral.com/arizonarepublic/news/articles/2008/08/22/20080822biz-apssolar0822.html)

Title: Re: Meltdown
Post by: BachQ on August 25, 2008, 04:03:38 PM

India's Diesel usage up by 35% CHENNAI: The repeated scarcity of diesel in the city and suburban areas is now becoming a cause of concern for all. With the shortage being felt in many of the 330 fuel outlets in the Chennai Metropolitan Area, fuel dealers are now blaming the oil companies for reduction in the supply. (http://timesofindia.indiatimes.com/Chennai/Diesel_usage_up_by_35/articleshow/3395003.cms)

Title: Re: Meltdown
Post by: BachQ on August 25, 2008, 04:04:41 PM

New peak oil film on CBCNewsworld ... Shot in 13 countries over a four-year period, Oil Apocalypse Now? reveals the myths and conspiracy theories surrounding the future of our world's oil supplies. (http://www.energybulletin.net/node/46332)

Title: Re: Meltdown
Post by: BachQ on August 25, 2008, 04:05:28 PM

Scotsman: Opec set to cut oil supplies after weakening demand sparks sharp price fall ... OIL cartel Opec is expected to reduce supplies next month following a sharp fall in crude prices on Friday. The value of US crude fell 5.5% to $114.59 a barrel – the biggest drop in percentage terms in one day since December 2004. In London, Brent crude dropped $6.24 to $113.92 a barrel.
(http://business.scotsman.com/business/Opec-set-to-cut-oil.4421625.jp)

Title: Re: Meltdown
Post by: BachQ on August 25, 2008, 04:06:24 PM

itn.co.uk: Windfall tax on fuel profits urged ... (http://itn.co.uk/news/storyf9ddcb2819fd819e22438060c8828bcb.jpg) Gordon Brown has faced renewed calls to impose a windfall tax on the record profits being enjoyed by energy companies to help Britons cope with rising fuel costs. An opinion poll has found widespread support for the move - 67 per cent of those surveyed 'strongly agreed' or 'agreed' with the proposal. The YouGov poll showed 57% of Tory voters backed the plan, indicating widespread anger at the profits being made by oil and gas firmsThe YouGov poll showed 57 per cent of Tory voters backed the plan, indicating widespread anger at the profits being made by oil and gas firms. (http://itn.co.uk/news/03d46dd5d95dfce06ae2d246336d6c79.html)

Title: Re: Meltdown
Post by: BachQ on August 25, 2008, 04:07:00 PM

UK Housing giant suffers massive land hit ... Taylor Wimpey will write down the value of its UK land by a massive £550m this week as the credit crunch continues to hammer the building industry...
(http://img.thisismoney.co.uk/i/pix/2008/07/houseES0207_203x150.jpg) (http://www.thisismoney.co.uk/investing-and-markets/article.html?in_article_id=450827&in_page_id=3&ct=5)

Title: Re: Meltdown
Post by: BachQ on August 25, 2008, 04:07:38 PM

Economist: Business and water: Running dry ... Everyone knows industry needs oil. Now people are worrying about water, too (http://www.economist.com/business/displayStory.cfm?%3Cbr%20/%3Esource=hptextfeature&story_id=11966993)

Title: Re: Meltdown
Post by: BachQ on August 26, 2008, 07:24:21 PM

FOXBusiness: Home Prices Take a Record Tumble, falling over 15% ... CLICK HERE (http://www.foxbusiness.com/story/markets/economy/home-prices-drop--second-quarter/)

Title: Re: Meltdown
Post by: BachQ on August 26, 2008, 07:25:04 PM

Ford slips to 22-year low as investors remain wary ... Shares of Ford Motor Co. touched their lowest price in more than 22 years Monday as investors remained wary of the struggling Detroit automaker.Deutsche Bank analyst Rod Lache said continued weak conditions contributing to July's "very poor" auto sales results still persist.
(http://www.businessweek.com/ap/financialnews/D92PFU501.htm)

Title: Re: Meltdown
Post by: BachQ on August 26, 2008, 07:25:29 PM

Financial Times: Bankers caught between hope and despair ... More than a year into the credit crunch, the world's central bank chiefs are still struggling to understand the impact of the squeeze on the global economy
(http://www.ft.com/cms/s/0/cd5c3c0e-721c-11dd-a44a-0000779fd18c.html)

Title: Re: Meltdown
Post by: BachQ on August 26, 2008, 07:26:12 PM

independent.co.uk: Job losses, homelessness, bankruptcy ... the outlook's grim but just be glad we're not Italian... All agree we're close to recession. The revised GDP figures released last Friday pretty much confirmed that two successive quarters of negative growth – where the economy shrinks, which is the conventional definition of "recession" – cannot be far away. In case you hadn't noticed, the economy ground to a halt in the second quarter of the year, and almost every leading indicator suggests that activity will slow further over the next year. But how bad will things get? And what will be the consequences? (http://www.independent.co.uk/news/business/comment/economic-view-job-losses-homelessness-bankruptcy--the-outlooks-grim-but-just-be-glad-were-not-italian-906784.html)

Title: Re: Meltdown
Post by: BachQ on August 26, 2008, 07:27:20 PM

independent.co.uk: Wall Street fears the worst as US housing sales continue to fall Wall Street will this week brace itself for further disappointing figures from the US housing arena when numbers for sales of existing and new homes are released on Monday and Tuesday. After economic data last week showing the UK on the brink of recession, attention will be on the US, with minutes from the Federal Reserve's interest rate-setting committee and GDP numbers also due to be released. (http://www.independent.co.uk/news/business/news/wall-street-fears-the-worst-as-us-housing-sales-continue-to-fall-906778.html)

Title: Re: Meltdown
Post by: BachQ on August 26, 2008, 07:27:49 PM

independent.co.uk: Bernanke says gale force financial storm is still blowing ... The credit crisis has created the most challenging economic and monetary policy environment in recent memory, the chairman of the US Federal Reserve has admitted. "Although we have seen improved functioning in some markets, the financial storm that reached gale force some weeks before our last meeting here in Jackson Hole has not yet subsided, and its effects on the broader economy are becoming apparent in the form of softening economic activity and rising unemployment. Add to this mix a jump in inflation, in part the product of a global commodity boom, and the result has been one of the most challenging economic and policy environments in memory."
(http://www.independent.co.uk/news/business/news/bernanke-says-gale-force-financial-storm-is-still-blowing-906582.html)

Title: Re: Meltdown
Post by: BachQ on August 26, 2008, 07:28:14 PM

independent.co.uk:Backlog of US homes for sale is worst on record ... The number of unsold homes on the market in the United States is at levels not seen for at least 40 years, and prices are continuing to slide, according to a disheartening new survey. (http://www.independent.co.uk/news/business/news/backlog-of-us-homes-for-sale-is-worst-on-record-908689.html)

Title: Re: Meltdown
Post by: BachQ on August 26, 2008, 07:28:36 PM

Economy 'as bad as the Seventies'... Dire warning from Bank of England's deputy governor (http://www.independent.co.uk/news/business/news/economy-as-bad-as-the-seventies-908634.html)

Title: Re: Meltdown
Post by: BachQ on September 02, 2008, 05:26:37 PM

Der Spiegel: Tiny Turbines May Have a Bright Future ... "They are small and look more like art than innovation. But the mini-windmills built by a British company could soon be on roofs across Europe and the US -- if German energy giant RWE has its way."

(http://www.spiegel.de/img/0,1020,1287787,00.jpg) (http://www.spiegel.de/international/business/0,1518,575877,00.html)

These represent the "newest generation" of high-tech wind turbines in that:

(1) they are virtually silent;
(2) they do not require long blades to catch the wind;
(3) they spin no matter which direction the wind is blowing; and
(4) they generate up to 10,000 kilowatt hours of electricity a year, enough to supply two low-energy homes, or a 20 person office, with power.

Title: Re: Meltdown
Post by: ezodisy on September 03, 2008, 01:29:34 AM

Quote from: Dm on September 02, 2008, 05:26:37 PM
Der Spiegel: Tiny Turbines May Have a Bright Future ... "They are small and look more like art than innovation. But the mini-windmills built by a British company could soon be on roofs across Europe and the US -- if German energy giant RWE has its way."
(http://www.spiegel.de/international/business/0,1518,575877,00.html)

That is very cool. I had a look at the company which designs these, Quiet Revolution, and it's a shame they're not publicly listed as they seem to be growing very fast. Very elegant turbines, looks like a certain success within richer forward-looking countries.

Title: Re: Meltdown
Post by: ezodisy on September 03, 2008, 11:38:56 AM

Dm, you should have told me you have a website :P :-*

http://www.gloomboomdoom.com/portalgbd/homegbd.cfm

Title: Re: Meltdown
Post by: ezodisy on September 03, 2008, 11:54:02 AM

Sept. 3 (Bloomberg) -- OAO Gazprom, Russia's natural-gas exporter, plans a joint venture with Nigerian National Petroleum Corp. to develop energy projects in Africa.

Gazprom Chief Executive Alexei Miller and his Nigerian counterpart, Abubakar Yar'Adua, signed a memorandum of understanding at a Moscow meeting, the Russian company said in an e-mailed statement today. The accord covers cooperation in the exploration, production and transportation of oil and gas.

``It's a general MOU, an agreement in principle welcoming Gazprom's interest to invest in our oil and gas sector,'' said Levi Ajuonuma, spokesman for the Nigerian state oil company, known as NNPC. ``The specifics will be worked out later.''

State-run Gazprom said in June that the two companies had agreed to construct a gas pipeline network in Nigeria and had discussed a gas link across the Sahara. They may also build electricity assets in Nigeria, Gazprom said today.

Nigeria, Africa's second-biggest crude exporter after Angola, has the continent's biggest reserves of more than 30 billion barrels of crude and 187 trillion cubic feet of gas, according to official figures.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPBJOFAtpe34

Title: Re: Meltdown
Post by: BachQ on September 03, 2008, 04:01:33 PM

Quote from: ezodisy on September 03, 2008, 01:29:34 AM
That is very cool. I had a look at the company which designs these, Quiet Revolution, and it's a shame they're not publicly listed as they seem to be growing very fast. Very elegant turbines, looks like a certain success within richer forward-looking countries.

They are extremely cool (click here for the company website featuring the QR5, pictured above... (http://www.quietrevolution.co.uk/qr5.htm)). Unfortunately, at €30,000 per turbine, they are still way too expensive. :'(

Title: Re: Meltdown
Post by: BachQ on September 03, 2008, 04:02:28 PM

Quote from: ezodisy on September 03, 2008, 11:38:56 AM
Dm, you should have told me you have a website :P :-*

http://www.gloomboomdoom.com/portalgbd/homegbd.cfm

LOL ...... :D

Title: Re: Meltdown
Post by: ezodisy on September 04, 2008, 03:06:45 AM

Demand for crude will increase 1 percent in 2009, the slowest growth in seven years, according to an Aug. 15 OPEC forecast. (http://www.bloomberg.com/apps/news?pid=20601087&sid=awnDSA4ipYLo&refer=home)

Title: Re: Meltdown
Post by: BachQ on September 04, 2008, 05:45:47 PM

Russian Oil Output Fell in August, Continuing Decline ... Sept. 2 (Bloomberg) -- Russia's oil production declined in August as companies struggled with costs and maturing fields, bringing the world's second-largest crude exporter closer to its first annual drop in output since 1998.

(http://www.bloomberg.com/apps/news?pid=20601072&sid=a9DMveQwfxVU&refer=energy)

Quote from: ezodisy on September 03, 2008, 11:54:02 AM
Sept. 3 (Bloomberg) -- OAO Gazprom, Russia's natural-gas exporter, plans a joint venture with Nigerian National Petroleum Corp. to develop energy projects in Africa.

Gazprom Chief Executive Alexei Miller and his Nigerian counterpart, Abubakar Yar'Adua, signed a memorandum of understanding at a Moscow meeting, the Russian company said in an e-mailed statement today. The accord covers cooperation in the exploration, production and transportation of oil and gas.

``It's a general MOU, an agreement in principle welcoming Gazprom's interest to invest in our oil and gas sector,'' said Levi Ajuonuma, spokesman for the Nigerian state oil company, known as NNPC. ``The specifics will be worked out later.''

State-run Gazprom said in June that the two companies had agreed to construct a gas pipeline network in Nigeria and had discussed a gas link across the Sahara. They may also build electricity assets in Nigeria, Gazprom said today.

Nigeria, Africa's second-biggest crude exporter after Angola, has the continent's biggest reserves of more than 30 billion barrels of crude and 187 trillion cubic feet of gas, according to official figures.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aPBJOFAtpe34

IOW, Russia continues to increase its stranglehold on resources available to Europe .....

Title: Re: Meltdown
Post by: ezodisy on September 04, 2008, 11:13:35 PM

Quote from: Dm on September 04, 2008, 05:45:47 PM
IOW, Russia continues to increase its stranglehold on resources available to Europe .....

Indeed. It seemed likely enough to happen as that part of the world is so energy-rich, and will no doubt irk US interests as they play (or try to) a very large part over there. There is an excellent article which was pointed out to me by someone very knowledgeable about this stuff. I'll copy/paste it below.

Russians grab monopoly of Nigerian gas

An unprecedented and secretive US $20 Bn deal has been forged that gives Gazprom and Suntera Resources unheard of control of Nigeria's gas resources.

The companies have signed contracts with the government that not only cast a shadow over Nigeria's new claims for transparency but also its real ambition to use gas for the benefit of Nigeria, while also landing a blow against independence of future gas supplies to Europe.

Under its new Gas MasterPlan three central gas processing hubs will be set up in Nigeria to control gas for the whole country. A Memorandum of Understanding (MoU) has now been signed, giving Gazprom control of two of these and Indo-Russian joint venture Suntera Resources control of the other.

The MoU gives the firms the construction rights to all related infrastructure and the rights to negotiate for access to gas with all producers. Gazprom will also be awarded a series of gas rich blocks.

It will take control of the hub in Calabar which will also provide the base for the newly resurgent Trans-Sahara gas pipeline which will provide an outlet for Nigerian gas in Algeria and then by pipeline on to Europe. The second hub will be located near Eni's existing Obiafu gas treatment plant which already provides feed gas for the Nigeria LNG project in Bonny. The third hub, which goes to Suntera, will be at Escravos which already acts as the source for the West Africa Gas Pipeline.

A major storm is now brewing within Nigeria, headed by those who feel that, once again, the family silver is being sold off without regard to the country's future.

For while the actual strategy is the same as that outlined in the recent gas roadshow held by the government it is the opaqueness of the deals that is being questioned.
The roadshow was only held recently and, with funding of $20-30 Bn needed, it is felt that most major companies have not had time to finalise their own proposals. In addition, particularly for a government that is supposed to be battling the old ways of corruption and insider-dealing, there has been no competition and no transparency in the deal. Without competition and details of exactly what Nigeria has promised, it appears that once again an alliance may have been forged that may not be benefiting the whole of Nigeria.

It appears that major western companies were unwilling to go ahead with the project without legal guarantees. But this is Gazprom and Suntera's first foray into Nigeria - although there have been rumours and promises for a long time. Such a major entry bears a remarkable similarity to the promises made by several Asian firms three years ago when they promised to build billions of pounds' worth of infrastructure in return for the award of promising offshore blocks, infrastructure that has yet to appear.

Finally the deal will also heighten gloom in Europe for those worried about Russia and the independence of gas supplies. One of the hopes had been that gas from Africa could counteract Russia's control of supply. These hopes are being dashed month by month.

Gazprom has now taken control of gas in the country which has the world's seventh largest reserves. It has taken control of the Trans-Sahara pipeline set to provide Europe with gas from the Gulf of Guinea. In recent months its presence has been growing in the Algerian and Libyan gas markets and it is also trying to muscle its way into LNG in Equatorial Guinea. This is something that Suntera Resources, a joint venture between Russia's Itera and India's Sun Group, is also trying to do. Suntera also has a large stake in UK independent BowLeven which has gas assets in Cameroon.

Currently Nigeria puts its proven gas reserves at 185 Tcf, although the government believes there are another 200 Tcf yet to be found.

Title: Re: Meltdown
Post by: Sean on September 07, 2008, 04:32:47 PM

With oil back to around $113/ barrel how to experts see prices over the next few years? Is the world in peak oil? What happens if prices glide up again? How much oil really is in Iraq for Western interests to loot to keep us afloat?

Title: Re: Meltdown
Post by: ezodisy on September 07, 2008, 10:59:03 PM

Quote from: Sean on September 07, 2008, 04:32:47 PM
With oil back to around $113/ barrel how to experts see prices over the next few years? Is the world in peak oil? What happens if prices glide up again? How much oil really is in Iraq for Western interests to loot to keep us afloat?

down to $100, probably a floor, then back up. Yesterday I watched an interview with Jean Clalude Gandur, CEO of Addax Petroleum, now that is a clever man....His company is deeply rooted in Nigeria and he expects oil prices to go only one way in the medium/long term. There are other places than Iraq mate.

Title: Re: Meltdown
Post by: Sean on September 08, 2008, 12:12:10 AM

I read Nigeria has 30 billion but Iraq possibly 300 billion...? Does anyone know?

Title: Re: Meltdown
Post by: ezodisy on September 08, 2008, 12:17:30 AM

http://www.eia.doe.gov/cabs/index.html

Title: Re: Meltdown
Post by: BachQ on September 09, 2008, 03:19:30 AM

Hi, Sean. Welcome back!

Quote from: Sean on September 07, 2008, 04:32:47 PM
Is the world in peak oil?

No one really knows. Oil production has been following an "undulating plateau" since May, 2005, and is projected to continue this way until 2010. Most geologists feel 2010 will be the year of peak oil (this is a chart of oil + natural gas liquids).

(http://www.theoildrum.com/files/PU200808_Fig3b_0.png)

Since 2004, world crude oil production has been flat @ 74 mbpd.

(http://www.theoildrum.com/files/Oildrum_oilwatch_july_2008_4.png) (flat @ 74mbpd)

Title: Re: Meltdown
Post by: BachQ on September 09, 2008, 03:26:11 AM

Quote from: Sean on September 07, 2008, 04:32:47 PM
What happens if prices glide up again?

Crude oil prices have been increasing @ 30%/yr on average:

(http://farm4.static.flickr.com/3212/2741726929_26755beb20.jpg?v=0)

Right now, we're headed down to about $105/bbl, but this will be followed by an increase again as the cycle continues. A steep rise in prices is always followed by a subsequent decline in prices, as oil gradually ratchets upward in price.

In general, commodity prices are cyclical and move in unison:

(http://www.investmentpostcards.com/wp-content/uploads/2008/09/7-sep-16.jpg)

Title: Re: Meltdown
Post by: sound67 on September 09, 2008, 03:33:26 AM

A friend of mine works in the oil industry, as a "problem solver". He agrees that our generation - meaning 30- and 40-somethings, will see the end of oil. "And then, we in the West will be finished", he adds. :-[

Thomas

Title: Re: Meltdown
Post by: ezodisy on September 09, 2008, 03:38:56 AM

Quote from: sound67 on September 09, 2008, 03:33:26 AM
"And then, we in the West will be finished", he adds. :-[

Thomas

not sure where your friend is from, but I would venture to add that "in the west" only applies to the northern territory between the Atlantic and Pacific oceans.

Title: Re: Meltdown
Post by: Sean on September 09, 2008, 04:45:14 PM

Hi Dm and thanks for forwarding those interesting charts. The present years, say from 2006-2012 it seems are the top of the curve.

Title: Re: Meltdown
Post by: Don on September 09, 2008, 04:56:02 PM

Quote from: sound67 on September 09, 2008, 03:33:26 AM
A friend of mine works in the oil industry, as a "problem solver". He agrees that our generation - meaning 30- and 40-somethings, will see the end of oil. "And then, we in the West will be finished", he adds. :-[

Thomas

Why be so pessimistic? Alternative energy sources could well solve the problem.

Title: Re: Meltdown
Post by: Lethevich on September 09, 2008, 05:55:59 PM

Quote from: Don on September 09, 2008, 04:56:02 PM
Why be so pessimistic? Alternative energy sources could well solve the problem.

Without oil he will lose his high-paying job - a disaster for him ;D I am sure that people who work for wind turbine and solar cell companies are much more upbeat :)

Title: Re: Meltdown
Post by: M forever on September 09, 2008, 07:08:41 PM

Quote from: sound67 on September 09, 2008, 03:33:26 AM
A friend of mine works in the oil industry, as a "problem solver". He agrees that our generation - meaning 30- and 40-somethings, will see the end of oil. "And then, we in the West will be finished", he adds. :-[

So, how is he going to solve that problem?

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on September 09, 2008, 11:46:03 PM

Quote from: sound67 on September 09, 2008, 03:33:26 AM
A friend of mine works in the oil industry, as a "problem solver". He agrees that our generation - meaning 30- and 40-somethings, will see the end of oil. "And then, we in the West will be finished", he adds. :-[

And will people not in the West not be finished?

Title: Re: Meltdown
Post by: BachQ on September 10, 2008, 03:13:37 AM

Quote from: Don on September 09, 2008, 04:56:02 PM
Alternative energy sources could well solve the problem.

I wish.

One barrel of oil has the energy equivalent of 12 men working all year, 25,000 man-hours of labor. No other source of energy comes close to this. The chart below demonstrates that oil is nothing short of a miraculous source of energy for which there is no substitute.

Oil Equivalency Chart

(http://www.spectrum.ieee.org/images/jan07/images/ncmo01.gif)

The world annual consumption of oil is roughly 1 cubic mile of oil. A cubic mile of oil has energy equivalent to:

-- 4 Three Gorges dams, cranking for 50 years.
-- 32850 1.65 megawatt wind turbines, cranking for 50 years (100% capacity factor).
-- 91,250,000 2.1 kW solar PV installations, for 50 years.
-- 104 500 megawatt coal-fired electric plants, for 50 years.
-- 52 1.1 gigawatt nuclear electric plants, for 50 years.

Title: Re: Meltdown
Post by: BachQ on September 10, 2008, 03:21:51 AM

Quote from: ezodisy on September 09, 2008, 03:38:56 AM
not sure where your friend is from, but I would venture to add that "in the west" only applies to the northern territory between the Atlantic and Pacific oceans.

With the exception of Eskimos, Saharan nomads, and similar tribal groups, every society is highly dependent on oil for its energy infrastructure. Obviously this applies to Western "first world" nations (North America; Europe), but also to Australia, Asia, Middle East, much of Africa, and South America.

Even "third world" nations rely on petroleum for agriculture (running equipment; fertilizer).

Title: Re: Meltdown
Post by: Sean on September 10, 2008, 03:28:13 AM

Good post there Dm: this is the reality underlying the present international affairs situation.

Quote from: Dm on September 10, 2008, 03:13:37 AM
I wish.

One barrel of oil has the energy equivalent of 12 men working all year, 25,000 man-hours of labor. No other source of energy comes close to this. The chart below demonstrates that oil is nothing short of a miraculous source of energy for which there is no substitute.

Oil Equivalency Chart

(http://www.spectrum.ieee.org/images/jan07/images/ncmo01.gif)

The world annual consumption of oil is roughly 1 cubic mile of oil. A cubic mile of oil has energy equivalent to:

-- 4 Three Gorges dams, cranking for 50 years.
-- 32850 1.65 megawatt wind turbines, cranking for 50 years (100% capacity factor).
-- 91,250,000 2.1 kW solar PV installations, for 50 years.
-- 104 500 megawatt coal-fired electric plants, for 50 years.
-- 52 1.1 gigawatt nuclear electric plants, for 50 years.

Title: Re: Meltdown
Post by: ezodisy on September 14, 2008, 11:40:00 PM

Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history. (http://www.bloomberg.com/apps/news?pid=20601087&sid=a0iuIemBxDPY&refer=home)

Title: Re: Meltdown
Post by: BachQ on September 15, 2008, 03:12:54 AM

Quote from: ezodisy on September 14, 2008, 11:40:00 PM
Lehman Brothers Holdings Inc., the fourth-largest U.S. investment bank, succumbed to the subprime mortgage crisis it helped create in the biggest bankruptcy filing in history. (http://www.bloomberg.com/apps/news?pid=20601087&sid=a0iuIemBxDPY&refer=home)

Staggering. Simply staggering. I NEVER thought the Fed would allow Lehman to fail. I'm speechless.

This Yahoo News headline says it all:

Wall Street Meltdown: Lehman Files for Record Bankruptcy, Merrill Lynch is Sold, AIG Seeks Capital (http://us.lrd.yahoo.com/_ylt=ApIlbZ2kLCNvc_8FQvQla4i7YWsA/SIG=11r2046al/**http%3A//biz.yahoo.com/ap/080915/financial_meltdown.html)

Title: Re: Meltdown
Post by: ezodisy on September 15, 2008, 04:19:30 AM

Yeah things are looking very dim, I think we're going to see more bad news to come. The UK's biggest mortgage lender, HBOS, is down 25% today, with an intraday low of 35%, and the US hasn't even opened yet.

In the biggest reshaping of the financial industry since the Great Depression, two of Wall Street's most storied firms, Merrill Lynch & Co. and Lehman Brothers Holdings Inc., headed toward extinction. (http://www.bloomberg.com/apps/news?pid=20601103&sid=abVpg8xJDMWk&refer=us)

Bloomberg is good for this sort of news but they have the most annoying TV anchors, an all-female crew who are loud, aggressive and rushed. They really need some calm men to host that channel.

Title: Re: Meltdown
Post by: Mark on September 15, 2008, 04:40:38 AM

The scariest thing for me about all of this is that a City 'insider' I know in London said to expect major shocks this year when I chatted to him last December. I didn't believe him at the time ...

Title: Re: Meltdown
Post by: ezodisy on September 15, 2008, 08:56:46 AM

well someone in that position would be more cognisant of trends and so on than people just reading daily newspapers. I think a lot of people saw it coming. For the past few months there's been a lot of talk in papers and journals about a major US bank going under and today it became reality. Apparently more trouble is on the way from the likes of AIG and Washington Mutual among others

Title: Re: Meltdown
Post by: ezodisy on September 15, 2008, 09:48:51 AM

It ended the day down 17.6% off a low of 36%. Worse to come over the next few days, with another "Sell" broker note released this afternoon. Worth reading if you're interested in shorting and stuff.

(http://www.marketoracle.co.uk/images/2008/hbos-15-9-08.gif)

Following on from the collapse of Lehman Brothers during the weekend, the financial sector was expected to be hit hard and to drag the overall market lower by some 5%. Whilst most of the big UK banks experienced falls in the order of 15%, Britain's biggest mortgage bank, Halifax Bank of Scotland (HBOS) crashed by over 30% as clearly hedge funds targeted the bank as a candidate for financial collapse, along the lines of Northern Rocks bank bust in Sept 07.

This is not the first time that amidst a fast breaking banking crisis that HBOS has been specifically targeted by hedge funds, back in March of this year following the bailout of Bear Stearns into the arms of JP Morgan, HBOS experienced a similar crash in share prices in the face of hedge fund short selling. At the time this raised statements from regulators warning speculators against such action. The Bank of England and the FSA took the unprecedented step of issuing statements that categorically denied the rumours. The FSA went further that it had launched an investigation into the trading activity surrounding HBOS and other banks this morning and accused traders of 'market abuse by spreading false rumours to profit from short-selling.

The assault on HBOS forced the company to release the statement "HBOS is a strong financial institution. The group's capital ratio - a core measure of financial strength - is the strongest of the major UK banks."

The Bank of England took immediate action during the morning to release £5 billion in emergency funding which was soon lapped up by distressed banks such as HBOS that are unable to borrow on the frozen interbank money markets due to the increased risk of default due to their exposure of liabilities to Lehman Brothers.

As the credit crisis unfolds the UK government may well yet be forced to takeover the mortgage giant HBOS at some point, much as the US government were forced to nationalise their mortgage giants Fannie Mae and Freddie Mac which were also once seen as invulnerable and too big to fail.

Implications for UK Savers

Currently UK savings are secured at £35,000 at 100%, this is proposed to rise by the end of this year to the first £50,000 at 100%. However as the Northern Rock example illustrated that the Government was prepared to step in and guarantee ALL savings at 100%, and therefore giving an unequivocal guarantee to savers so as to bring the Northern Rock bank run to a halt. Similarly should other retail banks fall over the edge of the credit crisis cliff, then similarly the expectations are for 100% security for all savers. However savers should take note of the difference between a high street retail bank such as Northern Rock and an Investment bank such as Lehman Brothers, therefore ensure that they definitely do limit exposure to non retail banks to £35,000.

http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=6277

Title: Re: Meltdown
Post by: Mark on September 15, 2008, 10:26:46 AM

Bloody scary stuff. Think it's time we revived the 'Super-duper cheap bargains' thread. :-\

Title: Re: Meltdown
Post by: BachQ on September 15, 2008, 10:55:25 AM

Quote from: ezodisy on September 15, 2008, 09:48:51 AM
Britain's biggest mortgage bank, Halifax Bank of Scotland (HBOS) crashed by over 30% as clearly hedge funds targeted the bank as a candidate for financial collapse, along the lines of Northern Rocks bank bust in Sept 07.

Many scholars predict that, once a "critical mass" of financial institutions succumb, a "domino effect" will ensue, bringing the whole house of cards down.

Title: Re: Meltdown
Post by: BachQ on September 15, 2008, 10:56:53 AM

Former Federal Reserve chief Alan Greenspan said yesterday that the U.S. credit calamity has brought on a "once-in-a-century" financial crisis that is likely to claim more big firms before it dissipates.

Greenspan told ABC's "This Week" that the situation "is in the process of outstripping anything I've seen, and it still is not resolved and it still has a way to go." "Indeed, it will continue to be a corrosive force until the price of homes in the United States stabilizes," Greenspan said. He predicted that would not happen until early 2009, and said the odds of U.S. recession have gone up in recent months. "I can't believe we could have a once-in-a-century type of financial crisis without a significant impact on the real economy globally, and I think that indeed is what is in the process of occurring," he said.
(http://money.cnn.com/2008/09/14/news/economy/greenspan/index.htm)

Title: Re: Meltdown
Post by: ezodisy on September 15, 2008, 01:04:51 PM

Dow has closed -504.48 at both an intraday and yearly low. First chart shows that we're at the lowest point in the last 12 months and that July's rally was false as we have broken through support and are heading down. Second shows today had the highest volume since March and one of the highest of the year; MACD crossed down at the start of September and now is heading well south; long black candlestick closing at a low signals a sell and further fall. Third is a ten year chart -- next significant support is probably at 10,000 - down it goes.

Today's drop was the biggest since 2001 :o

More to come tomorrow: after close an announcement that Hewlett Packard is cutting 24,600 jobs (7.5%).

On the "upside":

Nymex Crude Future 94.29 -6.89

Title: Re: Meltdown
Post by: ezodisy on September 15, 2008, 10:26:07 PM

Where do you go for the latest financial info? That's right:

(http://www.thatvideogameblog.com/wp-content/uploads/2008/04/sun.jpg)

(http://img.thesun.co.uk/multimedia/archive/00585/carousel_one_585254a.jpg)

http://www.thesun.co.uk/sol/homepage/news/money/article1694233.ece

Title: Re: Meltdown
Post by: BachQ on September 16, 2008, 06:33:57 AM

American International Group, Inc. (AIG), the largest insurer by assets, is on the brink, baby ......

"How quickly can AIG burn through $20 billion dollars in complex loans? It may not matter much, as the market pummels the once-mighty insurer. With ratings agencies downgrading its debt and the stock cut in half again overnight, the New York State lifeline is likely to be swallowed in the markets tsunami. At less than $5 a share, the stock is worth a fifth of what it was a week ago. Back then it was a $67 billion company. This morning, trading at around $3.80 and falling fast, it will be a company worth a little over $10 billion, so the value of the loan is, well, twice the value of the company. (continued)." (http://blogs.reuters.com/reuters-dealzone/2008/09/16/vertigo/)

Title: Re: Meltdown
Post by: BachQ on September 16, 2008, 06:35:26 AM

Quote from: ezodisy on September 15, 2008, 10:26:07 PM
(http://img.thesun.co.uk/multimedia/archive/00585/carousel_one_585254a.jpg)

Crash, Bang, Wallop pretty well sums it up .......

Title: Re: Meltdown
Post by: ezodisy on September 16, 2008, 07:43:45 AM

Quote from: Dm on September 16, 2008, 06:33:57 AM
American International Group, Inc. (AIG), the largest insurer by assets, is on the brink, baby ......

"How quickly can AIG burn through $20 billion dollars in complex loans? It may not matter much, as the market pummels the once-mighty insurer. With ratings agencies downgrading its debt and the stock cut in half again overnight, the New York State lifeline is likely to be swallowed in the markets tsunami. At less than $5 a share, the stock is worth a fifth of what it was a week ago. Back then it was a $67 billion company. This morning, trading at around $3.80 and falling fast, it will be a company worth a little over $10 billion, so the value of the loan is, well, twice the value of the company. (continued)."
(http://blogs.reuters.com/reuters-dealzone/2008/09/16/vertigo/)

Yep, and the $20b isn't even secured yet. You know this afternoon on CNBC some shadowy figure from the US Govt said that they may assist after all. It'll be interesting how this develops as tomorrow is a sort of D-Day for them.

Title: Re: Meltdown
Post by: ezodisy on September 16, 2008, 08:42:30 AM

The HBOS scenes today were nothing short of extraordinary. At its lowest point c.140p it was over 50% down from its close on Friday. It ended 21.7% down on the day with a lowered rating from Standard & Poor and concerns of further writedowns, possibly as much as £2b. It's in pretty bad shape and if there's more chaos this evening from the states which'll lead over to asia in the morning then to the UK, you can bet HBOS will be heading down closer to £1. It's getting shorted to hell and Alistair Darling has promised to tighten regulations on naked shorting but it probably wont' happen, not soon enough for this and Labour at least. 5 day chart below. The two gaps I've circled could be filled very quickly on the way back up if the beast ever turns.

Title: Re: Meltdown
Post by: BachQ on September 16, 2008, 09:26:20 AM

Quote from: ezodisy on September 16, 2008, 08:42:30 AM
The HBOS scenes today were nothing short of extraordinary. At its lowest point c.140p it was over 50% down from its close on Friday. It ended 21.7% down on the day with a lowered rating from Standard & Poor and concerns of further writedowns, possibly as much as £2b. It's in pretty bad shape and if there's more chaos this evening from the states which'll lead over to asia in the morning then to the UK, you can bet HBOS will be heading down closer to £1. It's getting shorted to hell and Alistair Darling has promised to tighten regulations on naked shorting but it probably wont' happen, not soon enough for this and Labour at least. 5 day chart below. The two gaps I've circled could be filled very quickly on the way back up if the beast ever turns.

Indeed, that is a stunning development, as HBOS appears to be in dire straits.

Title: Re: Meltdown
Post by: BachQ on September 16, 2008, 09:28:29 AM

Quote from: ezodisy on September 16, 2008, 07:43:45 AM
Yep, and the $20b isn't even secured yet. You know this afternoon on CNBC some shadowy figure from the US Govt said that they may assist after all. It'll be interesting how this develops as tomorrow is a sort of D-Day for them.

Here's a decent summary in Business Week regarding AIG's precipitous downfall.

AIG—a company with $110 billion in revenues last year and $1 trillion in assets—has suddenly gone from being the gold standard in its industry to fighting for survival. The sheer speed of its descent has stunned employees, customers, and many in the industry. "It's staggering to see just how much has changed in a very short time," says David Schiff, editor of Schiff's Insurance Observer, and a longtime critic of the company. Even more staggering are the ever-rising estimates of how much capital AIG now needs to cover its obligations. "That's a scary thing. It can be that some things are just unknowable in the high-wire finance a lot of these companies are in." (http://www.businessweek.com/bwdaily/dnflash/content/sep2008/db20080915_552271.htm?chan=top+news_top+news+index+-+temp_top+story)

Title: Re: Meltdown
Post by: BachQ on September 16, 2008, 11:05:24 AM

More ugliness:

Financial Times: Russia halts trading after 17% share price fall --- Russian shares suffered their steepest one-day fall in more than a decade on Tuesday, losing up to 20 per cent, as a sharp slide in oil prices and difficult money market conditions triggered a rush to sell. Trading was suspended on both the Micex and RTS stock exchanges as investors ignored assurances by Russian officials and a cycle of distrust set in amid liquidity fears. *** Andrei Sharonov, managing director of Troika Dialog, a Moscow investment bank, and a former deputy economic minister, said: "This is a vicious circle ... It is a situation of total mistrust. The liquidity crisis is being caused by a crisis of confidence in which people are frightened to borrow and frightened to lend."

(http://www.ft.com/cms/s/0/6ff9306c-83f1-11dd-bf00-000077b07658.html)

Title: Re: Meltdown
Post by: ezodisy on September 16, 2008, 02:35:12 PM

well the Dow might have closed up 141.51 but after hours Dow futures are down -136 and AIG -47%.

Government Officials Said to Consider AIG Conservatorship Plan (http://www.bloomberg.com/apps/news?pid=20601087&sid=aT9C3J5iHAFo&refer=home)

Title: Re: Meltdown
Post by: BachQ on September 16, 2008, 03:44:53 PM

Quote from: ezodisy on September 16, 2008, 02:35:12 PM
well the Dow might have closed up 141.51 but after hours Dow futures are down -136 and AIG -47%.

Government Officials Said to Consider AIG Conservatorship Plan (http://www.bloomberg.com/apps/news?pid=20601087&sid=aT9C3J5iHAFo&refer=home)

Good catch. Here's another update:

http://www.reuters.com/article/newsOne/idUSN1640428920080916

AIG may get $85-90 bln bridge loan in govt-brokered deal: CNBC

Title: Re: Meltdown
Post by: ezodisy on September 17, 2008, 08:14:37 AM

fuck me what a day. Dm if you start to copy-paste the bad news in here you're going to knock GMG offline! lol

Title: Re: Meltdown
Post by: Lethevich on September 17, 2008, 09:06:22 AM

This HBOS-Lloyds merger is funny. A few years ago this would've probably been denied on grounds of unfair lack of competition for the public, and now the government is probably crying with joy over the merger...

Title: Re: Meltdown
Post by: BachQ on September 17, 2008, 11:13:33 AM

Quote from: ezodisy on September 17, 2008, 08:14:37 AM
fuck me what a day. Dm if you start to copy-paste the bad news in here you're going to knock GMG offline! lol

This is too fucked up. This has been the worst week for financial companies since the Great Depression. Among today's headlines:

• Stocks in U.S. Slump as Bank Lending Seizes Up Following Takeover of AIG

• Interest rates (LIBOR rate) Skyrockets

• Morgan Stanley, Goldman Shares Plunge Most Ever as Credit Crisis Deepens

• Three-Month Bill Rates in U.S. Slide to Lowest Level Since at Least 1954

• Russia Pours Cash Into Banks, Halts Stock Trading to Stem Financial Crisis

• CNBC: A Thousand U.S. Banks Will Close Within Months

• Bank of Ireland fell 14% to €3.93 after it said it was halving its dividend to boost its capital.

• FTSE closed below the key 5000 level for the first time since May 2005

• Terrorists Bomb U.S. Embassy in Yemen's Capital, Sana'a; 16 People Killed

• Reid Says Congress Won't Act on Markets Because `No One Knows What to Do'

• The Fed has requested that the Treasury Department deposit $40 billion with the central bank

• UK unemployment rises to nine-year high & UK's Long-term unemployment set to double, says TUC

• The Impending Failure of WaMu Would Devastate FDIC

• Gold Climbs the Most in Nine Years as Investors Seek Haven From Turmoil

• The number of new building permits for single-family homes in US dropped to a 26-year low

• Lloyds Seeking to Acquire Failing HBOS

Title: Re: Meltdown
Post by: BachQ on September 17, 2008, 11:15:07 AM

Quote from: Lethe on September 17, 2008, 09:06:22 AM
This HBOS-Lloyds merger is funny. A few years ago this would've probably been denied on grounds of unfair lack of competition for the public, and now the government is probably crying with joy over the merger...

Government's panic mode is in overdrive now; they literally don't know what to do, and they are DESPERATE!

Title: Re: Meltdown
Post by: BachQ on September 17, 2008, 11:16:57 AM

Of particular note:

http://www.forbes.com/markets/equities/2008/09/16/libor-banks-europe-markets-equity-cx_po_0916markets17.html

The overnight dollar libor, or London Interbank Offered Rate, the benchmark rate at which banks lend money to one another, has more than doubled to 6.43%, from 3.10%, the British Bankers' Association said Tuesday. That's bad news for banks that are heavily reliant on the short-term borrowing market for their funding--as opposed to those who raise the bulk of their money from customer deposits

Title: Re: Meltdown
Post by: BachQ on September 17, 2008, 11:17:42 AM

US Home building tumbled again in August, with the number of new building permits for single-family homes dropping to a 26-year low, the Commerce Department estimated Wednesday. Starts of new homes fell 6.2% to a seasonally adjusted annual rate of 895,000, the lowest in 17 years, and much weaker than the 955,000 rate expected by economists surveyed by MarketWatch. Starts of single-family homes fell 1.9% to a 17-year low of 630,000 annualized units. Building permits for single- and multiple-family dwellings fell 8.9% to a 26-year low of 854,000 annualized units, with permits for single-family homes dropping 5.1% to 554,000, also a 26-year low.

http://www.marketwatch.com/news/story/single-family-building-permits-fall-26-year/story.aspx?guid=%7B96FE4F2F%2D9491%2D4337%2D9513%2DC201D298ADE0%7D&dist=hplatest

Title: Re: Meltdown
Post by: greg on September 17, 2008, 11:50:21 AM

Quote from: Dm on September 17, 2008, 11:13:33 AM
• The Impending Failure of WaMu Would Devastate FDIC

I just closed my savings account........ going to use SunTrust.

Title: Re: Meltdown
Post by: lukeottevanger on September 17, 2008, 12:27:09 PM

Is it wrong that I can't see Dm's moniker appear anymore without involuntarily inserting a couple of o's into the middle?

(http://lake.blogs.com/.a/6a00d83452654869e200e55282a8928834-500pi)

Title: Re: Meltdown
Post by: BachQ on September 17, 2008, 01:20:11 PM

Quote from: GGGGRRREEG on September 17, 2008, 11:50:21 AM
I just closed my [Washington Mutual] savings account........ going to use SunTrust.

According to CNBC, Washington Mutual has put itself up for auction. GET OUT! GET OUT OF THERE!!!

Greg, here is the link. GET OUT NOW !!! (http://www.cnbc.com/id/26761181)

Title: Re: Meltdown
Post by: BachQ on September 17, 2008, 01:21:34 PM

Quote from: lukeottevanger on September 17, 2008, 12:27:09 PM
Is it wrong that I can't see Dm's moniker appear anymore without involuntarily inserting a couple of o's into the middle?

(http://lake.blogs.com/.a/6a00d83452654869e200e55282a8928834-500pi)

LOL! :D Luke, I have no comment! >:D

(http://www.cartoonstock.com/lowres/hsc0790l.jpg)

Title: Re: Meltdown
Post by: Sean on September 17, 2008, 04:12:40 PM

We'll see the world return to reality in our lifetime.

Title: Re: Meltdown
Post by: ezodisy on September 17, 2008, 10:32:40 PM

you know what's funny? The Russians are considering not opening the market this morning. They really live in their own world over there ::)

Title: Re: Meltdown
Post by: ezodisy on September 18, 2008, 12:19:49 AM

Quote from: Dm on September 17, 2008, 01:20:11 PM
According to CNBC, Washington Mutual has put itself up for auction. GET OUT! GET OUT OF THERE!!!

Greg, here is the link. GET OUT NOW !!!
(http://www.cnbc.com/id/26761181)

come on Dm, don't send people into a panic! I don't know how it is in the good old US of A but here in the UK most accounts are covered up to a certain amount, something in the £30k region, and equity accounts £48k. So long as you spread your funds around you'll be okay.

Wachovia in talks with Morgan Stanley. How is Wachovia pronounced in the US? The joke obviously is "watch-over-ya" but I wouldn't be surprised if they say it like "wuhkovea".

Title: Re: Meltdown
Post by: ezodisy on September 18, 2008, 12:59:51 AM

http://www.citywire.co.uk/personal/-/news/markets-companies-and-funds/content.aspx?ID=314640

Bear market enters last phase, says Fidelity legend Bolton

By Dylan Lobo | 08:42:23 | 18 September 2008

Anthony Bolton says the historic events this week signify the final phase of the bear market where we will see a fall in commodities and more hedge fund blow-ups.

Bolton, who warned of the pending collapse of banks in his final months at the helm of the Fidelity Special Situations fund at the end of 2007, said: 'This is a week when children will be asking "mummy and daddy, were you there?" It will be remembered for a while. But I feel we are entering the final phase of the bear market. It started with the downturn in financials, then consumer cyclicals and the next stage was the industrial companies.

'The last stage will see the commodities affected. I felt that until commodities got broken the bear market could not end.'

Commodities have suffered a severe bout of selling in the last few months in tandem with the sharp decline in oil prices, but Bolton still feels there is some way for them to fall before their valuations are justified. 'Commodities are still over-owned,' Bolton said.

Bolton acknowledged the role played by hedge funds in the crisis. He criticised the growing interest in hedge funds, while questioning the growing interest in these vehicles in the market.

'A lot of consultants over the last five years have fallen in love with hedge funds and they have sucked in a huge amount of money. A lot of good hedge funds are now closed and while a lot of talent has come into the hedge fund industry it is not always so good.

'I think alpha is going to be much harder to come by and prime brokers won't get the same level of leverage now. I expect there to be more blow ups in the hedge fund world.'

Bolton made the distinction between the previous bull market during the technology, telecommunications and media (TMT) boom and the one experienced before the credit crisis hit markets last year. 'The TMT boom was all about valuations but the one we have recently experienced was all about return on capital and earnings expectations.'

Despite the recent turbulence in markets, Bolton believes people remain misguided on earnings expectations. 'We are still in a phase where earnings expectations are too high and that has to change.'

He expects the next bull market to be led by the most oversold areas of the market – financials and consumer cyclicals rather than the commodities-related plays which led the last bull market.

Bolton believes it is essential to hold banks with a low level of debt on the balance sheet. 'This year and next year it is essential to own well financed companies. Those companies which have a lot of debt will find it very difficult to renew their arrangements.'

Bolton also said China is developing into an interesting investment case, although he admitted the credit crunch has proved that the fortunes of emerging markets are closely linked to those of developed markets.

'The last few months have shown that the belief emerging markets can decouple from western markets is a myth. I think it will take some emerging markets longer than developed markets to recover from this crisis

Title: Re: Meltdown
Post by: ezodisy on September 18, 2008, 04:06:34 AM

Quote from: ezodisy on September 18, 2008, 12:19:49 AM
Wachovia in talks with Morgan Stanley. How is Wachovia pronounced in the US? The joke obviously is "watch-over-ya" but I wouldn't be surprised if they say it like "wuhkovea".

heard it on the news: wuhkovea. lol!

Title: Re: Meltdown
Post by: BachQ on September 18, 2008, 08:30:29 AM

Quote from: ezodisy on September 18, 2008, 12:19:49 AM
come on Dm, don't send people into a panic! I don't know how it is in the good old US of A but here in the UK most accounts are covered up to a certain amount, something in the £30k region, and equity accounts £48k. So long as you spread your funds around you'll be okay.

US accounts are insured up to $100,000 by the FDIC; the problem is the FDIC is going broke. In addition, it's far easier to withdraw your money before the bank folds than to have to wait for the FDIC to get its act together and send you the money. :P

Title: Re: Meltdown
Post by: BachQ on September 18, 2008, 08:34:15 AM

How an Eggbeater Could Power the Future

(http://www.foxnews.com/images/438665/0_21_080910_energy_ball2.jpg)

(http://www.foxnews.com/images/438665/0_22_080910_energy_ball3.jpg)

(http://www.foxnews.com/images/438665/0_24_080910_ball_airport.jpg)

(http://www.foxnews.com/images/438665/0_23_080910_ball_house.jpg)

From Holland, the country famous for its windmills, comes a new design for home wind power. Looking like an eggbeater, it spins more quietly and at lower wind speeds than a lot of traditional propeller-type turbines. It's now standard for big wind turbines to have propeller blades. Much of the turning force is generated at the tips, which slice perpendicularly through the air, causing a swooshing noise that some residents nearby have said they find unnerving. By contrast, the so-called Energy Ball, sold by Dutch-based Home Energy International, has rotors bent around in a ball shape so that they primarily move parallel to the wind. This generates less noise. "A small wind turbine has to be silent, otherwise it will be annoying to the community," said Erik Aurik, Home Energy's marketing manager.

(http://www.foxnews.com/story/0,2933,423850,00.html)

Title: Re: Meltdown
Post by: ezodisy on September 18, 2008, 09:11:13 AM

Quote from: Dm on September 18, 2008, 08:30:29 AM
the problem is the FDIC is going broke. :P

lol! Right, that is not funny, quite the opposite. I saw a blog entry about this somewhere this morning, there is way too much doom and way too little time to read about it. That Eggbeater looks mighty impressive. If I ever buy a house here I will definitely get one of these wind power things. Do you ever see things like this where you are Dm?

The big news in the UK is not that Lloyds will absorb HBOS but that this went through without Brown and Darling passing legislation to stop naked shorting, or naked shorting with financials, or shorting financials in general, or anything else. That is perhaps the reason why we are in the ludicrous yet wholly forseeeable position of the merger now being much, much cheaper than what was announced this morning. It was agreed that the paper deal would see 0.83 LLOY shares handed over for each HBOS share. At the time that was a takeover of £12.2b with an HBOS value of 232p a share, and what rightly happened this morning was that HBOS shares rose over 50% from the 140 region to the high 220s. At one point today LLOY was up about 20 points to nearly 300p to fall in line with the announcement. It closed down 15% at 237.50, thus considerably lowering the value of the merger to HBOS holders. The 232p a share HBOS price which is flaunted in the media is completely irrelevant. The point is that HBOS shareholders will get 0.83 LLOY shares at whatever price LLOY is at when the deal is concluded. It's not a cash offer, it's a paper deal and the HBOS price will fluctuate with the LLOY one -- which of course may be much higher from where it closed today, but I doubt it. Quite a lot of private investors who probably didn't even read the first page of the RNS held tightly and didn't sell today above 220. They're now holding at 172.6.

Since I wrote the above the FT has reported the following:

http://www.ft.com/cms/s/0/16102460-85a0-11dd-a1ac-0000779fd18c.html?nclick_check=1

FSA to ban short-selling of financial stocks

By Peter Thal Larsen, Banking Editor

Published: September 18 2008 17:44 | Last updated: September 18 2008 17:44

Short-selling of financial stocks is set to be banned in the United Kingdom under rules drawn up by the Financial Services Authority.

The watchdog is poised to announce the ban after a week in which the shares of leading financial institutions have come under intense pressure as a result of turmoil in the financial markets. Short-sellers have been blamed for driving down the share price of HBOS, the banking group that on Thursday unveiled it was being rescued through a takeover by Lloyds, its UK rival.

The change in the rules is the FSA's second attempt to curb short-selling. The regulator has already prevented short-selling of shares in companies that are in the midst of raising cash from investors through a rights issue.

News of the ban comes amid a growing political backlash against short-selling, which has been blamed for exacerbating the woes of the country's banks, and for contributing to the crisis of confidence in some of the country's largest financial institutions. It is unclear how long the ban will last.

Title: Re: Meltdown
Post by: greg on September 18, 2008, 11:45:20 AM

Quote from: Dm on September 18, 2008, 08:30:29 AM
US accounts are insured up to $100,000 by the FDIC; the problem is the FDIC is going broke. In addition, it's far easier to withdraw your money before the bank folds than to have to wait for the FDIC to get its act together and send you the money. :P

I hope Saturday morning isn't too late because I still have my checking account in there.......
it's probably not any more than 2 thousand bucks (enough to pay for the rest of school 8)), so hopefully it'll be safe.

Title: Re: Meltdown
Post by: greg on September 18, 2008, 11:47:18 AM

oh, and yesterday when I closed my savings, the lady had an attitude like, "we're not going out of business", but of course, a couple of hours later, WAMU goes up for auction.
so funny.......... lesson is, don't trust people you don't know. 8)

Title: Re: Meltdown
Post by: BachQ on September 18, 2008, 12:17:05 PM

Quote from: GGGGRRREEG on September 18, 2008, 11:45:20 AM
I hope Saturday morning isn't too late because I still have my checking account in there.......
it's probably not any more than 2 thousand bucks (enough to pay for the rest of school 8)), so hopefully it'll be safe.

That reminds me: I have a priceless Xenakis CD which I'm offering (as a gesture of magnanimity) to fellow GMG'ers for the mere price of $2,000 (shipping & handling not included) (certain restrictions apply).

Quote from: GGGGRRREEG on September 18, 2008, 11:47:18 AM
the lady had an attitude like, "we're not going out of business",

Little does she know ..........

Title: Re: Meltdown
Post by: BachQ on September 18, 2008, 12:20:51 PM

Quote from: ezodisy on September 18, 2008, 09:11:13 AM
Short-selling of financial stocks is set to be banned in the United Kingdom under rules drawn up by the Financial Services Authority.

It's all a game. This is all one big fucking game.

Title: Re: Meltdown
Post by: greg on September 18, 2008, 12:34:18 PM

Quote from: Dm on September 18, 2008, 12:17:05 PM
That reminds me: I have a priceless Xenakis CD which I'm offering (as a gesture of magnanimity) to fellow GMG'ers for the mere price of $2,000 (shipping & handling not included) (certain restrictions apply).

Little does she know ..........

;D ;D ;D
i think i'll pass........

Title: Re: Meltdown
Post by: ezodisy on September 19, 2008, 12:07:38 AM

What a difference a day makes. All banks up 30 - 40% since the ban on shorting financials till January '09 -- about the time the LLOY/HBOS deal is finalised, clever chaps. This may be a genuine bottom as there are even more measures to come apparently.

Title: Re: Meltdown
Post by: Lethevich on September 19, 2008, 11:28:42 AM

Quote from: ezodisy on September 19, 2008, 12:07:38 AM
What a difference a day makes. All banks up 30 - 40% since the ban on shorting financials till January '09 -- about the time the LLOY/HBOS deal is finalised, clever chaps. This may be a genuine bottom as there are even more measures to come apparently.

I went to deposit a cheque into my HSBC account this morning and it turned out that they had run out of pay in-envelopes, with none even in the store room, such was presumably the rush of HBOS customers shifting their dosh to more reliable banks in the preceeding days :D

Title: Re: Meltdown
Post by: BachQ on September 19, 2008, 12:41:39 PM

Quote from: ezodisy on September 19, 2008, 12:07:38 AM
What a difference a day makes. All banks up 30 - 40% since the ban on shorting financials till January '09 -- about the time the LLOY/HBOS deal is finalised, clever chaps. This may be a genuine bottom as there are even more measures to come apparently.

Good God!

The USA has entered the tWiliGhT ZoNe.

(http://www.therugs.com/images/JOYC/KAL/TwilightZone.jpg)

I'm going to read the book Alice in Wonderland just to get a sense of what may be in store for next week.

Given the role of derivatives, credit default swaps, and other exotic financial instruments, the global financial markets have truly fallen into a swirling vortex of uncertainty. This is fucking unbelivable.

I'm speechless.

Title: Re: Meltdown
Post by: greg on September 19, 2008, 12:47:04 PM

The World is going to end!

[size=984598715651pt]FINALLY![/size]

>:D

Title: Re: Meltdown
Post by: BachQ on September 19, 2008, 04:26:24 PM

UK Government steps up call for nuclear power -- LONDON (Reuters) - Britain will step up its campaign for new nuclear power stations on Thursday, saying they are vital for energy security, climate change and job creation. Industry minister John Hutton will tell the newly-created Nuclear Development Forum's first meeting that new nuclear power plants are also crucial in preventing power cuts as ageing coal and nuclear plants are progressively shut down. "I'm determined to press all the buttons to get nuclear built in this country at the earliest opportunity - not only because it's a no-brainer for our energy security, but also because it's good for jobs and our economy," he will say.
(http://upload.wikimedia.org/wikipedia/commons/thumb/4/4e/Nuclear_Power_Plant_Cattenom.jpg/800px-Nuclear_Power_Plant_Cattenom.jpg) (http://uk.reuters.com/article/domesticNews/idUKLH63980520080918)

Title: Re: Meltdown
Post by: BachQ on September 19, 2008, 04:29:23 PM

Russia aims to corner energy markets: U.S. official ... Russia aims to corner energy markets, a senior U.S. official said on Monday as Vice-President Dick Cheney arrived in Italy during a tour that has taken in eastern European states which are important transit routes."The fact is Russia has worked hard to try to corner the markets, so to speak, and is working to foreclose options to transit for those energy products across Russia," the official said, speaking on condition of anonymity. "They want everything to come out through Russia and a lot of us think it's more important that there be diverse means of gaining access to those resources. No one country ought to be able to totally dominate those deliveries." Cheney has visited Azerbaijan, Georgia and Ukraine to show support for the former Soviet states after the conflict between Georgia and Russia over the South Ossetia region which the vice-president called Moscow's "brutality against a neighbor".

Europe and the United States are concerned about transit routes for oil and gas through eastern European countries which are seen as alternatives to Russian supplies.

(Writing by Robin Pomeroy; Editing by Matthew Jones) (http://www.reuters.com/article/newsOne/idUSRAT00400820080908)

Title: Re: Meltdown
Post by: Florestan on September 21, 2008, 10:54:50 PM

Quote from: Dm on September 19, 2008, 12:41:39 PM
I'm speechless.

Will you be posting-less, too? ;D

Title: Re: Meltdown
Post by: ezodisy on September 22, 2008, 04:57:51 AM

Quote from: Florestan on September 21, 2008, 10:54:50 PM
Will you be I-less, too? ;D

The world is imploding, we need more posts, not less :)

Title: Re: Meltdown
Post by: BachQ on September 22, 2008, 09:25:48 AM

London Times: Taxes will soar in credit crisis (http://www.timesonline.co.uk/tol/news/uk/article4795086.ece)

Title: Re: Meltdown
Post by: BachQ on September 22, 2008, 09:26:20 AM

Matt Simmons: Here comes $500 oil (http://money.cnn.com/2008/09/15/news/economy/500dollaroil_okeefe.fortune/index.htm?postversion=2008092210)

Title: Re: Meltdown
Post by: ezodisy on September 22, 2008, 11:09:26 AM

thank god oil is going back up!

Nymex Crude Future 128.10 +23.55 22.52% 14:24 (time)

Title: Re: Meltdown
Post by: BachQ on September 22, 2008, 03:26:57 PM

Quote from: ezodisy on September 22, 2008, 11:09:26 AM
thank god oil is going back up!

Nymex Crude Future 128.10 +23.55 22.52% 14:24 (time)

Yes indeed. Oil spiked $16 (16%) in the single biggest one-day jump on record. (http://www.reuters.com/article/hotStocksNews/idUSSIN4333720080922)

Go Dubya!

Go Hank Paulson!

Go Ben Bernanke!
(http://www.foxnews.com/story/0,2933,425501,00.html)

Title: Re: Meltdown
Post by: ezodisy on September 22, 2008, 09:38:34 PM

It's a mess out there. Some articles are even expressing the opinion that this is the end of the US as the world's leading superpower.

Title: Re: Meltdown
Post by: BachQ on September 23, 2008, 12:43:17 PM

On a more positive note >:D:

UK Mortgage approvals crumble in August -- LONDON (Reuters) -- The number of mortgages approved by major British banks fell to a record low in August, industry figures showed on Tuesday, suggesting no end was in sight for the country's housing market woes. ... "These data fit in with other signs that the UK housing market remains in freefall, hit by stretched valuations, the credit crunch and understandable worries among the general public over prospects for jobs and incomes," said Michael Saunders at Citi.
(http://uk.reuters.com/article/businessNews/idUKTRE48M50Q20080923)

Title: Re: Meltdown
Post by: BachQ on September 23, 2008, 01:11:38 PM

Quote from: ezodisy on September 22, 2008, 09:38:34 PM
It's a mess out there. Some articles are even expressing the opinion that this is the end of the US as the world's leading superpower.

A recent Telegraph (http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2008/09/21/ccliam121.xml) article suggested that, for the first time in modern history, the US's debt load has become so problematic that the US could actually default on its debt? Recent activity in the LIBOR rate and the US 10-year credit default swap suggests that the market is now pricing-in the possibility that the US will struggle to pay-back some of its long-term T-bills. IOW, the possibility of a US government default is now a consideration. :o

Title: Re: Meltdown
Post by: BachQ on September 24, 2008, 02:24:52 PM

(http://ndn.newsweek.com/media/58/nw_080924_anderson.jpg)

Title: Re: Meltdown
Post by: BachQ on September 24, 2008, 02:25:16 PM

(http://ndn.newsweek.com/media/66/nw_080923_sack.jpg)

Title: Re: Meltdown
Post by: BachQ on September 24, 2008, 02:25:53 PM

(http://ndn.newsweek.com/media/57/nw_080921_handelsman.jpg)

:D

Title: Re: Meltdown
Post by: BachQ on September 24, 2008, 04:25:45 PM

(http://media.timesfreepress.com/img/news/tease/2008/09/24/080924_rescue_plan.jpg)

Title: Re: Meltdown
Post by: greg on September 24, 2008, 07:37:35 PM

Thanks for those, Dm, they made me laugh! :D

Title: Re: Meltdown
Post by: BachQ on September 25, 2008, 03:01:42 PM

Quote from: GGGGRRREEG on September 24, 2008, 07:37:35 PM
Thanks for those, Dm, they made me laugh! :D

Sometimes a cartoon is worth a thousand words ....... >:D

Title: Re: Meltdown
Post by: BachQ on September 25, 2008, 03:02:48 PM

Sean, please find this Richard Heinberg video, dated June 19, 2008:

http://www.youtube.com/watch?v=SR0-9jgAMeA&feature=related

Title: Re: Meltdown
Post by: BachQ on September 25, 2008, 08:04:59 PM

Quote from: GGGGRRREEG on September 17, 2008, 11:50:21 AM
I just closed my [WaMu] savings account........ going to use SunTrust.

Greg, BTW, today, WaMu became the 13th bank failure in 2008 and has garnered the title of the nation's biggest bank failure (by assets) on record, ahead of Continental Illinois, which had about $40 billion in assets when it collapsed in May of 1984. link (http://money.cnn.com/2008/09/25/news/companies/JPM_WaMu/index.htm?postversion=2008092523)

Title: Re: Meltdown
Post by: Gustav on September 26, 2008, 12:48:46 PM

Quote from: Dm on September 25, 2008, 08:04:59 PM
Greg, BTW, today, WaMu became the 13th bank failure in 2008 and has garnered the title of the nation's biggest bank failure (by assets) on record, ahead of Continental Illinois, which had about $40 billion in assets when it collapsed in May of 1984. link
(http://money.cnn.com/2008/09/25/news/companies/JPM_WaMu/index.htm?postversion=2008092523)

sucks for stockholders, the current price of WaMu is 16 cents per share.

Title: Re: Meltdown
Post by: BachQ on September 26, 2008, 12:55:40 PM

Quote from: Walter on September 26, 2008, 12:48:46 PM
sucks for stockholders, the current price of WaMu is 16 cents per share.

And the stockholders are suing Washington Mutual for securities fraud, claiming that the company (and its officers and directors) lied to investors, by, inter alia, failing to disclose the risky nature of WaMu's mortgage madness. The stockholders must be super-pissed.

Title: Re: Meltdown
Post by: BachQ on September 26, 2008, 12:56:17 PM

(http://media.timesfreepress.com/img/news/tease/2008/09/24/080925_bad_news.jpg)

Title: Re: Meltdown
Post by: ezodisy on September 27, 2008, 12:44:38 AM

Quote from: Dm on September 24, 2008, 04:25:45 PM
(http://media.timesfreepress.com/img/news/tease/2008/09/24/080924_rescue_plan.jpg)

Title: Re: Meltdown
Post by: Bogey on September 27, 2008, 03:45:24 AM

Talked to a close friend of ours last night. Her two daughters are both in college (one just finishing up). They both rely on. I believe, federally subsidized loans for their tuition. She got a letter the other day stating that both her daughters had been approved for their next round of loans, but that there may not be any money to actual go with those loans. Also, her 401K has "basically" collapsed. That is, it may recover to its full amount, but it will probably take 20 years to do so.

Title: Re: Meltdown
Post by: BachQ on September 27, 2008, 11:59:47 AM

Quote from: Bogey on September 27, 2008, 03:45:24 AM
Talked to a close friend of ours last night. Her two daughters are both in college (one just finishing up). They both rely on. I believe, federally subsidized loans for their tuition. She got a letter the other day stating that both her daughters had been approved for their next round of loans, but that there may not be any money to actual go with those loans. Also, her 401K has "basically" collapsed. That is, it may recover to its full amount, but it will probably take 20 years to do so.

Yep. The student loan mess is another area that has been rocked by turmoil. Anyone taking out a student loan who is left in limbo by their primary lender should have a backup plan.

Of course, tuition at private colleges is only about $35,000-$40,000/year, so who really needs a student loan anyways? :P >:D

Title: Re: Meltdown
Post by: greg on September 27, 2008, 12:30:19 PM

Quote from: Dm on September 26, 2008, 12:55:40 PM
And the stockholders are suing Washington Mutual for securities fraud, claiming that the company (and its officers and directors) lied to investors, by, inter alia, failing to disclose the risky nature of WaMu's mortgage madness. The stockholders must be super-pissed.

Makes me never want to to invest in the stock market, ever. I'm not an optimist, after all. :D

btw, nice avatar....

Title: Re: Meltdown
Post by: BachQ on September 28, 2008, 06:02:56 PM

God help us.

(http://graphics8.nytimes.com/images/2008/09/28/business/28bailout.xlarge2.jpg)

NYT: WASHINGTON — Congress braced for a difficult vote to be taken Monday on a $700 billion rescue of the financial industry after a weekend of tense negotiations produced a plan that Congressional leaders portrayed as greatly strengthened by new taxpayer safeguards. "This is something that all of us will swallow hard and go forward with," Senator John McCain said of the bailout plan in an interview on ABC's "This Week." The 110-page bill, intended to ease a growing credit crisis, came after a frenzied week of political twists and turns and still faced some resistance from lawmakers on both the left and right who portrayed it as a dangerous rush to economic judgment. (http://www.nytimes.com/2008/09/29/business/29bailout.html?ref=business)

Title: Re: Meltdown
Post by: BachQ on September 28, 2008, 06:06:06 PM

Mr. Obama, in a statement, said: "When taxpayers are asked to take such an extraordinary step because of the irresponsibility of a relative few, it is not a cause for celebration. But this step is necessary."

Title: Re: Meltdown
Post by: ezodisy on September 28, 2008, 10:41:55 PM

http://www.guardian.co.uk/world/2008/sep/26/anglicanism.religion

Church is accused of short-selling sterling

* Matthew Taylor
* The Guardian,
* Friday September 26 2008
* Article history

The Church of England, which this week condemned the practices of some City traders, has been using aggressive tactics to maximise profits on its £5b investment portfolio, according to a thinktank.

The Archbishop of York, John Sentamu, branded financiers who cashed in on falling share prices as "bank robbers" and "asset strippers", and the Archbishop of Canterbury, Rowan Williams, called for fresh scrutiny and regulation of the financial markets.

But yesterday the religion and society thinktank Ekklesia claimed that in 2006 the Church Commissioners, who manage the Church of England's investments, set up a currency hedging programme, in effect short-selling sterling to guard against rises in other currencies. Ekklesia also criticised the church for its shareholdings in oil and mining companies.

Jonathan Bartley, co-director of Ekklesia, said: "The archbishops should be extremely careful when attacking City bank robbers for short-selling and speculation. Amongst the billions of pounds that the church currently invests in property and shares are hundreds of millions invested in oil and mining companies."

He said the church has substantial share holdings in banks and a stated aim of making a profit on its investments of 5% a year above the rate of inflation.

Last night the church denied it was involved in short-selling, saying the think-tank's comments were "misleading".

"The currency hedging programme, set up in 2007, is designed to protect the sterling value of the commissioners' foreign currency-denominated assets," a spokesman said. "It is designed for protective, not speculative purposes and was put into place because the commissioners' foreign currency positions have been growing in significance as part of a wider move to improve the diversification of their asset base."

Bartley said the Church should invest more in institutions such as cooperatives, friendly societies and housing associations in return for a slightly lower profit.

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:38:51 PM

S&P 500 Falls Most Since 1987, Dow Has Worst Point Drop as Rescue Rejected (http://www.bloomberg.com/apps/news?pid=20601087&sid=aFVo3p8GzeWk&refer=home)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:39:53 PM

Asian Stocks Fall in Worst Rout for 21 Years as U.S. Bailout Plan Rejected (http://www.bloomberg.com/apps/news?pid=20601087&sid=a5RhFLErID5g&refer=home)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:41:47 PM

CENTRAL BANKS HEMMORAGING -- Fed Pumps Further $630 Billion Into Financial System (http://www.bloomberg.com/apps/news?pid=20601068&sid=a9MTZEgukPLY&refer=economy)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:42:17 PM

What the Pros Say: The Disease Is Spreading (http://www.cnbc.com/id/26938781)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:42:51 PM

GUARDIAN.UK: UK's £132bn Buy-to-Let Mortgage Fiasco (http://www.guardian.co.uk/money/2008/sep/30/buyingtolet.property)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:43:13 PM

Citigroup bails out Wachovia LINK (http://www.guardian.co.uk/business/2008/sep/30/citigroup.banking)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:44:07 PM

UK GUARDIAN -- "They're throwing billions around but things seem to be getting worse" (http://www.guardian.co.uk/business/2008/sep/30/banking.wallstreet)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:44:32 PM

Wall Street crisis spreads through Europe's banks -- Governments of Iceland, Germany and Belgium forced to bail out banks as turmoil widens
(http://www.guardian.co.uk/business/2008/sep/30/banking.europeanbanks)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:46:02 PM

``The commercial paper market is experiencing more dislocation than we have ever seen,'' said Jim Turner, head of debt capital markets at BNP Paribas in New York. ``Some very creditworthy issuers are only able to issue overnight rather than the more typical 30 days or longer, and if you're a corporate treasurer that situation probably makes it hard to sleep.'' (http://www.bloomberg.com/apps/news?pid=20601109&sid=aEvb987RgbsQ&refer=exclusive)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:46:55 PM

This link contains a collection of videos of anti-bailout protests taking place on Wall Street. Enjoy. 0:) (http://hubpages.com/hub/Protests-on-Wall-Street---what-the-news-media-isnt-showing-you)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:47:46 PM

Ben Bernanke at work:
(http://www.financialsense.com/fsu/editorials/dollardaze/2007/images/0626.h6.jpg)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:48:25 PM

Record 13% drop in Dublin market -- Shares in Irish banks plummeted today after a series of US and European bank failures. (http://www.rte.ie/business/2008/0929/marketupdate.html)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:48:51 PM

Fortis 'errors' helped spark crisis LINK (http://www.rte.ie/business/2008/0929/fortis.html)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:49:31 PM

Fannie and Freddie subpoenaed Prosecutors demand accounting documents - (http://www.ft.com/cms/s/0/153c5198-8e61-11dd-9b46-0000779fd18c.html)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:50:58 PM

A shattering moment in America's fall from power-- The global financial crisis will see the US falter in the same way the Soviet Union did when the Berlin Wall came down. The era of American dominance is over.

(http://www.guardian.co.uk/commentisfree/2008/sep/28/usforeignpolicy.useconomicgrowth)

(http://itn.co.uk/news/storyf8354221c187fc79ccddc342bf9d4947.jpg)
(http://itn.co.uk/news/101b157a59e836974956fe1367c559d9.html)

Title: Re: Meltdown
Post by: BachQ on September 29, 2008, 07:54:34 PM

Lehman's bankruptcy filing in the early hours of Monday, Sept. 15, sparked a chain reaction that sent credit markets into disarray.

(http://www.photo.net.ph/albums/userpics/10910/wc%239_The_domino_effect.jpg) (http://online.wsj.com/article/SB122266132599384845.html?mod=todays_us_nonsub_page_one)

Title: Re: Meltdown
Post by: ezodisy on September 30, 2008, 12:53:00 AM

Sept. 30 (Bloomberg) -- Russian stocks tumbled for a few seconds today before market regulators halted trading once again at local exchanges. (http://www.bloomberg.com/apps/news?pid=20601087&sid=amIdUGzSJG88&refer=home)

god the Russians are pathetic sometimes. lol!

Title: Re: Meltdown
Post by: BachQ on September 30, 2008, 07:28:49 PM

Quote from: ezodisy on September 30, 2008, 12:53:00 AM
Sept. 30 (Bloomberg) -- Russian stocks tumbled for a few seconds today before market regulators halted trading once again at local exchanges. (http://www.bloomberg.com/apps/news?pid=20601087&sid=amIdUGzSJG88&refer=home)

god the Russians are pathetic sometimes. lol!

Yeah, a totally dysfunctional stock market!

Title: Re: Meltdown
Post by: BachQ on September 30, 2008, 07:31:34 PM

American real-estate market hit by sharpest ever annual drop in prices -- The US real estate prices fell by the sharpest annual rate ever in July ....
(http://www.independent.co.uk/news/business/news/american-realestate-market-hit-by-sharpest-ever-annual-drop-in-prices-947351.html)

Title: Re: Meltdown
Post by: BachQ on September 30, 2008, 07:34:24 PM

Cost of interbank dollar loans rises by record margin -- The cost of borrowing dollars in the overnight interbank market jumped by the biggest ever margin yesterday as the credit markets seized up. (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/)

Title: Re: Meltdown
Post by: BachQ on September 30, 2008, 07:36:09 PM

America's No. 1 Export: Toxic Debt -- Japan and Germany make cars. Saudi Arabia pumps oil. China supplies the world with socks and toys and flat-screen TVs. What does the United States produce? Lots of stuff, but in recent years this country's No. 1 export--by far--has been debt. (http://www.time.com/time/magazine/article/0,9171,1844547,00.html)

Title: Re: Meltdown
Post by: BachQ on September 30, 2008, 07:37:41 PM

WSJ: Wall Street is dead. Whether it was murder or suicide is beside the point: Wall Street as it has operated for the past 75 years has been obliterated in a matter of weeks. And witnessing this violent death in broad daylight has traumatized investors everywhere.
(http://online.wsj.com/article/SB122272238714287459.html?mod=todays_us_nonsub_pj)

Title: Re: Meltdown
Post by: ezodisy on September 30, 2008, 11:32:19 PM

"The obsession with remedies marks the end of a civilisation." - Emil Cioran

Title: Re: Meltdown
Post by: Florestan on October 01, 2008, 12:00:50 AM

Quote from: Dm on September 30, 2008, 07:37:41 PM
WSJ: Wall Street is dead. Whether it was murder or suicide is beside the point: Wall Street as it has operated for the past 75 years has been obliterated in a matter of weeks. And witnessing this violent death in broad daylight has traumatized investors everywhere.

(http://online.wsj.com/article/SB122272238714287459.html?mod=todays_us_nonsub_pj)

Whoever busy himself with actually reading the whole article will learn that it is rather optimistic. ;)

Title: Re: Meltdown
Post by: BachQ on October 01, 2008, 03:01:13 PM

According to a Gallup poll, just 27% of Americans approve of the job George W. Bush is doing as president, the lowest rating of his presidency....The all-time low rating for any president is 22%, for Harry Truman in February 1952. Bush now joins Truman and Richard Nixon as the only presidents who have had approval ratings of 27% or lower in Gallup Polls.

(http://sas-origin.onstreammedia.com/origin/gallupinc/GallupSpaces/Production/Cms/POLL/wbg1q6qdce-7-hjzru42ya.gif)

(http://www.gallup.com/poll/110806/Bushs-Approval-Rating-Drops-New-Low-27.aspx)

Title: Re: Meltdown
Post by: BachQ on October 01, 2008, 03:03:09 PM

Ireland will now guarantee all (100%) deposits in Irish banks. This guarantees that if any Irish bank fails or encounters serious liquidity issues, the Irish Government will step in. (http://www.rte.ie/news/2008/0930/economy.html)

Title: Re: Meltdown
Post by: BachQ on October 01, 2008, 04:18:41 PM

Over the past decade, privately traded derivatives contracts known as Credit Default Swaps have ballooned from nothing into a $54.6 trillion market, representing the fastest-growing major type of financial derivatives. Credit Default Swaps and related derivatives are a root cause of the global credit crisis, and they have the potential of bringing down the whole house of cards. LINKY LINK
(http://i.l.cnn.net/money/2008/09/29/magazines/fortune/varchaver_derivatives.fortune/mag_HID13_graphic1.gif) (http://money.cnn.com/2008/09/29/magazines/fortune/varchaver_derivatives.fortune/index.htm?source=yahoo_quote)

Title: Re: Meltdown
Post by: Lethevich on October 01, 2008, 04:25:26 PM

Quote from: Dm on October 01, 2008, 03:01:13 PM
According to a Gallup poll, just 27% of Americans approve of the job George W. Bush is doing as president, the lowest rating of his presidency.
(http://www.gallup.com/poll/110806/Bushs-Approval-Rating-Drops-New-Low-27.aspx)

What is wrong with the 27% who still approve? :'(

Title: Re: Meltdown
Post by: adamdavid80 on October 01, 2008, 05:08:31 PM

Quote from: Lethe on October 01, 2008, 04:25:26 PM
What is wrong with the 27% who still approve? :'(

4 out of 5 dentists who chew gum recommend sugarless gum to their patients.

That means 20% of dentists surveyed beleive thier patients should chew gum that will rot their teeth (and will do so dramatically - all that continuous chomping and chewing, etc).

So there's your answer: there's always going to be some people out there who have very...curious...points of view.

That being said, I really don;t have any idea who's left. I was thinking people who approve of low taxes, but Bush's support of "the bail-out" plan would negate their approvals. Maybe it's always shifting...the people who once were wholly against the Iraq war maybe are pleased wwith the results of the surge, and think Bush stepped in just in the nick of time to save the financial markets?

There are things that I have admired about Bush in this current term, unfortunately both of them are where whe went up against his party/base. One is his attempt at immigration reform, and actualy he did seem truly principled in this latest crisis, meaning, if he's backing and approving something as "socialist" as this, maybe it truly is a desperate situation.

And there will always be those who approve of the President simply bc he's the President, whoever the President is.

Title: Re: Meltdown
Post by: Lilas Pastia on October 01, 2008, 08:21:13 PM

Quote from: Dm on October 01, 2008, 04:18:41 PM
Over the past decade, privately traded derivatives contracts known as Credit Default Swaps have ballooned from nothing into a $54.6 trillion market, representing the fastest-growing major type of financial derivatives. Credit Default Swaps and related derivatives are a root cause of the global credit crisis, and they have the potential of bringing down the whole house of cards. LINKY LINK
(http://i.l.cnn.net/money/2008/09/29/magazines/fortune/varchaver_derivatives.fortune/mag_HID13_graphic1.gif)
(http://money.cnn.com/2008/09/29/magazines/fortune/varchaver_derivatives.fortune/index.htm?source=yahoo_quote)

This is the first post of yours that has more than a single line of comment - other than offering yet another internet link you haven't entirely read. You don't use quote marks, but I can't believe for a second this comment above is your own thought. I don't even think you understand what you're posting about.

Title: Re: Meltdown
Post by: BachQ on October 02, 2008, 03:07:57 AM

On Tuesday, the 23d of September, 2008, Portugal deployed the world's first commercial "Wave Energy Farm" (with mixed results). Initially, the device is intended to generate 2.25 MW of electricity (enough to power 1,500 homes), and ultimately it is intended to produce up to 21 MW of power. LINK

(http://www.theoildrum.com/files/Pelamis_23-09-2008_01.jpg)

(http://cleantechnica.com/files/2008/09/face-on-snake2.jpg)
(http://europe.theoildrum.com/node/4575#more)

Title: Re: Meltdown
Post by: Lethevich on October 06, 2008, 04:12:16 AM

To Germany: thanks, very helpful :P 0:)

Title: Re: Meltdown
Post by: BachQ on October 06, 2008, 05:54:05 AM

... Iceland economy is faltering (bankruptcy?) ... LINK (http://www.marketoracle.co.uk/Article6650.html)

... While trading in Iceland financial firms has been suspended ... LINK (http://www.forbes.com/afxnewslimited/feeds/afx/2008/10/06/afx5511503.html)

Title: Re: Meltdown
Post by: BachQ on October 06, 2008, 05:54:56 AM

Sixty-Minutes special on Credit Default Swaps

http://www.cbsnews.com/stories/2008/10/05/60minutes/main4502454.shtml

Title: Re: Meltdown
Post by: BachQ on October 06, 2008, 05:56:10 AM

From the Sixty Minutes special:

Quote
It started out 16 months ago as a mortgage crisis, and then slowly evolved into a credit crisis. Now it's something entirely different and much more serious.

What kind of crisis it is today?

"This is a full-blown financial storm and one that comes around perhaps once every 50 or 100 years. This is the real thing," says Jim Grant, the editor of "Grant's Interest Rate Observer."

***

"The instruments themselves are at the heart of this mess," Grant says. "They are complex, in effect, mortgage science projects devised by these Nobel-tracked physicists who came to work on Wall Street for the very purpose of creating complex instruments with all manner of detailed protocols, and who gets paid when and how much. And the complexity of the structures is at the very center of the crisis of credit today."

***

Bear Stearns was the first to go under, selling itself to J.P. Morgan for pennies on the dollar. Then, Lehman Brothers declared bankruptcy. And when AIG, the nation's largest insurer, couldn't cover its bad debts, the government stepped in with an $85 billion rescue.

Asked what role the credit default swaps play in this financial disaster, Frank Partnoy tells Kroft, "They were the centerpiece, really. That's why the banks lost all the money. They lost all the money based on those side bets, based on the mortgages."

How big is the market for credit default swaps?

Says Partnoy, "Well, we really don't know. There's this voluntary survey that claims that the market is in the range of 50 to 60 or so trillion dollars. It's sort of alarming that, in a market that big, we don't even know how big it is to within, say, $10 trillion."

Title: Re: Meltdown
Post by: BachQ on October 06, 2008, 05:56:47 AM

The prolific writer/journalist Ambrose Evans-Pritchard paints a rather gloomy picture of the global financial markets here:

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3141428/Germany-takes-hot-seat-as-Europe-falls-into-the-abyss.html

Title: Re: Meltdown
Post by: BachQ on October 06, 2008, 05:58:52 AM

http://www.pressrepublican.com/0100_news/local_story_277050111.html

NY families, state services feel Wall Street woes

QuoteBy MICHAEL GORMLEY
Associated Press Writer

ALBANY, N.Y. (AP) -- Wall Street's meltdown is starting to be felt in household budgets, as consumers shudder and state services are scaled back even before legislative leaders and the governor meet Friday to plan more spending cuts.

A Siena College poll found the national economic crisis — led by Wall Street's woes — has already hit what economists call the real economy. The statewide poll of registered voters found 85 percent of New Yorkers felt the financial situation poses a serious threat to their household.

"They are feeling it when they have to fill up the gas tank, when they are going to the grocery store, and when they are trying to get a loan," said Steven Greenberg of the Siena Research Institute. "The average New Yorker is being forced to make tough fiscal choices in their own household budgets and I think they are looking to the governor and the Legislature to do the same thing for the state budget."

That's the plan for a Friday meeting of state leaders in Manhattan. Gov. David Paterson and leaders of the Senate and Assembly are meeting on how to confront a growing deficit driven by the projected loss of billions of dollars in tax revenue.

(continued)

Title: Re: Meltdown
Post by: ezodisy on October 06, 2008, 08:43:02 AM

"Britain's leading share index [FTSE 100] recorded its biggest ever one-day points fall on Monday with banking and commodity stocks taking a battering as the fallout from financial crisis once again overwhelmed global markets."

DAX in Germany got pummelled today and the CAC in Paris didn't do much better. Russia again closed down and so did Brazil for a while. More misery to come, especially for "Joe six-pack" (whoever t.f. that is).

Title: Re: Meltdown
Post by: BachQ on October 06, 2008, 09:24:30 AM

Quote from: ezodisy on October 06, 2008, 08:43:02 AM
Russia again closed down and so did Brazil for a while.

Moscow is in a bloodbath: "The mood [in Moscow] is kind of disbelief. You'd think we would have gotten used to it by now," said Ron Smith, strategist at Moscow-based Alfa Bank. "[Moscow] Traders are just sitting there staring at the screens and going, 'Wow.' ... In this environment, nobody wants to step up to the table and buy a stock." (http://biz.yahoo.com/ap/081006/eu_russia_markets.html)

Title: Re: Meltdown
Post by: ezodisy on October 06, 2008, 02:58:39 PM

Quote from: Dm on October 06, 2008, 09:24:30 AM
Moscow is in a bloodbath: "The mood [in Moscow] is kind of disbelief. You'd think we would have gotten used to it by now," said Ron Smith, strategist at Moscow-based Alfa Bank. "[Moscow] Traders are just sitting there staring at the screens and going, 'Wow.' ... In this environment, nobody wants to step up to the table and buy a stock."
(http://biz.yahoo.com/ap/081006/eu_russia_markets.html)

Thanks for that. At a party last night I was talking to a Polish friend about this and he relished taking the piss out of the Russians for not quite grasping the concept of a free market and so on. The silly buggers seem to think it can only go up. Bless 'em :P But for the past month or more I've seen news stories about international/US firms pulling out of the Russian market. It's not very surprising, even if seeing it on the day stuns for a while.

Title: Re: Meltdown
Post by: BachQ on October 07, 2008, 06:32:54 PM

Quote from: ezodisy on October 06, 2008, 02:58:39 PM
The silly buggers seem to think it can only go up. Bless 'em :P

LOL! :D It seriously looks that way! :D

Utterly dysfunctional.

Title: Re: Meltdown
Post by: BachQ on October 07, 2008, 06:33:20 PM

(http://media.mcclatchydc.com/smedia/2008/10/03/12/198-10032008Powell.slideshow_main.prod_affiliate.91.jpg)

Title: Re: Meltdown
Post by: BachQ on October 07, 2008, 06:36:05 PM

Dow Has Worst Year Since 1937 -- ``We've approached the edge of the cliff,'' Leon Cooperman, 65, who manages $6 billion at hedge fund Omega Advisors Inc., said at the Value Investing Congress in New York. ``Do we go over the cliff or begin to recede? History says we recede, but there's no guarantee. This is the most difficult financial environment I've lived through.'' (http://www.bloomberg.com/apps/news?pid=20601087&sid=aBuMcg50xGVg&refer=home)

Title: Re: Meltdown
Post by: Lethevich on October 08, 2008, 09:35:43 AM

Lolwut. Srsly, how can the UK afford something which the US almost didn't manage to do?

Brown and Darling commit £500 billion for bank bailout

Gordon Brown and Alistair Darling set out a radical £500 billion package today to restore confidence in the UK banking sector and break the crippling logjam in credit markets.

The three-part package includes committing up to £50 billion of taxpayer funds for a partial nationalisation of stricken banks, met from increased public borrowing and with political strings attached that would include reining in executive pay.

In addition, the Bank of England will pump at least £200 billion into the money markets under its existing Special Liquidity Scheme. The Government is also making a further £250 billion available for banks over the next three years to guarantee medium-term debt to help restore confidence and get banks lending to each other again.

The deal was hammered out in talks with banking chiefs that dragged on into the early hours. At a joint press conference in Downing Street, both the Prime Minister and Chancellor were keen to draw a distinction between their rescue plan and the $700 billion US bailout involving the purchase of "toxic" assets.

[Cont.] (http://www.timesonline.co.uk/tol/news/uk/article4905637.ece)

Title: Re: Meltdown
Post by: ezodisy on October 08, 2008, 12:28:04 PM

Quote from: Lethe on October 08, 2008, 09:35:43 AM
how can the UK afford something which the US almost didn't manage to do?

we have a longer history (which I guess means we have more things to pawn).

Title: Re: Meltdown
Post by: Lethevich on October 08, 2008, 12:30:55 PM

Quote from: ezodisy on October 08, 2008, 12:28:04 PM
we have a longer history (which I guess means we have more things to pawn).

Indeedie, I'm sure an oligarch would pay hansome sums to rent Windsor Castle as his "place in London"... let bidding commence 0:)

Title: Re: Meltdown
Post by: ezodisy on October 08, 2008, 12:39:00 PM

did you hear about the Afghan woman with 7 kids who gets £170k a year and gets to live in something like a 7 bed mansion which costs the council £12k/month? You could hardly make it up.

Title: Re: Meltdown
Post by: ezodisy on October 08, 2008, 10:12:51 PM

US debt clock runs out of digits (http://news.bbc.co.uk/1/hi/business/7660409.stm)

Title: Re: Meltdown
Post by: BachQ on October 09, 2008, 06:05:36 AM

Quote from: ezodisy on October 08, 2008, 10:12:51 PM
US debt clock runs out of digits (http://news.bbc.co.uk/1/hi/business/7660409.stm)

That cracks me up.

Whoever devised that apparently didn't anticipate that the tag team of Hank Paulson, Geo. Bush, and Ben Bernanke (Helicopter Ben) would go on a wild, bottomless spending frenzy.

To be safe, they'll need to add at least three more digits.

(http://www.financialsense.com/fsu/editorials/dollardaze/2007/images/0626.h6.jpg)

Title: Re: Meltdown
Post by: ezodisy on October 09, 2008, 06:35:55 AM

lol! nice one.

(http://heady.co.uk/rm/ftse_warning_new.gif)

Title: Re: Meltdown
Post by: BachQ on October 10, 2008, 03:04:34 AM

Quote from: ezodisy on October 09, 2008, 06:35:55 AM
lol! nice one.

(http://heady.co.uk/rm/ftse_warning_new.gif)

For this week, the doom-o-meter is deep into red (doom) territory!

Title: Re: Meltdown
Post by: BachQ on October 10, 2008, 03:05:22 AM

FRIDAY, OCT 10: Japan's Nikkei Index Has Second-Biggest Drop on Record, Falling Almost 10% (http://www.bloomberg.com/apps/news?pid=20601087&sid=aD65jXw9D3d4&refer=home)

Title: Re: Meltdown
Post by: BachQ on October 10, 2008, 03:06:20 AM

Bloomberg: Russia's Crash `Pretty Much the Same' as 1929, Micex Chief Says -- -- The 67 percent decline in Russian equities this year resembles the U.S. stock market crash of 1929 because of the damaging effect of highly leveraged investors, the head of Russia's Micex Stock Exchange said. (http://www.bloomberg.com/apps/news?pid=20601085&sid=a0Z7o9gkFaoA&refer=europe)

Title: Re: Meltdown
Post by: BachQ on October 10, 2008, 05:40:09 AM

Oil plummets below $83 on global slowdown fears -- (http://news.yahoo.com/s/ap/oil_prices;_ylt=AuVjRKA8etZfvh0mdmg.AFyAsnsA)

-- Oil prices plummeted to a one-year low below $83 a barrel Friday in Asia
-- This plunge is due to demand destruction as investor fears of a severe global economic downturn sparked a panicked sell-off
-- Light, sweet crude for November delivery was down $4.00 to $82.59 (the lowest since October 2007).

:o

:o

Title: Re: Meltdown
Post by: BachQ on October 10, 2008, 05:40:43 AM

Australia Stock Market has Worst day in 21 years -- Sydney Morning Herald -- Australian shares plummet by the most since the 1987 crash as global recession fears mount. (http://business.smh.com.au/business/worst-day-in-21-years-20081010-4xqy.html)

Title: Re: Meltdown
Post by: BachQ on October 10, 2008, 05:42:13 AM

Quote from: Lethe on October 08, 2008, 09:35:43 AM
Lolwut. Srsly, how can the UK afford something which the US almost didn't manage to do?

Brown and Darling commit £500 billion for bank bailout

Gordon Brown and Alistair Darling set out a radical £500 billion package today to restore confidence in the UK banking sector and break the crippling logjam in credit markets.

The three-part package includes committing up to £50 billion of taxpayer funds for a partial nationalisation of stricken banks, met from increased public borrowing and with political strings attached that would include reining in executive pay.

In addition, the Bank of England will pump at least £200 billion into the money markets under its existing Special Liquidity Scheme. The Government is also making a further £250 billion available for banks over the next three years to guarantee medium-term debt to help restore confidence and get banks lending to each other again.

The deal was hammered out in talks with banking chiefs that dragged on into the early hours. At a joint press conference in Downing Street, both the Prime Minister and Chancellor were keen to draw a distinction between their rescue plan and the $700 billion US bailout involving the purchase of "toxic" assets.

[Cont.] (http://www.timesonline.co.uk/tol/news/uk/article4905637.ece)

Lethe, the USA is considering a similar approach (as one of the tools available to the Treasury).

http://www.nytimes.com/2008/10/09/business/economy/09econ.html?em

Title: Re: Meltdown
Post by: Lethevich on October 10, 2008, 09:06:16 AM

It will be interesting to see how Australia works over the next few months. Apparently they have some of the toughest bank regulation in the world, which puts them on the other side of the table to US republican style free market fetishism. FIGHT!!!

Title: Re: Meltdown
Post by: greg on October 11, 2008, 03:55:56 PM

Gas prices- from a regular at $3.99 to what i saw today, $3.09.
I can't wait to go to the gas station again. I had to use $25 to fill it up all the time, but $20 did the same at about $3.34 less than a week ago. Man, what if it got so low that I end up having to use $15! :o

Title: Re: Meltdown
Post by: Lethevich on October 11, 2008, 08:07:16 PM

Quote from: GGGGRRREEG on October 11, 2008, 03:55:56 PM
Gas prices- from a regular at $3.99 to what i saw today, $3.09.
I can't wait to go to the gas station again. I had to use $25 to fill it up all the time, but $20 did the same at about $3.34 less than a week ago. Man, what if it got so low that I end up having to use $15! :o

There are arabs crying right now :'( "What happened to The Plan, guys?"

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:15:25 AM

Quote from: Lethe on October 10, 2008, 09:06:16 AM
It will be interesting to see how Australia works over the next few months. Apparently they have some of the toughest bank regulation in the world, which puts them on the other side of the table to US republican style free market fetishism. FIGHT!!!

Good points. FYI, a survey by the World Economic Forum recently has concluded that the top 20 soundest banking countries are as follows:

1. Canada [6.8]
2. Sweden (6.7)
3. Luxembourg (6.7)
4. Australia (6.7)
5. Denmark (6.7)
6. Netherlands (6.7)
7. Belgium (6.6)
8. New Zealand (6.6)
9. Ireland (6.6)
10. Malta (6.6)
11. Hong Kong
12. Finland
13. Singapore (6.5)
14. Norway (6.5)
15. South Africa (6.5)
16. Switzerland (6.5)
17. Namibia (6.5)
18. Chile (6.5)
19. France (6.5)
20. Spain

39. Germany (6.1)
40. United States (6.1)
44. United Kingdom (6.0)

124. Kazakhstan
125. Cambodia
126. Burundi
127. Chad
128. Ethiopia
129. Argentina
130. East Timor
131. Kyrgyz Republic
132. Lesotho
133. Libya
134. Algeria

The World Economic Forum's Global Competitiveness Report based its findings on opinions of executives and assigned banks a score between 1.0 (insolvent and possibly requiring a government bailout) and 7.0 (healthy, with sound balance sheets). U.K. banks = 6.0; US = 6.1; Germany = 6.1; France = 6.5; Switzerland = 6.5

Here's a link: financialweek.com (http://www.financialweek.com/apps/pbcs.dll/article?AID=/20081009/REG/810099991/1028/WRITEEDITOR)

Also; http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20081009/canadian_banks_081009/20081009?hub=TopStories

For the full report, click here (http://www.weforum.org/documents/GCR0809/index.html)

Obviously, this data is pre-meltdown, and God only knows what the post-meltdown rankings would look like.

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:16:53 AM

In contrast to the meltdown in the Western world, Islamic banks are thriving, with Dow Jones's Islamic financials index rising 4.75% in the most recent September quarter.

:o

:o (http://business.smh.com.au/business/islamic-finance-rides-the-storm-20081010-4yft.html?page=1)

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:17:33 AM

According to the Guardian, (http://www.guardian.co.uk/business/2008/oct/12/recession-unemploymentdata) some forecasters are suggesting that total UK unemployment will reach two million by Christmas. :o

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:18:55 AM

(http://www.chartoftheday.com/20081010.gif)

October 9, 2008, marked the one-year anniversary of the current US stock market correction (the Dow reached its record high of 14,164.53 on October 9, 2007). This is the most severe correction in 108 years.

(http://www.reuters.com/resources/r/?m=02&d=20081010&t=2&i=6337036&w=&r=2008-10-10T165740Z_01_BTRE4991B4A00_RTROPTP_0_MARKETS-GLOBAL) (http://www.chartoftheday.com/20081010.htm?T)

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:21:07 AM

(http://ndn.newsweek.com/media/18/nw_081006_auth.jpg)

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:22:22 AM

Lehman Failure May Spark Record Payout for Credit Swap Sellers (Bloomberg) -- "The collapse of Lehman Brothers Holdings Inc. may force sellers of credit-default swaps including Pacific Investment Management Co. to make the biggest- ever payout in the $55 trillion market. An auction to be held today will determine the size of the payments buyers of default protection can claim after New York- based Lehman filed for the largest bankruptcy with $618 billion in debt. Lehman's $128 billion of bonds were trading yesterday at an average of 13 cents on the dollar, indicating credit swap sellers may have to pay 87 cents on the dollar." (http://www.bloomberg.com/apps/news?pid=20601087&sid=aX_FLjiKfbic&refer=home)

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:22:57 AM

A THOUSAND new nuclear power stations are needed across the world to tackle the oil crisis, Gordon Brown warned. (http://thescotsman.scotsman.com/latestnews/Brown-World-needs-1000-more.4182560.jp)

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:23:13 AM

MSN: Crash of 2008 is Upon Us

http://articles.moneycentral.msn.com/Investing/Dispatch/market-dispatches-100908.aspx

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:24:11 AM

http://www.nakedcapitalism.com/2008/10/roubini-warns-of-possible-systemic.html

Roubini Warns of Possible Systemic Meltdown, "Severe Global Depression" --

Quote
The U.S. and advanced economies' financial systems are now headed towards a near-term systemic financial meltdown as day after day stock markets are in free fall, money markets have shut down while their spreads are skyrocketing, and credit spreads are surging through the roof. There is now the beginning of a generalized run on the banking system of these economies; a collapse of the shadow banking system, i.e. those non-banks (broker dealers, non-bank mortgage lenders, SIV and conduits, hedge funds, money market funds, private equity firms) that, like banks, borrow short and liquid, are highly leveraged and lend and invest long and illiquid, and are thus at risk of a run on their short-term liabilities; and now a roll-off of the short term liabilities of the corporate sectors that may lead to widespread bankruptcies of solvent but illiquid financial and non-financial firms....So we have a severe recession, a severe financial crisis and a severe banking crisis in advanced economies...

Title: Re: Meltdown
Post by: BachQ on October 12, 2008, 03:24:49 AM

GM shares drop to 58-year low, global risks eyed - (Reuters - Thu 6:27 pm ET) -- "General Motors Corp shares plunged to their lowest level since 1950 on Thursday as concerns mounted that an industry decline that started in the United States was spreading and a leading forecaster warned global auto demand could "collapse" in 2009." (http://www.canada.com/topics/news/story.html?id=e93e1ec2-9dd6-4622-a692-a0c5a4702b9f)

Title: Re: Meltdown
Post by: greg on October 12, 2008, 03:28:18 PM

Quote from: Lethe on October 11, 2008, 08:07:16 PM
There are arabs crying right now :'( "What happened to The Plan, guys?"

Mwahahaha, I ate the plan >:D

Title: Re: Meltdown
Post by: Lethevich on October 13, 2008, 04:15:17 AM

Royal Bank of Scotland, HBOS Set to Be Taken Over by Government (http://www.bloomberg.com/apps/news?pid=20601102&sid=aw6Y9TU3RioI&refer=uk)

This has made the stock markets rise around 5% since announced, and seems a good idea. Even better, the gov't has pledged to invest more if required, so this isn't a last gasp that could just be cash down the toilet. But from a UK POV this is kind of scary, as it has been proven how inter-linked all western and eastern banks are, that if enough governments cheap out in emulating this, then it could cause it to fail anyway. I hope other countries also do similar, as the results in the UK so far have been positive (it has allowed the government to ask banks to lower mortgage rates, etc).

Title: Re: Meltdown
Post by: Lilas Pastia on October 13, 2008, 07:22:12 PM

I'm amazed at how reactive posts have become here. Nothing is written about the future, everything is about yesterday's news. And yet, taking a step or two (or three) backwards, a lot becomes more intelligible.

It's the economy, stupid, not the markets! If you have cash and a sound balance sheet, you can get loans. If you have a negative balance and no prospect for improvement, nobody will give you the time of the day. The problem is, a lot of crap has obscured what good there is in the capitalist system when it's properly regulated. It's all a question of balance and common sense. When dogmas take over, the world suffers.

Quote(2008 Nobel Prize Winner for Economics) Mr. Krugman has been a harsh critic of the Bush administration and the Republican Party in The New York Times, where he writes a regular column and has a blog called "Conscience of a Liberal."

He has also taken the Bush administration to task over the current financial meltdown, blaming its pursuit of deregulation and unencumbered fiscal policies for the financial crisis that has threatened the global economy with recession

QuoteVerily, verily, I say unto thee: There is nothing new under the Sun.

. How many times does the Ecclesiastes (and his avatars throughout the ages)h ave to tell us? Pursuing personal gain is nothing, fostering common gain will benefit all.

Title: Re: Meltdown
Post by: BachQ on October 14, 2008, 03:44:26 AM

Quote from: Lilas Pastia on October 13, 2008, 07:22:12 PM
I'm amazed at how reactive posts have become here. Nothing is written about the future, everything is about yesterday's news. And yet, taking a step or two (or three) backwards, a lot becomes more intelligible.

It's the economy, stupid, not the markets! If you have cash and a sound balance sheet, you can get loans. If you have a negative balance and no prospect for improvement, nobody will give you the time of the day. The problem is, a lot of crap has obscured what good there is in the capitalist system when it's properly regulated. It's all a question of balance and common sense. When dogmas take over, the world suffers.
.
. How many times does the Ecclesiastes (and his avatars throughout the ages)h ave to tell us? Pursuing personal gain is nothing, fostering common gain will benefit all.

Without a doubt, this thread has become mostly a current events thread rather than a policy analysis thread. I wish I had time to delve into these policy issues, but I haven't of late (I've been averaging 10 minutes/day @ GMG). Moreover, the recent onslaught of financial doom has given rise to some extremely interesting news stories that are worth posting, even without commentary or analysis by me or by others. These events are too important to ignore, even if we can't invest the time to critique, analyze, or comment upon every news blurb.

But you are correct that the pervasive lack of proper regulation (or excessive deregulation) has been a primary driving force propelling at least three crises: (1) the subprime housing crisis; (2) the banking/insurance crisis; and (3) the shadow-banking / credit-default swap fiasco. A related issue is the unbridled leveraging and borrowing that debt-stricken individuals and companies have engaged in (or have fallen victim to, depending on your perspective). And when these individuals become unemployed, or when these companies' revenues fall, defaults on their debt will skyrocket. This will lead to asset deflation (devaluation), which will lead to more defaults and more unemployment. And this vicious cycle feeds upon itself. These forces, in turn, have caused the credit markets to freeze, the stock markets to implode, and the national debt to balloon.

Given the recent financial meltdown, I don't see how anyone can embrace unfettered free-market capitalism. Regulation is necessary in part because markets are not self-correcting; rather, distortions and bubbles are inherent in the global financial system. George Soros has succinctly summarized the issue thus: "If bubbles are endemic in the system, then government regulators [must] intervene to prevent bubbles from getting too big. Governments [must] recognize that markets are not self-correcting. It is not enough to pick up the pieces after the crisis." (http://www.huffingtonpost.com/nathan-gardels/soros-end-of-financial-cr_b_134008.html)

As you mention, balanced regulation is critical to the proper functioning of capitalism. Too much regulation will stultify the positive, salubrious forces of capitalism; too little regulation will allow greed, predation, shortsightedness, and recklessness to destabilize the system. We need to strike a balance, and we have a long way to go before that is achieved. Who's to blame? Geo. W. Bush & Co.? Greenspan? Bernanke? Unfortunately, Washington has become so overrun and infested with special interests that much of the current regulation fails in its essential purpose, and there's plenty of blame to go around.

It's interesting that the entire response to the global financial meltdown has become "reactionary" -- and this thread has fared no better. Quoting Emil Cioran, as ezodisy observed a few posts earlier: "The obsession with remedies marks the end of a civilisation." (http://www.good-music-guide.com/community/index.php/topic,3519.msg233064.html#msg233064) The global financial marketplace is now in full-blown reactionary mode, and the resultant policies are certain to address symptomatic crises rather than the underlying root causes. Ergo the current bailout frenzy.

One lingering question is whether the recent spate of emergency governmental interventions will destroy all sense of equilibrium and confidence, so as to set into motion an implosion of the now-fragile house of cards which deregulation has brought to bear (and/or has otherwise exacerbated). Another question is what effect the cumulative escalation of national debts of the various countries participating in these frenzied bailouts will have upon our children and grandchildren? Have we doomed them economically? Whenever a short-term solution renders impossible a longterm goal or equilibrium, it should be discarded in total.

Title: Re: Meltdown
Post by: Lilas Pastia on October 14, 2008, 02:58:14 PM

Very thought provoking post, Dm. I don't think anybody anywhere has a clear idea of the outcome 1, 5 or 25 years from now.

Title: Re: Meltdown
Post by: BachQ on October 15, 2008, 03:38:23 AM

Quote from: Lilas Pastia on October 14, 2008, 02:58:14 PM
Very thought provoking post, Dm. I don't think anybody anywhere has a clear idea of the outcome 1, 5 or 25 years from now.

You do not want to know what I predict for 5 years out ........... :D >:D

Title: Re: Meltdown
Post by: BachQ on October 15, 2008, 03:42:10 AM

More fun from Nouriel Roubini:

LINK (http://www.rgemonitor.com/roubini-monitor/253933/revisiting_my_february_paper_the_risk_of_a_systemic_financial_meltdown_the_12_steps_to_financial_disasterand_some_new_policy_recommendations_to_avoid_the_meltdown)

QuoteA contagious and cascading spiral of credit disintermediation, credit contraction, sharp fall in asset prices and sharp widening in credit spreads will [...] be transmitted to most parts of the financial system. This massive credit crunch will make the economic contraction more severe and lead to further financial losses. Total losses in the financial system will add up to more than $1 trillion and the economic recession will become deeper, more protracted and severe.

A near global economic recession will ensue as the financial and credit losses and the credit crunch spread around the world. Panic, fire sales, cascading fall in asset prices will exacerbate the financial and real economic distress as a number of large and systemically important financial institutions go bankrupt. A 1987 style stock market crash could occur leading to further panic and severe financial and economic distress. Monetary and fiscal easing will not be able to prevent a systemic financial meltdown as credit and insolvency problems trump illiquidity problems.

Fun times, baby. Fun times!

Title: Re: Meltdown
Post by: BachQ on October 15, 2008, 03:48:02 AM

From the UK Independent

Quote... When Governments spend vast sums of money to shore up the banking system, you just know that it would be all too convenient for it to let inflation erode the national debt incurred in the process. Even before these gigantic expenditures, Britain's true level of national debt, according to the economist Liam Halligan – the Government won't give the real figure including off-balance sheet liabilities – is over £1,300bn. This is equivalent to £50,000 per household.

http://www.independent.co.uk/opinion/commentators/dominic-lawson/dominic-lawson-it-all-went-wrong-when-we-left-the-gold-standard-960268.html

Title: Re: Meltdown
Post by: BachQ on October 15, 2008, 03:50:12 AM

independent.co.uk: A £516 trillion derivatives 'time-bomb'-- "The market is worth more than $516 trillion, (£303 trillion), roughly 10 times the value of the entire world's output: it's been called the "ticking time-bomb". It's a market in which the lead protagonists – typically aggressive, highly educated, and now wealthy young men – have flourished in the derivatives boom. But it's a market that is set to come to a crashing halt – the Great Unwind has begun."
(http://www.independent.co.uk/news/business/news/a-163516-trillion-derivatives-timebomb-958699.html)

Title: Re: Meltdown
Post by: BachQ on October 15, 2008, 04:55:52 AM

Us Inflation Jumps, Retail Slumps In September

(http://www.cnbc.com/id/27194392)

Quote
Elsewhere on the economic front, the New York State Empire manufacturing index posted it slowest reading in history. With the economic slowdown taking a turn for the worse in recent months, economists have been forecasting a quarterly decline in consumer spending for the first time in almost 20 years.

Title: Re: Meltdown
Post by: BachQ on October 15, 2008, 04:57:13 AM

Bloomberg's Chart-of-the-Day showing a "Black Swan Event." http://www.bloomberg.com/apps/data?pid=avimage&iid=ifNHW1Brxg0s

``It's way off the scale, a one-in-billions chance,'' said Marriott, a fellow of the Royal Statistical Society. ``This is absolutely a black swan event. The Depression was an event in human history. So is this.'' (http://www.bloomberg.com/apps/news?pid=20601109&sid=acw1G8iS8oXc&refer=home)

Title: Re: Meltdown
Post by: BachQ on October 15, 2008, 04:58:24 AM

(http://newsimg.bbc.co.uk/media/images/45084000/gif/_45084944_moneycrisis466_407.gif)

From BBC. (http://news.bbc.co.uk/2/hi/business/7644238.stm)

Title: Re: Meltdown
Post by: BachQ on October 16, 2008, 03:22:17 AM

LINK (http://www.rttnews.com/Content/AsianMtUpdates.aspx?Node=B3&Id=743429)

QuoteThe Japanese market slumped more than 11% on Thursday, posting its biggest one-day fall since the 1987 stock market crash. ... The benchmark Nikkei 225 index nose-dived 1,089 points or 11.4% to close at 8,458.5 and the broader Topix index fell 91 points or 9.5% to finish at 864.5.

Title: Re: Meltdown
Post by: BachQ on October 16, 2008, 03:23:21 AM

Two more government bailouts for Swiss bank powerhouses UBS and Credit Suisse.

(http://www.guardian.co.uk/business/2008/oct/16/ubs-creditsuisse)

Quote

The operation's scale underlines the continuing turmoil within the west's banking sector, with the Swiss banking commission and central bank forcing the two institutions to raise their capital ratios significantly. ... The Swiss authorities underlined the depth of the crisis by saying UBS had been hit by "massive" outflows of clients' money as investor confidence had crumbled. Marcel Rohner, UBS chief executive, said the markets had moved last month from "crisis mode" to "panic mode".

Title: Re: Meltdown
Post by: BachQ on October 16, 2008, 03:29:31 AM

First Iceland (http://www.economist.com/finance/displaystory.cfm?story_id=12382011) lurched toward the brink of collapse, now Pakistan faces bankruptcy. (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3147266/Pakistan-facing-bankruptcy.html) And there's more: Ukraine, Hungary, and Serbia (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3204874/Crisis-spreads-to-Eastern-Europe-as-Ukraine-Hungary-and-Serbia-call-IMF.html) have entered emergency talks with the IMF (International Monetary Fund), igniting fears that a departure of foreign investors will catalyze a systemic financial crisis across Eastern Europe. In the US, Jefferson County Alabama is nearing the brink, but has voted against filing for a record bankruptcy, (http://ap.google.com/article/ALeqM5i7NbXMswuwjatkCMoBzvFIZxY0nAD93QFHB80) and California (http://www.economist.com/world/unitedstates/displayStory.cfm?source=hptextfeature&story_id=12381204)is struggling to pay its bills.

(http://www.telegraph.co.uk/telegraph/multimedia/archive/01004/ZARDARI-ECONOMY-46_1004972c.jpg)

Title: Re: Meltdown
Post by: BachQ on October 16, 2008, 03:33:12 AM

However, in Liverpool, England, everything is hunky dory when you visit LIVERPOOL ONE (http://www.liverpool-one.com/website/takeatour.html)

Quote
Access All Areas on 1st October marked the first date that the entire 42 acres of shopping and leisure was fully accessible. You can now take advantage of 42-acres of retail and leisure heaven - great new shops, gourmet restuarants and a 14 screen ODEON as we revealed the highly anticipated Leisure Terrace, and the jewel in the crown - Chavasse Park - for the first time.

(http://www.liverpool-one.com/Comgenic.Manager.Images/sjs_01.jpg)

(http://www.liverpool-one.com/Comgenic.Manager.Images/sjs_05.jpg)

(http://www.liverpool-one.com/Comgenic.Manager.Images/sjs_06.jpg)

(http://www.liverpool-one.com/Comgenic.Manager.Images/paradise_06.jpg)

(http://www.liverpool-one.com/Comgenic.Manager.Images/hanover_02.jpg)

(http://www.liverpool-one.com/Comgenic.Manager.Images/park_02.jpg)

One may wonder for how long this monstrosity will survive.

Title: Re: Meltdown
Post by: ezodisy on October 16, 2008, 04:31:50 AM

Quote from: Dm on October 16, 2008, 03:29:31 AM
And there's more: Ukraine, Hungary, and Serbia (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3204874/Crisis-spreads-to-Eastern-Europe-as-Ukraine-Hungary-and-Serbia-call-IMF.html) have entered emergency talks with the IMF (International Monetary Fund), igniting fears that a departure of foreign investors will catalyze a systemic financial crisis across Eastern Europe.

Ah there's nothing quite like a little doom & gloom to get your day off to the perfect start >:D The poor Hungarian Forint is taking a right kicking with both the Euro and Pound rising strongly against it. Things can only get worse.* On the upside Budapest is a charming city with lovely cakes and beautiful women and property prices are outstanding for a major European capital.

*don't fall in love with the downside until you're sure that it's never-ending ;D

Quote from: Dm on October 16, 2008, 03:29:31 AM
(http://www.telegraph.co.uk/telegraph/multimedia/archive/01004/ZARDARI-ECONOMY-46_1004972c.jpg)

The Karachi Stock Exchange. Just kick back light up and drift off.

See what I mean?

(http://d.yimg.com/us.yimg.com/p/ap/20080916/capt.986bac1373ec460d89a523986704d4be.pakistan_markets_kar104.jpg)

Title: Re: Meltdown
Post by: Lilas Pastia on October 16, 2008, 06:15:59 AM

A bailout with a difference: http://www.globeinvestor.com/servlet/story/GAM.20081016.RBANKSCMHC16/GIStory/

The canadian government stands to make a bundle with the plan.

Title: Re: Meltdown
Post by: bwv 1080 on October 16, 2008, 07:01:16 AM

Oil price may hit $200 a barrel

Global demand for oil has been fuelled by China and India
The price of crude oil could soar to $200 a barrel in as little as six months, as supply continues to struggle to meet demand, a report has warned.

Goldman Sachs energy strategist Argun Murti made the warning as benchmark US light crude passed the $123 mark for the first time.

Surging demand was increasingly likely to create a "super-spike" past $200 in six months-to-two years' time, he said. Oil prices have now risen by 25% in the last four months and 400% since 2001.

US sweet, light crude hit an all-time peak of $123.53 (£63.25) on Wednesday, while London Brent crude jumped to $122.32.

Mr Murti correctly predicted three years ago - when oil was about $55 a barrel - that it would pass $100, which it reached for the first time in January of this year.

Chinese demand

Soaring global demand for oil is being led by China's continuing economic boom and, to a lesser extent, by India's rapid economic expansion.

Both are now increasingly competing with the US, the European Union and Japan for the lion's share of global oil production.

This additional demand comes at a time of continuing production problems in a number of oil-producing nations.

Production is down in Nigeria after the latest attacks on pipelines this week by anti-government militants, while Iraqi exports through the north of the country have been hit by renewed cross-border raids by Turkish forces against Kurdish insurgents.

Oil prices are also rising as the key US summer driving season approaches.

Economists warn that continuing high oil prices will impact on the global economy, hitting growth and fuelling inflation.

Title: Re: Meltdown
Post by: bwv 1080 on October 16, 2008, 07:04:15 AM

Ten Internet Stocks That
Will Revolutionize the World

Broadcom Corporation (Nasdaq BRCM) is a leading developer of highly integrated silicon solutions that enable broadband digital transmission of video, voice, and data content to and throughout the home, as well as within the business enterprise. Broadcom's products enable the high-speed transmission of data over existing communications and infrastructures, most of which were not originally intended for digital data transmission.
Broadcom designs, develops and supplies integrated circuits (IC) for some of the most significant broadband communications markets.
This includes the markets for cable set-top boxes, cable modems, high-speed office networks, home networking, direct broadcast satellite, terrestrial digital broadcast, and digital subscriber lines (DSL). Broadcom was founded in 1991 by Henry T. Nicholas, III, Ph.D. and Henry Samueli, Ph.D., with the vision of providing broadband communications by leveraging their combined 35 years of communications IC experience.
Broadcom has a significant market share in cable modems, digital set-top boxes, high-speed networking and Fast Ethernet networking, and provides key technology and products in emerging broadband markets.
Broadcom has strategic customer relationships with 3Com, Nortel-Bay, Cisco Systems, General Instrument, Motorola, Panasonic and Scientific-Atlanta. Broadcom Corporation has placed itself in a strategic position to excel in all methods of broadband communications. Broadcom has reported earnings of 133% and 280% from a sales increase of 171% and 157% for the last two reported quarters. Company headquarters: Irvine, CA, phone: 949-450-8700. (Source: www.broadcom.com)

CMGI

CMGI (Nasdaq CMGI) is the recognized leader in the consumer e-commerce sector of the exploding Internet. CMGI represents the largest, most diverse network of Internet companies in the world. This network includes both CMGI operating companies and a growing number of synergistic investments through its venture capital affiliate, @Ventures. CMGI leverages the technologies, content and market reach of its extended family companies to foster rapid growth and industry leadership across its network, as well as the larger Internet economy.
CMGI started in 1968 as a list management and direct marketing business. Since then CMGI has built upon that core by creating or investing in a number of companies that engage in or support direct marketing on the Internet.
CMGI has used an innovative investment strategy much like a private venture capital company to create value for its shareholders. Its @Ventures Internet investment had development arm has yielded a significant return on investment since its inception in 1995. The combination of CMGI's majority owned operating companies and the @Ventures portfolio creates exceptional diversity and depth across key Internet sectors, which include e-commerce, infrastructure, content, and community companies.
CMGI earnings increased by 999% from a sales increase of 106% for the second quarter of 1999. Over the past five years, the share price of CMGI has rocketed by 19,476%. Company headquarters: Andover, MA, phone: 978-684-3832. (Source: www.cmgi.com)

Excite@Home Corporation

Excite@Home (Nasdaq ATHM) is a new media company poised to revolutionize the way people across the globe use the Internet to communicate, conduct business, capture information, and perform various transactions. The company is the result of a merger between Excite, Inc. and The At Home Network in January 1999.
The company has combined the Excite brand (one of the best known names on the Internet with 70% recognition among Web users) with the At Home Network. At Home's broad reach agreement with 21 cable companies worldwide is a source of continuing revenue.
Today the new company delivers its vision of "All Band, All Device, All the Time." Excite@Home is creating global media network centers by combining online content and navigational services with the distribution power of its broadband infrastructure. Management's goal is to provide a new site of advanced interactive services that continually captures the imagination of Internet users.
By leveraging the global reach of dial-up Internet access and the consistent growth of broadband, Excite@Home gives its customers the flexibility to move between services at different speeds, using different devicesall with one consistent interface.
At Home offers the choice of using a PC, pager, cellular phone, or television to access the services that cater to your specific needs and interests 24 hours a day. Excite@Home's second quarter earnings were up 120% on a sales increase of 665%. Company headquarters: Redwood City, CA, phone: 650-569-5000. (Source: www.home.net)

Global Crossing Ltd.

Global Crossing (Nasdaq GBLX) is the leading independent provider of fiber optic telecommunications systems. Global Crossing's mission is to develop, own and operate the world's first independent integrated global network in order to help satisfy the explosive demand for reliable, high quality undersea transmission capacity. Global Crossing is rapidly developing major fiber optic undersea cable systems and terrestrial facilities, to reliably and cost effectively connect the leading cities of the world.
The demand for telecommunications capacity is exploding. Within the past five years, Internet traffic has grown 86% per year, more than six times the growth rate of voice traffic.
Add to this the increasing global competition caused by continuing telecommunication privatization worldwide, and it becomes very clear that the industry is in the midst of a major evolution. While there has been significant demand for global telecommunications capacity, there has not been a corresponding growth in the number of new facilities, especially in the undersea fiber optic cable industry. Global Crossing has already begun to meet this challenge.
They have the additional undersea network capacity and faster response times, which will be required to satisfy current and anticipated growth in telecommunications traffic.
Management owns 70% of the company. Second quarter sales were up 88%. GBLX should post its first profit during the third quarter of 1999. Company headquarters: Bermuda, phone: 441-296-8600. (Source: http://206.132-184.108)

JDS Uniphase

Uniphase Corporation (Nasdaq JDSU) is a high technology company that designs, develops, manufactures and markets fiber optic telecommunications components, modules and laser subsystems. The company's telecommunications products include semiconductor lasers, high speed external modulators, transmitters, fiber Bragg gratings and optical modules for fiber optic networks in the telecommunications and cable television industries. The company's laser division produces laser subsystems for a broad range of original equipment manufacturers (OEM).
Applications include biotechnology, industrial process control, measurement, graphics, printing, and semiconductor equipment.
Uniphase Corporation is in the process of acquiring EPITAXX, Inc., a leading supplier of optical detectors and receivers for fiber optic telecommunications and cable television (CATV) networks. EPITAXX's products include long wavelength detectors and receivers that address a number of applications, including dense wavelength division multiplexing (DWDM) and SONET/SDH transmission, optical network monitoring for terrestrial and undersea networks, test measurement and fiber optic analog CATV.
The capability to supply advance detectors and receivers, both in component form and as part of integrated modules, is a very significant step for JDS Uniphase in expanding its "active" optoelectronic product lines.
With EPITAXX joining the JDS Uniphase family, JDS has built a powerhouse providing advanced products and technologies for the rapidly growing fiber optics telecommunications market. JDS Uniphase has produced a steady increase in sales and earnings for the last four quarters. During the most recent second quarter, earnings increased by 47% from a 68% sales increase. Company headquarters: San Jose, CA, Phone: 408-434-1800. (Source: www.jdsunph.com)

Lucent Technologies

Lucent Technologies (NYSE LU) is at the very center of a global communications networking revolution that is expected to total $650 billion by 2001. Lucent is among the worldwide leaders in the design, development and manufacturing of leading edge communications solutions. In this market Lucent delivers a wide range of public and private networks, communications systems and software, optical and data networking systems, business telephone systems, and microelectronic components.
Lucent holds the Number One market position in optical networking, U.S. switching systems, and U.S. wireless infrastructure equipment.
Customers include global service providers: Internet service providers; and private, public and government owned telephone companies around the world. Lucent also holds the Number One market position in messaging and in-building wiring systems, and is Number One in the U.S. market for business communications systems, call centers and wireless systems. The crown jewel for Lucent is Bell Labs, which is the innovation engine for Lucent Technologies.
More than any other private R&D institution, Bell Labs has helped weave the technological fabric of modern society.
It is the birthplace of the transistor, the laser and the communications satellite, and continues to make major technological advances, including Internet switching and transmission products and pace setting optical networking systems. Lucent Technologies is literally taking the world into the future. Lucent Technologies has a growth rate of 56% and a return on equity of 51%.
Over the last two reported quarters, earnings have increased 143% and 56% over the same period last year. Company headquarters: Murray Hill, NJ, phone: 908-582-8500. (Source: www.lucent.com)

MCI WorldCom

MCI WorldCom (Nasdaq WCOM) is a telecommunications industry leader that owns and operates its own networks in local cities across the U.S. and around the world. The company's unique set of assets allows its customers to combine voice and data traffic from local U.S. and international locations onto seamless, end-to-end networks. MCI WorldCom combines financial strength and a depth of resources to pursue the industry's best growth opportunities.
Operating in more than 65 countries, the company is a premier provider of facilities-based and fully integrated local, long distance, international and Internet services.
Through UUNET, the company has developed one of the most reliable and widely deployed Internet networks, as well as networking and hosting solutions around the world. The powerful UUNET backbone supports speeds ranging from 56 Kbps to OC-3 and provides local access from more than 1,000 locations worldwide. MCI WorldCom also offers virtual private networks (VPN), security, Web hosting and e-commerce services.
In global operations, MCI WorldCom has established itself as a local, facilities-based competitor in 16 countries, representing $533 billion or 76% of the $700 billion global telecommunications market.
MCI WorldCom just acquired Sprint in the largest merger ever. Sprint owns the most advanced wireless telecommunications network. MCI WorldCom reported that second quarter earnings increased by 114% on a sales increase of 247%. Company headquarters: Jackson, MS, phone: 601-360-8600. (Source: www.wcom.com)

Qualcomm

Qualcomm (NYSE QCOM) is an inventive wireless technology company which has been transforming the wireless communications industries since 1985. Qualcomm designs, develops, manufactures, markets, licenses and services some of the most advanced chipsets, system software, subscriber products, mobile information and management systems. As the pioneer and leading provider of CDMA (Code Division Multiple Access), the fastest growing wireless technology in the world, Qualcomm is uniquely positioned to offer innovative technology products and services for the wireless future.
Qualcomm has earned a distinguished reputation that goes beyond CDMA. Qualcomm was recently added to the S&P 500 Index, and Fortune's "100 Fastest Growing Companies."
Qualcomm is also included in Fortune's list of "100 Best Companies to Work for in America" and Industry Week's "100 Best Managed Companies." Qualcomm continues to lead the industry with the development of a versatile wireless data solutionHigh Data Rate (HDR), a high-speed, high capacity wireless technology. HDR unleashes Internet access by providing up to 2.4 Mbps in a standard 1.25Mhz channel bandwidth that is unprecedented in systems capable of fixed, portable, and mobile services.
Qualcomm's technology applications also include Ommi Tracs Mobile Information Management Systems, which provides transportation companies with an innovative and effective way of managing logistics.
Developed and manufactured by Qualcomm, Ommi Tracs is used in more than 35 countries on four continents and is the world's largest wireless data application. Qualcomm's earnings increased by 341% and 215% for the last two reported quarters. Company headquarters: San Diego, CA, phone: 619-587-1121. (Source: www.qualcomm.com)

Softbank

Since 1995, Masayoshi Son's Softbank Corp. (Nasdaq SFTBF) has made perhaps the savviest venture capital bet of all time by taking equity stakes in which are now the hottest sites on the Web. Yahoo, GeoCities, E*Trade, and E-Loan are just a few well-known Internet names. Son owns a piece of all of them. He has parlayed startup investments of nearly $2 billion into paper profits now worth over $15 billion.
In what might be the model for the global expansion of e-commerce, Son is binding together his 100-plus confederation of companies into a cyber-conglomerate that will expand into Asia and Europe.
At its core is Softbank, a sprawling empire in Japan and the U.S. that includes software, retailing, magazines, Web publishing, and computer trade show properties. With a market cap of $38 billion, Softbank exceeds that of Toshiba. Sons basic strategy is to import U.S. Web sites into Japan, where there is precious little experience in commercializing the Internet. The Japanese government is counting on e-commerce and business-to-business transactions as a means to lower Japans bloated price structure and spur a productivity surge.
Son and Softbank are leading the way and over time will destroy Japans "good ole boy" corruption network of price fixing.
Son is financing the development of Japans Nasdaq market system and is in the best possible position to capture the profits from the Internet revolution as it spreads into Japan, China and all of Southeast Asia, where one-third of the globes 6 billion people live and work. (Source: www.softbank.co.jp, Business Week)

Texas Instruments

Texas Instruments (NYSE TXN) is a global semiconductor company and the worlds leading designer and supplier of digital signal processing (DSP) and analog technologies, which are the engines driving the digitization of electronics. The companys businesses also include materials and controls, education and productivity solutions, and digital imaging. The company has manufacturing or sales operations in more than 25 countries.
Over the next few years, Texas Instruments expects to make major contributions to the critical technologies driving the digital revolution.
By integrating their capabilities in sensing, processing, transmission and display, Texas Instruments will provide important solutions that will help make its customers more competitive in global markets. Today Texas Instruments best scientists, engineers, mathematicians, computer scientists and technicians are exploring new scientific concepts to create products that are changing forever the way you live, learn, work, and play.
Texas Instruments continues to invest heavily in research and development, which will allow it to enhance its position of leadership and supporting growth in emerging global markets.
Through these investments, Texas Instruments is well positioned to dominate the worldwide demands of a $50 billion digital signal processing solutions market. Texas Instruments reported an earnings increase of 156% during the second quarter of 1999. Company headquarters: Dallas, TX, phone: 972-995-3773. (Source: www.ti.com)
Editors Note: Donald Rowe is editor of The Wall Street Digest, One Sarasota Tower, Ste. 602, Sarasota, FL 34236 1 year, 12 issues, $150. Published continuously since 1977, The Wall Street Digest is one of Wall Streets most widely read investment and financial publication for economic trends and investment direction. This highly-regarded advisory newsletter provides specific investment advice for stocks, bonds, mutual funds, precious metals, stock and bond markets.

Title: Re: Meltdown
Post by: bwv 1080 on October 16, 2008, 07:15:19 AM

Economic Collapse Coming

The domino effect is the problem of falling systems. One system fails, but another is dependent on it. Like a series of gigantic rows of dominoes, each within falling distance of another, so is the y2k problem and its effects. No one can even guess what these effects will be. This is what makes y2k the most complex problem facing the world -- possibly ever.

Consider banking. Banks are threatened by y2k. Depositors will draw out cash. Then the system collapses. If a business cannot pay programmers because its bank is closed, it cannot complete its y2k repairs. When it fails, the firms it supplied are trapped by production shortages. Etc.

The domino effect is one gigantic "etc."

Scientists speak of the butterfly effect: when a butterfly in California flutters its wings, it sets up wind currents that may produce a tornado in Texas. (That's because just about anything can produce a tornado in Texas.) This is an analogy, of course. We can't test the truth of this hypothesis. But it will be easy to test the domino theory if there is a run by Japanese housewives on the unliquid Japanese banks in 1999. These banks will start selling the U.S. government debt that they hold in the hundreds of billions of dollars worth. Interest rates in the U.S. will soar. The dollar will fall. Meanwhile, the run will spread to other nations.

Who knows where it will start? Only one thing seems certain: it WILL start. And when it does, every market institution and every government will suffer enormous setbacks. (See the category, "Banking.")

Banking is the obvious domino. Here's another: shipping. What happens to cities if gasoline is unavailable to truckers? If the computers that control train schedules break down? If rail freight cars cannot be located by defective computers? Think about your supermarket's shelves.

What happens to production when "just in time production" becomes "bottleneck production"?

Here's another: farming. Modern commercial farming is tied to hybrid seeds. The plants produced by hybrid seeds produce seeds that will not produce healthy plants if planted. Every year, almost every large farm on earth must re-order another batch of hybrid seeds. If, for any reason, the seed companies fail, or the banks fail, farmers will not be able to plant anything. This will lead to a famine. Let's not hedge our words: FAMINE. There is no way today to get enough non-hybrid seeds into production in order to avoid this problem. If this is one of the dominoes, the result will be widespread starvation.

This is an unpleasant thought. Are you willing to order a year's supply of non-hybrid seeds today for a few dollars, just in case? If not, you do not understand y2k and the domino effect. You do not take it seriously.

Y2K is a systemic problem. It cannot be fixed. Whatever it's going to do, it will do. Deferral is the primary response when men face a problem they know they cannot solve. Deferral, in this instance, means resignation to systemic failure. "What's the use?" is a completely rational response to the magnitude of y2k. Too much of the breakdown is going to take place outside institutioonal, regional, and national borders. Money spent to fix your system is thrown away if few of those outside your organization are willing to spend money to fix their systems. Even this assumes that the systems can be fixed.

There is no precedent for a breakdown of this magnitude. It is not clear that money can solve the problem. There is overwhelming evidence that money cannot possibly solve it: there are too few y2k programmers worldwide. Money will only raise the price of programmers; it will not increase their supply in the time remaining. So, the money is not being spent at the local level. Y2K will not be fixed at the macro (system) level because it must be spent at the micro level. It will not be spent at the micro level unless there is a high probability of success for the organization. There is no reason to spend money at the micro level if the macro level will fail. There is overwhelming evidence that the money will surely be wasted: thrown down a y2k hole.

So, the money is not being spent, nor will it be spent. Desperate cries by y2k awareness specialists have led to only one institutional success story (maybe): Visa. But Visa's success will mean nothing in 2000 if the banks fail. Spending money at the micro level will accomplish nothing visible at the macro level. The y2k awareness lecturers are modern-day John the Baptists, crying in the wilderness.

All the programmers' cries of "this insight is not helpful" will not change the reality of this analysis. The money is not being spent. I have shown why. Furthermore, the cries of "we can fix it if we stick together" are bound to fail. We cannot "stick together," for there is no institutional means to "stick us together."

Title: Re: Meltdown
Post by: ezodisy on October 16, 2008, 09:05:57 AM

Quote from: bwv 1080 on October 16, 2008, 07:01:16 AM
Oil price may hit $200 a barrel

Goldman Sachs energy strategist Argun Murti made the warning as benchmark US light crude passed the $123 mark for the first time.

Yeah the crooks made the prediction around May and then sold it, most likely. A week or two ago they came out with a $70 prediction which has just been realised.

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:33:17 AM

Quote from: Lilas Pastia on October 16, 2008, 06:15:59 AM
A bailout with a difference: http://www.globeinvestor.com/servlet/story/GAM.20081016.RBANKSCMHC16/GIStory/

The canadian government stands to make a bundle with the plan.

As the article notes, it's not really a "bailout" if the government turns a profit.

Quote
***

[The Government] is taking advantage of its ability to borrow cheaply to buy the mortgages, which will pay a higher rate of interest. The difference will be the government's profit. *** The purchases will be conducted by so-called reverse auction, where banks will essentially have to tell the government how much they will pay in the form of interest to move the loans off their balance sheets. The government will accept the most profitable bids. ... The government will establish a minimum acceptable yield, or interest rate. That minimum is expected to be above the yield on comparable five-year Canada Mortgage Bonds that CMHC sells to investors. Banks are expected to place bids somewhere above the minimum, with more-stressed banks giving the government a better deal as they try to ensure they can raise cash.

Hopefully, the US Government will adopt Canada's version of a reverse auction (with an establilshed limit of available funds) when valuing the mortgages it purchases. It strikes me as the best method all-around: given limited funds available for distribution, the reverse auction mechanism theoretically would encourage participants to bid down the mortgage assets to a fire-sale price. Not sure whether Bernanke / Paulson favor this method, but in testifying to Congress, Bernanke suggested that the banks would tender their assets for sale, and subsequently the Treasury would place a bid at what it considers "close to the hold to maturity price". (http://seekingalpha.com/article/96991-bernanke-gives-up-on-reverse-auction-idea) WTF? According to Forbes, Bernanke testified that the Government would purchase "illiquid mortgage-backed and mortgage-related securities at a price determined by a reverse auction process that has yet to be defined. ... neither Bernanke nor [Paulson] offered any details of exactly how the auction process would work. " (http://www.forbes.com/feeds/afx/2008/09/23/afx5460234.html) Again: WTF?

Quote
The loans are solid, but by taking them off bank balance sheets in return for cash, the banks will theoretically be able to make new loans.

Obviously, the critical issue is whether the loans will remain solid. In the US, many of the sub-prime and Alt-A mortgages are steaming piles of worthless paper. If the mortgages remain solid throughout the life of the loan, then the government can indeed easily turn a decent profit over the longterm. If, however, there is a dire global recession with rampant unemployment, then all bets are off, and that assumption of longterm profitability will evaporate.

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:35:24 AM

Quote from: bwv 1080 on October 16, 2008, 07:15:19 AM
Economic Collapse Coming

The domino effect is the problem of falling systems. One system fails, but another is dependent on it. Like a series of gigantic rows of dominoes, each within falling distance of another, so is the y2k problem and its effects. No one can even guess what these effects will be. This is what makes y2k the most complex problem facing the world -- possibly ever.

Consider banking. Banks are threatened by y2k. Depositors will draw out cash. Then the system collapses. If a business cannot pay programmers because its bank is closed, it cannot complete its y2k repairs. When it fails, the firms it supplied are trapped by production shortages. Etc.

The domino effect is one gigantic "etc."

Scientists speak of the butterfly effect: when a butterfly in California flutters its wings, it sets up wind currents that may produce a tornado in Texas. (That's because just about anything can produce a tornado in Texas.) This is an analogy, of course. We can't test the truth of this hypothesis. But it will be easy to test the domino theory if there is a run by Japanese housewives on the unliquid Japanese banks in 1999. These banks will start selling the U.S. government debt that they hold in the hundreds of billions of dollars worth. Interest rates in the U.S. will soar. The dollar will fall. Meanwhile, the run will spread to other nations.

Who knows where it will start? Only one thing seems certain: it WILL start. And when it does, every market institution and every government will suffer enormous setbacks. (See the category, "Banking.")

Banking is the obvious domino. Here's another: shipping. What happens to cities if gasoline is unavailable to truckers? If the computers that control train schedules break down? If rail freight cars cannot be located by defective computers? Think about your supermarket's shelves.

What happens to production when "just in time production" becomes "bottleneck production"?

Here's another: farming. Modern commercial farming is tied to hybrid seeds. The plants produced by hybrid seeds produce seeds that will not produce healthy plants if planted. Every year, almost every large farm on earth must re-order another batch of hybrid seeds. If, for any reason, the seed companies fail, or the banks fail, farmers will not be able to plant anything. This will lead to a famine. Let's not hedge our words: FAMINE. There is no way today to get enough non-hybrid seeds into production in order to avoid this problem. If this is one of the dominoes, the result will be widespread starvation.

This is an unpleasant thought. Are you willing to order a year's supply of non-hybrid seeds today for a few dollars, just in case? If not, you do not understand y2k and the domino effect. You do not take it seriously.

Y2K is a systemic problem. It cannot be fixed. Whatever it's going to do, it will do. Deferral is the primary response when men face a problem they know they cannot solve. Deferral, in this instance, means resignation to systemic failure. "What's the use?" is a completely rational response to the magnitude of y2k. Too much of the breakdown is going to take place outside institutioonal, regional, and national borders. Money spent to fix your system is thrown away if few of those outside your organization are willing to spend money to fix their systems. Even this assumes that the systems can be fixed.

There is no precedent for a breakdown of this magnitude. It is not clear that money can solve the problem. There is overwhelming evidence that money cannot possibly solve it: there are too few y2k programmers worldwide. Money will only raise the price of programmers; it will not increase their supply in the time remaining. So, the money is not being spent at the local level. Y2K will not be fixed at the macro (system) level because it must be spent at the micro level. It will not be spent at the micro level unless there is a high probability of success for the organization. There is no reason to spend money at the micro level if the macro level will fail. There is overwhelming evidence that the money will surely be wasted: thrown down a y2k hole.

So, the money is not being spent, nor will it be spent. Desperate cries by y2k awareness specialists have led to only one institutional success story (maybe): Visa. But Visa's success will mean nothing in 2000 if the banks fail. Spending money at the micro level will accomplish nothing visible at the macro level. The y2k awareness lecturers are modern-day John the Baptists, crying in the wilderness.

All the programmers' cries of "this insight is not helpful" will not change the reality of this analysis. The money is not being spent. I have shown why. Furthermore, the cries of "we can fix it if we stick together" are bound to fail. We cannot "stick together," for there is no institutional means to "stick us together."

Y2K baby! :D

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:38:08 AM

Quote from: bwv 1080 on October 16, 2008, 07:04:15 AM
Excite@Home Corporation

Excite@Home (Nasdaq ATHM) is a new media company poised to revolutionize the way people across the globe use the Internet to communicate, conduct business, capture information, and perform various transactions.

Yeah, baby! We're excited ......... about Excite@Home's demise.

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:39:21 AM

Quote from: ezodisy on October 16, 2008, 04:31:50 AM
*don't fall in love with the downside until you're sure that it's never-ending ;D

I'm very tempted to incorporate this into my signature line .... :D

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:42:13 AM

Katrina Again? US Gets Poor Grades For Credit Crisis

(http://www.cnbc.com/id/27217731)

Quote
The US government's handling of the financial crisis is looking a lot like its reponse to Hurricane Katrina three years ago, say crisis management experts and former government officials. In this case, it's the economy that's under water—and people are losing their houses due to foreclosures, not flood waters.

The government was behind the curve from the start, these experts say. Communication was poor and organizational efforts were slow and often ineffective. "The government acted as if it was initially was on top of it and knew it was doing the right thing," says Jonathan Bernstein of Los Angeles-based Bernstein Crisis Management. "It came out later that they clearly didn't." No one escapes blame either. Congress, President Bush, Fed Chairman Ben Bernanke, Treasury Secretary Henry Paulson and even House Leader Nancy Pelosi—all made key mistakes, the pros say. "As a result," Bernstein says, "far more damage occurred than if they had been honest, organized, compassionate and understood the threat and didn't get into a position to respond to it before it was too late."

(continued)

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:43:13 AM

(http://www.oftwominds.com/photos08/head-fake2.gif)

Oil: One Last Head-Fake? (http://www.oftwominds.com/blogmay08/head-fake.html)

(http://www.oftwominds.com/blog-photos/oil-future.gif)

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:43:53 AM

Depressed Canadian oil giants ripe for takeover
(http://www.financialpost.com/reports/oil-watch/story.html?id=880486)

Quote"In case you didn't think there was money around, the super majors have lots," said Terry Peters, an analyst at Canaccord Adams, in a research note last week that riffed off an article in Petroleum Intelligence Weekly (PIW). "The super majors have money, motive and opportunity and some of our larger Canadian companies appear vulnerable."

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:44:46 AM

Oil dips below $75 as OPEC cuts demand forecast

(http://news.yahoo.com/s/ap/oil_prices;_ylt=AiXl32f8mbLSrmk1BY5clLCRP5Z4)

QuoteOil prices dipped below $75 a barrel Wednesday, a new 13-month low, as OPEC reduced its 2009 petroleum demand forecast amid signs that the global economy is headed for a severe downturn.

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:45:39 AM

Hard times are good times at the pawnshop LINK

(http://www.msnbc.msn.com/id/27121805/)

QuoteAt People's Pawn in Springfield, Mass., the collection of DVD players, televisions and other electronics just keeps getting bigger. As many as 200 a people a day come in to "sell all their stuff so they can get gas money," said Efren Rivera, who works at the shop. "Some people have to pay their mortgages." The story is similar at EZ Cash Pawn in West Palm Beach, Fla., where the shelves are so stacked with electronics, musical instruments, guns, fishing poles, scuba gear — you name it — that people are being turned away. "I have no choice," said Robert DeSantis, the shop's owner. "I have tools in the warehouse now — every single tool you can think about."

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:46:35 AM

Apparently oblivious to the concept of peak oil, India is completing construction of a massive superhighway called the GQ (the "Golden Quadrilateral"), a 3,633-mile expressway linking India's 4 major population centers of Delhi, Mumbai, Chennai, and Kolkata:

(http://s.ngm.com/2008/10/india-highway/img/india-highway-main-615.jpg)

Quote
It is part of the largest and most ambitious public infrastructure project in the country's history, one with a social engineering goal at its heart: Much as the U.S. interstate highway system mobilized American society and grooved the postwar economy, India hopes the Golden Quadrilateral will push the country's economic engine into overdrive—bringing the benefits of growth in its booming metropolises out to its impoverished villages, where more than half the population lives.

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:47:22 AM

(http://media.caglecartoons.com/preview/%7B62f89a8c-b876-45e5-90e7-e1b83b0f0bfa%7D.gif)

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:48:37 AM

Will China bail out the West? (http://news.bbc.co.uk/2/hi/asia-pacific/7671482.stm)

Quote
China's burgeoning exports over recent years have helped the country build up the world's largest foreign exchange reserves. Figures released this week show these reserves now total $1.9 trillion. ... "The Chinese government could offer to lend up to $500bn to the US government for the rescue of its financial sector," wrote Mr Subramanian, of the Peterson Institute for International Economics. In fact the Chinese have already been doing something similar for a number of years. Beijing has been buying up US government debt, which has allowed the US to spend beyond its means. "China is already helping the US economy and, if possible, it will continue to do this," said Zhao Xijun, of Beijing's Remin University of China.

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 03:51:03 AM

Scotland Bankruptcy at record levels after 162% leap in a year

(http://www.theherald.co.uk/news/news/display.var.2461127.0.Bankruptcy_at_record_levels_after_162_leap_in_a_year.php)

QuoteInsolvencies in Scotland hit record levels as stock markets took a further battering amid growing concerns that the global bailout of banks has come too late to avert a deep global recession. Latest statistics showed yesterday that the number of Scots going to the wall rose by more than 160% with nearly 6000 people and 300 firms going bust. There were 4055 bankruptcy cases between July and September this year, up 162% on the same time last year.

Title: Re: Meltdown
Post by: BachQ on October 17, 2008, 05:10:34 AM

Single-Family Home Starts in U.S. Fall to 26-Year Low

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aVBXVRx9wJbk&refer=home)

QuoteOct. 17 (Bloomberg) -- Housing starts in the U.S. fell more than forecast in September as construction of single-family homes plunged to the lowest level in a quarter century, indicating the real-estate slump intensified even before the recent credit meltdown. ... ``The full impact from the financial meltdown is yet to come,'' said David Sloan, a senior economist at 4Cast Inc. in New York, whose estimate matched the lowest in the Bloomberg survey. ``Housing will be a drag on growth into the middle of next year. The bottom is now looking further away than it did previously.''

Title: Re: Meltdown
Post by: Lilas Pastia on October 17, 2008, 08:27:48 AM

Quote from: Dm on October 17, 2008, 03:33:17 AM

Obviously, the critical issue is whether the loans will remain solid. In the US, many of the sub-prime and Alt-A mortgages are steaming piles of worthless paper. If the mortgages remain solid throughout the life of the loan, then the government can indeed easily turn a decent profit over the longterm. If, however, there is a dire global recession with rampant unemployment, then all bets are off, and that assumption of longterm profitability will evaporate.

That's for sure. But according to statistics, so called risky bank loans are only a fraction of their US counterparts. The simple reason is that credit requirements are much more stringent. Until quite recently minimum down payment was 10% and maximum amortization 25 years. In the past 2 years those criteria wer relaxed but, fortunately, the door was closed again last summer and 5% / 35 years are the minimal requirements. It also helps that banks exercise due diligence in verifying income, assets and property value (professional apraisers show up and submit a detailed report within 48 hours).

Consequently, the average equity on canadian houses is much higher than in places where these measures are ignored (70% vs 46% in USA). Loan delinquencies and bankrupties are lower, too, and flat (no increase as of Q3-2008). It also helps that savings levels are higher, possibly a reflection of current higher employement rates.

Link (http://www.bmonesbittburns.com/economics/focus/20080718/feature.pdf)to study.

Title: Re: Meltdown
Post by: BachQ on October 18, 2008, 03:07:42 AM

Quote from: Lilas Pastia on October 17, 2008, 08:27:48 AM
That's for sure. But according to statistics, so called risky bank loans are only a fraction of their US counterparts. The simple reason is that credit requirements are much more stringent. Until quite recently minimum down payment was 10% and maximum amortization 25 years. In the past 2 years those criteria wer relaxed but, fortunately, the door was closed again last summer and 5% / 35 years are the minimal requirements. It also helps that banks exercise due diligence in verifying income, assets and property value (professional apraisers show up and submit a detailed report within 48 hours).

Consequently, the average equity on canadian houses is much higher than in places where these measures are ignored (70% vs 46% in USA). Loan delinquencies and bankrupties are lower, too, and flat (no increase as of Q3-2008). It also helps that savings levels are higher, possibly a reflection of current higher employement rates.

Link (http://www.bmonesbittburns.com/economics/focus/20080718/feature.pdf)to study.

Thank you for that link. It reveals how fragile the US debt situation is, and how it is poised to worsen dramatically.

For example, as noted in Chart 3 ("Home Equity"), Canada's home equity as a percent of real estate values hovers around 70%, while in the US it has tanked at 46%. And of course the US graph shows the equity percent sloping steeply downward in 2007, delving into negative equity territory, whereas Canada is relatively stable. This does not bode well for the US. Canada's larger home equity as a percent of real estate values will provide significantly more cushion to Canadian households to weather financial storms. US loan delinquencies (mortgages and credit cards) are heading toward the stratosphere, and the slope of the graphs suggests that it will be getting worse. I'm surprised that the US and Canada have nearly identical bankruptcy rates (@ roughly 3%), although the US has been sloping upward since 2007, and Canada's has been stable since 2000 (of course, given the recent US bankruptcy overhaul, the figures are not entirely comparable).

The Wall Street Journal has reported that, in the US, one in six households (75 million homeowners) are mired in negative equity (i.e., homeowners owe more than the home is worth). And it's worse for newer homeowners, where almost 29% people who purchased their home in the last five years have negative equity. In South Florida, more than 40% of homeowners who bought in the last five years are in negative equity. For those who bought in 2006 when prices peaked, 76% of those homeowners are in negative equity, according to Zillow.com (http://www.miamiherald.com/103/story/728184.html).

But this is a global phenomenon affecting Europe and Australia. The UK Telegraph reports that "more than 60,000 [UK] families a month are now falling into negative equity, as the collapsing housing market wipes thousands of pounds off the value of homes." (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3226489/Negative-equity-affecting-60000-families-a-month-report-reveals.html) In Ireland, half of homeowners who bought between 2005 and 2007 will be stranded with negative equity by 2009, according to Goodbody Stockbrokers. (http://www.rte.ie/news/2008/1012/housing.html) This research also forecasts that Ireland's unemployment will climb from 6pc to 8pc in 2009, rendering all the more difficult the ability to make mortgage payments ....

It's worth noting that none of the current government bailouts address the negative equity crisis, which is an underlying cause of the larger credit crisis. Indeed, the government bailouts only prolong the insidious debt ponzi scheme. (http://www.globalresearch.ca/index.php?context=va&aid=10597) As one commentator notes: (http://www.envoyglobalresearch.com/why-the-bailout-news-is-failing-to-prop-up-the-market/)

QuoteLax lending policies, driven by a huge expansion in credit derivatives (such as CDS and CDO's) and fancy securitizations, coupled with enormous leverage, led to to the creation of a massive credit ponzi scheme and the facilitation of gigantic financial fraud worldwide. Though there is a lot of focus put on the housing crisis in the US, the truth is that housing was really only the trigger or spark which started this financial crisis. If the financial system were not without weak foundations to begin with, if the financial system was not a house of cards, the housing crisis would not have had the effect it had and a larger financial crisis would have been averted.

Current global bailout efforts merely reflect a desire to keep the ponzi scheme going a little bit longer. But at the end of the day, the ponzi scheme will collapse because there is little of value supporting this house of cards. For example, rather than focus on rebuilding its manufacturing base, the US has opted to keep lowering interest rates, thereby creating asset bubbles which worsen the crisis. This is a dire situation, and the bailouts only prolong (and possibly worsen) the inevitable collapse.

Thankfully we have classical music to momentarily take our minds away from this mess. :D

EDITED to add recent UK data.

Title: Re: Meltdown
Post by: BachQ on October 18, 2008, 03:12:59 AM

U.S. Economy: Sentiment Drops by Record; Housing Starts Decline -- Oct. 17 (Bloomberg) --

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aDdPW6jDDSsQ&refer=home)

QuoteConfidence among U.S. consumers fell by the most on record and single-family housing starts hit a 26-year low, posing an increasing threat to household spending that accounts for more than two-thirds of the economy. The Reuters/University of Michigan preliminary index of consumer sentiment fell to 57.5 this month from 70.3 in September. The measure averaged 85.6 last year. Construction of single-family homes dropped 12 percent last month to a 544,000 annual rate, the Commerce Department said in Washington.

... Falling property values, along with the crash in stocks, threaten to cause the first decline in consumer spending since 1991, and put pressure on the Federal Reserve to cut interest rates again this month. ``Even gasoline-price decreases were overpowered by the massive destruction of wealth,'' said Michael Feroli, an economist at JPMorgan Chase & Co. in New York who used to work at the Fed. ``Things are pretty awful in the economy and that should make itself felt through weaker consumer spending.''

Title: Re: Meltdown
Post by: BachQ on October 18, 2008, 03:15:24 AM

Banks Hoard Cash as Credit Card Defaults Rise

(http://www.washingtonpost.com/wp-dyn/content/article/2008/10/15/AR2008101503233.html)

Quote
J.P. Morgan Chase said the number of credit card loans in default rose 45 percent in the third quarter from the comparable period a year ago and predicted that default rates would sharply accelerate through 2009, with 7 percent of credit card loans going bad. "We have to be prepared that it gets a lot worse," J.P. Morgan chief executive Jamie Dimon said about the overall economic outlook. ... The deterioration in consumer credit, the latest downturn to whack Americans after the housing slump and mortgage meltdown, threatens one of the linchpins of the U.S. economy. Over the past 10 years, credit card debt has gone up 75 percent as Americans' real wages and savings rate have stayed flat. That means Americans have been spending beyond their means -- and fueling economic growth with borrowed money.

Now, the housing crash, financial downturn and contracting economy have made it more difficult for Americans to settle their bills, setting off a downward spiral. As people fail to pay off their credit card bills and other loans, banks must put away money to cover expected losses. So banks lend less. Americans who tended to rely on loans to fuel their spending must cut back, readjusting their spending habits to conform with what they earn.

"Given that the savings rate has been minuscule, there's no reserves in the tank for the consumer to tap his savings to support his spending," said Scott Valentin, a financial services analyst at Arlington investment bank Friedman Billings Ramsey. But consumers have been driving about two-thirds of the U.S. economy. Overall, the rate of credit card loans going bad increased 54 percent in the second quarter of 2008 from the same period in 2007, according to Federal Reserve data, the latest available.

A report this week from Innovest, a research firm, said banks and other credit card lenders could record nearly $100 billion in losses because of bad loans through the end of next year. Innovest said financial firms could be reaching a "tipping point" at which years of growth in credit card debt starts to decline.

Title: Re: Meltdown
Post by: BachQ on October 18, 2008, 03:16:05 AM

The $58 Trillion Elephant in the Room
(http://www.portfolio.com/images/site/editorial/magazine/2008/11/morgan-elephant-intro-large.jpg) (http://www.portfolio.com/views/columns/wall-street/2008/10/15/Credit-Derivatives-Role-in-Crash)

Title: Re: Meltdown
Post by: BachQ on October 18, 2008, 06:02:13 AM

Quote from: G$ on October 12, 2008, 03:28:18 PM
Mwahahaha, I ate the plan >:D

G$ / Greg:

It took you how many years to realize that all great screen names are 2 characters long ? .......

Title: Re: Meltdown
Post by: Lilas Pastia on October 18, 2008, 08:05:46 PM

Joseph Stieglitz' plan (http://www.time.com/time/business/article/0,8599,1851739-1,00.html) to the financial crisis.

Title: Re: Meltdown
Post by: BachQ on October 19, 2008, 04:20:00 AM

Quote from: Lilas Pastia on October 18, 2008, 08:05:46 PM
Joseph Stieglitz' plan (http://www.time.com/time/business/article/0,8599,1851739-1,00.html) to the financial crisis.

Very ambitious. As to bondholders, he states that "[t]here needs to be a forced conversion of this debt to equity." I wonder how bondholders can be forced to convert involuntarily?

Title: Re: Meltdown
Post by: BachQ on October 19, 2008, 04:22:38 AM

Quote from: Dm on October 18, 2008, 03:07:42 AM
But this is a global phenomenon affecting Europe and Australia. In Ireland, for example, half of homeowners who bought between 2005 and 2007 will be stranded with negative equity by 2009, according to Goodbody Stockbrokers. (http://www.rte.ie/news/2008/1012/housing.html) This research also forecasts that Ireland's unemployment will climb from 6pc to 8pc in 2009, rendering all the more difficult the ability to make mortgage payments ....

Today's Telegraph reports that "more than 60,000 [UK] families a month are now falling into negative equity, as the collapsing housing market wipes thousands of pounds off the value of homes."

(http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3226489/Negative-equity-affecting-60000-families-a-month-report-reveals.html)

Quote

***
Negative equity will affect more homeowners during the current financial crisis than the crash of the 1990s, according to new predictions. By the end of this month 335,000 homes will be worth less than their mortgages - a rise of 260,000 in four months, figures from the Standard & Poor's ratings agency show. If trends continue 2 million households will be caught up in the trap by 2010, more than the 1.8 million who fell victim to negative equity in the 1990s property crash. Figures to be released this week are expected to show that the British economy shrank over the last quarter, signaling that the UK's descent into recession is well underway.

Title: Re: Meltdown
Post by: greg on October 19, 2008, 05:17:21 AM

Quote from: Dm on October 18, 2008, 06:02:13 AM
G$ / Greg:

It took you how many years to realize that all great screen names are 2 characters long ? .......

4 years? ???
(5?)

Title: Re: Meltdown
Post by: Lilas Pastia on October 19, 2008, 09:01:01 AM

Quote from: Dm on October 19, 2008, 04:20:00 AM
Very ambitious. As to bondholders, he states that "[t]here needs to be a forced conversion of this debt to equity." I wonder how bondholders can be forced to convert involuntarily?

They can be forced either if the bonds are convertible (usually one of the options the issuer can avail itself of), or if forced by law. Recently Canada's Supreme Court denied bondholders any claim to preference against shareholders in a proposed takeover of giant Bell Canada by Teachers, an Ontario pension fund.

Quote"The business world has long argued directors' duties must be focused on maximizing value for shareholders, and now legal experts say this decision solidifies that tradition in law. It looks like the idea that some accounts should be taken of other stakeholders within the corporate entity, principally bond-holders in this case, doesn't have a legal foundation to it."

Source: The Gazette (http://www.canada.com/montrealgazette/news/story.html?id=8f6495de-4cfa-46f7-9125-f95ff710b23a)

Title: Re: Meltdown
Post by: BachQ on October 20, 2008, 04:10:56 AM

For a short article on the inter-relatedness of peak oil and the current banking crisis, CLICK HERE.

(http://seekingalpha.com/article/100550-from-subprime-to-meltdown-is-peak-oil-responsible)

Quote
***
[With respect] to the financial crisis, we have witnessed an impressive fall in oil prices over recent weeks under fears of an imminent global recession. However, the massive US bailout plan and similar European supports to the banking sector are likely to maintain an artificial growth at high costs and to the detriment of states' debts. Once we realize oil demand will not decline and will even continue to grow, as mentioned last week by the IEA, oil prices will once again surge.

Regrettably, when facing the next crisis which is likely to be unprecedented, the world will no longer [be able to] afford an emergency plan. In fact, the US bailout makes an emergency plan to develop alternatives to oil improbable. We have used our last bullets, and missed the target. Recent events have showed us how officials and mainstream commentators failed to forecast the current crisis. It is time to finally take the Peak Oil movement seriously, failing to do so would result in a nightmare scenario, Dr. Campbell and others have been desperately warning for too long.

Title: Re: Meltdown
Post by: BachQ on October 20, 2008, 06:55:34 AM

Quote from: Lilas Pastia on October 19, 2008, 09:01:01 AM
***Recently Canada's Supreme Court denied bondholders any claim to preference against shareholders in a proposed takeover of giant Bell Canada by Teachers, an Ontario pension fund.

Quote"The business world has long argued directors' duties must be focused on maximizing value for shareholders, and now legal experts say this decision solidifies that tradition in law. It looks like the idea that some accounts should be taken of other stakeholders within the corporate entity, principally bond-holders in this case, doesn't have a legal foundation to it."
Source: The Gazette (http://www.canada.com/montrealgazette/news/story.html?id=8f6495de-4cfa-46f7-9125-f95ff710b23a)

Interesting. As an aside, a majority of states in the US have adopted "stakeholder constituency statutes" that allow (but do not mandate) directors to consider the interests of stakeholders (creditors, employees, customers, etc.) in their decisionmaking. But if the issuer has a contractual right to convert the debt to equity, then the stakeholder issue becomes moot.

Title: Re: Meltdown
Post by: BachQ on October 21, 2008, 08:45:18 AM

Russia's (http://en.rian.ru/russia/20081015/117753001.html) crude oil output declined 0.6% year-on-year in January-September to 365 million metric tons (2.7 billion barrels), the country's top statistics body stated. Mexico's state-owned oil company (PEMEX) (http://www.bloomberg.com/apps/news?pid=20601086&sid=aS6tfJ3XZLI4&refer=latin_america) fell 14% to the lowest level since 1995.

More on Russia (http://www.bloomberg.com/apps/news?pid=20601072&sid=aFRsXOPD8qmY&refer=energy) and more on Mexico's oil production. (http://www.rigzone.com/news/article.asp?a_id=65774)

Title: Re: Meltdown
Post by: BachQ on October 21, 2008, 08:46:25 AM

New Zealand Herald

(http://www.nzherald.co.nz/employment/news/article.cfm?c_id=11&objectid=10538560)

QuoteEngineers are warning politicians that the lull in oil prices will be short-lived, and New Zealand is headed for sustained job losses unless it boosts energy efficiency efforts. Senior North Shore City transport strategist Archer Davis, speaking on behalf of Engineers for Social Responsibility, said a conservative estimate of a 4 per cent annual decline in oil supply raises the prospect of a 12 per cent contraction of New Zealand's economy over 15 years. "We are looking at losses of jobs, people losing their income, we are looking at severe issues here," he told Auckland Regional Council members in a call to action after a joint conference of the engineers' group and the Sustainable Energy Forum on how to prepare for oil shortages. "It will have a major impact and it will be ongoing - it won't be short term."

Title: Re: Meltdown
Post by: BachQ on October 21, 2008, 08:49:13 AM

Ambrose Evans-Pritchard: 2008 Financial Crisis may make 1929 look a "walk in the park"

(http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/2821629/Crisis-may-make-1929-look-a-%27walk-in-the-park%27.html)

Quote
Twenty billion dollars here, $20bn there, and a lush half-trillion from the European Central Bank at give-away rates for Christmas. Buckets of liquidity are being splashed over the North Atlantic banking system, so far with meagre or fleeting effects. As the credit paralysis stretches through its fifth month, a chorus of economists has begun to warn that the world's central banks are fighting the wrong war, and perhaps risk a policy error of epochal proportions.

"Liquidity doesn't do anything in this situation," says Anna Schwartz, the doyenne of US monetarism and life-time student (with Milton Friedman) of the Great Depression. "It cannot deal with the underlying fear that lots of firms are going bankrupt. The banks and the hedge funds have not fully acknowledged who is in trouble. That is the critical issue," she adds. Lenders are hoarding the cash, shunning peers as if all were sub-prime lepers.

(continued0

(http://www.telegraph.co.uk/telegraph/multimedia/archive/00885/money-graphics-2007_885225a.gif)

Title: Re: Meltdown
Post by: BachQ on October 21, 2008, 11:09:05 AM

Majority of States Now in Recession
In March, 5 States Were in Recession; Now There are 27 With 14 More at Risk

Quote
"We are seeing what I think anyone would characterize as a recession in certain parts of the country," Edward P. Lazear, chairman of the Council of Economic Advisers, said on CNN's Late Edition ... "There's no way around the map. It says the nation is in recession. The recession is coast to coast," Zandi said. "Just a handful of states are expanding at this point. One of the unique features of this downturn is how broad-based it is, regionally."

(http://a.abcnews.com/images/Business/recession_state_map2_081020_mn.gif)

LINK (http://abcnews.go.com/Business/Economy/story?id=6075580&page=1)

Title: Re: Meltdown
Post by: Lilas Pastia on October 21, 2008, 12:30:10 PM

To put things in perspective, how much is a 1929 dollar worth today?

At a 3% rate (roughly the inflation rate in the past 80 years, it would appear a 100 billion$ would be worth 9.6 billions$ in 1929 dollars.

Title: Re: Meltdown
Post by: Al Moritz on October 21, 2008, 01:05:54 PM

Quote from: Dm on October 21, 2008, 08:49:13 AM
Ambrose Evans-Pritchard: 2008 Financial Crisis may make 1929 look a "walk in the park"

(http://www.telegraph.co.uk/telegraph/multimedia/archive/00885/money-graphics-2007_885225a.gif)
(http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/2821629/Crisis-may-make-1929-look-a-%27walk-in-the-park%27.html)

Instead of randomly offering apocalyptic articles you might be better off taking a step back and look critically before you post. The article is from September 22, and a lot of things in the right direction have been done since then -- and importantly, credit is getting less tight now.

Title: Re: Meltdown
Post by: ezodisy on October 21, 2008, 01:18:25 PM

Quote from: Al Moritz on October 21, 2008, 01:05:54 PM
and importantly, credit is getting less tight now.

won't last for long

Title: Re: Meltdown
Post by: BachQ on October 21, 2008, 01:41:24 PM

Quote from: Al Moritz on October 21, 2008, 01:05:54 PM
Instead of randomly offering apocalyptic articles you might be better off taking a step back and look critically before you post. The article is from September 22, and a lot of things in the right direction have been done since then -- and importantly, credit is getting less tight now.

Notwithstanding your admonition:

Ambrose Evans-Pritchard: Events are moving with lightning speed as the global credit freeze evolves into something awfully like a classic trade-depression

(http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/3227361/Do-our-rulers-know-enough-to-avoid-a-1930s-replay.html)

Quote
The freight rates for Capesize vessels used to ship grains, coal, and iron ore have fallen 95pc to $11,600 since May, hence the bankruptcy of Odessa's Industrial Carriers last week with a fleet of 52 vessels. Cargo deliveries dropped 15.2pc at the US Port of Long Beach last month, but that is a lagging indicator. From what I have been able to find out, shipping is slowing as fast as it did in the grim months of late 1931. "The crisis is now in full swing across the entire world," said Giulio Tremonti, Italy's finance minister. "It is hitting the real economy, the productive forces of industry. It's global, it's total, and it's everywhere," he said.

Title: Re: Meltdown
Post by: Lilas Pastia on October 21, 2008, 03:55:23 PM

What is a "classic trade-depression" ? Isn't that an oxymoron? It happened only once before, and under different circumstances (as the article admits).

I retain this:

QuoteWe should be thankful that President Sarkozy and Gordon Brown took action in the nick of time to save our banking systems. Their statesmanship should at least spare us mass bankruptcy and unemployment.

But it will not spare us a decade-long toil of pitiful growth – or none at all – as we purge debt.

Purging debt is the necessary medicine to regain full economic health. And from what I understand this is the way we are all headed. Given the enormous size of the world debt, it will indeed take at least a decade. And, just like domestic debts, there will be bad debtors and some countries will go bust.

A "Pitiful growth" is not a terminal illness. It's a very beneficial economic diet. Necessary and useful activity will keep going: producing food, goods and services that everybody needs, at the most competitive cost possible. We can do without pet manicure salons or cemetaries, and without all the status-affirming luxury goods that cost a fortune and add nothing to the economy. A full decade of such a cure minceur will also help realign personal, social and political values in the right direction.

Title: Re: Meltdown
Post by: BachQ on October 22, 2008, 06:30:21 AM

Quote from: Lilas Pastia on October 21, 2008, 03:55:23 PM
What is a "classic trade-depression" ? Isn't that an oxymoron? It happened only once before, and under different circumstances (as the article admits).

I retain this:
Purging debt is the necessary medicine to regain full economic health. And from what I understand this is the way we are all headed. Given the enormous size of the world debt, it will indeed take at least a decade. And, just like domestic debts, there will be bad debtors and some countries will go bust.

A "Pitiful growth" is not a terminal illness. It's a very beneficial economic diet. Necessary and useful activity will keep going: producing food, goods and services that everybody needs, at the most competitive cost possible. We can do without pet manicure salons or cemetaries, and without all the status-affirming luxury goods that cost a fortune and add nothing to the economy. A full decade of such a cure minceur will also help realign personal, social and political values in the right direction.

Here's a USA Today blog (http://blogs.usatoday.com/oped/2008/10/as-painful-as-r.html) that agrees with you, opining that recessions are an essential "medicine" necessary for "purg[ing] the economy of excesses and lay[ing] the groundwork for future robust growth." As such, stimulus packages can do more harm than good. Helicopter Ben Bernanke doesn't seem to understand this. Perhaps he's too preoccupied with avoiding a depression.

Title: Re: Meltdown
Post by: BachQ on October 22, 2008, 06:32:42 AM

Wachovia reports $23.9 billion 3d qtr loss

(http://news.yahoo.com/s/nm/20081022/bs_nm/us_wachovia)

QuoteNEW YORK (Reuters) – Wachovia Corp on Wednesday posted a $23.9 billion third-quarter loss, a record for any U.S. lender in the global credit crisis, underscoring the challenges Wells Fargo & Co will face after it acquires the big lender. The loss totaled $11.18 per share, and followed a $9.11 billion loss in the second quarter. Wachovia said results included an $18.7 billion writedown of goodwill. About two-thirds related to its retail and small-business operations, where a troubled $118.7 billion portfolio of "option" adjustable-rate mortgages lies. Most of the rest related to commercial banking operations, and some to asset management and wealth management operations.

Title: Re: Meltdown
Post by: BachQ on October 22, 2008, 06:34:38 AM

Russia, Iran and Qatar announce cartel that will control 60% of world's gas supplies
(http://www.guardian.co.uk/business/2008/oct/22/gas-russia-gazprom-iran-qatar)

QuoteWestern concerns about global energy markets hit new heights last night when Russia, Iran and Qatar said they were forming an Opec-style gas cartel. The move by the three countries, which control 60% of the world's gas reserves, was met with immediate opposition from the European commission, which fears the group could drive up prices. Alexey Miller, chairman of Russia's Gazprom, said they were forming a "big gas troika" and warned that the era of cheap hydrocarbons had come to an end. "We are united by the world's largest gas reserves, common strategic interests and, which is of great importance, high cooperation potential in tripartite projects," he explained. "We have agreed to hold regular - three to four times a year - meetings of the gas G3 to discuss the crucial issues of mutual interest."

Title: Re: Meltdown
Post by: Lethevich on October 22, 2008, 08:46:27 PM

Amazon's stocks are falling and apparently could continue to in the next trading day. Depending how low, this may be a neat time to buy :3

Title: Re: Meltdown
Post by: ezodisy on October 23, 2008, 12:25:19 AM

Don't buy retailers. If you want to buy something--why?--buy something that has already been hammered to death. Amazon, Next and a whole bunch of others have already taken a delicious beating and there's more to come.

Title: Re: Meltdown
Post by: greg on October 23, 2008, 11:22:01 AM

Gas: $2.49 today. $2.69 yesterday. Down $1.50 from its highest (the gas stations around where i live).
Looks like i'll have an extra 30 or 40 bucks every month now.....

Title: Re: Meltdown
Post by: Catison on October 23, 2008, 11:34:25 AM

I found today's admission by Greenspan to be most interesting.

Greenspan Concedes Error on Regulation (http://www.nytimes.com/2008/10/24/business/economy/24panel.html?hp)

Title: Re: Meltdown
Post by: drogulus on October 23, 2008, 02:01:06 PM

Quote from: Dm on October 22, 2008, 06:30:21 AM
Here's a USA Today blog (http://blogs.usatoday.com/oped/2008/10/as-painful-as-r.html) that agrees with you, opining that recessions are an essential "medicine" necessary for "purg[ing] the economy of excesses and lay[ing] the groundwork for future robust growth." As such, stimulus packages can do more harm than good. Helicopter Ben Bernanke doesn't seem to understand this. Perhaps he's too preoccupied with avoiding a depression.

I'm not sure this is true. It depends on what means you use to stimulate. The problem is reducing debt without also causing a collapse in consumption leading to an overall collapse in production and income. The real disaster would be the combination of financial collapse with government de-stimulus, such as budget-balancing.

Quote from: Catison on October 23, 2008, 11:34:25 AM
I found today's admission by Greenspan to be most interesting.

Greenspan Concedes Error on Regulation (http://www.nytimes.com/2008/10/24/business/economy/24panel.html?hp)

Brett, I saw that, too. I posted it in the McCain Veep Is Economic Genius thread. _:)

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 03:43:10 AM

Quote from: Catison on October 23, 2008, 11:34:25 AM
I found today's admission by Greenspan to be most interesting.

Greenspan Concedes Error on Regulation (http://www.nytimes.com/2008/10/24/business/economy/24panel.html?hp)

Greenspan admitting to a multi-trillion dollar mistake.

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 03:44:21 AM

Black Friday anyone? :o This Friday morning, U.S. stock futures nosedived, sending the Dow and S & P 500 down by their daily limit. (http://www.bloomberg.com/apps/news?pid=20601087&sid=amV1xqk.4OQ4&refer=home)

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 03:45:13 AM

(http://seattlepi.nwsource.com/dayart/20081023/Cartoon20081023.jpg)

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 03:46:50 AM

Washington Post: Job Losses Accelerate, Signaling Deeper Distress

(http://www.washingtonpost.com/wp-dyn/content/article/2008/10/22/AR2008102203709.html?sub=new)

Quote

*** [T]he deterioration of the job market is now emerging as a driver of economic distress, according to a wide range of data and anecdotal reports from corporate America. In September, there were more mass layoffs -- instances in which employers slashed 50 or more jobs at one time -- than in any month since September 2001, the Labor Department said yesterday. And nearly half a million Americans have filed new claims for unemployment benefits in each of the past four weeks, the highest rate of such claims since just after the terrorist attacks seven years ago.

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 03:47:40 AM

US Foreclosures Rose 71% in 3rd Quarter as Prices Fell

(http://www.bloomberg.com/apps/news?pid=20601103&sid=aR9OGpC4jjao&refer=us)

QuoteOct. 23 (Bloomberg) -- U.S. foreclosure filings increased 71 percent in the third quarter from a year earlier to the highest on record as home prices fell and stricter mortgage standards made it harder for homeowners to sell or refinance, RealtyTrac said. ... ``The people living paycheck to paycheck are at risk if they lose their jobs,'' said Rick Sharga, executive vice president for marketing at RealtyTrac, of the potential that the weak economy will boost foreclosures. ``It will cause more people to lose their homes.'' The worst U.S. housing slump since the 1930s is being compounded by a recession that began in the third quarter and may last a year or more, according to Jay Brinkmann, chief economist for the Mortgage Bankers Association. Home prices in 20 U.S. metropolitan areas fell in July at the fastest pace on record, and sales of previously owned homes in August were 32 percent below the peak reached in September 2005.

(continued)

Title: Re: Meltdown
Post by: Florestan on October 24, 2008, 03:54:53 AM

Dm, when the oil barrel reached $147 you announced apocalypse. Now that it has went down to $70 you are as silent as a fish. Why?

Title: Re: Meltdown
Post by: ezodisy on October 24, 2008, 07:40:48 AM

Quote from: Florestan on October 24, 2008, 03:54:53 AM
Dm, when the oil barrel reached $147 you announced apocalypse. Now that it has went down to $70 you are as silent as a fish. Why?

perhaps because we are in the apocalypse?

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 10:08:10 AM

Quote from: Florestan on October 24, 2008, 03:54:53 AM
Dm, when the oil barrel reached $147 you announced apocalypse. Now that it has went down to $70 you are as silent as a fish. Why?

I love discussing oil. Thank you for mentioning it.

The global economy is currently on lifesupport, and a few weeks ago was at the brink of collapse. When an economy is in recession, the demand for oil drops significantly, and, accordingly, the price of oil drops significantly.

Just to demonstrate how sickly the world economy is, the price of oil dropped today EVEN THOUGH OPEC has cut production by 1.5 million barrels per day. That's a sure sign of an extremely weak global economy. But we've just seen the tip of the iceberg. As more and more people become unemployed, increasing numbers of people will default on their loans, mortgages, and credit cards. This will cause credit to tighten even further, thereby causing more unemployment and defaults, and the vicious cycle continues.

Here's a chart showing our predicament with respect to the price of oil viz. an economic recession.

(http://www.oftwominds.com/photos08/head-fake2.gif)

Oil: One Last Head-Fake? (http://www.oftwominds.com/blogmay08/head-fake.html)

Here's a Bloomberg link from a few hours ago.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=a9xUiaET3xoM&refer=home)

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 10:11:01 AM

Quote from: G$ on October 23, 2008, 11:22:01 AM
Looks like i'll have an extra 30 or 40 bucks every month now.....

You can use those extra funds to purchase more Xenakis and Mahler CD's!

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 10:19:46 AM

Quote from: drogulus on October 23, 2008, 02:01:06 PM
I'm not sure this is true. It depends on what means you use to stimulate. The problem is reducing debt without also causing a collapse in consumption leading to an overall collapse in production and income. The real disaster would be the combination of financial collapse with government de-stimulus, such as budget-balancing.

Drogulus:

I don't doubt that there may be a theoretical stimulus package that is consistent with purging excess debt. But I'm not sure what it would look like, and I doubt whether Helicopter Ben Bernanke, Hanky Paulson, or George W. Bush could achieve the appropriate balance. They've done enough damage, as aided and abetted by Congress.

Lilas Pastia is correct in concluding that we need a decade of belt tightening and debt purging, as painful as that may seem to policymakers. Bitter medicine for a lethal disease.

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 01:48:53 PM

Hedge Fund Withdrawals Rise, Inflicting Pressure on Markets --

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aa73Kbe0z97s&refer=home)

QuoteOct. 24 (Bloomberg) -- Investors may pull as much 25 percent of their money from hedge funds by year-end, forcing managers to dump assets and extending the worst market selloff 50 years. U.S. hedge-fund managers may lose 15 percent of assets to withdrawals while their European rivals shed as much as 25 percent, Huw van Steenis, a Morgan Stanley analyst in London, wrote today in a report to clients. Combined with investment losses, industry assets may shrink to $1.3 trillion, a 32 percent drop from the peak in June.

With the average hedge fund down 18 percent this year, as measured by the HFRX Global Index, managers are selling assets to repay departing investors and meet demands from lenders for more collateral. Others including Paulson & Co. and Winton Capital Management LLC are hoarding cash to soothe nervous clients and wait for signs the worst is over. When stocks rally, hedge funds take advantage to unload what they can.

``Even the healthy hedge funds are being forced to sell,'' Mohamed El-Erian, co-chief executive officer of Pacific Investment Management Co. of Newport Beach, California, said in an interview today with cable-television network CNBC. ``What we are seeing now is forced sellers trying to get out at any cost.''

(continued)

Title: Re: Meltdown
Post by: BachQ on October 24, 2008, 01:51:38 PM

Quote from: ezodisy on October 24, 2008, 07:40:48 AM
perhaps because we are in the apocalypse?

Certainly, we're at the precipice.

Title: Re: Meltdown
Post by: drogulus on October 24, 2008, 02:26:20 PM

Quote from: Dm on October 24, 2008, 10:19:46 AM
Drogulus:

Lilas Pastia is correct in concluding that we need a decade of belt tightening and debt purging, as painful as that may seem to policymakers. Bitter medicine for a lethal disease.

We'll get used to it. Paying down debt has positive consequences, too, as we saw in the '90s. This time growth is likely to be slow, so it won't be so wonderful. Still, it's possible for both good and bad trends to coexist, and in fact it happens all the time. So, life will not become pointless.

QuoteI don't doubt that there may be a theoretical stimulus package that is consistent with purging excess debt.

We don't need a perfect plan, we need a plan that will evolve towards greater effectiveness, which is what's happening now.

(http://www.oftwominds.com/photos08/head-fake2.gif)

It doesn't work that way. When other energy sources become price-competitive they will be used, and oil will stabilize at a higher price, but not a stratospheric one. The real energy situation depends on more factors than are depicted here. The most important is that substitution accelerates when prices go up. What will be substituted for oil? The answer is no one source will do. It will be a mix, and it will include a new round of energy conservation and efficiency improvements.

Title: Re: Meltdown
Post by: drogulus on October 24, 2008, 02:50:00 PM

Larry Summers in the FT (writing in late Sept.):

The American experience with financial support programmes is somewhat encouraging. The Chrysler bail-out, President Bill Clinton's emergency loans to Mexico, and the Depression-era support programmes for housing and financial sectors all ultimately made profits for taxpayers. While the savings and loan bail-out through the Resolution Trust Corporation was costly, this reflected enormous losses in excess of the capacity of federal deposit insurance programmes. The head of the FDIC has offered assurances that nothing similar will be necessary this time. It is impossible to predict the ultimate cost to the Treasury of the bail-out programme and of the other guarantee commitments that financial authorities have – this will depend primarily on the economy as well as the quality of execution and oversight. But it is very unlikely to approach $700bn and will be spread over a number of years.

Second, the usual concern about government budget deficits is that the need for government bonds to be held by investors will crowd out other, more productive, investments or force greater dependence on foreign suppliers of capital. To the extent that the government purchases assets such as mortgage-backed securities with increased issuance of government debt, there is no such effect.

Third, since Keynes we have recognised that it is appropriate to allow government deficits to rise as the economy turns down if there is also a commitment to reduce deficits in good times. After using the economic expansion of the 1990s to bring down government indebtedness, the US made a serious error in allowing deficits to rise over the last eight years. But it would be compounding this error to override what economists call "automatic stabilisers" by seeking to reduce deficits in the near term.

Indeed, in the current circumstances the case for fiscal stimulus – policy actions that increase short-term deficits – is stronger than at any time in my professional lifetime. Unemployment is now almost certain to increase – probably to the highest levels observed in a generation. Monetary policy has very little scope to stimulate the economy given how low policy rates already are and the problems in the financial system. And experience around the world with economic downturns caused by financial distress suggests that while they are of uncertain depth, they are almost always of long duration.

Title: Re: Meltdown
Post by: Lilas Pastia on October 24, 2008, 03:51:21 PM

The last budget deficit in Canada was posted 15 years ago. Federal and provincial authorities are preparing the public for a return to deficits to help stimulate the economy. Canadians hate the idea as much as Middle America hate the 700billion bailout plan. But it's not just an option it's a necessity.

One should beware of simple equations such as that made below about the oil price. Many factors are at work and some sorting out needs to be done before coming to a conclusion. In retrospect, analysts see the 147$ oil price not as a sign of demand, but built-in is a "refuge" premium that normally alternates between gold and the greenback. The fact that oil has gone down is a sign of lower demand (realization of an impending recession), but the corresponding rise in the greenback indicates that the "refuge' factor has been priced out of the sweet crude. IOW, if you price out the 6 months pre-147$ levels, you will get a fairer idea of the real price of oil.

Whatever happens to stock markets and commodity prices, the sun will rise tomorrow on 7 billion people still in need of a daily meal or two, needing clothing, heating, insurance, banking services and whatever basic commodities are required in a given society. To the Lima or Manila slum-dwellers there won't be an iota of change. For everything that is non essential, choices will have to be made. Some companies will go bust, others will thrive (Wal-Mart and Campbell's Soups stocks are rising). Lots of jobs will be eliminated. Unfortunately, that will mean duress or poverty for many. Lots of high paying jobs that contribute nothing to the 'real economy' will go too, and that's all to the good. After all, some savings need to be done in the global paycheck, and it's only normal that the parasites get zapped.

All of that will take a minimum of 3-5 years before significant domestic growth causes demand and employment to rise, and it will take the better part of the next 10 years to see the level of per capita income and employment to be at pre-2008 levels. Meanwhile, dire predictions and doom scenarios add nothing to the outcome. They're like so many flies on a starved infant's body.

Title: Re: Meltdown
Post by: drogulus on October 24, 2008, 04:11:48 PM

Doomsday scenarios aren't really about what will happen. They are expressions of fear, and the fearful also want to express their noncomplicity in the suffering that ensues. If you are the one saying the sky is falling, it's not your fault when it does. It's the fault of all those people who didn't listen to you. And that's why no solutions are offered by the panic-stricken, or even imagined. Because advocating a solution would reconnect you to responsibility for the results. What if the solutions didn't work? Then it would be your fault.

Doomsday thinking is very much like conspiracy thinking. In both all evidence is mustered to serve one interpretation and everything else is ignored, like the stroke victim that doesn't recognize one side of the body, or like looking at a mountain and seeing the path down but no path up. A little serious thought about what would have to happen first tells you why $1000/bbl oil won't happen. Who would pay that price? Yogi Berra was right! When a restaurant becomes that popular nobody goes there!! _{;D :P ;D}

Title: Re: Meltdown
Post by: BachQ on October 25, 2008, 03:21:47 PM

Quote from: drogulus on October 24, 2008, 02:26:20 PM
It doesn't work that way. When other energy sources become price-competitive they will be used, and oil will stabilize at a higher price, but not a stratospheric one. The real energy situation depends on more factors than are depicted here. The most important is that substitution accelerates when prices go up. What will be substituted for oil? The answer is no one source will do. It will be a mix, and it will include a new round of energy conservation and efficiency improvements.

Yes, the chart fails to tell the whole story, but it illustrates my point about recession, demand destruction, and the price of oil.

You mention that a mix of "substitutes" for oil will occur before the price of oil hits the stratosphere. This is a complex issue, because oil has several layers of demand. There is a substantial inelastic layer, wherein consumers will keep buying petroleum (and related fossil fuels) no matter what the price (e.g., pharmaceuticals; government; military; law enforcement; agriculture -- including fertilizers & pesticides --; emergency vehicles; hospitals). Thus, it's conceivable that based solely on this inelastic layer of demand, at some point in the future, oil will reach stratospheric prices. Unfortunately, the global economy will likely be in smoldering ruins (http://www.princeton.edu/hubbert/current-events-08-05.html) by the time oil reaches $300/bbl.

Title: Re: Meltdown
Post by: BachQ on October 25, 2008, 03:23:16 PM

From Time / CNN

(http://www.time.com/time/business/article/0,8599,1853775,00.html?cnn=yes)

Quote***According to the U.S. Department of Transportation, Americans drove 15 billion fewer miles in August, or 5.6% less than they did the year before. DOT says it's the largest ever year-to-year decline recorded in a single month. Over the past 10 months, Americans have driven 78 billion fewer miles than they did in the same 10 months the previous year — sure proof of what economists call "demand destruction." Coping with $4 a gallon gasoline has drastically altered driving patterns, perhaps permanently. "We are seeing changes in habits," says Julian Lee, senior energy analyst with the Center for Global Energy Studies in London. "The sales of big gas-guzzling vehicles have collapsed. If we see that kind of change it becomes a much longer term issue with long-term demand destruction." *** Falling worldwide demand, especially in emerging markets, is the reason that the oil market made road kill of OPEC's production cut. (continued)

Title: Re: Meltdown
Post by: BachQ on October 25, 2008, 03:27:59 PM

Quote from: drogulus on October 24, 2008, 04:11:48 PM

Doomsday thinking is very much like conspiracy thinking. In both all evidence is mustered to serve one interpretation and everything else is ignored,

Vanity Fair -- The News Blues

(http://www.vanityfair.com/images/culture/2008/11/cuar01_wolcott0811.jpg)

(http://www.vanityfair.com/culture/features/2008/11/wolcott200811?printable=true&currentPage=all)

Quote
*** The alarmists may not have gotten every particular right, but they nailed the big picture with Paul Revere gusto. Among those vindicated: Nouriel Roubini, an economics professor and market observer who earned the title "Dr. Doom" (formerly held by Henry Kaufman) for dire predictions of the credit crisis that panned out with a vengeance. "Over the past year, whenever optimists have declared the worst of the economic crisis behind us," Stephen Mihm wrote in a New York Times Magazine profile, "Roubini has countered with steadfast pessimism. In February, when the conventional wisdom held that the venerable investment firms of Wall Street would weather the crisis, Roubini warned that one or more of them would go 'belly up'—and six weeks later, Bear Stearns collapsed." Similarly, it was the "Peak Oil" theorists who warned of spiking oil prices and strains on the refinery system, only to be dismissed as amateur nerds and tinfoil-hat chiliasts—until $4-a-gallon gas and winter heating bills brought the new reality home. It was James Howard Kunstler, the author of The End of Suburbia and The Long Emergency, who warned with scourging wit and rococo imagery in his weekly online column that high gas prices, suburban sprawl, decaying infrastructure, the machinations of hedge-fund greedheads, and Wall Street necromancy were converging into a Hurricane Katrina–size "clusterfuck" that would deform the social and political landscape. In his August 25 column, Kunstler wrote, "I'm rather convinced that the carnage on the money scene will be so extreme this fall that the nation will seem to have been transformed from a superpower to a basketcase before November 4th, and that the blame for this state of affairs will be blindingly obvious: the people in charge for the past eight years looted the treasury, destroyed the currency, and left the machinery of capital a smoking wreckage." Within a month, the carnage Kunstler envisioned not only got worse but gained velocity as mortgage giants Freddie Mac and Fannie Mae required an emergency federal bailout, fabled Merrill Lynch disappeared into the maw of Bank of America, Lehman Brothers went belly-up, A.I.G. was rescued, and the Dow lost 500 points in one day, the worst loss since 2001. Billions of dollars of bad loans devoured by boll weevils, thousands of well-paying jobs liquidated in a single stroke, stock portfolios turning into scarecrows before one's eyes, and who knew what awaited over the next hill?

(continued)

Title: Re: Meltdown
Post by: drogulus on October 25, 2008, 04:30:05 PM

Quote from: Dm on October 25, 2008, 03:21:47 PM
Yes, the chart fails to tell the whole story, but it illustrates my point about recession, demand destruction, and the price of oil.

You mention that a mix of "substitutes" for oil will occur before the price of oil hits the stratosphere. This is a complex issue, because oil has several layers of demand. There is a substantial inelastic layer, wherein consumers will keep buying petroleum (and related fossil fuels) no matter what the price (e.g., pharmaceuticals; government; military; law enforcement; agriculture -- including fertilizers & pesticides --; emergency vehicles; hospitals). Thus, it's conceivable that based solely on this inelastic layer of demand, at some point in the future, oil will reach stratospheric prices. Unfortunately, the global economy will likely be in smoldering ruins (http://www.princeton.edu/hubbert/current-events-08-05.html) by the time oil reaches $300/bbl.

The price won't reach $1,000 because elasticity increases with price. At $100/bbl averaged over a few years electric vehicles will fill many roles now filled by internal combustion engines. At $150 virtually everything is on the table. Look at how fast the market changed from just a brief visit at the $140 level. Now imagine what kind of changes would happen if we faced 6 months at $200, which I don't think will happen in the near future. We would be forced to make a huge investment in new infrastructure, mostly the same ones we are going to make anyway, but accelerated. This would begin to relieve price pressures fairly quickly (and yes, slow down the necessary changes).

And how does a smoldering ruin of an economy pay for $300/bbl oil? IOW, there's no way for such a price to get established! Who's the buyer? People will run their cars on anything but gasoline long before we get to the doomsday price. At a steady price of $150 synthetics are competitive, and so are CNG cars using multifuel engines (you can modify current engines to run on several fuels rather easily, and some people have done it). You won't believe how fast this will happen if it becomes necessary. Which it most likely won't, because almost as soon as these trends start, they immediately begin to relieve the price pressures that inspire them.

So, things will get worse and in the process trigger the technological solutions that can be found, including some we can't foresee.

Quote(e.g., pharmaceuticals; government; military; law enforcement; agriculture -- including fertilizers & pesticides --; emergency vehicles; hospitals)

We'll find substitutes for all of these when the price goes high enough to make it necessary. The problem is that at current prices oil is still too cheap to force the change, though the "externalities" (climate change, Iraq, terrorism, etc.) are helping to clarify the situation.

(http://www.vanityfair.com/images/culture/2008/11/cuar01_wolcott0811.jpg)

This is what the DoomsDayers envision: It's silly to even imagine a solution, right? Notice, though, that something like this hasn't happened for 65 million years, and a lesser disaster is not the same as extinction. So, being right once every 65 million years doesn't make you a prophet, does it?

QuoteAccording to the U.S. Department of Transportation, Americans drove 15 billion fewer miles in August, or 5.6% less than they did the year before. DOT says it's the largest ever year-to-year decline recorded in a single month.

So, negative trends are negative and positive trends are negative, too. Or, positive trends with identifiable negative causes must be seen as additional negatives. Look at how conservation-minded we are becoming! Or, see how fast things change when the pressure is applied? _:D

Title: Re: Meltdown
Post by: BachQ on October 26, 2008, 12:03:59 PM

Quote from: drogulus on October 25, 2008, 04:30:05 PM
The price won't reach $1,000 because elasticity increases with price. At $100/bbl averaged over a few years electric vehicles will fill many roles now filled by internal combustion engines. At $150 virtually everything is on the table. Look at how fast the market changed from just a brief visit at the $140 level. Now imagine what kind of changes would happen if we faced 6 months at $200, which I don't think will happen in the near future. We would be forced to make a huge investment in new infrastructure, mostly the same ones we are going to make anyway, but accelerated. This would begin to relieve price pressures fairly quickly (and yes, slow down the necessary changes).

Drogulus:

I agree that oil will not be able to maintain a price floor of $200/bbl "in the near future." However, over the longterm, given that a significant portion of the demand for oil is inelastic (military; aviation; agriculture; law enforcement; emergency vehicles; hospitals; pharmaceuticals), and given that oil is a finite resource, AT SOME POINT, unless civilization shuts down completely, oil will approach $200/bbl. Whether we reach that point in 2 years, 5 years, or 10 years, I can't say.

Gasoline in Europe is 2 to 3 times the cost in the US ... and yet people still drive cars in Europe. Thus, there is plenty of upward mobility in the price of gasoline and the price of oil.

Title: Re: Meltdown
Post by: BachQ on October 26, 2008, 12:06:22 PM

Daimler to suspend production for one month - report

(http://www.marketwatch.com/news/story/daimler-suspend-production-one-month/story.aspx?guid=%7B5257D6B8-FAB3-4C05-897A-A9AE7FEDE021%7D&siteid=yahoomy)

QuoteBERLIN (AFP) -- German carmaker Daimler, hit by falling demand amid the global financial crisis, plans to suspend production for a month beginning in December, a newspaper said in report due to appear Sunday. The break in production would begin on December 11 and last until January 12, Frankfurter Sonntagszeitung reported, citing a company spokesman. Daimler, the first luxury car maker to present its quarterly results, unveiled big falls in profits on Thursday and issued a new profit warning owing to the global banking crisis. "The financial crisis is turning into an economic crisis," Daimler chairman Dieter Zetsche told a telephone news conference. It provoked "in recent weeks a dramatic slump on our major markets," he said. "The situation is very challenging," Zetsche added, "we are living in extraordinary times."

Title: Re: Meltdown
Post by: BachQ on October 27, 2008, 02:01:17 PM

Quote from: Lilas Pastia on October 24, 2008, 03:51:21 PM
One should beware of simple equations such as that made below about the oil price. Many factors are at work and some sorting out needs to be done before coming to a conclusion. In retrospect, analysts see the 147$ oil price not as a sign of demand, but built-in is a "refuge" premium that normally alternates between gold and the greenback. The fact that oil has gone down is a sign of lower demand (realization of an impending recession), but the corresponding rise in the greenback indicates that the "refuge' factor has been priced out of the sweet crude. IOW, if you price out the 6 months pre-147$ levels, you will get a fairer idea of the real price of oil.

Here's another take on the cause of falling oil prices, as announced by James Howard Kunstler

(http://www.kunstler.com/)

QuoteI hope you're enjoying the temporarily cheap prices at the gas pumps, because this is purely a function of the compressive deleveraging that is going on right now, as contracts and positions held in energy markets are being dumped by everybody and his uncle to raise cash to meet margin calls. My guess is that oil and its byproducts will become much more difficult to get in the months ahead -- not just more expensive, but literally not available. The current falling price of oil has little to do with the real supply and demand fundamentals. It's simply a function of the markets being in near-total disarray. We're running on current inventory, and running it down. In the background, all kinds of peculiar and terrible things are happening. The entire apparatus of allocation and distribution is being thrown out of whack. The smaller tanker operations are going bankrupt. The "less-developed" nations are heading back to the 17th-century level of daily life without electricity. The oil exploration and development projects that were planned for hard-to-get oil netting $100-a-barrel minimum -- in places like the deepwater Gulf of Mexico, Siberia, and Central Asia -- are being shelved, which means the world has less of a chance to offset coming depletions in old fields.

From October 27, 2008 "Easthampton Burning?" (http://www.kunstler.com/)

Title: Re: Meltdown
Post by: BachQ on October 27, 2008, 02:05:43 PM

When the economy heads into a deep recession, demand for gasoline plunges, and gas prices drop.

Gasoline prices in steepest drop ever
(http://www.reuters.com/article/domesticNews/idUSTRE49P36W20081026)

QuoteNEW YORK (Reuters) - The average retail price for a gallon of gasoline in the United States plunged more steeply than ever over the last two weeks as the economic slowdown weighed on crude oil and drove consumers off of the roads, according to the latest nationwide Lundberg survey. Prices will likely slide more, but at a slower pace, following the "extraordinary" decline this month, survey editor Trilby Lundberg said on Sunday. ... "The drop is unprecedented," Lundberg said in an interview. "It was dictated by the crash in crude oil prices and deepened powerfully by falling U.S. gasoline demand."

Title: Re: Meltdown
Post by: drogulus on October 27, 2008, 04:15:59 PM

Quote from: Dm on October 27, 2008, 02:05:43 PM
When the economy heads into a deep recession, demand for gasoline plunges, and gas prices drop.

Gasoline prices in steepest drop ever
(http://www.reuters.com/article/domesticNews/idUSTRE49P36W20081026)

That's why the doomsday price never happens. Recession and substitution are both reactions to the ultra-high price (this recession may not have been caused by the high price, but that may only be because the financial meltdown happened first. At a high enough price some recession would be caused).

Quote from: Dm on October 26, 2008, 12:03:59 PM
Drogulus:

I agree that oil will not be able to maintain a price floor of $200/bbl "in the near future." However, over the longterm, given that a significant portion of the demand for oil is inelastic (military; aviation; agriculture; law enforcement; emergency vehicles; hospitals; pharmaceuticals), and given that oil is a finite resource, AT SOME POINT, unless civilization shuts down completely, oil will approach $200/bbl. Whether we reach that point in 2 years, 5 years, or 10 years, I can't say.

Gasoline in Europe is 2 to 3 times the cost in the US ... and yet people still drive cars in Europe. Thus, there is plenty of upward mobility in the price of gasoline and the price of oil.

The experiment we're running (let's call it the "real world") suggests that $140/bbl causes compensatory reactions, reduced demand, slower growth, some substitution efforts. The higher the price goes the stronger these reactions get until you reach an equilibrium point. $140 is probably more than enough to cause these reactions, so even higher prices couldn't be maintained for very long. What happens is that the inelasticity you mention becomes elastic as the price goes up and alternatives you don't consider at the $100 price point becomes increasingly attractive as the price goes even higher, and if the price stays high for any length of time a whole new set of solutions is priced into existence. The reason we don't convert Abrams tanks or Post Office vehicles to CNG or vegetable oil or something else is that it's expensive to retrofit a huge installed base, but when the price goes high enough the whole process pays for itself in a few years. There's a lag while planners try to figure out if now is the time or if we still should wait, but plans are being dusted off right now. _:)

Title: Re: Meltdown
Post by: BachQ on October 28, 2008, 04:12:35 PM

Quote from: drogulus on October 27, 2008, 04:15:59 PM
That's why the doomsday price never happens. Recession and substitution are both reactions to the ultra-high price (this recession may not have been caused by the high price, but that may only be because the financial meltdown happened first. At a high enough price some recession would be caused).

The experiment we're running (let's call it the "real world") suggests that $140/bbl causes compensatory reactions, reduced demand, slower growth, some substitution efforts. The higher the price goes the stronger these reactions get until you reach an equilibrium point. $140 is probably more than enough to cause these reactions, so even higher prices couldn't be maintained for very long. What happens is that the inelasticity you mention becomes elastic as the price goes up and alternatives you don't consider at the $100 price point becomes increasingly attractive as the price goes even higher, and if the price stays high for any length of time a whole new set of solutions is priced into existence. The reason we don't convert Abrams tanks or Post Office vehicles to CNG or vegetable oil or something else is that it's expensive to retrofit a huge installed base, but when the price goes high enough the whole process pays for itself in a few years. There's a lag while planners try to figure out if now is the time or if we still should wait, but plans are being dusted off right now. _:)

Good post, Drogulus. 8)

For the most part, we agree more than we disagree; however, I am not nearly as optimistic as you appear to be that oil can be so easily substituted. Consider diesel-powered 18-wheeler trucks that are so critical to the movement of goods and raw materials. I just don't see those being converted to CNG powered (or electric powered) without major investments and structural changes. But let's assume that all diesel-powered 18-wheeler trucks converted to natural gas powered. Because natural gas is a fossil fuel which is projected to reach peak extraction within a decade (between 2010-2020), the price of natural gas will eventually skyrocket just like oil. Therefore, it will become an unattractive substitute for oil.

Similarly, if all vehicles were powered by battery (electricity), since most electricity is generated through the burning of fossil fuels (mostly coal), within a few decades, when coal extraction has peaked, the price of electricity will experience the same fate as oil and natural gas. And lest you believe that nuclear power will solve the electricity issue, various estimates project that uranium extraction will peak between 2030-2040.

The key is to generate electricity from RENEWABLE sources (sun, wind, water). But we are lightyears away from achieving the necessary infrastructures to accommodate that on a large scale.

Title: Re: Meltdown
Post by: BachQ on October 28, 2008, 04:25:34 PM

London Times: Arctic is melting even in winter
The polar icecap is retreating and thinning at a record rate

(http://www.timesonline.co.uk/multimedia/archive/00342/polarbear385_342960a.jpg)

(http://www.timesonline.co.uk/tol/news/environment/article5014744.ece)

QuoteThe Arctic icecap is now shrinking at record rates in the winter as well as summer, adding to evidence of disastrous melting near the North Pole, according to research by British scientists.

They have found that the widely reported summer shrinkage, which this year resulted in the opening of the Northwest Passage, is continuing in the winter months with the thickness of sea ice decreasing by a record 19% last winter.

Usually the Arctic icecap recedes in summer and then grows back in winter. These findings suggest the period in which the ice renews itself has become much shorter.

Dr Katharine Giles, who led the study and is based at the Centre for Polar Observation and Modelling at University College London (UCL), said the thickness of Arctic sea ice had shown a slow downward trend during the previous five winters but then accelerated.

She said: "After the summer 2007 record melting, the thickness of the winter ice also nose-dived. What is concerning is that sea ice is not just receding but it is also thinning."

The cause of the thinning is, however, potentially even more alarming. Giles found that the winter air temperatures in 2007 were cold enough that they could not have been the cause.

This suggests some other, longer-term change, such as a rise in water temperature or a change in ocean circulation that has brought warmer water under the ice.

If confirmed, this could mean that the Arctic is likely to melt much faster than had been thought. Some researchers say that the summer icecap could vanish within a decade.

Title: Re: Meltdown
Post by: BachQ on October 29, 2008, 02:09:19 PM

Quote from: Sean on May 02, 2008, 11:11:48 PM
Dm, I've had another read and listen today on this subject. Do you come across any other concrete forcasts for the present oil price surge? It's obviously volatile, but how volatile? I hardly believe in the world at all and know that the more serious something is the less people will really talk about it: is this the steep edge on the other side of the peak or just the start of a gentle slope?

Sean, you are asking about a "fast crash" vs a "slow crash." Well, today (Oct. 29), some astonishing preliminary data has been leaked from the International Energy Agency's (IEA's) comprehensive report officially due out November 12, 2008. This is unofficial data and has not been approved by the IEA, but if it's even close to accurate, it means that global oil extraction and production is falling far faster than had previously been expected. This would have dire consequences for the global economy, because with production lagging behind demand, oil prices will again skyrocket. It would also suggest that a "fast-crash" scenario is likely, given the steepness of the slope of annual decline in oil production.

Global Oil Production Is Falling Faster Than Expected, FT Says

(http://www.bloomberg.com/apps/news?pid=20602099&sid=arn1g3qUqKAI&refer=energy)

QuoteBy Angela Macdonald-Smith

Oct. 29 (Bloomberg) -- Global crude-oil output is falling faster than expected, leaving producers struggling to meet demand without extra investment, the Financial Times said, citing a draft of an International Energy Agency report. Annual production is set to drop by 9.1 percent in the absence of additional investment, according to the draft of the agency's World Energy Outlook obtained by the newspaper, the FT reported. Even with investment, output will slide by 6.4 percent a year, it said. The shortfall will become more acute as prices fall and investment decisions are delayed, the newspaper said. The IEA forecasts that the rising consumption of China, India and other developing nations requires investments of $360 billion a year until 2030, it said.

Here's the original Financial Times piece (http://www.ft.com/cms/s/0/0830883c-a55b-11dd-b4f5-000077b07658.htm)

Title: Re: Meltdown
Post by: BachQ on October 29, 2008, 02:46:18 PM

Quote from: Lilas Pastia on October 21, 2008, 03:55:23 PM
What is a "classic trade-depression" ? Isn't that an oxymoron? It happened only once before, and under different circumstances (as the article admits).

I retain this:
Purging debt is the necessary medicine to regain full economic health. And from what I understand this is the way we are all headed. Given the enormous size of the world debt, it will indeed take at least a decade. And, just like domestic debts, there will be bad debtors and some countries will go bust.

A "Pitiful growth" is not a terminal illness. It's a very beneficial economic diet. Necessary and useful activity will keep going: producing food, goods and services that everybody needs, at the most competitive cost possible. We can do without pet manicure salons or cemetaries, and without all the status-affirming luxury goods that cost a fortune and add nothing to the economy. A full decade of such a cure minceur will also help realign personal, social and political values in the right direction.

Peter Schiff agrees with you (see also the following post).

QuoteIn the end, by refusing to allow market forces to work their cure, our economy will inevitably die from the disease. Our economy will now face death by hyperinflation, which will cause a complete loss of confidence in the dollar and result in prices and interest rates skyrocketing out of sight. The evaporation of our national wealth will lead to civil unrest, food and energy shortages, and the possible imposition of marshal law. If such a scenario unfolds, what is left of our Constitution will surely be completely shredded.

LINK (http://www.europac.net/newsletter/newsletter15.htm#shiff)

Title: Re: Meltdown
Post by: BachQ on October 29, 2008, 02:48:02 PM

In an outstanding interview, Peter Schiff on Bloomberg (Youtube Oct 28: http://www.youtube.com/watch?v=TP_aJ7LcAAA) notes (1) that consumer confidence has dropped a record amount; (2) that the US government and US economy are broke; (3) that we need higher interest rates, and the Fed's lowering rates was a big mistake; (4) that the "recession is actually the medicine that is going to cure the economy from the disease that infected it during the boom"; (5) The dollar will soon "drop like a stone," and when that happens, it will pull the rug out from under our economy; (6) the government shouldn't be bailing out failed companies; (7) the US economy is built on consumer credit; once the credit stops flowing, the economy collapses.

Youtube: http://www.youtube.com/watch?v=TP_aJ7LcAAA

Highly recommended. 0:)

Title: Re: Meltdown
Post by: ezodisy on October 29, 2008, 02:50:34 PM

Quote from: Dm on October 29, 2008, 02:48:02 PM
In an outstanding interview, Peter Schiff on Bloomberg (Youtube Oct 28: http://www.youtube.com/watch?v=TP_aJ7LcAAA) notes (1) that consumer confidence has dropped a record amount; (2) that the US government and US economy are broke; (3) that we need higher interest rates, and the Fed's lowering rates was a big mistake; (4) that the "recession is actually the medicine that is going to cure the economy from the disease that infected it during the boom"; (5) The dollar will soon "drop like a stone," and when that happens, it will pull the rug out from under our economy; (6) the government shouldn't be bailing out failed companies; (7) the US economy is built on consumer credit; once the credit stops flowing, the economy collapses.

Youtube: http://www.youtube.com/watch?v=TP_aJ7LcAAA

Highly recommended. 0:)

I watched that live yesterday, absolutely outstanding, even the presenter seemed taken aback by how forthright he was. Dollar will plunge, long gbp, euro.

Title: Re: Meltdown
Post by: drogulus on October 29, 2008, 03:01:53 PM

Quote from: Dm on October 28, 2008, 04:12:35 PM

The key is to generate electricity from RENEWABLE sources (sun, wind, water). But we are lightyears away from achieving the necessary infrastructures to accommodate that on a large scale.

It's happening right now, and it will speed up. One way it will happen is that hydropower and wind will be hooked up together so excess capacity when winds are blowing will be used to pump water back over the dam, using reservoirs as "batteries". Also, you'll see more sophisticated ways of linking wind farms together so they can cover shortfalls, making them more suitable as base-power generators. But I think the biggest source for electricity generation will be coal, so there will be a major effort to learn how to use it cleanly, one of the options the crisis will price into existence.

Building the new infrastructure will mean someone is going to make a whole lot of money creating the new energy economy. So this is a very dark cloud with a very silvery lining for smart investors. The main problem I have with doomsday prediction is that it depends on forward projection of current trends out to infinity*, the least likely scenario IMO. Just about anything is more likely than that, though I wouldn't bet on UFOs showing up with a new power source and a book called TO SERVE MAN. _:)

(http://graylien.110mb.com/photos/film/twilightzonetoserveman.jpg)

_{* Mr. Doom: Doc, it hurts when I do this.

Doc: Then stop doing it.

Mr.D: I can't. It's a trend!}

Title: Re: Meltdown
Post by: BachQ on October 29, 2008, 04:28:42 PM

Quote from: ezodisy on October 29, 2008, 02:50:34 PM
I watched that live yesterday, absolutely outstanding, even the presenter seemed taken aback by how forthright he was. Dollar will plunge, long gbp, euro.

Exactly. Schiff is brutally honest about our predicament. Ain't lookin' pretty.

Here's Part II http://www.youtube.com/watch?v=coaI3d89kuA

PETER SCHIFF: "We're going to have massive unemployment; we're going to have rapid inflation, and our economy's gonna tank"

ANCHOR: "you're an upbeat guy, you know that Peter" :D

But I agree with his solution: first and foremost: CUT GOVERNMENT SPENDING.

Title: Re: Meltdown
Post by: BachQ on October 29, 2008, 04:31:24 PM

Quote from: drogulus on October 29, 2008, 03:01:53 PM
Just about anything is more likely than that, though I wouldn't bet on UFOs showing up with a new power source and a book called TO SERVE MAN.

Actually, I'm kinda hoping for aliens to show up with a new power source (but without the book "To Serve Man" :D).

http://www.youtube.com/v/WudBfRa0ETw "It's a cookbook"

Title: Re: Meltdown
Post by: drogulus on October 29, 2008, 04:41:14 PM

Quote from: Dm on October 29, 2008, 04:28:42 PM

But I agree with his solution: first and foremost: CUT GOVERNMENT SPENDING.

Nothing he said is important to this crisis, except in making it worse. Cutting spending is positively insane, abolishing gov't departments is totally irrelevant where it isn't harmful, and cutting taxes on the wealthy is a misdirection, trying to convince people that giving more money to rich people causes other people to become rich. In the process it starves gov't of the revenues it needs to do things worth doing. This is just another instance of an ideologue using the crisis to promote pet nostrums he would be in favor of even under totally different circumstances.

Quoteeven the presenter seemed taken aback by how forthright he was

Either that or she understood economics and couldn't figure out what to say without insulting her guest.

Quote from: Dm on October 29, 2008, 04:31:24 PM
Actually, I'm kinda hoping for aliens to show up with a new power source (but without the book "To Serve Man" :D).

http://www.youtube.com/v/WudBfRa0ETw "It's a cookbook"

Title: Re: Meltdown
Post by: Lilas Pastia on October 29, 2008, 05:58:44 PM

Government spending is an important source of economic stimulus when anemic domestic spending threatens to stall the whole economy. That much should be easily understood except if you're dogmatic about it. In general it tends to give work to people who badly need it. You know, repairing infrastructures, building roads, the usual stuff.

Title: Re: Meltdown
Post by: ezodisy on October 29, 2008, 11:13:56 PM

ah, crude back at $70, rebounding almost ten bucks in two days. Finally!!!!!! Get your resources while you can!

Title: Re: Meltdown
Post by: BachQ on October 30, 2008, 05:46:10 PM

Quote from: drogulus on October 29, 2008, 04:41:14 PM
Nothing he said is important to this crisis, except in making it worse. Cutting spending is positively insane, abolishing gov't departments is totally irrelevant where it isn't harmful, and cutting taxes on the wealthy is a misdirection, trying to convince people that giving more money to rich people causes other people to become rich. In the process it starves gov't of the revenues it needs to do things worth doing. This is just another instance of an ideologue using the crisis to promote pet nostrums he would be in favor of even under totally different circumstances.

Either that or she understood economics and couldn't figure out what to say without insulting her guest.

;D

So you think the US Gov't should spend more?

Spend more?

-- Bloomberg: The U.S. Treasury faces historic financing demands from a weakening economy and the added costs of a $700 billion Wall Street rescue program, the department's top domestic finance official said today. ``This year's financing needs will be unprecedented,'' said Anthony Ryan, the Treasury's acting undersecretary for domestic finance. (http://www.bloomberg.com/apps/news?pid=20601009&sid=aorUd4dpNb3Y&refer=bond)

Spend more?

-- Bloomberg: ``The budget deficit for fiscal year 2009 might reach $1 trillion if Congress passes another stimulus package this winter,'' said Lou Crandall, chief economist of Wrightson ICAP, in a research note. ``And that's just the beginning of the bad news -- financing needs arising from off-budget items might be nearly as large as the on-budget deficit.'' (http://www.bloomberg.com/apps/news?pid=20601009&sid=aorUd4dpNb3Y&refer=bond)

Spend more?

-- Wall Street Journal: Every $100 billion in bailout requires at least $130 billion in taxes, where the $30 billion extra is the cost of getting government involved. ...

(http://online.wsj.com/public/article/SB122506830024970697.html?mod=wsjbadge_ttf_wwwwsjradiocom)

QuoteSome 14 months ago, the projected deficit for the 2008 fiscal year was about 0.6% of GDP. With the $170 billion stimulus package last March, the add-ons to housing and agriculture bills, and the slowdown in tax receipts, the deficit for 2008 actually came in at 3.2% of GDP, with the 2009 deficit projected at 3.8% of GDP. And this is just the beginning.

The net national debt in 2001 was at a 20-year low of about 35% of GDP, and today it stands at 50% of GDP. But this 50% number makes no allowance for anything resulting from the over $5.2 trillion guarantee of Fannie Mae and Freddie Mac assets, or the $700 billion Troubled Assets Relief Program (TARP). Nor does the 50% number include any of the asset swaps done by the Federal Reserve when they bailed out Bear Stearns, AIG and others.

But the government isn't finished. House Speaker Nancy Pelosi and Senate Majority Leader Harry Reid -- and yes, even Fed Chairman Ben Bernanke -- are preparing for a new $300 billion stimulus package in the next Congress. Each of these actions separately increases the tax burden on the economy and does nothing to encourage economic growth. Giving more money to people when they fail and taking more money away from people when they work doesn't increase work. And the stock market knows it.

Title: Re: Meltdown
Post by: BachQ on October 30, 2008, 05:48:20 PM

Quote from: ezodisy on October 29, 2008, 11:13:56 PM
ah, crude back at $70, rebounding almost ten bucks in two days. Finally!!!!!! Get your resources while you can!

It will be interesting to see what happens to the price of oil in November/December.

Oil Is Poised for Worst Month Ever on Concern Over Demand Drop Oct. 31 (Bloomberg) -- "Crude oil in New York was poised for its biggest monthly drop since trading began in 1983 on concern that the decline in the U.S. economy will further curb fuel demand in the world's largest energy consuming country. Oil retreated after the U.S. Commerce Department said yesterday that gross domestic product contracted at a 0.3 percent annual pace in the third quarter, the most since 2001." (continued) (http://www.bloomberg.com/apps/news?%3Cbr%20/%3E%3Cbr%20/%3Epid=20601087&sid=a.h.GSPsqftM&refer=home)

Title: Re: Meltdown
Post by: BachQ on October 30, 2008, 05:49:44 PM

Richard Heinberg on the IEA 9% depletion rate:

(http://postcarbon.org/nine_percent)

QuoteThe Financial Times has leaked the results of the International Energy Agency's long-awaited study of the depletion profiles of the world's 400 largest oilfields, indicating that, "Without extra investment to raise production, the natural annual rate of output decline is 9.1 per cent." This is a stunning figure. Considering regular crude oil only, this means that 6.825 million barrels a day of new production capacity must come on line each year just to keep up with the aggregate natural decline rate in existing oilfields. That's a new Saudi Arabia every 18 months.

*** But if nine percent is even close to being the final figure, then it's absolutely clear: July 2008 was the all-time peak in world oil production. Don't expect anyone at the IEA to officially admit that fact until 2025 or so.

(continued)

CAVEAT: These are unofficial IEA figures, which the IEA has stated may not be the final numbers to be publicized in 2 weeks.

Title: Re: Meltdown
Post by: BachQ on October 30, 2008, 05:51:29 PM

Chevron Project Offers Glimpse Of Future: More Work, Less Oil

Oct 30, 2008

QuoteRIO DE JANEIRO -- Chevron Corp. executive Ali Moshiri spent the past seven years scouring the globe for hard-to-get equipment, schmoozing foreign officials and taking billion-dollar risks to fast-track a new oil prospect off the coast of Brazil. Despite the full-out effort, Mr. Moshiri concedes Chevron's $3 billion Frade (pronounced Frah-jay) project is a mediocre prospect compared with the huge pools of easy-to-get oil the company has tapped in the past. Even if it fulfills its greatest promise, the deep-water oil field will contribute only a trickle to the global river of petroleum. And Frade, whose first well is now being drilled, could still fail to deliver enough oil to make all the effort worthwhile.

Quote
What does all the effort buy? Chevron believes it can extract about 270 million barrels out of Frade over the next 18 years. The world guzzles that much every three days. The global economic slowdown is shrinking demand for crude oil and has caused oil prices to plummet since this summer. Pressure on the global oil industry to find new sources of crude is receding, but the daily struggle of replacing production declines in aging fields is a problem that isn't going away. And cuts to capital budgets to cope with the downturn in prices could hobble the industry's ability to ramp up supply when demand returns. The result could be "a serious supply crunch" in as little as two years, says Paul Horsnell, commodities research head for Barclays Capital.

Title: Re: Meltdown
Post by: BachQ on October 31, 2008, 06:55:23 PM

UK Guardian: UK will face peak oil crisis within five years, report warns

(http://static.guim.co.uk/sys-images/Environment/Pix/pictures/2008/10/30/Oil-Supply.gif)

(http://www.guardian.co.uk/environment/2008/oct/29/fossil-fuels-oil)

QuoteThe risk to the UK from [global] falling oil production in coming years is greater than the threat posed by terrorism, according to an industry taskforce report published today. The report, from the Peak Oil group, warns that the problem of declining availability of oil will hit the UK earlier than generally expected - possibly within the next five years and as early as 2011. Oil supply could then rapidly decline, or even collapse, the report warns, with potentially devastating implications for the UK economy.

The report was issued today by the recently established UK industry taskforce on peak oil and energy security, a group of eight companies including transport firms Virgin, Stagecoach and FirstGroup, engineers Arup, architects Foster and Partners, and energy giant Scottish and Southern. Entitled The Oil Crunch, the report argues that the risk of an early peak in oil production poses a bigger threat to UK society than tightening gas supplies, terrorism or the short-term impacts of climate change.

Quote
The new report marks the first time a group of businesses has weighed into this debate. At its core are two newly commissioned assessments of future oil production: one from Chris Skrebowski, consulting editor of Petroleum Review, and one from Shell. Skrebowski predicts that global oil production will peak in the period 2011-2013 and then decline steadily, with non-conventional sources such as tar sands failing to fill the gap in time to avoid a serious energy crunch. He also warns that supplies could collapse if a handful of huge, long-established oil fields go into terminal decline simultaneously.

Title: Re: Meltdown
Post by: BachQ on October 31, 2008, 06:56:00 PM

Out of Gas: We Were Warned

(Part 1) http://www.youtube.com/watch?v=1vPi7SEzzWg
(Part 2) http://www.youtube.com/watch?v=wDU94cTrXKY&feature=related
(Part 3) http://www.youtube.com/watch?v=znaVarGSP5Q&feature=related
(Part 4) http://www.youtube.com/watch?v=7iEpHAzbUWI&feature=related

Title: Re: Meltdown
Post by: BachQ on October 31, 2008, 06:57:03 PM

NYT: When Consumers Capitulate

By PAUL KRUGMAN
Published: October 31, 2008
(http://www.nytimes.com/2008/10/31/opinion/31krugman.html?hp)

QuoteThe long-feared capitulation of American consumers has arrived. According to Thursday's G.D.P. report, real consumer spending fell at an annual rate of 3.1 percent in the third quarter; real spending on durable goods (stuff like cars and TVs) fell at an annual rate of 14 percent. To appreciate the significance of these numbers, you need to know that American consumers almost never cut spending. Consumer demand kept rising right through the 2001 recession; the last time it fell even for a single quarter was in 1991, and there hasn't been a decline this steep since 1980, when the economy was suffering from a severe recession combined with double-digit inflation.

Also, these numbers are from the third quarter — the months of July, August, and September. So these data are basically telling us what happened before confidence collapsed after the fall of Lehman brothers in mid-September, not to mention before the Dow plunged below 10,000. Nor do the data show the full effects of the sharp cutback in the availability of consumer credit, which is still under way. So this looks like the beginning of a very big change in consumer behavior. And it couldn't have come at a worse time.

(http://graphics8.nytimes.com/images/2006/04/02/opinion/ts-krugman-190.jpg)

Title: Re: Meltdown
Post by: BachQ on October 31, 2008, 06:58:33 PM

NYT: Specter of Deflation Lurks as Global Demand Drops

(http://www.nytimes.com/2008/11/01/business/economy/01deflation.html?hp)

QuoteAs dozens of countries slip deeper into financial distress, a new threat may be gathering force within the American economy — the prospect that goods will pile up waiting for buyers and prices will fall, suffocating fresh investment and worsening joblessness for months or even years. The word for this is deflation, or declining prices, a term that gives economists chills. Deflation accompanied the Depression of the 1930s. Persistently falling prices also were at the heart of Japan's so-called lost decade after the catastrophic collapse of its real estate bubble at the end of the 1980s — a period in which some experts now find parallels to the American predicament. "That certainly is the snapshot of the risk I see," said Robert J. Barbera, chief economist at the research and trading firm ITG. "It is the crisis we face." With economies around the globe weakening, demand for oil, copper, grains and other commodities has diminished, bringing down prices of these raw materials.

*** "We're entering a really fierce global recession," [Harvard Professor Kenneth] Rogoff said. "A significant financial crisis has been allowed to morph into a full-fledged global panic. It's a very dangerous situation. The danger is that instead of having a few bad years, we'll have another lost decade."

(continued)

Title: Re: Meltdown
Post by: ezodisy on November 01, 2008, 04:26:24 AM

Quote from: Dm on October 30, 2008, 05:46:10 PM
So you think the US Gov't should spend more?

I just love the optimism of this thread!

The Financial Times newspaper has a very useful commentary section which posts all sorts of market and economic analyses. They have posted 2 pieces here aligning the bailout with "Japanese-style quantitative easing".

http://ftalphaville.ft.com/blog/2008/10/27/17448/the-unthinkable/

http://ftalphaville.ft.com/blog/2008/10/31/17669/where-bailout-money-comes-from/

and the site itself: http://ftalphaville.ft.com/

Title: Re: Meltdown
Post by: BachQ on November 05, 2008, 04:09:38 AM

Quote from: ezodisy on November 01, 2008, 04:26:24 AM
I just love the optimism of this thread!

The Financial Times newspaper has a very useful commentary section which posts all sorts of market and economic analyses. They have posted 2 pieces here aligning the bailout with "Japanese-style quantitative easing".

http://ftalphaville.ft.com/blog/2008/10/27/17448/the-unthinkable/

http://ftalphaville.ft.com/blog/2008/10/31/17669/where-bailout-money-comes-from/

and the site itself: http://ftalphaville.ft.com/

Very cool. I visit FT daily, but I never knew of this sub-site. 8)

Title: Re: Meltdown
Post by: BachQ on November 05, 2008, 04:19:45 AM

WSJ: Supply Worries Persist in Oil Market, Just Not Now

(http://online.wsj.com/article/SB122566263547491387.html?mod=googlenews_wsj)

QuoteNEW YORK -- While oil may be at its cheapest in months, prices deep in the future reveal a market with serious concerns about long-term supply. As evidence, analysts point to charts of crude oil futures. Oil for delivery years from now costs more than oil for imminent sale, and the difference has widened. While front-month crude is down 53% from its July peak, oil contracts for later delivery dates have fallen far less. For example, as recently as last summer, December 2008 and December 2013 crude-oil futures on the New York Mercantile Exchange cost the same. Now, the 2008 contract is $21.50 a barrel below 2013, an unprecedented discount. Light, sweet crude for December 2008 delivery closed at $67.81 a barrel Friday, up $1.85, capping the biggest monthly decline ever, while December 2013 crude closed at $89.31, up $3.11.

(http://s.wsj.net/public/resources/images/MI-AT242_COMMOD_NS_20081102184828.gif)

QuoteA pause in the march of world demand helped topple crude from record levels above $145 a barrel. But the current price weakness could set the stage for an explosive move higher when consumption takes off again. Analysts say the fall has been so steep it could diminish investment in new supplies that are only profitable in a high-price environment. "Low prices are bullish longer term, as they derail whole sets of high-cost projects, exacerbate decline rates and discourage alternatives," said Jan Stuart, an energy economist at UBS Securities LLC. ¶Some signs of slower supply investment are emerging. Marathon Oil Corp. last week said it expects capital spending to decline 15% in 2009. Russia's OAO Lukoil Holdings said next year's planned capital spending could fall if oil prices slide further. Suncor Energy Inc., the second-largest producer in western Canada's high-cost oil sands, has said it would delay a key project to turn tar-like bitumen into high-quality crude.

"The decline in prices is having a greater supply-destruction impact than the rise in prices had in terms of demand destruction," said John Hummel, president of hedge fund firm AIS Group, which manages a $400 million fund invested in commodity and other futures. Industrialized countries are now daily consuming 1.9% less oil than they did a year ago, according to the International Energy Agency. If economic conditions worsen, oil use will be the poorer.

Title: Re: Meltdown
Post by: BachQ on November 05, 2008, 04:22:04 AM

Obama's green jobs revolution -- Barack Obama is promising a $150bn "Apollo project" to bring jobs and energy security to the US through a new alternative energy economy.

(http://www.independent.co.uk/news/world/americas/obamas-green-jobs-revolution-984631.html)

Quote*** " [The "Apollo project" is] going to be my number one priority when I get into office," Mr Obama has said of his "green recovery" plans. *** [Obama] declared: "We'll invest $15bn a year over the next decade in renewable energy, creating five million new green jobs that pay well, can't be outsourced and help end our dependence on foreign oil." The appeal of the idea that clean energy could help to kick-start the economy is such that Mr Obama's Republican opponent, John McCain, has also promised "millions" of green jobs if he wins. ***

(continued)

Title: Re: Meltdown
Post by: BachQ on November 05, 2008, 04:24:28 AM

A Nightmare Inheritance: Obama faces the worst US economy since the great depression

(http://www.telegraph.co.uk/telegraph/multimedia/archive/01097/barack_1097235c.jpg)

(http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3362992/Barack-Obama-or-John-%3Cbr%20/%3EMcCain-need-to-tackle-the-5-Cs-to-get-the-US-economy-roaring-again.html)

Quote*** Inheriting the policies of the previous administration can be a bad thing for an incoming President, but when he is inheriting a $250bn (£154bn) bank capital injection programme through the Treasury's $700bn Troubled Assets Relief Programme (TARP), it may not be quite such a problem. The Treasury Secretary Hank Paulson's measures to prop up the balance sheets of American banks by buying preferred equity stakes have solved the initial problem of a lack of available capital to maintain regulator's adequacy levels. Nine major banks have taken $125bn of capital, with a further 20 regional banks allocated a further $40bn, with the rest of the money to be doled out to institutions deemed worthy by the Treasury.

(continued)

Title: Re: Meltdown
Post by: ezodisy on November 06, 2008, 12:08:13 AM

BOE rate cut decision today, they have not cut more than half a percentage point since 1993 though with all the calls for a whole % pt they may do so today and I don't think it's priced in. We've got gbp/usd and gbp/jpy moving within these silly little triangulating ranges and I quite unpatriotically want and expect the bugger to plunge for a retest low. As Obama said in a queer, Bush-like way during his acceptance speech, "The road is long, the path is steep" or some such nonsense, he should have carried on, openly and honestly, "The road is long, the path is steep, and at the top we're going to plunge like lemmings".

Title: Re: Meltdown
Post by: BachQ on November 06, 2008, 02:35:34 AM

Quote from: ezodisy on November 06, 2008, 12:08:13 AM
BOE rate cut decision today, they have not cut more than half a percentage point since 1993 though with all the calls for a whole % pt they may do so today and I don't think it's priced in. We've got gbp/usd and gbp/jpy moving within these silly little triangulating ranges and I quite unpatriotically want and expect the bugger to plunge for a retest low. As Obama said in a queer, Bush-like way during his acceptance speech, "The road is long, the path is steep" or some such nonsense, he should have carried on, openly and honestly, "The road is long, the path is steep, and at the top we're going to plunge like lemmings".

This was posted today on FT ALPHAVILLE [S ]ome economists are entertaining even more extreme views [than a 1% rate cut]. Former MPC member and LSE professor Charles Goodhart touted on Channel Four news last week the bank may have to lower rates as far as zero. Yes, that's right. Japan-style zero. That view was most recently reinforced by Michael Saunders, chief western European economist at Citigroup in London. He told Bloomberg the bank should be prepared to go that far if necessary.

Some of the latest headlines giving increasing credence for such a move:

-- UK car sales falling no less than 23 per cent in October. That's the sixth consecutive monthly decline reported by the Society of Motor Manufacturers. No surprise the Daily Mail is reporting cases of UK dealers actually offering "Buy one get one free" car sales offers.

-- House prices declining by 2.2 per cent in October alone, according to Halifax data. That compares to a fall of 1.3 per cent in September, the sharpest drop since May. On the year, house prices were down 15 per cent in October - a sharper decline than seen in the early 1990s downturn.

-- The fact politicians are having to beg high-street banks to pass on BoE cuts. That follows statements from the head of HSBC David Hodgkinson, that consumers may not see any benefits in the event of a BoE rate cut.

(http://ftalphaville.ft.com/blog/2008/11/06/17907/banking-on-a-mega-cut/)

FT Alphaville is a total goldmine; together with all of the links to other sites & forums, a person could spend all day, every day simply clicking away!

Simon Derrick, chief currency strategist, at Bank of New York Mellon says this:

QuoteAs regular readers will be aware, we struggle to find anything positive to say about GBP. The forecast that the UK is likely to face the deepest recession of all the G7 nations (driven by the importance of the financial sector within the broader economy and the collapse in the housing market) seems to be a reasonable one and suggests that the bank rate (the highest policy rate within the G7 nations) may still have a long way to fall. We certainly find little to argue with in market forecasts that the MPC could have cut its rate by 150 bp by March of next year, or that 75 bp or more of this could emerge later today.

Title: Re: Meltdown
Post by: Florestan on November 06, 2008, 02:42:11 AM

Quote from: Dm on November 06, 2008, 02:35:34 AM
FT Alphaville is a total goldmine; together with all of the links to other sites & forums, a person could spend all day, every day simply clicking away!

If one has nothing better to do, of course; like, for instance, working to pay the debts.

Title: Re: Meltdown
Post by: BachQ on November 06, 2008, 02:49:53 AM

Quote from: drogulus on October 29, 2008, 03:01:53 PM
It's happening right now, and it will speed up. One way it will happen is that hydropower and wind will be hooked up together so excess capacity when winds are blowing will be used to pump water back over the dam, using reservoirs as "batteries". Also, you'll see more sophisticated ways of linking wind farms together so they can cover shortfalls, making them more suitable as base-power generators.

You're correct. It is happening right now.

Using renewable energy to power electric cars: "Project Better Place founder Shai Agassi [announced] that Australia will become the third country, following Denmark and Israel, to implement the group's vision of electric vehicles powered by renewable energy. Better Place and Macquarie Capital Group will raise $1 billion to build a network of 250,000 charging stations and battery exchange stations in key locations along the east coast by 2012. The network will be powered by wind turbines owned by AGL Energy." (http://anz.theoildrum.com/node/4717)

Title: Re: Meltdown
Post by: BachQ on November 06, 2008, 02:51:32 AM

Quote from: Florestan on November 06, 2008, 02:42:11 AM
If one has nothing better to do, of course; like, for instance, working to pay the debts.

People can surf the net while working.

Title: Re: Meltdown
Post by: Florestan on November 06, 2008, 02:52:54 AM

Quote from: Dm on November 06, 2008, 02:51:32 AM
People can surf the net while working.

Sure, but not all day, every day, unless it is exactly that their job.

Title: Re: Meltdown
Post by: BachQ on November 06, 2008, 03:00:51 AM

Quote from: drogulus on October 27, 2008, 04:15:59 PM
The experiment we're running (let's call it the "real world") suggests that $140/bbl causes compensatory reactions, reduced demand, slower growth, some substitution efforts. The higher the price goes the stronger these reactions get until you reach an equilibrium point. $140 is probably more than enough to cause these reactions, so even higher prices couldn't be maintained for very long. What happens is that the inelasticity you mention becomes elastic as the price goes up and alternatives you don't consider at the $100 price point becomes increasingly attractive as the price goes even higher, and if the price stays high for any length of time a whole new set of solutions is priced into existence. The reason we don't convert Abrams tanks or Post Office vehicles to CNG or vegetable oil or something else is that it's expensive to retrofit a huge installed base, but when the price goes high enough the whole process pays for itself in a few years. There's a lag while planners try to figure out if now is the time or if we still should wait, but plans are being dusted off right now. _:)

Drogulus, as to our $200/bbl discussion, FYI, as announced by the Financial Times on 5 Nov. 2008, The International Energy Agency (IEA) predicts that the cost of oil will exceed $200/bbl by 2030. "While market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over," the report states.

(http://www.ft.com/cms/s/0/ca2b5254-ab6a-11dd-b9e1-000077b07658.html)

QuoteThe developed world's energy watchdog has doubled its long-term price expectation from last year's $108 a barrel for 2030 and assumes oil prices will rebound from today's $60-$70 a barrel to trade, in real terms adjusted by inflation, at an average of more than $100 a barrel from 2008 to 2015.

The IEA's World Energy Outlook has come to this conclusion largely because it believes companies will struggle to pump enough new oil to offset the steep production declines of the world's older fields.

"Current global trends in energy supply and consumption are patently unsustainable," the report states.

(http://media.ft.com/cms/dcce0b16-ab6c-11dd-b9e1-000077b07658.gif)

Quote
The stark assessment comes as companies cancel projects from Kazakhstan to Canada because the collapse in oil prices makes them uneconomical. The industry will have to invest $350bn each year until 2030 to counter the steep rates of decline of existing fields and find enough extra oil to satisfy the growing demand of countries such as China, the report states. Output from the world's oil fields is declining at a natural rate of 9 per cent, the IEA found, following the most comprehensive review of its kind. This decline rate is curtailed to 6.7 per cent when current investments to boost production are made. However, even with such investments, the decline rate worsens significantly to 8.6 per cent by 2030. The declining rates are steeper than the industry had previously assumed. They are also slightly steeper than an earlier draft of the report because the IEA has expanded the study to 800 oil fields, adding 250 smaller fields.

2030 is a long way off, but at least one authority thinks $200/bbl oil could happen. But, of course, they do not consider all of the economic substitutions that could counteract that prediction. Who knows.......

Title: Re: Meltdown
Post by: BachQ on November 06, 2008, 03:01:46 AM

Quote from: Florestan on November 06, 2008, 02:52:54 AM
Sure, but not all day, every day, unless it is exactly that their job.

True enough. Unless you're a night watchman, and have nothing else to do. 8)

Title: Re: Meltdown
Post by: Florestan on November 06, 2008, 03:02:44 AM

Quote from: Dm on November 06, 2008, 03:01:46 AM
True enough. Unless you're a night watchman, and have nothing else to do. 8)

Ah, but in this case it would be "all night, every night". :)

Title: Re: Meltdown
Post by: ezodisy on November 06, 2008, 11:45:50 PM

Quote from: Dm on November 06, 2008, 02:35:34 AM
FT Alphaville is a total goldmine; together with all of the links to other sites & forums, a person could spend all day, every day simply clicking away!

Yeah FT A is excellent, great source for info.

I think the guy (or guys) who suggests 0 is way off the mark. BOE has never gone below 2. It ain't gonna happen now.

Title: Re: Meltdown
Post by: BachQ on November 08, 2008, 06:21:33 AM

Quote from: ezodisy on October 29, 2008, 11:13:56 PM
ah, crude back at $70, rebounding almost ten bucks in two days. Finally!!!!!! Get your resources while you can!

Oil actually dipped below $60 at one point yesterday for the first time since March, 2007 (17-month low of $59.97/bbl). What a rollercoaster ride! --- FT link --- (http://www.ft.com/cms/s/0/b4452d10-acb5-11dd-971e-000077b07658.html) Nevertheless, The Economist notes that the current collapse of crude oil prices "may be setting the stage for another spike." (http://www.economist.com/finance/displaystory.cfm?story_id=12564013)

Title: Re: Meltdown
Post by: BachQ on November 08, 2008, 06:26:37 AM

Quote from: ezodisy on November 06, 2008, 11:45:50 PM
I think the guy (or guys) who suggests 0 is way off the mark. BOE has never gone below 2. It ain't gonna happen now.

You are probably right, but yesterday Bloomberg offered this: Zero Rate World May Lie Ahead as King, Trichet Cut (Update2)

The age of free money may be at hand.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=awfA72Fbtg4I&refer=home)

QuoteAs major central banks slash interest rates with unexpected speed, benchmark borrowing costs are now below core inflation for the first time since the early 1980s, and policy makers are signaling they will go deeper. Yesterday's cuts by the Bank of England and European Central Bank, which came with the Federal Reserve and Bank of Japan on the cusp of zero rates, are a bid to shock life back into their recessionary economies and strained money markets. It may be an uphill battle as consumers and businesses show greater interest in saving than spending, and banks hoard capital rather than lend it. ``It's the race to zero,'' said Stewart Robertson, an economist at Aviva Investors Ltd. in London, which manages about $230 billion. ``There's no obstacle to more rate cuts.''

Quote``It's clear you need to have interest rates that are lower than inflation going forward,'' said Jan Amrit Poser, chief economist at Bank Sarasin in Zurich. ``Central banks are rushing to get interest rates down.'' Still, it's ``far too early'' to talk about zero interest rates throughout the industrial world, given inflation expectations remain positive, says Jim O'Neill, chief economist at Goldman Sachs Group Inc. in London. ``People should be wary of rushing to shift the debate from inflation to deflation,'' he said.

Title: Re: Meltdown
Post by: BachQ on November 08, 2008, 06:29:17 AM

Quote from: Florestan on November 06, 2008, 03:02:44 AM
Ah, but in this case it would be "all night, every night". :)

Title: Re: Meltdown
Post by: ezodisy on November 08, 2008, 06:53:14 AM

Quote from: Dm on November 08, 2008, 06:21:33 AM
Oil actually dipped below $60 at one point yesterday for the first time since March, 2007 (17-month low of $59.97/bbl). What a rollercoaster ride! --- FT link --- (http://www.ft.com/cms/s/0/b4452d10-acb5-11dd-971e-000077b07658.html) Nevertheless, The Economist notes that the current collapse of crude oil prices "may be setting the stage for another spike."
(http://www.economist.com/finance/displaystory.cfm?story_id=12564013)

Thanks for the links Dm. What's amazing about the oil sector is that all of these exploration & production companies were always factoring a $60 or $70 crude price into their calculations -- their reports on paper never took into account the rise to $140. Yet indiscriminately both large producers and minnows have had their share price thrashed as funds have had to liquidate their positions and so on and so forth. It's just a bear market rally at present yet I do believe a return to fundamental analysis is not far off for oilers as their sector probably is the most oversold in the market. Miners have also taken a beating but I think the oilers will be back soon -- long-term investors are looking at opportunities now and are in something of a wet dream with the possibilities ahead in the next few years. IMO next few weeks up to Christmas will see a lot of these oilers jump 100% as they're so ridiculously oversold.

Title: Re: Meltdown
Post by: ezodisy on November 08, 2008, 07:12:22 AM

By the way, I just want to point out some of the manipulation going on in the Forex market as governments do their best to prop up some currencies which in reality should be plummeting (further). Plunge Protection Team are out in force.

NEW YORK (Dow Jones)--The Hong Kong Monetary Authority intervened in currency markets for a second time Friday during the New York trading session to maintain the USD/HKD trading band.
The HKMA said it bought a total of HK$2.480 billion worth of U.S. dollars Friday to add liquidity to the system and defend the Hong Kong dollar's peg against the U.S. currency. The settlement will take place on Nov. 12.
Of that amount, HK$1.32 billion was already bought overnight.
The moves Friday follow buying of HK$3.88 billion worth of U.S. dollars during the New York trading session on Wednesday to boost interbank liquidity.
HKMA intervention is automatic, and is triggered when the U.S. dollar hits HK$7.7500.

And here is a chart showing the intervention which gets triggered everytime the price hits that figure

(http://www.forexfactory.com/attachment.php?attachmentid=167263&d=1226090141)

I can only assume that similar intervention is taking place with GBP as it obstinately remains afloat against both JPY and USD. When you take into account that the ECB reduced its base rate to 3.25% and EUR/JPY is trading at 1.24, and that BOE which has just reduced its rate to 3% yet GBP/JPY trades at 1.53, you can only expect a big significant delicious and in my case very much Faustian drop of GBP to come. It might not be quite that simple, but why complicate things?

Title: Re: Meltdown
Post by: drogulus on November 08, 2008, 07:45:17 AM

Quote from: Dm on November 06, 2008, 03:00:51 AM

Drogulus, as to our $200/bbl discussion, FYI, as announced by the Financial Times on 5 Nov. 2008, The International Energy Agency (IEA) predicts that the cost of oil will exceed $200/bbl by 2030. "While market imbalances could temporarily cause prices to fall back, it is becoming increasingly apparent that the era of cheap oil is over," the report states.

(http://www.ft.com/cms/s/0/ca2b5254-ab6a-11dd-b9e1-000077b07658.html)

Once again, that's projecting current trends. What will happen will not be the end point of a straight line, but the product of different crossing trend lines. The future is hard to read because of that. We don't know all the factors and we don't know how they will interact. The safest bet is that new technologies and new market preferences, acting together, will produce a future very different from the post-apocalypse sci-fi scenario of the pessimists. _:P

Besides, is $200/bbl in 2030 worrisome? Why? Houses cost $20,000 in 1960. In the post-apocalyptic present they cost ~$200,000. Therefore, Doomsday has already happened, and we are living in the "nightmare scenario" now._>:D So, how do you like it? _;D

Title: Re: Meltdown
Post by: Lilas Pastia on November 08, 2008, 09:41:45 AM

Zero interest rates environment is not viable economically. It will not get there, even if a push downwards is what central banks are betting on now to stop the global economy from grinding to a complete halt. Trillions of dollars are invested in fixed income securities that, as they mature, will be replaced by newly issued ones with a lower yield. Private and government pension funds rely on them to provide both a balance against market fluctuations and a steady stream of income. A zero or microscopic return would produce just the opposite of what's needed (keep purchasing power afloat to ensure steady consumption in retired households). The alternative would be to fill pension funds with more equities, therefore trashing the delicate balance that they can navigate in. Their fiduciary mandate obligates them to protect future income streams, and that requires about 40-50% of reasonably priced fixed income securities.

With an ageing developed world population and an influx of newly retired boomers, a drop in pension income would mean zero consumption of anything that is not strictly necessary for daily living. In view of that, I think that these are very short term measures that will soon be reversed. A viable long term prime rate should be around 3%.

Title: Re: Meltdown
Post by: ezodisy on November 09, 2008, 08:34:54 AM

Deutsche Post to shed thousands of US jobs: According to the FAZ, "40,000 jobs are under threat in the United States," of which "20,000 are directly linked to Deutsche Post and as many again to the US partners." The paper said that within the group there was talk of a "bloodbath". (http://economictimes.indiatimes.com/International_Business/Deutsche_Post_to_shed_US_jobs/articleshow/3692099.cms)

Title: Re: Meltdown
Post by: ezodisy on November 09, 2008, 12:05:29 PM

oil should fall below $60 this week. You can see from the chart that support at $70 subsequently became resistance following the 22 Oct break. The same thing happened at the end of last week after the price fell again and failed to move back above upon retest. A break of $60 here and it could reach $50 by week end -- Jan 2007 low. Just remember what a wise man with broken English once said: "Trend is your girlfriend".

(http://greenberg-art.com/.Toons/.Toons%20recent/qqxsgOilPriceYoYo.gif)

Title: Re: Meltdown
Post by: BachQ on November 10, 2008, 03:37:53 AM

Quote from: drogulus on November 08, 2008, 07:45:17 AM
Once again, that's projecting current trends. What will happen will not be the end point of a straight line, but the product of different crossing trend lines. The future is hard to read because of that. We don't know all the factors and we don't know how they will interact. The safest bet is that new technologies and new market preferences, acting together, will produce a future very different from the post-apocalypse sci-fi scenario of the pessimists. _:P

Besides, is $200/bbl in 2030 worrisome? Why? Houses cost $20,000 in 1960. In the post-apocalyptic present they cost ~$200,000. Therefore, Doomsday has already happened, and we are living in the "nightmare scenario" now._>:D So, how do you like it? _;D

As to the IEA report, I'm assuming that the $200/bbl is in today's current dollars (otherwise it would be useless info); but the full report will be issued in two days (Nov. 12), and we'll know then. I agree with your other points, and that this $200 prediction is of limited value.

Title: Re: Meltdown
Post by: BachQ on November 10, 2008, 03:40:40 AM

Quote from: ezodisy on November 09, 2008, 08:34:54 AM
Deutsche Post to shed thousands of US jobs: According to the FAZ, "40,000 jobs are under threat in the United States," of which "20,000 are directly linked to Deutsche Post and as many again to the US partners." The paper said that within the group there was talk of a "bloodbath". (http://economictimes.indiatimes.com/International_Business/Deutsche_Post_to_shed_US_jobs/articleshow/3692099.cms)

Yep, November layoffs are hitting every sector with a vengeance.

CNN link (http://money.cnn.com/2008/11/07/news/economy/november_layoffs/index.htm?postversion=2008110811)

(http://img.timeinc.net//time/cartoons/20081017/cartoons_10.jpg)

Globally, the shipping industry is reeling and in crisis mode. From FT-ALPHAVILLE:

QuoteThe Baltic Dry Index which measures shipping costs in commodities sunk to its seventh weekly decline this week to 829 points, and is down more than 93 percent since hitting a record peak in May. But it's more than just a response to a global slowdown - capacity constraints during the commodities boom combined with low financing costs led to a massive wave of new investments into fleets. Lloyd's List estimates containership fleet capacity is set to expand by more than 50 per cent over the next four years. The timing couldn't be worse. Reuters reports up to a third of dry bulk ship orders could now be axed, while Bloomberg reports 20 per cent of vessels usually transporting coal and ore are sitting empty:

QuoteFifty to 100 so-called capesizes, each bigger than The Trump Building in New York, have been unable to find cargoes or their owners won't accept rental rates that have plunged 98 percent in five months, Sjuve said by phone today. Normally about 250 such carriers compete for spot bookings, he said.

Traders and brokers saying there are simply no cargoes, steelmakers like ArcelorMittal warning on output, concerns over letters of credit. Could it get any worse?

(http://alphaville.ftdata.co.uk/lib/inc/getfile/2819.jpg)

Not surprisingly, amid this sharp downturn, shipowners are forfeiting tens of millions of dollars to cancel contracts to purchase vessels.

(http://ftalphaville.ft.com/blog/2008/11/10/17997/shipowners-cut-losses-by-scrapping-orders/)

Title: Re: Meltdown
Post by: BachQ on November 10, 2008, 03:43:30 AM

Fox News -- New AIG Bailout Plan to Leave U.S. With $150B in Exposure

(http://www.foxbusiness.com/story/markets/industries/finance/new-aig-plan-leave-b-exposure/)

QuoteAmerican International Group's (AIG) board on Sunday night approved a major overhaul of the rescue plan it had received from the federal government in order to help the company function in a more stable financial environment, The Wall Street Journal reported, citing people familiar with the situation.The U.S. will end up with total exposure of about $150 billion in investments, the Journal said, up from the recent total of $123 billion. That's an unprecedented level of investment in a private company, and could increase pressure to bail out other companies such as Big Three auto makers General Motors, Ford Motor, or Chrysler, which are also struggling to survive.

(http://img.timeinc.net//time/cartoons/20081017/cartoons_11.jpg)

Title: Re: Meltdown
Post by: BachQ on November 10, 2008, 05:47:41 AM

Quote from: Lilas Pastia on November 08, 2008, 09:41:45 AM
Zero interest rates environment is not viable economically. It will not get there, even if a push downwards is what central banks are betting on now to stop the global economy from grinding to a complete halt. Trillions of dollars are invested in fixed income securities that, as they mature, will be replaced by newly issued ones with a lower yield. Private and government pension funds rely on them to provide both a balance against market fluctuations and a steady stream of income. A zero or microscopic return would produce just the opposite of what's needed (keep purchasing power afloat to ensure steady consumption in retired households). The alternative would be to fill pension funds with more equities, therefore trashing the delicate balance that they can navigate in. Their fiduciary mandate obligates them to protect future income streams, and that requires about 40-50% of reasonably priced fixed income securities.

With an ageing developed world population and an influx of newly retired boomers, a drop in pension income would mean zero consumption of anything that is not strictly necessary for daily living. In view of that, I think that these are very short term measures that will soon be reversed. A viable long term prime rate should be around 3%.

So any rate below 3% would be a temporary, "emergency" measure. Makes sense in light of your explanation. In the UK, current futures pricing indicates that investors are forecasting that interest rates could fall to 1.75 percent by the spring of 2009, representing the lowest rate since Bank of England began records in 1694. Of course, this is pure speculation.

*** Link *** (http://uk.reuters.com/article/personalFinanceNews/idUKLNE4A602U20081107)

QuoteWith inflation running at a 16-year high of 5.2 percent, the country's interest rates are now significantly negative in real terms. ... George Buckley at Deutsche Bank reckons retail price inflation -- a broader measure of price moves which includes housing costs -- could even turn negative next year and predicts British interest rates will fall to 1.5 percent. "Extraordinary circumstances call for extraordinary interest rate levels," he said. "There is only one lower boundary for interest rates and that's zero."

Title: Re: Meltdown
Post by: BachQ on November 10, 2008, 05:50:58 AM

Citing George Magnus, senior economic adviser to UBS, an article in FT ALPHAVILLE notes: "The next great financial crisis to hit the world will not be credit cards, revolving credit facilities or China, [but instead will be] pension deficits, as well as the demographics affecting pensions."

(http://img.timeinc.net//time/cartoons/20081031/cartoons_13.jpg)
(http://ftalphaville.ft.com/blog/2008/11/10/18028/the-great-pensions-disaster/)

Title: Re: Meltdown
Post by: BachQ on November 10, 2008, 08:16:57 AM

Jeff Rubin: Oil Prices Caused the Current Recession

(http://www.theoildrum.com/files/Recent%20oil%20spike%20vs%20past%20spikes.png)

(http://www.theoildrum.com/node/4727)

QuoteJeff Rubin, Chief Economist at CIBC World Markets, in a recent report, is now saying that the current recession is caused by high oil prices. Defaulting mortgages are only a symptom of the high oil prices. We should be blaming the underlying cause--higher oil prices--rather than the symptom. These higher oil prices caused Japan and the Eurozone to enter into a recession even before the most recent financial problems hit. Higher oil prices started four of the last five world recessions; we shouldn't be too surprised if they started this one also.

link <-------- (http://www.theoildrum.com/node/4727)

Title: Re: Meltdown
Post by: ezodisy on November 10, 2008, 11:47:46 AM

Total sees nuclear energy for growth after peak oil

By Simon Webb
DOHA, Nov 10 (Reuters) - French oil and gas giant Total is targeting
nuclear energy to drive growth long after oil and gas output peak, a top
executive said on Monday.
"In the future, energy demand will be constrained by tight supply,"
Arnaud Chaperon, Total's senior vice president for electricity and new energies,
said in a presentation to a nuclear energy conference in Qatar.
"Oil and gas will still play a big role in the energy balance. But in the
electrification of the world economy, nuclear will play a major role, together
with the development of solar and other renewables ... That is why Total is very
interested in developing nuclear and renewables."
Global oil output was likely to peak toward the end of the next decade,
while gas would follow a decade or so later, he said. Total executives had said
previously they expected global oil production to level off just short of 100
million barrels per day around 2020, up from current output of about 85 million
bpd.
Total believed it could leverage its experience building megaprojects in
the energy industry to take a foothold in the nuclear industry, Chaperon said.
In the Middle East, Total also had good relationships with governments of
oil and gas producing countries that could help facilitate projects to build
nuclear plants, he said.
"We have expressed interests, we are building experience, working on our
strategy, and one day we'll move," Chaperon told Reuters later.
"It's very complex, but the more we get into it the more we see we can
bring something. It's easier to convert oil and gas experts into nuclear than
the other way round."
Earlier this year, Total said it would join forces with French energy
producer Suez and French nuclear reactor maker Areva to compete for a contract
to develop a nuclear power plant in the United Arab Emirates. Total holds a 1
percent stake in Areva.
The UAE aimed to have the first nuclear power plant up and running by
2017, he said on Monday.
Total was concentrating its efforts in renewable energy in solar power,
Chaperon said.
"Nuclear and solar are the two areas we'd like to develop. Those are the
two areas we feel we can add value."
(Reporting by Simon Webb; editing by Walter Bagley) Keywords: TOTAL NUCLEAR
(simon.webb@reuters.com; +971 43918301; Reuters Messaging:
simon.webb.reuters.com@reuters.net)

Title: Re: Meltdown
Post by: ezodisy on November 10, 2008, 02:10:59 PM

Fed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aOngFPgq7r3M&refer=home)

Title: Re: Meltdown
Post by: Todd on November 10, 2008, 02:28:42 PM

Quote from: ezodisy on November 10, 2008, 02:10:59 PMFed Chairman Ben S. Bernanke and Treasury Secretary Henry Paulson said in September they would comply with congressional demands for transparency in a $700 billion bailout of the banking system. Two months later, as the Fed lends far more than that in separate rescue programs that didn't require approval by Congress, Americans have no idea where their money is going or what securities the banks are pledging in return. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aOngFPgq7r3M&refer=home)

True enough, but since the loans aren't part of TARP, they kept their word.

Title: Re: Meltdown
Post by: BachQ on November 11, 2008, 03:07:19 AM

Quote from: ezodisy on November 10, 2008, 11:47:46 AM
Total sees nuclear energy for growth after peak oil

By Simon Webb
DOHA, Nov 10 (Reuters) - French oil and gas giant Total is targeting
nuclear energy to drive growth long after oil and gas output peak, a top
executive said on Monday.
"In the future, energy demand will be constrained by tight supply,"
Arnaud Chaperon, Total's senior vice president for electricity and new energies,
said in a presentation to a nuclear energy conference in Qatar.
"Oil and gas will still play a big role in the energy balance. But in the
electrification of the world economy, nuclear will play a major role, together
with the development of solar and other renewables ... That is why Total is very
interested in developing nuclear and renewables."
Global oil output was likely to peak toward the end of the next decade,
while gas would follow a decade or so later, he said. Total executives had said
previously they expected global oil production to level off just short of 100
million barrels per day around 2020, up from current output of about 85 million
bpd.
Total believed it could leverage its experience building megaprojects in
the energy industry to take a foothold in the nuclear industry, Chaperon said.
In the Middle East, Total also had good relationships with governments of
oil and gas producing countries that could help facilitate projects to build
nuclear plants, he said.
"We have expressed interests, we are building experience, working on our
strategy, and one day we'll move," Chaperon told Reuters later.
"It's very complex, but the more we get into it the more we see we can
bring something. It's easier to convert oil and gas experts into nuclear than
the other way round."
Earlier this year, Total said it would join forces with French energy
producer Suez and French nuclear reactor maker Areva to compete for a contract
to develop a nuclear power plant in the United Arab Emirates. Total holds a 1
percent stake in Areva.
The UAE aimed to have the first nuclear power plant up and running by
2017, he said on Monday.
Total was concentrating its efforts in renewable energy in solar power,
Chaperon said.
"Nuclear and solar are the two areas we'd like to develop. Those are the
two areas we feel we can add value."
(Reporting by Simon Webb; editing by Walter Bagley) Keywords: TOTAL NUCLEAR
(simon.webb@reuters.com; +971 43918301; Reuters Messaging:
simon.webb.reuters.com@reuters.net)

Now is the perfect time for us to invest in uranium futures!

Title: Re: Meltdown
Post by: BachQ on November 11, 2008, 03:11:38 AM

Quote from: ezodisy on November 09, 2008, 12:05:29 PM
oil should fall below $60 this week.

You guessed it. 0:) West Texas Intermediate Crude (NYMEX) dipped to $59.54/bbl earlier today, and to $59.95 yesterday.

Currently it's at $60.25

How low will it go?

Title: Re: Meltdown
Post by: BachQ on November 11, 2008, 05:49:20 AM

Prior to the 1930s, the total debt in the U.S. was between 150% and 160% of GDP. Now it's close to 350% of GDP.

(http://images.moneyandmarkets.com/1147/us-debt-build-up.gif)

Why Washington Cannot Prevent Depression
by Martin D. Weiss, Ph.D. 11-10-08

(http://images.moneyandmarkets.com/1147/debts-too-big.jpg)

(http://www.moneyandmarkets.com/why-washington-cannot-prevent-depression-27968)

Title: Re: Meltdown
Post by: BachQ on November 11, 2008, 05:52:08 AM

Sculpture represents nation's economic meltdown

(http://i2.cdn.turner.com/cnn/2008/US/10/30/ice.sculpture.ap/art.economysculpture.ap.jpg)

(http://www.cnn.com/2008/US/10/30/ice.sculpture.ap/index.html)

QuoteNEW YORK (AP) -- The economy is melting -- literally. Two artists installed a 1,500-pound ice sculpture that spelled the word "Economy" in Manhattan's financial district. The "Main Street Meltdown" was to remain in Foley Square until it melted -- about 24 hours. (continued)

Title: Re: Meltdown
Post by: BachQ on November 11, 2008, 08:00:44 AM

Quote from: ezodisy on November 09, 2008, 12:05:29 PM
A break of $60 here and it could reach $50 by week end -- Jan 2007 low. Just remember what a wise man with broken English once said: "Trend is your girlfriend".

(http://greenberg-art.com/.Toons/.Toons%20recent/qqxsgOilPriceYoYo.gif)

:D

WTIC at $58.38

Oil Falls to 19-Month Low, Gasoline Tumbles, on Demand Outlook
By Mark Shenk

Nov. 11 (Bloomberg) -- Crude oil fell below $59 a barrel in New York for the first time since March 2007, and gasoline tumbled, on speculation the International Energy Agency will cut its 2009 oil-demand forecast because of slowing economic growth. Futures touched $58.32, the lowest since March 20, 2007. Prices have tumbled 60 percent since reaching a record $147.27 on July 11.

The IEA, which coordinates energy policy in 28 developed countries, will reduce the estimated growth in global demand for a third month in a report tomorrow, according to four former IEA analysts. The euro-area economy will probably contract 0.7 percent next year, Morgan Stanley said in a report.

``It all comes back to the economy and how deep folks think the recession will be,'' said Rick Mueller, director of oil markets at Energy Security Analysis Inc. in Wakefield, Massachusetts. ``Demand is poor and should get worse as the recession deepens.''

*** ``The view of the market is very pessimistic,'' said Addison Armstrong, director of market research for Tradition Energy in Stamford, Connecticut. ``The only news I foresee that can move prices higher is a cold spell, which would boost heating oil demand, and that would have only limited impact.''

The IEA already has cut its 2008 forecast about 1.3 million barrels a day in seven revisions this year. Last week, it published a summary of its annual World Energy Outlook, slashing its 2030 projection by 9.4 percent to 106 million.

(continued)

LINIK (http://www.bloomberg.com/apps/news?pid=20601087&sid=aHnuiFbzpUfs&refer=home)

Title: Re: Meltdown
Post by: ezodisy on November 11, 2008, 08:09:28 AM

Yes my good man, we are on our way to the Jan 2007 range of mid to low $50s, in my opinion. I have been short from yesterday at $65.32 on an obvious head of a head-and-shoulders formation, begging for a gap fill down to $61. Now I know what you're all thinking, "Ezodisy, it's so magnanimous of you to try to reduce the oil price for us. How will we ever repay you?", but really, don't worry, it's my pleasure, I assure you. I think production cuts are on the way so the party may be curtailed soon :'(

Title: Re: Meltdown
Post by: ezodisy on November 11, 2008, 09:29:08 AM

Quote from: Todd on November 10, 2008, 02:28:42 PM

True enough, but since the loans aren't part of TARP, they kept their word.

But we want blood! er, I mean justice!!! ;)

http://ftalphaville.ft.com/blog/2008/11/11/18092/the-american-bailout-group-formerly-insurance/

The American Bailout Group, formerly Insurance

FT Alphaville noted yesterday that AIG was hardly an insurance company any longer. Rather, it was a bailout fund: a sump into which the US government was pouring billions to prop up derivative contracts AIG had written on a host of structured financial instruments - in turn propping up the prices on those instruments, and the balance sheets of the institutions holding them.

Floyd Norris at the New York Times blogs it all fairly forcefully:

It is sad to see that the plan is for A.I.G. to stay in business forever. This is a company that should be wound down. Instead, it appears that the government will remain an investor for years and years, helping one insurance company compete with others that are not government-subsidized.

In a second post, Norris goes further, calling AIG's CDO buyback scheme (or rather, the inability of AIG execs to answer questions on it) "appalling".

For those unfamiliar with that scheme, the gist of the plan is to use $35bn to buy CDO paper AIG has written protection on. The Federal Reserve Bank of New York providing most of that funding:

...the New York Fed will lend up to $30 billion to a newly formed LLC to fund the LLC's purchase of multi-sector collateralized debt obligations (CDOs) on which AIG Financial Products has written credit default swap (CDS) contracts. AIG will make a $5 billion subordinated loan to the LLC and bear the risk for the first $5 billion of any losses on the portfolio. In connection with the purchase of the CDOs, the CDS counterparties will concurrently unwind the related CDS transactions. The loans will be secured by all of the LLC's assets and will be repaid from cash flows produced by these assets as well as the proceeds from any sales of these assets. The New York Fed and AIG will share any residual cash flows after the loans are repaid.

Spot the problems.

Firstly, the first loss tranche on this LLC - the equity portion that AIG will hold - is only $5bn. A lot? Not. The CDOs proposed to be purchased have a par value of $70bn. They have, thus, halved in value. Is it not conceivable their value might deteriorate further? A decline from their notional value of just 7 per cent would wipe out AIG's first loss stake. That's an equity tranche thinner than those found on these toxic assets in the first place. All this should tell you that this investment has little or nothing to do with prudence.

AIG's current exposure is twofold; a liquidity risk through the demands of mark-to-market exposure via collateral posting, and a default risk exposure. Which of these does this bailout solve? Neither.

Indeed, AIG is just crystallising existing losses. According to Norris, CDO sellers will keep any collateral hitherto posted against the CDOs. AIG isn't getting it back.

[Aside: Are these CDS or TRS?]
Anyway, none of this matters. Because there is an even larger CDO problem at AIG which has gone untalked about: the insurer's colossal involvement in the synthetic CDO market. AIG has derivative positions against $237bn of synthetic corporate CDOs, according to the company's results.

And if anything, synthetics are even more sensitive to dramatic declines in value than ABS CDOs, should they see problems with their underlying reference entities.

We are only just entering the opening phase of what is shaping up to be a particularly painful default cycle. If predictions about the fragility of synthetic CDOs prove true, then AIG's balance sheet could be eviscerated by the unwind, and the Fed will be on call to plug the gaps.

All of that and yet still Liddy insists AIG is on course.

News just in: AIG continues to party like it's 2006.

Title: Re: Meltdown
Post by: bwv 1080 on November 11, 2008, 10:06:11 AM

Quote from: ezodisy on November 11, 2008, 09:29:08 AM

For those unfamiliar with that scheme, the gist of the plan is to use $35bn to buy CDO paper AIG has written protection on. The Federal Reserve Bank of New York providing most of that funding:

...the New York Fed will lend up to $30 billion to a newly formed LLC to fund the LLC's purchase of multi-sector collateralized debt obligations (CDOs) on which AIG Financial Products has written credit default swap (CDS) contracts. AIG will make a $5 billion subordinated loan to the LLC and bear the risk for the first $5 billion of any losses on the portfolio. In connection with the purchase of the CDOs, the CDS counterparties will concurrently unwind the related CDS transactions. The loans will be secured by all of the LLC's assets and will be repaid from cash flows produced by these assets as well as the proceeds from any sales of these assets. The New York Fed and AIG will share any residual cash flows after the loans are repaid.

OK, per the article AIG is buying what in theory could be a liability of 100 cents for 50 cents, which may not be a bad trade. At least it is a wash - buying a 50cent liability for 50 cents. Now I am sure these are the AAA tranches that AIG insured and thus they won't go to zero. If the CDOs do go further down in value AIG is already on the hook through the CDS contracts it wrote. It does in essence retire this garbage from the market and make AIG's potential liability easier to quantify.

Title: Re: Meltdown
Post by: ezodisy on November 11, 2008, 11:25:17 AM

well in all honesty bwv I really don't understand it. It seems very complex, I did not study economics, politics or business in general, and I think you'd need a sound background in this stuff, such as Todd clearly has, to make heads or tails of it. I do like to keep up with it though (I don't think that that's a contradiction).

Title: Re: Meltdown
Post by: ezodisy on November 12, 2008, 02:06:05 AM

closed crude short under $59 for +600. Looking for long opportunities to $70 on the expiry of the December contract next week. No love for the Americans yet.

Title: Re: Meltdown
Post by: ezodisy on November 12, 2008, 02:17:58 AM

http://ftalphaville.ft.com/blog/2008/11/12/18123/russia-asking-for-it/

Russia seems to be asking for a speculative attack on the rouble after a shoddy defence of its currency on Tuesday, according to Renaissance Capital. The Moscow-based investment bank is thoroughly unimpressed by the move to try and stem the currency's 17 per cent slide. Bloomberg quotes Rencap analyst Alexei Moisseev's saying the intervention has achieved nothing, just cost $7bn of Russia's foreign exchange reserves.

Investors generally seem to agree.

Russia's Micex Index plunged 13 per cent in response on Tuesday, and was closed on Wednesday. The dollar-quoted RTS, meanwhile, was down nearly 11 per cent at 647.

Just to contextualise the troubles facing Russia, here's a snapshot of the declines on the RTS over a longer duration.

(http://alphaville.ftdata.co.uk/lib/inc/getfile/2873.jpg)

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 03:42:05 AM

Quote from: ezodisy on November 12, 2008, 02:06:05 AM
closed crude short under $59 for +600. Looking for long opportunities to $70 on the expiry of the December contract next week. No love for the Americans yet.

Holy f___. We might see $50 oil soon, v e r y s o o n . . . .

LONDON (Reuters) - Oil fell more than 2.5 percent on Wednesday to trade below $58 a barrel for the first time in 20 months as expectations of weaker energy demand more than offset news of reductions in supply. The move, spurred by another slide on stock markets, extended a fall of 5 percent on Tuesday and analysts said the mood in the market was so bearish that prices could keep falling toward $50 a barrel.
(http://www.reuters.com/article/newsOne/idUSTRE49B3Y620081112)

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 03:45:00 AM

Quote from: ezodisy on November 12, 2008, 02:17:58 AM
(http://alphaville.ftdata.co.uk/lib/inc/getfile/2873.jpg)

Now THAT is a graph of DOOM. You don't see a steep downward slope like that every day! :D

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 03:48:36 AM

Quote from: Dm on November 10, 2008, 03:37:53 AM
As to the IEA report, I'm assuming that the $200/bbl is in today's current dollars (otherwise it would be useless info); but the full report will be issued in two days (Nov. 12), and we'll know then. I agree with your other points, and that this $200 prediction is of limited value.

Drogulus, I had promised you that the official IEA report (World Energy Outlook) would be released today; and, lo, here it is:

http://www.iea.org/Textbase/press/pressdetail.asp?PRESS_REL_ID=275

Quote"Current trends in energy supply and consumption are patently unsustainable – environmentally, economically and socially – they can and must be altered", said Nobuo Tanaka [Executive Director of the International Energy Agency (IEA) today in London at the launch of the World Energy Outlook (WEO) 2008 – the latest edition of the annual IEA flagship publication. ].* * * Oil will remain the world's main source of energy for many years to come, even under the most optimistic of assumptions about the development of alternative technology. But the sources of oil, the cost of producing it and the prices that consumers will have to pay for it are extremely uncertain. "One thing is certain", stated Mr. Tanaka, "while market imbalances will feed volatility, the era of cheap oil is over". * * *

The prospect of accelerating declines in production at individual oilfields is adding to these uncertainties. The findings of an unprecedented field-by-field analysis of the historical production trends of 800 oilfields indicate that decline rates are likely to rise significantly in the long term, from an average of 6.7% today to 8.6% in 2030. "Despite all the attention that is given to demand growth, decline rates are actually a far more important determinant of investment needs. Even if oil demand was to remain flat to 2030, 45 mb/d of gross capacity – roughly four times the current capacity of Saudi Arabia – would need to be built by 2030 just to offset the effect of oilfield decline", Mr. Tanaka added.

KEY GRAPHS: (pdf warning) (http://www.iea.org/weo/key_graphs_08/WEO_2008_Key_Graphs.pdf)

EXECUTIVE SUMMARY: (pdf warning) (http://www.iea.org/Textbase/npsum/WEO2008SUM.pdf)

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 03:51:09 AM

Here Comes a Bankruptcy Boom
(http://www.usnews.com/blogs/flowchart/2008/11/11/here-comes-a-bankruptcy-boom.html)

Quote* * * The share of corporate bonds in default over the past 12 months, which goes hand in hand with bankruptcies, has been about 3 percent, according to data compiled by Prof. Edward Altman of New York University's Stern School of Business. That's near the historical average. So, the vast majority of corporations have been paying their debts during the early part of this recession.

But like many good things of the past few years, that's about to end. The latest data from Altman suggest that by this time next year, the corporate default rate will be somewhere between 8.5 percent and 11.1 percent. That means there could be three to four times the number of corporate bankruptcies we've seen over the past year. And each one of those will probably involve layoffs. As a result, Altman predicts, the unemployment rate could peak as high as 9.5 percent, which would represent a net loss of jobs for 3 million people beyond those who are already unemployed today. "It could hit autos, builders, retail, a lot of areas with a lot of employees," Altman says. "It's going to be rough."

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 03:52:57 AM

Credit Markets Dip Into Absurdity

(http://www.forbes.com/business/2008/11/11/bonds-credit-economy-biz-wall-cz_mc_1111bonds.html?feed=rss_business)

QuoteTo judge from the crystal ball of debt markets, next year will bring some incredible calamity, maybe a depression, maybe worse. Bond prices suggest nearly one in five companies with high-yield debt could slip into bankruptcy with certain loans fetching just 70 cents on the dollar. The differences between corporate bonds and Treasurys now stretch beyond some investors' beliefs. "Spreads are more than ridiculous," said David Kotok, chairman of Cumberland Advisors in Vineland, N.J. "Either we have dysfunctional credit markets evidenced by absurd pricing, or the market pricing is accurately forecasting the Great Depression of 2009, '10, '11, '12 and '13."

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 03:53:33 AM

US firms likely to sell 50% of assets to Tarp (http://www.opriskandcompliance.com/public/showPage.html?page=825305)

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 03:55:35 AM

WASHINGTON - The US economy is entering 'the steep part' of what could be the worst recession since World War II, said a member of the panel that gauges American recessions and expansions. Mr Jeffrey Frankel, part of the business cycle dating committee at the Cambridge, Massachusetts-based National Bureau of Economic Research (NBER), said in a Bloomberg Television interview on onday: 'We're in for a pretty serious recession.' 'There's a chance it'll be the worst post-war recession,' he said. (continued) (http://www.straitstimes.com/Breaking%2BNews/Money/Story/STIStory_300923.html)

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 03:56:50 AM

Financial Sense (11-10-2008) -- The Debt Culture

(http://www.financialsense.com/Market/allison/2008/1110.html)

Quote*** We have now reached a crisis where consumers and business are unable or unwilling to add more debt. As the economy slides into what looks to be a very severe recession, our federal government is now expected to bailout consumers, businesses and state governments to the tune of untold trillions of dollars. *** As the world's largest debtor, the US must borrow or simply print the trillions we will need to keep our economy afloat. This has unfortunate consequences. With very negative real interest rates for US Treasury bonds, foreign investors will eventually demand significantly higher rates, or simply stop buying our bonds. And the printing of money, wildly in excess of a country's growth rate, never ends well. While the dollar is currently the beneficiary of global fears, as well as global de-leveraging, the longer-term fundamentals for the US dollar are extremely ominous. It all comes back to our culture of debt and the piper now pounding on the door.

(http://www.financialsense.com/Market/allison/2008/images/1110_clip_image002.gif)

(http://www.financialsense.com/Market/allison/2008/images/1110_clip_image006.jpg)

(continued)

Title: Re: Meltdown
Post by: ezodisy on November 12, 2008, 05:03:36 AM

Quote from: Dm on November 12, 2008, 03:42:05 AM
Holy f___. We might see $50 oil soon, v e r y s o o n . . . .

LONDON (Reuters) - Oil fell more than 2.5 percent on Wednesday to trade below $58 a barrel for the first time in 20 months as expectations of weaker energy demand more than offset news of reductions in supply. The move, spurred by another slide on stock markets, extended a fall of 5 percent on Tuesday and analysts said the mood in the market was so bearish that prices could keep falling toward $50 a barrel.

(http://www.reuters.com/article/newsOne/idUSTRE49B3Y620081112)

yeah I know, it'll probably happen soon, but options and futures and the end of contracts create crazy times and I'm expecting a perhaps short-lived surge. The support around $58-$59 looks intentional and resolute to me which is one reason why I exited. I expect to see c.$70 by end of next week. We will see how close my prediction is. Key here is to ditch your straight, heterosexual friends and learn to "swing both ways" ;) :P

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 06:51:15 AM

Quote from: ezodisy on November 12, 2008, 05:03:36 AM
yeah I know, it'll probably happen soon, but options and futures and the end of contracts create crazy times and I'm expecting a perhaps short-lived surge. The support around $58-$59 looks intentional and resolute to me which is one reason why I exited. I expect to see c.$70 by end of next week. We will see how close my prediction is. Key here is to ditch your straight, heterosexual friends and learn to "swing both ways" ;) :P

:D

NYMEX WTIC @ $56.92 and falling. :o

We'll have to wait and see about $70 by the end of next week!

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 06:53:23 AM

Mexico is going to be one hurtin' unit by 2010.

HOUSTON CHRONICLE -- Ex-official says Mexico may have to halt oil exports

(http://www.chron.com/disp/story.mpl/headline/biz/6107671.html)

QuoteThe U.S. could soon find itself scrambling to make up 11 percent in lost oil imports. Mexico, the third-largest foreign supplier of U.S. oil, faces the real possibility of having to halt oil exports in four years, a former top Mexican energy official was reported as saying Tuesday in Mexico's El Universal newspaper.

Rogelio Gasca Neri, the former head of Mexico's federal electricity commission, blamed the inability of the nation's oil industry to produce enough oil to meet rising demand. His prediction comes on the heels of the Mexican Congress last month overturning decades of resistance to allowing private and foreign participation in Mexico's aging energy infrastructure. Neri's comment, made in Mexico at a business forum on reforms in the nation's energy industry, also joins that of a growing number of energy experts who see an end to Mexican oil exports coming soon.

John Padilla, director of finance and advisory for IPD Latin America, argues that with Mexico's oil production falling, and its demand for gasoline and other petroleum products on the rise, Mexico could cease to be an oil exporter around 2010 or 2011. "Mexico, whether it's 2011, 2012 or 2015, the country is poised to become a net importer," said Amy Jaffe, associate director of the Rice University energy program. "It's a tragedy really both for the country and in general. The tragedy is it's avoidable. It was avoidable and it could be avoidable if they would change their policies." But "the grim reality is Pemex's production is falling very dramatically," Padilla said this week of the state-owned energy company at a conference hosted by the Center for Strategic and International Studies in Washington, D.C.

(continued)

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 06:54:59 AM

UK Independent -- UK Traffic levels fall for first time in decades: Motor firms head for crash (http://www.independent.co.uk/news/uk/home-news/traffic-levels-fall-for-first-time-in-decades-motor-firms-head-for-crash-1003948.html)

QuoteTraffic on Britain's roads is decreasing significantly for the first time since the three-day week of the early 1970s, suggesting the car economy is heading for a crash, official figures revealed yesterday. ... The Department for Transport (DfT) recorded two consecutive quarters where road traffic has decreased year on year – the first time for more than 30 years. If the trend continues to the end of the year, it will hugely undermine the "great car economy" championed by Margaret Thatcher. At the same time, sales of new cars have fallen by 23 per cent and are at their lowest since 1996. The motor industry is suffering across the world, with Volvo, the Swedish giant, selling just 115 heavy trucks over the past few months, compared to 41,970 during the same period last year – a 99.7 per cent fall.

RELATED: Eastern European auto boom said to be over (http://www.upi.com/Business_News/2008/11/09/Eastern_European_auto_boom_said_over/UPI-56821226241008/)

Title: Re: Meltdown
Post by: ezodisy on November 12, 2008, 06:59:38 AM

Quote from: Dm on November 12, 2008, 06:51:15 AM
:D

NYMEX WTIC @ $56.92 and falling. :o

We'll have to wait and see about $70 by the end of next week!

yeah it's going but not much further. There's historical support at this level going back several years

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 11:29:29 AM

Quote from: ezodisy on November 12, 2008, 06:59:38 AM
yeah it's going but not much further. There's historical support at this level going back several years

12 November: Oil closes at $56.24/bbl, plunging 5.2% to a 21-month low!
``It's hard to see what will stop this slide,'' said Tom Bentz, senior energy analyst at BNP Paribas in New York. ``It's more of the same. The market is moving on continuing economic concerns.'' *** Prices of $80 a barrel are needed to make investment in new supply economic, the IEA's chief economist, Fatih Birol, said at a conference in London today. ``We are already seeing projects be canceled because of the fall in prices,'' Brodrick said. (continued)

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aJuFlCoL4y44&refer=home)

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 11:30:54 AM

(http://img.timeinc.net//time/cartoons/20081106/cartoons_01.jpg)

Title: Re: Meltdown
Post by: ezodisy on November 12, 2008, 11:35:15 AM

Quote from: Dm on November 12, 2008, 11:29:29 AM

12 November: Oil closes at $56.24/bbl, plunging 5.2% to a 21-month low!
``It's hard to see what will stop this slide,'' said Tom Bentz, senior energy analyst at BNP Paribas in New York. ``It's more of the same. The market is moving on continuing economic concerns.'' *** Prices of $80 a barrel are needed to make investment in new supply economic, the IEA's chief economist, Fatih Birol, said at a conference in London today. ``We are already seeing projects be canceled because of the fall in prices,'' Brodrick said. (continued)

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aJuFlCoL4y44&refer=home)

You've won the battle but the war goes on!!!!! >:D 8)

It is looking to test $55 now. Come on historic support, I still see $65 within reach.

Nothing except blood pressure's going up so long as the indices keep tanking

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 12:33:40 PM

Quote from: ezodisy on November 12, 2008, 11:35:15 AM
You've won the battle but the war goes on!!!!! >:D 8)

It is looking to test $55 now. Come on historic support, I still see $65 within reach.

Nothing except blood pressure's going up so long as the indices keep tanking

:D

Lots of red today:

Oil -5.34%
Dow -4.73%
NASDAQ -5.71%
S&P 500 -5.19%

FTSE 100 was down a mere -1.52% (we'll see what tomorrow brings ...) >:D

Title: Re: Meltdown
Post by: BachQ on November 12, 2008, 12:37:12 PM

Quote from: ezodisy on November 12, 2008, 02:17:58 AM

Russia's Micex Index plunged 13 per cent in response on Tuesday, and was closed on Wednesday.

Yep, the Russian stock exchange opens again tomorrow (Thurs).

UK Telegraph -- Rouble crisis deepens
By Ambrose Evans-Pritchard
Last Updated: 6:32PM GMT 12 Nov 2008

Russia's central bank has raised interest rates a full percentage point to 12pc to prevent a collapse of the rouble following a day of mayhem on the Moscow markets, prompting concerns that the financial crisis may be spiralling out of control. ... "The devaluation has begun," said Lars Christensen, Russia strategist at Danske Bank. "The rouble has fallen out of its basket against the euro and the dollar. Russia is facing a serious confidence crisis and this could set off a self-fulfilling panic. What is clear is that economy is slowing drastically." Chris Weafer, strategist at UralSib, said there were echoes of the 1998 crisis. "If people lose confidence, we could have a massive run on the banks as we saw twice in the nineties: then the game is up,'' he told Bloomberg. ... "There is massive deleveraging going on in Russia on all fronts," said Luis Costa, an economist at Commerzbank. (continued) (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3442376/Russia-lifts-rates-to-12pc-to-save-rouble-as-crisis-deepens.html)

Title: Re: Meltdown
Post by: ezodisy on November 12, 2008, 01:19:24 PM

Quote from: Dm on November 12, 2008, 12:33:40 PM
FTSE 100 was down a mere -1.52% (we'll see what tomorrow brings ...) >:D

well spotted. Futures have fallen but it is still a couple hundred points higher than it should be. The ride to the abyss continues.

http://uk.youtube.com/watch?v=gfXKRIR1Syo

Title: Re: Meltdown
Post by: ezodisy on November 12, 2008, 11:05:56 PM

Crude Oil Falls Below $55 as Slowing Economies Curb Consumption (http://www.bloomberg.com/apps/news?pid=20601087&sid=aJ6PhTnDFcCc&refer=home)

now now, this has gone on for long enough, we are not giving the stuff away so the yanks can water their lawns with gasoline. The spike is coming, and the pound is plummeting :(

Title: Re: Meltdown
Post by: ezodisy on November 13, 2008, 12:41:52 AM

crude will be back at $60 by end of day or weekend. It has risen to $56 this morning, and I am long from $55.

Blue Crude, now I'm no longer alone
Without a dream in my heart
Without a love of my own

Title: Re: Meltdown
Post by: ezodisy on November 13, 2008, 02:16:17 AM

ha ha finally

Russia's MICEX ordered not to halt stocks trade

MOSCOW, Nov 13 (Reuters) - Russia's MICEX stocks exchange said on Thursday the markets watchdog had ordered it not to halt stocks trade from 1240 local time (0940 GMT) as previously announced.
The news came moments after MICEX had said it was suspending trade for one hour for the second time in the session due to the steepness of the market fall.
It benchmark index was down 8.4 percent at 593.77 points at 0944 GMT.

---------------------------

Obama Pushes for $50 Billion for Automakers, Oversight Czar (http://www.bloomberg.com/apps/news?pid=20601087&sid=aBlCucXR33Jw&refer=home)

Title: Re: Meltdown
Post by: BachQ on November 13, 2008, 03:12:11 AM

Quote from: ezodisy on November 13, 2008, 02:16:17 AM
ha ha finally

Russia's MICEX ordered not to halt stocks trade

MOSCOW, Nov 13 (Reuters) - Russia's MICEX stocks exchange said on Thursday the markets watchdog had ordered it not to halt stocks trade from 1240 local time (0940 GMT) as previously announced.
The news came moments after MICEX had said it was suspending trade for one hour for the second time in the session due to the steepness of the market fall. It benchmark index was down 8.4 percent at 593.77 points at 0944 GMT.

LOL :D

All along we've been assuming that Hank Paulson's TARP represents the most dysfunctional aspect of the current meltdown. WRONG. Russia's MICEX garners that award. Seriously, MICEX wins the 2008 Financial Dysfunctionality Award hands down.

Here's an update showing MICEX reaching new levels of absurdity with its start-stop-start-stop-hesitate-start-wait-stop approach:

UK Guardian -- Russian stocks trade on and off on conflicting orders
Thursday November 13 2008

MOSCOW, Nov 13 (Reuters) - Russia's MICEX index fell steeply on Thursday when trade resumed after a one-day limit-down halt, prompting a fresh array of confusing suspension announcements and orders to the contrary from the markets watchdog. Russian markets have been hard-hit by the falling oil price, the global credit crunch and broad capital flight from emerging markets. This further weighed on sentiment already dented in the summer by high profile corporate wrangles and war with Georgia.

The bourses have responded with frequent trade suspensions, to the consternation of many funds, which have difficulties reporting net asset value to their investors.The MICEX, Russia's most liquid index, was halted limit down from late Tuesday, and activity resumed on Thursday only to be stopped again after 35 minutes. The exchange said on Thursday the suspension would last until Monday or an order from the markets watchdog, which then commanded a resumption after just one hour. Half an hour later MICEX announced a one-hour limit-down suspension, followed within moments by an order from the watchdog for trade to continue uninterrupted. (http://www.guardian.co.uk/business/feedarticle/8020654)

You can't make this stuff up! :D

Title: Re: Meltdown
Post by: BachQ on November 13, 2008, 03:18:47 AM

BTW

Quote from: ezodisy on November 06, 2008, 11:45:50 PM
I think the guy (or guys) who suggests 0 is way off the mark. BOE has never gone below 2. It ain't gonna happen now.

Bank of England: We'll slash interest rates to ZERO to rescue the economy

By Sam Fleming and James Chapman
Last updated at 6:23 PM on 12th November 2008

(http://i.dailymail.co.uk/i/pix/2008/11/12/article-1085038-0271E687000005DC-801_468x378.jpg)

Interest rates could be slashed to zero for the first time in UK history as the Bank of England battles the deepening recession. Governor Mervyn King said he is ready to reduce rates to 'whatever level is necessary' to counter the economic storm. He warned Britain's economy could shrink by at least two per cent during 2009, pushing inflation into negative territory for the first time in almost half a century. (continued)

(http://i.dailymail.co.uk/i/pix/2008/11/12/article-1085038-02728990000005DC-538_468x262.jpg) (http://www.dailymail.co.uk/news/article-1085038/Bank-England-Well-slash-rates-ZERO-rescue-economy.html)

Title: Re: Meltdown
Post by: BachQ on November 13, 2008, 03:23:27 AM

Quote from: ezodisy on November 13, 2008, 02:16:17 AM
Obama Pushes for $50 Billion Bailout for Automakers, Oversight Czar (http://www.bloomberg.com/apps/news?pid=20601087&sid=aBlCucXR33Jw&refer=home)

Bailout counter: (http://www.bailoutcounter.com/Bailout_counter.jpg)

Bailout Price Tag: $3.5T So Far, But 'Real' Cost May Be Much Higher
Posted Nov 12, 2008 10:16am

QuoteWhile the government is clearly spending a lot of taxpayers' money to bail out financial firms, the tally is even bigger than most Americans (economists and pundits included) are probably aware or willing to admit. The bailout bonanza has gotten so big and happened so fast it's the true cost often gets lost in the discussion. Maybe Hank Paulson and Ben Bernanke prefer it that way because the tally so far is nearly $3.5 trillion, and that's before a likely handout for the auto industry.

Yes, $3.45 trillion has already been spent, as Bailoutsleuth.com details:

* $2T Emergency Fed Loans (the ones the Fed won't discuss, as detailed here)
* $700B TARP (designed to buy bad debt, the fund is rapidly transforming as we'll discuss in an upcoming segment)
* $300B Hope Now (the government's year-old attempt at mortgage workouts)
* $200B Fannie/Freddie
* $140B Tax Breaks for Banks (WaPo has the details)
* $110B: AIG (with it's new deal this week, the big insurer got $40B of TARP money, plus $110B in other relief)

Tallying up the "true" cost of the bailout is difficult, and won't be known for months if not years. But considering $3.5
trillion is about 25% of the U.S. economy ($13.8 trillion in 2007) and the U.S. deficit may hit $1 trillion in fiscal 2009,
hyperinflation and/or sharply higher interest rates seem likely outcomes down the road. At the very least, the possibility of the U.S. losing its vaunted Aaa credit rating -- which determines the Treasury's borrowing costs -- cannot be discounted.

(continued) LINK LINK LINK

(http://www.blackcommentator.com/277/277_images/277_cartoon_bank_bailout_hurwitt_small_over.jpg)

(http://finance.yahoo.com/tech-ticker/article/126117/Bailout-Price-Tag-3.5T-So-Far-But-%27Real%27-Cost-May-Be-Much-Higher?tickers=AIG,FNM,FRE,XLF,%5EDJI,%5EGSPC,C)

Title: Re: Meltdown
Post by: BachQ on November 13, 2008, 03:24:52 AM

"Thailand on Monday said it planned to barter rice for oil with Iran in the clearest example to date of how the triple financial, fuel and food crisis is reshaping global trade as countries struggle with high commodity prices and a lack of credit." (http://www.ft.com/cms/s/0/c47190fe-a452-11dd-8104-000077b07658.html?nclick_check=1)

Title: Re: Meltdown
Post by: ezodisy on November 13, 2008, 08:29:12 AM

crude got as high as $58 today

(http://upload.wikimedia.org/wikipedia/en/3/31/Dancing_Banana.gif)

So when are they going to start throwing the greenback out of helicopters? I am ready.

Title: Re: Meltdown
Post by: BachQ on November 13, 2008, 09:19:56 AM

Oil dipped to $54.97 a few minutes ago! ! ! !

(http://img212.imageshack.us/img212/2377/simpsonsparty1vw7.jpg)

Title: Re: Meltdown
Post by: Bunny on November 13, 2008, 09:35:12 AM

Heating oil is holding steady, though.

All of the commodities are tumbling! Gold is at $700 (-18.20)

Title: Re: Meltdown
Post by: Todd on November 13, 2008, 09:51:46 AM

Quote from: Dm on November 13, 2008, 03:23:27 AMBailout Price Tag: $3.5T So Far, But 'Real' Cost May Be Much Higher

More end of the world thinking married to truly sloppy and inaccurate reporting. HOPE Now, for instance, didn't cost Uncle Sam anything. (Well, the cost of meetings, food, etc.) It was a voluntary plan to modify troubled loans by either fixing introductory rates on new mortgages and/or extending maturity dates, within the limits of existing securitization agreements. The only people who "lost" money on it were the security holders who had their income streams reduced, though the slight reduction in foreclosures actually helped them. The $300 billion refers to the nominal amount of the remaining loan balances. So scratch $300 billion right off the top.

As to the "cost" involved in the other programs, well, yes, the government has "spent" about $350 billion under TARP (new appropriations will be needed for the next part, hence Paulson's change of direction to meet the new political reality), but it is also acquiring dividend paying stakes in various enterprises. This is not an ideal situation, to be sure, but this isn't a simple expenditure either. It's something more like an investment. The various loans and loan guarantees are also not "expenditures" in any normal sense, and the Fed loans, in particular, should never be classified as standard expenditures. The Fed is acting like a bank making secured loans. Members of the press sorely need some financial education.

Title: Re: Meltdown
Post by: ezodisy on November 13, 2008, 12:52:02 PM

Quote from: Dm on November 13, 2008, 09:19:56 AM
Oil dipped to $54.97 a few minutes ago! ! ! !

ha ha oil is back at $59.50!!!! I should really get paid for this advice 8)

Title: Re: Meltdown
Post by: BachQ on November 14, 2008, 04:20:19 AM

Quote from: ezodisy on November 13, 2008, 12:52:02 PM
ha ha oil is back at $59.50!!!! I should really get paid for this advice 8)

Kudos to you ....... Your well-polished crystal ball must be functioning better than mine. But what a nailbiter. Earlier yesterday oil was plulnging toward the glorious $50 mark (falling to a near-22-month low of $54.67/bbl on Globex) -- only to make a u-turn, rocketing toward $60 and closing at $58.24/bbl on NYMEX (up 3.7%). Just a buck seventy-five shy of $60. link (http://www.marketwatch.com/news/story/crude-futures-close-higher-after/story.aspx?guid=%7BE3B23D0C-BDB5-4E86-8696-4AC75B21550D%7D&dist=msr_5)

Currently down at $57.87 :D

Title: Re: Meltdown
Post by: BachQ on November 14, 2008, 04:23:48 AM

California gets dire warning on global warming

By Matt Nauman

Mercury News
Article Launched: 11/13/2008 12:01:15 PM PST

(http://www.mercurynews.com/business/ci_10975508?nclick_check=1)

QuoteGlobal warming will have a broad and devastating impact on California's economy over the next century, according to a report released Thursday. Roads and bridges, the water supply, agriculture, public health and even winter skiing all will be affected by global climate change, said the report by University of California-Berkeley agricultural and resource economics professors David Roland-Holst and Fredrich Kahrl.

The report said damage could reach many billions of dollars per year. In real estate alone, up to $2.5 trillion of the state's $4 trillion worth of homes and other buildings are at risk from rising sea levels, wildfires and other extreme weather events occurring as the world gets warmer, it said.

The 127-page report was funded by the nonprofit Next 10 foundation that studies California's future and the intersection of the economy and the environment. This is the first time a major academic institution has attempted to put a price tag on the potential climate damage in California between now and the year 2100, the researchers said.

In an interview, Roland-Holst said that despite the staggering numbers, he didn't want his research to be seen as a doomsday report. "It's not Chicken Little. It is a wake-up call," he said. "The estimates at the moment have a lot of uncertainty, but we really have to take this seriously." Roland-Holst and Kahrl offered forecasts on the impacts of global warming on seven business sectors in California.

-- Water: An estimated $5 billion in levees, aqueducts and other water systems are at risk, and costs could reach $600 million a year in what the researchers call the "high-warming scenario."

-- Energy: $21 billion in transmission lines, power plants and grid components are at risk, with annual damage ranging from $2.7 billion to $6.3 billion. Potential impacts could include less hydropower due to less rainfall; more hot days requiring greater use of air conditioning; and more winter storms causing more power outages.

-- Transportation: $500 billion at risk to ports, airports, roads and bridges.

-- Tourism and recreation: $98 billion in assets are at risk, with annual damage ranging from $200 million to $7.5 billion. "In the highest warming scenario, California's ski industry collapses," Roland-Holst writes. Beaches, golf courses and state and national parks, will be impacted, too.

-- Real estate and insurance: $2.5 trillion in homes, office buildings, warehouses and other structures are at risk, and water damage could cost $1.4 billion a year, while fire damage could result in $2.5 billion in damages.

-- Agriculture, forests and fisheries: $113 billion in crop land and orchards, livestock, forests and squid and salmon fisheries are at risk, with annual damage ranging from $300 million to $4.3 billion.

-- Public health: Annual costs due to atmospheric changes range from $3.8 billion to $24 billion a year.

"The most expensive thing we can do about climate change is nothing," Roland-Holst said.

(continued)

link (http://www.mercurynews.com/business/ci_10975508?nclick_check=1)

Title: Re: Meltdown
Post by: ezodisy on November 14, 2008, 02:55:27 PM

Quote from: Dm on November 14, 2008, 04:20:19 AM
Kudos to you ....... Your well-polished crystal ball must be functioning better than mine. But what a nailbiter. Earlier yesterday oil was plulnging toward the glorious $50 mark (falling to a near-22-month low of $54.67/bbl on Globex) -- only to make a u-turn, rocketing toward $60 and closing at $58.24/bbl on NYMEX (up 3.7%). Just a buck seventy-five shy of $60. link (http://www.marketwatch.com/news/story/crude-futures-close-higher-after/story.aspx?guid=%7BE3B23D0C-BDB5-4E86-8696-4AC75B21550D%7D&dist=msr_5)

Currently down at $57.87 :D

It tried several times in the past 24 hours to get above trend but has failed on each occasion. There's talk of it even hitting $30 soon. It might, I just think it'll bounce hard before doing so.

Title: Re: Meltdown
Post by: BachQ on November 16, 2008, 06:57:23 PM

Quote from: ezodisy on November 14, 2008, 02:55:27 PM
There's talk of it even hitting $30 soon. It might, I just think it'll bounce hard before doing so.

Yuppers. I've seen $30/bbl bandied about as a possible price floor. (http://www.thestar.com/business/article/537482) And a handful of futures traders have wagered that oil will fall to $30/bbl (http://www.financialpost.com/news/story.html?id=958889), including options to sell oil at $30/bbl. (http://www.ameinfo.com/175733.html)

I wouldn't be surprised if oil fell to mid-40's/bbl, but given that the break-even cost of extracting and producing one barrel of oil exceeds $30/bbl, global oil supply would contract acutely at around the $30/bbl mark.

Title: Re: Meltdown
Post by: BachQ on November 16, 2008, 06:58:58 PM

The Scotsman -- The race begins for tide power bonanza

Published Date: 15 November 2008
By Jenny Haworth

(http://thescotsman.scotsman.com/latestnews/The-race-begins-for-tide.4697539.jp)

QuoteTHE race to develop Scotland's seas into the "Saudi Arabia of marine power" is about to start, with plans for 500 underwater turbines in the Pentland Firth. The Scotsman can reveal that an Australian company is already preparing a serious bid for the huge tidal farm that it says will power one million homes. Atlantis Resources wants to be the first to take advantage of an imminent decision by the Crown Estate, which owns the seabed, to invite firms to build in the powerful seas off the north coast.

But as Alex Salmond, the First Minister, pins his hopes on tidal power answering Scotland's energy crisis and providing a huge boost to the economy, an expert has warned that politicians are "living on a different planet" if they think the technology will provide the answers.Dr Tony Trapp, whose company built one of the first tidal devices, told The Scotsman the issue of renewable energy was based on "faith not science". He said four companies in the UK that had tried to develop tidal energy had still not achieved any output. "It has completely conned the politicians from all parties and the worst people who are being conned are in Scotland," he said. "They've been conned hugely."

Title: Re: Meltdown
Post by: BachQ on November 16, 2008, 06:59:39 PM

CNBC Bailout Counter = $3.828 Trillion

FINANCIAL CRISIS BALANCE SHEET

Federal Reserve
(TAF) Term Auction Facility, 900 billion
Discount Window Lending
Commercial Banks, 108 billion
Investment Banks, 102 billion
Loans to buy ABCP, 108 billion
AIG, 122 billion
Bear Stearns, 29.5 billion
(TSLF) Term Securities Lending Facility, 225 billion
Swap Lines, 519
(MMIFF) Money Market Investor Funding Facility, 540 billion
TARP 700 billion
Other
Automakers, 25 billion
(FHA) Federal Housing Administration, 300 billion
Fannie Mae/Freddie Mac, 150 billion
Total   3,828 trillion

(as of Oct. 23rd 2008) (http://www.cnbc.com/id/27719011)

Title: Re: Meltdown
Post by: ezodisy on November 16, 2008, 11:25:15 PM

How about gold? Is it going to $1k/ounce?

I saw an interesting chart on USD last night

http://clearstation.etrade.com/cgi-bin/bbs?post_id=8876054

Title: Re: Meltdown
Post by: BachQ on November 17, 2008, 04:19:55 AM

Quote from: ezodisy on November 16, 2008, 11:25:15 PM
I saw an interesting chart on USD last night

http://clearstation.etrade.com/cgi-bin/bbs?post_id=8876054

With all of the dramatic financial news last week (Eurozone in recession; Germany in recession; Japan in recession), and with lots of data being released this week, Forex movement will be worth scrutinizing.

Forex Club's Forex Focus (Colt FX) for Nov. 17-21: http://www.youtube.com/watch?v=KzqXPfYzlko (6 min.)

The US economy is at death's door, and is being propped up by profligate deficit spending. Where will the dollar go?

Title: Re: Meltdown
Post by: BachQ on November 17, 2008, 04:21:50 AM

Is deflation on the horizon?

http://www.bloomberg.com/apps/news?pid=20601087&sid=aTxtStJrKGr0&refer=home

QuoteNov. 16 (Bloomberg) -- The cost of living in the U.S. probably fell in October by the most in almost sixty years, while manufacturing and homebuilding sank deeper into a recession, economists said before reports this week. Consumer prices probably dropped 0.8 percent last month, the most since 1949, according to the median estimate in a Bloomberg News survey. Builders broke ground on the fewest houses in at least a half century and factory output weakened further, other reports may show. (continued)

Title: Re: Meltdown
Post by: BachQ on November 17, 2008, 04:23:38 AM

MSNBC: "According to CreditSights, a research firm in New York and London, the U.S. government has put itself on the hook for some $5 trillion, so far, in an attempt to arrest a collapse of the financial system." (http://www.msnbc.msn.com/id/27686586?ref=patrick.net)

Title: Re: Meltdown
Post by: BachQ on November 17, 2008, 04:26:24 AM

(http://media.economist.com/images/20081115/D4608FN1.jpg)

ECONOMIST: IN JUST a few brutal months, the prospects for the world economy have deteriorated with remarkable speed. Rich countries had seemed set for a shallow, muddle-through recession; now a much deeper slump is on the cards. ... Central banks, recently so fearful of inflation, are now slashing interest rates to stop it falling too far. It will not be easy: deflation—annual falls in consumer prices—is increasingly likely next year. But recalling the 1930s, policymakers will be anxious to ensure that it does not take hold and turn crisis into catastrophe.

*** A deadly mix of falling prices and high leverage could foment a "debt-deflation" of the type first described by Irving Fisher, an American economist, in 1933. In this schema, debt-laden firms and consumers rush to repay loans as credit dries up. That hurts demand and leads to price cuts. The deflation in turn increases the real cost of debt. It also means that real interest rates can't be negative, and so are undesirably high. That spurs yet more repayment so that, in Fisher's words, the "liquidation defeats itself."

(http://www.economist.com/finance/displaystory.cfm?story_id=12607235)

Title: Re: Meltdown
Post by: BachQ on November 17, 2008, 04:28:34 AM

Quote from: ezodisy on November 16, 2008, 11:25:15 PM
How about gold? Is it going to $1k/ounce?

When do you think gold will turn around and head toward $1,000/ounce?

Title: Re: Meltdown
Post by: ezodisy on November 17, 2008, 09:06:50 AM

Quote from: Dm on November 17, 2008, 04:28:34 AM
When do you think gold will turn around and head toward $1,000/ounce?

You're the man with the links, you tell me :P It's not something I've ever researched, so, I don't know. Some guys I pay attention to who are very much fundamentally-minded are expecting gold and gold companies to do very well in the next 6 months. I've also read at least one piece about an expected fall in price too. So? ::)

Title: Re: Meltdown
Post by: Drasko on November 17, 2008, 12:15:56 PM

Did euro drop against yen recently? Have been contemplating some japanese order but the total came higher than I thought it would, or am I just being bad with math?

Title: Re: Meltdown
Post by: BachQ on November 17, 2008, 01:10:12 PM

Quote from: ezodisy on November 17, 2008, 09:06:50 AM
You're the man with the links, you tell me :P It's not something I've ever researched, so, I don't know. Some guys I pay attention to who are very much fundamentally-minded are expecting gold and gold companies to do very well in the next 6 months. I've also read at least one piece about an expected fall in price too. So? ::)

:D

Here's another "How Low will Oil Go" link fer ya! LINK (http://www.reuters.com/article/newsOne/idUSTRE4AC5OY20081113?pageNumber=2&virtualBrandChannel=0&sp=true)

$45/bbl is soooo close I can smell it. :D

Title: Re: Meltdown
Post by: BachQ on November 17, 2008, 01:12:38 PM

Quote from: Drasko on November 17, 2008, 12:15:56 PM
Did euro drop against yen recently? Have been contemplating some japanese order but the total came higher than I thought it would, or am I just being bad with math?

Ezodisy is better with charts than I, but I'll give it a shot:

Euros to 1 JPY (http://www.x-rates.com/d/EUR/JPY/graph120.html)

(http://www.x-rates.com/d/EUR/JPY/graph120.png)

latest (Nov 17) 0.00809845

Japanese Yens to 1 EUR

(http://www.x-rates.com/d/JPY/EUR/graph120.png)

latest (Nov 17) 123.48

Title: Re: Meltdown
Post by: BachQ on November 17, 2008, 01:16:24 PM

Consumers Teetering on $14 Trillion Debt Pile

(http://www.cnbc.com/id/27716231)

Quote

Free-spending U.S. consumers who bought everything from homes to groceries on borrowed money are running out of credit, and paying the bills will cost the world's biggest economy and its trading partners dearly.

(http://media.cnbc.com/i/CNBC/Sections/News_And_Analysis/__Story_Inserts/graphics/__ECONOMY/credit_card_swipe2.jpg)

The housing bust has exposed just how much Americans were relying on rising home values to pad spending and replace traditional savings. During the five-year real estate boom that ended in late 2006, household wealth expanded, retail sales grew faster than income, and savings dwindled. But as banks restrict access to mortgages, auto loans and credit cards, consumers are altering their spending behavior so rapidly that companies cannot adjust fast enough.

Banks that eagerly handed out credit cards during the good times are reducing credit limits and setting asides billions of dollars to cover losses as customers miss payments. U.S. automakers are warning of a near collapse in demand because would-be buyers are unable or unwilling to get loans. Stores are bracing for the worst holiday season sales performance in at least 18 years.

*** Over the past decade, American households have piled on $8 trillion in debt, an increase of 137 percent, twice the gain seen in the size of the economy. At $14 trillion, the debt load is now roughly equal to the entire economy's annual output. Much of the increase comes from home mortgages, which have expanded by $6 trillion since 1998, but it also reflects higher balances on credit cards and auto loans. (continued)

Title: Re: Meltdown
Post by: ezodisy on November 17, 2008, 11:48:48 PM

Quote from: Drasko on November 17, 2008, 12:15:56 PM
Did euro drop against yen recently? Have been contemplating some japanese order but the total came higher than I thought it would, or am I just being bad with math?

At the end of October it tanked but has since rebounded to around 1/122. The £ has a near identical chart. Technically I think it should revisit the low of around 115 (annual/daily chart attached) or even make fresh lows, though who really knows what'll happen? What are you thinking about getting?

Title: Re: Meltdown
Post by: ezodisy on November 17, 2008, 11:59:25 PM

Quote from: Dm on November 17, 2008, 01:10:12 PM
Here's another "How Low will Oil Go" link fer ya! LINK (http://www.reuters.com/article/newsOne/idUSTRE4AC5OY20081113?pageNumber=2&virtualBrandChannel=0&sp=true)

"Most analysts see prices recovering fairly quickly in the next few months, according to a Reuters poll of 34 analysts last week, which produced an average forecast for WTI next year of $81.30 and almost $90 in 2010.

Barclays Capital sees the price for U.S. crude recovering to average almost $78 a barrel in the fourth quarter of this year and bouncing back to more than $105 for 2009."

That is interesting, I wasn't aware of these forecasts. Thanks for the link.

Quote
$45/bbl is soooo close I can smell it. :D

Yeah :-\ It is trying to make a new low beneath $55 now, a break of support there and I'll have to stop singing the Blue Crude song ::) Still crazy stuff sometimes happens leading up to expiry, I've still got to 20 Nov before conceding

Title: Re: Meltdown
Post by: BachQ on November 18, 2008, 04:13:30 AM

Washington Post -- NEW YORK -- First came the banks looking for a federal rescue plan to stay afloat. Next it was the automakers seeking a bailout. And now state governments say they, too, need emergency federal assistance to remain solvent. "I believe that the crisis that is happening in the states needs to be elevated in the national discussion about restoring our economy," said California state Assembly Speaker Karen Bass (D). "California is the world's sixth-largest economy. And just as we cannot let the auto industry fail, we can't let the state of California fail."

(http://www.washingtonpost.com/wp-dyn/content/article/2008/11/15/AR2008111502380_pf.html)

Title: Re: Meltdown
Post by: BachQ on November 18, 2008, 04:14:56 AM

CNN: US Cities Are Begging For Help -- Many cities in crisis mode

http://www.youtube.com/v/kv6IrXrVYGg

-- Shirley Franklin, Mayor of Atlanta, discribes what she sees as the results of not bailing out cities as well as banks. She stresses the need for additional police and infrastructure projects. City revenues are falling faster than the price of oil. Job loses in cities such as Wilmington, Ohio where 3,000 workers are being laid-off in a the population of 12,000 show that this is beyond a crisis.
-- Cities want TARP funds!
-- 10% pay cut
-- City revenues are spiraling down (Atlanta down 12% in 1st quarter)

Title: Re: Meltdown
Post by: BachQ on November 18, 2008, 04:16:19 AM

U.S. cities seek federal help to ease economic crisis
Thu Nov 13, 2008 10:26pm EST
By Jon Hurdle

(http://www.reuters.com/article/domesticNews/idUSTRE4AD0SH20081114)

QuotePHILADELPHIA (Reuters) - Three major American cities buffeted by the global financial crisis are requesting at least $50 billion in federal funds to help pay for infrastructure improvements, pensions and short-term borrowing. Philadelphia, Phoenix and Atlanta are asking U.S. Treasury Secretary Henry Paulson to release funds from the $700 billion financial bailout authorized by Congress last month. ... Five or six other cities, including Chicago, may also sign on ... *** In order to fully fund pension obligations, the cities are also seeking loans of an unspecified amount to cover pension liabilities that have become increasingly expensive because of a decline in investments with the slump in global markets. Philadelphia's pension fund lost more than $650 million in value in the first nine months of this year, and the city faces $300 million in increased pension costs between the fiscal years 2010 and 2013, the letter said.

***

link

(http://www.reuters.com/article/domesticNews/idUSTRE4AD0SH20081114)

Title: Re: Meltdown
Post by: BachQ on November 18, 2008, 04:17:57 AM

Quote from: ezodisy on November 17, 2008, 11:59:25 PM
Yeah :-\ It is trying to make a new low beneath $55 now, a break of support there and I'll have to stop singing the Blue Crude song ::) Still crazy stuff sometimes happens leading up to expiry, I've still got to 20 Nov before conceding

Reuters noted that on Tuesday, 18 November, oil prices fell below $55 a barrel for a 19 percent loss this month. (http://www.reuters.com/article/newsOne/idUSTRE4AH0Y920081118)

(http://www.filmreference.com/images/sjff_01_img0214.jpg)

Title: Re: Meltdown
Post by: BachQ on November 18, 2008, 04:22:52 AM

Quote from: Bunny on November 13, 2008, 09:35:12 AM
All of the commodities are tumbling! Gold is at $700 (-18.20)

Yes indeed.

(http://images.bloomberg.com/r06/markets/comm_futures.gif)

Bloomberg's Leading Commodities Indices (http://www.bloomberg.com/markets/commodities/cfutures.html)

Title: Re: Meltdown
Post by: BachQ on November 18, 2008, 04:26:13 AM

Mayor Daley: Prepare For Mass Layoffs
CEOs Tell Mayor They Plan Huge Layoffs In November, December

Joanie Lum

(http://cbs2chicago.com/local/daley.city.layoffs.2.863161.html)

Quote
CHICAGO (CBS) ? The warning is out – [Chicago] Mayor Richard M. Daley says a parade of corporate chief executives have told him huge layoffs are planned around the city and will carry into next year.
***
Mayor Daley says corporate leaders told him huge layoffs will impact the city this month and next, and into the new year. He also says city, county and state governments should be prepared for their revenue to fall dramatically because of the souring economy.

"This is going to be all year, so it's going to be a very frightening economy," Mayor Daley said. "Each one tells me what they're laying off, and they're going to double that next year. We're talking huge numbers of permanent layoffs for people in the economy. It's going to have a huge effect on all businesses."

The mayor said the gravity of the situation cannot be underestimated. "We never experienced anything like this except people who came from the Depression," Mayor Daley said. "When you have that many layoffs early – and they're telling me this is only the beginning of their layoffs – that is very frightening."

Title: Re: Meltdown
Post by: ezodisy on November 18, 2008, 04:28:06 AM

lol! nice picture.

but crude never stays down for long, already fighting back above $55. It's another Rocky moment for the brazen black gold

a reminder of the price to come: http://www.ibiblio.org/lunarbin/worldpop

Title: Re: Meltdown
Post by: BachQ on November 18, 2008, 06:24:16 AM

Quote from: ezodisy on November 18, 2008, 04:28:06 AM
a reminder of the price to come: http://www.ibiblio.org/lunarbin/worldpop

Oh yeah ... that pesky exploding population issue ... I forgot about that! :D

Title: Re: Meltdown
Post by: BachQ on November 18, 2008, 06:27:29 AM

More deflation news.

U.S. Producer Prices Decline 2.8%, Most on Record (Update2)

By Shobhana Chandra

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aCC.aK6XbpoA&refer=home)

QuoteNov. 18 (Bloomberg) -- Prices paid to U.S. producers plunged in October by the most on record as the faltering global economy caused demand for commodities to dry up.

The larger-than-forecast 2.8 percent drop followed a 0.4 percent decline in September, the Labor Department said today in Washington. So-called core producer prices that exclude fuel and food rose 0.4 percent, indicating that the declines in raw- material costs have yet to feed through to other products.

Today's figures, along with a U.K. government report showing Britain's inflation rate fell the most in at least 11 years, show a rising threat of deflation. That's likely to spur central banks to keep cutting interest rates, with some benchmarks approaching zero percent, economists say.

``Fuel prices are falling like a stone and will continue to drop,'' said Michael Gregory, a senior economist at BMO Capital Markets in Toronto, who had forecast a 2.5 percent decline in the PPI. ``The drop in consumer spending is going to cause a ripple effect all along the supply chain in disinflationary pressures, if not deflationary pressures.''

(continued)

Title: Re: Meltdown
Post by: mn dave on November 18, 2008, 06:28:10 AM

Hi Dm. Listen to any music lately? :)

Title: Re: Meltdown
Post by: Florestan on November 18, 2008, 06:37:41 AM

Quote from: mn dave on November 18, 2008, 06:28:10 AM
Hi Dm. Listen to any music lately? :)

The sound of crashing markets, maybe? ;D

Title: Re: Meltdown
Post by: karlhenning on November 18, 2008, 06:47:14 AM

Quote from: Florestan on November 18, 2008, 06:37:41 AM
The sound of crashing markets, maybe? ;D

Xenakis? 0:)

Title: Re: Meltdown
Post by: Florestan on November 18, 2008, 06:56:48 AM

Quote from: karlhenning on November 18, 2008, 06:47:14 AM
Xenakis? 0:)

Not yet. The markets are not the whole world. ;D

Title: Re: Meltdown
Post by: ezodisy on November 18, 2008, 07:25:38 AM

Quote from: mn dave on November 18, 2008, 06:28:10 AM
Hi Dm. Listen to any music lately? :)

There'll be time for music on the long journey aboard the last train out of this collapsing heap.

"No institution left behind"

Please don't fill the one honest thread on this board up with one-liners. Thank you.

Title: Re: Meltdown
Post by: BachQ on November 18, 2008, 08:09:52 AM

Quote from: mn dave on November 18, 2008, 06:28:10 AM
Hi Dm. Listen to any music lately? :)

Of course we listen to music. Why, just this morning, for example, we listened to:

Berlioz: "Ride to the Abyss" and "Pandemonium"
Berlioz: "Hell fall"
Bruckner: "Apocalyptic" Symphony (#8)
Messiaen: "Quartet for the End of Time"
Britten: "War Requiem"
Weigl: Symphony no. 5 "Apocalyptic", 4th mvt ("The Four Horsemen")
Stravinsky: "Infernal Dance" fr. "Rite of Spring"
Liszt: "Totentanz" in D Minor
Lyadov: "From the Apocalypse"
Jerry Goldsmith: "Ave Satani" (http://www.youtube.com/watch?v=8h7uJbWlMts) from "The Omen"
Berlioz: "March to the Scaffold" fr. "Symphonie Fantastique"
Holst: "Mars, Bringer of War" fr. "Die Planeten"
Hindemith: "Mathis der Maler" (http://www.youtube.com/watch?v=MQRpGcevG-c) Symphony (finale)
Crumb: "Black Angels"

Title: Re: Meltdown
Post by: mn dave on November 18, 2008, 08:10:36 AM

Quote from: Dm on November 18, 2008, 08:09:52 AM
Of course we listen to music. Why, just this morning, for example, we listened to:

Berlioz: "Ride to the Abyss" and "Pandemonium"
Berlioz: "Hell fall"
Bruckner: "Apocalyptic" Symphony (#8)
Messiaen: "Quartet for the End of Time"
Britten: "War Requiem"
Weigl: Symphony no. 5 "Apocalyptic", 4th mvt ("The Four Horsemen")
Stravinsky: "Infernal Dance" fr. "Rite of Spring"
Liszt: "Totentanz" in D Minor
Lyadov: "From the Apocalypse"
Jerry Goldsmith: "Ave Satani" (http://www.youtube.com/watch?v=8h7uJbWlMts) from "The Omen"
Berlioz: "March to the Scaffold" fr. "Symphonie Fantastique"
Holst: "Mars, Bringer of War" fr. "Die Planeten"
Hindemith: "Mathis der Maler" (http://www.youtube.com/watch?v=MQRpGcevG-c) Symphony (finale)
Crumb: "Black Angels"

Title: Re: Meltdown
Post by: Drasko on November 18, 2008, 09:30:39 AM

Quote from: Dm on November 17, 2008, 01:12:38 PM
Ezodisy is better with charts than I, but I'll give it a shot:

Euros to 1 JPY (http://www.x-rates.com/d/EUR/JPY/graph120.html)

(http://www.x-rates.com/d/EUR/JPY/graph120.png)

latest (Nov 17) 0.00809845

Japanese Yens to 1 EUR

(http://www.x-rates.com/d/JPY/EUR/graph120.png)

latest (Nov 17) 123.48

Thank you. Given that by recently I mean more like last several months my math seems to be ok, that's quite a hit.

Title: Re: Meltdown
Post by: ezodisy on November 18, 2008, 09:35:23 AM

Quote from: Dm on November 18, 2008, 08:09:52 AM
Berlioz: "Ride to the Abyss" and "Pandemonium"

awesome. This is the best music for the big 300pt NY sell offs in the final 10 minutes 8)

Quote from: Drasko on November 18, 2008, 09:30:39 AM
Thank you. Given that by recently I mean more like last several months my math seems to be ok, that's quite a hit.

Things can only get worse

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 03:28:23 AM

Quote from: ezodisy on November 17, 2008, 11:59:25 PM
"Most analysts see prices recovering fairly quickly in the next few months, according to a Reuters poll of 34 analysts last week, which produced an average forecast for WTI next year of $81.30 and almost $90 in 2010.

Barclays Capital sees the price for U.S. crude recovering to average almost $78 a barrel in the fourth quarter of this year and bouncing back to more than $105 for 2009."

That is interesting, I wasn't aware of these forecasts. Thanks for the link.

Yeah :-\ It is trying to make a new low beneath $55 now, a break of support there and I'll have to stop singing the Blue Crude song ::) Still crazy stuff sometimes happens leading up to expiry, I've still got to 20 Nov before conceding

On Tuesday, crude futures for December delivery hit a 22-month low, closing at $54.39, (http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=2465171) the lowest settlement since Jan. 29, 2007, when prices closed at $54.01. Meanwhile, gas prices have tumbled to a 90-year low (http://seekingalpha.com/article/106711-gas-prices-at-a-90-year-low) (when adjusted for inflation).

Moments ago, WTIC on NYMEX hit $53.84.

But who knows .... Israel may decide to attack Iran today .... or Dick Cheney might realize that he has only two more months to inflict havok upon the globe .... in which case the price of oil would skyrocket!

(http://img.timeinc.net//time/cartoons/20081114/cartoons_02.jpg)

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 03:30:23 AM

CNBC: Bailout tab as of Nov. 13th = $4.28 trillion. The Fed is responsible for 68%, while TARP gobbles up 16%. (http://www.cnbc.com/id/27719011?ref=patrick.net)

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 03:31:02 AM

(http://img.timeinc.net//time/cartoons/20081114/cartoons_03.jpg)

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 03:31:36 AM

(http://img.timeinc.net//time/cartoons/20081114/cartoons_08.jpg)

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 03:33:25 AM

Arctic is rich in promising energy source: gas hydrates
11/13/2008 - 16:06. By ERIKA BOLSTAD, Anchorage Daily News national

(http://www.scrippsnews.com/node/37949)

QuoteFrozen crystals packed with concentrated natural gas and buried 2,000 feet below the permafrost in Alaska could become the next major domestic energy source, an assessment just released by the U.S. Geological Survey found. The Geological Survey study shows that in the North Slope, those frozen methane-and-water crystals, known as hydrates, contain as much as 85.4 trillion cubic feet of recoverable natural gas. That's enough to heat 100 million homes for as much as 10 years, said Interior Secretary Dirk Kempthorne. New research into how to extract those resources has moved the possibility of recovering natural gas hydrates from the realm of "science and speculation" to that of the "actual and useful," Kempthorne said Wednesday. Globally, "hydrates have more potential for energy than all other fossil fuels combined," Kempthorne said. "This can be a paradigm shift."

continued

link (http://www.scrippsnews.com/node/37949)

Title: Re: Meltdown
Post by: The new erato on November 19, 2008, 03:54:45 AM

Quote from: Dm on November 19, 2008, 03:28:23 AM
On Tuesday, crude futures for December delivery hit a 22-month low, closing at $54.39, (http://www.sharecast.com/cgi-bin/sharecast/story.cgi?story_id=2465171) the lowest settlement since Jan. 29, 2007, when prices closed at $54.01. Meanwhile, gas prices have tumbled to a 90-year low (http://seekingalpha.com/article/106711-gas-prices-at-a-90-year-low) (when adjusted for inflation).

What a supreme irony then, that the producers of gasguzzlers are going broke.

Title: Re: Meltdown
Post by: ezodisy on November 19, 2008, 04:12:38 AM

Quote from: Dm on November 19, 2008, 03:28:23 AM
Moments ago, WTIC on NYMEX hit $53.84.

"We start with the assumption that the stock market is always wrong." - George Soros

Market internals were disastrous yesterday, I don't know how they managed to throttle it for a ride up on the Dow. More doom & gloom to come; possible turning point around the first or second week of December. Great bailout comics :)

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 09:20:34 AM

Quote from: ezodisy on November 19, 2008, 04:12:38 AM
Market internals were disastrous yesterday, I don't know how they managed to throttle it for a ride up on the Dow. More doom & gloom to come; possible turning point around the first or second week of December. Great bailout comics :)

If the markets knew what we knew yesterday, there would have been a massive selloff. The credit markets are still in extreme dysfunction, and the bailouts have not worked (and may have made things worse). The asset based indices like ABX (think subprime) went haywire ... Not to mention that the global economy appears to be headed toward a systemic deflationary depression. Paulson's backpedalling (reversal) on TARP's goal of purchasing toxic assets may have been the nail in the coffin.

Where are investors supposed to put their money? Commodities are tanking. Stocks are tanking. Global economies are tanking. National debts are soaring. Some analysts have even postulated that the USA might lose its AAA credit rating given the Bailout Mania coupled with decreasing tax revenues.

Meanwhile, perhaps we should give Mahler's Tragic Symphony a spin. :P

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 09:22:19 AM

Oil groups expect $40 barrel – CNOOC head
By Alan Beattie in Barcelona
Published: November 18 2008 20:35 | Last updated: November 18 2008 20:35

(http://www.doomers.us/forum2/index.php?topic=31244.0;topicseen)

QuoteThe world's national oil companies expect oil prices to fall further and will cancel most planned investment projects even at current levels, according to the head of a Chinese state-owned group. A recent meeting of the national oil companies in Beijing had predicted oil prices would fall to about $40 a barrel, Fu Chengyu, chief executive of China National Offshore Oil Corporation, told a conference in Barcelona. *** "If the oil price remained around $50 or $55, that would mean cutting at least 60 per cent of budgeted projects for the next one or two years from the national oil companies," Mr Fu said. Of the new extraction projects planned by state-owned oil companies in deep-sea areas, the lowest break-even oil price was about $60 a barrel and the highest about $90 per barrel, he said.

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 09:23:11 AM

The credit card industry "may end up with possibly the highest credit card losses the industry has ever experienced," Bank of America Chief Executive Kenneth Lewis said on Tuesday.
(http://www.cnbc.com/id/27791250%3Cbr%20/%3E)

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 09:24:53 AM

Telegraph.uk -- Barack Obama needs to resist bail-out mania

(http://www.telegraph.co.uk/finance/breakingviewscom/3397372/Barack-Obama-needs-to-resist-bail-out-mania.html)

QuoteObama and leaders of other countries must do their best to stem the torrent of potential beggars. This is partly because state aid will drain the public purse at a time when fiscal deficits are already high. Governments should save the little firepower they have left for really deserving cases, like the growing army of unemployed. Bailouts also distort markets: as weak companies are propped up, vibrant ones find it harder to grow. Ideally, governments would have made banking bailouts so unpleasant that other industries would hesitate to request the same medicine. Sadly, in most countries, this hasn't been so.

(http://img.timeinc.net//time/cartoons/20081024/cartoons_06.jpg)

Title: Re: Meltdown
Post by: ezodisy on November 19, 2008, 09:43:37 AM

Quote from: Dm on November 19, 2008, 09:20:34 AM
Where are investors supposed to put their money? Commodities are tanking.

Commodities will turn back around. We need some inflation and we need it fast. Spike me baby. 8)

QuoteSome analysts have even postulated that the USA might lose its AAA credit rating

Isn't the USA the one who applies the credit rating? ::)

Quote from: Dm on November 19, 2008, 09:22:19 AM
Oil groups expect $40 barrel – CNOOC head
(http://www.doomers.us/forum2/index.php?topic=31244.0;topicseen)

But who's going to bailout the oil industry?

Title: Re: Meltdown
Post by: ezodisy on November 19, 2008, 09:52:28 AM

only way this will not close 5% down would be if the Fed steps in to buy it again

Advances & Declines
     NYSE      NASDAQ
Advances    404 (11%)      444 (15%)
Declines    3,192 (88%)     2,356 (81%)
Unchanged    52 (1%)      91 (3%)
Up Vol*      282 (7%)      60 (5%)
Down Vol*    3,510 (93%)    1,151 (95%)
Unch. Vol*    2 (0%)      2 (0%)
New Hi's    12      2
New Lo's    755      581

*in millions

Title: Re: Meltdown
Post by: Drasko on November 19, 2008, 09:53:29 AM

Quote from: ezodisy on November 18, 2008, 09:35:23 AM
Things can only get worse

Seen worse. Enghuland seems like the place to by from at the moment, pound is 1.18 euros, that's lowest I remember, japanese orders go on hold for time being.

Title: Re: Meltdown
Post by: ezodisy on November 19, 2008, 10:11:18 AM

Quote from: Drasko on November 19, 2008, 09:53:29 AM
Seen worse. Enghuland seems like the place to by from at the moment, pound is 1.18 euros, that's lowest I remember, japanese orders go on hold for time being.

yeah well wait 6 months and you'll soon see on Belgrade TV shows like "Property tycoon - How to buy a UK property, fix it up and sell it on for 50% profit all over a plate of baked beans and toast".* We've got--well, used to have--shows like that here for Spanish properties (minus the baked beans & toast).

*or in 12 months time "How to buy a UK property for a plate of baked beans & toast".

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 12:33:06 PM

7997

Quote from: ezodisy on November 19, 2008, 09:52:28 AM
only way this will not close 5% down would be if the Fed steps in to buy it again

Advances & Declines
     NYSE      NASDAQ
Advances    404 (11%)      444 (15%)
Declines    3,192 (88%)     2,356 (81%)
Unchanged    52 (1%)      91 (3%)
Up Vol*      282 (7%)      60 (5%)
Down Vol*    3,510 (93%)    1,151 (95%)
Unch. Vol*    2 (0%)      2 (0%)
New Hi's    12      2
New Lo's    755      581

*in millions

You're good. The Dow closed exactly 5% down! 8) Perhaps the PPT took the afternoon off.

QuoteAssociated Press - November 19, 2008 4:23 PM ET

NEW YORK (AP) - Stocks took a hard fall, taking the Dow below 8,000. Investors were disheartened by the reported plunge in housing starts to the lowest level on record, and indications that an effort to bailout the Big Three automakers has stalled.

-- The Dow lost 427 points or 5% to 7,997.

-- The S&P fell 52 points or 6.1% to 806.

-- The Nasdaq composite dropped nearly 97 points or 6.5% to 1,386.

-- Declining issues outnumbered advancers by a 15 to 1 margin.

-- Volume on the NYSE came to 6.3 billion shares. Trading on the Nasdaq stock market was 2.3 billion shares.

-- Light, sweet crude for December delivery fell 77 cents to settle at $53.62 a barrel.

Title: Re: Meltdown
Post by: BachQ on November 19, 2008, 12:36:19 PM

BTW, WTIC on NYMEX just dipped to 52.87 >:D >:D >:D

Title: Re: Meltdown
Post by: drogulus on November 19, 2008, 01:00:47 PM

Concerning the possible bailout of the auto industry, it may not be a case of bailout or Chap. 11 (Chap. 7 is liquidation, which really would be a disaster). This TNR blog (http://blogs.tnr.com/tnr/blogs/the_plank/archive/2008/11/18/a-kindler-gentler-bankruptcy-for-gm.aspx) discusses the possibility of a restructuring with some assistance:

As a number of analysts have noted, the biggest reason a General Motors bankruptcy is so frightening is that it might not work out like the airline bankruptcies have. Remember, if General Motors were trying to reorganize itself under bankruptcy, it would have to come up with cash in order to buy parts. Thanks to the problems on Wall Street, that could be extremely difficult. That means GM could end up filing for bankruptcy under Chapter 7, rather than Chapter 11, and going through liquidation. The ripple effects could take down the rest of the auto industry or some significant portion of it. Unemployment would spike and the eocnomy would take yet another big hit.

But government could, in principle, provide funding as a precursor to Chapter 11 rather than an alternative to it. In effect, it would be stepping up to provide the kind of credit that would be available to General Motors (and the rest of the Big Three, if necessary) if Wall Street were not melting down. This would allow the company to take advantage of bankruptcy protection without complete liquidation.

I don't much like an auto industry bailout, mostly because I'm not sure we won't have to go back again if it doesn't work. However I recognize that the cost of not doing anything will be much higher than any bailout package contemplated now. Even Toyota is worried about this. The supply chain will not survive a Big 3 collapse, and the ripple effects will hit the other companies as well. This is a much worse outcome than anything a bailout might do.

Title: Re: Meltdown
Post by: ezodisy on November 19, 2008, 01:02:54 PM

Quote from: Dm on November 19, 2008, 12:36:19 PM
BTW, WTIC on NYMEX just dipped to 52.87 >:D >:D >:D

Massacre. Looks like the yanks will be driving their hummers to the mall for the time being. PPT again stepped in at 8000 -- if you check over the past 2 months, they have come in to defend this level (8000) for the 4th or 5th time now. The quicker they let it tank the better IMO (if we had been at 9000 instead of 8000 the Dow would have closed below 5% I think). Nikkei futures down over 5% at 7800. In late Oct when the Dow hit 8000 Nikkei was at 7000. Therefore when it rises to 7900/8000 tonight I will probably sell it, expecting 7600/7500 by close. S&P not far above 800. One big collapse please and then we can have our Christmas rally.

By the way, gold spiked to the 750s today before falling back to the 730s again. If you wish to hear some interviews / podcasts there's an excellent commodity channel here: http://commoditywatch.podbean.com/ (A Bounce is Due has some good historical insight).

(http://www.nationalgallery.org.uk/exhibitions/rubens/feature/img/feature5_4_lrg.jpg)

Title: Re: Meltdown
Post by: ezodisy on November 19, 2008, 09:54:33 PM

well that was a perfect trade. Before going to sleep I set orders to open at 7979, 8049 and 8149 with stops of 800 and limits of 300. Only the first was triggered and it hit the limit on a spike down this morning, so that is +300 while sleeping 8) Homework pays off >:D 0:)

Title: Re: Meltdown
Post by: ezodisy on November 19, 2008, 11:28:23 PM

A lot of doom & gloom to report but it seems to me that the super rich are still getting richer -- if not today then setting up for it tomorrow

http://ftalphaville.ft.com/blog/2008/11/20/18451/rothschild-sells-75-stake-to-rabobank/

Rothschild sells 7.5% stake to Rabobank

The Rothschild family is selling a 7.5% stake in its investment bank business to Rabobank of the Netherlands, as they team up to advise clients on food and agricultural deals. The deal, which could be the first step towards a closer alliance, comes as food manufacturers are investing more heavily in agribusinesses to secure raw material supplies. The two banks described the link-up as "a co-operation agreement". But the deal, costing Rabobank less than £100m, would give Rothschild's clients access to Rabobank's deeper financial pockets. Akeel Sachak, Rothschild's head of consumer banking, said the link-up would let his bank take advantage of Rabobank's close ties with Chinese, Indian and South Korean agricultural producers. Rabobank is acquiring the stake in Rothschild Continuation Holdings, one of several holding companies controlled by the family.

Title: Re: Meltdown
Post by: ezodisy on November 20, 2008, 02:04:48 AM

http://ftalphaville.ft.com/blog/2008/11/20/18476/itraxx-europe-at-all-time-high/

http://en.wikipedia.org/wiki/ITraxx

iTraxx Europe at all time high

The Markit iTraxx Europe index at 181.2bp - an all time high (earlier at 183bp).

(http://alphaville.ftdata.co.uk/lib/inc/getfile/3047.jpg)

Title: Re: Meltdown
Post by: ezodisy on November 20, 2008, 04:10:09 AM

No Great Depression - another Morgan Stanley analyst turns bull (http://www.investegate.co.uk/invarticle.aspx?id=58845)

The second half of that short piece is worth reading (and probably has been mentioned by some here already).

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 07:26:28 AM

Fed sees economic woes persisting into next year (http://news.aol.com/article/consumers-may-get-ray-of-good-news-lower/252466)

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 07:27:57 AM

NY Times

(http://graphics8.nytimes.com/images/2008/11/19/business/19ports_600.JPG)

NYT: Unwelcome by dealers and buyers, thousands of cars worth tens of millions of dollars are being warehoused on increasingly crowded port property. And for the first time, Mercedes-Benz, Toyota, and Nissan have each asked to lease space from the port for these orphan vehicles. They are turning dozens of acres of the nation's second-largest container port into a parking lot, creating a vivid picture of a paralyzed auto business and an economy in peril.

(http://www.nytimes.com/2008/11/19/business/economy/19ports.html?_r=1&em)

Quote"This is one way to look at the economy," Art Wong, a spokesman for the port, said of the cars. "And it scares you to death." *** "We're supposed to move things, not store them," Mr. Wong said. Roughly 20 percent of the nation's container imports last year came through Long Beach, putting it close behind the largest container port, Los Angeles. This year, shipping volume at Long Beach is down 10 percent from 2007, and nearly all major ports around the country have seen similar declines. Veteran port workers say the slowdown since mid-October is like nothing they have ever seen. And it is having a cascading impact on other businesses and workers.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 07:31:08 AM

GlobalResearch: The financial crisis is deepening, with the risk of seriously disrupting the system of international payments. This crisis is far more serious than the Great Depression. All major sectors of the global economy are affected. Recent reports suggest that the system of Letters of Credit as well as international shipping, which constitute the lifeline of the international trading system, are potentially in jeopardy.

(http://www.globalresearch.ca/index.php?context=va&aid=10977)

QuoteThe proposed bank "bailout" under the so-called Troubled Asset Relief Program (TARP) is not a "solution" to the crisis but the "cause" of further collapse. The "bailout" contributes to a further process of destabilization of the financial architecture. It transfers large amounts of public money, at taxpayers expense, into the hands of private financiers. It leads to a spiraling public debt and an unprecedented centralization of banking power. Moreover, the bailout money is used by the financial giants to secure corporate acquisitions both in the financial sector and the real economy. In turn, this unprecedented concentration of financial power spearheads entire sectors of industry and the services economy into bankruptcy, leading to the layoff of tens of thousands of workers.

The upper spheres of Wall Street overshadow the real economy. The accumulation of large amounts of money wealth by a handful of Wall Street conglomerates and their associated hedge funds is reinvested in the acquisition of real assets. Paper wealth is transformed into the ownership and control of real productive assets, including industry, services, natural resources, infrastructure, etc.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 07:37:20 AM

Quote from: ezodisy on November 20, 2008, 02:04:48 AM
http://ftalphaville.ft.com/blog/2008/11/20/18476/itraxx-europe-at-all-time-high/

http://en.wikipedia.org/wiki/ITraxx

iTraxx Europe at all time high

The Markit iTraxx Europe index at 181.2bp - an all time high (earlier at 183bp).

(http://alphaville.ftdata.co.uk/lib/inc/getfile/3047.jpg)

No surprise there. The credit markets are predicting a high rate of default for Europe's 125 most liquid investment grade credits.

On a related note, credit markets are predicting an extremely high rate of default on junk bonds: Junk Bond Yields Reach 20-Year Record of 20% as Economy Declines

By Gabrielle Coppola and Caroline Salas

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aec7wvoKeNEM&refer=home)

QuoteNov. 19 (Bloomberg) -- Yields on speculative-grade corporate bonds surpassed 20 percent for the first time in at least two decades as a declining economy increased the risk of default. ... The level is the highest since Merrill began collecting overall yield data in January 1986. Junk bonds have lost more than $187 billion in market value since August on speculation the U.S. recession will leave a glut of companies unable to meet their debt payments, Merrill data show. ... "Prices are in a virtual freefall,'' said Martin Fridson, chief executive officer of money management firm Fridson Investment Advisors in New York. . ``Either the market is right and expecting a default rate considerably higher than it was in the Great Depression, or we have such profound dislocations and selling pressures going on that it really is creating extraordinary fundamental value.'' About 72 percent of high-yield issuers have bonds trading at so-called distressed levels, or with yields of at least 10 percentage points more than similar-maturity Treasuries, Merrill data show. That ratio implies a default rate of 18 percent in the next 12 months, according to Fridson. ... ``People are just worried about the economic backdrop, they're worried about rising defaults,'' said Stephen Antczak, a credit strategist at UBS AG in Stamford, Connecticut. ... ``The risk premiums are just at a staggering level,'' said Fridson. ``The number is not something any of us expected to see,'' he said, referring to the 20 percent yields.

(continued)

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 07:39:10 AM

Illinois is a hurtin unit:

Illinois budget crashing; governor looks to feds, lenders, cuts

By Joseph Ryan
Daily Herald Staff
Published: 11/18/200 4:38 PM

(http://www.dailyherald.com/story/print/?id=251770)

QuoteWith an ever-widening budget gap of $2 billion, Gov. Rod Blagojevich is seeking sweeping authority to cut state programs, including education. "Today we have more difficult decisions to make," Blagojevich said Tuesday in releasing his latest budget proposal a day before lawmakers return to Springfield. [Illinois] is buried under a massive backlog of more than $4 billion in unpaid bills to health care and other state service providers. ... Blagojevich is looking at short-term borrowing so the state could pay off a $4 billion bill backlog, a problem Comptroller Dan Hynes has called "potentially catastrophic" as unpaid contractors threaten to walk off the job. Blagojevich also penned a letter to congressional leaders asking for a $3 billion cash infusion over three years in transportation, health care and welfare funding.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 07:40:22 AM

Russia is a hurtin unit. Bloomberg reports that "the ruble may weaken 13 percent by the end of next year as the plunging price of oil and the erosion of Russia's current-account surplus compels the central bank to devalue the currency." (http://www.bloomberg.com/apps/news?%3Cbr%20/%3E%3Cbr%20/%3Epid=20601083&sid=a52GVR4ESUnQ&refer=currency)

Said Russian President Dmitry Medvedev

Quote"Today it is clear that the crisis is spreading, unfortunately, from the financial sector into sectors of the real economy. Every industry is affected in its own way. It is impossible to say that one among them is sitting pretty." Mr. Medvedev said the government is willing to keep using its reserves, the third-largest in the world, to boost liquidity and bail out troubled industries. He said the Kremlin has yet to decide on a final figure for its bailout package. So far, it has pledged more than $200 billion in loans, tax cuts, and other measures. "We understand perfectly well that the scale of the problem is such that it is possible further measures will need to be undertaken," Russian news agencies cited Mr. Medvedev as saying.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 07:48:20 AM

Quote from: ezodisy on November 20, 2008, 04:10:09 AM
No Great Depression - another Morgan Stanley analyst turns bull (http://www.investegate.co.uk/invarticle.aspx?id=58845)

The second half of that short piece is worth reading (and probably has been mentioned by some here already).

Governments will do everything possible to avoid making the same mistakes during Great Depression I. But if the core fundamentals are spiraling downward into a blackhole, then all of the government action the world can muster would not be able to prevent a second depression.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 07:57:30 AM

Quote from: drogulus on November 19, 2008, 01:00:47 PM

Concerning the possible bailout of the auto industry, it may not be a case of bailout or Chap. 11 (Chap. 7 is liquidation, which really would be a disaster). This TNR blog (http://blogs.tnr.com/tnr/blogs/the_plank/archive/2008/11/18/a-kindler-gentler-bankruptcy-for-gm.aspx) discusses the possibility of a restructuring with some assistance:

As a number of analysts have noted, the biggest reason a General Motors bankruptcy is so frightening is that it might not work out like the airline bankruptcies have. Remember, if General Motors were trying to reorganize itself under bankruptcy, it would have to come up with cash in order to buy parts. Thanks to the problems on Wall Street, that could be extremely difficult. That means GM could end up filing for bankruptcy under Chapter 7, rather than Chapter 11, and going through liquidation. The ripple effects could take down the rest of the auto industry or some significant portion of it. Unemployment would spike and the eocnomy would take yet another big hit.

But government could, in principle, provide funding as a precursor to Chapter 11 rather than an alternative to it. In effect, it would be stepping up to provide the kind of credit that would be available to General Motors (and the rest of the Big Three, if necessary) if Wall Street were not melting down. This would allow the company to take advantage of bankruptcy protection without complete liquidation.

I don't much like an auto industry bailout, mostly because I'm not sure we won't have to go back again if it doesn't work. However I recognize that the cost of not doing anything will be much higher than any bailout package contemplated now. Even Toyota is worried about this. The supply chain will not survive a Big 3 collapse, and the ripple effects will hit the other companies as well. This is a much worse outcome than anything a bailout might do.

Thanks for that link, Drog.

The main reason a bailout will fail is because the Big 3 are churning out products that no one wants to buy. Even braindead consumers realize that the current lull in gas prices is only temporary, and, as such, they will not squander what little resources they have left on a 4-wheeled dinosaur. The Big 3 have no chance of survival without fundamental restructuring of (1) their product base; and (2) their labor/union structure.

Throwing $25 billion at the auto industry so that their overpaid, non-competitive unions can churn out more dinosaurs will solve nothing.

That said, the idea of a "government structured chapter 11 bankruptcy" is one of the better solutions floating around.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 08:01:30 AM

Quote from: ezodisy on November 19, 2008, 01:02:54 PM
Massacre. Looks like the yanks will be driving their hummers to the mall for the time being.
(http://www.nationalgallery.org.uk/exhibitions/rubens/feature/img/feature5_4_lrg.jpg)

WTIC dipped into the $49's/bbl this morning on NYMEX! :o >:D It's currently languishing in the $50's.

Title: Re: Meltdown
Post by: ezodisy on November 20, 2008, 09:02:58 AM

Quote from: Dm on November 20, 2008, 07:48:20 AM
Governments will do everything possible to avoid making the same mistakes during Great Depression I. But if the core fundamentals are spiraling downward into a blackhole, then all of the government action the world can muster would not be able to prevent a second depression.

I mostly agree with you. After all there is probably more than one way to a depression (just avoiding some perceived mistakes of the '30s doesn't guarantee anything). I'm not entirely convinced it'll reach depression though. Manic-depression maybe, but out-and-out? We shall see. I'm a little more concerned about this talk of cutting to 0bps. That sounds like a bad idea to me, but I don't know much about it really.

Quote from: Dm on November 20, 2008, 07:40:22 AM
"the ruble may weaken 13 percent by the end of next year as the plunging price of oil and the erosion of Russia's current-account surplus compels the central bank to devalue the currency." (http://www.bloomberg.com/apps/news?%3Cbr%20/%3E%3Cbr%20/%3Epid=20601083&sid=a52GVR4ESUnQ&refer=currency)

It's rather funny to see this. 6 months ago I was reading about how the world and Europe in particular should fear Russian oil and gas dominance, hegemony even, and that in 5 years we're all going to get screwed (I presume in part by all the wealthy Russian girls coming over here). Now all I hear about Russia is D&G, their market hitting limit down every other day of the week, their currency being devalued, their reserves wasted, their "economy" collapsing. Flavour of the season is some sour stuff. When all this blows over we'll go back to hearing about our different sort of dark and dreary Russky run and reigned future. What I'm trying to say is that we'll have our share of D&G welll beyond the current crisis. It's the never-ending feast. It's also something that requires a villain of sorts--what the yankiedoodles call the "bad guy"--and also something of a victim mentality which definitely is not cool at all. D&G suddenly sounds passive-aggressive. Fuck. I'm going to have to reformulate this and put a more predatory spin on it.

Looks like some sort of automotive rescue plan is on the way.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 09:25:19 AM

Quote from: ezodisy on November 20, 2008, 02:04:48 AM
http://ftalphaville.ft.com/blog/2008/11/20/18476/itraxx-europe-at-all-time-high/

http://en.wikipedia.org/wiki/ITraxx

iTraxx Europe at all time high

The Markit iTraxx Europe index at 181.2bp - an all time high (earlier at 183bp).

(http://alphaville.ftdata.co.uk/lib/inc/getfile/3047.jpg)

Seems that credit markets are in worse turmoil now than in the pre-bailout G&D era.

Bloomberg -- Bond Risk Soars to Record as Markets Return to 'Crisis Mode' "Credit-default swaps on the Markit CDX North America Investment-Grade index jumped 23 basis points to an all-time high 270"

(http://www.bloomberg.com/apps/news?pid=20601087&sid=acHSg6Qd.Jig&refer=home)

QuoteInvestors face a "poisonous cocktail" of concerns over the collapse in value of mortgage-related assets in the U.S., Jeroen van den Broek, the Amsterdam-based head of credit strategy at ING Groep NV, wrote in a report today. Treasury Secretary Henry Paulson's decision to abandon plans to buy toxic mortgage assets has driven the price of the securities to record lows, triggering concern of more losses and writedowns at banks.

Credit-default swaps on New York-based Citigroup Inc. rose 40 basis points to 405, Phoenix prices show. Contracts on Goldman Sachs Group Inc increased 65 basis points to 400 and Morgan Stanley rose 60 to 515.

"Anything's possible in this market," said Mark Bayley, a director of credit at ABN Amro Holding NV in Sydney. "You're seeing sellers of risk and very few buyers. The sellers are becoming more stressed and willing to accept very wide spread levels for corporate bonds."

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 09:29:25 AM

Quote from: ezodisy on November 20, 2008, 09:02:58 AM
It's the never-ending feast.

Bloomberg -- U.S. Economy: Jobless Claims Approach Highest Level Since 1982 -- The number of Americans filing for unemployment benefits approached a 26-year high, and a gauge of the economy's future performance dropped, sending yields on benchmark Treasuries to record lows. Initial jobless claims climbed to a higher-than-forecast 542,000 in the week ended Nov. 15, the Labor Department said today in Washington. The Conference Board's index of leading economic indicators declined 0.8 percent, and a measure of manufacturing in the Philadelphia region fell to an 18-year low. The U.S. stock market's benchmark index headed for its biggest annual decline on record, and yields on two-, five- and 30-year Treasuries posted historic lows as confidence in the economic outlook evaporated. The turmoil may intensify pressure on the Federal Reserve and incoming President Barack Obama's administration to take fresh steps to shore up the economy.

``The economic contraction appears to be worsening,'' said Sal Guatieri, a senior economist at BMO Capital Markets in Toronto. ``The stock markets are plunging, people are retrenching and manufacturing activity is virtually falling off a cliff. The increase in layoffs can only worsen the economic downturn.''
(http://www.bloomberg.com/apps/news?pid=20601087&sid=anVS4Mooik1I&refer=home)

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 11:07:50 AM

Russia Today -- Apocalypse now: the end of Earth brought forward
(http://www.russiatoday.com/media/news/d/492435ac0bace.jpg)You may not need to write your last will and testament after all. Now a group of pessimistic scientists from the U.S., the UK and France say humanity has reached the point of no return and has little hope of continuing life on Earth.

(http://www.russiatoday.com/scitech/news/33500)

Quote
19 Nov 2008

A new study published by The Open Atmospheric Science Journal says the concentration of CO2 in the planet's atmosphere has reached the point at which irreversible changes to climate start. Even if the concentration of carbon dioxide is lowered from its current level in record time, the catastrophic effects will still occur. The scientists give us about 30 years till the end of the planet to which humans are adapted.

The scientists predict spread of deserts, bad crop harvests, stronger hurricanes, the eventual dying out of coral reefs and complete disappearance of mountain glaciers that are the source of drinking water for hundreds of millions of people.

The paper notes that a large part of all CO2 emissions stay in the atmosphere for a long time. About a quarter of carbon dioxide emissions remain airborne for several centuries. So simply cutting down on fossil fuel is not going to affect climate change in the long term. Saving the planet means that no carbon dioxide can be emitted to the atmosphere, in the sense that no coal or other fossil fuel can ever be used again. At the same time agricultural and forestry policy need a drastic change: rapid reforestation could absorb a significant part of the emissions already left in the air, but realistically – what are the chances humans will stop driving, flying, or heating their homes tomorrow?
(continued)

(http://www.russiatoday.com/media/file/b/4924359cef22b.jpg)

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 11:08:45 AM

Oil performance in the last 1 month

(http://www.moneyweek.com/financialchartimage.aspx?show_header=1&tiny_chart=1&chart_primary_ticker=BRENT&chart_time_period=1_month&co_dimension%5Ewidth=510&co_dimension%5Eheight=349&finance_chart=1&plot_colour=fffff2&chart_moving_average_1_type=&chart_moving_average_1_period=20&chart_moving_average_2_type=&chart_moving_average_2_period=&chart_moving_average_3_type=&chart_moving_average_3_period=)

Lowest UK Oil Price In Three Years -- London oil prices have slipped below $50 a barrel for the first time since May 2005. (http://news.sky.com/skynews/Home/Business/London-Oil-Price-Slips-Below-50-Dollars-To-Its-Lowest-Level-In-Three-And-A-Half-Years/Article/200811315156493?lpos=Business_First_Buisness_Article_Teaser_Region_1&lid=ARTICLE_15156493_London_Oil_Price_Slips_Below_50_Dollars_To_Its_Lowest_Level_In_Three_And_A_Half_Years_)

Gold

(http://www.moneyweek.com/financialchartimage.aspx?show_header=1&tiny_chart=1&chart_primary_ticker=GOLD&chart_time_period=1_month&co_dimension%5Ewidth=510&co_dimension%5Eheight=349&finance_chart=1&plot_colour=fffff2&chart_moving_average_1_type=&chart_moving_average_1_period=20&chart_moving_average_2_type=&chart_moving_average_2_period=&chart_moving_average_3_type=&chart_moving_average_3_period=)

Title: Re: Meltdown
Post by: ezodisy on November 20, 2008, 01:34:25 PM

hmm let's see what's down today

dow - 7552
s&p - 752
gbp/usd - 1.47
gbp/jpy - 138
eur/jpy - 117
US crude - 48.50

everything looks okay to me. Same games on the Nikkei tonight.

Title: Re: Meltdown
Post by: drogulus on November 20, 2008, 02:21:35 PM

Quote from: Dm on November 20, 2008, 07:57:30 AM

The main reason a bailout will fail is because the Big 3 are churning out products that no one wants to buy.

This isn't true. They sell many cars people want to buy, but they are forced to sell many more cars that people don't want to buy because of their huge cost overhang which they can't escape except by going out of business. If we allow the companies to shrink they will do very well serving a smaller share of the market. We have very good reasons for allowing this to happen given the current circumstances.

I take your remark as expressing disapproval of the decisions these companies have made to fight off mileage regulation rather than compete in the economy car sector. They believed that they couldn't have done that successfully from their current position and needed to become truck/SUV companies to be profitable, so they sought political help to exempt them from the car standards.

In order to become the kinds of companies you want them to be they have to contract and will need to be helped or they will be destroyed totally. It's no use moralizing about how they got to this point. When they are relieved of the burden of making far more cars than they can profitably make they will be successful.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 02:41:51 PM

Quote from: drogulus on November 20, 2008, 02:21:35 PM
This isn't true. They sell many cars people want to buy, but they are forced to sell many more cars that people don't want to buy because of their huge cost overhang which they can't escape except by going out of business. If we allow the companies to shrink they will do very well serving a smaller share of the market. We have very good reasons for allowing this to happen given the current circumstances.

I take your remark as expressing disapproval of the decisions these companies have made to fight off mileage regulation rather than compete in the economy car sector. They believed that they couldn't have done that successfully from their current position and needed to become truck/SUV companies to be profitable, so they sought political help to exempt them from the car standards.

In order to become the kinds of companies you want them to be they have to contract and will need to be helped or they will be destroyed totally. It's no use moralizing about how they got to this point. When they are relieved of the burden of making far more cars than they can profitably make they will be successful.

Most consumers who were burned by the high gas prices this summer will never again buy an SUV, or a pickup truck, or a Hummer, or any other boxy gashog. While it's true that the Big 3 do produce some efficient cars, a big chunk of their product line has bit the dust.

What is your opinion on their union / labor structure?

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 02:43:14 PM

Quote from: ezodisy on November 20, 2008, 01:34:25 PM
s&p - 752

S & P 500 Plunges to 11-Yr Low The Standard & Poor's 500 Index extended its 2008 tumble to 49 percent, poised for the worst annual decline in its 80-year history.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=a7NukDRsRkpE&refer=home)

QuoteThe S&P 500 extended its plunge from an October 2007 record to almost 52 percent in the worst bear market since the Great Depression. Concern the recession is worsening was spurred after jobless claims approached the highest level since 1982, the index of leading economic indicators fell for a third time in four months and the Federal Reserve said manufacturing in the Philadelphia area shrank at the fastest pace in 18 years.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 02:44:13 PM

Quote from: ezodisy on November 20, 2008, 01:34:25 PM
hmm let's see what's down today

dow - 7552

Dow 5-day summary

(http://ichart.finance.yahoo.com/w?s=%5EDJI)

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 02:47:25 PM

Quote from: Lilas Pastia on October 17, 2008, 08:27:48 AM
Consequently, the average equity on canadian houses is much higher than in places where these measures are ignored (70% vs 46% in USA). Loan delinquencies and bankrupties are lower, too, and flat (no increase as of Q3-2008). It also helps that savings levels are higher, possibly a reflection of current higher employement rates.

NYT's interactive map showing homeowners' percentage of negative equity on a state-by-state basis:

LINK: http://www.nytimes.com/interactive/2008/11/10/business/20081111_MORTGAGES.html

Florida, Nevada, Michigan, California, and Georgia are the worst.

Title: Re: Meltdown
Post by: BachQ on November 20, 2008, 02:52:15 PM

Karl Denninger notes that when a country is operating with deep deficits, bailouts and stimulus packages can backfire.

Yes We Will (Have A Depression) (http://market-ticker.denninger.net/archives/651-Yes-We-Will-Have-A-Depression.html)

Quote*** And now we have The Fed continuing the game but on a global grand scale, taking the excess leverage that everyone else had and consolidating it on its own balance sheet. Where we had a few investment banks running at 30:1 leverage, we now have our Fed running at fifty to one [50:1]! The Fed is running what amounts to a gigantic kiting scheme where it borrows $500 billion (the "supplemental Treasury program") from various foreign and domestic sources then loans that money out to the same domestic and foreign sources who settle those trades! * * *

Bailouts make matters worse:

QuotePaulson's TARP (in its various forms, including its original design) makes it worse; in addition to kiting funds back and forth the TARP makes possible the exchange of Treasuries (money good) for trash (MBS and other "assets" that are worth fractions of a dollar.) Bluntly, what Paulson is doing is taking your money and giving it to the banks at a discount (based on whatever they tender to him) who then loan it to you at interest.

Stimulus packages work only when there is a surplus:

QuoteThis mistake is the root of all of the so-called "liquidity facilities" proposed thus far, and it is precisely the same set of mistakes made during 1929-31 that led to what was destined to be an ordinary (if deep) recession turning into The Great Depression. Nor does it stop there. Obama declared that his first priority was a "second stimulus." The problem with such a "stimulus" is that it can't and won't work, and public support for same relies on the ignorance of the body politic. As I demonstrated the last time the first "stimulus" cost you more in the first year if you were a home buyer than you got in the check; that is, it had a negative real value to you, and worse, it continued to accrue that negative value through the next 30 years! This is what must happen because our government does not have a surplus from previous "good years" banked in the Treasury; if we had we could use it to cushion the blow. But since our government has never managed to accumulate such a surplus any such "stimulus" is in fact coming out of your pocket in the form of additional debt upon yourself in order to pay yourself. It is exactly identical to you having $20,000 worth of credit card debt, "rolling it over" into a new credit card and then charging up the now-cleared credit line. You have not improved your financial situation one iota but rather have made things much worse! ...

(http://img.timeinc.net//time/cartoons/20080926/cartoons_06.jpg)

The only solution is to expose and purge the toxic debt.

QuoteWe're headed for another Depression folks ... [We must] force the bad debt out into the open where it must be recognized and defaulted, no matter who it screws, then pick up the necessary pieces. This will result in a lot of bankruptcies but it will also realign debt payment capacity with debt outstanding, which is the critical element that must and will come back into balance. We can do this via the marketplace or we can continue to increase the imbalances and guarantee a far worse outcome; it is only through government endorsement of a refusal to recognize insolvency that recessions are turned into Depressions, and right now we're getting it in spades.

Some food for thought. :D

Title: Re: Meltdown
Post by: drogulus on November 20, 2008, 03:35:17 PM

Quote from: Dm on November 20, 2008, 02:41:51 PM
Most consumers who were burned by the high gas prices this summer will never again buy an SUV, or a pickup truck, or a Hummer, or any other boxy gashog. While it's true that the Big 3 do produce some efficient cars, a big chunk of their product line has bit the dust.

No, trucks and SUVs will get better. As the companies return to profitability they will be able to do more R&D and will use new technology to make the most efficient gas guzzlers in history! _:D And they will be big sellers, because we're Americans, dammit, not a bunch of old ladies! _{;D :P ;D}

Quote from: Dm on November 20, 2008, 02:41:51 PM

What is your opinion on their union / labor structure?

It was one of the greatest developments in history, and we became the first middle class country in the world after WWII to a large extent because we shared the wealth created by a unique set of conditions. It's been out of date now for decades.

Title: Re: Meltdown
Post by: ezodisy on November 20, 2008, 09:12:50 PM

ouch, well that didn't work. Rally today

Title: Re: Meltdown
Post by: Lethevich on November 20, 2008, 09:18:25 PM

Quote from: ezodisy on November 20, 2008, 09:02:58 AM
It's rather funny to see this. 6 months ago I was reading about how the world and Europe in particular should fear Russian oil and gas dominance

People in this thread were saying that...

Title: Re: Meltdown
Post by: ezodisy on November 20, 2008, 09:40:18 PM

Quote from: Lethe on November 20, 2008, 09:18:25 PM
People in this thread were saying that...

lol. Yeah, people who were copied-and-pasted in this thread :) The experts are never wrong

Title: Re: Meltdown
Post by: ezodisy on November 21, 2008, 02:26:28 AM

Quite a few commentators have been knocked off their chairs the past couple of days by the seeming ability of the S&P, DJIA, FTSE et al to just keep falling, dammit.

What's happening in the stock markets doesn't even come close to the chaos in credit though. US corporate bond markets are not just crashing, they're failing. (http://ftalphaville.ft.com/blog/2008/11/21/18551/the-steepening-curve-redux/)

Title: Re: Meltdown
Post by: BachQ on November 21, 2008, 07:22:45 AM

Peter Schiff (http://www.goldseek.com/2007/Peter%20Schiff.jpg)

http://www.youtube.com/v/Mlo8uvlwQeQ

"Our entire phoney economy is collapsing around us, there's nothing the gov't can do to stop it, they should get out of the way and let it happen."

"We're going to have to rebuild a viable economy ...it won't be easy, and a lot of companies are going to go bankrupt in the process"

"Once this [dollar] rally is exhausted, the dollar is going to collapse"

"Next year gold will hit $2,000/oz, and then go higher"

Title: Re: Meltdown
Post by: BachQ on November 21, 2008, 07:27:57 AM

Quote from: ezodisy on November 21, 2008, 02:26:28 AM
Quite a few commentators have been knocked off their chairs the past couple of days by the seeming ability of the S&P, DJIA, FTSE et al to just keep falling, dammit.

What's happening in the stock markets doesn't even come close to the chaos in credit though. US corporate bond markets are not just crashing, they're failing. (http://ftalphaville.ft.com/blog/2008/11/21/18551/the-steepening-curve-redux/)

"Just take a look at the two graphs below, from Bank of America's credit team. On the left, spreads in the secondary market. On the right, issuance. *** What the curves are showing then is that the rules about markets and risk are changing: we are moving towards a zero interest rate environment. The nature of credit is altering."

(http://alphaville.ftdata.co.uk/lib/inc/getfile/3093.jpg)

(http://ftalphaville.ft.com/blog/2008/11/21/18551/the-steepening-curve-redux/)

Title: Re: Meltdown
Post by: ezodisy on November 21, 2008, 11:01:28 AM

Quote from: Dm on November 20, 2008, 02:52:15 PM

(http://img.timeinc.net//time/cartoons/20080926/cartoons_06.jpg)

This has to be the best one yet.

Title: Re: Meltdown
Post by: ezodisy on November 21, 2008, 11:04:49 AM

Quote from: Dm on November 21, 2008, 07:22:45 AM
Peter Schiff (http://www.goldseek.com/2007/Peter%20Schiff.jpg)

http://www.youtube.com/v/Mlo8uvlwQeQ

"Our entire phoney economy is collapsing around us, there's nothing the gov't can do to stop it, they should get out of the way and let it happen."

"We're going to have to rebuild a viable economy ...it won't be easy, and a lot of companies are going to go bankrupt in the process"

"Once this [dollar] rally is exhausted, the dollar is going to collapse"

"Next year gold will hit $2,000/oz, and then go higher"

haha this guy is amazing. Dollar should be on the wane by Christmas. I heard one of George Soros's boys say that he'll have pulled out of the dollar by then and that is a good enough sign for me.

Title: Re: Meltdown
Post by: mn dave on November 21, 2008, 11:11:52 AM

I've lost half my 401k. Yippee!!!

Title: Re: Meltdown
Post by: BachQ on November 21, 2008, 12:29:56 PM

Quote from: drogulus on November 19, 2008, 01:00:47 PM

Concerning the possible bailout of the auto industry, it may not be a case of bailout or Chap. 11 (Chap. 7 is liquidation, which really would be a disaster). This TNR blog (http://blogs.tnr.com/tnr/blogs/the_plank/archive/2008/11/18/a-kindler-gentler-bankruptcy-for-gm.aspx) discusses the possibility of a restructuring with some assistance:

As a number of analysts have noted, the biggest reason a General Motors bankruptcy is so frightening is that it might not work out like the airline bankruptcies have. Remember, if General Motors were trying to reorganize itself under bankruptcy, it would have to come up with cash in order to buy parts. Thanks to the problems on Wall Street, that could be extremely difficult. That means GM could end up filing for bankruptcy under Chapter 7, rather than Chapter 11, and going through liquidation. The ripple effects could take down the rest of the auto industry or some significant portion of it. Unemployment would spike and the eocnomy would take yet another big hit.

But government could, in principle, provide funding as a precursor to Chapter 11 rather than an alternative to it. In effect, it would be stepping up to provide the kind of credit that would be available to General Motors (and the rest of the Big Three, if necessary) if Wall Street were not melting down. This would allow the company to take advantage of bankruptcy protection without complete liquidation.

I don't much like an auto industry bailout, mostly because I'm not sure we won't have to go back again if it doesn't work. However I recognize that the cost of not doing anything will be much higher than any bailout package contemplated now. Even Toyota is worried about this. The supply chain will not survive a Big 3 collapse, and the ripple effects will hit the other companies as well. This is a much worse outcome than anything a bailout might do.

In a related story in Bloomberg today: Nov. 21 (Bloomberg) -- President-Elect Barack Obama's transition team is exploring a swift, prepackaged bankruptcy for automakers as a possible solution to the industry's financial crisis, according to a person familiar with the matter. *** In a prepackaged bankruptcy, an automaker would go into court with financing in hand after reaching agreement with lenders, workers and suppliers on what each would give up and on the business plan to be followed. The process might take six to 12 months, compared with two to five years if the automakers followed an ordinary Chapter 11 proceeding and worked out agreements under a judge's supervision, Bane said. Automakers would have to depend on government financing to restructure in bankruptcy court and probably couldn't attract private loans until they were ready to emerge from the process, Bane said. (http://www.bloomberg.com/apps/news?pid=20601087&sid=adYuNmHciHJQ&refer=home)

Congress has given the Big 3 until early December to show how the bailout funds will be spent toward enhancing their viability. This may be their last clear shot to avoid Chapter 11.

Title: Re: Meltdown
Post by: BachQ on November 21, 2008, 12:31:39 PM

Ireland experiences its first fall in employment since 1991. (http://www.rte.ie/business/2008/1121/jobless.html) Meanwhile, California's unemployment rate rose dramatically in October to 8.2%, its highest level in 14 years, the state Employment Development Department reported today. LA TIMES
(http://www.latimes.com/news/local/la-fi-caljobs22-2008nov22,0,2153451.story)

Title: Re: Meltdown
Post by: BachQ on November 21, 2008, 12:32:46 PM

U.S. oil demand for the first 10 months of 2008 fell at rates not seen since the recessions of the early 1980s, the American Petroleum Institute said on Wednesday.

(http://alphaville.ftdata.co.uk/lib/inc/getfile/3069.gif) (http://www.cnbc.com/id/27803386)

Title: Re: Meltdown
Post by: BachQ on November 21, 2008, 12:33:52 PM

Quote from: ezodisy on November 21, 2008, 11:04:49 AM
I heard one of George Soros's boys say that he'll have pulled out of the dollar by then and that is a good enough sign for me.

Yeah, that's good enough for me, as well.

Title: Re: Meltdown
Post by: BachQ on November 21, 2008, 12:38:50 PM

Quote from: ezodisy on November 06, 2008, 11:45:50 PM
I think the guy (or guys) who suggests 0 is way off the mark. BOE has never gone below 2. It ain't gonna happen now.

US deflation fears: 0% rates prediction -- This Is Money.UK says: A senior Wall street economist predicts US interest rates will be 0% by early next year, raising the spectre of deflation that haunted the Japanese economy for a decade...

(http://www.thisismoney.co.uk/news/article.html?in_article_id=457849&in_page_id=2)

Title: Re: Meltdown
Post by: ezodisy on November 21, 2008, 01:14:53 PM

Quote from: Dm on November 21, 2008, 12:33:52 PM
Yeah, that's good enough for me, as well.

Mostly everything rallied at the end today, really crazy movements on strong volume too. Gold shot up to over $800. Gold E&P companies probably will be the hot sector of 2009.

One of the more popular theories is that we're set to head into a strong bear market rally which should lead us into early 2009, perhaps beyond into spring even. This is when it becomes interesting: following this rally a prediction of a third (C) wave down which will send the indices well below where they are now. This will be the "capitulation" which is talked about a lot right now. I would like to think that this won't happen, that with the market's foresight it'll bottom out soon and the lows will be in. But the story is pretty convincing and wave theory has a sound technical foundation -- there's really no reason to think that the lows have to be in all at once and that this can't turn into an extended crash in mid to late 2009. The 500pt rally today is guilty until proven innocent as prices remain beneath longer trend lines and moving averages, not to mention that the bullish engulfing candle on the Dow is not matched at all by one on the S&P. I think we'll see a Christmas and presidential rally, one that may extend beyond late Jan, who knows? But I tend to think that this third wave down will happen and that it'll be fierce. It may also be around the time of a shift into commodities (again), with funds going out of the dollar and back into oil, and probably into gold too. Mining companies have taken a beating and should turn then as well.

Quote from: Dm on November 21, 2008, 12:38:50 PM
US deflation fears: 0% rates prediction -- This Is Money.UK says: A senior Wall street economist predicts US interest rates will be 0% by early next year, raising the spectre of deflation that haunted the Japanese economy for a decade...
(http://www.thisismoney.co.uk/news/article.html?in_article_id=457849&in_page_id=2)

In the US yeah, I wouldn't be surprised. I hope it doesn't happen in the UK though.

Title: Re: Meltdown
Post by: drogulus on November 21, 2008, 04:24:53 PM

Quote from: ezodisy on November 21, 2008, 01:14:53 PM
I would like to think that this won't happen,

Hahahahahahahahahaha!! ;D ;D ;D ;D ;D ;D ;D ;D ;D ;D

No, this is just like a horror film where everyone scares themselves by imagining it will really happen, the Asteroid is coming and all us dinosaurs will buy the farm. _:D

Disaster could strike, and in the case of something like a Depression which happens once you have no form of statistical analysis that can tell you if/when it will happen again. There's a big difference between a very bad recession and a depression, and no way going in to tell the difference since all the signs point to both. That allows all the panickers to credibly freak out and the rest of us to enjoy the show and get nervous, which is what we're supposed to do, I guess. _:P

Title: Re: Meltdown
Post by: ezodisy on November 22, 2008, 01:01:27 AM

Quote from: drogulus on November 21, 2008, 04:24:53 PM
Hahahahahahahahahaha!! ;D ;D ;D ;D ;D ;D ;D ;D ;D ;D

No, this is just like a horror film where everyone scares themselves by imagining it will really happen, the Asteroid is coming and all us dinosaurs will buy the farm. _:D

Disaster could strike, and in the case of something like a Depression which happens once you have no form of statistical analysis that can tell you if/when it will happen again. There's a big difference between a very bad recession and a depression, and no way going in to tell the difference since all the signs point to both. That allows all the panickers to credibly freak out and the rest of us to enjoy the show and get nervous, which is what we're supposed to do, I guess. _:P

I don't really know what you're getting at there. If you're saying that it's scaremongering, I would point out that that couldn't be the case, as we are already deep in trouble and statistically unemployment and certain other figures will continue to get worse well into 2009. I'm pointing out only that there's no reason to think that a permanent bottom is in. It could be, but then people thought the same during the Great Depression too (other comparisons aside). When most of the economists are talking about things being (or getting) as bad as in the '70s, yet the indices only reach 2002 and mid-'90s levels, then you have to wonder whether the economists are wrong or whether the markets haven't yet priced it in. I think the latter.

Title: Re: Meltdown
Post by: drogulus on November 22, 2008, 07:59:11 AM

Quote from: ezodisy on November 22, 2008, 01:01:27 AM
I don't really know what you're getting at there. If you're saying that it's scaremongering, I would point out that that couldn't be the case, as we are already deep in trouble and statistically unemployment and certain other figures will continue to get worse well into 2009. I'm pointing out only that there's no reason to think that a permanent bottom is in. It could be, but then people thought the same during the Great Depression too (other comparisons aside). When most of the economists are talking about things being (or getting) as bad as in the '70s, yet the indices only reach 2002 and mid-'90s levels, then you have to wonder whether the economists are wrong or whether the markets haven't yet priced it in. I think the latter.

Of course it could be scaremongering because it is! It's still a horror movie even if a monster kills you when you leave the theater. Scarification is the permanent theme of this thread. We're supposed to take all these worrisome trends and project them in a straight line and imagine that inflation news is confirmed by deflation news.* We are headed towards 8% unemployment next year (currently 6.5%). Is every instance of 8% unemployment supposed to mean 25% is on the way, or just this one? _::)

I want someone to show me that this isn't just a bad recession, possibly the deepest one since the '30s. Any possibility of a real Depression will have to first show signs of the kind of recession we're having now. And in calculating the chances of going over the edge you have to consider that the governing practice of economics is totally Keynesian (look at how quickly the Bushies went crying to Momma Keynes when the shit really hit the fan!). We'll have to have a Depression in spite of government intervention. The last one happened when international trade was choked off and protectionism was sweeping the world, and the reigning theory was that when the economy contracted the government contracted, too. FDR promised to balance the budget! In the Big Government Era (~1940-present) there have been zero Depressions and zero 19th-century-style panics with mass pauperization. We've forgotten what economic cycles look like under laissez faire because even conservative governments don't practice it. For all the pissing and moaning, no welfare state has ever been abolished, just tinkered with.

The point is not that a Depression is impossible when governments use all the tools available, it's that it hasn't happened, so everything beyond deep recession of the type that has happened is uncharted territory. I'll make a prediction: The government will try anything in the next year or so to halt the downturn and like a blind pig will turn up something, if they haven't already. I'll go with the odds, and you can go with the nightmare scenario. _:D

Naturally I.........I.....could be wrong! _{:o :o :o :o}

_>:D

_{*What happens when both inflation and deflation are projected into the future forever? A black hole?}

Title: Re: Meltdown
Post by: BachQ on November 22, 2008, 11:29:53 AM

Quote from: Dave of Wherewar on November 21, 2008, 11:11:52 AM
I've lost half my 401k. Yippee!!!

Don't feel too bad, Dave, even the savviest of investors have been burned. For example, since July, uber-investor Warren Buffet (http://www.etfguide.com/research/96/8/Down-$16-Billion---Has-Warren-Buffett-Lost-His-Touch?/) has lost 35% of his fortune. But this 35% loss looks good in comparison to most, including the Dow and the S&P 500 (down 40%). The NYT noted today (Saturday):

(http://dealbook.blogs.nytimes.com/2008/11/21/looking-to-washington-again-so-far-in-vain/)

Quote***Even mighty Berkshire Hathaway, Warren E. Buffett's Triple-A rated company whose largest business is insurance, seems to arouse doubts. The cost of insuring against a Berkshire default leaped this month, as the stock fell to a five-year low. Since the Lehman weekend, Berkshire has lost 35 percent of its value, which means it has performed better than most. The S.& P.'s 500-stock index is down 40 percent, and the S.& P. financial index has lost more than half of its value, which was severely depressed before the fall. It is now at a 13-year low.

A plummeting 401(k) might be the least of your worries. (Drogulus, do not click on this link ... it's chock full of doomer porn ! ! !). >:D >:D (http://www.financialsense.com/fsu/editorials/dorn/2008/images/1121_clip_image001.gif)
(http://www.financialsense.com/fsu/editorials/dorn/2008/1121.html)

Title: Re: Meltdown
Post by: BachQ on November 22, 2008, 11:38:14 AM

Quote from: ezodisy on November 21, 2008, 01:14:53 PM
One of the more popular theories is that we're set to head into a strong bear market rally which should lead us into early 2009, perhaps beyond into spring even. This is when it becomes interesting: following this rally a prediction of a third (C) wave down which will send the indices well below where they are now. This will be the "capitulation" which is talked about a lot right now. I would like to think that this won't happen, that with the market's foresight it'll bottom out soon and the lows will be in. But the story is pretty convincing and wave theory has a sound technical foundation -- there's really no reason to think that the lows have to be in all at once and that this can't turn into an extended crash in mid to late 2009. The 500pt rally today is guilty until proven innocent as prices remain beneath longer trend lines and moving averages, not to mention that the bullish engulfing candle on the Dow is not matched at all by one on the S&P. I think we'll see a Christmas and presidential rally, one that may extend beyond late Jan, who knows? But I tend to think that this third wave down will happen and that it'll be fierce. It may also be around the time of a shift into commodities (again), with funds going out of the dollar and back into oil, and probably into gold too. Mining companies have taken a beating and should turn then as well.

Jeff De Graaf, the highest-rated technical analyst 4 years in a row according to Institutional Investor magazine's survey, believes that the S&P will fall far lower, based on his analysis of several criteria, including: declining stocks outnumbering rising ones; higher trading volume when the market is falling than when it's rising; and two- year Treasury note yields near record lows at 1.17 percent, an indication investors are seeking to avoid risk. ``The final low will be much lower than this,'' (http://www.bloomberg.com/apps/news?pid=email_en&refer=home&sid=afseqpJK0p2E) and may not occur before the fourth quarter of next year, de Graaf said.

Title: Re: Meltdown
Post by: BachQ on November 22, 2008, 11:40:06 AM

First the subprime meltdown; now the "Alt-A" meltdown; and soon to arrive at a theatre near you: the "prime" meltdown.

Alt-A Losses Outstripping Expectations, Moody's Says
By PAUL JACKSON
November 20, 2008

(http://www.housingwire.com/2008/11/20/alt-a-losses-outstripping-expectations-moodys-says/)

QuoteSevere delinquencies on recent-vintage Alt-A RMBS are quickly getting worse than expected, Moody's Investors Service said earlier this week; the rating agency said worsening trends in Alt-A have forced it to undertake a revision of lifetime loss projections for 2006 and 2007 vintages, as a result. Moody's last revised its loss expectations for the Alt-A sector six months ago. As of Oct. 2008, serious delinquencies for Alt-A pools — including option ARMs — averaged 20.3 percent of current balance for the 2006 vintage and 17.5 percent for the 2007 vintage, up from 16.9 and 12.2 percent six months ago. At the same time, prepayment rates on these pools are at historical lows and are currently averaging in the mid to high single digits, Moody's noted. Serious delinquencies refers to mortgages more than 60 days in arrears, in this case.

More insight from Der Spiegel: The Next Subprime Crisis Looms (http://www.spiegel.de/international/business/0,1518,591613,00.html)

Title: Re: Meltdown
Post by: drogulus on November 22, 2008, 12:05:44 PM

Quote from: Dm on November 22, 2008, 11:29:53 AM

A plummeting 401(k) might be the least of your worries. (Drogulus, do not click on this link ... it's chock full of doomer porn ! ! !). >:D >:D

(http://www.financialsense.com/fsu/editorials/dorn/2008/1121.html)

I like that! _;D

Title: Re: Meltdown
Post by: ezodisy on November 22, 2008, 12:27:09 PM

Quote from: drogulus on November 22, 2008, 07:59:11 AM
I'll make a prediction: The government will try anything in the next year or so to halt the downturn and like a blind pig will turn up something, if they haven't already. I'll go with the odds, and you can go with the nightmare scenario. _:D

Actually if you look at it differently you might see that the odds are in favour of the nightmare scenario.

I'll tell you what I expect -- this is assuming that 7500 is the low for now.

If you follow Dow Theory you'll know that we're in the midst of the major trend (yes I know this is rather obvious). What we're waiting for is the secondary, intermediate trend -- the retrace, or the bounce. I do not think that the one from 8000-9600 counts. In my opinion we will witness a huge bear market rally to the 61.8% Fibonacci level on the year-to-date chart, c.11,000. This coincides with the 50% level of the whole move. From that point--stern resistance--we will witness heavy selling--just as the media thinks it's party time--and then BAM(!), another 40 to 50% plunge to around the 6000 level. Although we remain beneath all significant trends and MAs I do not think we will go any lower for now -- it's important that 50% is not broken and this historical point will be seen as a positive to rally. I can't be anymore positive than this, not with the sheer financial crisis that funds, companies and governments around the world are experiencing -- not to mention people. Presuming we rally from here, we'll be on our way for 2 to 3 months, maybe longer, and then I think we'll reverse and continue with the main trend. Just as bull market runs can go for several years, there's no reason to think that a bear market collapse cannot, especially with the level of panic and disorder we're seeing everywhere, and with all these economists calling this the worst in 30 years, or even since the '30s. So that's my prediction -- significant retracement to a fib level and then continuation. I don't know about Elliott Wave Theory and the 5 waves so can't say anything about that.

Of course I may be well wrong and 8000-9600 may have been the secondary stage, but I don't think so. You can remind me of all this if we comfortably pass through 11,000.

Sorry I can't reply to your comments about Keynes -- don't know anything about it.

Quote from: Dm on November 22, 2008, 11:29:53 AM
it's chock full of doomer porn ! ! !).

Well that's certainly one way of putting it! lol!

Quote from: Dm on November 22, 2008, 11:38:14 AM
Jeff De Graaf, the highest-rated technical analyst 4 years in a row according to Institutional Investor magazine's survey, believes that the S&P will fall far lower, based on his analysis of several criteria, including: declining stocks outnumbering rising ones; higher trading volume when the market is falling than when it's rising; and two- year Treasury note yields near record lows at 1.17 percent, an indication investors are seeking to avoid risk. ``The final low will be much lower than this,'' (http://www.bloomberg.com/apps/news?pid=email_en&refer=home&sid=afseqpJK0p2E) and may not occur before the fourth quarter of next year, de Graaf said.

Nice one. I read about this a few days back and I think he's going to be proven right yet again with his multi-year bear market prediction (I agree, though I think we'll see it before 4th quarter). As it is I think you and I will be in the business of G&D for a long time to come -- and I will drink to that.

Title: Re: Meltdown
Post by: Lilas Pastia on November 22, 2008, 08:42:41 PM

Tony, why do you place so much importance in the Fibonacci levels? They're reputedly elusive and unreliable as tools for predicting markets. Just curious.

Title: Re: Meltdown
Post by: Mozart on November 22, 2008, 11:12:03 PM

Quote from: Dm on November 21, 2008, 07:22:45 AM
Peter Schiff (http://www.goldseek.com/2007/Peter%20Schiff.jpg)

http://www.youtube.com/v/Mlo8uvlwQeQ

"Our entire phoney economy is collapsing around us, there's nothing the gov't can do to stop it, they should get out of the way and let it happen."

"We're going to have to rebuild a viable economy ...it won't be easy, and a lot of companies are going to go bankrupt in the process"

"Once this [dollar] rally is exhausted, the dollar is going to collapse"

"Next year gold will hit $2,000/oz, and then go higher"

Love this guy, along with Marc Faber the best economists on tv shows. And people always disagree with him...

Prediction for the auto companies, the US is going to buy them and turn more and more socialist.

Title: Re: Meltdown
Post by: ezodisy on November 23, 2008, 01:29:42 AM

Quote from: Lilas Pastia on November 22, 2008, 08:42:41 PM
Tony, why do you place so much importance in the Fibonacci levels? They're reputedly elusive and unreliable as tools for predicting markets. Just curious.

I wouldn't say so much importance, but I do plot them and I've found that they have been quite reliable as resistance points on this down move. Sometimes I find that if daily fibs are violated, the weekly ones will still hold (or the monthly on longer moves). In the past 3 weeks, the Dow has mostly respected different levels, 61.8 and last week 38.2 of the prior week and has then fallen off. Friday's surge of 500pts was stopped dead in its tracks at 61.8 for the week and at the 100 day simple moving average. They're just a guide but I think a useful one, especially when the levels coincide with other points like moving averages and trend lines, then resistance can be quite severe. Certainly if enough people believe in them they will work :) I used them in the last post to pinpoint an area that looks like it'll have a lot of resistance, though of course there are quite a few other resistance levels to get through before that happens, if this move even holds (right now it's just near the top of a descending channel so there's no breakout yet). I suppose a 3000pt move to 11,000 (or 2000 to 10,000) would make things appear like the worst is behind us. I don't think so. Plus I don't want to see further unemployment if Dm loses his G&D job :)

Title: Re: Meltdown
Post by: ezodisy on November 23, 2008, 01:53:33 AM

by the way, last night I dreamt that oil shot up to $75 within a few hours :o Long & strong!

Title: Re: Meltdown
Post by: springrite on November 23, 2008, 02:06:38 AM

Quote from: ezodisy on November 23, 2008, 01:53:33 AM
by the way, last night I dreamt that oil shot up to $75 within a few hours :o Long & strong!

You should sleep more.

Maybe we all should.

Title: Re: Meltdown
Post by: ezodisy on November 23, 2008, 03:39:46 AM

Quote from: springrite on November 23, 2008, 02:06:38 AM
You should sleep more.

once-in-a-lifetime opportunity to buy property in London for a 30% (agency) to 60% (repossession) discount and you're suggesting I go to sleep? :o I will sleep once I'm in 8)

Title: Re: Meltdown
Post by: BachQ on November 23, 2008, 10:13:29 AM

Yahoo Finance -- Mexico's 2008 Oil Production Down a Whopping 10% from 2007 "Pemex says production has dropped by a third this year at Mexico's main Cantarell oil field."
(http://biz.yahoo.com/ap/081121/lt_mexico_oil.html?.v=1)

Title: Re: Meltdown
Post by: BachQ on November 23, 2008, 10:15:00 AM

UK Guardian: Obama faces worst economic mess since FDR.

(http://www.guardian.co.uk/business/2008/nov/22/us-economy-barack-obama)

QuoteThree big structural changes help explain the mess the US now finds itself in. The first is that a profound shift in the balance of power between labour and capital over the past three decades has resulted in nugatory increases in real earnings for most but massive rewards for those at the top. The second is that the US is living beyond its means at every level. In recent years, it has spent $106 for every $100 it has earned. The third is that Wall Street has grown in size and importance as more of America's manufacturing capacity has been exported overseas.

Title: Re: Meltdown
Post by: BachQ on November 23, 2008, 10:16:06 AM

Quote from: ezodisy on November 23, 2008, 01:53:33 AM
by the way, last night I dreamt that oil shot up to $75 within a few hours :o Long & strong!

When the dollar plunges in 2009, oil will shoot up past $75 in a heartbeat.

Title: Re: Meltdown
Post by: BachQ on November 23, 2008, 10:18:21 AM

Quote from: drogulus on November 22, 2008, 12:05:44 PM
I like that! _;D

Drogulus, we're relieved that you did not click on that link. (http://www.financialsense.com/fsu/editorials/dorn/2008/1121.html) A lesser man would have fallen victim to temptation and clicked on the link (http://www.financialsense.com/fsu/editorials/dorn/2008/1121.html) ...

Title: Re: Meltdown
Post by: drogulus on November 23, 2008, 10:29:15 AM

Uh, I did click on it. _:-[

Why does so much of the doom-ology sound like National Treasure III: All Conspiracies Are True ???

Title: Re: Meltdown
Post by: ezodisy on November 23, 2008, 01:17:02 PM

Venezuela Calls for Million-Barrel OPEC Cut This Year (http://www.bloomberg.com/apps/news?pid=20601087&sid=aq7kSE8WdWao&refer=home)

Gazprom May Double Gas Price for Ukraine in January (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=auvtytVFz3PI)

Kalashnikov! Kalashnikov!!!!

boom boom boom boom boom

Title: Re: Meltdown
Post by: ezodisy on November 23, 2008, 01:22:33 PM

Citigroup Failure Imminent (http://www.moneyandmarkets.com/citigroup-failure-imminent-6-28244)

Title: Re: Meltdown
Post by: BachQ on November 23, 2008, 03:02:06 PM

Quote from: ezodisy on November 23, 2008, 01:29:42 AM
I wouldn't say so much importance, but I do plot them and I've found that they have been quite reliable as resistance points on this down move.

... FWIW, here's a decent video describing Fibonacci Forex trading (5 min).

http://www.youtube.com/watch?v=R6ft90FLI-I

Title: Re: Meltdown
Post by: BachQ on November 23, 2008, 03:07:28 PM

Washington Post -- Crisis Hits Values of Commercial Mortgages

By Heather Landy and Dana Hedgpeth
Washington Post Staff Writers
Friday, November 21, 2008; Page D01

(http://www.washingtonpost.com/wp-dyn/content/article/2008/11/20/AR2008112003732.html)

Quote NEW YORK, Nov. 20 -- Another levee in the financial markets is crumbling. Fears about rising default rates and declining property values, which engulfed the home mortgage market at the start of the credit crisis, are spreading to the commercial real estate market, hammering the value of bonds backed by loans made to office buildings, shopping centers and apartment complexes.

With the slowing economy threatening the health of commercial borrowers, investors are wary of scooping up the bonds, even though some cash-strapped banks, hedge funds and money managers are willing to part with them at steep discounts. As a result, the market for commercial-mortgage-backed securities has been sent into a tailspin by the now-familiar combination of forced selling and bleak economic forecasts. *** Skittish investors are demanding higher premiums to hold commercial-mortgage bonds. Yields on the safest-rated category of commercial-mortgage-backed debt are now 15 percent above benchmark interest rates, traders said. At the start of the week, that spread was just 8.5 percent.

(continued)

Title: Re: Meltdown
Post by: BachQ on November 23, 2008, 03:10:26 PM

BusinessWeek -- Segway inventor touts island as an energy model
By JOHN CHRISTOFFERSEN (http://www.businessweek.com/ap/financialnews/D94K5NB00.htm)
Mystic Conn.

Quote Energy independence is still only a hypothetical goal for the U.S., but the owner of a tiny island off the coast of Connecticut says he has already achieved that feat and is offering his work as a model. Dean Kamen, inventor of the Segway and numerous medical devices, jokingly refers to his North Dumpling Island as an independent nation and himself as Lord Dumpling. Kamen claims to have his own currency and offers visas to visitors to the tiny island a few miles from Mystic, where he is the only resident. But Kamen, who bought the three-acre island in the 1980s as a retreat, is serious about energy independence and the lessons it offers at a time of volatile gas prices and fears about global warming. "The rest of the world will eventually catch up if the Dumplonians can get their message out," Kamen said. Kamen's energy plan began when the Coast Guard recently notified him that it was cutting off electrical service to the rocky island, part of New York state, because it was switching to solar energy to power a lighthouse.

"That can typically ruin your day," said Kamen. Then he had an epiphany: Why not make the island energy self-sufficient and a showcase to the world. Kamen, a prolific inventor who has hundreds of patents, already had been working on energy conservation projects that he has introduced in poor countries.

(continued)

Title: Re: Meltdown
Post by: BachQ on November 23, 2008, 04:20:58 PM

Quote from: ezodisy on November 23, 2008, 01:53:33 AM
by the way, last night I dreamt that oil shot up to $75 within a few hours :o Long & strong!

Five-year U.S. crude oil futures at record $30 premium
(http://www.reuters.com/article/GCA-Oil/idUSTRE4AK3SM20081121)

QuoteU.S. crude oil futures for delivery in January 2014 are trading at a record $30 premium to current contracts, as investors bet that the long-term trend toward higher prices will remain intact despite oil's slump to $50 a barrel.

Title: Re: Meltdown
Post by: ezodisy on November 24, 2008, 07:31:17 AM

bank holiday rally!!!!!!!!!!!!!!!!!!!! easiest money you'll ever make

Up Vol* 2,517 (92%) 679 (92%)
Down Vol* 218 (8%) 52 (7%)
*in millions

Title: Re: Meltdown
Post by: BachQ on November 24, 2008, 10:38:08 AM

Quote from: ezodisy on November 23, 2008, 01:22:33 PM
Citigroup Failure Imminent (http://www.moneyandmarkets.com/citigroup-failure-imminent-6-28244)

CNBC: All US Financials Will be Nationalized in a Year (http://www.cnbc.com/id/27835645)

Title: Re: Meltdown
Post by: BachQ on November 24, 2008, 10:39:29 AM

Quote from: ezodisy on November 24, 2008, 07:31:17 AM
bank holiday rally!!!!!!!!!!!!!!!!!!!! easiest money you'll ever make

Up Vol* 2,517 (92%) 679 (92%)
Down Vol* 218 (8%) 52 (7%)
*in millions

Oil is up too. WTIC @ $55.

Title: Re: Meltdown
Post by: BachQ on November 24, 2008, 10:40:05 AM

LA TIMES -- Foreclosures, delinquencies skyrocketing among "prime" borrowers -- Nationwide, 3.07% of prime mortgages were in foreclosure or at least 60 days late in the second quarter of this year, easily topping the previous record of 1.97% set in 1985. (http://www.latimes.com/business/la-fi-prime24-2008nov24,0,6174050.story)

Title: Re: Meltdown
Post by: BachQ on November 24, 2008, 10:41:18 AM

LA TIMES -- Shopping malls are running on empty -- Shopping center owners are struggling to fill an increasing number of vacancies. (http://www.latimes.com/business/la-fi-malls24-2008nov24,0,6965079.story)

Title: Re: Meltdown
Post by: BachQ on November 24, 2008, 10:42:11 AM

(http://blog.cleveland.com/nationworld_impact/2008/07/medium_BUDGET%20DEFICIT%20072808.jpg)

Title: Re: Meltdown
Post by: ezodisy on November 24, 2008, 11:01:11 AM

Quote from: Dm on November 24, 2008, 10:39:29 AM
Oil is up too. WTIC @ $55.

it broke through a descending trendline going back to 4 Nov, $70. If the markets continue to rally it'll probably go to $60 this week.

Title: Re: Meltdown
Post by: Mozart on November 24, 2008, 11:53:36 AM

C - Citigroup Inc. (NYSE)
6.09 +2.32 (61.54%)

**** I knew this would be a brilliant buy at when it was under 4$, why am I still so poor? I would have bought silver a few weeks ago @ $ 9.38 and now its @ $10.50 is that 11%? Citigroup was a gimme.

Title: Re: Meltdown
Post by: Mozart on November 24, 2008, 02:10:59 PM

Marc Faber

http://www.youtube.com/watch/v/UDsaUD5KPdE

http://www.youtube.com/watch/v/QLeHPOVJsxc

Title: Re: Meltdown
Post by: ezodisy on November 24, 2008, 03:13:03 PM

Quote from: Mozart on November 24, 2008, 11:53:36 AM
C - Citigroup Inc. (NYSE)
6.09 +2.32 (61.54%)

**** I knew this would be a brilliant buy at when it was under 4$, why am I still so poor? I would have bought silver a few weeks ago @ $ 9.38 and now its @ $10.50 is that 11%? Citigroup was a gimme.

That's a rather gutsy buy. The only way I would approach that would be with the expectation of a dead cat bounce ::) Good luck if you decide to hold for longer.

If you're interested in metals you might want to glance at platinum too. It has been sold down ridiculously.

Of course it could fall further though. If you want a view on some metals and on gold in particular there are a few good broadcasts here.

http://commoditywatch.podbean.com/

Some experts--including Mr. boom boom boom gloom boom & doom above--think that gold will fall rather than rally, though strangely enough gold producers should still do (very) well.

Title: Re: Meltdown
Post by: Mozart on November 24, 2008, 03:40:39 PM

Quote from: ezodisy on November 24, 2008, 03:13:03 PM
That's a rather gutsy buy. The only way I would approach that would be with the expectation of a dead cat bounce ::) Good luck if you decide to hold for longer.

If you're interested in metals you might want to glance at platinum too. It has been sold down ridiculously.

Of course it could fall further though. If you want a view on some metals and on gold in particular there are a few good broadcasts here.

http://commoditywatch.podbean.com/

Some experts--including Mr. boom boom boom gloom boom & doom above--think that gold will fall rather than rally, though strangely enough gold producers should still do (very) well.

Well I have 7 pesos to my name, not even enough for a back of chickpeas so maybe I don't know enough, but I think citigroup is going on a bounceback rally. By the end of the week it will have crossed 10-15$, whether it stays there or not, I wouldn't care. Triple your investnment in a week, I think I could live with it. Let's see how it does tomorrow.

HOLY PONIES!

I can't believe titanium is almost on par with gold. I didn't follow it at all.

Title: Re: Meltdown
Post by: Mozart on November 24, 2008, 08:57:48 PM

Wait so aside from giving Citi 20 or whatever billion, the US bought 27 billion in stock?

Title: Re: Meltdown
Post by: ezodisy on November 25, 2008, 12:11:54 AM

There's an old rule which is particularly useful with risky stocks (and in risky times): when it doubles, sell half. Doubles again, sell half again. If you have a long(er)-term view and don't feel the need to lock in immediate profit, then I suppose it might be something that in 5 years will give you a great return. Yesterday the NY financials sector might have had its biggest ever single-day rise (or very close to it), but financials remain the poisoned chalice of stocks, and I think anyone lucky enough to get a 1-300% quick return on a bounce would do better to take their money and invest in something that does not have its back against the wall with more disclosures still to come.

That being said, I give you my view only in passing. You should always make your own decisions with these things, otherwise you won't learn fuck all about market psychology.

Title: Re: Meltdown
Post by: ezodisy on November 25, 2008, 12:16:18 AM

The bastardisation of the Tarp continues.

Fresh from bailing-out Citi, reports have it that Paulson will today announce the Tarp's use for a bailout of Mainstreet proper (someone has to assure all those GM, Chrysler and Ford cars get bought after all). (http://ftalphaville.ft.com/blog/2008/11/25/18661/mainstreet-tarp/)

Quote"But if you thought those figures were big, Bloomberg continues its campaign to reveal the real cost of government intervention in the market. The news agency tabulates Washington has now engaged in providing as much as $7.76 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year."

Title: Re: Meltdown
Post by: Mozart on November 25, 2008, 12:35:46 AM

Quote from: ezodisy on November 25, 2008, 12:11:54 AM
There's an old rule which is particularly useful with risky stocks (and in risky times): when it doubles, sell half. Doubles again, sell half again. If you have a long(er)-term view and don't feel the need to lock in immediate profit, then I suppose it might be something that in 5 years will give you a great return. Yesterday the NY financials sector might have had its biggest ever single-day rise (or very close to it), but financials remain the poisoned chalice of stocks, and I think anyone lucky enough to get a 1-300% quick return on a bounce would do better to take their money and invest in something that does not have its back against the wall with more disclosures still to come.

That being said, I give you my view only in passing. You should always make your own decisions with these things, otherwise you won't learn fuck all about market psychology.

Yes your view is smart and safe, I really would sell citibank fast after I made a good profit. If I wanted longer term investments, I would listen to Peter Schiff and look for good companies abroad that are inexpensive. But I am poor as dirt hehe and in volatile markets like we have now, I see a trend and tell me if it is wrong. The market plunges for awhile and then rallies big for a few days, and plunges lower, and rallies again. If I had even 10,000$ I would not risk in such crazy markets. But then again with some good timing in these crazy markets, a small fortune can be made. If the dow should plummet again, look for the rally.

Financial security goes against every concept I've been raised with, so should I ever get some savings, I would probably guard them like a mama bear protecting her cubs.

Title: Re: Meltdown
Post by: ezodisy on November 25, 2008, 02:38:15 AM

Mozart, in addition to Marc Faber and Peter Schiff, you should have a read of Jim Rogers. He is another outspoken and smart analyst of trends and valuations. He often speaks on Bloomberg, stirring up the news anchors.

Rogers Says Dollar to Be `Devalued' - Buys Commodities (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aP5uFzsclsDQ)

Title: Re: Meltdown
Post by: ezodisy on November 25, 2008, 03:20:26 AM

OECD November Economic Outlook: Sees protracted recession in many member economies, OECD members contracting on avg by 0.4% in 2009, urges Fed and ECB to cut rates

- UK GDP to fall by -1.1% in 2009 (biggest contraction since 1991) giving scope for BoE rate cuts
- Lowers China's 2009 GDP forecast to 8.0% from 9.5% prior, sees domestic demand slowing
- Lowers Russia's 2009 GDP forecast to +2.3% from +6.5% prior, sees 2008 inflation at 13.6%, falling to 7.5% in 2009
- Sees Eurozone 2009 GDP forecast at -0.6%
- Sees Japan' 2009 GDP forecast at -0.1%, warns of deflation risks, notes BoJ has no room for further rate cuts
- Sees USA's 2009 GDP forecast at -0.9%
- Sees Canada's 2009 GDP forecast at 2.1%
- Sees Australia's 2009 GDP forecast at 1.7%
- Sees Switzerland's 2009 GDP forecast at 1.2%
- Says recession is worst since 1982

Title: Re: Meltdown
Post by: ezodisy on November 25, 2008, 06:56:08 AM

FDIC: Troubled bank list grew to 171 in Q3, v 117 in Q2

- today's figure shows a 46% increase in problem banks since Q2, reaching its highest total since 1995.

- note: historically, about 13% of 'troubled' banks will eventually fail. The FDIC insures a total of about 8,500 banks.

'Problem' Banks Rose 46 Percent in Third Quarter, FDIC Says (http://www.bloomberg.com/apps/news?pid=20601087&sid=aj36OGUPu2T8&refer=home)

Title: Re: Meltdown
Post by: BachQ on November 25, 2008, 07:35:10 AM

Quote from: ezodisy on November 25, 2008, 03:20:26 AM

- Sees USA's 2009 GDP forecast at -0.9%

- Says recession is worst since 1982

(http://img.timeinc.net//time/cartoons/20081121/cartoons_06.jpg)

Title: Re: Meltdown
Post by: ezodisy on November 25, 2008, 08:26:10 AM

video: Jim Rogers last week about the dollar

http://www.ft.com/cms/893ac9c8-757e-11dc-b7cb-0000779fd2ac.html?_i_referralObject=929363526&_i_referrer=rss

Title: Re: Meltdown
Post by: ezodisy on November 25, 2008, 08:46:20 AM

part 4 of that video about the incompetents competing against the competents is outrageously funny (and accurate I think).

Title: Re: Meltdown
Post by: BachQ on November 25, 2008, 08:50:59 AM

Quote from: ezodisy on November 25, 2008, 12:16:18 AM
The bastardisation of the Tarp continues.

Fresh from bailing-out Citi, reports have it that Paulson will today announce the Tarp's use for a bailout of Mainstreet proper (someone has to assure all those GM, Chrysler and Ford cars get bought after all). (http://ftalphaville.ft.com/blog/2008/11/25/18661/mainstreet-tarp/)

Paulson is f#cking outta control. We're past the twilightzone, past la-la-land, past Alice in Wonderland ...... and we're now deep inside a blackhole where space and time are warped beyond recognition. Unf#ckingbelievable.

Fed bets $800 billion on consumers
Central bank and Treasury announce a massive plan to jumpstart lending.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: November 25, 2008: 12:23 PM ET

(http://money.cnn.com/2008/11/25/news/economy/paulson_consumer/index.htm?postversion=2008112510)

QuoteNEW YORK (CNNMoney.com) -- The Federal Reserve and Treasury Department on Tuesday unveiled hundreds of billions more in money they are pumping into the struggling U.S. economy, trying to jumpstart lending by the nation's banks for mortgages and consumer debt.

Together, the programs from the Federal Reserve and the New York Fed aim to dump $800 billion in additional funds into the struggling U.S. economy, more than Congress approved in October for a bailout of the nation's banks and Wall Street firms.

By putting that money in the hands of holders of securities backed by consumer and mortgage loans, the government hopes more money will flow to consumers than has occured so far in previous bailout plans.

But the program to make $200 billion available for a range of consumer loans - including credit cards and car loans - likely won't be up and running until February. Government officials briefing reporters couldn't say how much additional credit the program might make available to consumers in time to feed purchases for the holiday shopping season.

That $200 billion aimed at spurring consumer borrowing will come from the Federal Reserve Bank of New York, which will lend that money to holders of securities backed by consumer debt, such as credit card debt.

The statement from Treasury said that while roughly $240 billion of those kinds of securities were issued by the nation's financial institutions in 2007, the issuance of those securities essentially came to a halt in October.

"This lack of affordable consumer credit undermines consumer spending and, as a result, weakens our economy," said Treasury Secretary Henry Paulson at a press conference.

Paulson described the $200 billion program as a first step, one that could be expanded later to include different kinds of debt, including assets backed by commercial real estate mortgages and business debt.

He said the fact that the Fed and Treasury had to work together to get an additional $800 billion into the system is not a sign that the $700 billion bailout of banks and Wall Street firms passed by Congress last month has been a failure. He said that, without that program, it is likely that the financial markets would be in even worse shape than they are today.

Title: Re: Meltdown
Post by: ezodisy on November 25, 2008, 09:22:26 AM

Quote from: Dm on November 25, 2008, 08:50:59 AM
Paulson is f#cking outta control. We're past the twilightzone, past la-la-land, past Alice in Wonderland ...... and we're now deep inside a blackhole where space and time are warped beyond recognition. Unf#ckingbelievable.

lol!

Quote
He said the fact that the Fed and Treasury had to work together to get an additional $800 billion into the system is not a sign that the $700 billion bailout of banks and Wall Street firms passed by Congress last month has been a failure. He said that, without that program, it is likely that the financial markets would be in even worse shape than they are today.

Yeah, uh huh ::) Well he's going to pat himself on the back if the retest of the broken trendline holds today and we rally. Then we'll get days and weeks and maybe months of "the bailouts are working". Right. What's he going to say when it all unravels early next year and new lows get hit?

http://ftalphaville.ft.com/blog/2008/11/25/18702/bailout-maths/

Bloomberg has rejigged its estimated total of potential US support to the markets to around $8,500bn from $7,700bn, reflecting the most recent Fed proposals to save the world.

A ginormous sum, by any measure, and one which Barry Ritholtz has helpfully put into perspective.

By Ritholtz's estimate, the total actual cost of the various bailout programs (including Citi, but not including today's announcements) exceeds $4,600bn dollars, making it the "largest outlay in American history."

So large, that according to inflation adjusted numbers provided by Jim Bianco of Bianco Research, "the bailout has cost more than all of these big budget government expenditures – combined":

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion ($3,920bn)

Further, he notes:

The only single American event in history that even comes close to matching the cost of the credit crisis is World War II: Original Cost: $288 billion, Inflation Adjusted Cost: $3.6 trillion

Ritholtz estimates that by the end of 2010, the final bill may scale up to as much as $10,000bn.

Title: Re: Meltdown
Post by: Mozart on November 25, 2008, 09:25:51 AM

Quote from: ezodisy on November 25, 2008, 08:26:10 AM
video: Jim Rogers last week about the dollar

http://www.ft.com/cms/893ac9c8-757e-11dc-b7cb-0000779fd2ac.html?_i_referralObject=929363526&_i_referrer=rss

Haha I call this guy bowtie guy, but I didn't know his name. Thanks!

Title: Re: Meltdown
Post by: Mozart on November 25, 2008, 09:40:27 AM

Where could I find info about foreign stocks? This guy Rogers says invest in China, which makes sense, but how would I even begin learning about China and the companies there?

Title: Re: Meltdown
Post by: Mozart on November 25, 2008, 09:44:17 AM

Quote"But if you thought those figures were big, Bloomberg continues its campaign to reveal the real cost of government intervention in the market. The news agency tabulates Washington has now engaged in providing as much as $7.76 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year."

If there are 300 million Americans, that means that every person is paying like 25,000$ for this bailout so far. Where is this money coming from exactly?

Title: Re: Meltdown
Post by: ezodisy on November 25, 2008, 10:09:52 AM

Quote from: Mozart on November 25, 2008, 09:40:27 AM
Where could I find info about foreign stocks? This guy Rogers says invest in China, which makes sense, but how would I even begin learning about China and the companies there?

Search for Chinese companies listed in the states. I was talking to a mate in Geneva about this a few days ago, he gave me a few UK suggestions of Chinese companies he's buying into as well. Another recommendation would be to look at agriculture as a potential investment. We were looking at an Ukrainian producer of oilseed rape and wheat, this has good potential too.

Title: Re: Meltdown
Post by: BachQ on November 25, 2008, 01:07:00 PM

Quote from: Mozart on November 25, 2008, 09:44:17 AM
If there are 300 million Americans, that means that every person is paying like 25,000$ for this bailout so far. Where is this money coming from exactly?

Or how about bailout spending per taxpayer?

1. Assume that 55% of US citizens are taxpayers.
2. Assume a total population of 300,000,000 people
3. 55% of 300,000,000 = 165,000,000 taxpayers
4. Assume conservatively that the total cumulative bailout = $7 trillion.
5. $7,000,000,000,000 / 165,000,000 = $42,424.24 per taxpayer

I don't see a problem. How could there possibly be a problem?

Paulson for President!

Title: Re: Meltdown
Post by: BachQ on November 25, 2008, 01:08:07 PM

Downward spiral of GDP and home prices has accelerated (http://www.bloomberg.com/apps/news?pid=20601087&sid=agE8Sg.gs3l8&refer=home=)

Title: Re: Meltdown
Post by: BachQ on November 25, 2008, 01:09:20 PM

WSJ: The Fed Is Out of Ammunition
A discredited dollar is a likely outcome of the current crisis.
By CHRISTOPHER WOOD
(http://online.wsj.com/article/SB122748912533552007.html?mod=rss_opinion_main)

QuoteWith an estimated $4 trillion in housing wealth and $9 trillion in stock-market wealth destroyed so far in the United States, there is little doubt that we are witnessing a classic debt-deflation bust at work, characterized by falling prices, frozen credit markets and plummeting asset values. Those who want to understand the mechanism might ponder Irving Fisher's comment in 1933: When it comes to booms gone bust, "over-investment and over-speculation are often important; but they would have far less serious results were they not conducted with borrowed money."

(http://s.wsj.net/public/resources/images/OB-CS323_oj_woo_E_20081123193431.jpg)

Title: Re: Meltdown
Post by: BachQ on November 25, 2008, 01:10:28 PM

A glimpse at things to come: Solar Panel Theft on the Rise (http://www.nytimes.com/2008/09/24/technology/24solar.html?_r=1&partner=rssuserland&emc=rss&pagewanted=all)

Title: Re: Meltdown
Post by: ezodisy on November 26, 2008, 01:45:31 AM

lol! quality: http://uk.youtube.com/watch?v=TpR7bsMnOkw

Title: Re: Meltdown
Post by: ezodisy on November 26, 2008, 02:35:59 AM

http://www.ft.com/cms/s/0/61bbc964-bb5b-11dd-bc6c-0000779fd18c.html

Media in dock

By James Mackintosh

Published: November 26 2008 02:00 | Last updated: November 26 2008 02:00

The parliamentary probe into the banking crisis will consider whether journalists should be gagged during an emergency to preserve financial stability, writes James Mackintosh .

The inquiry by the Treasury select committee will consider "the role of the media in financial stability and whether financial journalists should operate under any form of reporting restrictions during banking crises".

The inclusion of the media comes after calls by Michael Howard, former Tory leader, for the Financial Services Authority to investigate the source of BBC reporter Robert Peston's story that banks had asked for government cash.

John McFall, Labour chairman of the committee, said the media were just one part of the debate.

Title: Re: Meltdown
Post by: ezodisy on November 26, 2008, 03:14:36 AM

Arthur Laffer, one of Reagan's economic policy advisors, totally embarrassed by Peter Schiff in 2006 (http://uk.youtube.com/watch?v=LfascZSTU4o)

Title: Re: Meltdown
Post by: ezodisy on November 26, 2008, 04:03:01 AM

recent Schiff video, worth watching: http://www.europac.net/Schiff-Bloomberg-11-21-08_lg.asp

Title: Re: Meltdown
Post by: ezodisy on November 26, 2008, 05:14:17 AM

anyone fancy a little rally before the yanks dig into their Big Macs tomorrow?

(http://farm4.static.flickr.com/3272/3060073545_f1297f6efa_o.jpg)

Title: Re: Meltdown
Post by: ezodisy on November 26, 2008, 05:18:34 AM

Northern Rock defies Government to raise rates (http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5237555.ece)

Title: Re: Meltdown
Post by: BachQ on November 26, 2008, 06:55:18 AM

Quote from: ezodisy on November 26, 2008, 03:14:36 AM
Arthur Laffer, one of Reagan's economic policy advisors, totally embarrassed by Peter Schiff in 2006 (http://uk.youtube.com/watch?v=LfascZSTU4o)

That's a classic! Art Laffer at his worst (total f#cking idiot) and Peter Schiff at his best (he nailed it!).

Title: Re: Meltdown
Post by: BachQ on November 26, 2008, 06:56:07 AM

Time -- "By the end of 2009 the number of retail players will be down by at least 25% and could be down by as much as 40%," says Britt Beemer, chairman of America's Research Group, a consumer research and marketing firm based in Charlotte. "I expect the number of bankruptcies next year to be more than we've seen in the last five years combined."

(http://img.timeinc.net/time/daily/2008/0811/retail_nv_1125.jpg)

(http://www.time.com/time/business/article/0,8599,1861929,00.html)

Title: Re: Meltdown
Post by: BachQ on November 26, 2008, 06:58:03 AM

UK Telegraph: More than 195,000 wind turbines to appear outside homes by 2020 -- More than 195,000 wind turbines will spring up outside homes across Britain over the next 12 years, according to energy advisers, after the Government pledged to pay people for generating their own electricity.

(http://www.telegraph.co.uk/earth/energy/windpower/3507196/More-than-195000-wind-turbines-to-appear-outside-homes-by-2020.html)

QuoteThe EST study predicts 195,100 wind turbines will be installed over the next 12 years. Some 112,000 will be small enough to be attached to the roof, while 83,000 will be bigger free-standing models. A further 921,000 households will install solar panels to heat water and generate electricity. And 805,000 will invest in air source heat pumps, usually installed outside the home.

(http://www.telegraph.co.uk/telegraph/multimedia/archive/01119/nwind122_1119083c.jpg)

Title: Re: Meltdown
Post by: BachQ on November 26, 2008, 07:01:00 AM

Quote from: Mozart on November 25, 2008, 09:44:17 AM
Quote"But if you thought those figures were big, Bloomberg continues its campaign to reveal the real cost of government intervention in the market. The news agency tabulates Washington has now engaged in providing as much as $7.76 trillion on behalf of American taxpayers, or half the value of everything produced in the nation last year."

If there are 300 million Americans, that means that every person is paying like 25,000$ for this bailout so far. Where is this money coming from exactly?

CNBC: Two new Federal Reserve programs aimed at easing consumer credit and lowering mortgage costs have pushed the potential bill for US financial rescue efforts to about $8.317 trillion, although far less has been committed so far and money extended might not be lost.

(http://www.cnbc.com/id/27912307)

Title: Re: Meltdown
Post by: ezodisy on November 26, 2008, 09:24:36 AM

expecting the Dow to rally extremely hard tonight. At present it's hitting resistance at the 50% fib from the ealry Nov top. A break would see it go to around 8800 ( 61.8 ), possibly beyond. Up vol huge.

Up Vol* 2,673 (81%) 862 (89%)
Down Vol* 619 (19%) 86 (9%)

Title: Re: Meltdown
Post by: BachQ on November 26, 2008, 09:40:52 AM

Quote from: ezodisy on November 26, 2008, 09:24:36 AM
expecting the Dow to rally extremely hard tonight. At present it's hitting resistance at the 50% fib from the ealry Nov top. A break would see it go to around 8800 ( 61.8 ), possibly beyond. Up vol huge.

Up Vol* 2,673 (81%) 862 (89%)
Down Vol* 619 (19%) 86 (9%)

Full fib @ 61.8, baby!

Title: Re: Meltdown
Post by: BachQ on November 26, 2008, 09:44:34 AM

Peter Schiff is a hot commodity (pun intended) on mainstream media. Here he is one month ago (I apologize if this was already posted).

http://www.youtube.com/v/AaUkpDddPDM&feature=related

Peter Schiff: "The Dollar is going to fall through the floor"

Title: Re: Meltdown
Post by: ezodisy on November 26, 2008, 12:12:26 PM

Quote from: Dm on November 26, 2008, 09:40:52 AM
Full fib @ 61.8, baby!

didn't quite get there, had something of an asthma attack after passing through 50. Still, not bad, volume not bad either. Closed Dow long at 8700 and Nikkei at 8500. Will join in the thanksgiving holiday tomorrow. I did grow up there after all.

For clarity: there is no rally yet. Bank holiday weeks are sometimes deceptive and against the grain. Next week will be revealing, even decisive for the holiday period. I think we'll see a corrective near-term wave and then continue on what is already something of a suspect intermediate rally. The Dow however is hitting a RSI resistance trendline and testing the one-time support of the broken triangle which now serves as resistance as well, so this is all speculative until proven. Gold by the way has strong resistance at the 830-850 range as well as 61.8 fib resistance from the October high. It fell from there today and is at 813 now, and could be back at 730 next week, even down to 600 by end of year.

Title: Re: Meltdown
Post by: ezodisy on November 26, 2008, 02:33:12 PM

http://ftalphaville.ft.com/blog/2008/11/26/18738/the-vision-thing/

Harvard Economic Society during the Great Depression.

"The Harvard Economic society, it will be recalled, had come up to the summer of the crash with a valuable reputation for pessimism. This position it abandoned during the summer when the stock market kept on rising and business seemed strong. On November 2, after the crash, the Society concluded that "the present recession, both for stocks and business, is not the precursor of business depression." On November 10 it made its notable estimate that "a serious depression like that of 1920-21 is outside the range of probability." It repeated this judgement on November 23 and on December 21 gave its forecast for the new year: "A depression seems improbable; [we expect] recovery of business next spring, with further improvement in the fall." On January 18, 1930, the Society said, "There are indications that the severest phase of the recession is over"; on March 1, that "manufacturing activity is now - to judge from past periods of contraction - definitely on the road to recovery", on March 22, "The outlook continues to be favorable"; on April 19, that "by May or June the spring recovery forecast in our letters of last December and November should be clearly apparent"; on May 17, that business "will turn for the better this month or next, recover vigorously in the third quarter and end the year at levels substantially above normal"; on May 24 it was suggested that conditions "continue to justify" the forecasts of May 17; on June 21, that "despite existing irregularities" there would soon be an improvement; on June 28 it stated that "irregular and conflicting movements of business should soon give way to sustained recovery"; on July 19 it pointed out that "untoward elements have operated to delay recovery but the evidence nonetheless points to substantial improvement"; and on August 30, 1930, the Society stated that "the present depression has about spent its force." Thereafter the Society became less hopeful. On November 15, 1930, it said: "We are now near the end of the declining phase of the depression." A year later, on October 31, 1931, it said: "Stabilization at [present] depression levels is clearly possible." Even these last forecasts were wildly optimistic. Somewhat later, its reputation for infallibility rather dimmed, the Society was dissolved."

Title: Re: Meltdown
Post by: ezodisy on November 27, 2008, 06:24:28 AM

Quote from: Dm on November 26, 2008, 09:44:34 AM
Peter Schiff is a hot commodity (pun intended) on mainstream media. Here he is one month ago (I apologize if this was already posted).

Peter Schiff: "The Dollar is going to fall through the floor"

Thanks for that. I agree with most of Schiff's views but am in two minds about gold. In the medium and long term I think we'll see his 2 or 3000 prediction. Short term I think it'll fall, maybe to 600, maybe more, next year could be the big turning point and if it hits those low numbers then I am in like flynn. Same with oil. Jim Rogers is making a big case for soft commodities, for agriculture, and medium term this should come good too. The commodity bubble is on the way -- we haven't even started yet.

Title: Re: Meltdown
Post by: ezodisy on November 27, 2008, 07:04:57 AM

Happy Thanksgiving - and US taxpayers get ~~stuffed~~ stuffing (http://ftalphaville.ft.com/blog/2008/11/27/18796/thanksgiving-on-wall-street/)

Title: Re: Meltdown
Post by: Mozart on November 27, 2008, 08:51:18 PM

I think the markets are going up yet again tomorrow, just a prediction but the dow will get to 9000.

Title: Re: Meltdown
Post by: ezodisy on November 28, 2008, 02:31:00 AM

That would be a big rise. Any reason for thinking that? What with Big-Mac-indigestion going on today, I'm not so sure they'll be up for it. Things are always shit slow when the US shuts down

Title: Re: Meltdown
Post by: ezodisy on November 28, 2008, 04:32:35 AM

Roubini was interviewed on Bloomberg for half an hour this morning. He's another one who called this correctly back in 2006. His points were:

House prices to fall 40%

Russian ruble to fall another 10 - 20%

Commodities to decline short-term, another 20% off oil

Dollar to lose its status as the world's reserve currency

ECB lagging, more aggressive moves required. He singled out Germany in particular for being too stubborn

No recovery before 2010/11

Title: Re: Meltdown
Post by: Valentino on November 28, 2008, 09:25:56 AM

ECB? European Central Bank?

Title: Re: Meltdown
Post by: BachQ on November 28, 2008, 12:00:22 PM

I believe this is what you're referring to ? ....

Quote from: ezodisy on November 28, 2008, 04:32:35 AM
Roubini was interviewed on Bloomberg for half an hour this morning. He's another one who called this correctly back in 2006. His points were:

House prices to fall 40%

Russian ruble to fall another 10 - 20%

Commodities to decline short-term, another 20% off oil

Dollar to lose its status as the world's reserve currency

ECB lagging, more aggressive moves required. He singled out Germany in particular for being too stubborn

No recovery before 2010/11

Roubini, Print baby, Print

Pt. 1 http://www.youtube.com/watch?v=G0gmx9wW-no

Pt. 2 http://www.youtube.com/watch?v=pHZRkbW5JyE

Title: Re: Meltdown
Post by: BachQ on November 28, 2008, 12:01:18 PM

Quote from: Valentino on November 28, 2008, 09:25:56 AM
ECB? European Central Bank?

Yes

Title: Re: Meltdown
Post by: BachQ on November 28, 2008, 12:03:59 PM

Quote from: ezodisy on November 27, 2008, 07:04:57 AM
Happy Thanksgiving - and US taxpayers get ~~stuffed~~ stuffing (http://ftalphaville.ft.com/blog/2008/11/27/18796/thanksgiving-on-wall-street/)

LOL

But they neglected to include a picture of TARP:

(http://g-ecx.images-amazon.com/images/G/01/askville/4048118_9138246_mywrite/pile_of_crap.jpg)

Pile of sh!t

Title: Re: Meltdown
Post by: ezodisy on November 28, 2008, 12:20:04 PM

Quote from: Dm on November 28, 2008, 12:00:22 PM
I believe this is what you're referring to ? ....

Roubini, Print baby, Print

Pt. 1 http://www.youtube.com/watch?v=G0gmx9wW-no

Pt. 2 http://www.youtube.com/watch?v=pHZRkbW5JyE

That's it. Man they are fast putting it up!

That tarp picture is too funny :)

Title: Re: Meltdown
Post by: BachQ on November 28, 2008, 07:08:44 PM

Quote from: ezodisy on November 25, 2008, 09:22:26 AM
lol!

Yeah, uh huh ::) Well he's going to pat himself on the back if the retest of the broken trendline holds today and we rally. Then we'll get days and weeks and maybe months of "the bailouts are working". Right. What's he going to say when it all unravels early next year and new lows get hit?

http://ftalphaville.ft.com/blog/2008/11/25/18702/bailout-maths/

Bloomberg has rejigged its estimated total of potential US support to the markets to around $8,500bn from $7,700bn, reflecting the most recent Fed proposals to save the world.

A ginormous sum, by any measure, and one which Barry Ritholtz has helpfully put into perspective.

By Ritholtz's estimate, the total actual cost of the various bailout programs (including Citi, but not including today's announcements) exceeds $4,600bn dollars, making it the "largest outlay in American history."

So large, that according to inflation adjusted numbers provided by Jim Bianco of Bianco Research, "the bailout has cost more than all of these big budget government expenditures – combined":

• Marshall Plan: Cost: $12.7 billion, Inflation Adjusted Cost: $115.3 billion
• Louisiana Purchase: Cost: $15 million, Inflation Adjusted Cost: $217 billion
• Race to the Moon: Cost: $36.4 billion, Inflation Adjusted Cost: $237 billion
• S&L Crisis: Cost: $153 billion, Inflation Adjusted Cost: $256 billion
• Korean War: Cost: $54 billion, Inflation Adjusted Cost: $454 billion
• The New Deal: Cost: $32 billion (Est), Inflation Adjusted Cost: $500 billion (Est)
• Invasion of Iraq: Cost: $551b, Inflation Adjusted Cost: $597 billion
• Vietnam War: Cost: $111 billion, Inflation Adjusted Cost: $698 billion
• NASA: Cost: $416.7 billion, Inflation Adjusted Cost: $851.2 billion

TOTAL: $3.92 trillion ($3,920bn)

Further, he notes:

The only single American event in history that even comes close to matching the cost of the credit crisis is World War II: Original Cost: $288 billion, Inflation Adjusted Cost: $3.6 trillion

Ritholtz estimates that by the end of 2010, the final bill may scale up to as much as $10,000bn.

Graphically:

(http://www.voltagecreative.com/blog/wp-content/uploads/2008/11/bailout-pie.png)

Title: Re: Meltdown
Post by: ezodisy on November 29, 2008, 04:19:52 AM

Quote from: Mozart on November 27, 2008, 08:51:18 PM
I think the markets are going up yet again tomorrow, just a prediction but the dow will get to 9000.

Dow stopped at the 61.8 target I was talking about on Tuesday - 8800. It will need to find support around here if it wants to rally onwards. Interestingly the 161.8 fib extension of this fall from 9600 is at c.11,000, the figure that I predicted a couple weeks ago. I definitely see it getting there if we're going to have a genuine bear market rally. The 200ma is descending around that area too.

Title: Re: Meltdown
Post by: drogulus on November 29, 2008, 08:49:17 AM

Could someone answer these questions for me? _>:D

What's the size of the current national debt?

What percentage of the ~$4.6 trill. bailout represents new indebtedness? (that is, not just moving numbers from one box to another or purchasing assets)

Title: Re: Meltdown
Post by: Mozart on November 29, 2008, 09:44:43 AM

Quote from: ezodisy on November 29, 2008, 04:19:52 AM
Dow stopped at the 61.8 target I was talking about on Tuesday - 8800. It will need to find support around here if it wants to rally onwards. Interestingly the 161.8 fib extension of this fall from 9600 is at c.11,000, the figure that I predicted a couple weeks ago. I definitely see it getting there if we're going to have a genuine bear market rally. The 200ma is descending around that area too.

I wasn't aware that Friday was a half day!

Title: Re: Meltdown
Post by: ezodisy on November 29, 2008, 02:11:39 PM

Quote from: drogulus on November 29, 2008, 08:49:17 AM
Could someone answer these questions for me? _>:D

What's the size of the current national debt?

What percentage of the ~$4.6 trill. bailout represents new indebtedness? (that is, not just moving numbers from one box to another or purchasing assets)

the little devil face makes me think that you know the answers already. So why not just say them and make a point? It might do us all some good to get a semblance of optimism in here.

Title: Re: Meltdown
Post by: BachQ on November 29, 2008, 03:04:20 PM

I agree. We need some optimism! (see below!) >:D

Quote from: ezodisy on November 29, 2008, 02:11:39 PM
It might do us all some good to get a semblance of optimism in here.

America's Coming Financial Vortex: 6 predictions for 2009-2012 (http://www.howestreet.com/articles/index.php?article_id=8037)

1. You will see an inflationary depression that will be evident by 2010.
2. Unemployment in the private sector will soar into double-digits by 2010.
3. More state and municipal governments will be federal bailout candidates.
4. Commodities will be in the next leg of their long-term bull market starting in 2009.
5. We will see oil hit $200 as Peak oil becomes obvious to all during 2009-2012.
6. International conflicts over natural resources will hit the headlines during 2009-12.

QuoteCurrent economic conditions and political outcomes have laid the groundwork for more events that we should be prepared for. All of these events combine to create a "Financial Vortex" that will hit us in the coming years.

First of all, be aware of what current conditions will help lay the groundwork for this financial vortex. They are:

1. America's debt load. The U.S. government has now $12 trillion in debt. Consumers and businesses are drowning in debt. America's gross domestic product (GDP) is about $13 trillion yet its total debt is over $44 trillion.

2. Derivatives. Derivatives are complicated, arcane and risky securities that now total about $500 trillion. That makes this market ten times greater than the dollar value of the world economy which is just under $50 trillion.

3. Unfunded Liabilities. The current future tally of the unfunded liabilities of Social Security, Medicare and Medicaid is nearly $99 trillion.

4. Growth of government. The expansion of the government's involvement in the economy is (and will be) massive. Taxes, regulations, controls, spending, etc. at all levels of government (both domestic and international) will be problematic by an order of magnitude that the private sector will not be able to tolerate.

So much good news!

Title: Re: Meltdown
Post by: BachQ on November 29, 2008, 03:05:26 PM

Quote from: ezodisy on November 29, 2008, 02:11:39 PM
It might do us all some good to get a semblance of optimism in here.

UK Telegraph --Recession: When the money goes, so does the toxic wife ... "As the recession worsens, a lot of rich men are finding their gold-digging wives are taking to their heels."

(http://www.telegraph.co.uk/finance/financetopics/recession/3527803/Recession-When-the-money-goes-so-does-the-toxic-wife.html)

Quote*** Lawyers and financial advisers have reported a 50 per cent increase in the number of divorce inquiries since the financial markets collapsed in September. A recent survey conducted by community website makefriendsonline revealed that a third of 10,000 respondents believe that financial hardship will cause a relationship to fail, while matrimonial law specialists Mishcon de Reya have reported up to 300 per cent more inquiries. *** As the joke doing the rounds among City men goes: "This credit crunch is worse than a divorce. I've lost half my net worth and I still have a wife."

Title: Re: Meltdown
Post by: BachQ on November 29, 2008, 03:06:46 PM

Gordon Brown's Downfall video >:D >:D

http://www.youtube.com/watch?v=jbgwR1pA1k0

Title: Re: Meltdown
Post by: BachQ on November 29, 2008, 03:08:38 PM

Meltdown far from over, new mortgage crisis looms

Associated Press Writer Matt Apuzzo
Thu Nov 27, 1:17 pm ET

(http://news.yahoo.com/s/ap/20081127/ap_on_bi_ge/meltdown_coming_soon_1)

Quote*** The same events poisoning the housing market are now at work on commercial properties, and the bad news is trickling in. Malls from Michigan to Georgia are entering foreclosure. Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages. That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit.

"We're probably in the first inning of the commercial mortgage problem," said Scott Tross, a real estate lawyer with Herrick Feinstein in New Jersey. That's bad news for more than just property owners. When businesses go dark, employees lose jobs. Towns lose tax revenue. School budgets and social services feel the pinch. Companies have survived plenty of downturns, but economists see this one playing out like never before. In the past, when businesses hit rough patches, owners negotiated with banks or refinanced their loans. But many banks no longer hold the loans they made. Over the past decade, banks have increasingly bundled mortgages and sold them to investors. Pension funds, insurance companies, and hedge funds bought the seemingly safe securities and are now bracing for losses that could ripple through the financial system.

"It's a toxic drug and nobody knows how bad it's going to be," said Paul Miller, an analyst with Friedman, Billings, Ramsey, who was among the first to sound alarm bells in the residential market.

(continued)

Title: Re: Meltdown
Post by: drogulus on November 29, 2008, 03:35:31 PM

Quote from: ezodisy on November 29, 2008, 02:11:39 PM
the little devil face makes me think that you know the answers already. So why not just say them and make a point?

No, I'll let you say them and make a point.

Here's another naughty question. What percentage of the national debt is owed to foreign investors/governments?

Now for the answers:

$10.6 trillion, I don't know, and 25%. _:D

Title: Re: Meltdown
Post by: Mozart on November 29, 2008, 11:56:54 PM

Quote from: drogulus on November 29, 2008, 03:35:31 PM
No, I'll let you say them and make a point.

Here's another naughty question. What percentage of the national debt is owed to foreign investors/governments?

Now for the answers:

$10.6 trillion, I don't know, and 25%. _:D

Didn't quite turn out as you schemed, now you just look silly :P

Title: Re: Meltdown
Post by: ezodisy on November 30, 2008, 11:31:27 AM

Quote from: drogulus on November 29, 2008, 03:35:31 PM
No, I'll let you say them and make a point.

but I don't have a point to make. I don't think Dm wishes to make one either. I do think that the recession will turn out considerably worse than what you said some time back (6 or 7% unemployment?), but that isn't a point, obviously.

Quote from: Dm on November 29, 2008, 03:05:26 PM
UK Telegraph --Recession: When the money goes, so does the toxic wife ... "As the recession worsens, a lot of rich men are finding their gold-digging wives are taking to their heels."
(http://www.telegraph.co.uk/finance/financetopics/recession/3527803/Recession-When-the-money-goes-so-does-the-toxic-wife.html)

Pathetic, but neither surprising nor unexpected ::) These hedge fund chaps should be quicker in adopting the mindset of Luzhin from Crime & Punishment -- marry the poor downtrodden girl who'll be forever grateful for your generosity. That way they won't have all this bother later on. Or perhaps they're being very clever indeed -- getting the tail and then letting it flee on some perceived shortcoming. Eating the cake without putting on weight, in other words. That is bloody smart.

Title: Re: Meltdown
Post by: ezodisy on November 30, 2008, 03:13:55 PM

The new Commodity Watch Radio interview has an interesting point re: OPEC intentionally keeping the oil price low for the next year or two in order to wipe out alternative fuel companies and sectors. Worth listening to if unlikely (around 28min in).

Not that OPEC control the price, of course...

Title: Re: Meltdown
Post by: BachQ on November 30, 2008, 05:29:58 PM

Quote from: ezodisy on November 30, 2008, 03:13:55 PM
The new Commodity Watch Radio interview has an interesting point re: OPEC intentionally keeping the oil price low for the next year or two in order to wipe out alternative fuel companies and sectors. Worth listening to if unlikely (around 28min in).

Not that OPEC control the price, of course...

This touches upon some very important issues (which I will discuss tomorrow in a long post 8)).

Meanwhile, this hot off the press -- NOV 30: Britain is considering joining the eurozone as a direct consequence of global financial turmoil, European Commission President Jose Manuel Barroso said Sunday. (http://www.breitbart.com/article.php?id=081130204959.yq2a770m&show_article=1)

Reuters: PARIS, Nov 30 -- The financial crisis has prompted British officials to acknowledge the merits of the euro and those who mattered were thinking about adopting the currency, European Commission President Jose Manuel Barroso said. ... "I don't mean to say that it will be tomorrow and I know that the majority in Britain remain opposed to this idea, but it is evolving and the people who count in the United Kingdom are in the process of thinking about it," he said.
(http://www.reuters.com/article/usDollarRpt/idUSLU4454120081130)

Title: Re: Meltdown
Post by: BachQ on November 30, 2008, 05:32:55 PM

Quote from: drogulus on November 29, 2008, 03:35:31 PM
No, I'll let you say them and make a point.

Here's another naughty question. What percentage of the national debt is owed to foreign investors/governments?

Now for the answers:

$10.6 trillion, I don't know, and 25%. _:D

I thought that roughly half of current US borrowings derives from foreign entities.

Title: Re: Meltdown
Post by: Lilas Pastia on November 30, 2008, 06:30:17 PM

Quote from: Dm on November 28, 2008, 07:08:44 PM
Graphically:

(http://www.voltagecreative.com/blog/wp-content/uploads/2008/11/bailout-pie.png)

Comparing melons with raisins. What % of world GDP do each of these financial efforts represent ? Today's is not the same world as 1936, 1946, 1953, 1968 or 1981.

Title: Re: Meltdown
Post by: ezodisy on December 01, 2008, 03:30:10 AM

something for you bulls to drink down during breakfast

The United Nations says the world economy faces its worst downturn since the Great Depression. (http://news.bbc.co.uk/1/hi/business/7757506.stm)

Title: Re: Meltdown
Post by: ezodisy on December 01, 2008, 07:26:54 AM

Up Vol* 191 (10%) 52 (9%)
Down Vol* 1,720 (90%) 495 (90%)

Here comes the bounce! lol

(http://www.iberkshires.com/images/iberkshires/deadcatbounce350x273.jpg)

Title: Re: Meltdown
Post by: drogulus on December 01, 2008, 02:02:20 PM

Quote from: ezodisy on November 30, 2008, 11:31:27 AM
but I don't have a point to make. I don't think Dm wishes to make one either. I do think that the recession will turn out considerably worse than what you said some time back (6 or 7% unemployment?), but that isn't a point, obviously.

I'll stand by what I actually said, though as a prediction it's not worth much more than the non-predictions you and Dm are making. Also, if you don't have a point then you shouldn't be upset when I point this out. _:)

Quote from: drogulus on November 22, 2008, 07:59:11 AM
We are headed towards 8% unemployment next year (currently 6.5%).

Quote from: Mozart on November 29, 2008, 11:56:54 PM
Didn't quite turn out as you schemed, now you just look silly :P

No, I'm not just silly, I'm prescient and silly. _0:)

Title: Re: Meltdown
Post by: drogulus on December 01, 2008, 02:28:38 PM

(http://www.voltagecreative.com/blog/wp-content/uploads/2008/11/bailout-pie.png)

Quote from: Lilas Pastia on November 30, 2008, 06:30:17 PM
Comparing melons with raisins. What % of world GDP do each of these financial efforts represent ? Today's is not the same world as 1936, 1946, 1953, 1968 or 1981.

And how much of these efforts represents debt, or consumption, or investment? Korea and Vietnam are part of the total cost of the Cold War, an effort to use far less destructive methods than total nuclear war to check Soviet expansion. To me it was worth it to spend vast sums for this, and it shifted the ground in our favor, since the Soviets couldn't outspend us.

We got our moneys worth for the Louisiana Purchase, and I would say the same for NASA and the Marshall Plan. Iraq is far too soon to call, so ask me in 20 years. _:)The S&L crisis raises the same question as the current one. How much do these bailouts really cost? And how much is our attitude towards these bailouts colored by the knowledge that we might have avoided most of the trouble, if not all of it in the case of the S&Ls?

Title: Re: Meltdown
Post by: BachQ on December 01, 2008, 03:54:52 PM

Quote from: ezodisy on December 01, 2008, 07:26:54 AM
Up Vol* 191 (10%) 52 (9%)
Down Vol* 1,720 (90%) 495 (90%)

Here comes the bounce! lol

(http://www.iberkshires.com/images/iberkshires/deadcatbounce350x273.jpg)

Global markets hammered as recession reality sinks in ... The Dow Jones Industrial Average sank 679.95 points (7.70 percent) to close at 8,149.09, in the fourth-steepest point loss in history for the blue-chip index. (http://news.yahoo.com/s/afp/20081201/bs_afp/stocksworld;_ylt=AkwfYvlll58f1PV9sZQFtloGw_IE)

Title: Re: Meltdown
Post by: BachQ on December 01, 2008, 03:55:23 PM

(http://d.yimg.com/us.yimg.com/p/ap/20081201/capt.6a65e8491f624f68848a43745dc6c58b.oil_prices_gfx936.jpg?x=242&y=345&q=85&sig=Vrsfl3jDBW9oKQqj2D6h6Q--)

Title: Re: Meltdown
Post by: BachQ on December 01, 2008, 03:55:46 PM

Bush: 'I'm sorry' the economic crisis is occurring (http://news.yahoo.com/s/ap/20081201/ap_on_go_pr_wh/bush_interview;_ylt=Aga2wPTccDqJNsoPRd_PA0Ws0NUE)

Title: Re: Meltdown
Post by: BachQ on December 01, 2008, 03:57:07 PM

Quote from: ezodisy on December 01, 2008, 03:30:10 AM
something for you bulls to drink down during breakfast

The United Nations says the world economy faces its worst downturn since the Great Depression. (http://news.bbc.co.uk/1/hi/business/7757506.stm)

We've known this for months. 0:)

WASHINGTON (AFP) - A US recession officially began in December 2007, a panel of economists charged with the official designation of business cycles said Monday. (http://news.yahoo.com/s/afp/20081202/ts_afp/useconomygrowthrecession;_ylt=AhjxHQ2RaYvHIijEPbtFsaiyBhIF)

Title: Re: Meltdown
Post by: BachQ on December 01, 2008, 03:59:08 PM

Quote from: drogulus on November 29, 2008, 03:35:31 PM
Here's another naughty question. What percentage of the national debt is owed to foreign investors/governments?

Pie chart of who owns US Debt

2006

(http://www.optimist123.com/photos/uncategorized/piechartmar06.gif)

2007

(http://www.optimist123.com/photos/uncategorized/2007/08/23/piechart200706.png)

In 2008, I'd venture that foreigners own close to 50% of US debt.

(http://www.optimist123.com/optimist/2007/08/an-800-billion-.html)

Title: Re: Meltdown
Post by: BachQ on December 01, 2008, 04:01:05 PM

Here's what remains of Antarctica's Wilkins Ice Shelf (Nov 28, 2008) --

"The rifts threaten the stability of the ice shelf which owing to previous breakups this year has been reduced to a narrow finger of ice."

(http://i251.photobucket.com/albums/gg311/johnnyrook1/wilkins26nov2008timeline_H.jpg)

It wasn't supposed to get this bad until 2030/2040. This is serious sh!t. (http://www.dailykos.com/storyonly/2008/11/28/16339/496/827/667352)

Title: Re: Meltdown
Post by: BachQ on December 01, 2008, 04:03:16 PM

UK Telegraph: Ocean currents can power the world, say scientists -- A revolutionary device that can harness energy from slow-moving rivers and ocean currents could provide enough power for the entire world, scientists claim.

(http://www.telegraph.co.uk/telegraph/multimedia/archive/01123/ocean-currents_1123425c.jpg)

(http://www.telegraph.co.uk/earth/energy/renewableenergy/3535012/Ocean-currents-can-power-the-world-say-scientists.html)

QuoteThe new device, which has been inspired by the way fish swim, consists of a system of cylinders positioned horizontal to the water flow and attached to springs. As water flows past, the cylinder creates vortices, which push and pull the cylinder up and down. The mechanical energy in the vibrations is then converted into electricity.

Cylinders arranged over a cubic metre of the sea or river bed in a flow of three knots can produce 51 watts. This is more efficient than similar-sized turbines or wave generators, and the amount of power produced can increase sharply if the flow is faster or if more cylinders are added.

A "field" of cylinders built on the sea bed over a 1km by 1.5km area, and the height of a two-storey house, with a flow of just three knots, could generate enough power for around 100,000 homes. Just a few of the cylinders, stacked in a short ladder, could power an anchored ship or a lighthouse.

Systems could be sited on river beds or suspended in the ocean. The scientists behind the technology, which has been developed in research funded by the US government, say that generating power in this way would potentially cost only around 3.5p per kilowatt hour, compared to about 4.5p for wind energy and between 10p and 31p for solar power. They say the technology would require up to 50 times less ocean acreage than wave power generation.

The system, conceived by scientists at the University of Michigan, is called Vivace, or "vortex-induced vibrations for aquatic clean energy". Michael Bernitsas, a professor of naval architecture at the university, said it was based on the changes in water speed that are caused when a current flows past an obstruction. Eddies or vortices, formed in the water flow, can move objects up and down or left and right.

"This is a totally new method of extracting energy from water flow," said Mr Bernitsas. "Fish curve their bodies to glide between the vortices shed by the bodies of the fish in front of them. Their muscle power alone could not propel them through the water at the speed they go, so they ride in each other's wake."

Such vibrations, which were first observed 500 years ago by Leonardo DaVinci in the form of "Aeolian Tones", can cause damage to structures built in water, like docks and oil rigs. But Mr Bernitsas dded: "We enhance the vibrations and harness this powerful and destructive force in nature.

"If we could harness 0.1 per cent of the energy in the ocean, we could support the energy needs of 15 billion people. In the English Channel, for example, there is a very strong current, so you produce a lot of power."

Title: Re: Meltdown
Post by: drogulus on December 01, 2008, 04:55:16 PM

Dm, 27% is not that far from 25%. I don't think we could suddenly go to 50% in one year, could we? Are you counting the cost of the bailout in there? I would imagine that even if we did that it wouldn't change things that much. And of course we shouldn't do that, since only some as yet undetermined fraction of the total cost will be new debt.

So far what we have is the worst recession in my lifetime. Now that it appears that we've been in recession for about a year my fuzzy prediction that 2009 will be a recession year as well means 2 years of recession, a little longer than average. I think we'll come out of it next fall.

Title: Re: Meltdown
Post by: ezodisy on December 01, 2008, 11:28:06 PM

Quote from: Dm on December 01, 2008, 04:01:05 PM
Here's what remains of Antarctica's Wilkins Ice Shelf (Nov 28, 2008) --

"The rifts threaten the stability of the ice shelf which owing to previous breakups this year has been reduced to a narrow finger of ice."

It wasn't supposed to get this bad until 2030/2040. This is serious sh!t.
(http://www.dailykos.com/storyonly/2008/11/28/16339/496/827/667352)

That's depressing. The financial crisis is just a little bit of fun compared to this.

Quote from: drogulus on December 01, 2008, 04:55:16 PM
So far what we have is the worst recession in my lifetime. Now that it appears that we've been in recession for about a year my fuzzy prediction that 2009 will be a recession year as well means 2 years of recession, a little longer than average. I think we'll come out of it next fall.

I heard a very good interview which argued that the end of this recession could be very different, as unlike other ones Wall Street will not be in a position to rally us out of this (the usual case in the past, apparently). It made a lot of sense, I just can't find it right now.

Title: Re: Meltdown
Post by: ezodisy on December 02, 2008, 09:43:41 AM

Bill Gross, manager of the world's biggest bond fund, said stocks aren't as cheap as they appear given that the era of deregulation, low borrowing costs and tax cuts is over.

"Stocks are cheap when valued within the context of a financed-based economy once dominated by leverage, cheap financing and even lower corporate tax rates. That world, however, is in our past not our future." (http://www.bloomberg.com/apps/news?pid=20601087&sid=a7XsZc_xbKpM&refer=home)

Title: Re: Meltdown
Post by: BachQ on December 02, 2008, 07:59:43 PM

Fortune / CNN --
A European-style VAT tax coming to the USA?
Like it or not, there's only one way we're going to be able to pay for our ballooning deficit: a value-added tax.

By Shawn Tully, editor at large
Last Updated: December 2, 2008: 9:27 AM ET

(http://money.cnn.com/2008/12/01/news/economy/tully_vat.fortune/index.htm?postversion=2008120207)

QuoteNEW YORK (Fortune) -- It's highly possible, if not inevitable, that Americans will soon live under a radically different tax system - one that the pundits and politicians aren't talking about.It's called a value-added tax, or VAT, and it's been used for decades to pay the bills and sustain the immense growth of governments around the world, from France to Mexico to Australia. Created in 1954 by a French economist, the VAT is the most potent, efficient machine for revenue generation yet invented.

And if there's one thing the U.S. government needs as the federal budget balloons, it's a ton of new revenue. "The bottom line is that the income tax cannot support the level of spending that's projected, something other countries faced years ago," said Roberton Williams of the Tax Policy Center, a non-partisan research institute. Today the VAT raises almost half of the total government revenue in France, and a similar share in most of the developed world.

The VAT is essentially a sales tax, except that it's charged at each stage in the development of a product instead of at the moment when the product is sold. ... The genius of the VAT is that, while the consumer pays it, the actual cash is mostly collected from producers before it reaches the retailer. Since the VAT is essentially a hidden charge embedded in the price of goods and services, raising the VAT doesn't arouse nearly the uproar caused by increasing income taxes.

The ease with which a VAT can be increased points to one of its big drawbacks: Governments see it as an easy way to pay for increased spending, which is a potential drag on economic growth. Even so, the VAT would be better than the other likely alternative: A higher retail sales tax. If the national sales tax were raised to, say, 20%, consumers would cheat by paying cash to avoid it, and retailers would submit because they'd sell more goods by cutting the price 20%. With the VAT, every step of the manufacturing (and tax collection) process is documented.

Make no mistake: A VAT may be unavoidable in the United States. The reason is that spending is rising far faster than the revenue that can conceivably be generated by the current tax regime.

(continued)

Title: Re: Meltdown
Post by: Lethevich on December 03, 2008, 02:03:10 AM

Quote from: Dm on December 02, 2008, 07:59:43 PM
A European-style VAT tax coming to the USA?

Oh noes, this smells like COMMUNISM!

Title: Re: Meltdown
Post by: ezodisy on December 03, 2008, 06:23:29 AM

where's gold going?

Title: Re: Meltdown
Post by: BachQ on December 03, 2008, 04:32:31 PM

Quote from: ezodisy on December 03, 2008, 06:23:29 AM
where's gold going?

Where is oil going?

(currently at $46.66!)

(http://tonto.eia.doe.gov/oog/info/twip/crprsptm.gif)

(http://ichart.finance.yahoo.com/b?s=CLF09.NYM)

Oil falls below $46 near four year lows SINGAPORE (Reuters) - Oil fell below $46 a barrel to near four-year lows on Thursday, extending four consecutive days of falls as continued demand worries minimized bullish draws in U.S. oil stocks.

(http://www.reuters.com/article/newsOne/idUSTRE49B3Y620081204)

QuoteOil prices have lost more than $100 a barrel since an all-time high of $147.27 hit in July, and some 16 percent from last week, as demand is seen weakening worldwide and analysts expect it to contract this year and next. U.S. light crude for January delivery fell 83 cents to $45.96 a barrel by 2:28 a.m. GMT (9:28 p.m. EST), off an earlier low of $45.75, the lowest since a $45.42 low hit on February 10, 2005. Oil settled down 17 cents at $46.79 on Wednesday.

Title: Re: Meltdown
Post by: ezodisy on December 03, 2008, 11:15:30 PM

yes where is oil going? Unlike gold, the physical part of which is in very high demand right now and it's only a matter of time until the weekly downtrend reverses, the plummeting oil price makes sense. That is made sense before the King announced that $75 would be a fair price. The production cuts therefore should be quite large. Down a bit more to the low $40s perhaps and then a proper correction?

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 04:14:44 AM

Quote from: ezodisy on December 03, 2008, 11:15:30 PM
yes where is oil going? Unlike gold, the physical part of which is in very high demand right now and it's only a matter of time until the weekly downtrend reverses, the plummeting oil price makes sense. That is made sense before the King announced that $75 would be a fair price. The production cuts therefore should be quite large. Down a bit more to the low $40s perhaps and then a proper correction?

What OPEC wants versus what OPEC can actually deliver may not always coincide. A few weeks ago I predicted that oil would collapse to "mid-40's"; now I'm thinking mid-30's. But for that to happen, the economy would have to really tank. It's interesting that seemingly "omnipotent" entities like the Federal Reserve and OPEC are running out of options, and they may be forced to ride out the storm and let nature take its course.

VIENNA (Xinhua) -- OPEC, which supplies 40 percent of the world's crude oil, admitted its limited influence on the price fluctuation trend in the international crude oil market. In a report made at the National Defense Academy of Austrian Armed Forces in Vienna on Tuesday evening, Director of OPEC Research Division Hasan M. Qabazard pointed out that recently the international crude oil prices fluctuate irregularly, on which OPEC "is able to impose no or almost no influence." (http://news.xinhuanet.com/english/2008-12/04/content_10452656.htm)

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 04:16:39 AM

Quote from: ezodisy on December 03, 2008, 11:15:30 PM
That is made sense before the King announced that $75 would be a fair price.

Barclays has stated that "a cyclical bear trend has begun pointing to push toward the high $30s in the months ahead." (http://www.rigzone.com/news/article.asp?a_id=70179) Meanwhile, Nymex crude oil futures don't price WTIC at $75/bbl until April 2011.

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 04:17:35 AM

Oil and Economic Collapse—The Trillion Dollar per Year Question

(http://www.thecuttingedgenews.com/index.php?article=951&pageid=44&pagename=Slices)

QuoteBy the time the dust settles and the numbers are collected for 2008, it will become crystal clear that a central reason we are at the point of economic collapse is our addiction to oil. In the first half of this year, while gasoline prices were soaring, the US economy lost $500 billion diverted to oil imports. That $500B is gone, permanently bled out of our economy. ... In the past, the nation has paid for such bleeding by creating concomitant growth. But this year, our oil expenses were almost double the growth in GDP. This means that none of the growth in the economy went to prosperity. All of it and more went to pay for our oil addition. ...

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 04:19:21 AM

Quote from: ezodisy on August 22, 2008, 09:06:40 AM
Persimmon up another 10% today. Anymore bad reports like this and it might just reach breakout ;D

It looks like Lehman could be taken out. In fact this is an excellent time for any sound company to acquire one of the many strugglers. Iceland, a fairly large UK supermarket, has put forth a bid for Woolworth's, a large UK chain retailer. The latter is in the shits at present and looks likely to be acquired. Blinkx likewise have made an opportunistic bid for Miva, another seemingly moribound business. There's quite a lot of this going around. I am waiting for someone to come in and scoop up Tanfield, the UK's leading manufacturer of electric vehicles and powered access platforms, which has lost some 95% of its share price of a year ago.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aQdrdFsp.lQ4&refer=home

Woolworths Nears Collapse in U.K., MFI Fails, Putting 30,000 Jobs at Risk
(http://www.bloomberg.com/apps/news?pid=20601087&sid=ad6DOWNOlNww&refer=home)

Title: Re: Meltdown
Post by: ezodisy on December 04, 2008, 04:49:04 AM

Yep Woolworths is in the shit. I caught a 2p rise over the summer and got out -- now anyone still holding is stuffed. Tanfield is languishing. Blinkx appears to have failed on the triple bottom test. It's pointless to hold most stocks at present. Only thing I'm buying are junior gold producers.

Title: Re: Meltdown
Post by: ezodisy on December 04, 2008, 05:20:13 AM

decision time for the Dow. Looks bearish to me

Title: Re: Meltdown
Post by: Lethevich on December 04, 2008, 05:48:06 AM

Quote from: Dm on December 04, 2008, 04:19:21 AM
Woolworths Nears Collapse in U.K., MFI Fails, Putting 30,000 Jobs at Risk
(http://www.bloomberg.com/apps/news?pid=20601087&sid=ad6DOWNOlNww&refer=home)

To be honest, it was obvious that the Woolworths failure was coming. Some businesses are either unwilling or unable to change, and Woolies was a mess. Apparently the MFI closure was also not surprising to any expert interviewed, due to some dodgy decisions on the target market of their business. Job losses are bad, but it couldn't have happened to two less secure companies - perhaps this is like having a clean out, hehe :) The 30k figure in one go does sound big, but it's small fry compared to the trickles of losses coming from every sector...

Title: Re: Meltdown
Post by: ezodisy on December 04, 2008, 06:21:13 AM

Lethe I think that Bailout Brown has already promised to help the 30k Woolworths employees find work again quickly. You have to say that he is doing his utmost to keep to his promise of "no more boom & bust". The whole idea of "no bust" is bullshit of course, and naturally impossible.

I agree that Woolworths is or was rubbish. In my 8 years in London and my half dozen visits to Woolworths, I could never understand how they make a profit. There seems to be next to nothing of interest in the store.

Sometimes economists and politicians would do better to study things like natural selection and psychoanalysis rather than politics.

Title: Re: Meltdown
Post by: ezodisy on December 04, 2008, 12:01:45 PM

Quote from: ezodisy on December 04, 2008, 05:20:13 AM
decision time for the Dow. Looks bearish to me

oh no, ezodisy got it right yet again. That is what you call a Bump and Run Formation, sweetly known as BARF in the industry. Some use the word Reversal instead of Formation, but it just doesn't look as cool on the chart. Anyway it was bloody obvious that the speculative bump from 3 Dec wouldn't hold.

At the last moment PPT stepped in to hold it miraculously above trend. Still, I get to write BARF on the chart and pocket the difference :)

(http://img201.imageshack.us/img201/6010/dow2gp1.jpg) (http://img201.imageshack.us/my.php?image=dow2gp1.jpg)
(http://img201.imageshack.us/img201/dow2gp1.jpg/1/w1024.png) (http://g.imageshack.us/img201/dow2gp1.jpg/1/)

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 04:47:09 PM

(http://ndn.newsweek.com/media/6/nw_081201_toles.jpg)

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 04:52:22 PM

Solar car completes 1st ever round-the-world trip

By VANESSA GERA, Associated Press Writer Vanessa Gera, Associated Press Writer
5 Nov 2008

(http://news.yahoo.com/s/ap/20081204/ap_on_bi_ge/eu_poland_solar_car)

QuotePOZNAN, Poland – If a solar-powered car can drive 32,000 miles (52,000 kilometers) around the globe without using a drop of oil, perhaps it can be forgiven for not having a coffee cup holder. ... Palmer, a teacher on leave from his job, spent 17 months driving his own creation — a fully solar-powered car built with the help of Swiss scientists — through 38 countries. The two-seater travels up to 55 mph (90 kph) and covers 185 miles (300 kilometers) on a fully charged battery.

"This is the first time in history that a solar-powered car has traveled all the way around the world without using a single drop of petrol," he said, adding that he lost only two days to breakdowns.

*** For now, the aluminum and fiberglass car is still a prototype, and it feels like one. The car, designed to be light and efficient, is powered by solar cells that it hauls on a trailer. It has plastic windows, three wheels instead of four and ironically, no climate control. Designed like a race car, it can hold two people comfortably and has a radio. It meets all safety standards in Switzerland and has headlights, brakes, blinkers and other standard safety features. Before his world trip, Palmer, 36, used it for a year to commute to the school in Lucerne, Switzerland, where he taught.

***Hawaii this week unveiled plans to build a network of charging stations for electric cars and to provide recharged batteries. There are also plans to offer similar services in Australia, Denmark and Israel.

(http://d.yimg.com/us.yimg.com/p/ap/20081204/capt.3e4a99b3231f4b7cb11195891b897fa2.poland_climate_change_solar_taxi_xak153.jpg)

?x=400&y=228&q=85&sig=UrPI8kCP1nh0V0_EiI.Ugg--

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 04:55:41 PM

Harvard's Endowment Lost 22% in 4 Months
(http://www.reuters.com/article/etfNews/idUSN0352965320081203#)

QuoteBOSTON, Dec 3 (Reuters) - Harvard University's endowment has lost 22 percent, or roughly $8 billion, in the last four months, leaving the world's richest university on track to deliver its worst annual returns in 40 years.Harvard President Drew Faust told administrators about the loss in a letter dated Dec. 2 and posted on the website on Wednesday, and warned that officials expect to see even steeper declines of 30 percent by the end of its fiscal year in June, 2009.

Faust cited "severe turmoil in the world's financial markets," and said every major asset class has been affected. The news is especially jarring for the Ivy League school, whose worst-ever investment loss was 12.2 percent in 1974. By relying heavily on alternative investments like hedge funds, real estate and timber, Harvard has delivered an average annualized investment return of 13.8 percent over the last decade. (continued)

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 04:58:14 PM

Quote from: ezodisy on December 04, 2008, 12:01:45 PM
oh no, ezodisy got it right yet again. That is what you call a Bump and Run Formation, sweetly known as BARF in the industry. Some use the word Reversal instead of Formation, but it just doesn't look as cool on the chart. Anyway it was bloody obvious that the speculative bump from 3 Dec wouldn't hold.

At the last moment PPT stepped in to hold it miraculously above trend. Still, I get to write BARF on the chart and pocket the difference :)

(http://img201.imageshack.us/img201/6010/dow2gp1.jpg) (http://img201.imageshack.us/my.php?image=dow2gp1.jpg)
(http://img201.imageshack.us/img201/dow2gp1.jpg/1/w1024.png) (http://g.imageshack.us/img201/dow2gp1.jpg/1/)

You are hereby christened GMG's resident BARF expert!

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 07:08:38 PM

Quote from: Lethe on December 04, 2008, 05:48:06 AM
To be honest, it was obvious that the Woolworths failure was coming. Some businesses are either unwilling or unable to change, and Woolies was a mess. Apparently the MFI closure was also not surprising to any expert interviewed, due to some dodgy decisions on the target market of their business. Job losses are bad, but it couldn't have happened to two less secure companies - perhaps this is like having a clean out, hehe :) The 30k figure in one go does sound big, but it's small fry compared to the trickles of losses coming from every sector...

Apparently, this Friday, all 800 of Woolworths stores will hold its "biggest ever" sale, slashing prices by up to 50%. Meanwhile, the Woolworths Group may be headed for bankruptcy administration. The Independent (http://www.independent.co.uk/news/business/news/carnage-on-the-high-street-as-retailers-feel-the-chill-1052788.html)

Title: Re: Meltdown
Post by: BachQ on December 04, 2008, 07:10:49 PM

FT ALPHAVILLE: Credit default swap "markets are pricing in a savage recession, and perhaps a depression."

(http://ftalphaville.ft.com/blog/2008/12/04/50016/cds-update-the-perils-of-record-fatigue/)

QuoteWe're in danger of record fatigue here in the credit markets. The Markit iTraxx Europe index closed above 200bp for the first time today, while the Markit iTraxx HiVol broke new ground by surging through the 500bp barrier. And North America wasn't left out. The Markit CDX HiVol widened beyond 600bp for the first time and the IG widened significantly - the 300bp mark is now in sight.

Rate cuts in Europe did little to improve sentiment. The Bank of England reduced rates by 100bp, as expected. Bank rate now resides at 2%, the lowest rate since 1951. The ECB was a little more cautious, as befitting its hawkish reputation. The central bank cut rates by 75bp - the largest cut since its foundation - to 2.5%. Markit PMI survey data points towards a deep and lengthy recession, and the delays by both central banks in easing monetary policy now look costly. More rate cuts can be
expected in the near future but it is doubtful that monetary policy alone can take the economy back towards growth by 2010/11.

(continued)

Title: Re: Meltdown
Post by: ezodisy on December 04, 2008, 11:41:09 PM

Quote from: Dm on December 04, 2008, 07:08:38 PM
Apparently, this Friday, all 800 of Woolworths stores will hold its "biggest ever" sale, slashing prices by up to 50%. Meanwhile, the Woolworths Group may be headed for bankruptcy administration. The Independent
(http://www.independent.co.uk/news/business/news/carnage-on-the-high-street-as-retailers-feel-the-chill-1052788.html)

But what will they sell? They only have chocolate bars, pens and papers and children's toys. It's a joke.

Here is our theme song for the next year or two: http://uk.youtube.com/watch?v=gSq8ZBdSxNU

Title: Re: Meltdown
Post by: ezodisy on December 05, 2008, 03:58:07 AM

you should see the market right now, nearly everything is on the edge of tipping over: Dow, FTSE, euro/yen, gold, oil and so much more on a precipice. A little gust of wind and the Dow's going to 8000 today (61.8% of the recent rise) or lower

QuoteThe Market iTraxx Crossover index of 50 mainly high-yield names set a fresh record high of 1,036 basis points, or €1,036,000 to insure €10m of debt annually over five years. The index was trading at 880bp only a week ago.

The Markit iTraxx Europe index of 125 investment grade names rose to a record 208bp. It was trading at 170bp only a week ago.

Credit sentiment has deteriorated in particular amid increasing worries over the ability of companies to refinance their debt, with worries over the rising number of jobless a big concern.

Title: Re: Meltdown
Post by: ezodisy on December 05, 2008, 04:37:05 AM

biggest job loss in 34 years

Employers in U.S. Cut 533,000 Jobs; Jobless Rate Rises to 6.7% (http://www.bloomberg.com/apps/news?pid=20601087&sid=atyGePggg0uo&refer=home)

Title: Re: Meltdown
Post by: BachQ on December 05, 2008, 05:22:47 AM

Quote from: ezodisy on December 05, 2008, 04:37:05 AM
biggest job loss in 34 years

Employers in U.S. Cut 533,000 Jobs; Jobless Rate Rises to 6.7% (http://www.bloomberg.com/apps/news?pid=20601087&sid=atyGePggg0uo&refer=home)

533,000 is huge, especially given that it's been fudged by Bush, Cheney & Co., after they've taken their pens and erasers to the data. When the revised numbers emerge, one can expect to add an additional few hundred thousand. Alternative methods of measuring unemployment would arrive at a much more alarming figure.

(http://www.shadowstats.com/imgs/sgs-emp.gif)

Title: Re: Meltdown
Post by: BachQ on December 05, 2008, 05:24:45 AM

NYT front page: "We have recorded the largest decline in consumer confidence in our history," said Richard T. Curtin, director of the Reuters/University of Michigan Survey of Consumers, which started its polling in the 1950s. "It is being driven down by a host of factors: falling home and stock prices, fewer work hours, smaller bonuses, less overtime and disappearing jobs."
(http://www.nytimes.com/2008/12/06/business/economy/06jobs.html?_r=1&hp=&adxnnl=1&adxnnlx=1228485884-fvJ8kKEtw8N7j+Thn1M0yg)

Title: Re: Meltdown
Post by: BachQ on December 05, 2008, 05:27:22 AM

Quote from: ezodisy on December 05, 2008, 04:37:05 AM
biggest job loss in 34 years

Employers in U.S. Cut 533,000 Jobs; Jobless Rate Rises to 6.7% (http://www.bloomberg.com/apps/news?pid=20601087&sid=atyGePggg0uo&refer=home)

Dec. 5 (Bloomberg) -- Canadian employment fell by the most since 1982 in November, led by manufacturing, a sign the world's eighth-largest economy is falling victim to a global recession. Employers shed a net 70,600 workers, almost three times as many as economists anticipated, after a gain of 9,500 in October. The unemployment rate rose to a two-year high of 6.3 percent from 6.2 percent the month before. ... Bank of Canada Governor Mark Carney will probably cut interest rates by half a point to 1.75 percent on Dec. 9, the lowest in more than 50 years, according to economists surveyed by Bloomberg. (continued) LINK (http://www.bloomberg.com/apps/news?pid=20601087&sid=a71.wrr.7jbE&refer=home)

Title: Re: Meltdown
Post by: ezodisy on December 05, 2008, 12:24:30 PM

well you've got to give the yanks credit for their murder-mystery theatricality. All this last minute suspense--with regular commercial breaks--and what do you get? Only saw it today. DIAMOND BOTTOM PATTERN. Rally rally rally yummy tasty rally. Maybe. They kept flirting and flirting and I kept waiting, a bit like my ex-girlfriend before she went down, but it just didn't happen this time and they closed above 8600.

diamond bottom pattern

(http://img123.imageshack.us/img123/7230/diamondgx2.jpg) (http://img123.imageshack.us/my.php?image=diamondgx2.jpg)
(http://img123.imageshack.us/img123/diamondgx2.jpg/1/w1024.png) (http://g.imageshack.us/img123/diamondgx2.jpg/1/)

Title: Re: Meltdown
Post by: BachQ on December 05, 2008, 05:24:59 PM

Quote from: ezodisy on December 05, 2008, 03:58:07 AM
you should see the market right now, nearly everything is on the edge of tipping over: Dow, FTSE, euro/yen, gold, oil and so much more on a precipice. A little gust of wind and the Dow's going to 8000 today (61.8% of the recent rise) or lower

Well, 61.8 didn't happen! >:D Instead of a "gust of wind," we experienced a hurricane (given the unemployment and housing data) and yet the Dow rallied.

Quote from: ezodisy on December 05, 2008, 12:24:30 PM
well you've got to give the yanks credit for their murder-mystery theatricality. All this last minute suspense--with regular commercial breaks--and what do you get? Only saw it today. DIAMOND BOTTOM PATTERN. Rally rally rally yummy tasty rally. Maybe. They kept flirting and flirting and I kept waiting, a bit like my ex-girlfriend before she went down, but it just didn't happen this time and they closed above 8600.

diamond bottom pattern

(http://img123.imageshack.us/img123/7230/diamondgx2.jpg) (http://img123.imageshack.us/my.php?image=diamondgx2.jpg)
(http://img123.imageshack.us/img123/diamondgx2.jpg/1/w1024.png) (http://g.imageshack.us/img123/diamondgx2.jpg/1/)

Good God ... What a crazy rally! According to Reuters, stocks rallied because "investors bet that a steep drop in oil prices will boost consumer spending, lifting retail stocks and offsetting government data showing half a million jobs were lost in November." (http://www.reuters.com/article/newsOne/idUSN02ELLSNA20081205) That may be partially true, but more likely this is just an inexplicable rally (PPT?).

Title: Re: Meltdown
Post by: BachQ on December 05, 2008, 05:25:39 PM

Peter Schiff against bailouts: http://www.youtube.com/watch?v=dyO4q3C4f_s

Simple message: "Americans need to make things; they need to go to work; and they need to save. We can't try to stimulate the economy through more spending; and we can't keep bailing out [dying companies]"

Title: Re: Meltdown
Post by: BachQ on December 05, 2008, 05:27:00 PM

4 minute Peter Schiff background documentary on National Public Radio (4 Dec 2008) 4 min audio only (http://www.youtube.com/watch?v=-jI7o08Cbmo)

Title: Re: Meltdown
Post by: BachQ on December 05, 2008, 05:28:37 PM

FT ALPHAVILLE -- The Californian economy - the eighth largest in the world - is crumbling.
(http://ftalphaville.ft.com/blog/2008/12/05/50108/the-governator-ill-pay-you-back/)

Title: Re: Meltdown
Post by: ezodisy on December 06, 2008, 03:31:30 AM

Quote from: Dm on December 05, 2008, 05:24:59 PM
Well, 61.8 didn't happen! >:D Instead of a "gust of wind," we experienced a hurricane (given the unemployment and housing data) and yet the Dow rallied.

Yeah it found support at the same 50% line of earlier in the week, about 8150. Cheeky bear.

Quote
Good God ... What a crazy rally! According to Reuters, stocks rallied because "investors bet that a steep drop in oil prices will boost consumer spending, lifting retail stocks and offsetting government data showing half a million jobs were lost in November." (http://www.reuters.com/article/newsOne/idUSN02ELLSNA20081205) That may be partially true, but more likely this is just an inexplicable rally (PPT?).

I don't know but that was a big fake-out / bear trap, the upward trend was busted in what should have been an irremediable way. But you can see the same thing happened on the left-side of the supposed diamond, and it kept going, so you've just got to learn to live with the market's little gags and fakes. Anyway a Christmas rally on lighter volume would be good for everyone. There will be more selling next year, that seems certain, and I've corresponded with a mate who knows that some big funds will be dumping after Christmas, so it ain't over yet.

(http://www.bruddabear.com/photo/BearCavalry.jpg)

or this one :)

(http://www.pown.us/wp-content/uploads/2008/06/354.jpg)

Title: Re: Meltdown
Post by: drogulus on December 06, 2008, 12:56:42 PM

The Doomsday Fallacy: On Doomsday, or any day that passes for Doomsday by the standards of this thread, find someone who has always predicted that everything is going to hell, and proclaim that he's a seer. Also ignore the fact that there are always people who say this, since there are always bad trends which could go really bad. What I take from these guys is that they are right when the bad news catches up to what they tend to think anyway. The same thing can happen on the upswing:

Didn't I say the market was going to go up?

Yes sir, Mr. Wizard! But, how did you know??

As far as the particular circumstances of the housing bubble and debt securitization, that's been common knowledge for a long time now. Read Henry Blodget in this issue of the Atlantic Monthly and you see that the problem is not that we don't pay attention to seers, but rather that even though many people warn about the problem, no one does anything to fix it, because their job is always to do something else, like keep the economy going, maximize profit, get the mortgage, or beat the market average. No one is in charge of preventing bubbles, and Blodget says that in fact they can't be prevented, only managed, and we could have done much better at that. I think he's right.

Here's the link to the Blodget piece. (http://www.theatlantic.com/doc/200812/blodget-wall-street) Allowing for special pleading in his own behalf, it sounds like a fair appraisal of the situation.

Here's a snippet:

First things first: for better and worse, I have had more professional experience with financial bubbles than I would ever wish on anyone. During the dot-com episode, as you may unfortunately recall, I was a famous tech-stock analyst at Merrill Lynch. I was famous because I was on the right side of the boom through the late 1990s, when stocks were storming to record-high prices every year—Internet stocks, especially. By late 1998, I was cautioning clients that "what looks like a bubble probably is," but this didn't save me. Fifteen months later, I missed the top and drove my clients right over the cliff.

Later, in the smoldering aftermath, as you may also unfortunately recall, I was accused by Eliot Spitzer, then New York's attorney general, of having hung on too long in order to curry favor with the companies I was analyzing, some of which were also Merrill banking clients. This allegation led to my banishment from the industry, though it didn't explain why I had followed my own advice and blown my own portfolio to smithereens (more on this later).

Title: Re: Meltdown
Post by: ezodisy on December 07, 2008, 12:17:21 PM

I would agree that they can't be prevented, not with our free market way anyway. You ever read Mackay's Extraordinary Popular Delusions and the Madness of Crowds? The tulip mania bubble is a quality read, absolutely hilarious.

Here's an article on the recent backwardation of gold and its implication that the US dollar--and not it alone--is going to get stuffed

http://news.goldseek.com/GoldSeek/1228499200.php

Title: Re: Meltdown
Post by: ezodisy on December 07, 2008, 12:43:22 PM

Hugh Hendry recently on Bloomberg, definitely worth watching.

Who wants to bet against 1 million job losses in a month?

http://www.bloomberg.com/avp/avp.htm?N=adviser&T=Eclectica%27s%20Hendry%20Sees%20Opportunity%20in%202-Year%20Treasuries&clipSRC=mms://media2.bloomberg.com/cache/vRa_Dah8BqSM.asf

Title: Re: Meltdown
Post by: ezodisy on December 07, 2008, 02:33:20 PM

essential reading IMO.

GOLD, SILVER, PLATINUM, PALLADIUM AND DIAMONDS

...

We have watched over and over again since 10/19/87 our government dump gold on the market to suppress prices. From 10/19/87 until 8/20/88 that was an illegal enterprise. As we moved into the early 1990s, we saw commercials on the Comex shorting and increasing shorts as prices rose, which is not a normal procedure. It exposes one to the possibility of major losses, unless your shorting is covered by the US government. The result has been suppressed gold prices for 30 years, especially over the past 16 years. These methods have been augmented by the selling and leasing of gold by a large number of central banks. These sales were made over and over again to break the back of any gold rally. Due to overwhelming physical demand over the years gold has still managed to achieve new highs.

During this month of December we see unusual physical delivery of Comex futures contracts. We have been reporting those figures to you as we receive them. The registered gold available at the Comex for delivery is being depleted something that has never happened before. Due to the fact that the CFTC has never audited the registered Comex holdings we really do not know how much gold is available for delivery. If the demand is high default could occur. We'll know that by the end of the month or perhaps sooner.

A short seller must be 90% covered by gold or by offsetting long contracts. The CFTC is supposed to oversee such activity and if they haven't then we can assume that the US government is behind the naked shorting of gold contracts without gold as collateral or offsetting long positions. The pros, specs, and traders have seen this going on during 2008 and they have been abandoning the market in droves. Open interest has fallen from 625,000 contracts to 264,000 as a result. Players are tired of being stolen from by their own government.

Normally ½% to 1% of contracts are delivered when the contract expires. Thus far into the delivery month we are seeing about 6% take delivery. Over the next three weeks we will find out just what a fix Comex is in. It won't be a positive event no matter what happens. Large deliveries will force gold higher and default will send gold upward like a rocket.

Our government needs much higher gold prices to devalue the dollar. If the Fed curtails the availability of money and credit the stock market will collapse, as well will the economy and the Second Great Depression will be underway.

As this transpires we are seeing the beginnings of a trade war as export countries deliberately devalue their currencies, this is a confluence of very bad events. This we believe is about to force the Fed and the Treasury to abandon their gold suppression of many years.

The Fed has to devalue the dollar versus gold - it has no other choice. If it doesn't everything else, financial and economic, collapses. We are at a great crossroads - the event we've been waiting years to see. This is the only way Fed Chairman Ben Bernanke can void many years of depression. He knows if gold goes to $6,000 an ounce, debt will be mitigated and pressure will ease on the economy. This is why we are starting to hear insider Illuminists talk of $2,000 gold. They want to be recognized as having forecast the event and they also want to set a mental barrier at $2,000 an ounce. This revaluation of gold and return to the gold standard will neutralize hyperinflation by absorbing excess currencies. Why else would JP Morgan Chase and Citigroup be predicting $2,000 gold?

We see Morgan, Citigroup, Goldman and Hong Kong Shanghai Bank HSBC, taking large deliveries of gold because they know what is coming and they can buy cheaper on the Comex. The trade is a lock because they take delivery on the futures market and if they want to they can sell on the spot market and take a profit due to massive physical demand. We are close to seeing a great breakout in the gold price. Stand by we'll let you know when to add to your positions.

http://news.goldseek.com/InternationalForecaster/1228637760.php

Title: Re: Meltdown
Post by: ezodisy on December 07, 2008, 03:01:39 PM

new Goldseek interview with Roubini.

http://radio.goldseek.com/

It starts at the 60 minute mark and is worth hearing if only for that stat about 72% of total demand for goods & services in private US consumption coming from the housing sector.

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:17:20 PM

Quote from: drogulus on December 06, 2008, 12:56:42 PM
Here's the link to the Blodget piece. (http://www.theatlantic.com/doc/200812/blodget-wall-street) Allowing for special pleading in his own behalf, it sounds like a fair appraisal of the situation.

Here's a snippet:

First things first: for better and worse, I have had more professional experience with financial bubbles than I would ever wish on anyone. During the dot-com episode, as you may unfortunately recall, I was a famous tech-stock analyst at Merrill Lynch. I was famous because I was on the right side of the boom through the late 1990s, when stocks were storming to record-high prices every year—Internet stocks, especially. By late 1998, I was cautioning clients that "what looks like a bubble probably is," but this didn't save me. Fifteen months later, I missed the top and drove my clients right over the cliff.

Later, in the smoldering aftermath, as you may also unfortunately recall, I was accused by Eliot Spitzer, then New York's attorney general, of having hung on too long in order to curry favor with the companies I was analyzing, some of which were also Merrill banking clients. This allegation led to my banishment from the industry, though it didn't explain why I had followed my own advice and blown my own portfolio to smithereens (more on this later).

Drog,

Here's an excellent 14-minute video on "bubbles" produced by Chris Martenson, Ph.D. ...

http://www.chrismartenson.com/crashcourse/chapter-15-bubbles (14 Min)

This entire series is first-rate, and I particularly recommend the video on "peak oil"

http://www.chrismartenson.com/crashcourse/chapter-17a-peak-oil (17 Min)

Click here for the entire series, called the "Crash Course," broken down into 20 components.

http://www.chrismartenson.com/crashcourse

To attest to the popularity of this series, Dr. Martenson produced 10,000 DVD's of Crash Course, and all sold out within 36 hours.

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:21:29 PM

Obama Plans Largest Building Program Since 1950s (http://www.bloomberg.com/apps/news?pid=20601087&sid=aBcPiaRqqffg&refer=home)

Polito.com "[W]e will launch a massive effort to make public buildings more energy-efficient. Our government now pays the highest energy bill in the world. We need to change that. We need to upgrade our federal buildings by replacing old heating systems and installing efficient light bulbs. That won't just save you, the American taxpayer, billions of dollars each year. It will put people back to work."

[ L I N K ] (http://www.politico.com/news/stories/1208/16258.html)

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:23:17 PM

Peter Schiff discusses his new book "CRASH PROOF: How to Profit from the Coming Economic Collapse" (2007)

http://www.youtube.com/watch?v=Y0FMJoHfUDo

(http://ak.buy.com/db_assets/large_images/089/202994089.jpg)

QuoteFrom the Inside Flap

From both an economic and monetary perspective, the United States is a house of cards—impressive on the outside, but a disaster waiting to happen beneath the surface. In a relatively short period of time, the country has gone from the world's largest creditor to its greatest debtor; the value of the dollar has declined; and domestic manufacturing has given way to non-exportable services. While these and other issues could potentially spell disaster for your financial well-being, the situation could also present unique opportunities—if you're prepared.

For more than a decade, seasoned Wall Street prognosticator Peter Schiff has not only observed the U.S. economy, but also helped his clients restructure their portfolios to reflect his outlook. What he sees today is a nation facing an economic storm brought on by growing federal, personal, and corporate debt; too little savings; a declining dollar; and lack of domestic manufacturing. (continued)

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:25:49 PM

Quote from: ezodisy on December 06, 2008, 03:31:30 AM
There will be more selling next year, that seems certain, and I've corresponded with a mate who knows that some big funds will be dumping after Christmas, so it ain't over yet.

(http://www.bruddabear.com/photo/BearCavalry.jpg)

or this one :)

(http://www.pown.us/wp-content/uploads/2008/06/354.jpg)

True enough. The US Economy has not hit bottom yet. Come Spring of 2009, the economy will be on a trajectory towards the abyss.

(http://upload.wikimedia.org/wikipedia/en/7/73/Slim-pickens_riding-the-bomb_enh-lores.jpg)

In this 13-second clip, the US economy is represented by the person waving his hat on the rapidly descending BOMB (Major Kong fr: Dr. Strangelove), hollering ecstatically with delerius abandon while heading toward what will become a very large crater on Earth.

http://www.youtube.com/v/wcW_Ygs6hm0

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:27:57 PM

Addressing the credit crisis and the impending need for California to issue emergency IOU's, Governor Arnold Schwarzenegger warned that "It's getting worse very quickly. It's like an avalanche in that it gains momentum. And that's what we're in right now, so it's a real crisis."

(http://www.bloomberg.com/apps/data?pid=avimage&iid=inU1ICAgyoXg)

(http://www.bloomberg.com/apps/news?pid=20601087&sid=a2TUhalNFDds&refer=home)

QuoteCalifornia's cash account is projected to be negative $1.9 billion by March, 2009. ... California's two-year budget shortfall is about $28 billion, accounting for one-third of the deficits faced by U.S. states, according to figures from the National Conference of State Legislatures in Denver.... "We're just barely hanging on right now," said California Controller John Chiang.

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:28:39 PM

(http://img.timeinc.net//time/cartoons/20081205/cartoons_06.jpg)

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:29:20 PM

(http://img.timeinc.net//time/cartoons/20081128/cartoons_10.jpg)

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:30:06 PM

(http://img.timeinc.net//time/cartoons/20081205/cartoons_04.jpg)

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:32:09 PM

Der Spiegel -- Global Crisis Hits Shipping Industry Hard

By Thomas Schulz

Shipping benefits from globalization more than almost any other sector. But this has also made it more vulnerable to the global economic crisis. Freight and charter rates have plunged, jobs at shipping companies are being cut and many ships are being parked for months at a time.

(http://www.spiegel.de/international/business/0,1518,594710,00.html)

QuoteMany ships are now sailing half-empty, if they are sailing at all. In fact, shipping companies are pulling more and more ships out of circulation, due to a lack of demand, and placing them at anchor indefinitely. Experts estimate that one-fourth of all ships used to transport raw materials in the Pacific are now idle. ... the talk behind the scenes revolves around the concept of a "perfect storm," in which everything that can go wrong does go wrong, culminating in the worst possible disaster. "The negative conditions we are seeing in the market place are unprecedented in our industry's history," says Ron Widdows, the CEO of NOL, a shipping company. Bertram Rickmers, a German ship owner, concludes matter-of-factly: "The party is over."

(http://www.dryships.com/graphics/chart1.jpg)

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 06:34:29 PM

BLOOMBERG: AIG TO DOUBLE MANAGERS' SALARIES: Bailout recipient AIG will offer "special retention payments that more than double the salaries of some senior managers," and some AIG executives "will get more than $500,000, about 200 percent of their salaries, to stay through 2009," reported

Bloomberg.

(http://www.uclick.com/feature/08/11/12/ta081112.gif)
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aqyRUyX83Uqg&refer=home)

Title: Re: Meltdown
Post by: BachQ on December 07, 2008, 08:09:23 PM

Quote from: ezodisy on December 07, 2008, 12:17:21 PM
Here's an article on the recent backwardation of gold and its implication that the US dollar--and not it alone--is going to get stuffed

http://news.goldseek.com/GoldSeek/1228499200.php

Time will tell whether this backwardation represents a short-term distortion, or a longterm trend (or, worse yet, a permanent trend). But it does not bode well for paper curriencies. This could become scary sh!t if it continues.

I've highlighted from your GoldSeek source:

QuoteThe fact that [gold backwardation] has happened is the coup de grâce for the regime of irredeemable currency. It will bleed to death, maybe rather slowly, even if no other hits, blows, or shocks are dealt to the system. Very few people realize what is going on and, of course, official sources and the news media won't be helpful to them to explain the significance of all this. ... Gold going to permanent backwardation means that gold is no longer for sale at any price, whether it is quoted in dollars, yens, euros, or Swiss francs. The situation is exactly the same as it has been for years: gold is not for sale at any price quoted in Zimbabwe currency, however high the quote is. To put it differently, all offers to sell gold are being withdrawn, whether it concerns newly mined gold, scrap gold, bullion gold or coined gold.

*** December 2 is a landmark, because before that date the monetary system could have been saved by opening the U.S. Mint to gold. Now, given the fact of gold backwardation, it is too late. The last chance to avoid disaster has been missed. The proverbial last straw has broken the back of the camel.

*** Now gold backwardation has caught up with us and shut down the free flow of gold in the system. This will have catastrophic consequences. Few people realize that the shutting down of the gold trade, which is what is happening, means the shutting down of world trade. This is a financial earthquake measuring ten on the Greenspan scale, with epicenter at the Comex in New York, where the Twin Towers of the World Trade Center once stood. It is no exaggeration to say that this event will trigger a tsunami wiping out the prosperity of the world.

Title: Re: Meltdown
Post by: BachQ on December 08, 2008, 03:16:53 AM

Quote from: ezodisy on December 07, 2008, 12:17:21 PM
Here's an article on the recent backwardation of gold and its implication that the US dollar--and not it alone--is going to get stuffed

http://news.goldseek.com/GoldSeek/1228499200.php

The Last Contango in Washington ... Coming soon! ...

(http://news.goldseek.com/GoldSeek/1228499200.php)

Quote
Definitions: Contango implies the existence of a healthy supply of the commodity in the warehouses available for immediate delivery, while backwardation implies shortages and conjures up the scraping of the bottom of the barrel. ... Backwardation in gold is always and everywhere a monetary phenomenon: it is a reminder of the incurable pathology of paper money. It dramatizes the decay of the regime of irredeemable currency. It can only get worse. As confidence in the value of fiat money is a fragile thing, it will not get better. It depicts the paper dollar as Humpty Dumpty who sat on a wall and had a great fall and, now, "all the king's horses and all the king's men could not put Humpty Dumpty together again." To paraphrase a proverb, give paper currency a bad name, you might as well scrap it. Once entrenched, backwardation in gold means that the cancer of the dollar has reached its terminal stages. The progressively evaporating trust in the value of the irredeemable dollar can no longer be stopped.

Title: Re: Meltdown
Post by: ezodisy on December 08, 2008, 03:58:17 AM

Quote from: Dm on December 08, 2008, 03:16:53 AM
The Last Contango in Washington ... Coming soon! ...
(http://news.goldseek.com/GoldSeek/1228499200.php)

Yep I think it's underway and it's an utterly fascinating subject. I've been reading about Kondratieff waves, these big 50-60 year cycles of boom and bust split up into 4 seasons of which, yep, you guessed it, we are heading into the winter season of the wave.

(http://www.kondratieffwinter.com/images/wave1.gif)

K-winter is the season during which excessive debt is purged from the economy. This creates some difficulties in the banking system, because they have clocked up excessive credit, a significant proportion of which will never be repaid. Of course, the same argument applies to entities outside the traditional banking system who may have supplied credit on favorable terms in the "good times".

Kondratieff winter also ensures that the financial excesses of the K-spring and K-autumn that resulted in asset overvaluation are corrected. Accumulated wealth is destroyed as financial assets collapse.

Bankruptcies and unemployment grow in a domino chain reaction and asset prices collapse. Not surprisingly, as anyone can see from the effects of the financial collapse in Argentina, the fabric of society itself threatens to break down. The net effect is the set of conditions that in the 1930s cycle were termed the "Great Depression". A spell of deflation is to be expected, as wealth has been destroyed, easy money is no longer being created, and people are no longer confident to spend money. Prices fall to encourage spending, but people put off purchases because they know that things may be cheaper in the future.

As consumer confidence drops rapidly, confidence in the banking system and the economy fails and there is a run away from things with intangible value, such as speculative stock market and "new economy" concept companies, towards tangible assets such as durable goods, established industries without debt loading, gold and silver, and commodities.

There may be currency crises with interest rates spiking up as credit contracts or foreigners disinvest in the currencies associated with the worst excesses of the cycle.

The K-winter is also associated with the "trough wars" which is liable to break out in relation to the social and political stresses caused by the depression. World War II is an example of a "trough war"- and the geopolitical realignments that it caused set the stage for the world's international relations in the next cycle. (http://www.kondratieffwinter.com/kw_wave_depression.html)

(http://www.kondratieffwinter.com/images/first_snow_1.jpg) (http://www.kondratieffwinter.com/kw_intangibles_first_snow.html)

^click^

A short, lucid and recent article on the Kondratiev cycle

"Finally, the excesses of the autumn plateau lead to "winter" — an exhaustion of accumulated wealth that forces the economy into a sharp pullback. Kondratieff saw this as a three-year collapse followed by 15 years of deflation and quiet innovation. Winter ends with a final recession before growth starts anew." (http://www.investmentnews.com/apps/pbcs.dll/article?AID=/20081113/REG/811129978)

Title: Re: Meltdown
Post by: ezodisy on December 08, 2008, 07:33:42 AM

Here is an update on the backwardation in gold that started on December 2. It continued and worsened on December 3, 4, and 5. So far this is the most serious signal of the economic crisis: the world is rushing headlong into a Great Depression, possibly worse than that of the 1930's. (http://news.goldseek.com/GoldSeek/1228744800.php)

Title: Re: Meltdown
Post by: BachQ on December 08, 2008, 07:55:17 AM

Quote from: ezodisy on December 08, 2008, 07:33:42 AM
Here is an update on the backwardation in gold that started on December 2. It continued and worsened on December 3, 4, and 5. So far this is the most serious signal of the economic crisis: the world is rushing headlong into a Great Depression, possibly worse than that of the 1930's. (http://news.goldseek.com/GoldSeek/1228744800.php)

This is some scary sh!t. Very interesting article. The final four paragraphs offer an excellent summary of the battle between paper and gold ... and gold always wins!

Comex's potentially declaring a liquidation only policy is also very interesting:

Quote *** Comex can no longer attract sufficient quantities of gold from investors to its warehouses which, in consequence, get more and more depleted. Such a gold flow is the lifeblood not only of Comex, but of the irredeemable dollar as well. There is a world of a difference between the irredeemable dollar with the gold window of Comex open, and the irredeemable dollar with the gold window of Comex closed. The institute of the gold futures market is the prop keeping the global game of musical chairs of fiat money going. The music stops when Comex closes its gold window.

But Comex will eventually have to declare "liquidation only" policy, effectively closing its gold window. The phrase means revoking the right of holders of contracts to demand delivery on their expiring gold futures under certain circumstances. Clients have to accept settlement on their contracts in cash. This has happened in the past, e.g., in silver and palladium, although it has never happened in gold. It is not widely known that Comex would not go bankrupt de jure if it declared "liquidation only". Small print in the contract makes allowance for this option in case of force majeure. Nevertheless, Comex would be considered bankrupt de facto in the eyes of the public if it declared "liquidation only" on its gold futures contracts. Comex is the residual source of the world's only currency that is not the liability of some government, gold. ***

(continued)

We're witnessing the first time in history that there has been a backwardation in gold. Fasten your seatbelts.

Title: Re: Meltdown
Post by: BachQ on December 08, 2008, 07:57:00 AM

Quote from: ezodisy on December 08, 2008, 03:58:17 AM
Yep I think it's underway and it's an utterly fascinating subject. I've been reading about Kondratieff waves, these big 50-60 year cycles of boom and bust split up into 4 seasons of which, yep, you guessed it, we are heading into the winter season of the wave.

... Yeah, we're definitely in WINTER ...

Much earlier in this thread, Sean and I were discussing how all civilizations undergo four seasons of existence (it being understood that every civilization in history has eventually experienced a "winter" of decline and extinction). Whether Western civilization currently is in its "Winter" is a question for another day ... (things are depressing enough!).

Title: Re: Meltdown
Post by: BachQ on December 08, 2008, 07:59:22 AM

Quote from: ezodisy on December 03, 2008, 11:15:30 PM
yes where is oil going? Unlike gold, the physical part of which is in very high demand right now and it's only a matter of time until the weekly downtrend reverses, the plummeting oil price makes sense. That is made sense before the King announced that $75 would be a fair price. The production cuts therefore should be quite large. Down a bit more to the low $40s perhaps and then a proper correction?

ALGIERS, Algeria (AP) — Oil markets should brace for a surprise decision on output cuts when OPEC meets Dec. 17, the cartel's president said Saturday, suggesting that reductions could be deeper than expected. "A consensus has formed for a significant reduction of production levels" by the 14-member Organization of Petroleum Exporting Countries, OPEC President Chakib Khelil told The Associated Press. The OPEC head would not discuss how deep the output cut would be, but said it could be "severe," and noted that some analysts are predicting cuts of as much as 2 million barrels per day. (http://www.google.com/hostednews/ap/article/ALeqM5g0mksbfO-uz9UjL37eZvR3u1NHMAD94TDKNG0)

Title: Re: Meltdown
Post by: BachQ on December 08, 2008, 08:05:22 AM

Quote from: drogulus on October 27, 2008, 04:15:59 PM
What happens is that the inelasticity you mention becomes elastic as the price goes up and alternatives you don't consider at the $100 price point becomes increasingly attractive as the price goes even higher, and if the price stays high for any length of time a whole new set of solutions is priced into existence. The reason we don't convert Abrams tanks or Post Office vehicles to CNG or vegetable oil or something else is that it's expensive to retrofit a huge installed base, but when the price goes high enough the whole process pays for itself in a few years. There's a lag while planners try to figure out if now is the time or if we still should wait, but plans are being dusted off right now. _:)

Drogulus, if we assume that healthcare-related demand for energy is inelastic, then these figures offer a glimpse at the huge chunk of demand that is inelastic.

From the OilDrum: Health care & Energy -- some facts:

-- The U.S. presently spends an estimated 16 percent of its GDP on health care, compared with 8 to 10 percent in most other major industrialized nations.

-- The Centers for Medicare and Medicaid Services (CMS) projects that growth in health spending should continue to outpace GDP over the next 10 years

-- From an energy perspective, health care buildings account for 11 percent of all commercial energy consumption.

-- Health care facilities are the fourth highest consumer of total energy of all building types and have an energy intensity (Btu/square foot) that is the second highest among all commercial building types.

-- Many medical products, few of which are designed to be recycled, are petroleum based; including gloves, syringes, IV and dialysis tubing, tablets, gels, ointments, antihistamines, and many antibiotics and antibacterial medications.

*** None of these energy estimates accounts for the huge energy and material costs for the manufacture and transportation of goods, services, personnel and patients that enable these energy intensive facilities to perform their myriad and complex functions. (http://www.theoildrum.com/node/4842)

Title: Re: Meltdown
Post by: ezodisy on December 08, 2008, 11:28:22 PM

Quote from: Dm on December 08, 2008, 07:55:17 AM
We're witnessing the first time in history that there has been a backwardation in gold. Fasten your seatbelts.

It's a fascinating subject. I would really like to know the implications for Russia, what with their $ currency reserves and the current low price of oil. Do they even hold any gold? The idea of exchanging gold for oil is pretty funny (yesterday I was thinking of going to buy some bread in exchange for gold :) ).

Title: Re: Meltdown
Post by: ezodisy on December 09, 2008, 01:33:00 AM

Rouble Trouble in Russia: The Inconsistent Trinity at Work and the Need for a 20-25% Currency Depreciation

Nouriel Roubini | Dec 8, 2008

I recently spent a few days in Moscow meeting with a variety of economic and financial officials and analysts, both in the public and private sector.

Until July of this year Russia was growing at an annual rate close to 8%, oil prices were peaking at $140 a barrel, the country was running a large fiscal surplus and a large current account surplus, it had a war chest of $600 billion plus of foreign reserves, its stock market, bond markets and currency values were strong and policy makers were thinking of turning the rouble into a major reserve currency, at least for the CIS bloc. This economic and financial success was leading Russia to flex its geo-political muscle challenging the U.S. on a number of political and military issues, using its energy power as an instrument of foreign policy in its relations with the Eurozone and its former Soviet neighbors. The peak of this geopolitical resurgence of the Russian bear was during the August war with Georgia when Russia flexed its military power while the US looked impotent in its inability to defend an alleged ally.

But what a difference a few months make: six months later Russia is today in deep economic and financial trouble. Let me now explain in detail why...

Today S&P announced it has lowered Russia's foreign currency credit rating by one notch from BBB+ to BBB. In less than six months oil prices have fallen to less than $50 a barrel (from the $140 plus peak of July); the stock market has fallen by over 60% and in some days it has been shut down to prevent a free fall; the current account surplus has turned into a near deficit and a sure deficit by 2009; the country has experienced a capital flight of over $100 billion and has lost about $150 billion of foreign reserves (now down to about a $450 billion level); it is facing massive external debt financing problems as its banks financed their lending with foreign currency borrowings and its corporate firms financed massive expansion with foreign currency debt; it is now desperately trying to prevent a sharp depreciation of its currency by aggressive forex intervention; it may face a large fiscal deficit (2% of GDP) next year; and its GDP growth rate is sharply slowing down leading the World Bank to predict a growth rate of 3% alone in 2009 while leading local analysts are predicting an actual recession (negative growth of as much as -2%) in 2009 (see the recent analysis by RGE's Rachel Ziemba for more on the risks of a hard landing in Russia).

Given this sudden change in the Russian fortunes there are several key policy issues that the policy authorities need to deal with: of course given the external shocks (terms of trade worsening and sudden stop of capital and credit) it was important to use the buffer of foreign reserves to avoid a bank run by providing liquidity and capital to banks and by providing a fiscal stimulus to a country that is sharply slowing down. But the key unresolved policy issue is what to do with the exchange rate. Until recently Russia was on an effective basket peg (with 55% for the dollar and 45% weight for the euro). But with oil prices now down over 60% from the peak of the summer and with incipient current account deficits and fiscal deficits and a likely recession in 2009 the currency is obviously overvalued. A reasonable estimate of the needed exchange rate depreciation – with oil at about $50 a barrel in 2009 – is 25%. But until recently the authorities resisted the needed depreciation through aggressive forex intervention.

The reasons for resisting such necessary depreciation were varied: the banks and the corporate sector had massive foreign currency liabilities and a sharp movement of the currency would have led to nasty balance sheet effects and severe financial distress; the incipient bank run of retail depositors could accelerate if the currency were to fall sharply (Russian depositors were wiped out already twice in the transition period in the early 1990s and again in 1998 and they tend to be trigger happy); Putin staked part of his reputation and his view of a strong Russia on maintaining a strong rouble.

But the forex intervention that financed the capital flight out of Russia (a flight initially triggered by the increase in political risk given the Georgia conflict and then exacerbated by the global sudden stop of capital given the US financial turmoil in October-November) exacerbated the flight. Indeed, a good part of the forex intervention was sterilized thus preventing a significant stabilizing increase in domestic interest rates that an unsterilized intervention would have triggered. But, as a perfect case study of Triffin's "inconsistent trinity", a country cannot maintain a peg, have no capital controls and, at the same time, maintain monetary independence and avoid an increase in domestic interest rates that an expected depreciation triggers. The sterilized intervention thus led to a persistent bleeding of forex reserves that would continue unless such intervention is allowed to be unsterilized and thus force a rise in interest rates that would however be seriously costly in growth terms.

For a while the Russian authorities tried to skirt this inconsistent trinity inconsistency by introducing capital controls on capital outflows (taking the form of reading the riot act to local and foreign banks and financial institutions and telling them not to speculate against the rouble). But even such controls are leaky as many banks - faced with retail depositors converting roubles into dollars - needed to hedge such currency risk to avoid exacerbating their open currency positions mismatch. So the authorities cannot be too heavy handed against banks that are just hedging rather than "speculating". And unless capital controls are imposed on retail depositors their demand for currency hedging drives the financial institutions need to hedge in turn this currency exposure. So the conundrum of the inconsistent trinity still holds as there are limits to regaining monetary independence under fixed rates when such capital controls are effectively leaky and implemented partially.

The more appropriate way to regain a modicum of monetary independence and prevent a sharp increase in domestic interest rates that expectations of a rouble depreciation trigger is to let the currency peg go and flexibilize the exchange rate regime. Only after the currency has moved down enough expectations of further depreciation would quiet down. So, the right policy move would be one of a one-step large depreciation of the currency value that reduces significantly the amount of actual overvaluation of the currency. Instead, for the time being, the authorities have reacted by allowing only a gradual and modest depreciation, in a series of four 1% downward steps in the last month. But such small step depreciations exacerbate the capital flight incentives (and ensuing bleeding of reserves) as they lead to further expected depreciation expectations that triggers further flight. Only a relatively large unexpected step depreciation can stop such expectations and reduce the amount of the capital flight and forex reserve depletion.

But so far authorities had resisted such large step move for three reasons: losing face politically; worrying about a run on banks by depositors; and the large foreign currency exposure of financial institutions and corporate firms. These three reasons to resist a larger currency move are now becoming less important for several reasons. First, a continued bleeding of a large stock of reserves could cause a much bigger problem down the line – a real currency crash that would be politically even more damaging - if continued sterilized intervention leads to a sharp fall in reserves at the time when the current account and the fiscal account are likely to move into a deficit in 2009. Second, the risk of a bank run can be better managed via a controlled devaluation when reserves are still high rather than when reserves have been mostly depleted via a self-defeating defense of an indefensible peg.

Third, and most important, by now a significant part of the foreign currency exposure of the financial and corporate has been reduced by using the forex reserve intervention to effectively allow banks and corporate firms to reduce their exposure to foreign currency liabilities and thus avoid severe balance sheet effects when the currency moves by a larger amount. Effectively Russia has been doing what Brazil did in 1998-99 – i.e. bailing out ex-ante its banks and corporates by allowing them to cover their forex currency exposure via purchase of a large fraction of the reserves of the central bank;. This Brazilian "ex-ante bail-out" prevented the "ex-post bail-out" that would have been necessary if banks and corporates with a massive amount of foreign currency debt had experienced a large currency depreciation before they had the time to hedge such exposure. So now that the forex reserves of Russia have been run down enough to reduce the foreign currency exposure of the private sector the central bank can allow a faster rate of rouble depreciation without worrying about the banks and corporate going bust via the balance sheet effects of a large currency move on the value of their previous large foreign currency exposure.

All these factors suggests that the Russian authorities are now ready to let the currency fall at a faster rate than it the past. They have already moved in that direction by surprising markets with their weekly 1% moves. But since a much larger depreciation is needed and since further expected 1% moves will trigger even greater amounts of capital flight and reserve depletion a broader and large one-step move is now necessary and viable. The rouble may need to fall by about 25% before reaching a new equilibrium value. It is thus better to make a good chunk of that adjustment faster and in an unexpected way rather than keep on bleeding a large stock of forex reserves if small step movements trigger expectations of further depreciation. Now that banks and corporate firms are more hedged than before and the war chest of reserves has not yet fallen to alarming levels it is time to let the currency level take a larger burden of the necessary adjustment that the country needs to cope with lower oil prices, the sudden stop of capital, the increase in investors' risk aversion and a global economic outlook that signals a sharp recession in advanced economies and a very likely recession in Russia too.

Title: Re: Meltdown
Post by: BachQ on December 09, 2008, 03:00:33 AM

UK GUARDIAN: "As many as 1 million American jobs could be lost every month by next spring as businesses struggle to raise capital in financial markets consumed by fear, according to a new analysis." (http://www.guardian.co.uk/business/2008/dec/07/recession-job-losses)

Title: Re: Meltdown
Post by: BachQ on December 09, 2008, 03:01:06 AM

Nobel winner Krugman: U.S. auto industry will 'probably disappear' ... : Krugman told reporters in Stockholm Sunday that congress support to the auto-industry was not a long-term solution, but the result of a "lack of willingness to accept the failure of a large industry in the midst of an economic crisis." (http://edition.cnn.com/2008/BUSINESS/12/07/krugman.nobel.economics.auto.ap/index.html)

Title: Re: Meltdown
Post by: BachQ on December 09, 2008, 03:01:45 AM

November UK housing sales fall to record low, down 55% on the year. (http://uk.reuters.com/article/businessNews/idUKTRE4B803S20081209)

Title: Re: Meltdown
Post by: BachQ on December 09, 2008, 03:03:10 AM

Quote from: ezodisy on December 09, 2008, 01:33:00 AM
Rouble Trouble in Russia: The Inconsistent Trinity at Work and the Need for a 20-25% Currency Depreciation

Nouriel Roubini | Dec 8, 2008

I recently spent a few days in Moscow meeting with a variety of economic and financial officials and analysts, both in the public and private sector.

Until July of this year Russia was growing at an annual rate close to 8%, oil prices were peaking at $140 a barrel, the country was running a large fiscal surplus and a large current account surplus, it had a war chest of $600 billion plus of foreign reserves, its stock market, bond markets and currency values were strong and policy makers were thinking of turning the rouble into a major reserve currency, at least for the CIS bloc. This economic and financial success was leading Russia to flex its geo-political muscle challenging the U.S. on a number of political and military issues, using its energy power as an instrument of foreign policy in its relations with the Eurozone and its former Soviet neighbors. The peak of this geopolitical resurgence of the Russian bear was during the August war with Georgia when Russia flexed its military power while the US looked impotent in its inability to defend an alleged ally.

But what a difference a few months make: six months later Russia is today in deep economic and financial trouble. Let me now explain in detail why...

Today S&P announced it has lowered Russia's foreign currency credit rating by one notch from BBB+ to BBB. In less than six months oil prices have fallen to less than $50 a barrel (from the $140 plus peak of July); the stock market has fallen by over 60% and in some days it has been shut down to prevent a free fall; the current account surplus has turned into a near deficit and a sure deficit by 2009; the country has experienced a capital flight of over $100 billion and has lost about $150 billion of foreign reserves (now down to about a $450 billion level); it is facing massive external debt financing problems as its banks financed their lending with foreign currency borrowings and its corporate firms financed massive expansion with foreign currency debt; it is now desperately trying to prevent a sharp depreciation of its currency by aggressive forex intervention; it may face a large fiscal deficit (2% of GDP) next year; and its GDP growth rate is sharply slowing down leading the World Bank to predict a growth rate of 3% alone in 2009 while leading local analysts are predicting an actual recession (negative growth of as much as -2%) in 2009 (see the recent analysis by RGE's Rachel Ziemba for more on the risks of a hard landing in Russia).

Given this sudden change in the Russian fortunes there are several key policy issues that the policy authorities need to deal with: of course given the external shocks (terms of trade worsening and sudden stop of capital and credit) it was important to use the buffer of foreign reserves to avoid a bank run by providing liquidity and capital to banks and by providing a fiscal stimulus to a country that is sharply slowing down. But the key unresolved policy issue is what to do with the exchange rate. Until recently Russia was on an effective basket peg (with 55% for the dollar and 45% weight for the euro). But with oil prices now down over 60% from the peak of the summer and with incipient current account deficits and fiscal deficits and a likely recession in 2009 the currency is obviously overvalued. A reasonable estimate of the needed exchange rate depreciation – with oil at about $50 a barrel in 2009 – is 25%. But until recently the authorities resisted the needed depreciation through aggressive forex intervention.

The reasons for resisting such necessary depreciation were varied: the banks and the corporate sector had massive foreign currency liabilities and a sharp movement of the currency would have led to nasty balance sheet effects and severe financial distress; the incipient bank run of retail depositors could accelerate if the currency were to fall sharply (Russian depositors were wiped out already twice in the transition period in the early 1990s and again in 1998 and they tend to be trigger happy); Putin staked part of his reputation and his view of a strong Russia on maintaining a strong rouble.

But the forex intervention that financed the capital flight out of Russia (a flight initially triggered by the increase in political risk given the Georgia conflict and then exacerbated by the global sudden stop of capital given the US financial turmoil in October-November) exacerbated the flight. Indeed, a good part of the forex intervention was sterilized thus preventing a significant stabilizing increase in domestic interest rates that an unsterilized intervention would have triggered. But, as a perfect case study of Triffin's "inconsistent trinity", a country cannot maintain a peg, have no capital controls and, at the same time, maintain monetary independence and avoid an increase in domestic interest rates that an expected depreciation triggers. The sterilized intervention thus led to a persistent bleeding of forex reserves that would continue unless such intervention is allowed to be unsterilized and thus force a rise in interest rates that would however be seriously costly in growth terms.

For a while the Russian authorities tried to skirt this inconsistent trinity inconsistency by introducing capital controls on capital outflows (taking the form of reading the riot act to local and foreign banks and financial institutions and telling them not to speculate against the rouble). But even such controls are leaky as many banks - faced with retail depositors converting roubles into dollars - needed to hedge such currency risk to avoid exacerbating their open currency positions mismatch. So the authorities cannot be too heavy handed against banks that are just hedging rather than "speculating". And unless capital controls are imposed on retail depositors their demand for currency hedging drives the financial institutions need to hedge in turn this currency exposure. So the conundrum of the inconsistent trinity still holds as there are limits to regaining monetary independence under fixed rates when such capital controls are effectively leaky and implemented partially.

The more appropriate way to regain a modicum of monetary independence and prevent a sharp increase in domestic interest rates that expectations of a rouble depreciation trigger is to let the currency peg go and flexibilize the exchange rate regime. Only after the currency has moved down enough expectations of further depreciation would quiet down. So, the right policy move would be one of a one-step large depreciation of the currency value that reduces significantly the amount of actual overvaluation of the currency. Instead, for the time being, the authorities have reacted by allowing only a gradual and modest depreciation, in a series of four 1% downward steps in the last month. But such small step depreciations exacerbate the capital flight incentives (and ensuing bleeding of reserves) as they lead to further expected depreciation expectations that triggers further flight. Only a relatively large unexpected step depreciation can stop such expectations and reduce the amount of the capital flight and forex reserve depletion.

But so far authorities had resisted such large step move for three reasons: losing face politically; worrying about a run on banks by depositors; and the large foreign currency exposure of financial institutions and corporate firms. These three reasons to resist a larger currency move are now becoming less important for several reasons. First, a continued bleeding of a large stock of reserves could cause a much bigger problem down the line – a real currency crash that would be politically even more damaging - if continued sterilized intervention leads to a sharp fall in reserves at the time when the current account and the fiscal account are likely to move into a deficit in 2009. Second, the risk of a bank run can be better managed via a controlled devaluation when reserves are still high rather than when reserves have been mostly depleted via a self-defeating defense of an indefensible peg.

Third, and most important, by now a significant part of the foreign currency exposure of the financial and corporate has been reduced by using the forex reserve intervention to effectively allow banks and corporate firms to reduce their exposure to foreign currency liabilities and thus avoid severe balance sheet effects when the currency moves by a larger amount. Effectively Russia has been doing what Brazil did in 1998-99 – i.e. bailing out ex-ante its banks and corporates by allowing them to cover their forex currency exposure via purchase of a large fraction of the reserves of the central bank;. This Brazilian "ex-ante bail-out" prevented the "ex-post bail-out" that would have been necessary if banks and corporates with a massive amount of foreign currency debt had experienced a large currency depreciation before they had the time to hedge such exposure. So now that the forex reserves of Russia have been run down enough to reduce the foreign currency exposure of the private sector the central bank can allow a faster rate of rouble depreciation without worrying about the banks and corporate going bust via the balance sheet effects of a large currency move on the value of their previous large foreign currency exposure.

All these factors suggests that the Russian authorities are now ready to let the currency fall at a faster rate than it the past. They have already moved in that direction by surprising markets with their weekly 1% moves. But since a much larger depreciation is needed and since further expected 1% moves will trigger even greater amounts of capital flight and reserve depletion a broader and large one-step move is now necessary and viable. The rouble may need to fall by about 25% before reaching a new equilibrium value. It is thus better to make a good chunk of that adjustment faster and in an unexpected way rather than keep on bleeding a large stock of forex reserves if small step movements trigger expectations of further depreciation. Now that banks and corporate firms are more hedged than before and the war chest of reserves has not yet fallen to alarming levels it is time to let the currency level take a larger burden of the necessary adjustment that the country needs to cope with lower oil prices, the sudden stop of capital, the increase in investors' risk aversion and a global economic outlook that signals a sharp recession in advanced economies and a very likely recession in Russia too.

Excellent article. So one may query whether Russia's current S&P foreign currency credit rating downgrade represents the first of many more downgrades to come? (http://ftalphaville.ft.com/blog/2008/12/09/50202/russia-downgrade-first-of-many/) Meanwhile, Russia is chomping at the bit, anxiously awaiting for oil and natural gas prices to skyrocket, so as to empower the Russian Bear to flex its international muscle once again. What a difference six months makes!

Title: Re: Meltdown
Post by: BachQ on December 09, 2008, 03:04:39 AM

Crude oil forecast 2009:

(http://www.marketoracle.co.uk/images/2008/crude-oil-forecast-2009b.gif)

(http://www.marketoracle.co.uk/Article7664.html)

QuoteCrude oil is still in a downtrend, that means investors and traders need to WAIT for a buy trigger which normally means the break of a recent high or a significant resistance area ($50) before scaling into a position, and I mean scaling in because it will take much time for crude oil to formulate a bottom that I expect will form a very volatile double or even triple bottom pattern i.e. protracted bottom formation punctuated with very sharp short-covering rallies that could see crude oil spike higher to $80 and declines back to below $50 over the next 12 months as the below graph illustrates. What this anticipated scenario means is that there is TIME for investors to buy into crude oil positions as the base building confirmation takes place, as any strong rallies will likely be followed by tests and probable breaks of the previous low so as to enable the creation of the overall saucer shaped double bottom pattern.

However the long-term trend for crude oil remains higher, when I mean long-term I am looking at well beyond the next 12months towards 5 to 10 years, when I would not be surprised given the peak oil fundamentals that we will actually be visiting the $200 crude targets that were loudly pronounced during mid 2008 as being imminent when crude oil was trading at $147. This scene rios should not be surprising given that the US Dollar bull market remains intact that will continue to bear down on all commodities during 2009, but more on the dollar in my next (fourth) US Dollar bull market update.

Title: Re: Meltdown
Post by: BachQ on December 09, 2008, 03:06:37 AM

Quote from: ezodisy on December 08, 2008, 03:58:17 AM

(http://www.kondratieffwinter.com/images/wave1.gif)

Kondratieff winter also ensures that the financial excesses of the K-spring and K-autumn that resulted in asset overvaluation are corrected. Accumulated wealth is destroyed as financial assets collapse.

Bankruptcies and unemployment grow in a domino chain reaction and asset prices collapse. Not surprisingly, as anyone can see from the effects of the financial collapse in Argentina, the fabric of society itself threatens to break down. The net effect is the set of conditions that in the 1930s cycle were termed the "Great Depression". A spell of deflation is to be expected, as wealth has been destroyed, easy money is no longer being created, and people are no longer confident to spend money. Prices fall to encourage spending, but people put off purchases because they know that things may be cheaper in the future.

As consumer confidence drops rapidly, confidence in the banking system and the economy fails and there is a run away from things with intangible value, such as speculative stock market and "new economy" concept companies, towards tangible assets such as durable goods, established industries without debt loading, gold and silver, and commodities.

There may be currency crises with interest rates spiking up as credit contracts or foreigners disinvest in the currencies associated with the worst excesses of the cycle.

The K-winter is also associated with the "trough wars" which is liable to break out in relation to the social and political stresses caused by the depression. World War II is an example of a "trough war"- and the geopolitical realignments that it caused set the stage for the world's international relations in the next cycle. (http://www.kondratieffwinter.com/kw_wave_depression.html)

Yep, the dreaded deflationary spiral.

(http://www.financialsense.com/fsu/editorials/sobolev/2008/images/1208_clip_image001.gif) (http://www.financialsense.com/fsu/editorials/sobolev/2008/1208.html)

Title: Re: Meltdown
Post by: BachQ on December 09, 2008, 03:08:09 AM

Quote from: ezodisy on December 08, 2008, 11:28:22 PM
It's a fascinating subject. I would really like to know the implications for Russia, what with their $ currency reserves and the current low price of oil. Do they even hold any gold? The idea of exchanging gold for oil is pretty funny (yesterday I was thinking of going to buy some bread in exchange for gold :) ).

Market Oracle ...Brian Bloom: Gold Stocks a Buy!

(http://www.marketoracle.co.uk/Article7650.html)

Quote *** Whilst the "investor fear" that has been manifesting over the past few weeks seems likely to recede temporarily in both the Bond Markets (yields may bounce) and the Stock Markets; and whilst the downward trend in both yields and equities is presaging a possible emergence of deflation – something sinister may be happening behind the scenes: The gold market may be about to become dysfunctional.

This potential dysfunctionality is being evidenced by Backwardation in the gold price and the market appears to be sensing this possible dysfunctionality by shifting its emphasis to focus more intently on gold shares. If this happens, it will be the first time since 2005 that gold shares will have outperformed the gold price. In an environment where many other technical indicators are pointing to potential deflation – as validated fundamentally by a slowing in the velocity of money – the potential relative strength of gold shares to gold is a very significant development. Professor Fekete may well be correct in his assessment that " Central banks have stopped feeding the market with gold sales and leases."

Interesting stuff. 8)

Title: Re: Meltdown
Post by: BachQ on December 09, 2008, 03:09:29 AM

Quote from: ezodisy on December 03, 2008, 11:15:30 PM
yes where is oil going? Unlike gold, the physical part of which is in very high demand right now and it's only a matter of time until the weekly downtrend reverses, the plummeting oil price makes sense. That is made sense before the King announced that $75 would be a fair price. The production cuts therefore should be quite large. Down a bit more to the low $40s perhaps and then a proper correction?

Oil Sinking Below $20/Bbl? Dec. 5 (Bloomberg) -- Bets that oil for January delivery will fall below $20 a barrel were the most active options contract in electronic trading today, a day after Merrill Lynch & Co. said oil may drop to less than $25. Oil may dip to a six-year low if the worldwide recession spreads and the Organization of Petroleum Exporting Countries fails to stem declines, Francisco Blanch, Merrill commodity strategist, said in a report yesterday. "Under a number of circumstances including a recession in China and a failure from OPEC to cut enough output, we could see prices dipping all the way to $25 a barrel, which is the level at which we'll destroy some non-OPEC supply," Blanch said in an interview today. "We're not forecasting that. We're saying it might happen." His 2009 forecast is for $50 a barrel.
(http://www.bloomberg.com/apps/news?pid=20602099&sid=aGVEWl4Nnlio&refer=energy)

Title: Re: Meltdown
Post by: BachQ on December 09, 2008, 03:10:56 AM

Quote from: ezodisy on December 08, 2008, 07:33:42 AM
Here is an update on the backwardation in gold that started on December 2. It continued and worsened on December 3, 4, and 5. So far this is the most serious signal of the economic crisis: the world is rushing headlong into a Great Depression, possibly worse than that of the 1930's. (http://news.goldseek.com/GoldSeek/1228744800.php)

Apparently gold futures settled in contango on 5 Dec 2008 (just barely). The author of this article (http://news.goldseek.com/GoldSeek/1228767064.php) suggests that certain "interested parties" may have been "tipped off" by Fekete's article, and may have engaged the PPT (or their own version of a PPT) to manipulate out of backwardation to avooid a panic. Who knows!?

Title: Re: Meltdown
Post by: Lethevich on December 09, 2008, 03:25:33 AM

Quote from: ezodisy on December 09, 2008, 01:33:00 AM
Rouble Trouble in Russia: The Inconsistent Trinity at Work and the Need for a 20-25% Currency Depreciation

[snip]

Thanks for that - one of the few long posts in this thread that I have bothered reading, as I find it nice to see something get what it deserves. One interesting point might be how much the sabre rattling prior to the crisis (and the foolish economic actions carried out before and during it) has done to damage the countries reputation for no longer being a borderline rogue state. As has been proven by this crisis, going against the US is quite a stupid thing to do* when you are (more or less) a western nation, as you cannot have your cake and eat it - you should either be with the club or outside it. But unfortunately the latter is not an option, and the first can't be done either, due to the epic national ego involved. I hope the shit continues to fall on the deserving party.

*As much as I read claims of the US no longer being relevent, or being irrelevent within a matter of years or a few decades, I don't really believe this - old habits die hard, and the political change neccessary to create places worth investing in takes ages. Russia is a fine example here, going from a "must invest" country to one that has to close its stock exchange on a regular basis - the facade fell down, and the US still seems a safe place to be in comparison...

Title: Re: Meltdown
Post by: ezodisy on December 09, 2008, 01:23:42 PM

Thanks for the links Dm. I'm all tired out and will get back to you tomorrow.

Before that though there's a new Peter Schiff video.

"A lot of the jobs that are now being destroyed in our economy never should have been created in the first place."

http://www.europac.net/Schiff-CNN-12-6-08_lg.asp

Title: Re: Meltdown
Post by: drogulus on December 09, 2008, 04:29:07 PM

The thing about Kondratieff-style determinism is it might lead you to believe that events don't have proximate causes. If it's a wave, is it a contingent one that depends on human nature to bring it about? Is the Wave spying on us? Or is some inhuman force telling us that nothing we do can prevent it? Why should I worry about government spending or bailouts if the Big Wave is going to inundate us all?

This last idea should appeal to fans of this thread, since the Wave could be seen as a kind of periodic punishment for sins that the laws of probability ensure we've committed. _:D

Title: Re: Meltdown
Post by: drogulus on December 09, 2008, 05:02:36 PM

The waves are constituted by the sum of all economic actions. That's what produced the wave, which isn't spying on us._:o It's just a pattern you see at the higher level, and all it shows is that the cycles exist. It's like the checkerboard pattern you see from an airplane. Aha, humans are just like ants, making these patterns they aren't even aware of! You can always look at things from a distant perspective and conclude there's no free will, or economic determinism means there's no point in doing anything. Also, the waves are pretty rough so there must be different factors impinging on their supposed perfection. Maybe things we can do can change the wave. _:D

Title: Re: Meltdown
Post by: ezodisy on December 09, 2008, 11:39:50 PM

Quote from: drogulus on December 09, 2008, 04:29:07 PM
Or is some inhuman force telling us that nothing we do can prevent it?

It was created by a Russian, the answer should be obvious.

I don't think sarcasm is the right answer though. You've been sarcastic for months now and all that's happened is that economic news has gotten worse and the market has gone down a huge amount (I do remember when you were quoting Buffett and buying shares some time ago). I would doubt guys like Peter Schiff and Jim Rogers are basing their ideas on the unstoppable wave (which it is, by the way) but that doesn't stop them from saying and sometimes shouting that there's nothing the government can do to correct the problem, that the market has to take its course, that intervention could lead to the US's own lost decade. Granted they may not be correct, but when the've been calling it correctly for the past 2 years (actually well beyond that, especially in Rogers' case ever since his partnership with Soros) then it would be silly to dismiss them now. I'm wondering if you'll still be sarcastic if official unemployment figures surpass 10%, or the Dow falls to 6000, or the dollar collapses.

QuoteAha, humans are just like ants, making these patterns they aren't even aware of!

Yes that is usually how it works, acknowledgement in retrospect. Human history pretty much confirms it.

Title: Re: Meltdown
Post by: ezodisy on December 10, 2008, 12:12:01 AM

Quote from: Lethe on December 09, 2008, 03:25:33 AM
one of the few long posts in this thread that I have bothered reading

:o

:)

Quoteas I find it nice to see something get what it deserves. One interesting point might be how much the sabre rattling prior to the crisis (and the foolish economic actions carried out before and during it) has done to damage the countries reputation for no longer being a borderline rogue state. As has been proven by this crisis, going against the US is quite a stupid thing to do* when you are (more or less) a western nation, as you cannot have your cake and eat it - you should either be with the club or outside it. But unfortunately the latter is not an option, and the first can't be done either, due to the epic national ego involved. I hope the shit continues to fall on the deserving party.

*As much as I read claims of the US no longer being relevent, or being irrelevent within a matter of years or a few decades, I don't really believe this - old habits die hard, and the political change neccessary to create places worth investing in takes ages. Russia is a fine example here, going from a "must invest" country to one that has to close its stock exchange on a regular basis - the facade fell down, and the US still seems a safe place to be in comparison...

I feel as you do when it comes to their leaders and their sabre rattling -- not the smoothest diplomacy, or savoir-faire, just a bit of schoolyard bullying. There is a reason, probably more than one, why people in the western world don't take Russia seriously -- or if they do, in a condescending way. I do wonder though what effect this worldwide economic collapse will have on a country which appears to be wealthy only within a few square miles of its city centres. From what I know, which ain't much, you probably won't hear about a real estate crisis in Russia just because many people couldn't get a mortgage to begin with. That is the wealth has not spread, as it has in the US, and the level of prosperity apparently isn't there. So while I'm happy initially with the idea of the country being in a mess as a form of spanking for not having any idea how to behave in the company of adults, it's really only some of the leaders and probably most of the businessmen who deserve it.

That said it does make me think that they might get out of this economic mess before the US, just because it does not go as deep into their society. In other words, it's not systemic. I'm also reminded of an old sex joke which I'm going to change around a little: if you've got half of the money and all of the oil (and gas), it's only a matter of time until you've got all of the money.

Title: Re: Meltdown
Post by: ezodisy on December 10, 2008, 12:20:37 AM

Quote from: Dm on December 09, 2008, 03:01:06 AM
Nobel winner Krugman: U.S. auto industry will 'probably disappear' ... : Krugman told reporters in Stockholm Sunday that congress support to the auto-industry was not a long-term solution, but the result of a "lack of willingness to accept the failure of a large industry in the midst of an economic crisis."
(http://edition.cnn.com/2008/BUSINESS/12/07/krugman.nobel.economics.auto.ap/index.html)

I heard one of the auto chiefs say that they need 5 billion this month and 5 billiion in January. What about February, and March? I haven't been following this much, I just noticed that the "expert" consensus seems to be that they'll be back for more money some time in 2009. That does seem a certainty. I think Peter Schiff said that it could go into the hundreds of billions. How very reassuring. Now where's that plug for the printing press? :)

Title: Re: Meltdown
Post by: ezodisy on December 10, 2008, 02:56:57 AM

Dec. 10 (Bloomberg) -- A global stock slump may have further to go, according to Tobin's Q ratio, which compares the market value of companies to the cost of their constituent parts, CLSA Ltd. strategist Russell Napier said.

The ratio, developed in 1969 by Nobel Prize-winning economist James Tobin, indicates the Standard & Poor's 500 Index is still too expensive relative to the cost of replacing assets, said Napier. While the 39 percent drop in the S&P this year pushed equity prices below replacement cost, history suggests the ratio must sink further as deflation sets in, he said. The S&P may plunge another 55 percent to a trough of 400 by 2014, the strategist said. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aKNSK0gYlqB0&refer=home)

Title: Re: Meltdown
Post by: BachQ on December 10, 2008, 03:11:14 AM

Quote from: ezodisy on December 10, 2008, 02:56:57 AM

Dec. 10 (Bloomberg) -- A global stock slump may have further to go, according to Tobin's Q ratio, which compares the market value of companies to the cost of their constituent parts, CLSA Ltd. strategist Russell Napier said.

The ratio, developed in 1969 by Nobel Prize-winning economist James Tobin, indicates the Standard & Poor's 500 Index is still too expensive relative to the cost of replacing assets, said Napier. While the 39 percent drop in the S&P this year pushed equity prices below replacement cost, history suggests the ratio must sink further as deflation sets in, he said. The S&P may plunge another 55 percent to a trough of 400 by 2014, the strategist said. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aKNSK0gYlqB0&refer=home)

Good catch. According to Tobin's Q Ratio, we need an additional 55% plunge in the S&P 500 to hit bottom! :o

Title: Re: Meltdown
Post by: BachQ on December 10, 2008, 03:13:26 AM

Pound hits all-time low against euro (£1 = €1.1391) The pound's latest weakness came as economists warned Britain's economy was deteriorating faster than expected and could suffer badly in 2009.

(http://static.guim.co.uk/sys-images/Business/Pix/pictures/2008/07/29/euro_toby_melville_pa4.jpg)

(http://www.guardian.co.uk/business/2008/dec/10/currencies-pound-euro)

QuoteThe National Institute of Economic and Social Research warned today that the UK's gross domestic product shrank by 1% in the three months to November, more than the official estimates. Howard Archer, the chief European and UK economist at IHS Global Insight, said he expected to see a further "substantial contraction" in the first half of 2009, ... predicting a 2% drop in GDP next year. ... With the Bank of England expected to keep cutting interest rates, sterling is expected to keep falling.

British Pound to Euro

(http://ichart.finance.yahoo.com/3m?gbpeur=x)

Euro to British Pound

(http://ichart.finance.yahoo.com/3m?eurgbp=x)

Title: Re: Meltdown
Post by: BachQ on December 10, 2008, 03:15:24 AM

"Peter Schiff's Greatest Hits" compilation. Most of these have been posted before, but here's a compilation that makes all of the other guests look like total idiots.

http://www.bloggingstocks.com/2008/12/09/peter-schiff-was-right-but-people-laughed/

Quote from: ezodisy on December 09, 2008, 01:23:42 PM
"A lot of the jobs that are now being destroyed in our economy never should have been created in the first place."

http://www.europac.net/Schiff-CNN-12-6-08_lg.asp

Excellent.

Title: Re: Meltdown
Post by: BachQ on December 10, 2008, 03:19:59 AM

Quote from: drogulus on October 29, 2008, 03:01:53 PM
But I think the biggest source for electricity generation will be coal, so there will be a major effort to learn how to use it cleanly, one of the options the crisis will price into existence.

Drogulus, until "clean coal" becomes fully viable, this is why we can't count on coal as a primary energy source:

The cream of the UK climate science community sat in stunned silence as [climate scientist Kevin] Anderson pointed out that carbon emissions since 2000 have risen much faster than anyone thought possible, driven mainly by the coal-fuelled economic boom in the developing world. So much extra pollution is being pumped out, he said, that most of the climate targets debated by politicians and campaigners are fanciful at best, and "dangerously misguided" at worst.

(http://www.guardian.co.uk/environment/2008/dec/09/poznan-copenhagen-global-warming-targets-climate-change)

Title: Re: Meltdown
Post by: BachQ on December 10, 2008, 03:26:09 AM

Floating Offshore Wind Power

(http://www.technologyreview.com/files/17476/hywind_x220.jpg)

[click here]

(http://anz.theoildrum.com/node/4849)

QuoteMatthew Simmons has received quite a bit of press in the past week, after his Ocean Energy Institute floated a proposal to build a $25 billion, 5 GW wind farm in the Gulf of Maine. Offshore wind farms have a number of advantages over their land based equivalents - they are less hazardous to wildlife, have fewer objections raised on NIMBY concerns and winds are generally stronger over the oceans than they are over land. Ideally, offshore wind farms will be far enough away from land to avoid being seen from the shoreline, eliminating any residual objections from local residents.

*** According to a 2006 report by the U.S. Department of Energy, General Electric and the Massachusetts Technology Collaborative, offshore wind resources on the Atlantic and Pacific coasts of the United States exceed the current electricity generation of the entire U.S. power industry. NASA has also been investigating ocean wind strengths worldwide, using the QuikSCAT satellite.

(continued)

(http://www.inhabitat.com/wp-content/uploads/mitturbine.jpg)

Click here for an article on floating wind turbines in the North Sea.

(http://www.inhabitat.com/2007/07/02/floating-wind-turbines-in-the-north-sea/)

Title: Re: Meltdown
Post by: BachQ on December 10, 2008, 03:28:15 AM

BBC: World Bank Predicts Global Gloom ... The World Bank has forecast a significant decline in global economic growth in 2009 for both developed and emerging countries. ... "It seems inevitable that the major countries will see significant contraction in the immediate period ahead and that recovery may not materialise any time soon, even if the bail-out and stimulus package succeed."

(http://news.bbc.co.uk/2/hi/business/7774199.stm)

Title: Re: Meltdown
Post by: BachQ on December 10, 2008, 03:29:00 AM

Quote from: ezodisy on December 10, 2008, 12:20:37 AM
I heard one of the auto chiefs say that they need 5 billion this month and 5 billiion in January. What about February, and March? I haven't been following this much, I just noticed that the "expert" consensus seems to be that they'll be back for more money some time in 2009. That does seem a certainty. I think Peter Schiff said that it could go into the hundreds of billions. How very reassuring. Now where's that plug for the printing press? :)

Car Wars: Peter Schiff Debates Detroit Mayor of Lansing as to Whether to Bailout the Big 3 Detroit automakers

http://www.youtube.com/watch?v=ddUtu3y13vU

http://www.youtube.com/watch?v=zT7Y0OQEVzk

Please note that the interviewer is obnoxious (pathetic) in the extreme.

Title: Re: Meltdown
Post by: BachQ on December 10, 2008, 03:30:36 AM

Quote from: ezodisy on December 10, 2008, 12:20:37 AM
I heard one of the auto chiefs say that they need 5 billion this month and 5 billiion in January. What about February, and March? I haven't been following this much, I just noticed that the "expert" consensus seems to be that they'll be back for more money some time in 2009. That does seem a certainty. I think Peter Schiff said that it could go into the hundreds of billions. How very reassuring. Now where's that plug for the printing press? :)

(http://img.timeinc.net//time/cartoons/20081205/cartoons_05.jpg)

Title: Re: Meltdown
Post by: BachQ on December 10, 2008, 03:33:29 AM

London Times: A crash as historic as the end of communism

The credit crunch has destroyed casino capitalism. From the rubble a new, less divisive, economic model will emerge

... 2009 will be treacherous. ... Capitalism is changing in fundamental ways. What's happening will affect the relationship between business and government, between taxpayers and the private sector, between employers and employees, between investors and companies for many years to come. Arguably the crisis will turn out to be more significant for us and other developed economies than the collapse of communism.

(http://www.timesonline.co.uk/tol/comment/columnists/guest_contributors/article5309917.ece)

QuoteA New Capitalism is likely to emerge from the rubble, one which may well seem fairer and less alienating than the model of the past 30 years. The system's salvation may require it to be kinder, gentler, less divisive, less of a casino in which the winner takes all. For me, the most important event of the past week was the chastising of the US Treasury Secretary, Hank Paulson, by Zhou Xiaochuan, governor of the Chinese central bank. Mr Zhou said that "overconsumption and a high reliance on credit is the cause of the US financial crisis" and "the US should take the initiative to adjust its policies, raise its savings ratio appropriately and reduce its trade and fiscal deficits".

This seemed a pretty unambiguous statement by the Chinese that they are no longer prepared to finance the spendthrift ways of the US and UK: they don't want to lend more and they want to be confident that what they have lent won't disappear in a puff of bad debts and inflation.

Title: Re: Meltdown
Post by: Lethevich on December 10, 2008, 05:14:43 AM

Quote from: Dm on December 10, 2008, 03:26:09 AM
Floating Offshore Wind Power

(http://www.technologyreview.com/files/17476/hywind_x220.jpg)
(http://anz.theoildrum.com/node/4849)

I encountered something pretty sad a few months ago - I was sorting some stuff in a charity shop, and found a British technology magazine from 1955. It was talking about wind turbines to a country with some of the largest wind resources in the world. 50 years later - almost nothing has been done.

(http://img155.imageshack.us/img155/2112/turbinenp4.jpg) (http://img155.imageshack.us/img155/2112/turbinenp4.jpg)
(click for larger)

Title: Re: Meltdown
Post by: drogulus on December 10, 2008, 12:00:35 PM

Quote from: ezodisy on December 09, 2008, 11:39:50 PM
I'm wondering if you'll still be sarcastic if official unemployment figures surpass 10%, or the Dow falls to 6000, or the dollar collapses.

No, I won't be sarcastic. I do want to reassure you that my sarcasm will not actually cause these things to happen. I feel I have to say that here since causality is kind of a fuzzy concept will all these waves rolling around.

If I had any cash to spare I would buy more stock. That doesn't mean I don't take these events seriously, it just means that certain economic realities still obtain even in these conditions.

Title: Re: Meltdown
Post by: ezodisy on December 11, 2008, 04:00:52 AM

(http://images2.dailykos.com/images/user/363/SP_from_1825.JPG)

fun (http://www.dailykos.com/storyonly/2008/12/2/102214/940/743/668445)

Title: Re: Meltdown
Post by: BachQ on December 11, 2008, 05:08:55 AM

Lethe, it is very sad and tragic that we've pissed away more than 50 years chasing fossil fuels when we could have been investing in wind technology which, as you'll see below, may be the optimal source of energy, preferable even to solar.

Quote from: Lethe on December 10, 2008, 05:14:43 AM
I encountered something pretty sad a few months ago - I was sorting some stuff in a charity shop, and found a British technology magazine from 1955. It was talking about wind turbines to a country with some of the largest wind resources in the world. 50 years later - almost nothing has been done.

Science Daily: Wind, Water And Sun Beat Biofuels, Nuclear And Coal For Clean Energy ...

ScienceDaily (Dec. 10, 2008) — The best ways to improve energy security, mitigate global warming and reduce the number of deaths caused by air pollution are blowing in the wind and rippling in the water, not growing on prairies or glowing inside nuclear power plants, says Mark Z. Jacobson, a professor of civil and environmental engineering at Stanford. And "clean coal," which involves capturing carbon emissions and sequestering them in the earth, is not clean at all, he asserts..

(http://www.sciencedaily.com/releases/2008/12/081210171908.htm)

QuoteJacobson has conducted the first quantitative, scientific evaluation of the proposed, major, energy-related solutions by assessing not only their potential for delivering energy for electricity and vehicles, but also their impacts on global warming, human health, energy security, water supply, space requirements, wildlife, water pollution, reliability and sustainability. His findings indicate that the options that are getting the most attention are between 25 to 1,000 times more polluting than the best available options.

"The energy alternatives that are good are not the ones that people have been talking about the most. And some options that have been proposed are just downright awful," Jacobson said. "Ethanol-based biofuels will actually cause more harm to human health, wildlife, water supply and land use than current fossil fuels." He added that ethanol may also emit more global-warming pollutants than fossil fuels, according to the latest scientific studies.

The raw energy sources that Jacobson found to be the most promising are, in order, wind, concentrated solar (the use of mirrors to heat a fluid), geothermal, tidal, solar photovoltaics (rooftop solar panels), wave and hydroelectric. He recommends against nuclear, coal with carbon capture and sequestration, corn ethanol and cellulosic ethanol, which is made of prairie grass.

(http://www.sciencedaily.com/images/2008/12/081210171908-large.jpg)

Wind power is the most promising alternative source of energy, according to Mark Jacobson.

Title: Re: Meltdown
Post by: BachQ on December 11, 2008, 05:12:03 AM

CNN: California budget shortfall $14.8 billion -- Gov. Arnold Schwarzenegger says that the deficit for his state is $3.6 billion more than previously estimated. "We are heading toward a financial Armageddon. We can already see it coming," Schwarzenegger said. (http://money.cnn.com/2008/12/10/news/economy/california_deficit.ap/index.htm)

Title: Re: Meltdown
Post by: ezodisy on December 11, 2008, 05:42:06 AM

Quote from: Dm on December 11, 2008, 05:12:03 AM
CNN: California budget shortfall $14.8 billion -- Gov. Arnold Schwarzenegger says that the deficit for his state is $3.6 billion more than previously estimated. "We are heading toward a financial Armageddon. We can already see it coming," Schwarzenegger said.
(http://money.cnn.com/2008/12/10/news/economy/california_deficit.ap/index.htm)

yeah yeah Schwarzenegger, as if we're going to believe someone who made his fortune through sating other's fantasies on screen. I don't buy it Dm, I think it's just more box-office hype to draw in the mug punters (i.e. the government) and then spit them out again. He's a shrewd customer though

Title: Re: Meltdown
Post by: BachQ on December 11, 2008, 06:13:24 AM

Quote from: ezodisy on December 11, 2008, 05:42:06 AM
yeah yeah Schwarzenegger, as if we're going to believe someone who made his fortune through sating other's fantasies on screen. I don't buy it Dm, I think it's just more box-office hype to draw in the mug punters (i.e. the government) and then spit them out again. He's a shrewd customer though

The Governator is getting much more pain & agony than he bargained for; ... and, just like in the movies, I'm sure he's expecting a happy ending by virtue of the Federal government stepping in with bailouts to save his ass.

Forecasts addressing California's spiral toward insolvency worsened dramatically on Thursday:

SAN FRANCISCO (Reuters) - California faces a $41.8 billion shortfall for its combined current and next fiscal years, up from a prior $28 billion estimate as its economy weakens and revenues decline, the director of the state's Department of Finance, said on Thursday. ... After meeting with Schwarzenegger and other top lawmakers on Thursday, state Assembly Speaker Karen Bass told reporters the state's financial situation is dire. "The fact is we're running out of cash today," she said. A UCLA Anderson Forecast report released on Thursday underscored the near-term prospects for California's economy, [noting:] "If the parade of implosions on Wall Street continues, credit market conditions could create a worse downturn in California," the report said. "The California economy is in for a rough ride in 2009," said Jerry Nickelsburg, the economist who wrote the report. "It's going to be a reasonably deep recession."

(http://www.reuters.com/article/ousiv/idUSTRE4BA73C20081212)

Title: Re: Meltdown
Post by: BachQ on December 11, 2008, 06:14:58 AM

CNN: US Jobless Claims at 26-year High -- "It was the highest number of jobless claims since Nov. 27, 1982 when initial filings hit 612,000."
(http://money.cnn.com/2008/12/11/news/economy/jobless_claims/index.htm?postversion=2008121108)

Title: Re: Meltdown
Post by: Lethevich on December 11, 2008, 09:37:06 AM

A Woolworths update: It's even better than I thought. So far a supermarket chain has snapped up at least 50 of the stores, with a fair chance of reemploying the workers under the new brand. Other retail brands are snapping up the stores in smaller numbers, due to the prime sites on high streets that most of the stores are situated in. It seems like the replacement stores will offer much more diversity and interest to shoppers than there was before - and the stores will make a profit, which is something Woolies was a miserable failure at. A nice healthy business failure :)

Title: Re: Meltdown
Post by: Daverz on December 11, 2008, 08:09:41 PM

Nobel Prize winning economist Joseph Stigletz on the mistakes leading up to the meltdown:

http://www.vanityfair.com/magazine/2009/01/stiglitz200901

Title: Re: Meltdown
Post by: BachQ on December 12, 2008, 03:05:35 AM

Britain worse credit risk than McDonald's ... Britain has become a worse credit risk than McDonald's and a host of other large companies, figures produced for The Independent reveal.

(http://www.independent.co.uk/multimedia/archive/00099/CDSmarketBusinessGRA_99183a.jpg)

(http://www.independent.co.uk/news/business/news/britain-worse-credit-risk-than-mcdonalds-1059574.html)

QuoteThe collapse in Britain's credit rating has taken place over the past two and a half months, since the Government underwrote the banking system and decided to spend its way out of recession. Investing in UK government debt is now almost twice as risky as buying McDonald's corporate bonds, according to the market in credit default swaps (CDS), which provides insurance for the buyers of such debt. The government debt of large economies such as the UK would normally be considered far more secure than corporate bonds. However, on 29 September, the cost of buying insurance against default on UK five-year government debt became more expensive than the equivalent cover for the US burger chain and has since overtaken Kellogg's and Coca-Cola, according to data from Bloomberg. The cost of insuring British debt soared on that day, as the Government nationalised Bradford & Bingley, increasing fears that the state would have to bail out the banking system.

(continued)

Click for link (http://www.independent.co.uk/news/business/news/britain-worse-credit-risk-than-mcdonalds-1059574.html)

Title: Re: Meltdown
Post by: BachQ on December 12, 2008, 03:07:36 AM

U.S. Treasury Protection Costs Surpass Campbell Soup on Bailout ... Dec. 10 (Bloomberg) -- The cost to hedge against losses on U.S. Treasuries surpassed the price of default protection on bonds from Campbell Soup Co. and drug-maker Baxter International Inc. as government spending on stimulus packages grows. Credit-default swaps on U.S. government debt in euros for five years are trading at 67 basis points, according to CMA Datavision, meaning it costs 67,000 euros ($87,100) to protect 10 million euros of debt. Contracts on Campbell of Camden, New Jersey, were quoted at 51 basis points today, and Deerfield, Illinois-based Baxter contracts were at 55 basis points, CMA data show. (http://www.bloomberg.com/apps/news?pid=20601009&sid=abBCULxBKLVA&refer=bond)

Title: Re: Meltdown
Post by: BachQ on December 12, 2008, 03:09:54 AM

USA Today: Federal share of economy soaring The government's spending surge to ease the financial crisis and a worsening recession is increasing the federal share of the nation's economic activity close to $1 out of every $4, the highest level since World War II, an analysis of current and projected payments shows.

(http://www.usatoday.com/news/washington/2008-12-10-spending_N.htm)

QuoteEmergency rescue plans for financial institutions and increased benefits for needy individuals are mounting, as Congress considers President-elect Barack Obama's call for a massive public works program that could exceed $500 billion and a $14 billion bailout of the auto industry. All that spending will push the federal share of the nation's $14.4 trillion economy to 25% or more — past the post-World War II record of 23.5% set in 1983, at the end of what was then the worst recession since the Depression.

Economists warn that the fast pace of government spending could spell trouble in the future: slower economic growth, higher interest rates, and the likelihood that tax increases or spending cuts will be needed to tame a budget deficit headed toward a record $1 trillion. The government reported Wednesday that the deficit for the first two months of the 2009 fiscal year was more than $400 billion. "That's the opposite of what we're trying to do to the economy," says Maya MacGuineas, president of the non-partisan Committee for a Responsible Federal Budget. The government should boost spending, but "we have to do it really carefully," she says.

(continued)

Title: Re: Meltdown
Post by: BachQ on December 12, 2008, 03:11:21 AM

Reuters: Jim Rogers calls most big U.S. banks "bankrupt" ... Jim Rogers, one of the world's most prominent international investors, on Thursday called most of the largest U.S. banks "totally bankrupt," and said government efforts to fix the sector are wrongheaded.

(http://www.reuters.com/article/newsOne/idUSTRE4BA5CO20081211)

Quote"Without giving specific names, most of the significant American banks, the larger banks, are bankrupt, totally bankrupt. What is outrageous economically and is outrageous morally is that normally in times like this, people who are competent and who saw it coming and who kept their powder dry go and take over the assets from the incompetent. What's happening this time is that the government is taking the assets from the competent people and giving them to the incompetent people and saying, now you can compete with the competent people. It is horrible economics. The way things are going, we're going to have a lost decade too, just like the 1970s," Rogers said.

Title: Re: Meltdown
Post by: BachQ on December 12, 2008, 03:14:21 AM

Daverz, excellent article.

Quote from: Daverz on December 11, 2008, 08:09:41 PM
Nobel Prize winning economist Joseph Stigletz on the mistakes leading up to the meltdown:

http://www.vanityfair.com/magazine/2009/01/stiglitz200901

Joseph Stiglitz nails it. In placing the bulk of the blame squarely on deregulation, he notes:

QuoteIf the administration had really wanted to restore confidence in the financial system, it would have begun by addressing the underlying problems—the flawed incentive structures and the inadequate regulatory system. *** The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal.

It will be interesting to see how the Obama administration attempts to rectify the massive incompetence of its predecessor. Assuming that Congress is not asleep at the wheel, and assuming that Congress does not become preoccupied with applying bandaids to the current crisis in lieu of addressing the root causes, we should be able to expect significantly more regulation of the financial markets under the Obama administration (unless the current banking system is so deep in the toilet as to be unsalvageable).

Title: Re: Meltdown
Post by: BachQ on December 12, 2008, 03:19:06 AM

Quote from: Lethe on December 11, 2008, 09:37:06 AM
A Woolworths update: It's even better than I thought. So far a supermarket chain has snapped up at least 50 of the stores, with a fair chance of reemploying the workers under the new brand. Other retail brands are snapping up the stores in smaller numbers, due to the prime sites on high streets that most of the stores are situated in. It seems like the replacement stores will offer much more diversity and interest to shoppers than there was before - and the stores will make a profit, which is something Woolies was a miserable failure at. A nice healthy business failure :)

How many stores does Woolworths have in total? Likely all of the prime sites will be bought, leaving the dross for the vultures.

Title: Re: Meltdown
Post by: Lethevich on December 12, 2008, 03:30:06 AM

Quote from: Dm on December 12, 2008, 03:19:06 AM
How many stores does Woolworths have in total? Likely all of the prime sites will be bought, leaving the dross for the vultures.

800, according to Wikipedia. They tend to be situated in very "central" sites in towns (often through having stores there while the towns built up - the sale value of the buildings probably increasing by multiples - inflation adjusted - in many areas), so most of the buildings should be considered quite desirable IMO. I'll be interested to see what my local one becomes :)

Title: Re: Meltdown
Post by: ezodisy on December 12, 2008, 07:36:06 AM

mate of mine posted a £ chart so you can get an idea of where we're going

(http://img67.imageshack.us/img67/6083/bingoeh1.jpg)

http://img67.imageshack.us/img67/6083/bingoeh1.jpg

Title: Re: Meltdown
Post by: drogulus on December 12, 2008, 12:27:41 PM

Quote from: Daverz on December 11, 2008, 08:09:41 PM
Nobel Prize winning economist Joseph Stigletz on the mistakes leading up to the meltdown:

http://www.vanityfair.com/magazine/2009/01/stiglitz200901

Good article.

Volcker is back. +1 for Obama. _:)

Title: Re: Meltdown
Post by: ezodisy on December 13, 2008, 04:13:51 AM

There's a new Schiff interview on Goldseek radio, starting from the second hour: http://radio.goldseek.com/

Jim Rogers interview immediately after Schiff ends

Title: Re: Meltdown
Post by: ezodisy on December 13, 2008, 04:34:03 AM

http://www.chartoftheday.com/20081212.htm?T

"How significant is this bear market? It all depends on how you measure. When measured in US dollars, the Dow currently trades 39.5% off its October 2007 record high. However, when measured with that other world currency (gold), the picture is actually more dismal. To help illustrate the point, today's chart presents the Dow divided by the price of one ounce of gold. This results in what is referred to as the Dow / gold ratio or the cost of the Dow in ounces of gold. For example, it currently takes 10.5 ounces of gold to "buy the Dow." This is considerably less that the 44.8 ounces it took back in 1999. When priced in gold, the US stock market has been in a bear market for the entire 21st century."

(http://www.chartoftheday.com/20081212.gif)

Title: Re: Meltdown
Post by: BachQ on December 13, 2008, 05:47:54 AM

UK bailouts may deepen crisis, says Panmure Gordon & Co -- Dec 10 (Reuters) - UK's bailouts "may deepen and prolong the recession by sending conflicting signals," Panmure Gordon & Co said. More loan covenants will be breached, leading to more bankruptcies and more forced selling, putting more cash flows under pressure, the brokerage said in a note to clients."Instead of a recovery for the UK economy (and its banks) in 2009, we expect the opposite: further economic contraction and a further rise in bad debts and bankruptcies," said Sandy Chen, an analyst at Panmure. (http://www.reuters.com/article/bondsNews/idUSBNG37597920081210?sp=true#)

Title: Re: Meltdown
Post by: ezodisy on December 13, 2008, 05:49:00 AM

oh for sure, the UK is going to get stuffed. Badly. Just not as badly as the yanks (why do we always come in second to those people?).

By the way, the Jim Rogers interview above is worth hearing for his talk about countries cutting themselves off from the outside world.

Title: Re: Meltdown
Post by: BachQ on December 13, 2008, 05:50:19 AM

Germany is also getting stuffed.

Quote from: ezodisy on December 13, 2008, 05:49:00 AM
oh for sure, the UK is going to get stuffed. Badly. Just not as badly as the yanks (why do we always come in second to those people?).

Deutsche Bank chief economist Norbert Walter stated that Germany's GDP could contract by up to 4% in 2009, which "would be four times as bad as its previous worst one-year performance since West Germany's creation in 1949." (http://www.forbes.com/reuters/feeds/reuters/2008/12/05/2008-12-05T114350Z_01_L572726_RTRIDST_0_GERMANY-ECONOMY-ORDERS-UPDATE-1.html)

Title: Re: Meltdown
Post by: BachQ on December 13, 2008, 05:52:49 AM

NYT: Russia Volunteers to Join an OPEC Cut in Oil Output

[NOTE: Russia pumps about 9.8 million barrels of oil a day, the second-greatest output in the world after Saudi Arabia, and exports about seven million barrels of crude oil and refined products, mostly to Europe.]

11 Dec 2008
By ANDREW E. KRAMER

MOSCOW — Faced with falling oil prices, Russia is preparing to announce that it will work with [OPEC] to coordinate a reduction in output, the minister of energy said Wednesday. This fall, a Russian official floated the idea of storing oil, rather than exporting it, to help OPEC stabilize prices, but this is the first time that the Kremlin has offered to reduce output.

World oil prices, which have fallen to around $40 a barrel, rose in response to the comments by the minister of energy, Sergei I. Shmatko, in early trading in New York. Oil settled at $43.10 a barrel, up $1.03. Mr. Shmatko said that by Dec. 17, the date of the next scheduled OPEC meeting, Russia will announce a plan to reduce the country's oil production, the Interfax news agency reported. The minister offered no details of how this would be done, or how much oil might be taken off the market. Mr. Shmatko said Russia would also seek to persuade other non-OPEC producers to reduce output. A spokeswoman for the ministry declined to elaborate. In fact, Russian oil output is declining in any case, as costs rise and deposits are depleted. "Russia wants to make official what has already happened," Vitaly Y. Yermakov, research director for Russian and Caspian energy at Cambridge Energy Research Associates, said.

At the same time, the Russian statement represented a continuing evolution in Russia's relationship to OPEC. While formally at arm's length, Russia and OPEC have flirted over some form of cooperation through the fall. The development could alarm consumers, who were breathing a sigh of relief that American gasoline prices had dipped below $2 a gallon. But it is unclear how much Russia will affect prices. Over all, the government has grown increasingly anti-Western.

(http://www.nytimes.com/2008/12/11/business/worldbusiness/11oil.html?ref=world)

QuoteOther non-OPEC countries — which also benefit from OPEC while not belonging to it — have rejected cooperation with OPEC. A spokesman for the ministry of petroleum and energy in Norway, the world's fifth-largest oil exporter, said Wednesday his country would not cooperate with the cartel, regardless of Russia's decision, Bloomberg News reported.

QuoteSo far, OPEC's cuts have not slowed the drop in the price of oil. For example, imports to China fell in November and American crude oil inventories are rising, all putting downward pressure on prices regardless of what supplier nations do. Since the last OPEC production cut on Oct. 24, oil prices have dropped 30 percent.

Title: Re: Meltdown
Post by: BachQ on December 13, 2008, 06:02:04 AM

Quote from: ezodisy on December 13, 2008, 04:13:51 AM
There's a new Schiff interview on Goldseek radio, starting from the second hour: http://radio.goldseek.com/

Jim Rogers interview immediately after Schiff ends

Here's a direct link (mp3 audio only). (http://radio.goldseek.com/shows/2008/12.13.2008/GSR-12.13.08-cc.mp3)

Edit: Schiff begins at 1hr, 1m, 6 sec (01:01:06)

Title: Re: Meltdown
Post by: BachQ on December 13, 2008, 06:04:51 AM

Nouriel Roubini (Fortune/CNN):

(http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/index.html)

QuoteWe are in the middle of a very severe recession that's going to continue through all of 2009 - the worst U.S. recession in the past 50 years. It's the bursting of a huge leveraged-up credit bubble. There's no going back, and there is no bottom to it. It was excessive in everything from subprime to prime, from credit cards to student loans, from corporate bonds to muni bonds. You name it. And it's all reversing right now in a very, very massive way. At this point it's not just a U.S. recession. All of the advanced economies are at the beginning of a hard landing. And emerging markets, beginning with China, are in a severe slowdown. So we're having a global recession and it's becoming worse.

Things are going to be awful for everyday people. U.S. GDP growth is going to be negative through the end of 2009. And the recovery in 2010 and 2011, if there is one, is going to be so weak - with a growth rate of 1% to 1.5% - that it's going to feel like a recession. I see the unemployment rate peaking at around 9% by 2010. The value of homes has already fallen 25%. In my view, home prices are going to fall by another 15% before bottoming out in 2010.

Title: Re: Meltdown
Post by: BachQ on December 13, 2008, 06:06:14 AM

According to Jim Rogers:

(http://money.cnn.com/galleries/2008/fortune/0812/gallery.market_gurus.fortune/5.html)

QuoteWe are in a period of forced liquidation, which has happened only eight or nine times in the past 150 years. ... Farmers cannot get a loan to buy fertilizer right now. Nobody's going to get a loan to open a zinc or a lead mine. Meanwhile, every day the supply of commodities shrinks more and more. Nobody can invest in productive capacity, even if he wants to. You're going to see gigantic shortages developing over the next few years. The inventories of food worldwide are already at the lowest levels they've been in 50 years. This may turn into the Great Depression II. But if and when we come out of this, commodities are going to lead the way, just as they did in the 1970s when everything was a disaster and commodities went through the roof.

Title: Re: Meltdown
Post by: BachQ on December 13, 2008, 06:08:13 AM

Quote from: Lethe on December 12, 2008, 03:30:06 AM
800, according to Wikipedia. They tend to be situated in very "central" sites in towns (often through having stores there while the towns built up - the sale value of the buildings probably increasing by multiples - inflation adjusted - in many areas), so most of the buildings should be considered quite desirable IMO. I'll be interested to see what my local one becomes :)

Yep, 813 stores. Seems that huge bargains can be found at Woolworths' closeout sales (see, e.g., Woolworths is Picked Clean in Shutdown Sale (http://www.istockanalyst.com/article/viewiStockNews/articleid/2876650)). It's ironic that the only way to get customers into your store is to have a liquidation and closeout sale. >:D

Title: Re: Meltdown
Post by: ezodisy on December 13, 2008, 06:16:34 AM

Quote from: Daverz on December 11, 2008, 08:09:41 PM
Nobel Prize winning economist Joseph Stigletz on the mistakes leading up to the meltdown:

http://www.vanityfair.com/magazine/2009/01/stiglitz200901

You would think a Nobel Prize winning economist could have written a forward-looking piece rather than one looking back that I'm sure some members on this forum could have written

Title: Re: Meltdown
Post by: drogulus on December 13, 2008, 08:06:41 AM

Quote from: ezodisy on December 13, 2008, 06:16:34 AM
You would think a Nobel Prize winning economist could have written a forward-looking piece rather than one looking back that I'm sure some members on this forum could have written

Do you disagree with anything he said? He's talking about how this crisis developed, and by implication the steps needed to respond. And yes, most of what he said has already been said by posters here. Economics is not a black art, even though it isn't exactly a science either. Large elements of common sense are used, so what an expert says will overlap with what an informed non-expert perceives to be the case. If you lack common sense, you will tend to buy the esoteric idea that what's true is something you can't know, and be vulnerable to every con artist and ideologue that comes down the pike. I tend to favor the expert whose reasoning I can understand and evaluate, which means it will appear conventional and too obvious to be true.

The implied steps are the reintroduction of the kind of regulations which would have limited the damage. Regulations on mortgage standards, firewalls for banks, more oversight of securities markets, a reorientation of the Fed to monitor bubble conditions. It would also help to keep the example of Greenspan in mind, who says he was dismayed to find his ideology was wrong (how often do you hear that?). By that light Schiff looks like more of the same dismal "markets are self regulating" crap that got us into this mess.

Title: Re: Meltdown
Post by: Daverz on December 13, 2008, 12:29:08 PM

A little schadenfreude (http://www.nytimes.com/2008/12/14/nyregion/14lawyer.html?hp) to brighten up a dreary Saturday afternoon.

In recent days, Dreier L.L.P., the Park Avenue law firm that Mr. Dreier founded, has been plunged into chaos. At least $35 million in escrow money that was to have been held by the firm also seems to be missing, the authorities say, and nearly all of its 250 lawyers are now looking for work.

...

As the Dreier firm's lawyers rummage through the law firm's books, which had been until recently Mr. Dreier's exclusive preserve, the lawyers are finding that bills have not been paid in months. Their health insurance is in default and the firm will not be able to make its $2.6 million payroll on Monday, lawyers there say.

...

There would be no executive committee. No partners meetings. Mr. Dreier would handle all administrative chores.

For lawyers there now, the delegation of responsibility means that they are just now figuring out that Mr. Dreier had let their malpractice insurance lapse, exposing them to enormous risk if they are sued by Mr. Dreier's growing list of potential victims, lawyers said.

Title: Re: Meltdown
Post by: ezodisy on December 14, 2008, 06:14:07 AM

Quote from: drogulus on December 13, 2008, 08:06:41 AM
Do you disagree with anything he said?

In detail, not really, but only because I'm neither smart nor experienced enough to disagree point-by-point. I still think a nobel prize guru could have written something more useful.

QuoteBy that light Schiff looks like more of the same dismal "markets are self regulating" crap that got us into this mess.

Hmm no, you are thinking like everyone else. What Schiff--and particularly Rogers--is saying is that we got "into this mess" because the markets were not allowed to regulate themselves , not because they did. Listen to any number of Rogers interviews and you'll hear him shouting about Greenspan interfering by propping up companies that should have failed, bailing out his friends on Wall Street, creating Japanese-style zombie companies and so on. These two, who have been correct for years, are claiming that the markets, and I suppose by extension capitalism, have not been allowed to run properly with the continued interference by the government of funding and saving businesses. If you look at it from their view--that markets have been continually interfered with--then some of these claims that market deregulation got us into this mess just become silly and ironic, not to mention myopic. It can't be proven but it's worth hearing Rogers go on about Greenspan and his claims that if some of these companies hadn't been propped up to begin with then this current crisis would not be happening. Anyway I tend to favour their views, particularly Rogers' and Hugh Hendry's (not that they all agree of course). I know Rogers would agree with you that Greenspan was well wrong (he's been saying it for years).

Some mortgage standards would be useful. At least the property boom is well and truly over. I've heard a few opinions that we won't see 2007 prices again for 10 or 15 years. Maybe, who knows? Hendry talks about 25 years in one example. The Hugh Hendry interview here is outstanding: http://commoditywatch.podbean.com/

Title: Re: Meltdown
Post by: ezodisy on December 14, 2008, 09:23:31 AM

http://news.goldseek.com/EuroCapital/1229114501.php

A Nightmare Before Christmas

By: Peter Schiff, Euro Pacific Capital, Inc.

-- Posted Friday, 12 December 2008

Like many pragmatic economists I have always warned that rapid expansions of government debt would result in inflation and higher interest rates. The explanation was always simple: rising supply of government debt inflates the money supply and weakens the government's ability to service its debt through legitimate means.

But in recent months, government has flooded the market with hundreds of new Treasury obligations and telegraphed its intention to increase the deluge even more. In response, both bond prices and the dollar have risen. This benign reaction has led many to the happy conclusion that the doom and gloomers are wrong and that bailouts and economic "stimuli" can be financed with deficit spending without any adverse consequences on interest rates or consumer prices. Recent action in the foreign exchange markets suggests these hopes will prove illusory. The renewed strength in gold, together with the long overdue rupture of the correlation between the movements of foreign currencies and U.S. equities, is further evidence that recent market dynamics are changing.

When the financial crisis of 2008 kicked into high gear in September, the U.S. dollar began to rally furiously. While America's economic ship was sinking from stem to stern, its currency was becoming the must have asset for public and private investors around the world. The dollar benefitted from the positive flows that result from massive global deleveraging. Treasuries got an added boost from a reflexive flight to "safety." As a result, politicians were able to fill out their Christmas wish lists with complete confidence that Santa would deliver. However, as these dollar-positive forces appear to be giving way, the Grinch is about make an unwanted appearance.

Last weekend Barack Obama announced his intention to implement a New Deal-style stimulus and public works program. What he somehow forgot to mention is that the United States is wholly dependent on the willingness of foreign creditors to supply the funds. But a weakening dollar makes continued foreign purchase of U.S. Treasuries a much more difficult decision.

Once the dollar begins to collapse beneath the weight of all this new deficit spending, accumulation of contingency liabilities, and the socialization of our economy, commodity prices and interest rates will head skyward. In addition, once all the going out of business sales at U.S. retailers are over, and excess inventories have been reduced, watch for big price increases at the consumer level as well.

Once the government runs out of foreign and private sector bidders for new treasuries, the Federal Reserve will be the only buyer, and the hyper-inflation cat will be completely out of the bag. Sensing this, the Fed has recently indicated a desire to begin issuing its own bonds. However, since dollars are already recorded as liabilities on the Fed's balance sheet (dollars are in actuality Federal Reserve Notes) the Fed already issues debt. The difference now is that they are proposing to issue interest bearing debt. Perhaps the Fed feels this will make holding its notes more appealing. However, since the interest will be paid in more of its own script, I do not believe this con will work.

In the end, rather than filling our stockings with Christmas goodies, our foreign creditors will likely substitute lumps of coal. Of course given how high coal prices will ultimately rise as a result of all this inflation, in Christmas Future perhaps our stockings will be stuffed with nothing but our own worthless currency. It might not burn as well as coal, but at least we will have plenty of it.

Title: Re: Meltdown
Post by: ezodisy on December 14, 2008, 09:37:57 AM

http://news.goldseek.com/JamesTurk/1229298105.php

More on Gold Backwardation

By: James Turk, Founder & Chairman of GoldMoney.com

-- Posted Sunday, 14 December 2008

Over the last few weeks, there have been a lot of articles on the Internet about backwardation, i.e., when the price of commodities for delivery today is higher than the price of commodities for delivery in the future. Like nearly all the things on the Internet, most of what was written is useful, but some of it is total rubbish, and it takes time to sort through to find the gems from the rest. I offer the following in the hope that it clears up some of the confusion that has arisen about backwardation as well as to provide some insight into today's gold market.

Backwardations are no big deal in most commodities, but they are indeed a very big deal for gold. Since I started following gold in the 1970s, I can recall seeing a gold backwardation against the US dollar only three times. Fortunately, we can pinpoint the exact dates from data made available by the London Bullion Market Association, which regularly posts the "GoFo" (gold forward) interest rate at its website.
http://www.lbma.org.uk/?area=stats&page=gofo/2008gofo
http://www.lbma.org.uk/stats/goldfwds

The first occurrence was November 29, 1995. That backwardation lasted for a day and was probably the result of a hedge buy-back by Barrick Gold completed then (one was announced by it shortly thereafter).

The next occurrence lasted for two days, September 29-30, 1999, after several central banks announced the Washington Agreement on Gold. That accord set off a mad rush for physical gold to cover short positions in the wake of the price surge triggered by their announcement.

The third occurrence happened last month, and continued for three business days, November 20, 21 and 24. There was not any apparent event triggering this latest backwardation as there was with the two previous occurrences. But it probably reflects the exceptionally strong demand recently for physical metal.

We can reasonably conclude from the above observations that gold rarely trades in backwardation. It almost always trades in contango, i.e., the price for delivery today is lower than the price for delivery in the future. Therefore, gold is very different from other commodities, all of which frequently trade in backwardation. Why is gold different?

Gold is money. In other words, gold's usefulness does not arise from its consumption, but rather, from its accumulation. In contrast to all other commodities, gold does not get used up and consumed in its applications. Rather, gold is hoarded, or as I like to say it because it is money, gold is saved.

Gold therefore contrasts to all other commodities because it has a huge aboveground stock of inventory that is available to come back into the market in exchange for national currencies if the price is right. This aboveground stock is comprised of essentially all the gold mined throughout history. Other commodities have very little aboveground stock relative to the amount consumed, with the result that shortages in these other commodities can and do occur.

These shortages make it difficult if not impossible to arbitrage any backwardation that appears in these other commodities. If there were a huge aboveground inventory, one could sell their inventory today and buy it back in the future at a cheaper price, profiting from the difference.

Gold's huge aboveground stock makes it different from other commodities. Backwardation in gold does not occur in practice because there are always people willing to profit by selling some of their hoard in the spot market and buying back gold at a lower price in the future, except the three rare instances noted above.

In the first two instances, the market for physical gold was temporarily disrupted. The reasons for the third backwardation are not yet certain, but it is important to consider its possible causes.

The demand for physical gold has been strong recently for a number of reasons, but perhaps the two most important are relatively low US dollar interest rates and the growing concern about counterparty risk. These factors make holding physical gold an increasingly attractive alternative compared to holding US dollars in particular and national currencies generally, and as a result, it is possible that November's backwardation may be the precursor of a fundamental change in the gold market. What could that change be? We don't need to speculate here because there are only two possible answers.

The first is that gold goes into backwardation because no one who owns gold is willing to sell their hoard at the current price. I noted this possibility in my August 17th alert posted on the GoldMoney website. I wrote back then:

"The extraordinary demand for coins and small bars can be viewed as an early sign that the market is moving into backwardation. In other words, the backwardation is in effect being reflected by higher premiums above spot for physical metal, rather than spot itself rising and going into backwardation.

Central banks do not transact in small bars and their coin transactions are inconsequential compared to the size of the market. So the market for fabricated product is relatively free from government influence. But central banks of course exert a dominant influence on the market for LBMA-sized bars by using their existing gold stocks, and they can keep the spot price for gold (which is determined by the buying/selling of LBMA-sized bars) artificially low by dishoarding gold from their vaults.

So my thought is that if gold does not climb back above at least $900 quickly, a shortage of LBMA-sized bars will develop unless central banks allow their vaults to be cleaned out, much like Ft. Knox was drained in the weeks leading up to the 2-tiered London gold price created in March 1968."

The 3-day backwardation in November indicates that a shortage of LBMA bars seems to be developing. The implication is that the gold cartel is about to lose its grip on the gold market, and can no longer cap the gold price at current levels.

The second possible answer is more ominous. If gold does trade in backwardation against US dollar for a protracted period (again, barring a very short-term and ephemeral event like the first two instances noted above in which a temporary demand for physical gold disrupts normal market activity), it will mean that a collapse of the dollar has begun. Think about it. How could gold go into backwardation for any prolonged period? If it does, it would mean that no one is willing to take the risk of selling their hoard and instead hold US dollars. It would mean that no one is willing to accept the risks that come with holding dollars while waiting until they can be used at a future date to exchange back into gold.

Those risks are:

1) the dollar can be created out of thin air by governments, and

2) holding dollars has counterparty risk.

The trillions of dollars of newly created bail-out money highlight the first risk, and the sad state of the banking industry today makes clear the second.

Physical gold has neither of these risks. So because of the greater risk of holding dollars, dollar interest rates are higher than gold's interest rates. In short, the higher interest rate currency is always in backwardation when the forwards are measured against a currency with lower interest rates.

In recent years, the politically correct thing to do is to call gold's interest rate a "lease rate", which is unfortunate. If people recognized that gold has an interest rate because it is money, they would more quickly grasp the significance of a gold backwardation if it were to occur. The contango is gold's interest rate.

For more information about gold backwardation, I recommend the following:

1) a monograph entitled "Golden Sextant" by Reg Howe, which is available at the following link: http://www.goldensextant.com/goldensextant.html

2) an article by Doug Pollitt, which can be downloaded by clicking here.

In summary, the market for physical gold is tight. The extraordinarily high premiums now being charged on coins and small bars is the most visible aspect of this incredible tightness. The negative GoFo rate for three days in November is another example.

This tightness in the physical market for gold could be a passing phenomenon, but then again, maybe not. It may be any indication that the gold market is profoundly changing, which will cause the price of gold to soar because the gold cartel is unable or unwilling to use any of its remaining inventory to cap the gold price at current levels, or because US dollar is becoming suspect. Then again, it is not unreasonable to conclude that both factors may be at work here. After all, the collapse in the US Dollar Index this month strongly suggests that the dollar's 4-month bear market rally ended in November.

In any case, we'll know for sure that the gold price is ready to soar if GoFo goes negative and remains negative. If that happens, take note of the old saying that a bird in the hand is worth two in the bush. Own physical metal and not paper.

------------------------------------------------------------------------------------------------------------------

James Turk is the founder and chairman of GoldMoney.com. He is the co-author of The Coming Collapse of the Dollar, which has been updated for a newly released paperback version, now entitled The Collapse of the Dollar.

Title: Re: Meltdown
Post by: ezodisy on December 14, 2008, 10:03:59 AM

for anyone who remembers the bump-and-run formation (BARF!!!!) which I posted a few weeks ago on the dollar, it is underway now. Second link includes a video.

http://news.goldseek.com/TacticalInvestor/1229298518.php

http://www.ft.com/cms/s/0/39528a76-c7ae-11dd-b611-000077b07658.html?nclick_check=1

Short View: Dollar rally ends

By John Authers

Published: December 11 2008 18:23 | Last updated: December 11 2008 18:23

The great rally in the US dollar is over for now. Is the buck taking a rest before resuming a rally, or is this the precursor for another decline?

On a trade-weighted basis, the dollar rose 22.7 per cent from July until its peak last month. This was not, evidently, due to any great strength in the US economy. Instead it was largely a perverse phenomenon – as traders sold assets to pay down debts (deleveraging), they often had to buy dollars. So as the crisis intensified, so the dollar strengthened.

The only exception to this was the yen, which does even better than the dollar when investors are anxious.

The dollar is now weakening, down 4.7 per cent on a trade-weighted basis from its peak. This might be down to reducing risk aversion, as a number of stock markets around the world have calmed down for now.

But the dollar is also close to a 13-year low against the yen. Some measures of anxiety are falling, but historic low bond yields suggest risk aversion remains very much alive.

And US stocks, notably financials, have conspicuously failed to join in the party, and refuse to make a decisive break from their downward trend.

That implies that the dollar's fall may not be about the end of deleveraging, or a general recovery of risk appetite. Rather, something specific to the US is causing concern.

The latest US economic data are terrible, but so are those of everyone else. So there are two broad possibilities.

One is that political anxiety is driving the dollar lower. Ashraf Laidi, of CMC Markets, argues that the mere possibility that the US carmakers could go bankrupt may be scaring traders out of the dollar.

A second is that even as deleveraging goes on, the dollar looks so overvalued that traders are taking the opportunity to sell it. Neither option is encouraging for the US.

Title: Re: Meltdown
Post by: ezodisy on December 14, 2008, 10:27:08 AM

Quote from: drogulus on December 13, 2008, 08:06:41 AM
Do you disagree with anything he said? He's talking about how this crisis developed, and by implication the steps needed to respond. And yes, most of what he said has already been said by posters here. Economics is not a black art, even though it isn't exactly a science either. Large elements of common sense are used, so what an expert says will overlap with what an informed non-expert perceives to be the case. If you lack common sense, you will tend to buy the esoteric idea that what's true is something you can't know, and be vulnerable to every con artist and ideologue that comes down the pike. I tend to favor the expert whose reasoning I can understand and evaluate, which means it will appear conventional and too obvious to be true.

The implied steps are the reintroduction of the kind of regulations which would have limited the damage. Regulations on mortgage standards, firewalls for banks, more oversight of securities markets, a reorientation of the Fed to monitor bubble conditions. It would also help to keep the example of Greenspan in mind, who says he was dismayed to find his ideology was wrong (how often do you hear that?). By that light Schiff looks like more of the same dismal "markets are self regulating" crap that got us into this mess.

okay I've found one instance of it if you wish to see it: http://uk.youtube.com/watch?v=P6nkHbbj8fA

Title: Re: Meltdown
Post by: drogulus on December 14, 2008, 11:23:50 AM

Quote from: ezodisy on December 14, 2008, 10:27:08 AM
okay I've found one instance of it if you wish to see it: http://uk.youtube.com/watch?v=P6nkHbbj8fA

There are 2 theories of the crisis that are operating in parallel, and there is evidence for both of them. One is poor regulatory behavior where we removed regulations that would have mitigated if not prevented the crisis (Stiglitz and many others). The other is Schiff, Rogers and others who say that existing regulations plus the unwillingness to let failures happen causes the problem. While I agree with elements of the second analysis (the problems are real, and the Japan case is instructive), you have to realize that the problems occured exactly at the weak points, precisely where regs were eliminated. This boosts the case for the Stiglitz analysis because it's more specific.

Also, you have to consider that the only "test to failure" we've experienced was during the Great Depression. So the real test of a hands off approach will never be attempted. That's nice for the Paullists like Schiff, who can then claim (like the Communists) that Real Capitalism has never been tried. Well, yes it was, and no one with real power is willing to go back to that. The danger of failure with their approach is far higher than with the moderate regulatory course that has produced so much economic growth since the 1940's. Where's the evidence that welfare states drive themselves into poverty with regulation? The only states that don't run their economies the way we do are not exactly role models. So where does the Paullist go for empirical validation for laissez faire? Nowhere, that's where.

Title: Re: Meltdown
Post by: ezodisy on December 14, 2008, 01:16:52 PM

Quote from: drogulus on December 14, 2008, 11:23:50 AM
There are 2 theories of the crisis that are operating in parallel, and there is evidence for both of them. One is poor regulatory behavior where we removed regulations that would have mitigated if not prevented the crisis (Stiglitz and many others). The other is Schiff, Rogers and others who say that existing regulations plus the unwillingness to let failures happen causes the problem. While I agree with elements of the second analysis (the problems are real, and the Japan case is instructive), you have to realize that the problems occured exactly at the weak points, precisely where regs were eliminated. This boosts the case for the Stiglitz analysis because it's more specific.

Also, you have to consider that the only "test to failure" we've experienced was during the Great Depression. So the real test of a hands off approach will never be attempted. That's nice for the Paullists like Schiff, who can then claim (like the Communists) that Real Capitalism has never been tried. Well, yes it was, and no one with real power is willing to go back to that. The danger of failure with their approach is far higher than with the moderate regulatory course that has produced so much economic growth since the 1940's. Where's the evidence that welfare states drive themselves into poverty with regulation? The only states that don't run their economies the way we do are not exactly role models.

Well I try to keep an open mind about it, not blindly assuming that Rogers, Schiff, Hendry et al., for all their past success, are correct on every point they make.

QuoteSo where does the Paullist go for empirical validation for laissez faire? Nowhere, that's where.

No that's not the case. For empiricial validation, Rogers points to South Korea and how it handled the '97 Asian financial crisis. It's an outstanding example of a country hitting hard times, not interfering with failing financial institutions (or car makers), and just several years later rebounding to continue its course as one of the fastest growing and most prosperous economies. Cleaned out, stronger base, and onwards, what he's been saying the US should do. Agree with him or not, it's a bloody good example (and you can't say "nowhere" anymore :) ).

http://www.korea.net/news/news/newsView.asp?serial_no=20071108002&part=104&SearchDay=&page=1

Title: Re: Meltdown
Post by: BachQ on December 14, 2008, 01:52:31 PM

Quote from: Daverz on December 13, 2008, 12:29:08 PM
A little schadenfreude (http://www.nytimes.com/2008/12/14/nyregion/14lawyer.html?hp) to brighten up a dreary Saturday afternoon.

In recent days, Dreier L.L.P., the Park Avenue law firm that Mr. Dreier founded, has been plunged into chaos. At least $35 million in escrow money that was to have been held by the firm also seems to be missing, the authorities say, and nearly all of its 250 lawyers are now looking for work.

...

As the Dreier firm's lawyers rummage through the law firm's books, which had been until recently Mr. Dreier's exclusive preserve, the lawyers are finding that bills have not been paid in months. Their health insurance is in default and the firm will not be able to make its $2.6 million payroll on Monday, lawyers there say.

...

There would be no executive committee. No partners meetings. Mr. Dreier would handle all administrative chores.

For lawyers there now, the delegation of responsibility means that they are just now figuring out that Mr. Dreier had let their malpractice insurance lapse, exposing them to enormous risk if they are sued by Mr. Dreier's growing list of potential victims, lawyers said.

You can check out his firm's website before it's taken down tomorrow (Monday):

http://www.drierllp.com/index2.php?id=5&members=26

(Bio of Marc S. Dreier, Managing Partner)

Title: Re: Meltdown
Post by: ezodisy on December 14, 2008, 11:43:55 PM

lol! You've got to laugh when you read about these hedge funds which are suspending redemptions to investors. What a bunch of pricks. A lot of them will be buried over the next few years. That Madoff story has got to be one of the richest and most interesting to come along for a while, and to think it was just a grand Ponzi scheme, amazing. That's the sort of story that will serve as a catalyst for tighter regulation, as if there weren't enough reasons already. Public outcry and all that, it's already beginning. But the banks, well they're innocent, it was all the hedge funds' fault!!! lol! Things are going to get really ugly soon.

Title: Re: Meltdown
Post by: BachQ on December 15, 2008, 03:09:27 AM

Drogulus, I agree adamantly with Schiff/Rogers that BAILOUTS DO NOT WORK! We must allow the weak companies to fail.

Quote from: drogulus on December 14, 2008, 11:23:50 AM
The other is Schiff, Rogers and others who say that existing regulations plus the unwillingness to let failures happen causes the problem. While I agree with elements of the second analysis (the problems are real, and the Japan case is instructive), you have to realize that the problems occured exactly at the weak points, precisely where regs were eliminated. This boosts the case for the Stiglitz analysis because it's more specific.

MoneyWeek: How TARP became a Banking Buying Bonanza: American banks are taking advantage of the US Treasury's $700bn Troubled Asset Relief Program. But they're not using the money to increase lending. They're using it to buy up other banks.

(http://www.moneyweek.com/news-and-charts/economics/how-the-us-banking-bailout-became-a-buying-spree-14273.aspx)

QuoteWhile the Treasury Department's noble investment of more than $250 billion in US financial
institutions has been billed as a strategy that will bolster the health of the banking system, the real story shows that the 'recapitalisation' has actually had a very different result. And it's one that has left whipsawed US investors and lawmakers alike feeling burned. *** Those billions have touched off a banking-sector version of "Let's Make a Deal," in which the biggest US banks are using government money to get even bigger.

While that's admittedly removing the smaller, weaker banks from the market - a possible benefit to consumers and taxpayers alike - this trend is also having a detrimental effect: It's reducing the competition that has benefited consumers and kept the explosion in banking fees from being far worse than it already is. And this all happens without any of the economic benefits that an actual increase in lending would have had. Plus, it does nothing to address the billions worth of illiquid securities that remain on (or off) banks' balance sheets - as the recent Citigroup Inc. (NYSE:C) imbroglio demonstrates.

For example ...

QuoteThe US government dished out $15 billion to Bank of America (NYSE:BAC), which is using the money to double its stake in state-owned China Construction Bank Corp. When the deal is finalised, it will hold a 20% stake, worth $24 billion, in China's second-largest lender.

Another example...

QuotePNC Financial Services Group Inc. (NYSE:PNC), which will get $7.7 billion from the Treasury's Troubled Assets Relief Program (TARP), is using that cash infusion to help finance its $5.2 billion buyout of embattled National City Corp. (NYSE:NCC).

Another example...

QuoteUS Bancorp (NYSE:USB), which received a $6.6 billion capital infusion from that same rescue package, has acquired two California lenders - Downey Savings & Loan Association, F.A., a subsidiary of Downey Financial Corp. (NYSE:DSL), and PFF Bank & Trust, a subsidiary of PFF Bancorp Inc. (OTC:PFFB). US Bancorp agreed to assume the first $1.6 billion in losses from the two, but says anything beyond that amount is subject to a loss-sharing deal it struck with the Federal Deposit Insurance Corp. (FDIC).

Title: Re: Meltdown
Post by: ezodisy on December 15, 2008, 03:11:17 AM

One of the City's best-known fund managers has criticised US financial regulators for failing to detect early an alleged $50bn (£33bn) fraud.
Nicola Horlick, boss of Bramdean investments, said US regulators had "fallen down on the job".
Mrs Horlick told the BBC: "I think now it is very difficult for people to invest in things that are meant to be regulated in America, because they haven fallen down in the job."
"This is the biggest financial scandal, probably in the history of the markets - $50bn is a huge amount of money," she said.

Mrs Horlick said 9% of Bramdean's funds were invested with Mr Madoff ($20.9 million)
(http://news.bbc.co.uk/1/hi/business/7783236.stm)

This stupid cow, who has been creating a fanciful media image for years and who has been ripping off investors at the same time, is now getting on the news, blaming it on a lack of regulation in the states and even using the word sexist to describe the media attention focused on her[1] (http://www.thisislondon.co.uk/standard/article-23601817-details/Singling+me+out+over+loss+is+sexist+says+Horlick/article.do). As if a 5 year rolling contract and sucking 10% out of a £250m pot to begin with isn't enough, this fat philistine now goes on the news to disclaim responsibility as much as possible and fly the white passive-aggressive flag. One crook screaming foul at another crook and blaming it on the biggest crook of all (yankee doodle). So much for honour among thieves. The funny thing is that she seems to genuinely believe that she's not a crook, just because she's not running "against the law", as it were. Anyone who is crooked, and who is aware of the fact, will know that this sort of crook (Mrs Horlick, the blameless type) willl always sooner or later fail as they refuse to acknowledge their true, underlying nature. I hope Bramdean gets spanked.

Title: Re: Meltdown
Post by: BachQ on December 15, 2008, 03:13:44 AM

Quote from: ezodisy on December 13, 2008, 04:13:51 AM
There's a new Schiff interview on Goldseek radio, starting from the second hour: http://radio.goldseek.com/

Peter Schiff: "Ultimately I'm confident that when the dollar stops rising, and when it finally starts to break down, it will be a major, major collapse, and the dollar's decline will be much more dramatic than the rally we've had over the past [few months]."

Bloomberg: The biggest foreign-exchange strategists and investors say the best may be over for the dollar after a four-month, 24 percent rally. The currency weakened 5.9 percent measured by the trade- weighted Dollar Index after strengthening between July and November as investors bought the greenback to flee riskier assets and repay dollar-denominated loans from lenders reining in credit. Ever since peaking on Nov. 21, the dollar fell against all 16 of the most-widely traded currencies, according to data compiled by Bloomberg.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=azuNjokrEk88&refer=home)

QuoteU.S. policy makers are flooding the world with an extra $8.5 trillion through 23 different plans designed to bail out the financial system and pump up the economy. The decline shows that the increased supply of money may be overwhelming investors just as the government steps up debt sales, the trade and budget deficits grow and de-leveraging by investors slows.

"The dollar will go to new lows as the U.S. attacks its currency," said John Taylor, chairman of New York-based FX Concepts Inc., which manages about $14.5 billion of currencies. *** Speculation that the dollar has peaked gained steam last week as the currency plunged 4.9 percent against the euro to $1.3369, its biggest drop since Europe's common currency was created in 1999. It weakened 1.75 percent versus the yen.

"We're at a turning point in terms of dollar dynamics," said Jens Nordvig, a New York-based strategist at Goldman Sachs, the biggest U.S. securities firm to convert to a bank. "The dollar shortage has been addressed and we'll see people start to focus on other things and those are all dollar negative." *** "A lot of the reasons why the dollar went up are not sustainable and have started to disappear," said Robert Sinche, the head of global currency strategy at Bank of America in New York, who predicts the currency will weaken to $1.44 per euro as early as March 31. "Bad news about the U.S. economy is beginning to be bad news for the dollar."

Title: Re: Meltdown
Post by: BachQ on December 15, 2008, 03:16:43 AM

The mainstream media is now finally beginning to grasp the enormity of the problems facing the real estate market. And to the extent the real estate market is core to the overall economy, 2009-2010 will be ruinous (see video below).

Yesterday on 60 Minutes -- Beyond Subprime: The Next Wave of Mortgage Meltdown (Video) (title mine) (http://www.cbsnews.com/video/watch/?id=4668112n&tag=topHome;topStory)

"It's terrifying ...Things are going to be much worse than anyone anticipates"

"The same craziness that occured in the mortgage markets occured in the commercial real estate markets. That's taking a little longer to show ... we may be only in the 3d inning of the bursting of this asset bubble"

Q: "Did you read the paperwork [before you bought 6 properties]?"
A: "No I didn't. I was too busy buying properties." :D :D :D

Title: Re: Meltdown
Post by: BachQ on December 15, 2008, 03:17:38 AM

Reuters: Home Values to Lose "Well Over $2 Trillion" in 2008 (http://www.reuters.com/article/newsOne/idUSTRE4B84A420081215)

Title: Re: Meltdown
Post by: ezodisy on December 15, 2008, 03:19:08 AM

Quote from: Dm on December 15, 2008, 03:09:27 AM
Another example...

The US government dished out $15 billion to Bank of America (NYSE:BAC), which is using the money to double its stake in state-owned China Construction Bank Corp. When the deal is finalised, it will hold a 20% stake, worth $24 billion, in China's second-largest lender.

That sounds like a good move, what with future Chinese dominance and prosperity looking quite likely. The one acquiring the California lenders must be mad.

Title: Re: Meltdown
Post by: BachQ on December 15, 2008, 03:22:22 AM

Quote from: ezodisy on December 08, 2008, 03:58:17 AM
Yep I think it's underway and it's an utterly fascinating subject. I've been reading about Kondratieff waves, these big 50-60 year cycles of boom and bust split up into 4 seasons of which, yep, you guessed it, we are heading into the winter season of the wave.

(http://www.kondratieffwinter.com/images/wave1.gif)

http://www.kondratieffwinter.com/kw_wave_depression.html

If you go to the links page on your kondratieffwinter.com website (http://www.kondratieffwinter.com/kw_wave_depression.htm), you will see a link to The Longwave Analyst, (http://www.thelongwaveanalyst.ca/) within which you can access this mammoth article titled This is It on the Kondratieff Winter by Ian Gordon (Aug/Sep 2007). A year ago he concluded that we're heading into a K-winter, and he was spot on.

http://www.thelongwaveanalyst.ca/pdf/07_12_04_News.pdf (PDF WARNING).

Ian begins ominously:

QuoteThis is it. The Kondratieff winter is now underway in earnest and nothing can stop it. The huge credit expansion initiated by the Maestro, the past Federal Reserve Chairman, Alan Greenspan, has now reversed. The ensuing credit contraction will be devastating. It will take down creditor and debtor alike and will result in a destructive and frightening deflationary depression.

... This time it is different. As the 4th Kondrataieff winter unfolds, most of the world is party to the debt bubble and the congruent speculative mania. The sheer size of this situation is at least 100 times greater than the 1920s. Thus the repercussions are likely to be far more punishing than during the "dirty '30s."

Title: Re: Meltdown
Post by: BachQ on December 15, 2008, 03:25:02 AM

Quote from: drogulus on December 06, 2008, 12:56:42 PM
Here's the link to the Blodget piece. (http://www.theatlantic.com/doc/200812/blodget-wall-street) Allowing for special pleading in his own behalf, it sounds like a fair appraisal of the situation.

Drog, FYI, here's a video of Henry Blodget on C-SPAN (33 min aired on 12-09-2008) discussing his article in The Atlantic. Basic and straightforward.

http://www.c-spanarchives.org/library/index.php?main_page=product_video_info&products_id=282766-7&showVid=true

If that link doesn't work, then click on the top link on this page. (http://www.c-spanarchives.org/library/index.php?main_page=basic_search&query=henry+blodget) When that page loads, click on the flash video icon on the far right margin.

Title: Re: Meltdown
Post by: BachQ on December 15, 2008, 03:29:04 AM

Quote from: drogulus on December 14, 2008, 11:23:50 AM
*** unwillingness to let failures happen causes the problem.

According to Sen. Richard Shelby, speaking on the Senate floor Thursday night about the Big 3 bailout: "Bailouts generally don't work, and this is a huge proposed bailout, and I fear it's just the down payment on more to come next year. These companies are either already failed or failing, and that's a shame. These aren't the General Motors, Ford and Chrysler I knew."

(http://www.ibtimes.com/articles/20081212/uaw-president-hopes-washington-will-help-industry.htm)

Quote from: drogulus on December 14, 2008, 11:23:50 AM
*** unwillingness to let failures happen causes the problem.

Joseph Stiglitz: Chapter 11 is the right road for US carmakers

(http://us.ft.com/ftgateway/superpage.ft?news_id=fto121120081513587422)

Quote *** Today, [the Big 3] are asking to escape accountability. We should not allow it. What needs to be done is to help the automakers get a fresh start and allow them to focus on producing good cars rather than trying to juggle their books to meet past obligations. The US car industry will not be shut down, but it does need to be restructured. That is what Chapter 11 of America's bankruptcy code is supposed to do. A variant of pre-packaged bankruptcy – where all the terms are set before going before the bankruptcy court – can allow them to produce better and more environmentally sound cars. *** The failure lies with the managers of US carmakers and America's financial markets, which failed in their oversight and encouraged short-sighted behaviour. The "bridge loan to nowhere" – the down payment on what could be a sinkhole of enormous proportions – is another example of the short-sighted behaviour that got us into this mess.

Title: Re: Meltdown
Post by: ezodisy on December 15, 2008, 05:00:29 AM

getting more and more interesting

For a little context, the net short positioning of the big U.S. banks represents a net short positioning of just under 6.4 million ounces (just under 200 tonnes). As of December 4, there were 2,918,028 ounces classed as "Registered" in COMEX warehouses. So, these 3 U.S. banks were net short 218% of the amount of deliverable gold from ALL COMEX members which use the COMEX warehouses. (http://www.resourceinvestor.com/pebble.asp?relid=48524)

Title: Re: Meltdown
Post by: BachQ on December 15, 2008, 12:35:43 PM

Stay tuned for the Gold Rush of 2009.

(http://meltdown2011.files.wordpress.com/2008/12/comex-countdown-gold-2008-12-15.png)

Quote from: ezodisy on December 15, 2008, 05:00:29 AM
getting more and more interesting

For a little context, the net short positioning of the big U.S. banks represents a net short positioning of just under 6.4 million ounces (just under 200 tonnes). As of December 4, there were 2,918,028 ounces classed as "Registered" in COMEX warehouses. So, these 3 U.S. banks were net short 218% of the amount of deliverable gold from ALL COMEX members which use the COMEX warehouses. (http://www.resourceinvestor.com/pebble.asp?relid=48524)

http://www.gata.org/node/6997

*** The amount [of Comex gold] that is registered to dealers, and therefore available for delivery, is only 2.846 million ounces. The delivery notices that have been issued so far in December total 1.26 million ounces, which is 44 percent of the available deliverable gold. This assumes that the gold registered to dealers is totally unencumbered, which is not necessarily a good assumption in the fuzzy accounting world of Wall Street. ...

*** The pieces of the puzzle are falling into place:

-- The central banks are selling only a fraction of their Washington Agreement allowance.

-- Coin-melt gold bars are showing up on the wholesale market, indicative of the bottom of the barrel.

-- The U.S. Mint is rationing coins.

-- The Perth Mint has suspended taking orders for any bullion products.

-- Retail dealers are sold out and only small quantities of precious metals are available.

-- The traditional major shorts on the Tokyo commodities exchange have covered their positions.

-- Prices in the retail market are very much higher than Comex spot.

-- Significant reduction in the gold contango has been observed, and even some backwardation.

-- A disconnect has formed between Comex paper gold trading and physical gold markets.

*** We will probably see a reduction in contango in the further-out months reduce and gold purchased in the cash market as investors switch from future IOUs to real metal. This may even provoke a much more pronounced backwardation than we have already seen in recent days. Make no mistake about this. We are seeing the early signs of a gold rush like the world has never seen before. *** (http://www.gata.org/node/6997)

Title: Re: Meltdown
Post by: ezodisy on December 15, 2008, 04:22:15 PM

well you know, in spite of all that, it is possible gold will first fall as low as $390 before rallying to record highs over the next 5 years. An analyst on ADVFN used his ridiculously complex, 95% accurate, pretty much genius MP3C analysis to ascertain that the price should first fall to those levels before rallying. So, there might be time to load up before we witness the great gold rush. However if it doesn't happen--and the guy really has a 95% accuracy rate--then we could be off to $1250 quite quickly. Personally I think there'll be more downside first.

Title: Re: Meltdown
Post by: BachQ on December 16, 2008, 03:05:54 AM

Quote from: ezodisy on December 09, 2008, 01:33:00 AM
Rouble Trouble in Russia: The Inconsistent Trinity at Work and the Need for a 20-25% Currency Depreciation

An article published today in Seeking Alpha paints a sobering view of Russia's economic outlook for 2009

Russia's Economic and Financial Meltdown Continues Swiftly --Russia's foreign-exchange reserves have been declining very rapidly since mid August, and as the money goes, so does the faith that the large stock of reserves the country built up during the boom times would be sufficient to see them through any downturn in energy prices. As the money leaves, so it seems does the decade of economic growth and stability which they symbolised. Indeed so rapid has been the decline, that Russia's international reserves, which are the third-biggest after those of China and Japan, have now fallen ... 27% since 8 August ... Russia has now used some 27% of its reserves in [] attempts to stem what has now become a 16 percent decline in the ruble following a 69% drop in the price of oil and last week's decision by credit ratings agency Standard & Poor's to cut its Russian credit rating for the first time in nine years.

(http://static.seekingalpha.com/uploads/2008/12/16/saupload_russia_gdp.png)

(http://seekingalpha.com/article/110920-russia-s-economic-and-financial-meltdown-continues-swiftly)

QuoteApart from the financial turmoil, Russia's economy is really reeling under the weight of the sharp drop in crude prices, and the price of Urals crude, Russia's main export blend, is currently trading at around $44.13 a barrel, down 69 percent from the July peak, and well below the $70 average required to balance the country's 2009 budget.

GDP Collapse

QuoteDeutsche Bank recently cut its Russian growth forecast to 1 percent for next year, down from an earlier 3.4 percent, while the World Bank last month forecast a slowdown to 3 percent from what has been an average expansion of 7 percent a year since 1999. At the bottom end of the forecast range we have Oleg Vyugin, chairman of MDM Bank and a former central banker, who suggests the economy may contract by as much as 4% if the prices of raw materials exports do not recover. My own feeling is that the final figure may well be much nearer to Vyugin's estimate than to the World Bank one, especially if we don't get a strong rebound in commodity prices and given the sharp contraction in non-energy industrial output.

Analysts at OAO Sperbank have gone one step further and come up with two possible scenarios for possible impacts of the economic slump on property prices. For the first (or mild case) scenario they postulate a 2.5-3.5% growth in GDP, 11% inflation and a 30 ruble per dollar exchange rate in 2009. In this case, the bank anticipates a drop in Moscow real estate prices of 34.4% in ruble terms and 46.6% in dollars. On the second scenario GDP stagnates (or even contracts by up to 2.5%), there is higher inflation and an even larger devaluation of the ruble against the dollar. In this (worst) case scenario the Bank suggests that Moscow property prices would plummet by 38.1% in rubles and 59.6% in US dollars. You have been warned!

(continued)

Title: Re: Meltdown
Post by: BachQ on December 16, 2008, 03:07:07 AM

Quote from: ezodisy on December 15, 2008, 04:22:15 PM
well you know, in spite of all that, it is possible gold will first fall as low as $390 before rallying to record highs over the next 5 years. An analyst on ADVFN used his ridiculously complex, 95% accurate, pretty much genius MP3C analysis to ascertain that the price should first fall to those levels before rallying. So, there might be time to load up before we witness the great gold rush. However if it doesn't happen--and the guy really has a 95% accuracy rate--then we could be off to $1250 quite quickly. Personally I think there'll be more downside first.

95% accuracy is phenomenal. Can you explain in a nutshell the major factors contributing to this anticipated plunge?

Title: Re: Meltdown
Post by: BachQ on December 16, 2008, 03:09:35 AM

The Herald: Irish beer market in "meltdown" as sales collapse 20%-25% ... "Spending on beer doesn't follow the curve," an industry source said. "It's ahead of the curve. This is a precursor for what's going to happen in other sectors. Everybody is just afraid. They are not spending money on beer or anything else."

(http://www.herald.ie/national-news/now-beer-market-in-meltdown-as-sales-plunge-20pc-1575213.html)

Title: Re: Meltdown
Post by: BachQ on December 16, 2008, 04:59:45 AM

Quote from: ezodisy on December 10, 2008, 12:20:37 AM
I heard one of the auto chiefs say that they need 5 billion this month and 5 billiion in January. What about February, and March? I haven't been following this much, I just noticed that the "expert" consensus seems to be that they'll be back for more money some time in 2009. That does seem a certainty. I think Peter Schiff said that it could go into the hundreds of billions. How very reassuring. Now where's that plug for the printing press? :)

Bloomberg (12-12-08): Peter Schiff decimates Fmr. Sen. Don Riegle (D-Mich.) -- Will Washington Save Detroit?

http://www.youtube.com/watch?v=_DgraUoeDBg&eurl=http://www.roguegovernment.com/news.php?id=13244&feature=player_embedded

Utter decimation. :D

(Query: what would the founding fathers think of all these bailouts?)

Title: Re: Meltdown
Post by: ezodisy on December 16, 2008, 08:07:28 AM

Quote from: Dm on December 16, 2008, 03:07:07 AM
95% accuracy is phenomenal. Can you explain in a nutshell the major factors contributing to this anticipated plunge?

well I certainly couldn't explain his MP3C analysis, it is ridicously complex and those who have studied under him are still coming to terms with it 12 months after beginning. He has something of a cult following on ADVFN though and gets it right nearly all the time, albeit not always immediately. His argument was something like $390 must at some time be hit as there is a lot of "unfinished business" down in that lower area, and as that price is unlikely to be hit after gold hits $10,000, then it should be hit before. I'll have a look through it to see if I can paste anything here.

Federal Reserve sets stage for Weimar-style Hyperinflation (http://www.globalresearch.ca/index.php?context=va&aid=11401)

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 03:05:21 AM

Gerald Celente, Founder of the Trends Research Institute, had accurately predicted the "panic of 2008" and now predicts the "collapse of 2009" (audio only)

http://uk.youtube.com/v/LQOb-XmWo1Q

"The next shoe to fall following the home market in real estate is going to be the commercial market. ... Following the great collapse we're going to go into the greatest depression."

Part 2/3 http://uk.youtube.com/watch?v=bFybErLqoMk
Part 3/3 http://uk.youtube.com/watch?v=wxlaAq0I3_s

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 03:07:45 AM

Quote from: ezodisy on December 16, 2008, 08:07:28 AM
Federal Reserve sets stage for Weimar-style Hyperinflation (http://www.globalresearch.ca/index.php?context=va&aid=11401)

That is a depressing article. Even amid an annualized expansion rate for the monetary base exceeding 300%, banks are still not lending, suggesting that the US is spiraling into a free-falling vortex of deflationary depression. "[T]he Federal Reserve's panic actions since September, by their explosive expansion of the monetary base, has set the stage for a Zimbabwe-style hyperinflation."

QuoteOnce banks begin finally to lend again, perhaps in a year or so, that will flood the US economy with liquidity in the midst of a deflationary depression. At that point or perhaps well before, the dollar will collapse as foreign holders of US Treasury bonds and other assets run. That will not be pleasant as the result would be a sharp appreciation in the Euro and a crippling effect on exports in Germany and elsewhere should the nations of the EU and other non-dollar countries such as Russia, OPEC members and, above all, China not have arranged a new zone of stabilization apart from the dollar. The world faces the greatest financial and economic challenges in history in coming months. The incoming Obama Administration faces a choice of literally nationalizing the credit system to insure a flow of credit to the real economy over the next 5 to 10 years, or face an economic Armageddon that will make the 1930's appear a mild recession by comparison.

At least the article has a happy ending, predicting that Obama will inherit the "Very Great Depression of 2008-2014."

Title: Re: Meltdown
Post by: ezodisy on December 17, 2008, 04:01:57 AM

Those numpties at the Fed with their cuts ruined an absolutely perfect bearish rising wedge, negative divergence and a zillion overbought indicators on gold. It was setting up to be a complete collapse but oh no, the big announcement comes in for a big fakeout north. Not going to happen. Anyway it would seem to be in their interest to keep it low for now.

Title: Re: Meltdown
Post by: ezodisy on December 17, 2008, 04:04:23 AM

crude going to $25 Dm?

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 04:36:45 AM

Quote from: ezodisy on December 17, 2008, 04:01:57 AM
Those numpties at the Fed with their cuts ruined an absolutely perfect bearish rising wedge, negative divergence and a zillion overbought indicators on gold. It was setting up to be a complete collapse but oh no, the big announcement comes in for a big fakeout north. Not going to happen. Anyway it would seem to be in their interest to keep it low for now.

The Bank that Ate America: "It seems the Federal Reserve is about the only fully operational bank in America, and Ben Bernanke is Atlas with the world upon his shoulders."

(http://www.businessspectator.com.au/bs.nsf/Article/The-bank-that-ate-America-$pd20081217-MDS5B?OpenDocument&src=sph)

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 04:38:36 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

OPEC production cuts vs Demand destruction. Who will win?

Title: Re: Meltdown
Post by: ezodisy on December 17, 2008, 04:46:20 AM

Quote from: Dm on December 17, 2008, 04:36:45 AM
The Bank that Ate America: "It seems the Federal Reserve is about the only fully operational bank in America, and Ben Bernanke is Atlas with the world upon his shoulders."
(http://www.businessspectator.com.au/bs.nsf/Article/The-bank-that-ate-America-$pd20081217-MDS5B?OpenDocument&src=sph)

Thanks.

Quote"But the other important development is that once again the Fed and the European Central Bank are out of step.

On Monday night the ECB president, Jean-Claude Trichet, told journalists that he was wary of taking rates too low and signalled that the ECB was now pausing its rate cuts.

The European official cash rate is now 2.5 per cent, the highest in the industrialised world. Trichet said on Monday: "Do we have a feeling there is a limit to the decrease in rates? At this stage, certainly yes."

The Fed started cutting rates in September last year and by July had cut by 2.75 per cent to 2 per cent. In July the ECB actually increased rates by 0.25 per cent.

For a few weeks, though, they got together. Three days after the collapse of Lehman Brothers on September 15 the Fed and the ECB led co-ordinated action by several central banks to reduce rates and provide extra liquidity the system. That led to several weeks of alignment between the US and European central banks.

That now appears to have broken down again. Woe is Europe."

Woe is Europe? I'm not so sure. I don't know much about Trichet yet, should read what I can find, but so far I like him a lot and I would definitely favour his approach to what the US have done. Perhaps some of the experts are wrong that he's too far behind in cuts. You have an opinion on this Dm?

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 05:12:48 AM

Quote from: ezodisy on December 17, 2008, 04:46:20 AM
Woe is Europe? I'm not so sure. I don't know much about Trichet yet, should read what I can find, but so far I like him a lot and I would definitely favour his approach to what the US have done. Perhaps some of the experts are wrong that he's too far behind in cuts. You have an opinion on this Dm?

I disagree with the final statement "Woe is Europe." Ben Bernanke is a hapless, reactive, impulsive desperado, and Europe would be well served to take a hard look at the effects of Uncle Ben's actions before Europe emulates it. It's totally appropriate that Trichet be "wary of taking rates too low" while signalling that "the ECB is now pausing its rate cuts." (OTOH, we're facing a global crisis, and there is some merit in encouraging all of the central banks to operate together toward a common good).

But the Fed won't even disclose the assets its holding as collateral for $2 trillion lent out over the past three months. Why would anyone trust the Fed, let alone emulate their actions?

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 07:29:13 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

Wall St. Journal: (http://www.marketwatch.com/news/story/opec-cut-output-42-mln/story.aspx?guid=%7B5BA419BE-1B0D-44D9-9145-972205D29088%7D&dist=msr_1) OPEC has announced that it will slash its oil output by 4.2 million barrels a day from September levels, or 2.2 million barrels a day from current output.

Meanwhile, oil tumbled to $41.60 ! :-* >:D ... and the Dow is down 113 ...

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 07:43:30 AM

Quote from: ezodisy on December 16, 2008, 08:07:28 AM
Federal Reserve sets stage for Weimar-style Hyperinflation (http://www.globalresearch.ca/index.php?context=va&aid=11401)

(http://1.bp.blogspot.com/_nSTO-vZpSgc/SUa272c5yXI/AAAAAAAAD-8/nQkDGOA9LAk/s1600-h/Bernanke-QE-Cartoon.png)

(http://1.bp.blogspot.com/_nSTO-vZpSgc/SUa272c5yXI/AAAAAAAAD-8/nQkDGOA9LAk/s1600/Bernanke-QE-Cartoon.png)

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 08:44:25 AM

Fed unleashes greatest bubble of all (Reuters 17 Dec 2008): Like the sorcerer's apprentice, Federal Reserve Chairman Ben Bernanke and his predecessor Alan Greenspan have unleashed a series of ever-larger asset bubbles they cannot control. Now the Fed's decision to cut interest rates to between zero and 0.25 percent, coupled with a promise to keep them there for an extended period, and the threat to conduct even more unconventional operations in the longer-dated Treasury market risks the biggest bubble of all, this time in U.S. government debt.

(http://blogs.reuters.com/great-debate/2008/12/17/fed-unleashes-greatest-bubble-of-all/)

QuoteEven as officials recognize policy has played a role stimulating an endless series of bubbles, the Fed finds itself trapped with no way out. Following the collapse of much of the modern banking system, the risk of pernicious deflation is now very real ...

Title: Re: Meltdown
Post by: ezodisy on December 17, 2008, 09:17:10 AM

The Dollar Is Doomed, Jim Rogers Sells All U.S Dollar (http://www.allthingsjimrogers.com/2008/12/17/the-dollar-is-doomed-jim-rogers-sells-all-us-dollar/)

Title: Re: Meltdown
Post by: ezodisy on December 17, 2008, 09:29:25 AM

Quote from: Dm on December 17, 2008, 07:29:13 AM
Meanwhile, oil tumbled to $41.60 ! :-* >:D

ha ha I was short from $50 on Monday (http://i121.photobucket.com/albums/o211/aknapp99/bananahuge3rd119202oj.gif)

In Madoff We Trust
By: Peter Schiff (http://news.goldseek.com/EuroCapital/1229498220.php)

QuoteUnfortunately, the Ponzi economy doesn't stop there. A chain letter is no more viable when run by governments than when run by private citizens. However, government orchestrated pyramids have the advantage of required participation. As a result, they can maintain the illusion of viability for several generations. But the longer such schemes operate the larger will be the losses when they ultimately collapse.

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 10:27:38 AM

Mike Whitney: Bernanke's Fatal Flaw Ever since the two Bear Stearns hedge funds defaulted 17 months ago triggering a global financial crisis, the Federal Reserve has been busy putting out one fire after another. Fed chief Ben Bernanke has slashed interest rates to .25 per cent, handed out billions in emergency funding to teetering insurance companies and mortgage lenders, and provided $8.3 trillion in loan guarantees to keep the financial system from collapsing. Unfortunately, nothing the Fed has done has either stabilized the markets or stopped the contagion from spreading to the broader economy where consumer spending has fallen sharply, unemployment has skyrocketed, manufacturing has slipped to a 30 year low, and housing prices have plummeted.

(http://www.counterpunch.org/whitney12172008.html)

QuoteBernanke, the Princeton academic who is an expert on the Great Depression, is limited in his understanding of the crisis by his "monetarist" bias. He believes that the only way to fight credit contraction is by flooding the financial system with liquidity ("quantitative easing"). But this remedy focuses more on reducing the symptoms rather than curing the disease. Christopher Wood sums it up in an article in the Wall Street Journal article "The Fed is Out of Ammunition":

Quote"The origins of the modern conventional wisdom lies in the simplistic monetarist interpretation of the Great Depression popularized by Milton Friedman and taught to generations of economics students ever since. This argued that the Great Depression could have been avoided if the Federal Reserve had been more proactive about printing money. Yet the Japanese experience of the 1990s -- persistent deflationary malaise unresponsive to near zero-percent interest rates -- shows that it is not so easy to inflate one's way out of a debt bust."

Bernanke's strategy may provide some temporary relief, but it won't fix the underlying problems. The debts will have to be brought forward and written off, insolvent institutions will have to be shut down, indictments will have to be served to those who defrauded investors, and transparency will have to be established. Bernanke and his colleagues at the US Treasury believe they can bypass these confidence-building measures by simply opening the liquidity-valves and waiting for the economy to come charging back to life, but it won't work. Liquidity is not credibility and it's the lack of credibility that has investors racing for the exits.

Fear; pure, unadulterated fear.

QuoteBernanke's liquidity injections don't address the panic that has spread from the trading pits to every hearth and hamlet across the country where the tremors from the credit crunch are now being felt.

Frozen credit

QuoteSecuritization [is] frozen, the investment banks are gone, the hedge funds in distress, and the commercial banks are not capable of making up the difference. That means credit will continue to contract no matter what the Fed does. The recession will be long and deep.

Stimulus is merely a bandaid

QuoteStimulus doesn't deal with the deeply-rooted problems either; its just another band-aid for a sucking chest wound. *** Barring a complete economic meltdown, the rot at the heart of the system will continue to fester and grow under Obama just as it did under Bush and Clinton. ... Meanwhile, the economy continues to deteriorate faster than anyone expected. Companies are cutting back on investment, slowing production and laying off workers. Corporations are unable to finance ongoing operations or expansion because of widening spreads on corporate bonds. The volume of debt issued around the world plunged by 75 per cent in the last three months, according to the Bank for International Settlements (BIS).

Consumer debt is double 1929 percentages

QuoteConsumer debt is at an all-time high, more than $13 trillion. And, as journalist Stephen Lendman notes, "As a per cent of GDP, total credit market debt is now double its 1929 level at about 350 per cent." We have reached peak credit, a tipping point where consumers are forced to curtail spending and hunker-down for leaner times. The conventional strategy of pump-priming with low interest credit or stimulus checks from Uncle Sam will only soften the blow from the hard landing ahead.

Hyperinflation is coming

QuoteThe Fed's persistent price-fixing and market interventions can only succeed as long as there's a reliable pool of speculators willing to borrow capital and put it to work to turn a profit; that's the basic premise of bubblenomics. With the financial system deleveraging, the broader economy contracting, and commodities, stocks and housing flat-lining; there are fewer and fewer opportunities for even the most risk-tolerant investor. That's why Bernanke is planning to force-feed credit into the system via untested methods that, many believe, will engender hyperinflation when the recession winds down. If the economy kicks in faster than Bernanke figures, he'll have to mop up $8.3 trillion of liquidity or watch while the dollar gets torn to shreds.

Title: Re: Meltdown
Post by: BachQ on December 17, 2008, 10:28:46 AM

Quote from: ezodisy on December 17, 2008, 09:29:25 AM
ha ha I was short from $50 on Monday (http://i121.photobucket.com/albums/o211/aknapp99/bananahuge3rd119202oj.gif)

:D Congrats

Title: Re: Meltdown
Post by: Daverz on December 17, 2008, 07:54:11 PM

Quote from: ezodisy on December 17, 2008, 09:17:10 AM
The Dollar Is Doomed, Jim Rogers Sells All U.S Dollar (http://www.allthingsjimrogers.com/2008/12/17/the-dollar-is-doomed-jim-rogers-sells-all-us-dollar/)

I wish I'd gotten into the Yen when it was low.

Title: Re: Meltdown
Post by: BachQ on December 18, 2008, 03:04:22 AM

Quote from: Dm on December 17, 2008, 10:27:38 AM
Consumer debt is double 1929 percentages

US total debt to GDP
(http://alphaville.ftdata.co.uk/lib/inc/getfile/3627.jpg)

Title: Re: Meltdown
Post by: BachQ on December 18, 2008, 03:07:18 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

Merrill Lynch: Crude Oil may Dip Below $25/bbl as Demand Drops
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aqvLPt.tTAk4&refer=home)

QuotePrices may dip below $25 a barrel next year if the contraction spreads to China, Merrill Lynch & Co. said in a report yesterday. Oil has dropped 19 percent [during the first week in December], and is poised for its biggest percentage decline since March 2003. "We've got the U.S., U.K., Europe and Japan all in recession for the first time since World War II, and the oil market is reacting," said Chip Hodge, a managing director at MFC Global Investment Management in Boston, who oversees a $5 billion energy-company bond portfolio.

Title: Re: Meltdown
Post by: BachQ on December 18, 2008, 03:09:04 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

Goldman Sachs: Oil will average $45/bbl for 2009 -- SINGAPORE/LONDON (Reuters) - Goldman Sachs' energy equity research team, which predicted a crude oil spike to $200 a barrel earlier this year, slashed on Friday its 2009 forecast to just $45 as demand deteriorates.

(http://www.reuters.com/article/ousiv/idUSTRE4BB2BG20081212)

QuoteThe team led by Arjun Murti, who made waves in 2005 by calling crude's ascent to $100, also said prices would bottom out early next year and that a shift from "demand destruction" to "supply destruction" would ultimately revive oil's rally. In a separate report, Goldman's commodities research team also cut its 2009 forecast to an average $45 and predicted world oil demand would fall by 1.7 million barrels per day (bpd) and help drive oil prices down to $30 a barrel in the first quarter. "We expect that an additional 2 million barrels per day (bpd) of OPEC supply cuts will be required in 2009, along with a 600,000 bpd reduction in Non-OPEC production, in order to rebalance the market," the team led by Jeffrey Currie wrote.

Title: Re: Meltdown
Post by: BachQ on December 18, 2008, 03:10:59 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

CNBC guest Devina Mehra, chief strategist at First Global (Dec. 11): Oil May Crash to $10 a Barrel ---> Click here for 3 min video <--- "We tend to give too much importance as to how much [OPEC] can control ..."
(http://www.cnbc.com/id/15840232/?video=960474937&play=1)

Title: Re: Meltdown
Post by: BachQ on December 18, 2008, 03:13:16 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

Below are links to Matt Simmons and Robert Hirsch explaining the price of oil and the destiny of peak oil (audio only; 55 min):

Real Player -----> http://www.netcastdaily.com/broadcast/fsn2008-1213-2.ram

WinAmp -----> http://www.netcastdaily.com/broadcast/fsn2008-1213-2.m3u

Windows MediaPlayer -----> http://www.netcastdaily.com/broadcast/fsn2008-1213-2.asx

MP3 -----> http://www.netcastdaily.com/broadcast/fsn2008-1213-2.mp3

Matt Simmons: "The [oil] industry is now panicked and is starting to unravel itself. ... It's the worst thing to happen at the worst time."

Upon interpreting the IEA's 2008 data (which was derived from 798 oil fields), Matt Simmons concluded: "The game's over. The era of cheap oil is over. ... We need to start evacuating the theater folks. ... We're going to see the problem so quickly now, that I think the game is over "

Robert Hirsch "The giant oil fields (which provide 60% of world oil) are in decline, and more and more are going into decline, and the decline rates are increasing ..."

Title: Re: Meltdown
Post by: ezodisy on December 18, 2008, 06:11:08 AM

Quote from: Daverz on December 17, 2008, 07:54:11 PM
I wish I'd gotten into the Yen when it was low.

Why think about missed chances? Sell the dollar and cash in. In some respects it's not too late to sell the pound too. Have you seen the beating it's taken in the past few days against the Swiss Franc?

Quote from: Dm on December 18, 2008, 03:10:59 AM
CNBC guest Devina Mehra, chief strategist at First Global (Dec. 11): Oil May Crash to $10 a Barrel ---> Click here for 3 min video <--- "We tend to give too much importance as to how much [OPEC] can control ..."

(http://www.cnbc.com/id/15840232/?video=960474937&play=1)

haha this is crazy. Surely it has to be the equivalent of Goldman Sachs' $200 oil?

Title: Re: Meltdown
Post by: ezodisy on December 18, 2008, 09:56:59 AM

Helicopter Ben goes ZIRP, QE and More...While the Global Economy Enters Stag-Deflation

Nouriel Roubini | Dec 17, 2008

The Fed decision yesterday to cut the Fed Funds range to 0-0.25% formalized the fact that, over the last month, the Fed had already moved to a ZIRP (zero-interest-rate-policy) - as the effective Fed Funds rate was already close to zero -and started a policy of QE (quantitative easing) as its balance sheet has surged over the last few months from $800 billion to over $2 trillion. And – as discussed below – the Fed is now undertaking even more unorthodox policy actions.

These Fed policy actions are occurring while the US and the global economy is now risking a protracted bout of stag-deflation, a disease that I first discussed as early as January 2008 when I warned about the risk of a global deflation and stag-deflation. While it is now fashionable to talk about such deflationary risks – and the latest U.S. CPI figures confirm that we are entering into deflation – some of us were worrying about the coming deflation well before the mainstream – concerned with short-run and unsustainable increases in commodity prices – discovered the deflationary risks in the global economy.

It was clear to those of us that saw early on the risks of a severe US and global recession that, once that recession would emerge, deflationary rather than inflationary pressures would emerge as slack in goods markets, slack in labor markets and slack in commodity markets would emerge. So now we need to worry about stag-deflation, deflation, liquidity traps and debt deflation. Welcome to the world of stag-deflation or, as Krugman would put it, to the world of "depression economics".

So what is the outlook for the US and the global economy in 2009? And what is the likely policy response to the risks of a global stag-deflation? Let us discuss next these two questions...

The outlook for the U.S. and the global economy is now very bleak and getting worse as the global economy is experiencing its worst recession in decades. In the US, recession started last December, and will last at least 24 months until next December — the longest and deepest US recession since World War II, with the cumulative fall in GDP possibly exceeding 5 percent. In comparison the last two recessions in 1990-91 and 2001 lasted only 8 months each and in 2001 (1990-91) the cumulative fall in GDP was only 0.4% (1.3%). There is also a risk that this deep and protracted U-shaped recession (the mainstream consensus view of a V-shaped short and shallow recession is now out of the window) may morph into a more severe Japanese style L-shaped recession unless aggressive fiscal policy and recapitalization of the financial system is enacted.

The recession in other advanced economies (the euro zone, the UK, other European economies, Canada, Japan, Australia and New Zealand) started in the second quarter of this year, before the financial turmoil in September and October further aggravated the global credit crunch. This contraction has become even more severe since then. I don't expect growth in the advanced economies to recover before the end of 2009.

There is now also the beginning of a hard landing in emerging markets as the recession in advanced economies, falling commodity prices and capital flight take their toll on growth. Indeed, the world should expect a recession (growth in the -1 to-2% range) in Russia and a near recession (growth close to zero) in Brazil next year, owing to low commodity prices. There will also be a very sharp slowdown in China and India that will be the equivalent of a hard landing (growth well below potential) for these countries. In China the latest figures for electricity use, export and imports suggest that the economy is already close to the hard landing scenario of a growth rate of 5%. The deceleration of growth in China is much more rapid than expected.

Other emerging markets in Asia, Africa, Latin America and Europe will not fare better, and some may experience full-fledged financial crises. More than a dozen emerging-market economies now face severe financial pressures: Belarus, Bulgaria, Estonia, Hungary, Latvia, Lithuania, Romania, Turkey and Ukraine in Europe; Indonesia, South Korea and Pakistan in Asia; and Argentina, Venezuela and Ecuador (a country that has just defaulted on its sovereign debt) in Latin America.

How is the policy response in the US and other countries to this risk of a global stag-deflation?

The Fed decision yesterday to cut the target for the Fed Funds rate to a 0% to 0.25% range is just underwriting what was already obvious and happening in reality: while the target Fed Funds was - until yesterday - still1% in the last few weeks - following the massive increase in liquidity by the Fed - the actual Fed Funds was already trading at a level literally close to 0%.

So the Fed just formalized what was already happening for weeks now, i.e. that the Fed Funds rate was already zero and that the Fed had already moved to quantitative and qualitative easing (QE) in the form of massive increase in the monetary base and aggressive use of monetary policy - via a range of new facilities and tools - to reduce short term and long term market rates that are stubbornly high in a sign that the credit crunch is severe and worsening.

I predicted early in 2008 that the Fed Funds rate "would be closer to 0% than to 1%" in the midst of a severe recession. Now 12 months into this severe recession (that officially started in December 2007) - a recession that will last at least another 12 months (if not, as possible, much longer) - the Fed Funds rate is already down to 0% (the beginning of the zero-interest-rate-policy or ZIRP for the US) and the Fed has moved into uncharted unorthodox monetary policy as a severe stag-deflation is taking place.

And, as predicted here over a month ago, the Fed is now committed to keep the Fed Funds rate close to zero for a long time (as a way to push lower long term Treasury yields), is purchasing agency debt and agency MBS in massive amount; and is even considering purchasing long-term Treasuries as a way to push lower long term government bond yields that are already falling sharply.

More aggressive policy actions may be undertaken by the Fed as a severe credit crunch shows no signs of relenting. In his 2002 speech on deflation the Bernanke spoke even of helicopter drops of money, monetizing fiscal deficits, and even buying equities. The latter actions have already been partially undertaken: the Fed is effectively already monetizing the US fiscal deficits as the purchase of markets assets (agency debt and MBS and other facilities) is financed with the Fed printing presses rather than the TARP program; and now with the Fed considering the purchase of long term Treasuries such monetization of deficits will be made more formal. Also, since the TARP has been turned into a program to recapitalize financial institutions (and thus boost their capital and market value) the U.S. has already effectively intervened indirectly in the equity market (by partially nationalizing a good part of the US financial system); once the Fed starts to buy the US long term Treasuries financing the TARP program this indirect Fed purchase of U.S. equities will be even more clear.

While Fed actions to reduce mortgage rates – via purchases of agency debt and agency MBS – are partially successful as long term mortgage rates are falling most of Fed purchases of private assets have been so far limited to very high grade securities. Thus, the gap between the yield on high grade commercial paper purchased by the Fed and the one that the Fed is not purchasing is sharply rising; ditto for the gap between agency MBS and private label MBS; also while long term Treasury yields are sharply falling the spread of corporate bonds – both high yield and high grade – relative to Treasuries remains huge as a sign of a severe credit crunch. Thus, as a next step the Fed may be soon forced to walk down the credit curve and start buying private short-term and long-term securities with lower credit rating. That would mean that the Fed will take on even more credit risk than is already taking on today while purchasing illiquid private assets. But desperate times lead to desperate actions by desperate policy makers.

In the rest of the world monetary and fiscal easing is also occurring as global policy makers are trying to prevent a global stag-deflation; but the policy response in most countries is more limited and constrained than the aggressive one of the US monetary and fiscal authorities.

In the Eurozone the policy response has been extremely slow. First, the ECB is behind the curve and cutting rates too little and too late. Second, the ECB has been much less creative and aggressive than the Fed in creating new facilities to unclog the liquidity and credit crunch that is becoming as severe in Europe as in the US. Third, the fiscal policy stimulus in the EU is weak: those countries that need a stimulus the most (Italy, Portugal, Greece, Spain, UK) are the ones that can afford it the least given their large fiscal deficits and debts; and those who can afford it the most – Germany – are least willing to have it. Fourth, the recapitalization of financial institutions in Europe is occurring more slowly than in the US and some of the financial firms rescue plans have been partly botched. Also, cross-border financial activities and the lack of cross-border burden sharing in the EU limit the ability of the EU to rescue large financial firms with cross-border activities. Add to this the fact that many banks in Europe are too big to fail but also too big to be rescued (large relative to the fiscal resources of their country's government). Fifth, the structural rigidities of Eurozone (labor markets in particular) may cause the Eurozone contraction to be as severe as the U.S. one even if the initial economic and financial imbalances were less severe in this region.

While the US and Japan are already into a ZIRP policy other advanced economies' central banks will in 2009 get very close to it, starting with those in Switzerland and the UK. And more unorthodox monetary policies, such as QE and the other ones adopted by the Fed, may become more popular in a number of advanced economies.

In the many emerging market economies at the risk of a financial crisis aggressive monetary easing and fiscal easing are not likely. Indeed, many of these countries start with large fiscal deficits and debt, thus requiring fiscal discipline rather than easing. Moreover, many of these countries have large stocks of foreign currency liabilities whose real value would sharply increase if easy monetary policy leads to a sharp depreciation of their currency. Thus, there is less room for monetary easing. Also, many of these countries don't have the fiscal resources to provide liquidity and capital to their financial institutions that are now facing a sudden stop of capital inflows. The international community – IMF programs, World Bank other IFIs financial support, and the Fed/ECB with their swap lines – can help countries under distress as long as they implement appropriate policy changes but the risks of outright financial crises remain in some of the weakest economies.

In China – that is now at risk of a severe hard landing - it is not clear whether the aggressive fiscal and monetary/credit easing will be able to prevent a hard landing. Can aggressive monetary/credit and fiscal policy easing prevent this hard landing? Not necessarily. First note that China has already reduced interest rates three times in the last few months and easing some credit controls. But monetary and credit policy easing may be ineffective: if capex spending by the corporate sector will start to fall sharply as the fall in next exports leads to a sharp fall in the expected return on new capital spending on exportables a reduction of interest rates and/or an easing of credit controls will make little difference to such capex spending: easing money and credit will be like pushing on a string as the overinvestment of the last few years has led to a glut of capital goods. There is indeed already evidence that but corporate loan demands have diminished sharply while commercial banks have hesitated to lend while choosing to firewall risks. The government can ease money and credit but it cannot force corporate to spend and banks to lend if loan demand is falling because of low expected returns on investment.

Could fiscal policy rescue the day and prevent a Chinese hard landing? The optimists argue yes by pointing out that fiscal deficits and public debt are low in China and that China has the resources to engineer a rapid fiscal stimulus in a short period of time. But the ability of China to implement a rapid and massive fiscal stimulus is limited for a variety of reasons. First, the combined effects of natural disasters, social strife in the West, and the Olympics have created a large hole in the central government budget this fiscal year. The Ministry of Finance may have dipped into various stabilisation funds to avoid the appearance of running a large deficit. For regional and municipal governments, the decline in turnover in local property markets has reduced the flow of fees and taxes, causing them to delay ambitious industrial development plans in some cases. Second, a hard landing in the economy and in investment would lead to a sharp increase in non-performing loans of the – still mostly public – state banks; the implicit liabilities from a serious banking problem would then add to the implicit and explicit budget deficits and public debt. Note that the poor quality of the underwriting by Chinese banks –that financed a huge overinvestment in the economy - has been hidden for the last few years by the high growth of the economy. Once net exports go bust and real investment sharply falls we will see a massive surge in non-performing loans that financed low return and marginal investment projects. The ensuing fiscal costs of cleaning up the banking system could be really high. Third, as pointed out by Michael Pettis – a leading expert of the Chinese economy – a surge in tax revenues in last 4 years has been more than matched by surge in spending so that if revenue growth diminishes/reverses it might not be easy to slow spending growth proportionately. Contingent liabilities from non-performing loans could also reduce resources available for a fiscal stimulus.

In summary, with traditional monetary policy becoming less effective, non-traditional policy tools aimed at generating greater liquidity and credit (via quantitative easing and direct central bank purchases of private illiquid assets) will become necessary in many advanced economies. And while traditional fiscal policy (government spending and tax cuts) will be pursued aggressively, non-traditional fiscal policy (expenditures to bail out financial institutions, lenders and borrowers) will also become increasingly important in these advanced economies.

In the process, the role of states and governments in economic activity will be vastly expanded. Traditionally, central banks have been the lenders of last resort, but now they are becoming the lenders of first and only resort. As banks curtail lending to each other, to other financial institutions and to the corporate sector, central banks are becoming the only lenders around.

Likewise, with household consumption and business investment collapsing, governments will soon become the spenders of first and only resort, stimulating demand and rescuing banks, firms and households.

The long-term consequences of the resulting surge in fiscal deficits are serious. If the deficits are monetized by central banks, inflation will follow the short-term deflationary pressures; if they are financed by debt, the long-term solvency of some governments may be at stake unless medium-term fiscal discipline is restored.

Nevertheless, in the short run, very aggressive monetary and fiscal policy actions — both traditional and non-traditional — must be undertaken to ensure that the inevitable stag-deflation of next year does not persist into 2010 and beyond.

Title: Re: Meltdown
Post by: ezodisy on December 18, 2008, 10:48:43 AM

well that was worth reading, more me anyway. Part about China was very informative, and this part "if they are financed by debt, the long-term solvency of some governments may be at stake unless medium-term fiscal discipline is restored" sounds dire for the UK, if I'm not misunderstanding too much.

Title: Re: Meltdown
Post by: BachQ on December 18, 2008, 11:32:35 AM

Quote from: ezodisy on December 18, 2008, 09:56:59 AM
Helicopter Ben goes ZIRP, QE and More...While the Global Economy Enters Stag-Deflation

Nouriel Roubini | Dec 17, 2008

[snip]

The Fed decision yesterday to cut the target for the Fed Funds rate to a 0% to 0.25% range is just underwriting what was already obvious and happening in reality: while the target Fed Funds was - until yesterday - still1% in the last few weeks - following the massive increase in liquidity by the Fed - the actual Fed Funds was already trading at a level literally close to 0%. So the Fed just formalized what was already happening for weeks now, i.e. that the Fed Funds rate was already zero ***

Very true. The Fed's effective rate of interest had been hovering around zero percent (0.1%, for the most part) since Oct/Nov. So the USA has been "effectively" ZIRPed for quite a while.

It will be interesting to see whether UK/Eurozone will go ZIRP. I'm also curious as to how low Canada will go: to ZIRP or not to ZIRP? ...

On the issue of UK's entering ZIRPdom, Roubini opines:

QuoteWhile the US and Japan are already into a ZIRP policy other advanced economies' central banks will in 2009 get very close to it, starting with those in Switzerland and the UK. And more unorthodox monetary policies, such as QE and the other ones adopted by the Fed, may become more popular in a number of advanced economies.

Title: Re: Meltdown
Post by: BachQ on December 18, 2008, 11:36:40 AM

Q: What's the best way to rid a company of unwanted toxic assets?
A: Give them to top management as year-end bonuses!

Bloomberg: Credit Suisse to Use $5 Billion of Illiquid Assets for Bonuses -- Credit Suisse Group AG's investment bank has found a new way to reduce the risk of losses from about $5 billion of its most illiquid loans and bonds: using them to pay employees' year-end bonuses. The bank will use leveraged loans and commercial mortgage-backed debt, some of the securities blamed for generating the worst financial crisis since the Great Depression, to fund executive compensation packages... "It's monstrously clever," said Dirk Hoffman-Becking, an analyst at Sanford C. Bernstein Ltd. in London who has a "market perform" rating on Credit Suisse stock. "From a shareholders' perspective it's great because you've got rid of some of the assets and regulators will be pleased because you've organized a risk transfer." *** (continued) (http://www.bloomberg.com/apps/news?pid=20601087&sid=auEEfFRNdqcs&refer=home)

:D Gotta love it!

Title: Re: Meltdown
Post by: BachQ on December 18, 2008, 11:39:39 AM

On 12-16-08, COMEX silver inventory was 38.2% depleted. The following day, on 12-17-08, silver was 43.6% depleted (due to a large decrease in "registered" inventories).

(http://meltdown2011.files.wordpress.com/2008/12/comex-countdown-silver-2008-12-17.png)

Silver has become nearly as depleted as gold.

Title: Re: Meltdown
Post by: BachQ on December 18, 2008, 11:42:51 AM

Quote from: ezodisy on December 18, 2008, 10:48:43 AM
well that was worth reading, more me anyway. Part about China was very informative, and this part "if they are financed by debt, the long-term solvency of some governments may be at stake unless medium-term fiscal discipline is restored" sounds dire for the UK, if I'm not misunderstanding too much.

Restoring "fiscal discipline"? :D Not a chance!

Title: Re: Meltdown
Post by: BachQ on December 19, 2008, 04:20:53 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

My current guess is that oil will bottom below $25/bbl -- perhaps in the $17-$18/bbl range. On Friday morning, NYMEX light sweet crude for delivery in January dipped to $33.44/bbl -- the lowest price since April 2, 2004.

(http://www.tfc-charts.w2d.com/charts/CO19.GIF)

Meanwhile, Gold fell in Asia and London, tumbling $42 from Thursday's top – and cutting this week's gains by 80% to 1.5%.

According to GoldNews: (http://goldnews.bullionvault.com/gold_japan_rate_yen_121920083)

QuoteLooking ahead to the Price of Gold in 2009, "How it will perform if the world enters a period of severe deflation is really unknown," says the Virtual Metals consultancy in London in its latest Fortis Metals Monthly. "The historical precedents are few. During the Great Depression, the Gold Price was fixed nominally and so naturally rose. The more recent Japanese deflation was by definition regional only." But "what seems more certain," the report concludes, setting a short-term range of $760-$875, "is that when economies do recover – and need to deal with the legacy of the current monetary easing – gold should perform better as the threat of inflation returns with a vengeance."

Title: Re: Meltdown
Post by: ezodisy on December 19, 2008, 12:13:46 PM

Quote from: Dm on December 19, 2008, 04:20:53 AM
My current guess is that oil will bottom below $25/bbl -- perhaps in the $17-$18/bbl range. On Friday morning, NYMEX light sweet crude for delivery in January dipped to $33.44/bbl -- the lowest price since April 2, 2004.

bring it on. That sudden fall at the end might have had something to do with longs closing with the contract moving to Feb, which is at something like $43 now. I wouldn't mind more downside (the trend is your girlfriend). The longer it stays cheap--like $25 cheap--the more exploration will be delayed, and production cut, and reserves used, and whatever else, which is just a big red waving flag for the next bull run baby. Don't taunt the bull!!!! :)

Title: Re: Meltdown
Post by: ezodisy on December 19, 2008, 01:30:50 PM

Quote from: Dm on December 19, 2008, 04:20:53 AM
Meanwhile, Gold fell in Asia and London, tumbling $42 from Thursday's top – and cutting this week's gains by 80% to 1.5%.

According to GoldNews: (http://goldnews.bullionvault.com/gold_japan_rate_yen_121920083)

I'm not yet convinced that it's on the way up. Before that Fed news earlier in the week, it seemed on the verge of collapsing at the 830-840$ resistance. Well it's back there now, $838, and if the rally is on and genuine then it'll have to find support here, which I don't think'll happen. Missed the new Fekete piece until now:

The key to understanding the present upheaval in the world economy and the relevance of backwardation to it is that, regardless of official propaganda, gold circulation (such as it is) never ceased to be an important part of the world's trading system. Backwardation means that gold circulation is stopped in its tracks, which is deflationary in the extreme, greatly contributing to the contraction of world trade.

Backwardation in gold causes, and is caused by, the cascading contraction of world trade. It is preposterous to suggest that no special event triggered the backwardation in gold last November. The special event was the onset of Great Depression II, just as sabotaging the gold standard by Britain on September 1, 1931, heralded the onset of Great Depression I. (http://news.goldseek.com/GoldSeek/1229620000.php)

QuoteThe father of backward thinking on backwardation is undoubtedly John Maynard Keynes.

Title: Re: Meltdown
Post by: BachQ on December 20, 2008, 05:44:15 AM

Ambrose Evans-Pritchard (UK Telegraph): Germany is already collapsing -- The German economy is on the "brink of the abyss", says the IMK institute in Dusseldorf. The country's GDP could contract by 3.5% next year.

(http://wa3.images.onesite.com/blogs.telegraph.co.uk/user/ambrose_evans-pritchard/trader.jpg?v=80000)

(http://blogs.telegraph.co.uk/ambrose_evans-pritchard/blog/2008/12/19/germany_is_already_collapsing)

QuoteCarsten Brzeski, ING's Europe economist, said Germany's fourth quarter will "very likely make history as the worst collapse of the German industry ever. One thing is evident: The current downturn could behave like a rock that threatens to roll down a hill. Once the boulder has gained momentum, it will simply mow down everything in its path. It should be stopped in time."

Title: Re: Meltdown
Post by: BachQ on December 20, 2008, 05:48:19 AM

U.S. debt approaches insolvency; Chinese currency reserves at risk -- Milan (AsiaNews) 19 Dec 2008- In a few months, America's public debt has grown to more than 100% of GDP. Fear of a valuation crisis for the dollar, with tremendous consequences for Asian countries, major exporters to the United States. (http://www.asianews.it/index.php?l=en&art=14054)

[NOTE: According to a study by the IMF, countries with more than 60% of their public debt held by nonresident foreigners run a high risk of currency crisis and insolvency, or debt default. In 2007, 61.82% of America's public debt was held by foreign investors, most of them Asian].

QuoteIn the United States, the danger of debt insolvency is growing, putting at risk the currency reserves of foreign countries, China chief among them. According to new figures published by Bloomberg in recent days (Nov. 25, 2008), the American government has employed a total of 8.549 trillion dollars to stop the financial crisis. This means a total of about 24-25.4 trillion dollars of direct or indirect public debt weighing on American taxpayers. The complete tally must also include the debt - about 5-6 trillion dollars - of Fannie Mae and Freddie Mac, which are now quasi-public companies, because 79.9% of their capital is controlled by a public entity, the Federal Housing Finance Agency, which manages them as a public conservatorship.

US Debt has swelled to 184% of GDP

QuoteIn 2007, public debt in the United States was 10.6 trillion dollars, compared to a GDP (gross domestic product) of 13.811 trillion dollars. Public debt in 2007 was therefore 76.75% of GDP. In just one year, direct and indirect public debt have grown to more than 100% of GDP, reaching 176.9% to 184.2%. These percentages exclude the debt guaranteed by policies underwritten by AIG, also nationalized, and liabilities for health spending (Medicaid and Medicare) and pensions (Social Security). By way of comparison, the Maastricht accords require member states of the EU to reduce their public debt to no more than 60% of GDP. Again by way of comparison, in one of the EU countries with the largest public debt, Italy, public debt in 2007 was equal to 104% of GDP.

Private debt has swelled to over 100% of GDP

QuoteFamilies and businesses are also deeply in debt: in 2007, American private debt was equal to a little more than 100% of GDP.

Asia is VERY WORRIED

QuoteIn the early months of next year, when the official data are published, the United States will run a serious risk of insolvency. This would involve, in the first place, a valuation crisis for the dollar. After this, the United States could face a social crisis like that in Argentina in 2001. A crisis in U.S. public debt would likely have a severe impact on the Asian countries that are the main exporters to the United States, China first among them. Chinese monetary authorities, thanks to a steeply undervalued artificial exchange rate, by about 55%, have limited imports (including food) and have achieved an export surplus. This has allowed them to accumulate a large stockpile of dollar reserves. In a currency crisis, China risks losing much of the value of its accumulated currency reserves. (continued)

Title: Re: Meltdown
Post by: BachQ on December 20, 2008, 05:50:25 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

... "[Once oil falls] below $38, we don't see anything until the $25 level," said Edward Meir, an analyst at MF Global. "This is admittedly a rather dramatic set of chart-based forecasts for a complex that only six months ago looked like it could do no wrong on the upside."... "There are doubts among market participants of OPEC's ability to comply with these cuts given the magnitude of the cut and their previous history," said Nimit Khamar, an analyst at Sucden Financial. ... "If prices slide toward $30, no doubt OPEC will be meeting before [its next scheduled meeting on March 15 in Vienna] and perhaps announcing further cuts, which will be required in our opinion," Khamar said.
(http://www.marketwatch.com/news/story/Oil-futures-tumble-10-end/story.aspx?guid=%7BAA269026-1CAA-4CE8-96BD-590424D90D63%7D)

Title: Re: Meltdown
Post by: BachQ on December 20, 2008, 05:51:21 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

J.P. Morgan cuts oil price forecast
(http://www.marketwatch.com/news/story/Oil-futures-tumble-10-end/story.aspx?guid=%7BAA269026-1CAA-4CE8-96BD-590424D90D63%7D)

QuoteStrategists at J.P. Morgan slashed their forecast for oil prices in 2009 to $43 a barrel from $69 a barrel, citing "the ongoing deterioration in the world economic environment and the ensuing sharp contraction in global oil demand in both 2008 and 2009."

Title: Re: Meltdown
Post by: BachQ on December 20, 2008, 05:55:27 AM

Quote from: ezodisy on December 19, 2008, 12:13:46 PM
The longer it stays cheap--like $25 cheap--the more exploration will be delayed, and production cut, and reserves used, and whatever else, which is just a big red waving flag for the next bull run baby. Don't taunt the bull!!!! :)

Ezodisy, you raise some important issues. First, although oil seems super-cheap at $33/bbl, it's still 50% above the price as when Dubya became President in 2001. Thus, there is substantial room for oil to go even lower.

Second, when oil is priced so cheap that it diffuses efforts toward conservation and alternative energy, that catalyzes a very pernicious downward sprial of disinvestment and non-conservation, as consumers will once again purchase gas guzzling Hummers, and high-tech companies will once again refrain from investing in green energy. Taken to the extreme, if Western economies undergo a "deflationary depression" (which seems quite possible, if not highly likely), then commodity prices will likely deflate to abnormally low levels (e.g., oil @ $18/bbl), which will kill off most longterm investments in alternative energy, and eviscerate most incentives to conserve.

Third, and most troubling, given that we are amid peak oil, with oil being pissed away at such bargain prices, and with the infrastructures supporting alternative fuels being eroded, the end result of peak oil will be many orders of magnitude more catastrophic than if oil were priced sufficiently high so as to optimize investments in green energy, and maximize efforts toward conservation. High oil prices are the optimal free-market mechanism for allocating scarce resources. That market mechanism is now broken. Moreover, with bargain-basement oil prices, oil companies will refrain from investing in necessary infrastructure enhancements and upgrades for current and future oil fields/ oil rigs, further worsening the longterm effects of peak oil.

Title: Re: Meltdown
Post by: ezodisy on December 20, 2008, 01:32:03 PM

Quote from: Dm on December 20, 2008, 05:55:27 AM
First, although oil seems super-cheap at $33/bbl, it's still 50% above the price as when Dubya became President in 2001. Thus, there is substantial room for oil to go even lower.

When Dubya became president the bull run was already underway.

(http://www.marketoracle.co.uk/images/2008/article_id1222_02.jpg)

Maybe it'll go to the mid or high 20s, maybe to 20, maybe lower, it doesn't really matter, it could even go to $1, the point is that the bull run for crude continues and will continue for many years to come and that prices will eventually exceed what we saw over the summer. Oil is still one of the cheapest things going -- even at $147 it was still one of the cheaper things around. Hugh Hendry gave a good example of this in that radio interview I posted: fitting 5 people into a gas-guzzling jeep and paying only 7p a mile (something like that) and comparing it to the price he'd have to pay for one of those rickshaw drivers in Soho to cover the same distance for the same number of people. It sounds silly but is true, and he points out that deflation and the credit crunch are just sowing the seeds for the next bull run ($400, $500 prices possibly, "next decade"). I bet he's right.

Quote
Second, when oil is priced so cheap that it diffuses efforts toward conservation and alternative energy, that catalyzes a very pernicious downward sprial of disinvestment and non-conservation, as consumers will once again purchase gas guzzling Hummers, and high-tech companies will once again refrain from investing in green energy. Taken to the extreme, if Western economies undergo a "deflationary depression" (which seems quite possible, if not highly likely), then commodity prices will likely deflate to abnormally low levels (e.g., oil @ $18/bbl), which will kill off most longterm investments in alternative energy, and eviscerate most incentives to conserve.

Third, and most troubling, given that we are amid peak oil, with oil being pissed away at such bargain prices, and with the infrastructures supporting alternative fuels being eroded, the end result of peak oil will be many orders of magnitude more catastrophic than if oil were priced sufficiently high so as to optimize investments in green energy, and maximize efforts toward conservation. High oil prices are the optimal free-market mechanism for allocating scarce resources. That market mechanism is now broken. Moreover, with bargain-basement oil prices, oil companies will refrain from investing in necessary infrastructure enhancements and upgrades for current and future oil fields/ oil rigs, further worsening the longterm effects of peak oil.

That was very good. You don't perchance write for oilbarrel.com or some other company, do you? :)

Title: Re: Meltdown
Post by: ezodisy on December 21, 2008, 10:36:16 PM

lol! hahaha

(http://www.davehitt.com/blog2/wp-content/uploads/2008/12/bigthree.jpg)

Title: Re: Meltdown
Post by: orbital on December 21, 2008, 11:55:28 PM

Quote from: Dm on December 20, 2008, 05:50:25 AM
... "[Once oil falls] below $38, we don't see anything until the $25 level," said Edward Meir, an analyst at MF Global. "This is admittedly a rather dramatic set of chart-based forecasts for a complex that only six months ago looked like it could do no wrong on the upside."... "
(http://www.marketwatch.com/news/story/Oil-futures-tumble-10-end/story.aspx?guid=%7BAA269026-1CAA-4CE8-96BD-590424D90D63%7D)

I worked with this guy for quite a while. The energy team at Man used to be the best, I don't know if they have retained everyone working there since I left though.

Quote from: Dm on December 20, 2008, 05:55:27 AM
Second, when oil is priced so cheap that it diffuses efforts toward conservation and alternative energy, that catalyzes a very pernicious downward sprial of disinvestment and non-conservation, as consumers will once again purchase gas guzzling Hummers, and high-tech companies will once again refrain from investing in green energy. Taken to the extreme, if Western economies undergo a "deflationary depression" (which seems quite possible, if not highly likely), then commodity prices will likely deflate to abnormally low levels (e.g., oil @ $18/bbl), which will kill off most longterm investments in alternative energy, and eviscerate most incentives to conserve.

Third, and most troubling, given that we are amid peak oil, with oil being pissed away at such bargain prices, and with the infrastructures supporting alternative fuels being eroded, the end result of peak oil will be many orders of magnitude more catastrophic than if oil were priced sufficiently high so as to optimize investments in green energy, and maximize efforts toward conservation. High oil prices are the optimal free-market mechanism for allocating scarce resources. That market mechanism is now broken. Moreover, with bargain-basement oil prices, oil companies will refrain from investing in necessary infrastructure enhancements and upgrades for current and future oil fields/ oil rigs, further worsening the longterm effects of peak oil.

Cheap oil - bad, overpriced oil - bad ;D Something's gotta give Dm $:)

Although I am not very optimistic about the short term markets, I think -or rather hope- that we are not the only ones who are aware of the above and that the people whose business it is to know are :P

Title: Re: Meltdown
Post by: BachQ on December 22, 2008, 03:18:22 AM

Quote from: ezodisy on December 20, 2008, 01:32:03 PM
Maybe it'll go to the mid or high 20s, maybe to 20, maybe lower, it doesn't really matter, it could even go to $1, the point is that the bull run for crude continues and will continue for many years to come and that prices will eventually exceed what we saw over the summer.

Quote from: orbital on December 21, 2008, 11:55:28 PM
Cheap oil - bad, overpriced oil - bad ;D Something's gotta give Dm $:)

Although I am not very optimistic about the short term markets, I think -or rather hope- that we are not the only ones who are aware of the above and that the people whose business it is to know are :P

While most indicators point to rising future oil prices, there is one huge unknown that acts as a wildcard: namely, no one can predict the magnitude and duration of the impending Kondratieff Winter and its depressionary effect upon oil prices. If the Kondratieff Winter becomes sufficiently dire, the normal pricing mechanisms associated with supply-demand may not apply; instead, as we spiral into the vortex of a deflationary depression, we can expect oil prices to exhibit volatility, uncertainty, and perhaps even irrationality (as demand is destroyed and countries desperate for cash sell oil at abnormally low prices). Oil could drop to $20/bbl in a heartbeat if the depression becomes sufficiently severe. OTOH, as the oil supply constraints caused by peak oil escalate, there will be substantial upward pressure on the price of oil. Then there's the falling dollar :'( ..... 2009 is going to be SUCH an interesting year ...... especially if you love rollercoaster rides.

The Titanic has entered uncharted waters, and we should all expect the unexpected.

EDIT: Just to make things interesting, I predict that oil will tumble below $15/bbl by spring of 2009. >:D

Title: Re: Meltdown
Post by: BachQ on December 22, 2008, 03:21:43 AM

BBC News (19 Dec 2008): The New Capitalism Part I (Economy Collapsing Fast!) --

http://www.youtube.com/v/bxhcxVnIsVE

"We're riding into the mother of all recessions with the banking sector which is already on its knees"

(http://news.bbc.co.uk/2/hi/business/7791469.stm)

The New Capitalism Part II (http://news.bbc.co.uk/2/hi/business/7793080.stm)

Click here for Robert Peston's essay on The New Capitalism (http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/12/the_new_capitalism.html)

Title: Re: Meltdown
Post by: BachQ on December 22, 2008, 03:25:14 AM

Quote from: ezodisy on December 10, 2008, 12:12:01 AM
:o

:)

I feel as you do when it comes to their leaders and their sabre rattling -- not the smoothest diplomacy, or savoir-faire, just a bit of schoolyard bullying. There is a reason, probably more than one, why people in the western world don't take Russia seriously -- or if they do, in a condescending way. I do wonder though what effect this worldwide economic collapse will have on a country which appears to be wealthy only within a few square miles of its city centres. From what I know, which ain't much, you probably won't hear about a real estate crisis in Russia just because many people couldn't get a mortgage to begin with. That is the wealth has not spread, as it has in the US, and the level of prosperity apparently isn't there. So while I'm happy initially with the idea of the country being in a mess as a form of spanking for not having any idea how to behave in the company of adults, it's really only some of the leaders and probably most of the businessmen who deserve it.

Don't destabilize Russia, Putin warns foes -- MOSCOW (Reuters) - Prime Minister Vladimir Putin warned Russia's foes on Friday against trying to destabilize a country facing broadening economic crisis, Russian news agencies reported. Putin did not specify who might pose a threat to Russia's stability. "Any attempts to weaken or destabilize Russia, harm the interests of the country will be toughly suppressed," they quoted ex-KGB spy Putin as telling an annual meeting of top spies and security officers ahead of their professional holiday.

(http://www.reuters.com/article/newsOne/idUSTRE4BI62M20081219)

Title: Re: Meltdown
Post by: BachQ on December 22, 2008, 03:26:25 AM

Global economy to contract in 'severe' 2009 recession -- WASHINGTON (AFP) — The global economy likely will contract next year for the first time in decades in a "severe" recession as the credit crunch bites, an international banking group said. The Institute of International Finance (IIF), the Washington-based association representing more than 375 of the world's major banks and financial institutions, projected the world economy would shrink 0.4 percent in 2009, after 2.0 percent growth this year. Charles Dallara, the managing director of the IIF, called it "the most severe, globally synchronized recession in modern economic history." ... Dallara said the economy was mired in a [positive] feedback loop of weakening economic activity and intense financial market strains. (http://www.google.com/hostednews/afp/article/ALeqM5hF3NoMkF-dvfW2IkTWi23Of5BgyQ)

QuoteSince the start of 2007, the reported losses at financial institutions has topped one trillion dollars, the IIF said. Institutions have raised about 930 billion dollars since mid-2007, with more than one third coming from the public sector.Hung Tran, head of the IIF's capital markets and emerging market policy department, warned that those losses would increase amid the economic slowdown. "The weakening economy will increase credit losses, continuing to put pressure on bank capital. This underscores the point that capital injection alone will not be sufficient to strengthen the banking system until the economy and financial markets stabilize," Tran said.

Title: Re: Meltdown
Post by: BachQ on December 22, 2008, 03:27:52 AM

Treasury Sued By FOX Business Network Over Rescue Plan Info -- WASHINGTON -(Dow Jones)- FOX Business Network said Thursday it has filed a lawsuit against the U.S. Treasury Department for being slow to provide information on the $700 billion financial rescue plan. The television network, a unit of News Corp. (NWSA), said in a release that Treasury has not responded to two Freedom of Information Act requests, one on Nov. 25 and one on Dec. 1, regarding the use of funds for Citigroup Inc. (C), American International Group Inc. (AIG) and Bank of New York Mellon. The request sought data on the specific restrictions placed on the firms and the collateral extended as part of their acceptance of federal funds, among other things. A lawyer for the network said that "it has become apparent that the Treasury will not cooperate without mounting legal pressure." (http://money.cnn.com/news/newsfeeds/articles/djf500/200812181548DOWJONESDJONLINE000946_FORTUNE5.htm)

Title: Re: Meltdown
Post by: BachQ on December 22, 2008, 04:21:27 AM

Quote from: ezodisy on December 21, 2008, 10:36:16 PM
lol! hahaha

(http://www.davehitt.com/blog2/wp-content/uploads/2008/12/bigthree.jpg)

(http://ndn2.newsweek.com/media/98/nw_081207_morn.jpg)

Title: Re: Meltdown
Post by: BachQ on December 22, 2008, 04:22:19 AM

(http://ndn2.newsweek.com/media/25/nw_081209_rall.jpg)

Title: Re: Meltdown
Post by: ezodisy on December 22, 2008, 09:56:35 AM

Quote from: Dm on December 22, 2008, 03:18:22 AM
namely, no one can predict the magnitude and duration of the impending Kondratieff Winter and its depressionary effect upon oil prices.

lol! There's no stopping the predestined Russian wave!

Quote2009 is going to be SUCH an interesting year ...... especially if you love rollercoaster rides.

It's going to be fascinating, and the years at the end of this decade will be talked about for decades to come.

Quote
EDIT: Just to make things interesting, I predict that oil will tumble below $15/bbl by spring of 2009. >:D

okay you're on. I don't have a target but if it actually gets to $15 I will go out and by some barrels for a rainy day.

Quote from: Dm on December 22, 2008, 03:25:14 AM
Don't destabilize Russia, Putin warns foes -- MOSCOW (Reuters) - Prime Minister Vladimir Putin warned Russia's foes on Friday against trying to destabilize a country facing broadening economic crisis, Russian news agencies reported. Putin did not specify who might pose a threat to Russia's stability. "Any attempts to weaken or destabilize Russia, harm the interests of the country will be toughly suppressed," they quoted ex-KGB spy Putin as telling an annual meeting of top spies and security officers ahead of their professional holiday.
(http://www.reuters.com/article/newsOne/idUSTRE4BI62M20081219)

what is wrong with that guy? He threatens people when he's doing well, and he threatens people when he's not doing well. Couldn't he just STFU? I'm not sure if it's still planned but some time around now Russia is supposed to raise (well, double I think) the price of gas exports to Europe. I wonder if they'll have the nerve to try during the winter which one of their own forceast. You've got to feel sorry for Ukraine, trying to balance some western ambitions while keeping their much lower-than-average gas prices. Which colour for the next revolution?

Title: Re: Meltdown
Post by: ezodisy on December 23, 2008, 02:01:14 AM

Quote from: Dm on December 22, 2008, 03:18:22 AM
EDIT: Just to make things interesting, I predict that oil will tumble below $15/bbl by spring of 2009. >:D

Today Putin said: "the era of cheap gas is over". What a prick

Dm, short Alphaville article about WTI,storage capacity in Cushing, Oklahoma, and how it could affect price:

http://ftalphaville.ft.com/blog/2008/12/23/50712/its-all-about-cushing/

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on December 23, 2008, 02:18:42 AM

Quote from: ezodisy on December 23, 2008, 02:01:14 AM
Today Putin said: "the era of cheap gas is over". What a prick

Not much has visibly changed where I sit. My favorite restaurants are still, for the most part, full of customers. However, there's a creeping sense of foreboding in certain sectors of the press. I supppose you've heard about the protests in Vladivostok. The question is what comes next?

Something I have trouble understanding, maybe some smart person can explain it to me in a few words. While I'm not surprised the price of oil has gone down (fewer people driving their SUV to the Wal-Mart, fewer holiday jets to exotic destinations), I can't understood why it has plunged SO MUCH. Anyone can give a short & sweet explanation? ???

Title: Re: Meltdown
Post by: ezodisy on December 23, 2008, 03:47:06 AM

Quote from: Spitvalve on December 23, 2008, 02:18:42 AM
I supppose you've heard about the protests in Vladivostok. The question is what comes next?

I hadn't but I've looked it up, about raising duty on imported cars? More isolationism, at least towards the west, is only going to hurt Russia, in the short run anyway. Throwing out threats on the back of capital flight and his powerlessness to curtail it, which has just resulted in wasted reserves, is not smart and is not the answer. Unfortunately it seems that they don't have much of an idea what to do, aside from the usual stuff, i.e. threaten and hike prices. The country's fascinating but the policies and/or actions so far seem stupid.

Quote
Something I have trouble understanding, maybe some smart person can explain it to me in a few words. While I'm not surprised the price of oil has gone down (fewer people driving their SUV to the Wal-Mart, fewer holiday jets to exotic destinations), I can't understood why it has plunged SO MUCH. Anyone can give a short & sweet explanation? ???

I think you mean their Hummers to Mickey D's and their economy-packed flights to Hawaii :) Dm is your man for most things oil, but I will chip in with the easy answers. First of all you have to get the stuff about the market always looking 6/12/18 months ahead, anticipating weakening demand. But I suppose more accurately forced liquidation and deleveraging have played a big part with funds having to free up money and banks and investors recalling loans and payments. I heard an interview a while back from a fund employee of when an investor deposits £1m, for example, the fund will then go and borrow a further £5m or £10m or £30m or whatever, throw it all in, and if the original £1m is recalled by the investor, the whole position will have to be unwound for the return of the £1m, which of course would result in a huge amount of selling. And when many funds have to do it at the same time, like now, then it's going to hurt. I don't know how much truth there is in that--have never been associated with any of those nefarious city boys--it does sound a bit like BS, but in the current climate is probably accurate enough. Perhaps someone who has knowledge of this could clarify. In any case those huge positions will be a thing of the past with banks not lending and a lot of hedge funds closing down next year. So there's that and then I assume huge short positions with oil sold further on each rise. Sooner or later these short positions will unwind and there'll be a rally on the back of it, however brief. The best explanation is probably the easiest one: most investors are just a bunch of sods who run after the sod in front of them and all overreact one way or another. There's really no sensible reason why it's fallen so far, though of course you'll hear some explanations, particularly in hindsight. Market psychology is hilarious, fear and greed and trend following, it's all a bunch of nonsense that is quite easy to exploit. Anyway yeah, just remember to go long when it hits Dm's target of $15 :)

Deutsche Bank's prediction for UK house prices in 2009

[they mention 35%, but as the guys on Alphaville pointed out, with the crazy spike and typical overcorrection it'll be closer to 50% probably]

In our UK Outlook for 2009 published last week we discussed the need for
further adjustment in house prices following the 16% fall to date
(Nationwide/Halifax measure). We now see prices falling by a total of 35% in
nominal terms from peak (end-2007) to trough (end-2010). That translates
into a real decline of around 40% over the period.

• Housing overvaluation has been one of the largest imbalances to build up over
recent years in the UK. House prices broadly tripled between 1997 and their
peak at the end of 2007. As a corollary, the household debt/income ratio has
risen, from less than 100% of gross disposable incomes in 1997 to over 175%
in H1 this year. It stands higher than that of any other G7 economy – even the
US (see top chart).

Forecasts for house prices are subject to error for two key reasons: i)
estimating fair value of housing is tricky – one would come to a very different
conclusion about the scale of the necessary decline if it were assumed that
affordability ratios were trended upwards rather than static over time (see
bottom chart right), ii) even if we knew where equilibrium was, there is nothing
to stop prices from overshooting this level on the downside, as has been the
case in previous boom and bust episodes.

While the Crosby report's recent proposal for government guarantees to senior
RMBS could provide the impetus for a revival in the RMBS market, the
economics of mortgage origination remains stretched. In addition, demand for
structured paper has shrunk considerably and is unlikely to be fully restored by
such guarantees. Indeed since our last Housing Watch UK RMBS/covered
bond issuance has been entirely made up of retained issuance for the purpose
of accessing central bank liquidity.

Credit performance in securitised pools has weakened further and we see
signs of rising losses on possessions. Rate cuts should help affordability, but
will stop short of restoring the marginal bid for housing. Moreover, rising
unemployment against a backdrop of a deteriorating economy will likely be a
key driver of collateral performance over the coming months.

• In the secondary market RMBS spreads have widened in sympathy with other
asset classes and on the back of Granite's (Northern Rock) trigger breach.
Typical year-end liquidity concerns will likely exacerbate already extremely
weak technicals. However, 2009 may prove to be a less volatile year for ABS
prices. More specifically, bad bank initiatives should help reduce distressed
sellers, while government-guaranteed bank debt should act to anchor
financials, creating a better benchmark for ABS.

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on December 23, 2008, 04:05:51 AM

Thanks for your take on this. Regarding the protests in Vlad and elsewhere in Russia, here's some info on the latest developments, from my favorite Russia-related blog:

http://seansrussiablog.org/2008/12/21/russias-protest-armageddon-averted/

Title: Re: Meltdown
Post by: ezodisy on December 23, 2008, 04:39:27 AM

Quote from: Spitvalve on December 23, 2008, 04:05:51 AM
Thanks for your take on this. Regarding the protests in Vlad and elsewhere in Russia, here's some info on the latest developments, from my favorite Russia-related blog:

http://seansrussiablog.org/2008/12/21/russias-protest-armageddon-averted/

I hate blogs. You start to read one, then you find a comment that's interesting which links you to another blog, then another, then another, and by the time you're done an hour has gone. Why doesn't Putin ban blogging and put people back to work?

Thanks for the link, I've bookmarked it. Was worth it for this quote alone.

"Decisions concerning which securities to buy or sell on Russian markets are, for the most part, made abroad. Moreover, the criteria by which these decisions are made have very little connection to the actual state of our economy or Russian companies... This is some kind of ugly thing, absolutely unfair." - Putin (http://blog.foreignpolicy.com/node/10419)

lol

Title: Re: Meltdown
Post by: Lethevich on December 23, 2008, 05:03:57 AM

Quote from: ezodisy on December 23, 2008, 04:39:27 AM
"Decisions concerning which securities to buy or sell on Russian markets are, for the most part, made abroad. Moreover, the criteria by which these decisions are made have very little connection to the actual state of our economy or Russian companies... This is some kind of ugly thing, absolutely unfair." - Putin (http://blog.foreignpolicy.com/node/10419)

lol

(http://img266.imageshack.us/img266/8711/bawwwwwbunnybs4.jpg)

"Why can't everybody love me while I threaten them?"

Title: Re: Meltdown
Post by: ezodisy on December 23, 2008, 08:12:02 AM

lol. Merry Christmas

(http://www.truthdig.com/images/eartothegrounduploads/luck_putin_santa_500.gif)

Title: Re: Meltdown
Post by: BachQ on December 23, 2008, 08:17:00 AM

Quote from: Spitvalve on December 23, 2008, 02:18:42 AM
While I'm not surprised the price of oil has gone down (fewer people driving their SUV to the Wal-Mart, fewer holiday jets to exotic destinations), I can't understood why it has plunged SO MUCH. Anyone can give a short & sweet explanation? ???

As ezodisy noted, forced deleveraging is a major factor in the decline of oil prices. As you suggested, when the price of oil soared to $147/bbl in July, 2008, this price spike "shocked" the market to such an extent that consumers increased their conservation efforts; this price shock correspondingly also led to a destruction in the demand for oil. But the main reason oil has declined SO MUCH is that, macroeconomically, the global economy has been in a deflationary recession for several months, and looks to be heading for a deflationary depression for all of 2009. During this deflationary period, the price of all commodities will decline (see the Bloomberg commodities index below):

(http://images.bloomberg.com/r06/markets/comm_futures.gif)

Moreover, given that we're amid a "perfect storm" of financial and economic crises (popping asset and equity bubbles / crisis in credit, debt & liquidity / oil crisis), there are positive feedback loops that amplify the deflationary depression:

CREDIT/CONSUMPTION FEEDBACK: bursting of asset bubbles --> loss of wealth --> increases in defaults --> decreases in credit availability --> decreases in consumption --> decreases in business revenues --> decreases in hiring / employment --> decreases in consumer incomes --> increases in defaults / foreclosures --> further decreases in credit --> further decreases in consumption --> further layoffs --> drastic plunge in the demand for oil

Amid this deflationary recession, analysts have forecasted global trade as follows:

(http://www.itulip.com/images/worldtrade2000-2009.gif)

In a nutshell, when the global economy contracts, the demand for oil and other commodities also contracts. This general downward trend is depicted below (note the decline in GDP, prices, commodities, and interest rates):

(http://www.marketoracle.co.uk/images/2008/Major_price_trends_2008_2009.gif)

As to the oil price shock mentioned above, Colin Campbell described the bumpy plateau that we've experienced in 2008 as:

1. Oil price shock (resulting when the capacity limit is breached)
2. Economic recession (or depression) curtailing demand
3. Price collapse (when the markets overreact to surplus/shortage imbalances)
4. Temporary economic recovery (catalyzing increased demand for oil)
5. Oil price shock (as the falling capacity limits are again breached)

(http://www.fromthewilderness.com/images/graph%201_10_4_2006.jpg) (http://www.fromthewilderness.com/members/100406_markets_react.shtml)

In 2009 we may witness the convergence of a deflationary depression coupled with constraints on the supply of oil (i.e., "peak oil"), leading to highly volatile oil prices. Because economies require energy to grow, once we head down the cliff of peak oil, a permanent economy recovery will be impossible absent some miraculous new energy source. This is why I'm not terribly optimistic about 2009! :D

Title: Re: Meltdown
Post by: BachQ on December 23, 2008, 08:22:00 AM

Bank of Spain: World faces Total Financial Meltdown -- MADRID (AFP) — The governor of the Bank of Spain on Sunday issued a bleak assessment of the economic crisis, warning that the world faced a "total" financial meltdown unseen since the Great Depression. "The lack of confidence is total," Miguel Angel Fernandez Ordonez said in an interview with Spain's El Pais daily. "The inter-bank (lending) market is not functioning and this is generating vicious cycles: consumers are not consuming, businessmen are not taking on workers, investors are not investing and the banks are not lending. There is an almost total paralysis from which no-one is escaping," he said, adding that any recovery -- pencilled in by optimists for the end of 2009 and the start of 2010 -- could be delayed if confidence is not restored. ... "This is the worst financial crisis since the Great Depression" of 1929, he added.

(http://www.google.com/hostednews/afp/article/ALeqM5h2SsVV8JJZk5ooieD_bfpKcrg_qw)

Title: Re: Meltdown
Post by: BachQ on December 23, 2008, 08:23:31 AM

Modified mortgages re-defaulting at high rates: regulators -- WASHINGTON (MarketWatch) -- More than half of mortgages modified in the first quarter were at least 30 days delinquent after half a year, regulators said Monday.
(http://www.marketwatch.com/news/story/High-defaults-even-after-mortgages/story.aspx?guid=%7BD74CA5B2-657F-486D-9B0E-545DC2F33340%7D&dist=hplatest)

QuoteThe proportion of modified loans delinquent by 30 days or more was 55% after six months, according to the Office of the Comptroller of the Currency and the Office of Thrift Supervision. Modified loans that were 30 or more days delinquent after three months stood at 37%, the agencies' data showed. "One very troubling point is that, whether measured using 30-day or 60-day delinquencies, re-default rates increased each month and showed no signs of leveling off after six months and even eight months," said Comptroller of the Currency John Dugan. (cont'd)

Title: Re: Meltdown
Post by: BachQ on December 23, 2008, 08:24:23 AM

Housing Sector Reports Worst Levels on Record U.S. home builders threw in the towel in November, slashing construction of new dwellings far below the worst levels seen in 50 years, according to Commerce Department data released Tuesday. New starts dropped an eye-popping 18.9% to a seasonally adjusted annual rate of 625,000, the lowest since the Commerce Department began keeping records in 1959. According to similar records kept elsewhere, it's the slowest pace of construction in the post-World War II period. ... Building permits -- a separate, less-volatile measure of new construction -- fell 15.6% last month to a seasonally adjusted annual rate of 616,000, also a record low. ...The National Association of Home Builders said Monday that its builder sentiment index remained at a record low level in December ...
(http://www.marketwatch.com/news/story/Housing-starts-plunge-189-record/story.aspx?guid=%7BE21F7EFD-5EFF-445E-87C8-8AE300767217%7D&dist=hplatest&print=true&dist=printMidSection)

Title: Re: Meltdown
Post by: BachQ on December 23, 2008, 08:26:54 AM

Russian Industrial Production Shrinks Most Since 1998

(http://www.bloomberg.com/apps/news?pid=20601068&sid=aGM.h_O4I3Bw&refer=home)

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on December 23, 2008, 09:01:39 AM

Quote from: Dm on December 23, 2008, 08:17:00 AM
In 2009 we may witness the convergence of a deflationary depression coupled with constraints on the supply of oil (i.e., "peak oil"), leading to highly volatile oil prices. Because economies require energy to grow, once we head down the cliff of peak oil, a permanent economy recovery will be impossible absent some miraculous new energy source. This is why I'm not terribly optimistic about 2009! :D

Thank you for that sapient and well-structured post. It is precisely the conjunction of the oil peak (which some experts are saying already occurred, in 2005 or so) with prices falling off a cliff, that had me most confused.

But everything's gonna be OK. Today in my mailbox was a free copy of the Вестник тибетской медицины ("Tibetan Medicine Newsletter"). On the front was a Tibetan yogi saying: "The financial crisis is a temporary phenomenon!"

Sure put my mind at ease! :) Meanwhile, I will enter 2009 carless for the 8th year in a row! The price of gas won't affect me!

Title: Re: Meltdown
Post by: ezodisy on December 23, 2008, 09:29:15 AM

Quote from: Spitvalve on December 23, 2008, 09:01:39 AM
But everything's gonna be OK. Today in my mailbox was a free copy of the Вестник тибетской медицины ("Tibetan Medicine Newsletter"). On the front was a Tibetan yogi saying: "The financial crisis is a temporary phenomenon!"

And underneath the header: "Just add vodka to cure".

Something like that. I have seen it as an advertisement to cure baldness (among everything else) 8)

QuoteMeanwhile, I will enter 2009 carless for the 8th year in a row!

Funny, I read that as 'careless'. Applying my own mindset to your post?

The stark IEA (International Energy Agency) report released this fall was mostly ignored in the media, other than to highlight that 2009 will feature "demand destruction." Other headlines touted "Goodbye to the oil supercycle." The message sent to the public; lower oil prices ahead, problem solved. Unfortunately, the critical message of 9.1% global oil depletion was ignored.

According to the IEA report, "There remains a real risk that underinvestment will cause an oil supply crunch. The gap now evident between what is being built and what is needed to keep pace with demand is set to widen sharply after 2010." (http://www.financialsense.com/Market/wrapup.htm)

The red line (oil prices) is now considerably lower (approximately $40 a barrel for the February contract), and if the trend follows, domestic investment (blue line) will be much lower in 2009. This does not bode well for future supply.

(http://www.financialsense.com/Market/allison/2008/1222_clip_image002.jpg)

Title: Re: Meltdown
Post by: ezodisy on December 23, 2008, 09:40:13 AM

Some of the country's biggest commercial real estate players are asking the government for help, as their $6 trillion industry of hotels, office buildings and shopping malls faces a record amount of debt coming due in the next few years.

In the next three years, they pointed out, an estimated $530 billion of commercial mortgages will come due for refinancing -- with about $160 billion due next year, according to Foresight Analytics, based in Oakland, Calif. But with the credit markets virtually collapsed, thousands of those properties could go into foreclosure or bankruptcy if owners are unable to get new loans. (http://www.washingtonpost.com/wp-dyn/content/article/2008/12/23/AR2008122300974.html)

Title: Re: Meltdown
Post by: ezodisy on December 23, 2008, 10:20:04 AM

Most Americans believe that investment fraud like the recently revealed Ponzi scheme run by Bernard Madoff happens regularly on Wall Street, according to a recent survey.
Of the more than 1,000 American surveyed from Dec. 19-21, 59% said the government regulates the stock market and financial institutions too loosely. (http://money.cnn.com/2008/12/22/news/economy/madoff_poll/?postversion=2008122306)

Dec. 23 (Bloomberg) -- Thierry Magon de La Villehuchet, who ran a fund that invested with Bernard Madoff, was found dead at his office today in an apparent suicide, according to a police officer at the scene. (http://www.bloomberg.com/apps/news?pid=20601103&sid=aI_dGvx.XITs&refer=us)

More U.S. investors sue funds over Madoff (http://www.guardian.co.uk/business/feedarticle/8167515)

More Scientific Fallout From Madoff Scandal

The Picower Foundation is the latest U.S. charity to be sunk by Bernard Madoff and his self-admitted $50 billion Ponzi scheme. Researchers are reeling from the blow to the foundation, which in 2007 listed assets of $958 million. (http://blogs.sciencemag.org/scienceinsider/2008/12/more-scientific-fallout-from-m.html)

Ripples of Madoff scandal spread everywhere (http://www.iht.com/articles/ap/2008/12/20/america/NA-US-Ripples-of-a-Fraud.php)

Madoff Victims May Have to Return Profits, Principal

"Right now there are Madoff winners and Madoff losers," said Lynn LoPucki, who teaches bankruptcy law at Harvard University. "Before this is over there will be nothing but Madoff losers." (http://www.bloomberg.com/apps/news?pid=20601087&sid=awmAWSxKpXRM&refer=home)

Title: Re: Meltdown
Post by: BachQ on December 23, 2008, 10:22:35 AM

(http://img.timeinc.net//time/cartoons/20081219/cartoons_07.jpg)

Title: Re: Meltdown
Post by: BachQ on December 23, 2008, 10:26:36 AM

Quote from: ezodisy on December 23, 2008, 09:40:13 AM
Some of the country's biggest commercial real estate players are asking the government for help, as their $6 trillion industry of hotels, office buildings and shopping malls faces a record amount of debt coming due in the next few years.

In the next three years, they pointed out, an estimated $530 billion of commercial mortgages will come due for refinancing -- with about $160 billion due next year, according to Foresight Analytics, based in Oakland, Calif. But with the credit markets virtually collapsed, thousands of those properties could go into foreclosure or bankruptcy if owners are unable to get new loans. (http://www.washingtonpost.com/wp-dyn/content/article/2008/12/23/AR2008122300974.html)

U.S. Housing Prices Collapse at Near-Depression Pace Dec. 23 (Bloomberg) -- Sales of single-family houses in the U.S. dropped in November by the most in two decades and resale prices collapsed at a pace reminiscent of the Great Depression, dashing speculation the market was close to a bottom. ... A 13% drop in the median resale price was the most since records began in 1968 and was likely the largest since the 1930s, the National Association of Realtors said. "Housing is still in a freefall," said Nariman Behravesh, chief economist at IHS Global Insight in Lexington, Massachusetts. The figures were worse than economists had forecast and signal that the battered housing market that led the economy into a recession may be taking another lurch down. Sliding property values mean more Americans will be under water on their mortgages, destroying household wealth and undermining consumers' purchasing power.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aQ7HBEgYCzUE&refer=home)

QuoteThe Realtors' figures showed home resales, including condos, fell 8.6 percent to an annual rate of 4.49 million, below all but one estimate in a Bloomberg News survey of 63 economists. The median resale price dropped to $181,300. Separately, the Commerce Department reported that new- home sales fell 2.9 percent last month to a 17-year low of 407,000. The median sales price declined 11.5 percent from a year earlier to $220,400.

Title: Re: Meltdown
Post by: ezodisy on December 23, 2008, 10:40:14 AM

Quote from: Dm on December 23, 2008, 10:22:35 AM
(http://img.timeinc.net//time/cartoons/20081219/cartoons_07.jpg)

hahaha great!

Donna Werbner reveals her top three tips to get into better financial shape – and fulfil any financial goal. (http://www.fool.co.uk/news/your-money/2008/12/23/my-top-three-financial-tips.aspx)

It basically says DO NOT BUY, DO NOT SPEND, SAVE AND CLEAR DEBTS. You see articles like this, on popular penny-pinching amateur sites, at the start of every new year. This time though it's just ironic as you know more people than usual will listen and it totally runs counter to the government's intention of lowering mortgage rates so consumers can spend the difference. Ain't gonna happen. The difference will be saved, or spent at McDonalds, which seems to be doing well so far.

Title: Re: Meltdown
Post by: BachQ on December 25, 2008, 07:53:24 PM

Quote from: ezodisy on December 23, 2008, 10:20:04 AM
Ripples of Madoff scandal spread everywhere (http://www.iht.com/articles/ap/2008/12/20/america/NA-US-Ripples-of-a-Fraud.php)

BTW, New York University has initiated litigation against synagogue leader J. Ezra Merkin (http://business.timesonline.co.uk/tol/news/world/us_and_americas/article5397861.ece) for having negligently entrusted $24m with Madoff.

Title: Re: Meltdown
Post by: ezodisy on December 27, 2008, 11:44:45 AM

Quote from: Dm on December 25, 2008, 07:53:24 PM
BTW, New York University has initiated litigation against synagogue leader J. Ezra Merkin (http://business.timesonline.co.uk/tol/news/world/us_and_americas/article5397861.ece) for having negligently entrusted $24m with Madoff.

It's quite amusing how he so extensively duped his own kind in this scandal. A sound wakeup call for some of the fraternity, no doubt. I once knew someone like that and he came to a very bad end. Still it's common enough, even the prevailing state-- there's no shortage of a Tartuffe and his rabble. With that in mind it does make me curious as to when Israel may eventually bomb itself.

Title: Re: Meltdown
Post by: BachQ on December 28, 2008, 07:50:25 PM

Telegraph: Russia looks to control world's gas prices -- Plan for "Gas OPEC" could tighten Prime Minister Vladimir Putin's grip on Europe's gas supplies. (http://www.telegraph.co.uk/earth/energy/gas/3982543/Russia-look-to-control-worlds-gas-prices.html)

Title: Re: Meltdown
Post by: BachQ on December 28, 2008, 07:51:49 PM

Power Shift: Russia May Use Energy as a Political Weapon -- (Guardian, 28 Dec 2008) Britain was given a sharp reminder of the dangers to its energy supplies yesterday when Gazprom warned that western Europe could be hit by gas shortages. The Russian gas provider said a long-running row with Ukraine could disrupt supplies this winter. The fears were raised 24 hours before Russia hosts a meeting of the world's major gas suppliers to set up an Opec-style production cartel that could push up the price of energy in Britain and elsewhere. Energy experts warned that the two events demonstrated that Russia was using energy as a political weapon, and argued Britain should accelerate its switch to renewable power in order to reduce its dependence on unpredictable carbon fuel suppliers.

(http://www.telegraph.co.uk/telegraph/multimedia/archive/01211/putin1_1211585c.jpg)

(http://www.guardian.co.uk/commentisfree/2008/dec/28/russia-gazprom)

Title: Re: Meltdown
Post by: BachQ on December 28, 2008, 07:53:18 PM

Quote from: ezodisy on December 27, 2008, 11:44:45 AM
It's quite amusing how he so extensively duped his own kind in this scandal. A sound wakeup call for some of the fraternity, no doubt. I once knew someone like that and he came to a very bad end. Still it's common enough, even the prevailing state-- there's no shortage of a Tartuffe and his rabble. With that in mind it does make me curious as to when Israel may eventually bomb itself.

Not surprisingly, at least one rabbi has called for Madoff's excommunication, stating that "never before has one man done such damage to individual Jews, Jewish organizations and Judaism itself. His actions were a betrayal of trust of an unprecedented degree."

(http://blogs.jta.org/philanthropy/article/2008/12/26/1001830/rabbi-kick-madoff-out-of-the-jewish-people)

Title: Re: Meltdown
Post by: ezodisy on December 29, 2008, 06:32:55 AM

Quote from: Dm on December 28, 2008, 07:51:49 PM
Power Shift: Russia May Use Energy as a Political Weapon -- (Guardian, 28 Dec 2008) Britain was given a sharp reminder of the dangers to its energy supplies yesterday when Gazprom warned that western Europe could be hit by gas shortages. The Russian gas provider said a long-running row with Ukraine could disrupt supplies this winter. The fears were raised 24 hours before Russia hosts a meeting of the world's major gas suppliers to set up an Opec-style production cartel that could push up the price of energy in Britain and elsewhere. Energy experts warned that the two events demonstrated that Russia was using energy as a political weapon, and argued Britain should accelerate its switch to renewable power in order to reduce its dependence on unpredictable carbon fuel suppliers.
(http://www.guardian.co.uk/commentisfree/2008/dec/28/russia-gazprom)

Putin, and his little Nashi puppets, can shove it, because no matter how hard he tries to be Russia's supreme prick he'll never surpass the exploits of Russia's THIRD GREATEST HISTORICAL FIGURE OF ALL TIME (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=azh4y0rQB3DI), one Joseph Stalin. And how about that guy "who fought off western invaders"? lol. Yeah we get the message. Anyway at least that overrated Pushkin figure got pushed out of the medals. "Multiple voting was allowed." The Russians really are something special, all those attempts to overtake the US as the world's most hated country and they just keep coming up short. One day and all that

Title: Re: Meltdown
Post by: Lethevich on December 29, 2008, 12:24:17 PM

The moronic UK government will find all manner of ways to allow Russia to influence its affairs - the Blair/Brown administration has a completely perverse disdain towards renewable energy.

Title: Re: Meltdown
Post by: BachQ on December 29, 2008, 01:49:20 PM

Quote from: ezodisy on December 29, 2008, 06:32:55 AM
"Multiple voting was allowed."

LOL

Putin would have fared well in the poll (but he was ineligible since he's still alive), possibly outscoring Alexander Nevsky.

Title: Re: Meltdown
Post by: BachQ on December 29, 2008, 01:50:55 PM

Another UK analyst predicting an employment collapse for 2009.

http://www.cnbc.com/id/15840232?video=978164631 (4 minute video)

Title: Re: Meltdown
Post by: drogulus on December 29, 2008, 01:54:52 PM

Quote from: ezodisy on December 27, 2008, 11:44:45 AM
It's quite amusing how he so extensively duped his own kind in this scandal. A sound wakeup call for some of the fraternity, no doubt. I once knew someone like that and he came to a very bad end. Still it's common enough, even the prevailing state-- there's no shortage of a Tartuffe and his rabble. With that in mind it does make me curious as to when Israel may eventually bomb itself.

This is vicious garbage. Don't you find swindlers among your "own kind"? Or do you only look for them among people you already hate?

Title: Re: Meltdown
Post by: BachQ on December 29, 2008, 01:56:01 PM

Gas Tax as the Optimal Solution

According to Johns Hopkins author and foreign policy specialist Michael Mandelbaum, a gasoline tax "is not just win-win; it's win, win, win, win, win. A gasoline tax would do more for American prosperity and strength than any other measure Obama could propose." (http://www.nytimes.com/2008/12/28/opinion/28friedman.html?_r=1&ref=opinion)

In the New York Times, Thomas L. Friedman (http://www.nytimes.com/2008/12/28/opinion/28friedman.html?_r=1&ref=opinion) opines:

QuoteA gas tax reduces gasoline demand and keeps dollars in America, dries up funding for terrorists and reduces the clout of Iran and Russia at a time when Obama will be looking for greater leverage against petro-dictatorships. It reduces our current account deficit, which strengthens the dollar. It reduces U.S. carbon emissions driving climate change, which means more global respect for America. And it increases the incentives for U.S. innovation on clean cars and clean-tech.

Title: Re: Meltdown
Post by: BachQ on December 29, 2008, 03:22:46 PM

NYT: "Passive Houses" are the rage (26 Dec 2008) -- The concept of the passive house ... [incorporates] ultrathick insulation and complex doors and windows; the architect engineers a home encased in an airtight shell, so that barely any heat escapes and barely any cold seeps in. That means a passive house can be warmed not only by the sun, but also by the heat from appliances and even from occupants' bodies. And in Germany, passive houses cost only about 5 to 7 percent more to build than conventional houses.

(http://graphics8.nytimes.com/images/2008/12/26/world/27house_600.JPG)

(http://www.nytimes.com/2008/12/27/world/europe/27house.html?_r=1&pagewanted=all)

Quote[N]ew passive houses use an ingenious central ventilation system. The warm air going out passes side by side with clean, cold air coming in, exchanging heat with 90 percent efficiency. "The myth before was that to be warm you had to have heating. Our goal is to create a warm house without energy demand," said Wolfgang Hasper, an engineer at the Passivhaus Institut in Darmstadt. "This is not about wearing thick pullovers, turning the thermostat down and putting up with drafts. It's about being comfortable with less energy input, and we do this by recycling heating." There are now an estimated 15,000 passive houses around the world, the vast majority built in the past few years in German-speaking countries or Scandinavia.

Title: Re: Meltdown
Post by: ezodisy on December 29, 2008, 03:50:16 PM

Quote from: drogulus on December 29, 2008, 01:54:52 PM
This is vicious garbage. Don't you find swindlers among your "own kind"? Or do you only look for them among people you already hate?

So much emotion, and it's all so needless. Didn't I say it's common enough, even the prevailing state? Perhaps it's the word rabble which threw you. Anyway you sound a little bit silly saying "or do you only look for them among people you already hate?". Luckily I know that you weren't being serious, otherwise it would have sounded stupid.

Title: Re: Meltdown
Post by: drogulus on December 29, 2008, 04:11:57 PM

Quote from: ezodisy on December 29, 2008, 03:50:16 PM
So much emotion, and it's all so needless. Didn't I say it's common enough, even the prevailing state? Perhaps it's the word rabble which threw you. Anyway you sound a little bit silly saying "or do you only look for them among people you already hate?". Luckily I know that you weren't being serious, otherwise it would have sounded stupid.

You can't clever your way out of this. What you said is disgraceful, and the only honorable thing to do is apologize.

Title: Re: Meltdown
Post by: ezodisy on December 29, 2008, 04:44:22 PM

There's nothing to get out of*, though you may want to unwind your imagination because it seems to have gotten itself into a knot. This sort of screw-your-own-kind type exists everywhere and is common enough among the jewish people too. I spent enough time in midtown Manhattan with some of my uncles jewish buddies to know how desperately they wanted to screw each other over in business. At least now there's a clear publicised representation of it, and once you get past the tragedy of the suicide and the closed charities and so on you might find a lot of humour there, if you appreciate how messed and degenerate people are -- all people.

*please don't reply if you're going to throw all sorts of loaded moral rubbish into the discussion. There's no honour among moralists.

Title: Re: Meltdown
Post by: drogulus on December 29, 2008, 04:56:29 PM

You didn't say all people. That's what I say, and what you say now.

Quote from: ezodisy on December 27, 2008, 11:44:45 AM
It's quite amusing how he so extensively duped his own kind in this scandal. A sound wakeup call for some of the fraternity, no doubt. I once knew someone like that and he came to a very bad end. Still it's common enough, even the prevailing state-- there's no shortage of a Tartuffe and his rabble. With that in mind it does make me curious as to when Israel may eventually bomb itself.

This is what you said then.

Title: Re: Meltdown
Post by: ezodisy on December 29, 2008, 11:07:15 PM

Yes and that is what I say now too. All people, including everyone in Israel (maybe even especially in Israel). Now stop being nasty. It's early and I have to go out and it's cold :'(

Title: Re: Meltdown
Post by: BachQ on December 30, 2008, 11:28:35 AM

Quote from: Daverz on May 07, 2008, 09:01:15 PM
Kind of shortsighted. Why not pray for workable fusion power and more efficient batteries for electric cars?

http://news.yahoo.com/s/afp/20080505/lf_afp/usreligionpovertyenergyoil

With fusion experiment, scientists plan to ignite tiny man-made star (UK Telegraph 27 Dec 2008) "We are creating the conditions that exist inside the sun," said Ed Moses, director of the facility. "It is like tapping into the real solar energy as fusion is the source of all energy in the world. It is really exciting physics, but beyond that there are huge social, economic and global problems that it can help to solve." (http://www.telegraph.co.uk/scienceandtechnology/science/sciencenews/3981697/Scientists-plan-to-ignite-tiny-man-made-star.html)

(http://www.telegraph.co.uk/telegraph/multimedia/archive/01212/Ign1_1212408c.jpg)
Inside the target chamber, where scientists will attempt to create an artificial sun. Photo: Lawrence Livermore National Laboratory

Title: Re: Meltdown
Post by: BachQ on December 30, 2008, 11:31:11 AM

WSJ: Recession, Tight Credit Compound Housing Woes -- A deepening recession and tight credit conditions are compounding problems in the housing market, suggesting that declines in home prices may continue well into 2009. ...

[NOTE: The Federal Housing Finance Agency said this week that the median sale price of an existing home declined to $181,300 in November, down 13.2% from a year earlier. That is the largest drop in the four-decade history of the survey and likely the sharpest decline since the Depression. The group estimates that 45% of existing-home sales are linked to foreclosures].

The adverse feedback loop:
(http://online.wsj.com/article/SB123003859646029853.html?ref=patrick.net)

QuoteThe housing sector has been hit hard throughout the year by an oversupply of homes that gradually forced high prices to fall. Tumbling prices, in turn, hurt the overall economy by battering financial institutions, reducing the wealth of homeowners and prompting job cuts in the housing sector. Now, the worsening recession is further damaging the housing market. Consumers who lose their jobs are adding to homeowner defaults, pushing forecasts for when the sector will hit bottom into the second half of 2009 or later. ... "What will be a significant number of foreclosures over coming quarters will only add to the inventory overhang and keep downward pressure on house prices," said Richard Moody, chief economist at real-estate firm Mission Residential, which expects prices to stop falling in 2010.

Title: Re: Meltdown
Post by: BachQ on December 30, 2008, 11:37:25 AM

Quote from: ezodisy on December 17, 2008, 04:04:23 AM
crude going to $25 Dm?

According to Gulf CEO Joe Petrowski during a CNBC interview, crude oil could slide to $20/bbl if current conditions persist: "Oil's got some more downside. Whether it hits $20--could--but I think $25 is in the cards."

(http://www.cnbc.com/id/28390338)

Title: Re: Meltdown
Post by: ezodisy on December 30, 2008, 12:13:22 PM

Quote from: Dm on December 30, 2008, 11:28:35 AM
With fusion experiment, scientists plan to ignite tiny man-made star (UK Telegraph 27 Dec 2008) "We are creating the conditions that exist inside the sun," said Ed Moses, director of the facility. "It is like tapping into the real solar energy as fusion is the source of all energy in the world. It is really exciting physics, but beyond that there are huge social, economic and global problems that it can help to solve." (http://www.telegraph.co.uk/scienceandtechnology/science/sciencenews/3981697/Scientists-plan-to-ignite-tiny-man-made-star.html)

that's interesting. I hope their funding doesn't get cut during the Great Depression II.

So Dm when will the Euro collapse? I'm not buying into this song and dance of strength, it's about time to sell it, I think.

Title: Re: Meltdown
Post by: BachQ on December 30, 2008, 07:25:42 PM

Quote from: ezodisy on December 30, 2008, 12:13:22 PM
I hope their funding doesn't get cut during the Great Depression II.

Speaking of GDII ... on NPR, analyst Howard Davidowitz concludes that the 2008 retail season was the worst in 50 years and that a "depression is not off the table" (http://www.npr.org/templates/player/mediaPlayer.html?action=1&t=1&islist=false&id=98785757&m=98785735) (4 minute audio)

Title: Re: Meltdown
Post by: ezodisy on December 31, 2008, 12:54:22 AM

--Bloomberg reckons that between cash, bank deposits, and money market mutual funds, investors have squirreled away US$8.85 trillion. That amount is equal to 74% of the total market capitalisation of the stock market. The last time the ratio that was high was in 1990, on the eve of the last U.S. recession.
--Yet the ratio has been even higher in the past. In July of 1982, the total cash position was 95% of total market cap. Stocks bottomed at that point and the S&P 500 rose by 36% over the next six months, according to Bloomberg.
--Then there's 1974. The total cash position of investors actually exceeded the stock market capitalisation by 121%. Then, between October 1974 and March 1975 stocks rallied by 31%.

Title: Re: Meltdown
Post by: ezodisy on December 31, 2008, 02:19:39 AM

A passenger plane has successfully completed a two-hour test flight partly powered by vegetable oil.

Air New Zealand hailed the flight as a "milestone" in the development of sustainable fuels that could lower aeroplane emissions and cut costs.

One engine of the Boeing 747-400 was fueled by a 50-50 mixture of jatropha plant oil and standard A1 jet fuel.

A Virgin Atlantic test flight in February used fuel derived from a blend of Brazilian babassu nuts and coconuts.

In Auckland on Tuesday, a range of tests were completed both on the ground and during the flight, said Air New Zealand Chief Pilot David Morgan.

He said the oil from the plum-sized jatropha fruit performed "well through both the fuel system and engine". (http://news.bbc.co.uk/1/hi/sci/tech/7805499.stm)

Title: Re: Meltdown
Post by: BachQ on January 01, 2009, 03:03:36 PM

2008 in review:

Britain's FTSE 100 posted its worst year on record, down 31%, with £480billion wiped out.
Britain's FTSE All Share did even worse, falling by 32.78%.
Germany's DAX experienced its second-worst annual performance in its 20-year history, down 40.4%
France's CAC plunged 42.7% over the year
The Dow Jones sank nearly 34% in 2008, its worst year since 1931, wiping out $US6.9 trillion.
Shanghai's stock market lost a record 65% (US$3 trillion wiped off share values).
Japan's Nikkei fell 42%, an alltime record.
Hong Kong's Hang Seng index plummeted 48% lower, its 2d-biggest drop (worst since the 70's oil shock)
India's main index in Mumbai nosedived by more than half, losing 51.9% in 2008
The Australian sharemarket lost 41% of its value during 2008.

Title: Re: Meltdown
Post by: BachQ on January 01, 2009, 03:07:55 PM

Quote from: ezodisy on December 31, 2008, 02:19:39 AM
A passenger plane has successfully completed a two-hour test flight partly powered by vegetable oil.

Air New Zealand hailed the flight as a "milestone" in the development of sustainable fuels that could lower aeroplane emissions and cut costs.

One engine of the Boeing 747-400 was fueled by a 50-50 mixture of jatropha plant oil and standard A1 jet fuel.

A Virgin Atlantic test flight in February used fuel derived from a blend of Brazilian babassu nuts and coconuts.

In Auckland on Tuesday, a range of tests were completed both on the ground and during the flight, said Air New Zealand Chief Pilot David Morgan.

He said the oil from the plum-sized jatropha fruit performed "well through both the fuel system and engine". (http://news.bbc.co.uk/1/hi/sci/tech/7805499.stm)

Fill 'Er Up With Human Fat -- How a Beverly Hills doctor powered his SUV using his patients' spare tires. Liposuctioning unwanted blubber out of pampered Los Angelenos may not seem like a dream job, but it has its perks. Free fuel is one of them. For a time, Beverly Hills doctor Craig Alan Bittner turned the fat he removed from patients into biodiesel that fueled his Ford SUV and his girlfriend's Lincoln Navigator.

(http://www.forbes.com/sciencesandmedicine/2008/12/21/fat-fuel-biodiesel-tech-sciences-%3Cbr%20/%3E%3Cbr%20/%3Ecz_pcb_1222fatfuel.html)

QuoteLove handles can power a car? Frighteningly, yes. Fat--whether animal or vegetable--contains triglycerides that can be extracted and turned into diesel. Poultry companies such as Tyson are looking into powering their trucks on chicken schmaltz, and biofuel start-ups such as Nova Biosource are mixing beef tallow and pig lard with more palatable sources such as soybean oil. Mike Shook of Agri Process Innovations, a builder of biodiesel plants, says this year's batch of U.S. biodiesel was likely more than half animal-derived since the price of soybeans soared.

A gallon of grease will get you about a gallon of fuel, and drivers can get about the same amount of mileage from fat fuel as they do from regular diesel, according to Jenna Higgins of the National Biodiesel Board. Animal fats need to undergo an additional step to get rid of free fatty acids not present in vegetable oils, but otherwise, there's no difference, she says.

Title: Re: Meltdown
Post by: BachQ on January 01, 2009, 03:12:18 PM

Rising desperation as China's exports drop

(http://www.iht.com/articles/2009/01/01/business/exports.php)

Title: Re: Meltdown
Post by: BachQ on January 01, 2009, 03:13:09 PM

Dec. 29 (Bloomberg) -- U.S. retailers face a wave of store closings, bankruptcies and takeovers starting next month as holiday sales are shaping up to be the worst in 40 years. Retailers may close 73,000 stores in the first half of 2009, according to the International Council of Shopping Centers. Talbots Inc. and Sears Holdings Corp. are among chains shuttering underperforming locations.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=ajAqMbszJmNY&refer=home)

Title: Re: Meltdown
Post by: BachQ on January 01, 2009, 03:14:54 PM

Commodity Boom Turns Bust in 2008 as Worldwide Economy Crumbles "Macroeconomically, we're in a free fall," said John Brynjolfsson, the managing director and chief investment officer at hedge fund Armored Wolf LLC in Aliso Viejo, California. "That's a complete destruction in industrial production and demand, and this is likely to keep pressure on the commodity sector in general."

(http://www.bloomberg.com/apps/news?pid=20601087&sid=a_oih_J0oMWg&refer=home)

Title: Re: Meltdown
Post by: ezodisy on January 01, 2009, 03:16:54 PM

Quote from: Dm on January 01, 2009, 03:03:36 PM
Britain's FTSE 100 posted its worst year on record, down 31%, with £480billion wiped out.
Britain's FTSE All Share did even worse, falling by 32.78%.
Germany's DAX experienced its second-worst annual performance in its 20-year history, down 40.4%
France's CAC plunged 42.7% over the year
The Dow Jones sank nearly 34% in 2008, its worst year since 1931, wiping out $US6.9 trillion.
Shanghai's stock market lost a record 65% (US$3 trillion wiped off share values).
Japan's Nikkei fell 42%, an alltime record.
Hong Kong's Hang Seng index plummeted 48% lower, its 2d-biggest drop (worst since the 70's oil shock)
India's main index in Mumbai nosedived by more than half, losing 51.9% in 2008
The Australian sharemarket lost 41% of its value during 2008.

I saw a smaller comparison on Bloomberg and immediately wondered why the FTSE was down less than its neighbours either side (US & France). I don't think that that makes any sense, though perhaps there are reasons I dont' know of. If there aren't, then I think we're heading for my mate's target of 2500. I would really like to see gold tank to $400 so I could load up on the physical--in the future you'll have to buy things like bread and butter with gold--but I don't think it's gonna happen. I sold it overnight Tuesday at $873, there's potential BARF on the daily and the price at present is still a lower high from Sept/Oct, and closed at $860 the next day, immediately after which it went up to $880. Too much dip buying, I keep hoping for the Fed to manipulate it down further but am becoming less hopeful by the day. Anyway once people get back to work next week we should see some good action, such as the Euro taking a beating sooner or later

Title: Re: Meltdown
Post by: Lethevich on January 01, 2009, 05:15:13 PM

Quote from: Dm on January 01, 2009, 03:03:36 PM
2008 in review:

Britain's FTSE 100 posted its worst year on record, down 31%, with £480billion wiped out.
Britain's FTSE All Share did even worse, falling by 32.78%.
Germany's DAX experienced its second-worst annual performance in its 20-year history, down 40.4%
France's CAC plunged 42.7% over the year
The Dow Jones sank nearly 34% in 2008, its worst year since 1931, wiping out $US6.9 trillion.
Shanghai's stock market lost a record 65% (US$3 trillion wiped off share values).
Japan's Nikkei fell 42%, an alltime record.
Hong Kong's Hang Seng index plummeted 48% lower, its 2d-biggest drop (worst since the 70's oil shock)
India's main index in Mumbai nosedived by more than half, losing 51.9% in 2008
The Australian sharemarket lost 41% of its value during 2008.

Something that is confusing me: I thought the UK was considered by most as faring among the worst in this crisis?

Edit: Ok, Sidoze got there first :P

Quote from: ezodisy on January 01, 2009, 03:16:54 PM
I saw a smaller comparison on Bloomberg and immediately wondered why the FTSE was down less than its neighbours either side (US & France). I don't think that that makes any sense

Title: Re: Meltdown
Post by: BachQ on January 01, 2009, 07:55:29 PM

2 Jan 2009: London Times: (http://business.timesonline.co.uk/tol/business/industry_sectors/technology/article5429969.ece) According to certain insiders, Microsoft may announce its first widescale layoffs in its 32-year history, with up to 15,000 jobs at risk (10 to 17 per cent of the company's 91,000 employees worldwide). :o :o

:o

:o

Title: Re: Meltdown
Post by: BachQ on January 01, 2009, 07:57:55 PM

Quote from: ezodisy on December 30, 2008, 12:13:22 PM
So Dm when will the Euro collapse?

First, you tell us when the dollar will collapse! :D

My guess is summer 2009.

Title: Re: Meltdown
Post by: ezodisy on January 02, 2009, 05:50:59 AM

Quote from: Dm on January 01, 2009, 07:57:55 PM
First, you tell us when the dollar will collapse! :D

My guess is summer 2009.

The big question though is what happens to the EUR/USD pair when they both collapse? lol black hole. "After you sir" "No no I insist, after you".

Summer 2009 sounds okay. There's no rush after all, and probably no stopping it either.

Title: Re: Meltdown
Post by: BachQ on January 03, 2009, 03:24:53 PM

Quote from: ezodisy on January 02, 2009, 05:50:59 AM
The big question though is what happens to the EUR/USD pair when they both collapse? lol black hole. "After you sir" "No no I insist, after you".

We'll know soon enough.

(http://img.timeinc.net//time/cartoons/20090102/cartoons_03.jpg)

Title: Re: Meltdown
Post by: BachQ on January 03, 2009, 04:18:58 PM

New Yorker Jan 05 Issue:

(http://www.newyorker.com/images/2009/01/05/p154/090105_2009_p154.jpg)

Meanwhile, UK pubs are offering the perfect credit crunch / economic meltdown menu: meals for £1. (http://www.guardian.co.uk/business/2009/jan/03/one-pound-pub-lunch-deals)

Beer down to 99p a pint for first time since 1989
(http://business.timesonline.co.uk/tol/business/industry_sectors/retailing/article5431844.ece)

Buy car, get one free - NY Daily News (http://www.nydailynews.com/money/2008/12/10/2008-12-10_buy_1_get_1_free_car_dealerships_despera.html)

"Desperate car dealers today stunned experts by launching an extraordinary credit-crunch busting deal -- buy one new car and get another completely free."
(http://usnews.rankingsandreviews.com/cars-trucks/daily-news/081110-Car-Deal-of-the-Day-Buy-One-Get-One-Free-Dodge-Avengers/)

Title: Re: Meltdown
Post by: ezodisy on January 03, 2009, 04:23:20 PM

Quote from: Dm on January 03, 2009, 03:24:53 PM
(http://img.timeinc.net//time/cartoons/20090102/cartoons_03.jpg)

lol!

Title: Re: Meltdown
Post by: ezodisy on January 03, 2009, 04:59:39 PM

Brown to create 100,000 new jobs (http://news.bbc.co.uk/1/hi/uk_politics/7810178.stm)

lol! He'll have to do better than that if his plan to take 500,000 or 1m or whatever number off of benefits and into jobs is to succeed.

Title: Re: Meltdown
Post by: ezodisy on January 03, 2009, 06:23:55 PM

Rosenberg, the chief North American economist at Merrill Lynch & Co. in New York, by January had already called the recession that this month was officially declared to have started in December 2007.

Now, he predicts the carnage will cause a 2.5 percent contraction in gross domestic product in 2009, and sees historians calling the current era "GDII," a reference to the Great Depression.

The severity of today's housing bust, and the resulting collapse in credit, indicate that the U.S. won't soon emerge from the already yearlong recession, according to Rosenberg.

"What we know about periods of asset deflation and credit contraction is that the impact on the economy tends to last for years not quarters," he said, projecting housing is likely to contract through the end of 2009. (http://www.bloomberg.com/apps/news?pid=email_en&refer=us&sid=a8KK_pGpxqL4)

From the same report:

"In the oil market, Merrill's Francisco Blanch proved most accurate in calling the record price of $147.27 a barrel that was reached in July. Blanch, head of global commodities research at the firm in London, roiled traders this month by saying crude may move back to $25 next year. It was at $38.45 Dec. 23."

Title: Re: Meltdown
Post by: ezodisy on January 03, 2009, 06:33:19 PM

which led me on to this (5 is a beauty)

Bob Farrell's 10 Market Rules To Remember

Bob Farrell's (Merrill Lynch chief market strategist from 1967-1992) 10 Market Rules to Remember (link):

1) Markets tend to return to the mean over time.

2) Excesses in one direction will lead to an opposite excess in the other direction.

3) There are no new eras — excesses are never permanent.

4) Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways.

5) The public buys the most at the top and the least at the bottom.

6) Fear and greed are stronger than long-term resolve.

7) Markets are strongest when they are broad and weakest when they narrow to a handful of blue chip names.

8) Bear markets have three stages — sharp down — reflexive rebound —a drawn-out fundamental downtrend.

9) When all the experts and forecasts agree – something else is going to happen.

10) Bull markets are more fun than bear markets

Title: Re: Meltdown
Post by: ezodisy on January 04, 2009, 03:28:38 AM

predictions for 2009 from someone who got most of his 2008 predictions correct.

http://market-ticker.denninger.net/archives/689-Where-We-Are,-Where-Were-Heading-2009.html

Title: Re: Meltdown
Post by: ezodisy on January 04, 2009, 07:26:22 AM

a blog which includes all the latest videos from Rogers, Schiff, Faber and Paul. The Faber one on 29 Dec is a good lengthy one

http://financialtruth0.blogspot.com/

Title: Re: Meltdown
Post by: BachQ on January 04, 2009, 12:18:57 PM

Quote from: ezodisy on January 04, 2009, 03:28:38 AM
predictions for 2009 from someone who got most of his 2008 predictions correct.

http://market-ticker.denninger.net/archives/689-Where-We-Are,-Where-Were-Heading-2009.html

Excellent catch! 0:) Denninger nailed almost all of his 2008 predictions, and I agree with most of his 2009 predictions. It would be great to have Peter Schiff and Denninger debate, inter alia, whether the dollar will collapse in 2009 (Schiff believing that it will).

Says Denninger:

QuoteThe Dollar will not collapse. This is not because we're in great shape or will truly recover, it is because the rest of the world is in worse shape than we are. Last year pundits were all calling for the dollar to collapse to 40 - it didn't happen. Now they're calling the dollar's strength a "Bear market rally." Nonsense; the simple truth is that while we're in bad shape the rest of the world is literally on the precipice of a full-on collapse. European banks are more-levered and less-transparent than our banks as just one example.

Denninger makes a lot of sense. But so does Schiff. :D

Title: Re: Meltdown
Post by: BachQ on January 04, 2009, 12:21:57 PM

Quote from: ezodisy on January 04, 2009, 03:28:38 AM
predictions for 2009 from someone who got most of his 2008 predictions correct.

http://market-ticker.denninger.net/archives/689-Where-We-Are,-Where-Were-Heading-2009.html

OMG: Top 10 threats facing the dollar in 2009 (http://www.marketskeptics.com/2009/01/ten-major-threats-facing-dollar.html)

1) Foreign central banks selling US assets
2) The worsening US Trade deficit
3) Treasuries
4) Gold
5) China and the yuan
6) Bailouts
7) US budget deficits and (lack of) Tax revenues
8] The "flight to quality"
9) A loss of confidence
10) The dollar's former self

Notice the scary charts!

Title: Re: Meltdown
Post by: BachQ on January 04, 2009, 12:23:39 PM

2008 Russian oil output has fallen for first time in a decade -- MOSCOW (Reuters) - Russian oil production fell by around one percent in 2008, official data showed on Friday, the country's first annual decline in a decade after large increases in previous years and a sign of things to come. The decline is widely expected to continue because of ageing reserves and plunging oil prices, which combine with heavy taxation to leave producers with limited cash to invest in maintaining production and opening new fields.
(http://uk.biz.yahoo.com/03012009/325/russia-oil-output-falls-first-time-decade.html)

Title: Re: Meltdown
Post by: ezodisy on January 05, 2009, 02:00:08 AM

Schiff piece in the Wall Street Journal from a few days back

http://online.wsj.com/article/SB123033898448336541.html?mod=googlenews_wsj

Title: Re: Meltdown
Post by: BachQ on January 05, 2009, 04:02:51 AM

Quote from: ezodisy on January 04, 2009, 03:28:38 AM
predictions for 2009 from someone who got most of his 2008 predictions correct.

http://market-ticker.denninger.net/archives/689-Where-We-Are,-Where-Were-Heading-2009.html

James Howard Kunstler's Forecast for 2009 -- *** By May of 2009, the stock markets will resume crashing with the ultimate destination of a Dow 4000 before the end of the year. Meanwhile, jobs will vanish by the millions and companies will go bankrupt by the thousands, especially in the so-called service sector, and in all the suppliers of such, along with the landlords in all the malls and strip malls. The desolation will mount quickly and will be obvious in the empty storefronts and trash-filled parking lagoons. In the event, two things will become increasingly clear to the nation: that the consumer economy is dead, and that there is no more available credit of the kind that Americans are in the habit of enjoying. *** Borrowing from the future will become a practical impossibility as past bad debts from previous borrowings continue to unwind, cease performing, and get written off. This argument implies that the federal government will tend to flounder just as General Motors, Citicorp, Target Stores and other gigantic enterprises will tend to flounder. It would be sad to see a President Obama so hamstrung and helpless, and it is largely why I see his role as largely symbolic -- as a reassuring presence encouraging the distressed public to bravely bear their hardships, and to be kind and helpful among their neighbors. (cont'd) (http://www.energybulletin.net/node/47586)

Good for a daily dose of doom. >:D

Title: Re: Meltdown
Post by: BachQ on January 05, 2009, 04:08:06 AM

Quote from: ezodisy on January 05, 2009, 02:00:08 AM
Schiff piece in the Wall Street Journal from a few days back

http://online.wsj.com/article/SB123033898448336541.html?mod=googlenews_wsj

Unfortunately, very few in Congress will heed Schiff's wisdom.

Senator McConnell Urges Caution in Debate on Economic Stimulus Measure -- Dec. 29 (Bloomberg) -- Senate Minority Leader Mitch McConnell said he wants to slow consideration of the economic stimulus package Democrats are drafting, warning that the measure sought by President-elect Barack Obama invites wasteful spending. Said he: "A trillion-dollar spending bill would be the largest spending bill in the history of our country at a time when our national debt is already the largest in history. As a result, it will require tough scrutiny and oversight. Taxpayers, already stretched to the limit, deserve nothing less."
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aCJL4fN0uXow&refer=home)

Title: Re: Meltdown
Post by: ezodisy on January 05, 2009, 02:15:28 PM

Quote from: Dm on January 04, 2009, 12:18:57 PM

Denninger makes a lot of sense. But so does Schiff. :D

yeah who knows, we might even make it through all of 2009 with the dollar intact. There's a new commodity watch radio interview with 4 esteemed pundits (including one from DollarCollapse.com). Worth adding to the ipod or whatever for listening during free/quiet time. There's too much out there to read, it's good to get some of these audio-only interviews which don't appear on TV ('cause they're not optimistic enough :) ).

http://commoditywatch.podbean.com/

Title: Re: Meltdown
Post by: BachQ on January 06, 2009, 03:12:54 AM

10 minutes ago, WTIC breached the $50/bbl threshold (NYMEX). Mideast tensions? Russian/Ukraine tensions? OPEC's upcoming February meeting?

Title: Re: Meltdown
Post by: BachQ on January 06, 2009, 03:16:12 AM

Quote from: ezodisy on January 04, 2009, 07:26:22 AM
a blog which includes all the latest videos from Rogers, Schiff, Faber and Paul. The Faber one on 29 Dec is a good lengthy one

http://financialtruth0.blogspot.com/

Thank you for that convenient resource. Peter Schiff (Bloomberg, 2 Jan 09) nails it by concluding that the government (Obama) is attempting to re-inflate the asset bubbles, with the guaranteed outcome of sowing the seeds for a much more ominous crisis in the future.

Title: Re: Meltdown
Post by: ezodisy on January 06, 2009, 04:58:34 AM

Quote from: Dm on January 06, 2009, 03:12:54 AM
10 minutes ago, WTIC breached the $50/bbl threshold (NYMEX). Mideast tensions? Russian/Ukraine tensions? OPEC's upcoming February meeting?

How dare they. Well the Russians will not be in any way endorsed by me to carry on their petulant behaviour so I am selling at 50. I hope it tanks to $5 :P

Title: Re: Meltdown
Post by: BachQ on January 07, 2009, 03:05:08 AM

Quote from: ezodisy on January 06, 2009, 04:58:34 AM
How dare they. Well the Russians will not be in any way endorsed by me to carry on their petulant behaviour so I am selling at 50. I hope it tanks to $5 :P

lol. Now Gazprom has cutoff all of Europe's natural gas which flows through Ukraine. Russia blames Ukraine for the shutdown. And Ukraine blames Russia. Fun times. Isn't it wonderful to be dependent on Russia .....

(http://news.bbc.co.uk/nol/shared/spl/hi/pop_ups/05/europe_enl_1136301170/img/1.jpg) (http://news.bbc.co.uk/2/hi/europe/7814743.stm)

As the map indicates, over a dozen countries are affected, including: Austria, Italy, Poland, Bulgaria, Turkey, Greece, Romania & Czech Republic, forcing some countries like Austria to tap into their dwindling reserves. I assume that Germany and France are also partially affected by this.

This gives new meaning to the concept of "cold war." Brrrrr.

Title: Re: Meltdown
Post by: ezodisy on January 07, 2009, 04:03:16 AM

Quote from: Dm on January 07, 2009, 03:05:08 AM
This gives new meaning to the concept of "cold war." Brrrrr.

well it certainly gives a new meaning to the term "bullshit". I hear Bulgaria is down to just a couple days of reserves. Now I sense is the time to swoop in to save Miss Bulgaria from the discomfort of sub-zero temperatures 8)

U.S. Democratic lawmakers on Tuesday reintroduced legislation to change bankruptcy laws to allow homeowners to shrink their mortgage debts on primary residences, a measure fiercely opposed by the banking industry. (http://www.easybourse.com/bourse-actualite/marches/us-democrats-reintroduce-legislation-to-change-591588)

Title: Re: Meltdown
Post by: Lethevich on January 07, 2009, 04:54:37 AM

Everything seems to have a silver lining - this can only hammer it into the eastern European former colonies that Russia is not their friend.

Title: Re: Meltdown
Post by: Florestan on January 07, 2009, 05:04:18 AM

Quote from: Lethe on January 07, 2009, 04:54:37 AM
this can only hammer it into the eastern European former colonies that Russia is not their friend.

As if we needed one more proof for that... ;D

Title: Re: Meltdown
Post by: ezodisy on January 07, 2009, 08:02:05 AM

bloody great interview with Mish and Michael Hampton on commod watch covering everything from deflation to the environment to personal savings and beyond

http://commoditywatch.podbean.com/

Title: Re: Meltdown
Post by: BachQ on January 07, 2009, 08:36:56 AM

NY Daily News: Porn kings Larry Flint and Joe Francis go begging for a bailout

BY CATEY HILL
DAILY NEWS STAFF WRITER

Wednesday, January 7th 2009, 11:51 AM

(http://www.nydailynews.com/money/2009/01/07/2009-01-07_porn_kings_larry_flint_and_joe_francis_g.html)

QuoteIs the porn industry up next for a bailout? If porn titans Joe Francis and Larry Flynt have anything to do with it, it will.

Yes, ladies and gentleman, the titans of pornography are begging for a bailout.

Joe Francis, creator of the "Girl's Gone Wild" video series, and Larry Flynt, founder of Hustler, will ask Congress for a $5 billion bailout, according to TMZ.

Why does the porn industry need a bailout? Because apparently even porn is getting smacked by the recession.

XXX DVD sales have taken a hit - about a 22% hit, according the TMZ.

"With all this economic misery and people losing all that money, sex is the farthest thing from their mind," Flynt is quoted as saying on TMZ. "It's time for Congress to rejuvenate the sexual appetite of America."

Francis thinks that the porn industry deserves a bailout just like the auto and financial industries got, and he said he'll go to DC to get it, according to TMZ.

"Congress seems willing to help shore up our nation's most important businesses; we feel we deserve the same consideration," Francis is quoted as saying on TMZ.

Is the porn industry really experiencing a severe downturn? It depends on who you ask.

Francis Koenig's fund AdultVest, which invests in porn-related assets, was up 50% in 2008, according to Tom Johansmeyer's article in next month's Atlantic (as reported by The Huffington Post). But video sales are down.

"The industry's not going anywhere," Koenig says. "You've got 6 billion people on the planet," he laughs, "and they're all horny."

The porn industry generated about $12 billion in 2007, according to the Atlantic article.

Title: Re: Meltdown
Post by: BachQ on January 07, 2009, 08:40:22 AM

Quote from: ezodisy on January 07, 2009, 04:03:16 AM
U.S. Democratic lawmakers on Tuesday reintroduced legislation to change bankruptcy laws to allow homeowners to shrink their mortgage debts on primary residences, a measure fiercely opposed by the banking industry. (http://www.easybourse.com/bourse-actualite/marches/us-democrats-reintroduce-legislation-to-change-591588)

Yeah, the banking lobby vigorously opposed that in 2007. However, times have changed, and now everyone hates bankers, so this legislation should sail through Congress (provided that Obama gives it a green light).

Title: Re: Meltdown
Post by: ezodisy on January 07, 2009, 10:27:50 AM

Quote from: ezodisy on January 06, 2009, 04:58:34 AM
How dare they. Well the Russians will not be in any way endorsed by me to carry on their petulant behaviour so I am selling at 50. I hope it tanks to $5 :P

ha ha ha get stuffed Putin, under $43 now and tanking.

BARF all over the gold chart. First is one I plotted before it happened, showing what would happen. Second is underway. See you at $400.

Title: Re: Meltdown
Post by: ezodisy on January 07, 2009, 02:41:30 PM

http://financialtruth0.blogspot.com/

Faber on Bloomberg from 7 Jan setting the public straight about who's to blame

Title: Re: Meltdown
Post by: BachQ on January 07, 2009, 06:59:29 PM

Quote from: ezodisy on January 07, 2009, 08:02:05 AM
bloody great interview with Mish and Michael Hampton on commod watch covering everything from deflation to the environment to personal savings and beyond

http://commoditywatch.podbean.com/

Nice. The interview covered a lot of ground. I liked Mish's take on deflation (which, by definition, includes the contraction of credit/debt) and deleveraging (which he sees persisting for another 6 months into 2009).

Here's a permanent link to the interview:

http://commoditywatch.podbean.com/2009/01/07/2009-mish-and-mike-give-their-views/

You gotta love the way they trashed Dubya's moronic policies .....

Title: Re: Meltdown
Post by: ezodisy on January 08, 2009, 04:41:21 AM

speaking of Dubya, the BBC's collection of Bushisms: http://news.bbc.co.uk/1/hi/world/americas/7809160.stm

last one's a beauty

Title: Re: Meltdown
Post by: BachQ on January 08, 2009, 08:26:44 AM

Quote from: ezodisy on January 08, 2009, 04:41:21 AM
speaking of Dubya, the BBC's collection of Bushisms: http://news.bbc.co.uk/1/hi/world/americas/7809160.stm

last one's a beauty

:D :D

Hilarious ...

Title: Re: Meltdown
Post by: BachQ on January 08, 2009, 08:27:20 AM

Senate Majority Leader Harry Reid: "I really do believe President Bush is the worst president we've ever had." (http://politicalticker.blogs.cnn.com/2009/01/04/leading-democrat-bush-the-worst-president-weve-ever-had/)

Title: Re: Meltdown
Post by: BachQ on January 08, 2009, 08:30:15 AM

Quote from: ezodisy on January 07, 2009, 10:27:50 AM
ha ha ha get stuffed Putin, under $43 now and tanking.

Oil just dipped below $41/bbl! (NYMEX WTIC).

(http://images.newsquest.co.uk/image.php?id=743276&type=full)

Title: Re: Meltdown
Post by: BachQ on January 08, 2009, 09:44:17 AM

RT News (07 Jan 2009): Peter Schiff is highly doomerish on America's economy & Obama's economic stimulus (http://uk.youtube.com/watch?v=djgH9wA-JSU)

http://uk.youtube.com/v/djgH9wA-JSU

DOLLAR DOOM !

Title: Re: Meltdown
Post by: ezodisy on January 08, 2009, 10:18:00 AM

I don't know if anyone wants to listen to Paul Craig Roberts ("was Assistant Secretary of the Treasury in the Reagan administration"), but he questions whether there will be a recovery at all, which I have to say sounds a lot more sensible than all thosee economists on Bloomberg now predicting recovery in the second half of '09

Will There be a Recovery? (http://www.counterpunch.org/roberts01052009.html)

Title: Re: Meltdown
Post by: ezodisy on January 09, 2009, 01:51:09 AM

oh dear

"Paulson said he had to make it attractive to banks, which is code for 'I'm going to give money away,'" said Joseph Stiglitz, who won a Nobel Prize in 2001 for his work on the economic value of information.

"The worst aspect of this is that they were designed not to do what they were supposed to do," he said in a telephone interview from Paris Jan. 7. "In many ways, it's not only a giveaway, but a giveaway that was designed not to work."

Stiglitz said finance professionals at Treasury possessed expertise on warrant pricing that members of Congress didn't. As a result, Paulson gave lip service to the lawmakers' intent on TARP without gaining much value for taxpayers, said Stiglitz, a Columbia University professor who described the pricing mechanism as "a gimmick to make sure that they were giving away something worth nothing."

"If Paulson was still an employee of Goldman Sachs and he'd done this deal, he would have been fired," he said.

Paulson declined to comment, McLaughlin said. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aAvhtiFdLyaQ&refer=home)

Title: Re: Meltdown
Post by: BachQ on January 09, 2009, 03:06:43 AM

Quote from: ezodisy on January 09, 2009, 01:51:09 AM
oh dear

"Paulson said he had to make it attractive to banks, which is code for 'I'm going to give money away'", said Joseph Stiglitz, who won a Nobel Prize in 2001 for his work on the economic value of information.

"The worst aspect of this is that they were designed not to do what they were supposed to do," he said in a telephone interview from Paris Jan. 7. "In many ways, it's not only a giveaway, but a giveaway that was designed not to work."
Stiglitz said finance professionals at Treasury possessed expertise on warrant pricing that members of Congress didn't. As a result, Paulson gave lip service to the lawmakers' intent on TARP without gaining much value for taxpayers, said Stiglitz, a Columbia University professor who described the pricing mechanism as "a gimmick to make sure that they were giving away something worth nothing."

"If Paulson was still an employee of Goldman Sachs and he'd done this deal, he would have been fired," he said.

Paulson declined to comment, McLaughlin said. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aAvhtiFdLyaQ&refer=home)

No surprises there.

(http://www.oftwominds.com/photos08/paulson-and-devil.jpg)

QuoteAs a result, Paulson gave lip service to the lawmakers' intent on TARP without gaining much value for taxpayers, said Stiglitz, a Columbia University professor who described the pricing mechanism as "a gimmick to make sure that they were giving away something worth nothing."

It's called FRAUD. Hanky Panky Paulson = Fraudster

QuotePaulson declined to comment,

LOL :D

Title: Re: Meltdown
Post by: BachQ on January 09, 2009, 03:09:21 AM

Meanwhile, a bipartisan congressional oversight panel led by Harvard Law School professor Elizabeth Warren has concluded that there were significant gaps in the Treasury Dept's transparency, oversight and accountability with respect to TARP. What a shocker! Who would have guessed!

http://www.reuters.com/article/newsOne/idUSTRE50818T20090109

Paulson declined to comment on the Reuters article.

(http://www.buckfush.com/images/George_Bush_Treasurer_Hank_Paulson.jpg)

Title: Re: Meltdown
Post by: BachQ on January 09, 2009, 06:30:34 AM

Will Gordon Brown become UK's "Social Landlord" ?

http://www.bloomberg.com/apps/news?pid=20601102&sid=aGC7OOyZWXW0&refer=uk

Title: Re: Meltdown
Post by: BachQ on January 09, 2009, 10:20:04 AM

Friday: oil < $40/bbl 8)

Title: Re: Meltdown
Post by: ezodisy on January 10, 2009, 05:56:56 AM

Quote from: Dm on January 09, 2009, 03:06:43 AM
No surprises there.

(http://www.oftwominds.com/photos08/paulson-and-devil.jpg)

It's called FRAUD. Hanky Panky Paulson = Fraudster

LOL :D

haha stop making me laugh, it really shouldn't be funny! :D

Quote from: Dm on January 09, 2009, 10:20:04 AM
Friday: oil < $40/bbl 8)

Hmm. You know we've got the commodity index rebalancing upon us now which could result in some large moves, particularly in gold which is being shot down by 3% (oil up by 4%). Ironically this is set to happen just as gold is at a critical resistance level. It's getting quite volatile up there, weekly MACD is just below the 0 waterline and I still favour a big fall of 10-15% this week and this announcement can only help I'd guess.

http://ftalphaville.ft.com/blog/2009/01/05/50769/beware-commodity-index-rebalancing-ahead/

Those boys are crooked as sin. Short-term it may work but in the long run gold's going beyond $5000 baby.

However here's a short piece from RGE Monitor in which the writer expects the rebalancing ploy in gold to fail:

http://www.rgemonitor.com/globalmacro-monitor/255006/here_comes_the_commodity_index_rebalancing

And yet another contrarian view that gold sentiment is too high at present for further short-term profitability:

http://www.marketwatch.com/news/story/gold-timers-more-bullish-theyve/story.aspx?guid={385CB7CF-0F71-4BE2-936C-246A12E2F4F4}&dist=msr_7

Title: Re: Meltdown
Post by: BachQ on January 10, 2009, 09:00:53 AM

Quote from: ezodisy on January 08, 2009, 10:18:00 AM
I don't know if anyone wants to listen to Paul Craig Roberts ("was Assistant Secretary of the Treasury in the Reagan administration"), but he questions whether there will be a recovery at all, which I have to say sounds a lot more sensible than all thosee economists on Bloomberg now predicting recovery in the second half of '09

Will There be a Recovery? (http://www.counterpunch.org/roberts01052009.html)

It is true that the US economy has lost its "real basis," and that it will take a miracle for this "hollow shell" of an economy to recover. But let's assume that any recovery will be shallow and short-lived (if there is any recovery at all): won't that same fate befall all other nations? Given that most first-world nations are built on a house-of-cards financial system that is collapsing into quicksand, isn't it reasonable to assume that they will fail along with the US? Many European nations are leveraged to an even greater extent than the US.

(http://www.crystalinks.com/housecardsfall.jpg)

There is no denying that the US economy is deeply and fundamentally troubled, perhaps beyond repair. But even a one-eyed person is king in a land of the blind. Given that all (most) other nations will be dragged into the quagmire along with the US, it's probable that the US will remain the world's largest economy even after a massive systemic collapse. If not, who will replace the US? It's true that the US is in a particularly dire situation thanks to trillions wasted in Dubya's and Cheney's Iraq debacle ... but one can be hopeful that Obama will minimize the longterm adverse effects of this Dubya-catalyzed catastrophe. Unfortunately, Obama is already on the wrong track (see Peter Schiff interview), and there is little cause for optimism.

This map shows the USA with its states replaced by countries with similar GDP (note, e.g., that Russia has similar GDP to NY state; and Australia's GDP is comparable to Florida's).

(http://i42.tinypic.com/qxou4g.jpg)

A question that we don't have an answer for is: will there be any countries that emerge from this global meltdown largely intact (or better off)? China is reeling, and may be headed for a fast crash. Russia is Russia. And even Dubai is in meltdown!

Title: Re: Meltdown
Post by: BachQ on January 10, 2009, 09:04:55 AM

Time Magazine: The Great California Fiscal Earthquake (08 Jan 2009) ... "The list of cuts and shortfalls is almost apocalyptic. According to the UCLA Anderson Forecast, thousands of lost jobs in the public and private sectors will cause California's unemployment rate to leap to 8.5% by the end of 2009 (it was 6.5% in October 2008). If the state runs out of cash by mid-February, as has been predicted, hundreds of state vendors, such as electrical-supply wholesalers, food-service companies and building- and grounds-maintenance firms, will be sent IOUs from the state government. Deductions for each dependent may drop from $309 to $103 on Californians' 2009 income tax forms. And, by the way, don't count on a tax refund showing up soon after you file in April — one of those IOUs may find its way to your mailbox instead, explaining that the refund may be delayed."
(http://www.time.com/time/nation/article/0,8599,1870299,00.html?ref=patrick.net)

Title: Re: Meltdown
Post by: BachQ on January 10, 2009, 09:19:53 AM

New York Times facing bankruptcy?
(http://www.theatlantic.com/doc/200901/new-york-times)

Title: Re: Meltdown
Post by: ezodisy on January 10, 2009, 03:55:24 PM

"Great Britain does not meet the entry criteria for the euro," said Lorenzo Bini Smaghi, the ECB's board member in charge of international affairs. (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4161945/ECB-deems-Britain-unworthy-of-euro.html)

oh this is rich, coming from a man whose country leapt into the Euro only after the entry requirements were dropped. Hopefully we never get to join their little party as the last thing I want to see is this country lose autonomy and go headlong into a doomed currency. I wonder what Lorenzo will say when Germany starts to wobble and the EU loses its life support of the UK consumer. Long live the pound baby, the next best thing to gold and the swiss franc. and oil 8)

Title: Re: Meltdown
Post by: BachQ on January 11, 2009, 09:09:21 AM

Quote from: ezodisy on January 10, 2009, 03:55:24 PM
"Great Britain does not meet the entry criteria for the euro," said Lorenzo Bini Smaghi, the ECB's board member in charge of international affairs. (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4161945/ECB-deems-Britain-unworthy-of-euro.html)

Ambrose Evans-Pritchard:

QuoteIf anything, Mr Bini Smaghi may have been too kind to Britain. The Treasury expects the deficit to reach £118bn in the 2009 tax year - almost 8pc of GDP - but there are now fears that this will rise even higher as tax revenues collapse. Some analysts have begun to warn that Britain will soon face a deficit of 10pc, the sort of catastrophic levels seen in Latin America in the 1980s.

Title: Re: Meltdown
Post by: BachQ on January 11, 2009, 09:12:59 AM

Quote from: ezodisy on January 10, 2009, 03:55:24 PM
I wonder what Lorenzo will say when Germany starts to wobble and the EU loses its life support of the UK consumer.

Indeed. Lorenzo should take notice of the significantly deteriorating condition of Eurozone member countries. To mention just three:

GERMANY = (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4177664/Europes-economy-contracts-at-rates-not-seen-since-1930s.html)German exports and industrial orders have both plunged at the steepest rate since modern records began ... "Industry is in free-fall," said Dirk Schumacher, from Goldman Sachs. Germany's industrial orders have plummeted 27pc year-on-year, heralding a drastic economic contraction this year. ...

SPAIN = (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4177664/Europes-economy-contracts-at-rates-not-seen-since-1930s.html)"Spain's unemployment has surged above three million to 13.4%, capping one of the most disastrous days for Europe's economy since the Second World War." Spain also suffers from a massive real estate bubble.

FRANCE = (http://www.marketwatch.com/news/story/bloodletting-continues-european-manufacturers/story.aspx?guid=%7B41729FD4-9D76-4D94-AFAD-998964A45950%7D&dist=msr_6) 4th Quarter GDP is projected to fall between 1% to 1.8%; Nov. industrial production fell 2.4% and October industrial production was revised downward for a 3.7% monthly decline ; Nov. manufacturing output dropped 3.1%.

Title: Re: Meltdown
Post by: BachQ on January 11, 2009, 10:36:50 AM

Another reason why gold will skyrocket (Peter Schiff: bond market bubble = giant ponzi scheme)

http://uk.youtube.com/v/ZNQ4lP6vvB8&feature=related (BNN Canada; 5.17 minutes; 07 Jan 2009)

Title: Re: Meltdown
Post by: Bu on January 11, 2009, 11:53:40 AM

Quote from: Dm on January 10, 2009, 09:04:55 AM
Time Magazine: The Great California Fiscal Earthquake (08 Jan 2009) ... "The list of cuts and shortfalls is almost apocalyptic. According to the UCLA Anderson Forecast, thousands of lost jobs in the public and private sectors will cause California's unemployment rate to leap to 8.5% by the end of 2009 (it was 6.5% in October 2008). If the state runs out of cash by mid-February, as has been predicted, hundreds of state vendors, such as electrical-supply wholesalers, food-service companies and building- and grounds-maintenance firms, will be sent IOUs from the state government. Deductions for each dependent may drop from $309 to $103 on Californians' 2009 income tax forms. And, by the way, don't count on a tax refund showing up soon after you file in April — one of those IOUs may find its way to your mailbox instead, explaining that the refund may be delayed."

(http://www.time.com/time/nation/article/0,8599,1870299,00.html?ref=patrick.net)

You're a bad news bear, Dm..............this really ruins my day.

Title: Re: Meltdown
Post by: ezodisy on January 11, 2009, 12:34:08 PM

Quote from: Dm on January 11, 2009, 10:36:50 AM
Another reason why gold will skyrocket

this is a few months old but worth a read

GOLD: Not the "Safe Haven" You Think It Is (http://www.elliottwave.com/freeupdates/archives/2008/11/17/GOLD-Not-the--Safe-Haven--You-Think-It-Is-.aspx)

just to keep an open mind.

and: "07 January 2009 UAE: gold sales in Dubai fell 15 per cent last month from a year earlier as higher prices for the metal and the slowing economy deterred buyers, the managing director of the Dubai gold and Jewellery Group said."

mate of mine sent me all that, very good stuff to know. Hopefully it tanks this week so we can all load up under $500. Very nice US/country map by the way

Title: Re: Meltdown
Post by: Bu on January 11, 2009, 01:12:14 PM

QuoteIn Bob's own words: "All huge gains in gold have come while the economy was expanding... The idea that gold reliably rises during recessions and depressions is wrong. In fact, like most such passionately accepted lore, it's backwards."

Fascinating, and goes against everything I have read/heard. I was about to buy Ron Paul's A Case for Gold (published back in the early 80's, but I've heard its been updated and is still relevant) and am wondering now if it would be to able answer any objections brought up in this article.

Title: Re: Meltdown
Post by: ezodisy on January 12, 2009, 12:19:40 AM

yes well I haven't read that one yet. I'm sure it'll still be worth it.

Two things to observe IMO. One, from the article:

"unless you count the Great Depression era, when the government fixed the price of bullion as all other asset classes were plunging in value."

and two, from the news:

that the Gulf Cooperation Council plans by 2010 to have created a unified currency most likely tied to gold and gulf oil reserves.

Some reading on the latter:

Gulf Cooperation Council to create new currency (http://caps.fool.com/blogs/viewpost.aspx?bpid=125230&t=01000785550515854591)

Gulf takes wrong currency path (http://www.atimes.com/atimes/Middle_East/KA06Ak02.html)

Title: Re: Meltdown
Post by: ezodisy on January 12, 2009, 02:20:08 AM

£3-an-hour sweatshop in UK 'supplied Primark' (http://www.thisismoney.co.uk/news/article.html?in_article_id=465209&in_page_id=2)

Title: Re: Meltdown
Post by: ezodisy on January 12, 2009, 03:31:11 AM

Hugh Hendry video. doom to the euro and no money sitting on the sidelines to come in

http://www.cnbc.com/id/28616631

and on oil

http://www.cnbc.com/id/15840232?video=994375164

Title: Re: Meltdown
Post by: BachQ on January 12, 2009, 06:43:00 AM

Quote from: ezodisy on January 12, 2009, 03:31:11 AM
Hugh Hendry video. doom to the euro and no money sitting on the sidelines to come in

http://www.cnbc.com/id/28616631

Yes, the plight of the PIIGS amid this global recession may cause the euro to splinter in favor of a more flexible system ..... but when?

Good interview, btw.

Title: Re: Meltdown
Post by: BachQ on January 12, 2009, 07:03:27 AM

Monday 10:15 AM E.S.T.: Oil < $38/bbl 8)

Quote from: ezodisy on January 12, 2009, 03:31:11 AM
and on oil

http://www.cnbc.com/id/15840232?video=994375164

Hendry notes that oil is in contango, with future prices exceeding $60/bbl several years forward. However, we are entering uncharted territory amid a deflationary depression on the one hand (exerting downward price pressure), versus peak oil; OPEC cutbacks; and disinvestment in oil extraction on the other hand (exerting upward pressure).

For the winter/spring of 2009, the deflationary forces are showing signs of being far more potent than the countervailing forces of peak oil, OPEC, and disinvestment. Oil may fall significantly lower before these countervailing forces overcome the deflationary forces. But as Hendry so tactfully notes, nobody really knows what's going to happen, and any strategist who claims to know is either a liar or a fool (or both). :P

(http://www.wtrg.com/daily/clfclose.gif)

Title: Re: Meltdown
Post by: BachQ on January 12, 2009, 07:05:26 AM

(http://img.timeinc.net//time/cartoons/20090109/cartoons_07.jpg)

Title: Re: Meltdown
Post by: ezodisy on January 12, 2009, 12:07:17 PM

Gold futures for February delivery fell $34, or 4 percent, to $821 an ounce on the Comex division of the New York Mercantile Exchange, the biggest drop since Dec. 1 for a most- active contract. Earlier, the metal touched $817.10, the lowest since Dec. 12. (http://www.bloomberg.com/apps/news?pid=20601081&sid=akil0L3PbNwU&refer=australia)

(http://i47.photobucket.com/albums/f174/efabela/Banana.gif)

Quote from: Dm on January 12, 2009, 07:05:26 AM
(http://img.timeinc.net//time/cartoons/20090109/cartoons_07.jpg)

lol!

Title: Re: Meltdown
Post by: ezodisy on January 12, 2009, 01:46:41 PM

countdown to the next bailout

Ministers are considering plans to guarantee up to £20bn of loans to small businesses to help them survive the downturn, the BBC has learnt. (http://news.bbc.co.uk/1/hi/uk_politics/7825460.stm)

and if the downturn lasts 5 years? These boys are projecting another 12 months or something ridiculous and then we'll be back in positive territory and spending with a blindfold on again. Someone needs to sit them down and remind them that nothing's permanent except death, taxes, and the sex appeal of eastern European women. As it is this lack of foresight is going to cripple the economy for a long time I think

Title: Re: Meltdown
Post by: BachQ on January 13, 2009, 03:16:46 AM

Quote from: ezodisy on January 10, 2009, 03:55:24 PM
"Great Britain does not meet the entry criteria for the euro," said Lorenzo Bini Smaghi, the ECB's board member in charge of international affairs. (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4161945/ECB-deems-Britain-unworthy-of-euro.html)
Quote from: ezodisy on January 10, 2009, 03:55:24 PM

Ambrose Evans-Pritchard:
QuoteIf anything, Mr Bini Smaghi may have been too kind to Britain. The UK Treasury expects the deficit to reach £118bn in the 2009 tax year - almost 8pc of GDP - but there are now fears that this will rise even higher as tax revenues collapse. Some analysts have begun to warn that Britain will soon face a deficit of 10pc of GDP, the sort of catastrophic levels seen in Latin America in the 1980s.

Perhaps both the UK and the US will join the Eight Percent Club, as last week, the Congressional Budget Office released its "Budget and Economic Outlook: Fiscal Years 2009 to 2019" (http://www.cbo.gov/doc.cfm?index=9958) which includes deficit projections indicating:

-- that the US budget deficit will skyrocket from $455 billion (2008) to $1.2 trillion in 2009;
-- that the deficit will represent 8.3% of GDP (the highest percentage since WW II);
-- that publicly held debt will soar from 41% of GDP in 2008 to 54% of GDP in 2010. The CBO has previously stated that this percentage could theoretically reach 400% by 2050.

(http://www.pgpf.org/images/us-federal-debt-chart.png)

However, the 2009 projections include neither the cost of Obama's stimulus package (roughly $700B - $1T and growing), nor the cost of entitlements (e.g., social security & medicare). :'(

The Economist (http://www.economist.com/world/unitedstates/displayStory.cfm?story_id=12903453&source=hptextfeature)

Back in 2005, the situation was already quite dire:

(http://www.gao.gov/cghome/nat408/img7.jpg)

(http://www.gao.gov/cghome/nat408/img12.jpg)

Q: How much more of this PURE IDIOCY will the American people take?
A: This will continue until the dollar collapses, and will likely continue even beyond that point.

Title: Re: Meltdown
Post by: BachQ on January 13, 2009, 03:20:27 AM

Quote from: ezodisy on January 12, 2009, 01:46:41 PM
As it is this lack of foresight is going to cripple the economy for a long time I think

"Foresight" and "government" are mutually exclusive concepts. >:D

Title: Re: Meltdown
Post by: ezodisy on January 13, 2009, 03:26:39 AM

well we can have a race between the UK screwing itself and the Euro(zone) imploding

http://www.ft.com/cms/s/0/9f80f414-e0da-11dd-b0e8-000077b07658.html?nclick_check=1

:)

Title: Re: Meltdown
Post by: BachQ on January 13, 2009, 03:27:32 AM

Spain might be the first major European power to fold:

WSJ: S&P puts Spain on CreditWatch negative, may lower Spain's AAA rating (http://www.marketwatch.com/news/story/sp-puts-spain-creditwatch-negative/story.aspx?guid=%7BA0D30CA9-9482-42DE-B499-53846508FB1D%7D&dist=msr_2)

FT Alphaville: So begin the (serious) sovereign downgrades...?

(http://ftalphaville.ft.com/blog/2009/01/12/51037/so-begin-the-serious-sovereign-downgrades/)

Title: Re: Meltdown
Post by: BachQ on January 13, 2009, 03:34:40 AM

Quote from: ezodisy on January 13, 2009, 03:26:39 AM
well we can have a race between the UK screwing itself and the Euro(zone) imploding

http://www.ft.com/cms/s/0/9f80f414-e0da-11dd-b0e8-000077b07658.html?nclick_check=1

:)

Current Eurozone implosion watch list (to be updated from time to time :D):

-- Greece
-- Ireland
-- Spain

Title: Re: Meltdown
Post by: bwv 1080 on January 13, 2009, 06:21:24 AM

Good paper at:

http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf (http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf)

QuoteBroadly speaking, financial crises are protracted affairs. More often than not, the
aftermath of severe financial crises share three characteristics. First, asset market
collapses are deep and prolonged. Real housing price declines average 35 percent stretched out over six years
while equity price collapses average 55 percent over a
downturn of about three and a half years. Second, the aftermath of banking crises is
associated with profound declines in output and employment. The unemployment rate
rises an average of 7 percentage points over the down phase of the cycle, which lasts on
average over four years. Output falls (from peak to trough) an average of over 9 percent,
although the duration of the downturn, averaging roughly two years, is considerably
shorter than for unemployment. Third, the real value of government debt tends to
explode, rising an average of 86 percent in the major post–World War II episodes.
Interestingly, the main cause of debt explosions is not the widely cited costs of bailing
out and recapitalizing the banking system. Admittedly, bailout costs are difficult to
measure, and there is considerable divergence among estimates from competing studies.
But even upper-bound estimates pale next to actual measured rises in public debt. In
fact, the big drivers of debt increases are the inevitable collapse in tax revenues that
governments suffer in the wake of deep and prolonged output contractions, as well as
often ambitious countercyclical fiscal policies aimed at mitigating the downturn.

Title: Re: Meltdown
Post by: BachQ on January 13, 2009, 10:02:13 AM

Quote from: bwv 1080 on January 13, 2009, 06:21:24 AM
Good paper at:

http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf (http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf)

The US is already well on its way to an 86% increase in its cumulative real public debt. But it seems quite unlikely that GDP will drop by 9.3% over 2 years, at least not using "official" data. If it drops even half that: Yikes. With the 2007 US housing price decline of 28% already more than twice that of the Great Depression, it's frightening to think that the housing crisis could last a total of six-years.

(http://www.safehaven.com/images/mauldin/12204_a.png) (http://www.safehaven.com/article-12204.htm)

Title: Re: Meltdown
Post by: BachQ on January 13, 2009, 10:12:31 AM

In his weekly radio/video address last Saturday (3 Jan 09), Obama unveiled his "American Recovery and Reinvestment Plan" (http://money.cnn.com/2009/01/03/news/economy/obama_stimulus/index.htm), under which Obama intends to create 600,000 new government jobs by:

* doubling renewable energy production and making public buildings more energy efficient;
* rebuilding infrastructures for roads, bridges and schools;
* computerizing the health care system
* modernizing classrooms, labs and libraries; and
* increasing tax breaks to American workers.

Meanwhile, the details of Obama's $1T stimulus package remain controversial.
(http://www.ft.com/cms/s/0/18de7b9c-da96-11dd-8c28-000077b07658.html?nclick_check=1)

Title: Re: Meltdown
Post by: bwv 1080 on January 13, 2009, 10:47:15 AM

Quote from: Dm on January 13, 2009, 10:02:13 AM
The US is already well on its way to an 86% increase in its cumulative real public debt. But it seems quite unlikely that GDP will drop by 9.3% over 2 years, at least not using "official" data. If it drops even half that: Yikes. With the 2007 US housing price decline of 28% already more than twice that of the Great Depression, it's frightening to think that the housing crisis could last a total of six-years.

I know people in Houston (which had a hugh real estate bust in the 80s) who bought houses in the early 80s whose house values got back to their original purchase prices (in nominal terms) in this decade. Take your average 2500 sq ft $500,000 house sold at the height, price it at a replacement cost of $80/ft (generous) and throw in another $50K for the lot (again generous) and you have a 50% decline

Title: Re: Meltdown
Post by: ezodisy on January 13, 2009, 11:24:01 PM

Shipping rates hit zero as trade sinks (http://www.telegraph.co.uk/finance/4229198/Shipping-rates-hit-zero-as-trade-sinks.html)

Title: Re: Meltdown
Post by: ezodisy on January 14, 2009, 12:38:58 AM

just introduced to the BBC archive online. They have a series called City Season about old financial life pre-1970

http://www.bbc.co.uk/archive/menandmoney/

Title: Re: Meltdown
Post by: BachQ on January 14, 2009, 04:07:01 AM

Quote from: bwv 1080 on January 13, 2009, 06:21:24 AM
Good paper at:
http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf (http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf)

QuoteThe unemployment rate rises an average of 7 percentage points over the down phase of the cycle, which lasts on average over four years.

(http://images.moneyandmarkets.com/1217/unemployment.gif)

Martin D. Weiss, Ph.D.: Unemployment is snowballing. Layoffs beget consumer cutbacks, and consumer cutbacks beget more layoffs — a classic vicious cycle that's gaining momentum. (http://www.moneyandmarkets.com/jobs-disaster-emergency-conference-thursday-29219)

Title: Re: Meltdown
Post by: BachQ on January 14, 2009, 04:09:53 AM

Quote from: ezodisy on January 13, 2009, 11:24:01 PM
Shipping rates hit zero as trade sinks (http://www.telegraph.co.uk/finance/4229198/Shipping-rates-hit-zero-as-trade-sinks.html)

Ezodisy, that is extremely scary sh!t. :o "This is no regular cycle slowdown, but a complete collapse in foreign demand," said Lindsay Coburn, ING's trade consultant. Exports have fallen:

-- 30% drop in Korea
-- 42% drop in Taiwan
-- 27% drop in Japan

QuoteThe Baltic Dry Index (BDI) which measures freight rates for bulk commodities such as iron ore and grains crashed several months ago, falling 96pc. The BDI – though a useful early-warning index – is highly volatile and exaggerates apparent ups and downs in trade. However, the latest phase of the shipping crisis is different. It has spread to core trade of finished industrial goods, the lifeblood of the world economy. Trade data from Asia's export tigers has been disastrous over recent weeks, reflecting the collapse in US, UK and European markets.

(http://www.dryships.com/images/graph/chart1.jpg)

Title: Re: Meltdown
Post by: BachQ on January 14, 2009, 04:19:53 AM

Quote from: bwv 1080 on January 13, 2009, 06:21:24 AM
Good paper at:
http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf (http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf)
QuoteReal housing price declines average 35 percent stretched out over six years

The chart below convinces me that the bottom for housing prices remains several years away. With tons of prime, Alt-A, "option adjustable rate," and other adjustable rate mortgages (ARM's) resetting in 2010-2011 (the total number of ARM's is even greater than the total number of subprime mortgages), there will be a second wave of foreclosures, and a second wave of collapsing housing prices. Not to mention that defaults in commercial real estate are just beginning to gain momentum. The wild card in this is future government action, such as allowing bankruptcy judges to modify the mortgage terms on a case-by-case basis.

(http://static.seekingalpha.com/uploads/2009/1/8/saupload_jl.jpg) (http://seekingalpha.com/article/113843-housing-where-is-the-bottom?ref=patrick.net)

What a mess.

Quote from: bwv 1080 on January 13, 2009, 10:47:15 AM
I know people in Houston (which had a hugh real estate bust in the 80s) who bought houses in the early 80s whose house values got back to their original purchase prices (in nominal terms) in this decade. Take your average 2500 sq ft $500,000 house sold at the height, price it at a replacement cost of $80/ft (generous) and throw in another $50K for the lot (again generous) and you have a 50% decline

A 50% decline seems entirely plausible, if not likely.

Title: Re: Meltdown
Post by: ezodisy on January 14, 2009, 05:37:45 AM

One thing that annoys me is the often said assumption, "US led the world into recession, US will lead it out". There is really no basis to that. Other countries will lag behind, the US might look better off for some time as I think the US dollar might continue to strengthen against £ and Euro. But this is a long process, not an 18 month thing, and it might take a good deal of time before the US dollar collapses. In any case I don't think the US will lead anyone out of anything as there's a lot more pain to come and more bubbles to burst and more money to print and more things to crumble (I mean for the US). If anyone wants to back up the idea that the US will lead out then I'd like to hear it because I don't see it happening. If this turns into a L-shaped recession as Roubini thinks it may then there won't be anyone leading anyone else out of anything

Title: Re: Meltdown
Post by: BachQ on January 14, 2009, 06:49:25 AM

Oil < $37 :D

Title: Re: Meltdown
Post by: ezodisy on January 14, 2009, 06:57:06 AM

yeah but that doesn't help me as I closed out ;) Question is will we see price rise to meet the end-of-year price contracts around $60 or the later contracts come down to meet us? Or is that even a question at all? Range 20-60 sounds okay 0:)

How about gold? It's a gonna tank baby

Title: Re: Meltdown
Post by: BachQ on January 14, 2009, 07:06:04 AM

Oil < $36/bbl 8) 8)
Gold < $810

Quote from: ezodisy on January 14, 2009, 06:57:06 AM
yeah but that doesn't help me as I closed out ;) Question is will we see price rise to meet the end-of-year price contracts around $60 or the later contracts come down to meet us? Or is that even a question at all? Range 20-60 sounds okay 0:)

How about gold? It's a gonna tank baby

Oil will fall to $15/bbl this spring, and close 2009 at $66/bbl.

Gold will fall to $450, baby!

Title: Re: Meltdown
Post by: BachQ on January 14, 2009, 07:13:39 AM

Quote from: ezodisy on January 14, 2009, 05:37:45 AM
One thing that annoys me is the often said assumption, "US led the world into recession, US will lead it out".

Hogwash.

Quote from: ezodisy on January 14, 2009, 05:37:45 AM
In any case I don't think the US will lead anyone out of anything as there's a lot more pain to come and more bubbles to burst and more money to print and more things to crumble (I mean for the US).

I agree. Indeed, in many respects, the USA's consumer-driven house-of-cards economy is among the most FRAGILE economies right now, and even after pumping trillions into the credit markets, and bailing out countless companies, it's still plunging into the abyss. Even if the US somehow manages to squeeze out a shallow, short-lived recovery, it will remain consumer-oriented (rather than manufacturing based), and will remain saddled with a gigantic anchor of debt, causing it to fall back into the abyss.

(http://robynslingsby.files.wordpress.com/2008/01/ball-n-chain-guy_rubberball.jpg)

Not to mention that an economy cannot grow without energy; and once any economy begins to pick up steam, it will hit the wall of energy constraints head-on, causing the economy to tumble back down the hill.

(http://www.indorphyn.com/wp-content/uploads/2007/01/Sisyphus.jpg)

I do not see the US pulling anyone out of a recession. If anything, the US will drag down other economies, with its trillions in toxic assets bundled into derivatives (and fraudulently sold to foreigners with phony AAA ratings), and its trillions in treasury bonds ballooning into a bubble on the brink of bursting.

Title: Re: Meltdown
Post by: bwv 1080 on January 14, 2009, 07:36:21 AM

Quote from: Dm on January 14, 2009, 07:13:39 AM

I agree. Indeed, in many respects, the USA's consumer-driven house-of-cards economy is among the most FRAGILE economies right now, and even after pumping trillions into the credit markets, and bailing out countless companies, it's still plunging into the abyss. Even if the US somehow manages to squeeze out a shallow, short-lived recovery, it will remain consumer-oriented (rather than manufacturing based), and will remain saddled with a gigantic anchor of debt, causing it to fall back into the abyss.

...

I do not see the US pulling anyone out of a recession. If anything, the US will drag down other economies, with its trillions in toxic assets bundled into derivatives (and fraudulently sold to foreigners with phony AAA ratings), and its trillions in treasury bonds ballooning into a bubble on the brink of bursting.

The only problem with that levels of consumer & government debt and housing bubbles are if anything worse in most of Europe

Quoteeasier to get insurance against McDonald's defaulting than UK government bonds.

He said 2009 would be "a really bad year" and society was going to suffer.

Public debt has risen to £650bn - 44.2% of UK gross domestic product. Consumer debt is more than £1.4 trillion.

In last month's pre-Budget report, the chancellor announced plans for a £20bn economic stimulus package, which would bring public debt close to 50% of GDP.

http://news.bbc.co.uk/1/hi/uk/7794294.stm (http://news.bbc.co.uk/1/hi/uk/7794294.stm)

(http://balboamediagroup.wordpress.com/files/2008/10/graph31.png)

QuoteThe United Kingdom is an interesting economy in particular because its aggregate consumer debt alone ($2660 US Billion) is roughly equal to the nation's total GDP. In this sense, the UK is just like your friend that spends exactly what they make, or even beyond their means to try and impress his/her friends. This is worse than living month to month – it's like living a month to two months behind! And now, the UK is accumulating new debt at a faster rate than the economy. If the UK were a private citizen, it might be time for him/her to sell off what they can and move to Panama, or declare some type of bankruptcy.

http://www.creditloan.com/blog/americans-debt-to-income-ratio-as-compared-with-other-countries/ (http://www.creditloan.com/blog/americans-debt-to-income-ratio-as-compared-with-other-countries/)

And European bank capital ratios are as bad or worse than Lehman or Bear Stearns was:

(http://www.finfacts.ie/artman/uploads/2/European_banks_sept242008.JPG)

Title: Re: Meltdown
Post by: karlhenning on January 14, 2009, 08:01:24 AM

". . . a qualified success."

"Maybe I'm missing something, but I don't see how it's possible to rescue the banking system without rescuing banks." (http://www.washingtonpost.com/wp-dyn/content/article/2009/01/13/AR2009011303111.html?hpid=topnews)

Title: Re: Meltdown
Post by: BachQ on January 14, 2009, 11:50:15 AM

US Census Bureau: Retail sales collapsed in 2009

(http://img387.imageshack.us/img387/2439/retaildec2008cd1.jpg) (http://www.calculatedriskblog.com/2009/01/retail-sales-collapse-in-december.html)

Retail sales in real terms declined by 11.3% from 2009 vs 2008, representing the largest yearly decline since the Census Bureau began recording sales data.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aNIls_gWQjqk&refer=home

Title: Re: Meltdown
Post by: ezodisy on January 14, 2009, 12:07:23 PM

oh dear the UK is going to get stuffed. But I am not too worried about it. This country always finds a way out and always wins in the end, it'll just take some time (probably we'll be the second to last to get out of recession, just before the Eurozone, or what's left of it 8) ).

Quote from: Dm on January 14, 2009, 07:06:04 AM
Oil < $36/bbl 8) 8)
Gold < $810

Oil will fall to $15/bbl this spring, and close 2009 at $66/bbl.

Gold will fall to $450, baby!

You've really got a way with pictures. That post below with the balls was bloody hilarious (unless you live in the US) >:D 0:)

Oil's gonna have a tough time getting back above $50 -- and below $35 maybe.
Gold today turned $815 from support into resistance. Any day now I'm looking for it to sell off into the $760s and lower.

Some of those graphs are pretty scary when somehow translated into human terms

Title: Re: Meltdown
Post by: BachQ on January 14, 2009, 12:18:22 PM

Quote from: ezodisy on January 14, 2009, 12:07:23 PM
Oil's gonna have a tough time getting back above $50 -- and below $35 maybe.

MarketWatch (12 Jan 2009): Oil in SuperContango ! (http://www.marketwatch.com/news/story/Super-contango-crude-oil-creates/story.aspx?guid=%7B892E024C-A368-4BBB-AAB9-DE341A5A94C9%7D)

Title: Re: Meltdown
Post by: BachQ on January 14, 2009, 12:22:21 PM

Quote from: bwv 1080 on January 14, 2009, 07:36:21 AM
The only problem with that levels of consumer & government debt and housing bubbles are if anything worse in most of Europe

http://news.bbc.co.uk/1/hi/uk/7794294.stm (http://news.bbc.co.uk/1/hi/uk/7794294.stm)

(http://balboamediagroup.wordpress.com/files/2008/10/graph31.png)

http://www.creditloan.com/blog/americans-debt-to-income-ratio-as-compared-with-other-countries/ (http://www.creditloan.com/blog/americans-debt-to-income-ratio-as-compared-with-other-countries/)

And European bank capital ratios are as bad or worse than Lehman or Bear Stearns was:

(http://www.finfacts.ie/artman/uploads/2/European_banks_sept242008.JPG)

Even if the US solves all of its credit/banking woes, and even if all of its asset bubbles are properly purged and set aright, what worries me most is that the US will be hard-pressed to dig itself out of a depression amid a collapsed manufacturing infrastructure which has eroded to a 27-year low, and is getting worse. It's difficult to fathom how the US can lead others out of a depression if the US cannot itself accomplish that feat.

America Has No Means to Recover from a Depression

Dustin Ensinger
OpEdNews
December 8, 2008

(http://www.opednews.com/articles/America-Has-No-Means-to-Re-by-Dustin-Ensinger-081208-723.html)

QuoteSpeaking in front of members of Congress on Tuesday, economist Peter Morici, a professor at the University of Maryland, said the job loss experienced in November "was much worse than was expected ... The threat of a widespread depression is now real and present." *** Unfortunately, during the Great Depression we had the capacity to innovate, manufacture and otherwise create wealth that could drag us out of the hole we were in. Today, we no longer have that capability. We have forfeited that ability through disastrous trade policies that have shipped the majority of America's manufacturing prowess across the border and overseas. Without the capability to manufacture and create wealth, the U.S. will never truly recover. Today we are maintaining our living standards only with imports & through the good graces of our creditors who loan us money. How can our creditors have faith in our credit worthiness when we can only pay them if we can borrow money from someone else to pay them.

Title: Re: Meltdown
Post by: bwv 1080 on January 14, 2009, 12:27:14 PM

Quote from: Dm on January 14, 2009, 11:50:15 AM
US Census Bureau: Retail sales collapsed in 2009

(http://img387.imageshack.us/img387/2439/retaildec2008cd1.jpg) (http://www.calculatedriskblog.com/2009/01/retail-sales-collapse-in-december.html)

Retail sales in real terms declined by 11.3% from 2009 vs 2008, representing the largest yearly decline since the Census Bureau began recording sales data.

http://www.bloomberg.com/apps/news?pid=20601087&sid=aNIls_gWQjqk&refer=home

That decline brings us all the way back to the level of 2005, hardly a return to the dark ages

Title: Re: Meltdown
Post by: bwv 1080 on January 14, 2009, 12:33:12 PM

Quote from: Dm on January 14, 2009, 12:22:21 PM

Dustin Ensinger
OpEdNews
December 8, 2008

Frankly, that is simply bullshit. The US still has the best research University and Venture Capital system in the world. Creative destuction is how you create wealth, not building automobiles which no one needs.

Title: Re: Meltdown
Post by: ezodisy on January 14, 2009, 01:25:13 PM

Quote from: bwv 1080 on January 14, 2009, 12:33:12 PM
The US still has the best research University and Venture Capital system in the world. Creative destuction is how you create wealth, not building automobiles which no one needs.

could you briefly explain to me what you mean by this and what might happen? I don't see where you're coming from here

Title: Re: Meltdown
Post by: bwv 1080 on January 14, 2009, 01:57:00 PM

Quote from: ezodisy on January 14, 2009, 01:25:13 PM
could you briefly explain to me what you mean by this and what might happen? I don't see where you're coming from here

Technology and Entrepeneurship creates wealth, not factories and the US is still a leader in this area. There are a set of technological tools coming into maturity - nanotech, synthetic biology, biotech, materials science that have a wide range of potential applications in energy, healthcare & agriculture (and manufacturing for that matter). For example, what happens when something equivalent to Moore's law occurs with photovoltaic cells, driving the installed, fully amortized cost of solar power to 2 cents / kwh over a period of 20 years? I am not talking about big government, Manhatten-project type science, rather the darwinian process of thousands of research projects resulting in hundreds of VC companies resulting in a few viable and distruptive technologies. Would you rather live somewhere that could make cheaper TV sets than anyone else or a country where this sort of research was being done?

Title: Re: Meltdown
Post by: ezodisy on January 14, 2009, 11:17:07 PM

Quote from: bwv 1080 on January 14, 2009, 01:57:00 PM
Technology and Entrepeneurship creates wealth, not factories and the US is still a leader in this area. There are a set of technological tools coming into maturity - nanotech, synthetic biology, biotech, materials science that have a wide range of potential applications in energy, healthcare & agriculture (and manufacturing for that matter). For example, what happens when something equivalent to Moore's law occurs with photovoltaic cells, driving the installed, fully amortized cost of solar power to 2 cents / kwh over a period of 20 years? I am not talking about big government, Manhatten-project type science, rather the darwinian process of thousands of research projects resulting in hundreds of VC companies resulting in a few viable and distruptive technologies. Would you rather live somewhere that could make cheaper TV sets than anyone else or a country where this sort of research was being done?

Thanks. Not sure about the answer to your first question but the rhetorical second would be easy enough. It would be interesting to see a historical study of the effect of downturns on this sort of technology -- for example how the '70s recession slowed and delayed science & tech. I don't know, perhaps it'll turn out to be the US's chief wealth-creating export -- to China, naturally. :)

Title: Re: Meltdown
Post by: BachQ on January 15, 2009, 03:35:54 AM

Quote from: bwv 1080 on January 14, 2009, 01:57:00 PM
Technology and Entrepeneurship creates wealth, not factories and the US is still a leader in this area. There are a set of technological tools coming into maturity - nanotech, synthetic biology, biotech, materials science that have a wide range of potential applications in energy, healthcare & agriculture (and manufacturing for that matter).

True. The US and Japan lead the world in the procurement of patents, and, presumably, in the development of high-tech intellectual property. However, the US's share of issued patents has declined from 26% in 2000 to 21% in 2006. While it's not clear how much of this R & D is classified as "manufacturing," strictly speaking, your point is extremely important.

What is potentially troubling is the US's declining share of global manufacturing.

(http://www.scdigest.com/images/misc/CHINA_US_MANUFACTURING3.jpg) (http://www.scdigest.com/assets/On_Target/08-08-11-2.php?cid=1847&ctype=content)

According to a study by Global Insight, China's share of global manufacturing is expected to increase from 3% in 1990, to 35% in 2025; while the US share is expected to tumble to roughly 10% by 2025. Of course, most countries are losing ground to China:

(http://myinsight.globalinsight.com/imgs/content/649c58f9-a332-44f7-bb8d-d9ea03721215.jpg) (http://www.globalinsight.com/Perspective/PerspectiveDetail13718.htm)

As of 31 Dec 2008, US manufacturing hasn't been this dismal in 28 years (since 1980), and the manufacturing sector continues to contract at a statistically significant rate, specifically, the manufacturing index was down 3.8% from Nov to Dec 2008, and plunged 18.3% for 2008 (in contrast, U.S. real GDP fell at a 0.3% annual rate in the third quarter of 2008). New manufacturing orders are at the lowest level in 60 years (since 1948), when recordkeeping began. And there's no bottom in sight.

Quote from: bwv 1080 on January 14, 2009, 12:33:12 PM
Creative destuction is how you create wealth, not building automobiles which no one needs.

It's not just manufacturing worthless automobiles. The vast majority of US industries have reported contraction; specifically (in order):

-- Nonmetallic Mineral Products;
-- Wood Products;
-- Fabricated Metal Products;
-- Printing & Related Support Activities;
-- Textile Mills;
-- Plastics & Rubber Products;
-- Paper Products;
-- Transportation Equipment;
-- Machinery;
-- Primary Metals;
-- Electrical Equipment, Appliances & Components;
-- Chemical Products;
-- Computer & Electronic Products;
-- Miscellaneous Manufacturing;
-- Food, Beverage & Tobacco Products; and
-- Furniture & Related Products.

http://www.ism.ws/ISMReport/MfgROB.cfm?navItemNumber=12942

http://www.industryweek.com/ReadArticle.aspx?ArticleID=18125

Title: Re: Meltdown
Post by: ezodisy on January 15, 2009, 03:58:29 AM

you are the master of Gloom & Doom Dm. In fact I just figured out what Dm stands for: Doom-monger :)

Title: Re: Meltdown
Post by: BachQ on January 15, 2009, 04:29:34 AM

Quote from: ezodisy on January 15, 2009, 03:58:29 AM
you are the master of Gloom & Doom Dm. In fact I just figured out what Dm stands for: Doom-monger :)

Well, according to the birth certificate, it's "Doom Meister" ... >:D

Title: Re: Meltdown
Post by: BachQ on January 15, 2009, 04:30:57 AM

Jim Rogers : "Oil Reserves are dropping 7% a year and these drop in reserves will cause serious supply problems in the near future. We're going to see US$200 oil at some point, it may be by 2013. It's a sad fact but the world is running out of known oil. Oil will make a big comeback."

(http://www.bi-me.com/main.php?id=29774&t=1&c=33&cg=4&mset=)

Title: Re: Meltdown
Post by: ezodisy on January 15, 2009, 05:54:06 AM

lol!

Jim Rogers is the best. He may be shamelessly self-promoting his interest in China right now but he doesn't have a short-term interest and will most likely be right in most respects over time.

For the gold bugs, I've spotted an inverted head and shoulders pattern on the weekly chart with the right (left) shoulder in formation. Price should play down to the 740-760 area soon to complete it and I expect the pattern to fail overall--just as all daily inverted H&S patterns on the major indices have over the past year--and new lows in the $600s to follow.

Title: Re: Meltdown
Post by: BachQ on January 15, 2009, 06:08:20 AM

RealtyTrac: US foreclosures soar 81% in 2008

(http://www.reuters.com/article/newsOne/idUSTRE50E1KV20090115)

Quote from: ezodisy on January 15, 2009, 05:54:06 AM
lol!

Jim Rogers is the best. He may be shamelessly self-promoting his interest in China right now but he doesn't have a short-term interest and will most likely be right in most respects over time.

For the gold bugs, I've spotted an inverted head and shoulders pattern on the weekly chart with the right (left) shoulder in formation. Price should play down to the 740-760 area soon to complete it and I expect the pattern to fail overall--just as all daily inverted H&S patterns on the major indices have over the past year--and new lows in the $600s to follow.

Oil is again below $36/bbl (WTIC NYMEX). Gold @ $810

Meanwhile, several brokers are taking advantage of contango by acquiring supertankers for storing cheap oil, including Morgan Stanley, Citigroup, and Royal Dutch Shell Plc. Some 80 million barrels are being stored in supertankers, setting a 20 yr record. Bloomberg (http://www.bloomberg.com/apps/news?pid=20601087&sid=aRo2aV9.jLhI&refer=home)

Title: Re: Meltdown
Post by: BachQ on January 15, 2009, 06:40:32 AM

Guardian (15 Jan 09 Reuters) - Societe Generale said on Thursday that the United States' economy looks likely to enter a depression and China's could implode. "It is becoming clear that the Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression." (http://www.guardian.co.uk/business/feedarticle/8260101)

Title: Re: Meltdown
Post by: Lethevich on January 15, 2009, 06:58:16 AM

Good to see.

The west may have caused this screw-up, but by god we'll bring everybody else down with us ;D

Title: Re: Meltdown
Post by: ezodisy on January 15, 2009, 01:41:18 PM

http://www.allthingsjimrogers.com/2009/01/15/wtfu-is-going-on/

"no, sorry, we won't tell you where your money is going"

Title: Re: Meltdown
Post by: BachQ on January 15, 2009, 03:52:26 PM

Gov. Arnold Schwarzenegger State of the State address (15 Jan 2009)

(part 1) http://uk.youtube.com/v/Qv-MD_KLQ2k

"California, the 8th largest economy in the world, faces insolvency within weeks ... [and] is in a state of emergency."

(part 2) http://uk.youtube.com/v/FCWnqtwgojk

Title: Re: Meltdown
Post by: Lethevich on January 15, 2009, 04:52:48 PM

He...he...he...

"Elect a movie star as governer, it'll be fun!"

Title: Re: Meltdown
Post by: ezodisy on January 16, 2009, 02:03:21 AM

I think we are about to witness Sterling's revenge >:D

And about time too. The pound never dies.

The weekly cable (GBP/USD) chart shows that the 5 and 10 day simple moving averages are trying to cross up for the first time since the cross down and subsequent plummet in August. Also the weekly candle is trying to form a dragonfly doji, and there's been positive divergence on the daily for quite a while now. This could very likely result in a rally of several thousand pips, back to the 170s (currently just under 150). Witness what happened to EUR/USD when the MAs crossed up a few weeks ago (second chart).

(http://i41.tinypic.com/sd1gux.jpg)

(http://i40.tinypic.com/hs50cg.jpg)

Title: Re: Meltdown
Post by: ezodisy on January 16, 2009, 02:32:24 AM

Bank of America Posts First Loss in 17 Years After U.S. Bailout (http://www.bloomberg.com/apps/news?pid=20601087&sid=aBZnwHwKhBkM&refer=home)

[BAC] Bank of America Q4 net loss $1.79B

[BAC] BofA: Merrill Lynch Q4 loss was $15.31B, or $9.62 a share

[BAC] Merrill wrote down $1.92B on loans, $1.13B on real estate

[BAC] Merrill losses include $2.31 goodwill charge

[BAC] Merrill losses included $3.22B monoline write-down

----------------------------------------------------

C] Citi reaches agreement with Treasury, Fed on loss sharing

[C] Citi to split global bank from brokerage, asset mgmt unit

[C] Citi loss sharing program covers $301B of assets

[C] Citi Q4 loss $1.72 vs $1.99 loss

[C] Citi to reorganize into two operating units

[C] Citi took $5.3B value adjustment for derivatives

[C] Citi took $7.8B of revenue marks in securities, banking

[C] Citigroup Q4 loss from continuing ops. $12.14B

[C] Citigroup Q4 net loss $8.29B

Title: Re: Meltdown
Post by: Lethevich on January 16, 2009, 03:47:48 AM

Irish bank set to be nationalised (http://news.bbc.co.uk/1/hi/business/7832203.stm)

They're still falling like ninepins :3

Title: Re: Meltdown
Post by: BachQ on January 16, 2009, 05:58:05 AM

Question: Given a huge national debt and dwindling tax revenues, how can a country quickly and easily raise revenues without raising income taxes?

Answer #1: Legalize drugs, (http://www.cnbc.com/id/28672671) and tax & regulate drugs as appropriate. Reduce state prison population by 20% and federal prison population by 50% (http://stopthedrugwar.org/chronicle/564/US_jail_prison_population_all_time_high_drug_offenders) by legalizing drugs.

Answer #2: Raise gas tax (http://www.nytimes.com/2008/12/28/opinion/28friedman.html?_r=1&ref=opinion)

Title: Re: Meltdown
Post by: BachQ on January 16, 2009, 06:00:16 AM

9 Reasons to implement a Gas Tax: (http://www.examiner.com/x-2429-DC-Bicycle-Transportation-Examiner~y2009m1d16-9-reasons-increasing-the-gas-tax-is-good-for-America)

1. Higher gas prices will prop up Detroit.
2. Higher gas prices will enhance national security.
3. Higher gases prices will help combat climate change.
4. Higher gas prices will help pay for needed road maintenance.
5. Automakers support increasing the gas tax.
6. Higher gas prices will help fight obesity.
7. Higher gas taxes will decrease congestion.
8. Higher gas taxes will make our roads safer.
9. Gas taxes need not be regressive.

Title: Re: Meltdown
Post by: BachQ on January 16, 2009, 06:02:06 AM

Financial Times: China surges past Germany to become the world's third largest economy.
(http://www.ft.com/cms/s/0/8d9337be-e245-11dd-b1dd-0000779fd2ac.html)

Title: Re: Meltdown
Post by: ezodisy on January 16, 2009, 08:44:12 AM

So Lethe how's your investment in the banks going?

Barclays - 98p
RBS - 34.7p <---our government got in around 60p I think it was
Lloyds - 98.4p
HSBC - 535.75p

Title: Re: Meltdown
Post by: ezodisy on January 16, 2009, 08:52:31 AM

Quote from: Dm on January 16, 2009, 05:58:05 AM
Question: Given a huge national debt and dwindling tax revenues, how can a country quickly and easily raise revenues without raising income taxes?

Answer #1: Legalize drugs, (http://www.cnbc.com/id/28672671) and tax & regulate drugs as appropriate. Reduce state prison population by 20% and federal prison population by 50% (http://stopthedrugwar.org/chronicle/564/US_jail_prison_population_all_time_high_drug_offenders) by legalizing drugs.

Answer #2: Raise gas tax (http://www.nytimes.com/2008/12/28/opinion/28friedman.html?_r=1&ref=opinion)

I don't drive in the UK and don't remember the figures but I think "gas" tax here is already ridiculously high, creating the highest petrol prices in Europe I think. People here aren't getting cheap petrol prices like our mates across the pond who certainly seem to have room to raise taxes on this quite a lot.

Can't imagine any drugs would be legalised there. Possibly downgraded, not legalised. Even less of a chance for prostitution, of course. Not that I advocate such things $:)

Title: Re: Meltdown
Post by: Lethevich on January 16, 2009, 08:58:12 AM

Quote from: ezodisy on January 16, 2009, 08:44:12 AM
So Lethe how's your investment in the banks going?

Not paying very close attention atm. Rather than watch every small dip and rise (which is seemingly all that can happen right now in time, given the low starting point, unless an outright bankrupcy happens - which the gov't is unlikely to allow happen), I am hoping for a reasonable-odds gamble on the long-term). I'm sure that they've gone down slightly since, but it was something I was OK with before I bought. I will only start to get worried if they are at the same level in a years time ;D

Title: Re: Meltdown
Post by: ezodisy on January 16, 2009, 08:59:42 AM

Quote from: Lethe on January 16, 2009, 08:58:12 AM
I will only start to get worried if they are at the same level in a years time ;D

oh no chance of that. They will either be well up or nationalised :P

Title: Re: Meltdown
Post by: Sarastro on January 16, 2009, 09:26:10 AM

Quote from: Dm on January 15, 2009, 03:52:26 PM
Gov. Arnold Schwarzenegger State of the State address

Well ya, they promise to issue vouchers....that'll be FUN. 8)

Title: Re: Meltdown
Post by: ezodisy on January 16, 2009, 09:40:20 AM

oh dear, someone forgot to tell Jim Rogers that the £ is indestructible

What are your thoughts on the British Pound?

Rogers: More doomed. It will disappear sooner. If it weren't for the North Sea, the British Pound would have already disappeared. It's more doomed. The UK has been exporting oil for 26 years; within the decade, the UK will be a net importer of oil again, and they have nothing else to sell to the world once the oil dries up. (http://www.allthingsjimrogers.com/2009/01/16/jim-rogers-interview-with-gace-cheng-dollar-will-disappear-sooner/)

I hope those boys in Oxford & Cambridge are thinking up ways for us to get out of this 'cause Westminster ain't helping

Title: Re: Meltdown
Post by: BachQ on January 16, 2009, 11:38:21 AM

Quote from: ezodisy on January 13, 2009, 03:26:39 AM
well we can have a race between the UK screwing itself and the Euro(zone) imploding

http://www.ft.com/cms/s/0/9f80f414-e0da-11dd-b0e8-000077b07658.html?nclick_check=1

:)

This week's Eurozone update:

ECB (http://www.bloomberg.com/apps/news?pid=20601085&sid=azQAixzrw_y4&refer=europe) President Jean-Claude Trichet's vision of stable Eurozone economies may be unraveling as the gap between Germany's interest rate versus those of Spain, Italy, Greece and Portugal has ballooned to the widest in the Euro's history. "It will act as an additional braking mechanism on these economies," said Julian Callow, chief European economist at Barclays Capital in London. "For the ECB it makes it harder to determine the future evolution of the economy."

Spain's (http://www.bloomberg.com/apps/news?pid=20601085&sid=aQYlaf0MK4zc&refer=europe) Finance Minister Pedro Solbes: Spain has spiraled into deepest recession in half a century, and is expected to contract by 1.6% in 2009.

France's (//http://) 4th qtr GDP contracted by the most in 34 years, according to the Bank of France.

Quote from: Lethe on January 16, 2009, 03:47:48 AM
Irish bank set to be nationalised (http://news.bbc.co.uk/1/hi/business/7832203.stm) They're still falling like ninepins :3

Ireland's (http://www.bloomberg.com/apps/news?pid=20601100&sid=aGjQcXDDF2Ms&refer=germany) credit default swap risk surged to a record high amid its nationalization of Anglo Irish Bank Corp., which stoked fears over escalating bank bailouts. Spain, Austria and Germany CDS's also set records. The country of Ireland is deemed to be riskier than Tesco and Nestle. "At worst it's going to lead to fresh worries about how the Irish economy survives this crisis and how they can service their increasing debt burden," (http://ftalphaville.ft.com/blog/2009/01/16/51263/cds-report-eu-nation-default-risk-touches-record-high/) said Jim Reid, a credit strategist at Deutsche Bank.

Title: Re: Meltdown
Post by: BachQ on January 16, 2009, 11:39:55 AM

Quote from: ezodisy on January 16, 2009, 09:40:20 AM
Brits "have nothing else to sell to the world once the oil dries up."

Title: Re: Meltdown
Post by: Lethevich on January 16, 2009, 12:08:12 PM

I think the UK is being mistaken for Saudi Arabia. An easy mistake to make, it happens all the time...
Awaits JdP...

Title: Re: Meltdown
Post by: ezodisy on January 17, 2009, 05:31:52 AM

Hey Dm, I've finally found someone who is more pessimistic than we are! lol

http://www.abbaswatchman.com/PAGE%208%20GRAPH%20OF%20THINGS%20TO%20COME.htm

The 50 year chart is a good one created back in the '90s. Apparently no more bull runs in our lifetime ::)

"You had better start buying food and storing it fast"

lol!

Title: Re: Meltdown
Post by: ezodisy on January 17, 2009, 05:43:37 AM

Bob Carver's blog (http://marketclues.blogspot.com/)

TARP's First $350 Billion Has Gone Up in Smoke

While the Congress asks the Treasury Secretary and the Federal Reserve chief what the $350 Billion in bailout funds have been used for, they are mum on the subject. There's a good reason they're silent---the money has disappeared down a black hole of falling mortgage paper.

Meredith Whitney, the single analyst most responsible for exposing the Wall Street banks' Subprime Mortgage Ponzi Scheme that's at the heart of the current Greater Depression, revealed after the market closed Wednesday afternoon that the money the taxpayers had given Wall Street as part of the TARP bailout is now gone.

This revelation, which came after the market closed, came on top of devastating news indicating that the economy remains in freefall into the deepest depression in the country's history. This sent the market plunging from the opening bell. In the last days of the Bush Administration it's clear that they have made no progress whatsoever in dodging this historic catastophe which threatens to completely destroy our financial system. After decades of an expanding debt bubble, there is nothing that can be done to stop its inevitable deflation.

One bank is particular egregious. Citibank has lost as much taxpayer money as was lost in the Madoff Ponzi Scheme in just the last six months. These "blackhole banks" are doing exactly what we said they would do: implode and take our money with them. And, eventually, they are going to drag the country into insolvency and leave the US Dollar totally worthless.

Title: Re: Meltdown
Post by: ezodisy on January 17, 2009, 06:35:26 AM

Quote from: Dm on January 15, 2009, 06:40:32 AM
Guardian (15 Jan 09 Reuters) - Societe Generale said on Thursday that the United States' economy looks likely to enter a depression and China's could implode. "It is becoming clear that the Chinese economy is imploding and this raises the possibility of regime change. To prevent this, the authorities would likely devalue the yuan. A subsequent trade war could see a re-run of the Great Depression."
(http://www.guardian.co.uk/business/feedarticle/8260101)

'We believe that the market is (now) set to quickly slide sharply towards our 500 target for the S&P," he said.'

most of the guys I talk to are targeting that area as well. I think it was Robert McHugh who put out a most bearish figure of 50 for the S&P. Yeah, 50. lol!

Title: Re: Meltdown
Post by: ezodisy on January 17, 2009, 06:46:17 AM

found it, here we go

Robert McHugh thinks the crash will drive the S&P to 500 or lower (in McHugh's worst-case scenario, the S&P could end up at 50). (http://www.infowars.com/?p=6975)

and if you want to read about "Grand Super Cycles" and their waves, get a load of this from McHugh (1718! hahaha)

McHUGH: From a time perspective, Grand Super Cycle wave 4, to correct something that started in 1718, you would think this thing would last for 20, 30 or 40 years. So, time wise from proportionality, that's what you would estimate. However, the price damage that is happening is so rapid and so powerful and so fast that, a Grand Super Cycle wave four could correct three centuries of bull markets in a very short relative period of time, something on the order of two to six years, let's say. Our hope is that it is over in two years, but that will happen only if the degree of labels that I have marked in our analysis is correct, the highest levels. In other words, I have the decline from last October to this November's low as a Super Cycle degree decline because it was a 50% drop. If I am wrong and that is only a Cycle degree drop instead of a Super Cycle degree drop, that means that Cycle wave (A) down, the first leg of this Bear Market, isn't even over yet. Any correction of the Grand Super Cycle is going to be three waves, most likely. (A) down, (B) up, (C ) down, of the Super Cycle highest degree. If I am wrong, and these labels are too high, then this thing is going to last for six years and we could be seeing stock markets plummet further, the DJIA could go down to 1,000 or 500 and the S&P500 down to a similar level, to 50. (http://www.321gold.com/editorials/taylor/taylor121808.html)

Title: Re: Meltdown
Post by: ezodisy on January 17, 2009, 07:45:19 AM

"egad...drawler"? huh? Bring back the Fibonacci pic :)

Title: Re: Meltdown
Post by: BachQ on January 17, 2009, 08:48:33 AM

Quote from: ezodisy on January 17, 2009, 05:31:52 AM
Hey Dm, I've finally found someone who is more pessimistic than we are! lol

http://www.abbaswatchman.com/PAGE%208%20GRAPH%20OF%20THINGS%20TO%20COME.htm

The 50 year chart is a good one created back in the '90s. Apparently no more bull runs in our lifetime ::)

"You had better start buying food and storing it fast"

lol!

Egad!... The Chart of Doom! (http://www.abbaswatchman.com/PAGE%208%20GRAPH%20OF%20THINGS%20TO%20COME.htm)

That website is too optimistic for this thread! :D

(http://www.abbaswatchman.com/JESUS%20PICTURES%201/PAGE%2081.jpg) (http://www.abbaswatchman.com/PAGE%208%20GRAPH%20OF%20THINGS%20TO%20COME.htm)

"The Mother of All Depressions"

Title: Re: Meltdown
Post by: BachQ on January 17, 2009, 08:51:54 AM

Quote from: ezodisy on January 17, 2009, 05:43:37 AM
Bob Carver's blog (http://marketclues.blogspot.com/)

TARP's First $350 Billion Has Gone Up in Smoke

While the Congress asks the Treasury Secretary and the Federal Reserve chief what the $350 Billion in bailout funds have been used for, they are mum on the subject. There's a good reason they're silent---the money has disappeared down a black hole of falling mortgage paper.

Meredith Whitney, the single analyst most responsible for exposing the Wall Street banks' Subprime Mortgage Ponzi Scheme that's at the heart of the current Greater Depression, revealed after the market closed Wednesday afternoon that the money the taxpayers had given Wall Street as part of the TARP bailout is now gone.

This revelation, which came after the market closed, came on top of devastating news indicating that the economy remains in freefall into the deepest depression in the country's history. This sent the market plunging from the opening bell. In the last days of the Bush Administration it's clear that they have made no progress whatsoever in dodging this historic catastophe which threatens to completely destroy our financial system. After decades of an expanding debt bubble, there is nothing that can be done to stop its inevitable deflation.

One bank is particular egregious. Citibank has lost as much taxpayer money as was lost in the Madoff Ponzi Scheme in just the last six months. These "blackhole banks" are doing exactly what we said they would do: implode and take our money with them. And, eventually, they are going to drag the country into insolvency and leave the US Dollar totally worthless.

Can we please remove Paulson before the release of the remaining TARP funds? That man is a walking nightmare.

(http://farm4.static.flickr.com/3101/2894274085_a5af8ca163.jpg?v=0)

Title: Re: Meltdown
Post by: BachQ on January 17, 2009, 08:56:01 AM

Wholesale prices and consumer prices have fallen for 5 consecutive months, signalling DEFLATION. This is the greatest annual fall in consumer prices in 54 years (http://www.reuters.com/article/newsOne/idUSTRE50D3GM20090116) (since 1954).
(http://d.yimg.com/us.yimg.com/p/ap/20090115/capt.fed8ed8f94ea4e92ab6ad04cd1d3772d.producer_price_index_gfx232.jpg?x=229&y=345&q=85&sig=SrVU8fpljtl4oj9jogwDGQ--)

(http://www.reuters.com/resources/r/?m=02&d=20090116&t=2&i=7885153&w=450&r=2009-01-16T141545Z_01_BTRE50F13MD00_RTROPTP_0_US-USA-ECONOMY)

Title: Re: Meltdown
Post by: BachQ on January 17, 2009, 08:57:15 AM

"Global oil demand is reducing at an alarming rate," said Rob Laughlin, senior oil analyst at MF Global in London. "This latest report from the IEA is another warning shot across the bows to OPEC that supply is still outpacing demand and the situation is getting worse seemingly day by day."

http://news.bbc.co.uk/2/hi/business/7832989.stm

Title: Re: Meltdown
Post by: BachQ on January 17, 2009, 09:00:31 AM

Quote from: bwv 1080 on January 13, 2009, 06:21:24 AM
Good paper at:

http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf (http://www.economics.harvard.edu/faculty/rogoff/files/Aftermath.pdf)

QuoteThird, the real value of government debt tends to explode, rising an average of 86 percent in the major post–World War II episodes.

For the entire FY 2008, the annual US budget deficit was $454.8 billion; In first quarter 2009, the quarterly deficit rocketed to $485.2 billion for just the first three months FY 2009. Bloomberg

(http://www.bloomberg.com/apps/news?pid=20601087&sid=arYLeeR67vIU&refer=home)

Title: Re: Meltdown
Post by: ezodisy on January 17, 2009, 11:40:10 AM

Quote from: Dm on January 17, 2009, 08:56:01 AM
(http://www.reuters.com/resources/r/?m=02&d=20090116&t=2&i=7885153&w=450&r=2009-01-16T141545Z_01_BTRE50F13MD00_RTROPTP_0_US-USA-ECONOMY)

Right side looks to me like an inverted middle-finger-salute straight at the US consumer

(http://one-finger-salute.org/middle_finger.png)

Title: Re: Meltdown
Post by: BachQ on January 17, 2009, 11:53:08 AM

Quote from: Sarastro on January 16, 2009, 09:26:10 AM
Well ya, they promise to issue vouchers....that'll be FUN. 8)

LA Times: California is F#cked (http://www.latimes.com/news/local/la-me-budget17-2009jan17,0,4472460.story)

QuoteThe state will suspend tax refunds, welfare checks, student grants and other payments owed to Californians starting Feb. 1, Controller John Chiang announced Friday. Chiang said he had no choice but to stop making some $3.7 billion in payments in the absence of action by the governor and lawmakers to close the state's nearly $42-billion budget deficit. More than half of those payments are tax refunds. The controller said the suspended payments could be rolled into IOUs if California still lacks sufficient cash to pay its bills come March or April. "It pains me to pull this trigger," Chiang said at a news conference in his office. "But it is an action that is critically necessary."

Title: Re: Meltdown
Post by: Sarastro on January 17, 2009, 01:02:09 PM

Quote from: Dm on January 17, 2009, 11:53:08 AM
The state will suspend tax refunds, welfare checks, student grants and other payments owed to Californians starting Feb. 1, Controller John Chiang announced Friday.

Just have read it in the morning newspapers (same LA Times). However, I don't go back to Russia -- the idea of nationalization thrown by the government is more intimidating, as it is an obvious premise for further actions...who knows what...as my good American friend says when he's drunk: "f*ck Russia, f*ck the US" :D We go to Panama.

Title: Re: Meltdown
Post by: Sarastro on January 17, 2009, 01:18:31 PM

Quote from: Dm on January 17, 2009, 08:57:15 AM
"Global oil demand is reducing at an alarming rate,"

That's actually very good. Love it. First, the amount of emissions released into the atmosphere will reduce :D thus we get a probability that by the year 2030 the Earth won't undergo irreversible processes :D , and second, Russian government will take a more thorough look at its policies, as well as other oil-exporting countries in the Persian Gulf. Hopefully, they won't start out a war for resources they could buy selling their oil...in some of the links you gave in this topic there was also a warning that China might soon run low on food. :o This world is doomed.

Title: Re: Meltdown
Post by: BachQ on January 17, 2009, 02:59:40 PM

Quote from: ezodisy on January 17, 2009, 11:40:10 AM
Right side looks to me like an inverted middle-finger-salute straight at the US consumer

(http://one-finger-salute.org/middle_finger.png)

Or perhaps this:

(http://www.popular-pics.com/ppimages/bush-giving-the-finger.jpg)

Or this:

(http://onebrownguy.com/wp-content/uploads/2008/01/bush_finger.jpg)

Title: Re: Meltdown
Post by: BachQ on January 17, 2009, 05:38:23 PM

"The ECB is ... providing a stealth bail-out for Europe's governments – though secrecy veils all. An EU debt union is being created, in breach of EU law. Liabilities are being shifted quietly on to German taxpayers. What happens when Germany's hard-working citizens find out?"

(http://wa1.images.onesite.com/blogs.telegraph.co.uk/user/ambrose_evans-pritchard/profile.jpg?type=user&ts=0612-1728)

Telegraph (17 Jan 2009)
(http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4278642/Monetary-union-has-left-half-of-Europe-trapped-in-depression.html)

Title: Re: Meltdown
Post by: ezodisy on January 18, 2009, 03:29:49 AM

Quote from: Dm on January 17, 2009, 05:38:23 PM
"The ECB is ... providing a stealth bail-out for Europe's governments – though secrecy veils all. An EU debt union is being created, in breach of EU law. Liabilities are being shifted quietly on to German taxpayers. What happens when Germany's hard-working citizens find out?"

(http://wa1.images.onesite.com/blogs.telegraph.co.uk/user/ambrose_evans-pritchard/profile.jpg?type=user&ts=0612-1728)

Telegraph (17 Jan 2009)

(http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/4278642/Monetary-union-has-left-half-of-Europe-trapped-in-depression.html)

ah it's The Torygraph. Look I am all for complete collapse and combustion but that piece was rubbish and there's no getting around it. Only part worth reading was what you highlighted and he didn't exactly go into detail about it. Attempting to scandalise a couple of almost unrelated and otherwise peaceful protests, come on that was cheap. Often with these things the comments which follow make for much greater interest.

sponsor an executive

http://uk.youtube.com/v/qDC0qcf0kzE

Title: Re: Meltdown
Post by: ezodisy on January 18, 2009, 03:38:37 AM

Alphaville published a chart created by the Federal Reserve Bank of Minneapolis which shows about where we are compared to past recessions.

http://ftalphaville.ft.com/blog/2009/01/16/51272/you-call-this-a-recession/

(http://alphaville.ftdata.co.uk/lib/inc/getfile/4028.jpg)

"Conclusion: This is mild."

According to one writer who analysed the method they used to create the graph, it is not accurate--"intellectually dishonest"--and he came up with his own to prove that even the mildest recession results in a fall in employment

http://angrybear.blogspot.com/2009/01/honest-resarch.html

Title: Re: Meltdown
Post by: ezodisy on January 18, 2009, 05:25:01 AM

Peter Schiff tearing things up on the Sat 17 Jan double posting: http://financialtruth0.blogspot.com/

Title: Re: Meltdown
Post by: BachQ on January 18, 2009, 05:32:54 PM

Quote from: ezodisy on January 18, 2009, 05:25:01 AM
Peter Schiff tearing things up on the Sat 17 Jan double posting: http://financialtruth0.blogspot.com/

Yep, the US is doing everything BACKWARDS, and is on its way to becoming an economic wasteland. In digging itself deeper into a fiscal blackhole, it is racking up a minimum of a $2 Trillion deficit for 2009.

(http://www.cewip.org/html/games2/DRAWINGS/colours/black_hole_es.JPG)

Title: Re: Meltdown
Post by: BachQ on January 18, 2009, 05:34:51 PM

Economist David McWilliams: (http://www.independent.ie/national-news/national-government-backed-by-73-per-cent-1605906.html) "If Ireland continues hurtling down this road which is close to default, the whole of Europe will be badly affected. The credibility of the euro will be badly affected. Then Spain might default, Italy and Greece ..."

Title: Re: Meltdown
Post by: BachQ on January 18, 2009, 05:40:23 PM

(http://img.timeinc.net//time/cartoons/20081219/cartoons_05.jpg)

Title: Re: Meltdown
Post by: ezodisy on January 19, 2009, 02:22:56 AM

Quote from: Dm on January 18, 2009, 05:32:54 PM
Yep, the US is doing everything BACKWARDS

but as ever the US has its faithful ally for company

Jan. 19 (Bloomberg) -- Prime Minister Gordon Brown's government tightened its grip on Britain's financial system, guaranteeing toxic assets and giving the Bank of England unprecedented power to buy securities.

The plan will increase the cost of bailing out the nation's banks by at least 100 billion pounds ($147 billion), the Treasury said in a statement today. The government raised its stake in Royal Bank of Scotland Group Plc to 70 percent and said it would use Northern Rock Plc to spur mortgage lending. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aCKRyD7vWfnE&refer=home)

this just shows that all those people who say "great minds think alike" don't know wtf they're talking about

Title: Re: Meltdown
Post by: ezodisy on January 19, 2009, 02:30:33 AM

Quote from: Dm on January 18, 2009, 05:34:51 PM
Economist David McWilliams: (http://www.independent.ie/national-news/national-government-backed-by-73-per-cent-1605906.html) "If Ireland continues hurtling down this road which is close to default, the whole of Europe will be badly affected. The credibility of the euro will be badly affected. Then Spain might default, Italy and Greece ..."

some more on this topic

"A eurozone member state faced with the prospect of sovereign default, or just having suffered the indignity of sovereign default, would be immensely relieved to be a member of the eurozone. The last thing it would want to do is give up the financial shelter provided by membership in the eurozone to try and emulate Iceland, New Zealand or the UK."
(http://ftalphaville.ft.com/blog/2009/01/19/51316/ireland-needs-help/)

Sovereign default in the eurozone and the breakup of the eurozone: Sloppy Thinking 101 (http://blogs.ft.com/maverecon/2009/01/sovereign-default-in-the-eurozone-and-the-breakup-of-the-eurozone-sloppy-thinking-101/)

Title: Re: Meltdown
Post by: ezodisy on January 19, 2009, 09:15:18 AM

another crazy day

RBS -- 11.6p (down 66.6%) mwuahaha
Lloyds - 65p (down 33.9%)
Barclays -- 88p (down 10.2%)
HSBC - 501p (down 6.5%)

Some Irish banks were slaughtered too

The £ scenario has not yet played out. The £ is down against everything, as is the Euro, except against the £ ;D

PIGS to S&P slaughter (http://ftalphaville.ft.com/blog/2009/01/19/51347/pigs-to-sp-slaughter/)

"In fact, Spain's looking to be the worst economy in the eurozone.....Spain's own government is now forecasting a 1.6 per cent fall in GDP in 2009 — driven by a 9 per cent slump in investment and a subsequent 3.9 per cent dip in employment. Inflation meanwhile, stood at 1.4 per cent at the end of 2008, compared to 4.2 per cent in 2007 — raising the prospect of a deflationary spiral."

Eurozone economy to shrink 1.9% this year (http://www.ft.com/cms/s/0/93a80f16-e61a-11dd-8e4f-0000779fd2ac.html?nclick_check=1)

"The European Commission's forecast for this year was somewhat less pessimistic than that of many private sector economists. Analysts at Deutsche Bank, for example, predict a 2.5 per cent fall in eurozone GDP this year before a return to 1.0 per cent growth in 2010."

and finally some info about Poland

Another Eastern European meltdown? (http://ftalphaville.ft.com/blog/2009/01/16/51254/another-eastern-european-meltdown/)

Forex failure begins in Poland (http://ftalphaville.ft.com/blog/2009/01/19/51350/forex-failure-begins-in-poland/)

About the zloty and RBC capital saying:

"The timetable for Euro membership by January 2012 is simply too tight. The PLN needs to enter ERM2 by mid-2009, at the latest; but this looks extremely unlikely. First, Euro membership requires support from the main opposition parties and/or the president, but this is conditional on the outcome of a proposed public referendum. Second, a referendum will not be held before June (to coincide with the European Elections). Third, even with a positive public vote the Polish constitution must then be changed to remove the stipulation that the national currency can only be issued within Poland.

On top of all this, there is no guarantee that Poland will meet the five Maastricht convergence criteria. Holding the PLN stable within the ERM2 bands for two years may prove to be a tall order while the budget deficit, which has been squeezed lower purely as a result of recent strong economic growth, will widen sharply as the economy slows, breeching (SIC) the 3%/GDP limit and disqualifying Poland from Euro entry. The best way to play the likely Euro delay is to be a payer of the 5y5y forward spread (targeting 120bp). At just 31bp at present, this is ignoring all the pitfalls along the way."

Title: Re: Meltdown
Post by: ezodisy on January 19, 2009, 09:43:04 AM

Bank of China VP warns of fresh financial crisis (http://www.terradaily.com/reports/Bank_of_China_VP_warns_of_fresh_financial_crisis_999.html)

A top Bank of China official warned the world should brace for "a second round of financial crisis" due to rising bad loans as the real economy falls into recession, in remarks published Thursday.

Efforts by governments around the world to bail out markets have so far failed to solve the deep-rooted problems behind the current crisis, Zhu Min, a vice president for the bank, wrote in the China Securities Journal.

"The real estate market will continue to see corrections and the stock prices of financial institutions will continue to see wide swings," he said.

Banks will remain reluctant to lend and currencies will continue to fluctuate as funds are reallocated around the world, he wrote.

"Rising defaults of industrial loans and personal loans caused by a recession in the real economy could lead to a second round in the financial crisis," Zhu wrote in the full page commentary.

The scale and nature of the crisis had been misjudged, and the lack of structure and vision in government efforts to stabilise the markets could lead to unforeseen pitfalls, he warned.

"We think the government decisions during the global financial crisis were full of contradictions and mistakes," he said.

In the next one or two years, big financial institutions previously bailed out by governments could fall into trouble again, he predicted, while smaller banks could go bankrupt and hedge funds could collapse.

Governments have injected billions of dollars into financial institutions and made concerted interest rates cuts after the crisis deepened in September with the collapse of US bank Lehman Brothers.

Title: Re: Meltdown
Post by: ezodisy on January 19, 2009, 09:55:14 AM

Ruble Drops to Pre-1998 Crisis Low on 6th Devaluation This Year

Unemployment rose to 6.6 percent last year. (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ad50GocO1Qjg)

Title: Re: Meltdown
Post by: BachQ on January 19, 2009, 10:51:41 AM

Quote from: ezodisy on January 19, 2009, 02:22:56 AM
but as ever the US has its faithful ally for company

Jan. 19 (Bloomberg) -- Prime Minister Gordon Brown's government tightened its grip on Britain's financial system, guaranteeing toxic assets and giving the Bank of England unprecedented power to buy securities.

The plan will increase the cost of bailing out the nation's banks by at least 100 billion pounds ($147 billion), the Treasury said in a statement today. The government raised its stake in Royal Bank of Scotland Group Plc to 70 percent and said it would use Northern Rock Plc to spur mortgage lending. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aCKRyD7vWfnE&refer=home)

this just shows that all those people who say "great minds think alike" don't know wtf they're talking about

LOL :D :D We have a race to the bottom, folks! It seems that both the US and UK are outta control, and one step closer to full-blown nationalization. "I will not sit idly by and let people and businesses go to the wall." Why don't they admit that they're clueless and desperate!

Title: Re: Meltdown
Post by: BachQ on January 19, 2009, 10:55:32 AM

Quote from: ezodisy on January 19, 2009, 09:55:14 AM
Ruble Drops to Pre-1998 Crisis Low on 6th Devaluation This Year

Unemployment rose to 6.6 percent last year. (http://www.bloomberg.com/apps/news?pid=newsarchive&sid=ad50GocO1Qjg)

Only 6 devaluations in 7 days! >:D

Title: Re: Meltdown
Post by: BachQ on January 19, 2009, 10:57:40 AM

Quote from: ezodisy on January 19, 2009, 09:15:18 AM
"In fact, Spain's looking to be the worst economy in the eurozone.....Spain's own government is now forecasting a 1.6 per cent fall in GDP in 2009 — driven by a 9 per cent slump in investment and a subsequent 3.9 per cent dip in employment. Inflation meanwhile, stood at 1.4 per cent at the end of 2008, compared to 4.2 per cent in 2007 — raising the prospect of a deflationary spiral."

Spain vs. Ireland: which will be the first to fall? >:D

Title: Re: Meltdown
Post by: BachQ on January 19, 2009, 11:01:25 AM

Quote from: ezodisy on January 19, 2009, 09:43:04 AM
Quote"We think the government decisions during the global financial crisis were full of contradictions and mistakes," he said.

Bingo!

Title: Re: Meltdown
Post by: BachQ on January 19, 2009, 11:06:05 AM

Quote from: ezodisy on January 19, 2009, 09:15:18 AM
another crazy day

RBS -- 11.6p (down 66.6%) mwuahaha
Lloyds - 65p (down 33.9%)
Barclays -- 88p (down 10.2%)
HSBC - 501p (down 6.5%)

"Nationalization at zero value is implicit in the price," said Derek Chambers, an analyst at Standard & Poor's Equity Research Ltd. who has a "hold" rating on the stock. The stock price "is an option on the vague chance that it doesn't get nationalized." ... "The market is pricing in the risk of full nationalization for RBS," said Sandy Chen, an analyst at Panmure Gordon & Co. who has a "sell" rating on the stock. "It's not an RBS-specific issue. The mixture of deflation and de-leveraging is toxic for bank shares."

http://www.bloomberg.com/apps/news?pid=20601087&sid=auq0PJ4wSOsg&refer=home

Title: Re: Meltdown
Post by: BachQ on January 19, 2009, 11:15:43 AM

Quote from: Sarastro on January 17, 2009, 01:02:09 PM
as my good American friend says when he's drunk: "f*ck Russia, f*ck the US" :D We go to Panama.

BTW, there's a silver lining to California's foreclosure boom: Southern California home sales rose by 51% in December amid a surge in foreclosures which pushed home prices down 35% from a year earlier.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a9tuBSHCY5JM&refer=home

Title: Re: Meltdown
Post by: ezodisy on January 19, 2009, 12:05:03 PM

U.S. stimulus not enough, TARP bailout misused: Soros (http://www.reuters.com/article/ousiv/idUSTRE50I4XZ20090119)

"The economies of the world are falling off a cliff. This is a situation that is comparable to the 1930s. And once you recognize it, you have to recognize the size of the problem is much bigger," he said.

Soros said the United States needed "radical and unorthodox policy measures" to prevent a repeat of the Great Depression of the early 20th century that include recapitalizing banks and writing down the country's accumulated debt.

Also, he said, it should create more money to offset the collapse of credit and then rapidly pull that cash out of the system when inflation emerges. The government would have to be very nimble in the timing of such moves, he said.

"If they are successful...the deflationary pressures will be replaced by the specter of inflation and the authorities will have to drain the excess money from the economy almost as quickly as they pumped it in. Of the two operations the second one is going to be, politically, even more difficult than the first," he said.

Title: Re: Meltdown
Post by: BachQ on January 19, 2009, 12:24:59 PM

Quote from: ezodisy on January 08, 2009, 04:41:21 AM
speaking of Dubya, the BBC's collection of Bushisms: http://news.bbc.co.uk/1/hi/world/americas/7809160.stm

last one's a beauty

On the eve of Bush's final day in office, Reuters has collected some editorials to bid former President Bush a "farewell:"

"Goodbye to the worst president ever," declared the Toronto Sun's editorial page. "Bush was an unmitigated disaster, failing on the big issues from the invasion of Iraq to global warming, Hurricane Katrina and the worst economic crisis since the Great Depression."

"Bush leaves a country and an economy in tatters," wrote the Sunday Times in London. It said America's national debt and unemployment nearly doubled on his watch. Britain's Daily Mail said he entered office with a budget surplus of $128 billion but exits with a $482 billion deficit. "He leaves the world facing its biggest crisis since the Depression, the Middle East in flames and U.S. standing at an all-time low."

The Scottish Daily Record observed: "America is now hated in many parts of the world. Bush leaves a legacy of wars and the world economy in meltdown. He has been dismissed as a buffoon and a war-monger, a man who made the world a more dangerous place while sending it to the brink of economic collapse."

"It's hard to find a historian who won't say that Bush was the most catastrophic leader the U.S. has ever known," the French daily Le Monde wrote. "One success: since September 11, 2001, there was no attack on U.S. soil. But this sits alongside an interminable list of failures, starting with the war in Iraq."

Stern magazine said: "Bush led the world's most powerful nation to ruin. He lied to the world, tortured in the name of freedom and caused lasting damage to America's standing."

http://www.reuters.com/article/newsOne/idUSTRE50I2OV20090119?sp=true

Title: Re: Meltdown
Post by: ezodisy on January 19, 2009, 02:44:20 PM

and for good measure:

U.S.-installed Iraqi ex-PM says Bush "utter failure" (http://www.reuters.com/article/newsOne/idUSTRE50212820090103?source=BuckFush.com)

Title: Re: Meltdown
Post by: ezodisy on January 19, 2009, 11:01:21 PM

Jim Rogers, chairman of Singapore-based Rogers Holdings, said the "U.K. is finished" and investors should sell the currency. Commonwealth Bank of Australia said there was a high risk of a cut to the country's credit rating outlook and lowered its pound forecast. Prime Minister Gordon Brown authorized a 100 billion pound ($142 billion) bailout for banks.

"I would urge you to sell any sterling you might have," said Rogers. "It's finished. I hate to say it, but I would not put any money in the U.K." Rogers correctly predicted the start of the commodities rally in 1999. (http://www.bloomberg.com/apps/news?pid=20601087&sid=agxlt5ZPtyLA&refer=home)

Nice little "reminder" at the bottom there that he's usually correct. Bugger ::)

Title: Re: Meltdown
Post by: arkiv on January 19, 2009, 11:23:47 PM

You must be shielded from the beginning:

;D

(http://img80.imageshack.us/img80/1931/equityindicesbh4.jpg)

Title: Re: Meltdown
Post by: ezodisy on January 19, 2009, 11:42:44 PM

Quote from: epicous on January 19, 2009, 11:23:47 PM
You must be shielded from the beginning:

is that a sort of pre-emptive green strike?

I looked at its current position, seems to be holding up quite well. Can't say I'm too surprised though.

cable is getting hammered

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on January 20, 2009, 12:20:59 AM

Quote from: Dm on January 19, 2009, 12:24:59 PM
On the eve of Bush's final day in office, Reuters has collected some editorials to bid former President Bush a "farewell:"

To the above, I would like to add this piquant characterization of W's time in office, by a writer of paleoconservative-Catholic tendency, John Zmirak. As you would expect from a conservative, he is fairly moderate and forgiving in his view of Bush ;)

"George Bush is not simply a failed president, but a disgrace to the citizenship he enjoys, to the Faith he pretends to hold. There should be no place in this country where he can retire peacefully. He should be pelted with dung wherever he goes, and hounded into exile like Idi Amin."

http://www.takimag.com/blogs/article/cut_the_pentagon_till_its_a_triangle_part_i

Title: Re: Meltdown
Post by: ezodisy on January 20, 2009, 01:55:56 AM

where cable rests today on a long-term chart. Screw you JR

(http://www.forexfactory.com/attachment.php?attachmentid=193618&d=1232447229)

Title: Re: Meltdown
Post by: ezodisy on January 20, 2009, 02:35:08 AM

something for the "rebound in 2009" chaps

Roubini: Not even halfway there (http://ftalphaville.ft.com/blog/2009/01/20/51397/roubini-not-even-halfway-there/)

Title: Re: Meltdown
Post by: ezodisy on January 20, 2009, 02:47:49 AM

Quote from: Dm on January 19, 2009, 10:51:41 AM
LOL :D :D We have a race to the bottom, folks! It seems that both the US and UK are outta control, and one step closer to full-blown nationalization. "I will not sit idly by and let people and businesses go to the wall." Why don't they admit that they're clueless and desperate!

basically the yanks, limies and PIIGS are fucked for years to come. It's no wonder you get Faber, Schiff and Rogers going on and on about investment opportunities in the far east. You can't prevent the Kondratieff wave baby, just got to ride it

Title: Re: Meltdown
Post by: BachQ on January 20, 2009, 10:40:45 AM

Quote from: ezodisy on January 19, 2009, 11:01:21 PM
Jim Rogers, chairman of Singapore-based Rogers Holdings, said the "U.K. is finished" and investors should sell the currency. Commonwealth Bank of Australia said there was a high risk of a cut to the country's credit rating outlook and lowered its pound forecast. Prime Minister Gordon Brown authorized a 100 billion pound ($142 billion) bailout for banks.

"I would urge you to sell any sterling you might have," said Rogers. "It's finished. I hate to say it, but I would not put any money in the U.K." Rogers correctly predicted the start of the commodities rally in 1999. (http://www.bloomberg.com/apps/news?pid=20601087&sid=agxlt5ZPtyLA&refer=home)

Nice little "reminder" at the bottom there that he's usually correct. Bugger ::)

Looks like forex traders listened to Jim Rogers today:

Sterling plunges on public debt concerns (London Times 20 Jan 2009) Sterling today fell below $1.40 to its lowest point in seven and a half years because of concerns about the depth of Britain's banking crisis and the Government's rising debt levels as it seeks to bail out the struggling sector. The pound, which declined by 2.67 cents to $1.4529 yesterday, fell further to $1.396 this morning over fears that the Government's borrowing levels may exceed £118 billion, equal to 8 per cent of national income, for the next financial year. Yesterday, the Goverment unveiled a package of measures designed to rescue the country's flailing banking sector. However, sterling continued to plunge today and Jim Rogers, who co-founded the Quantum fund with George Soros, the billionaire investor, told Bloomberg: "I would urge you to sell any sterling you might have. It's finished. I hate to say it, but I would not put any money in the UK".
(http://business.timesonline.co.uk/tol/business/economics/article5552136.ece)

(http://i.thisislondon.co.uk/i/pix/2009/01/currency-415x675.jpg)

Sterling crashed to $1.3884 against the dollar, a fall of 6.46 cents on the day. Against the euro, the single European currency was trading 2.44p stronger at 93.04p, with the pound valued ever closer to parity at just €1.2926. In fact the pound was in reverse against all 16 major actively-traded currencies in the world as latest inflation figures saw economists predicting a stagnating economy in the UK would be further mired by deflation. "The British economy is in deep trouble and investors are in no mood to hang around and wait for a pick-up," said IdeaGlobal's foreign exchange head Maurice Pomery.

(http://www.thisislondon.co.uk/standard-business/article-23623479-details/Sterling+in+2+slide+over+fears+for+UK+credit+rating/article.do)

QuoteOther currency specialists warned there is now a real risk credit-rating agencies could follow their move on Spain and downgrade British sovereign debt, making it more expensive and more difficult for the Treasury to raise money on the world's capital markets. With official GDP figures at the end of the week expected to show the depths to which the UK economy has contracted, the rate of decline shown in today's consumer and retail price indices indicate, say the City, a lurch deep into deflation in the coming months. Other official figures tomorrow will show the huge borrowing hole in the public finances and give the latest snapshot on soaring unemployment. Out today, the headline Consumer Prices Index, which the Bank of England is meant to control at or around 2%, fell to 3.1% in December from 4.1% in November as the price of oil further collapsed from its midsummer highs.That is the sharpest fall in inflation since the last recession in 1992.

Title: Re: Meltdown
Post by: BachQ on January 20, 2009, 10:43:30 AM

Quote from: ezodisy on January 20, 2009, 01:55:56 AM
where cable rests today on a long-term chart. Screw you JR

LOL. But you love Jim Rogers!

We'll see whether cable falls below its record low of $1.0520 (Feb 1985). The US will be printing money nonstop under Obama, so the dollar's value will sink in due course.

Title: Re: Meltdown
Post by: BachQ on January 20, 2009, 10:45:01 AM

Prostitutes forced to slash prices amid economic meltdown: The economic meltdown that has triggered massive layoffs and production cutbacks in the formal business sector has spread to the illegal sex industry as prostitutes and sensual massage parlours have reported at least a 50 per cent decline in profits and clientele. ,... "Men who used to take on three girls have to limit to one, as well as men who used to take a double round have to limit to strictly one time and so I am losing big time," one parlour manager lamented.
(http://www.jamaica-gleaner.com/gleaner/20090119/lead/lead1.html)

Title: Re: Meltdown
Post by: BachQ on January 20, 2009, 10:46:35 AM

(http://img.timeinc.net//time/cartoons/20090109/cartoons_04.jpg)

(http://seattlepi.nwsource.com/dayart/20060216/cartoon20060216.gif)

Title: Re: Meltdown
Post by: ezodisy on January 20, 2009, 11:47:29 AM

Quote from: Dm on January 20, 2009, 10:43:30 AM
LOL. But you love Jim Rogers!

We'll see whether cable falls below its record low of $1.0520 (Feb 1985). The US will be printing money nonstop under Obama, so the dollar's value will sink in due course.

Yeah I love him, but he's such a relentless salesman that it gets a bit tiresome when you know what he's doing (and when he's against you).

cable should fall to 1.36 and change (this week) before any possible correction. For the past two months it was forming this attractive falling wedge which looked ripe for reversal but that's been smashed through now. Who wants a rally?

Jan. 20 (Bloomberg) -- The Dow Jones Industrial Average fell 14 percent between Barack Obama's election and Inauguration Day, the biggest decline ever. The second-biggest drop gave way to a 75 percent rally in 1933. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aTv4IsA.Y7t8&refer=home)

Title: Re: Meltdown
Post by: BachQ on January 20, 2009, 12:29:02 PM

Quote from: ezodisy on January 20, 2009, 11:47:29 AM
Jan. 20 (Bloomberg) -- The Dow Jones Industrial Average fell 14 percent between Barack Obama's election and Inauguration Day, the biggest decline ever. The second-biggest drop gave way to a 75 percent rally in 1933. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aTv4IsA.Y7t8&refer=home)

And another record was broken today: the Dow closed below 8,000 and had its worst Inauguration Day performance in the Dow's 114 year history.

http://www.bloomberg.com/apps/news?pid=20601087&sid=ai_7M8Bahjm8&refer=home

Title: Re: Meltdown
Post by: BachQ on January 20, 2009, 05:06:19 PM

Quote from: ezodisy on January 18, 2009, 03:29:49 AM
ah it's The Torygraph.

More on Eastern Europe:

Quote from: Coopmv on February 14, 2009, 01:54:00 PM
I hear you but the ECB headed by that idiot Jean-Claude Trichet still talks about inflation. Deflation is now the biggest enemy for the global economy. The higher the deflation rate, the higher the real interest rate since the latter is nominal rate less inflation rate. When the inflation rate is negative, it does not matter what the nominal rate is, as is the case of the US fed funds rate, which is currently between 0 and 1%.

FT Alphaville: (http://ftalphaville.ft.com/blog/2009/02/16/52508/forex-failure-continues-in-poland/)Forex failure continues in Poland

Australia.to: (http://www.australia.to/index.php?option=com_content&view=article&id=5497:eastern-europe-is-about-to-blow-&catid=95:overflow) Eastern Europe is about to Blow

UK Telegraph: (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4642259/Eastern-European-currencies-crumble-as-fears-of-debt-crisis-grow.html)Eastern European currencies crumble as fears of debt crisis grow

Title: Re: Meltdown
Post by: BachQ on February 17, 2009, 06:51:08 AM

AP: (http://realestate.yahoo.com/promo/americas-emptiest-cities.html)Las Vegas has Edged-out Detroit to become America's Emptiest City

CNN: (http://money.cnn.com/news/newsfeeds/articles/djf500/200902111428DOWJONESDJONLINE000820_FORTUNE5.htm)"The economic meltdown is continuing to batter the casino industry, with the two largest U.S. markets -- Las Vegas and Atlantic City, N.J. -- posting sharp declines in gambling revenue. On the Las Vegas Strip, the overall take fell 23% to $474 million in December, according to the Nevada Gaming Control Board."

BBC: (http://news.bbc.co.uk/2/hi/business/7894338.stm)Trump casino files for Chapter 11

Title: Re: Meltdown
Post by: BachQ on February 17, 2009, 06:52:09 AM

Quote from: ezodisy on February 16, 2009, 12:22:40 PM
anyone interested in chart formations should check out Oscar's Weekend Webinar. If historical patterns over the past 18 months mean anything there should be a big sell-off soon, probably this week.

http://www.youtube.com/watch?v=8_1rSbcO1GQ&feature=channel_page

Oscar rules

That video was a gas ...... I've never seen anyone so excited about head and shoulders formations! "This market has dandruff ..." Oscar is da man!

Title: Re: Meltdown
Post by: BachQ on February 17, 2009, 06:54:11 AM

New Scientist: (http://www.newscientist.com/article/mg20126956.800-nanotubes-outshine-costly-platinum-as-fuelcell-catalyst.html)Nanotubes outshine costly platinum as fuel-cell catalyst

Title: Re: Meltdown
Post by: BachQ on February 17, 2009, 07:02:24 AM

Quote from: Coopmv on February 16, 2009, 12:02:36 PM
Debt Is Hobbling Europe Inc.

Read on ...

http://www.businessweek.com/magazine/content/09_08/b4120028076400.htm?chan=magazine+channel_news

Coopmv, this could spell disaster: "Corporate debt in the euro zone stands at more than $11 trillion, equaling some 95% of the region's annual output. U.S. corporate debt, by contrast, is about 50% of the economy." (http://www.businessweek.com/magazine/content/09_08/b4120028076400.htm?chan=magazine+channel_news) Given that these debts were securitized, rebundled, and re-sold to investors, one wonders how much toxic debt an economy is able to withstand before it implodes?

Title: Re: Meltdown
Post by: ezodisy on February 17, 2009, 07:46:43 AM

Quote from: Dm on February 17, 2009, 06:52:09 AM
That video was a gas ...... I've never seen anyone so excited about head and shoulders formations! "This market has dandruff ..." Oscar is da man!

lol! He's like that in every video ;D

Title: Re: Meltdown
Post by: ezodisy on February 17, 2009, 08:01:09 AM

Quote from: Dm on February 13, 2009, 09:11:01 AM
When crude oil broke through $80/bbl 15 months ago, I told friends and family that oil would be $200/bbl within a year. Well, oil is now $36/bbl, and I'm predicting that oil will fall below $20/bbl this spring.

If this actually gets to $20 it'll be the buy of the decade. Even at $36 it's amazing.

Double bottom or spew?

I know which one I want (the thing is overvalued anyway) (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

(http://i39.tinypic.com/2vj7axk.jpg)

Title: Re: Meltdown
Post by: BachQ on February 18, 2009, 05:38:33 AM

Gold hits record against euro on fear of Zimbabwean-style response to bank crisis Telegraph (http://www.telegraph.co.uk/finance/4682554/Gold-hits-record-against-euro-on-fear-of-Zimbabwean-style-response-to-bank-crisis.html) (18 Feb 09): "Gold has surged to an all-time high against the euro, sterling, and a string of Asian currencies on mounting concerns that global authorities are embarking on a 'Zimbabwe-style' debasement of the international monetary system."

Downgrades Looming for Czech, Hungarian, Polish Debt, Bond Market Shows -- Bloomberg (17 feb 09) (http://www.bloomberg.com/apps/news?pid=20601087&sid=aoFOX_YnlT04&refer=home#)"Everybody is running for the door," said Lars Christensen, head of emerging-market strategy at Danske Bank A/S in Copenhagen. "The markets have decided the central and eastern European region is the subprime area of Europe."

"Europe is now the Epicenter" FT Alphaville (http://ftalphaville.ft.com/blog/2009/02/18/52617/europe-is-now-the-epicenter/) (18 Feb 09): "The exposure of Western banks to emerging europe is leading markets to price in a full below 'institutional credit event,' [and] Austria stands out as particularly vulnerable, with loans to emerging Europe totaling 80% of Austrian GDP."

(http://alphaville.ftdata.co.uk/lib/inc/getfile/4771.jpg)

London Times (http://business.timesonline.co.uk/tol/business/economics/article5757895.ece) (18 Feb 09): Bank of England to request that Chancellor Darling begin printing money as soon as March.

Telegraph (http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4681167/Britains-credit-rating-threatened-by-scale-of-bank-bail-out-warns-SandP.html) (18 Feb 09):"Britain could be stripped of its prized AAA credit rating as a result of the Government's latest bank bail-out, potentially jeopardising any economic recovery, according to rating agency Standard & Poor's. ... Credit default swaps (CDS) on UK sovereign debt, which act as insurance for borrowers, have risen sharply this year, from 106.9 to 158.6, indicating the market's dwindling faith in the security of UK gilts. Tellingly, the UK has tracked Spain, where CDS have risen from 100.7 to 156.8 this year."

Title: Re: Meltdown
Post by: BachQ on February 18, 2009, 05:40:46 AM

(http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2009/2/17/1234887167421/Crossway-Crossway-zero-ca-001.jpg)
UK Guardian (http://www.guardian.co.uk/environment/gallery/2009/feb/18/grand-designs-crossway-eco-home-kent?picture=343387569) (18 Feb 09): This house, in Crossway, Kent, is one of the first zero-carbon homes in the UK. The arched building is essentially one large vault spanning 20 metres, covered on the outside with earth and plants to help it blend in with its rural surroundings More than a quarter (27%) of UK carbon emissions come from households, adding considerably to global warming. "The design is cost-effective in that the home is relatively simple to build and, once you know what you're doing, it's quick," said structural designer Michael Ramage
(http://static.guim.co.uk/sys-images/Guardian/Pix/pictures/2009/2/17/1234887186288/Crossway-Crossway-zero-ca-005.jpg)

Title: Re: Meltdown
Post by: BachQ on February 18, 2009, 05:44:28 AM

In light of Sean's long-awaited return, included herewith is a double dose of doom:

James Howard Kunstler (http://jameshowardkunstler.typepad.com/clusterfuck_nation/2009/02/presidents-day.html)

QuoteIn the White House, Mr. Obama is under excruciating pressure to "do something" as systems unravel and economies augur into darkness. Amid all the anxiety and raging cluelessness, one thing is clear: we're doing everything possible to evade reality. The reality we can't face is that one way of life is over and a new one is waiting to be born.*** I suspect that President Obama has learned over the last several weeks that the nation's banking system and economy -- indeed, the whole world's -- are in way worse shape than anyone imagined before January 20. He is faced with the immediate crushing problem of appearing to do something while a tsunami of catastrophic debt deleveraging sweeps away the first outlier nations and their economies and bears down on the G-7. I suspect that in a few weeks, or possibly even a few days, Mr. Obama will have to start announcing all kinds of new and more drastic measures that will shock the stunned American public -- things like bank holidays, nationalizations, possibly even dollar devaluation.

Dmitry Orlov:"The Superpower Collapse Soup." (http://cluborlov.blogspot.com/2009/02/social-collapse-best-practices.html)

QuoteThe theory states that the United States and the Soviet Union will have collapsed for the same reasons, namely: a severe and chronic shortfall in the production of crude oil (that magic addictive elixir of industrial economies), a severe and worsening foreign trade deficit, a runaway military budget, and ballooning foreign debt. I call this particular list of ingredients "The Superpower Collapse Soup." Other factors, such as the inability to provide an acceptable quality of life for its citizens, or a systemically corrupt political system incapable of reform, are certainly not helpful, but they do not automatically lead to collapse, because they do not put the country on a collision course with reality.

QuoteNow, $40 a barrel is a good price for US consumers at the moment, but there is hyperinflation on the horizon, thanks to the money-printing extravaganza currently underway in Washington, and $40 could easily become $400 and then $4000 a barrel, swiftly pricing US consumers out of the international oil market.

Title: Re: Meltdown
Post by: BachQ on February 18, 2009, 05:47:21 AM

Quote from: ezodisy on February 17, 2009, 08:01:09 AM
If this actually gets to $20 it'll be the buy of the decade. Even at $36 it's amazing.

Double bottom or spew?

I know which one I want (the thing is overvalued anyway) (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

(http://i39.tinypic.com/2vj7axk.jpg)

Haah! Oil just plunged below $35/bbl ($34.82)!

Meanwhile, gold is hovering around $970/oz.

Title: Re: Meltdown
Post by: DavidRoss on February 18, 2009, 05:50:31 AM

Quote from: Dm on February 18, 2009, 05:40:46 AM
UK Guardian (http://www.guardian.co.uk/environment/gallery/2009/feb/18/grand-designs-crossway-eco-home-kent?picture=343387569) (18 Feb 09): This house, in Crossway, Kent, is one of the first zero-carbon homes in the UK. The arched building is essentially one large vault spanning 20 metres, covered on the outside with earth and plants to help it blend in with its rural surroundings More than a quarter (27%) of UK carbon emissions come from households, adding considerably to global warming. "The design is cost-effective in that the home is relatively simple to build and, once you know what you're doing, it's quick," said structural designer Michael Ramage

Lovely in some ways. Hardly "blends in." Doesn't seem likely to be nearly as efficient as the "earth houses" that have been built for quite some time in the U.S.

Title: Re: Meltdown
Post by: BachQ on February 18, 2009, 07:33:32 PM

Quote from: DavidRoss on February 18, 2009, 05:50:31 AM
Lovely in some ways. Hardly "blends in." Doesn't seem likely to be nearly as efficient as the "earth houses" that have been built for quite some time in the U.S.

No argument from me ... I think Earth-homes are cool:

(http://www.calearth.org/EcoDome/EcDmThruRD.jpg)

Cal-Earth photogallery (http://www.calearth.org/PhotoGallery/photogallery.html)

(http://conceptrends.com/wp-content/uploads/earth_house_small1.jpg) (http://www.ecologicalconsulting.ca/Images/honey%20house.jpg)

Title: Re: Meltdown
Post by: ezodisy on February 18, 2009, 11:21:27 PM

cool, but uuuuuuuuuuuuuuuuuuuugly :)

Title: Re: Meltdown
Post by: Coopmv on February 19, 2009, 06:57:51 PM

Quote from: Dm on February 17, 2009, 07:02:24 AM
Coopmv, this could spell disaster: "Corporate debt in the euro zone stands at more than $11 trillion, equaling some 95% of the region's annual output. U.S. corporate debt, by contrast, is about 50% of the economy." (http://www.businessweek.com/magazine/content/09_08/b4120028076400.htm?chan=magazine+channel_news) Given that these debts were securitized, rebundled, and re-sold to investors, one wonders how much toxic debt an economy is able to withstand before it implodes?

No doubt, the US is crippled by the subprime mortgages and all the toxic derivatives whose values depend on these subprime mortgages while Euroland is wallowing in the equally devastating amount of corporate junk bonds. In the meantime, Japan has never fully recovered from the economic debacle that started with the collapse of the Tokyo stock market from the lofty 38,000 level. The western industrial world is in serious economic trouble ...

Title: Re: Meltdown
Post by: ezodisy on February 19, 2009, 10:32:29 PM

BOE's Gieve Sees Risk of [UK] Decade-Long Depression Like Japan (http://www.bloomberg.com/apps/news?pid=20601087&sid=aoU6VkHvLBnU&refer=home)

Title: Re: Meltdown
Post by: ezodisy on February 20, 2009, 12:19:52 AM

my morning reading has somehow taken me around to Polybius and anacyclosis, the humour of which I am enjoying very much indeed.

From Wiki (okay it's not the most rigorous reading I've done)

Polybius' sequence of anacyclosis proceeds in the following order: 1. Monarchy, 2. Kingship, 3. Tyranny, 4. Aristocracy, 5. Oligarchy, 6. Democracy, and 7. Ochlocracy.

...This point of the cycle sees the emergence of "democracy", as well as the beginning of "rule by the many". In the same way that the descendants of kings and aristocrats abused their political status, so too will the descendants of democrats. Accordingly, democracy degenerates into "ochlocracy", literally, "mob-rule". During ochlocracy, according to Polybius, the people of the state will become corrupted, and will develop a sense of entitlement and will be conditioned to accept the pandering of demagogues. Eventually, the state will be engulfed in chaos, and the competing claims of demagogues will culminate in a single demagogue claiming absolute power, bringing the state full-cirlce back to monarchy.

lol

Title: Re: Meltdown
Post by: BachQ on February 20, 2009, 05:49:58 AM

Quote from: Spitvalve on February 12, 2009, 10:19:05 PM
Should I be buying Swiss francs? Or gold? What do you gurus think?

I hope you bought GOLD, because it just broke the $1,000/oz barrier! And given that we're facing Ochlocracy (mob rule), GOLD will become the currency of choice.

Buy, buy, buy .....

Quote from: ezodisy on February 20, 2009, 12:19:52 AM
Accordingly, democracy degenerates into "ochlocracy", literally, "mob-rule". During ochlocracy, according to Polybius, the people of the state will become corrupted, and will develop a sense of entitlement and will be conditioned to accept the pandering of demagogues. Eventually, the state will be engulfed in chaos, and the competing claims of demagogues will culminate in a single demagogue claiming absolute power, bringing the state full-cirlce back to monarchy.

lol

:D

So that's what we can look forward to. Cool. Does that mean that capitalism is also out the window? I hope not ... it's been so highly effective thus far. The UK is already prepackaged for monarchy rule, so the transition from ochlocracy to monarchy should be fairly smooth. >:D

Title: Re: Meltdown
Post by: BachQ on February 20, 2009, 05:53:01 AM

Quote from: Coopmv on February 19, 2009, 06:57:51 PM
No doubt, the US is crippled by the subprime mortgages and all the toxic derivatives whose values depend on these subprime mortgages while Euroland is wallowing in the equally devastating amount of corporate junk bonds. In the meantime, Japan has never fully recovered from the economic debacle that started with the collapse of the Tokyo stock market from the lofty 38,000 level. The western industrial world is in serious economic trouble ...

We've had growth and relative prosperity for so long, it seems almost surreal at how quickly this is unfolding.

Nouriel Roubini: (http://www.rgemonitor.com/roubini-%3Cbr%20/%3E%3Cbr%20/%3Emonitor/255627/the_worst_economic_and_financial_crisis_since_the_great_depression_reveals_the_weaknesses_of_the_laissez_faire_anglo-saxon_model_of_capitalism) " ... The global economy is now literally in free fall as the contraction of consumption, capital spending, residential investment, production, employment, exports and imports is accelerating rather than decelerating. ... In many countries the banks may be too-big-to-fail but also too- big-to-save, as the fiscal/financial resources of the sovereign may not be large enough to rescue such large insolvencies in the financial system. ... At some point a sovereign bank may crack, in which case the ability of governments to credibly commit to act as a backstop for the financial system — including deposit guarantees — could come unglued. ..."

Comments @ FT Alphaville (http://ftalphaville.ft.com/blog/2009/02/19/52691/roubini-end-of-the-laissez-faire-anglo-saxon-model-of-capitalism/)

Title: Re: Meltdown
Post by: BachQ on February 20, 2009, 06:04:49 AM

Quote from: ezodisy on February 19, 2009, 10:32:29 PM
BOE's Gieve Sees Risk of [UK] Decade-Long Depression Like Japan (http://www.bloomberg.com/apps/news?pid=20601087&sid=aoU6VkHvLBnU&refer=home)

And the solution, of course, is to begin printing money ..... It's simple! >:D

The Looming Collapse of European Banking (19 Feb 09) -- LewRockwell.com (http://www.lewrockwell.com/north/north689.html):

Quote Central banks will inflate to keep any major bank from collapsing. But the trend is ominous. Russia and Eastern Europe are gonners. European banks that lent to them are, too. So is the purchasing power of the euro – and maybe even the actual euro. I can see Germany cutting and running sometime before 2011. Evans-Pritchard pulls no punches. This is a gutsy forecast.

Quote from: Ambrose Evans-Pritchard Whether it takes months, or just weeks, the world is going to discover that Europe's financial system is sunk, and that there is no EU Federal Reserve yet ready to act as a lender of last resort or to flood the markets with emergency stimulus.

Title: Re: Meltdown
Post by: BachQ on February 20, 2009, 06:23:34 AM

Citigroup and Bank of America are spiralling inexorably closer to imminent nationalization:

WSJ/MarketWatch (http://www.marketwatch.com/news/story/Citi-B-A-spiral-further/story.aspx?guid=%7B6543BD49-6410-4C08-9C18-0CA122E0612A%7D&dist=hplatest) -- "Shares of Citigroup and Bank of America both fell about 15% to fresh lows Friday as weary investors backed further away from the pair, expressing growing concern over their future as independent banks."

Title: Re: Meltdown
Post by: ezodisy on February 20, 2009, 07:34:22 AM

Quote from: Dm on February 20, 2009, 06:23:34 AM
Citigroup and Bank of America are spiralling inexorably closer to imminent nationalization:

WSJ/MarketWatch (http://www.marketwatch.com/news/story/Citi-B-A-spiral-further/story.aspx?guid=%7B6543BD49-6410-4C08-9C18-0CA122E0612A%7D&dist=hplatest) -- "Shares of Citigroup and Bank of America both fell about 15% to fresh lows Friday as weary investors backed further away from the pair, expressing growing concern over their future as independent banks."

Citigroup (C) and Bank of America (BAC) won't live to see May. The government will take them over within the next 60 days. The announcement may come as soon as tomorrow evening. (http://www.chartingstocks.net/2009/02/gone-in-60-days-citi-and-bank-of-america-wont-live-to-see-may/)

Title: Re: Meltdown
Post by: Coopmv on February 21, 2009, 05:10:49 AM

Quote from: ezodisy on February 20, 2009, 07:34:22 AM
Citigroup (C) and Bank of America (BAC) won't live to see May. The government will take them over within the next 60 days. The announcement may come as soon as tomorrow evening. (http://www.chartingstocks.net/2009/02/gone-in-60-days-citi-and-bank-of-america-wont-live-to-see-may/)

The Obama Administration just came public yesterday saying it has no intention of nationalizing Citigroup and Bank of America. Now, it must find ways to stabilize the banking system to which both these banks has been a major drag.

Title: Re: Meltdown
Post by: ezodisy on February 22, 2009, 04:30:07 AM

Quote from: ezodisy on February 17, 2009, 08:01:09 AM
If this actually gets to $20 it'll be the buy of the decade. Even at $36 it's amazing.

Double bottom or spew?

I know which one I want (the thing is overvalued anyway) (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

(http://i39.tinypic.com/2vj7axk.jpg)

and now

Title: Re: Meltdown
Post by: Coopmv on February 22, 2009, 05:04:59 AM

Quote from: ezodisy on February 22, 2009, 04:30:07 AM
and now

It is amazing how fast and how far oil prices have crashed. Back in the mid to late 80's, prices were at single digit. I think it might have briefly hit $4/bbl. But then there were 2.3B people fewer in the global consumption chain then since India and China were not even a factor in the global oil consumption equation. Indeed, the multiplier effect is one that is not easy to accurately estimate, which is how much Chinese oil consumption will be driven down when the US and the EU really jam on the brake on Chinese imports. As many as 20M Chinese factory workers have already lost their jobs due to the crashing export demands ...

Title: Re: Meltdown
Post by: ezodisy on February 22, 2009, 06:36:36 AM

yeah oil has plummeted in spectacular fashion but those charts are for Dow cash which has crashed in its own way. Dow Jones Transports has also smashed through its Nov low

Title: Re: Meltdown
Post by: Coopmv on February 22, 2009, 08:31:31 AM

Quote from: ezodisy on February 22, 2009, 06:36:36 AM
yeah oil has plummeted in spectacular fashion but those charts are for Dow cash which has crashed in its own way. Dow Jones Transports has also smashed through its Nov low

The Dow Transports is much more correlated to the US economy than the Dow Industrials ...

Title: Re: Meltdown
Post by: ezodisy on February 22, 2009, 08:44:07 AM

Quote from: Coopmv on February 22, 2009, 08:31:31 AM
The Dow Transports is much more correlated to the US economy than the Dow Industrials ...

When they're both sick and collapsing, it doesn't make much of a differnce, does it?

Title: Re: Meltdown
Post by: BachQ on February 22, 2009, 08:48:23 AM

Quote from: ezodisy on February 22, 2009, 08:44:07 AM
When they're both sick and collapsing, it doesn't make much of a differnce, does it?

Nice title for your Dow chart: "ByeBye.JPG" :D

Title: Re: Meltdown
Post by: BachQ on February 22, 2009, 08:49:24 AM

BBC (http://news.bbc.co.uk/2/hi/europe/7903518.stm?lss) (21 Feb 09): Roughly 100,000 Irish citizens are protesting Ireland's handling of the "recession."

(http://newsimg.bbc.co.uk/media/images/45499000/jpg/_45499630_006912879-1.jpg)

That's a big crowd. :o

Title: Re: Meltdown
Post by: BachQ on February 22, 2009, 08:54:38 AM

Quote from: ezodisy on January 31, 2009, 11:24:56 AM
The game changer

By George Soros

January 28 2009 (http://www.ft.com/cms/s/0/49b1654a-ed60-11dd-bd60-0000779fd2ac.html)

Soros sees no bottom for world financial collapse (20 Feb 09) -- Reuters (http://www.reuters.com/article/businessNews/idUSTRE51K0A920090221?feedType=RSS&feedName=businessNews) -- Soros and Volcker spoke at a Columbia University conference on Friday (20 Feb 09). Soros opined that the current turbulence is actually more severe than during the Great Depression, comparing the current situation to the demise of the Soviet Union, and he stated: "The financial system [is] still on life support. There's no sign that we are anywhere near a bottom." Volcker said: "I don't remember any time, maybe even in the Great Depression, when things went down quite so fast, quite so uniformly around the world."

Speaking of Russia: WSJ: (http://www.marketwatch.com/news/story/Russia-goes-splash-crash-commodities/story.aspx?guid=%7B8721A3D2-2BCD-4147-8A70-5DA0FC240FEA%7D) The escalating downward spiral of Russia's economy, currency, and stock market is threatening Putin's political legacy & plunging Russia "into the worst financial crisis since its 1998 debt default."

Title: Re: Meltdown
Post by: Coopmv on February 22, 2009, 09:06:38 AM

The late Jimmy Goldsmith, the British financier, aka corporate raider, predicted that with the relentless job outsourcing to the third world, the western economies would be engaged in a race to the bottom - ever declining middle-class wages and living standards. Those in power then dismissed his prognostication and attempted to discredit him in anyway they could. Well, he was right.

Title: Re: Meltdown
Post by: BachQ on February 22, 2009, 09:10:06 AM

Quote from: Coopmv on February 22, 2009, 05:04:59 AM
Indeed, the multiplier effect is one that is not easy to accurately estimate, which is how much Chinese oil consumption will be driven down when the US and the EU really jam on the brake on Chinese imports. As many as 20M Chinese factory workers have already lost their jobs due to the crashing export demands ...

China is a major wildcard in this global house of cards. As the largest purchaser of US treasuries, China has been supporting the US's unparalleled debt binge; but if China is forced to look after its own citizens, or otherwise gets wise to the fact that US treasuries might not be the best investment (LOL :D), then we can crank up the doom-meter several notches. According to one source, "actual" US government debt exceeds $65.5 trillion, (http://www.worldnetdaily.com/index.php?fa=PAGE.view&pageId=88851) which effectively renders the US insolvent -- even without Obama's multi-trillion dollar spend-a-thon.

(http://www.worldnetdaily.com/images/misc/deficittwo.jpg)

This exceeds the total world GDP, and is four times the total US GDP. And now Hillary Clinton (http://www.google.com/hostednews/afp/article/ALeqM5h2xftywUIB_eC527jrKdyKRX-i0Q) is joining this circus as she tries to convince the Chinese that buying US treasuries is a great idea (actually, she's pleading with the Chinese to continue to fund America's debt binge).

Title: Re: Meltdown
Post by: BachQ on February 23, 2009, 07:17:51 AM

Eleven States Declare Sovereignty Over Obama's Actions
by A.W.R. Hawkins
Posted 02/23/2009 ET
HumanEvents.com (http://www.humanevents.com/article.php?id=30807)
-->print version <-- (http://www.humanevents.com/article.php?print=yes&id=30807)

State governors -- looking down the gun barrel of long-term spending forced on them by the Obama "stimulus" plan -- are saying they will refuse to take the money. This is a Constitutional confrontation between the federal government and the states unlike any in our time.

In the first five weeks of his presidency, Barack Obama has acted so rashly that at least 11 states have decided that his brand of "hope" equates to an intolerable expansion of the federal government's authority over the states. These states -- Washington, New Hampshire, Arizona, Montana, Michigan, Missouri, Oklahoma, California, Georgia, South Carolina, and Texas -- have passed resolutions reminding Obama that the 10th Amendment protects the rights of the states, which are the rights of the people, by limiting the power of the federal government. These resolutions call on Obama to "cease and desist" from his reckless government expansion and also indicate that federal laws and regulations implemented in violation of the 10th Amendment can be nullified by the states.

[snip]

*** Our Constitutional system of checks and balances is always thought of as enabling two of the three branches of the federal government to keep the third within its constitutional bounds. But there is a fourth check, the states, which also have a Constitutional function. It is to them this burden now falls. The states can choose between allowing the federal government to impose untenable conditions on them if they accept the stimulus money, or to reject it.

These eleven states have the right to reject the stimulus plan. And they must.

There is no other option. For this federal expansion will not stop unless we stand in its way with courage in our hearts and the Constitution in our hands.

The 10th Amendment

QuoteWhen the Constitution was being ratified during the 1780s, the 10th Amendment was understood to be the linchpin that held the entire Bill of Rights together. The amendment states: "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

The use of the 10th Amendment in conjunction with nullification garnered much attention in 1828, when the federal government passed a tariff that southerners believed affected them disproportionately. When the 1828 tariff was complemented by another in 1832, Vice President John C. Calhoun resigned the Vice Presidency to lead his home state of South Carolina in pursuit of an "ordinance of nullification," which was no less a declaration of the sovereignty of each individual state within the union than the declarations now being made.

Calhoun was simply exercising what he recognized to be his state's right to defend liberty within its borders by rejecting the dictates of an overbearing central government. While his efforts culminated in a tense affair referred to as the "nullification crisis," which witnessed everything from threats of a federal invasion of South Carolina to an ongoing and near union-rending debate over national power vs. state's rights, they also succeeded in turning back the tariffs that had been passed in spite of the Constitutional limits on federal power.

Example of State Sovereignty Legislation

QuoteSouth Carolina's resolution is typical of the others issued to date:
Quote"The General Assembly of the State of South Carolina, by this resolution, claims for the State of South Carolina sovereignty under the Tenth Amendment to the Constitution of the United States over all powers not otherwise enumerated and granted to the federal government by the United States Constitution...

Be it...resolved that this resolution serves as notice and demand to the federal government, as South Carolina's agent, to cease and desist immediately all mandates...beyond the scope of the federal government's constitutionally delegated powers."
What these state assemblies and congresses have hit upon here is key to our entire conservative interpretation of the Constitution, for these states understand that the Constitution limits the federal government, not the people. Or to put it another way, it guarantees the freedom of the people by limiting the government.

Title: Re: Meltdown
Post by: Coopmv on February 23, 2009, 05:12:12 PM

Financial Dereg is the ultimate con job perpetuated by the self-professing free-market capitalists. They are the 21th century financial alchemists ...

Title: Re: Meltdown
Post by: ezodisy on February 23, 2009, 10:12:12 PM

Quote from: Coopmv on February 23, 2009, 05:12:12 PM
Financial Dereg is the ultimate con job perpetuated by the self-professing free-market capitalists. They are the 21th century financial alchemists ...

financial deregulation rules dude! (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Quote from: Dm on February 23, 2009, 07:17:51 AM
Eleven States Declare Sovereignty Over Obama's Actions
by A.W.R. Hawkins

that's great they can do that. More conflict to come no doubt about it

Title: Re: Meltdown
Post by: BachQ on February 24, 2009, 07:42:28 AM

Quote from: LewRockwell on February 20, 2009, 06:04:49 AM
The Looming Collapse of European Banking (19 Feb 09) -- LewRockwell.com (http://www.lewrockwell.com/north/north689.html):

S&P Slashes Latvia's Credit Rating to Junk as Outlook Worsens ..Financial Times: (http://www.ft.com/cms/s/0/d8fbc068-0284-11de-b58b-000077b07658.html) (24 Feb 09): "Latvia on Tuesday became the second European Union nation after Romania to receive a "junk" level credit rating after Standard & Poor's reduced its rating on the crisis-hit nation. . S&P also put neighbours Estonia and Lithuania on CreditWatch, with negative implications."

Title: Re: Meltdown
Post by: BachQ on February 24, 2009, 07:44:41 AM

Quote from: Coopmv on February 22, 2009, 09:06:38 AM
The late Jimmy Goldsmith, the British financier, aka corporate raider, predicted that with the relentless job outsourcing to the third world, the western economies would be engaged in a race to the bottom - ever declining middle-class wages and living standards. Those in power then dismissed his prognostication and attempted to discredit him in anyway they could. Well, he was right.

Here's an oped piece (http://www.opednews.com/articles/America-Has-No-Means-to-Re-by-Dustin-Ensinger-081208-723.html) that agrees resoundingly with Goldsmith. There are some interesting comments that follow the editorial.

Title: Re: Meltdown
Post by: Coopmv on February 24, 2009, 06:52:54 PM

Quote from: Dm on February 24, 2009, 07:44:41 AM
Here's an oped piece (http://www.opednews.com/articles/America-Has-No-Means-to-Re-by-Dustin-Ensinger-081208-723.html) that agrees resoundingly with Goldsmith. There are some interesting comments that follow the editorial.

The foolishness that a country can be prosperous on service jobs alone. The only problem is not all service job workers are lawyers and doctors. Most are in the fast food industry making minimum wages ...

Title: Re: Meltdown
Post by: Que on February 25, 2009, 01:57:57 PM

(http://sinfest.net/comikaze/comics/2008-10-12.gif)

Title: Re: Meltdown
Post by: ezodisy on February 26, 2009, 10:46:49 PM

lol

Title: Re: Meltdown
Post by: BachQ on February 27, 2009, 11:49:26 AM

A very laid-back Jim Rogers starts off with a bang: "The US is in serious trouble because people in Washington don't have a clue what's going on ... so the US is going to have its worst economy since the 1930's"

Live from Singapore: http://www.youtube.com/v/1N6RRSxzu6o

"Farming is going to become a fantastic industry in the future" :D

Title: Re: Meltdown
Post by: BachQ on February 27, 2009, 11:51:34 AM

Ukraine's Hryvnia Drops to Record Low on Moody's Rating Warning--Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601085&sid=aXZKSMgT4GJU&refer=europe) (24 Feb 09): "The rating action reflects concerns about how persistent political uncertainty clouds the prospects for an orderly resolution of banking problems, in the context of a severe economic downturn," Jonathan Schiffer, senior credit officer at Moody's in New York, said in the report.

Ukraine's CDS graph: (http://www.debtorsprisonblog.org/storage/5Y%20CDS%20EURO%20EM%206M.png?__SQUARESPACE_CACHEVERSION=1235391499784)

The rate of devaluation of Ukraine's hryvnia has been so rapid and steep that only Icelandic Krona has declined at a faster rate.

(http://www.exchange-rates.org/Chart.aspx?iso_code=UAH&base_iso_code=USD&mode=G&filter=30)

Title: Re: Meltdown
Post by: BachQ on February 27, 2009, 11:53:17 AM

History Channel's Mega Disasters: Oil Apocalypse

http://www.youtube.com/v/nbWGoPEN9l8

Title: Re: Meltdown
Post by: BachQ on February 27, 2009, 11:56:22 AM

Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601087&sid=aECwrlIFIIYY&refer=home) RBS analyst: Corporate Bonds Are Next "Ugly Bubble" as default rates soar and more than half of issuers face multiple ratings cuts.

Moody's predicts default rate will exceed peaks hit in Great Depression -- Telegraph (http://www.telegraph.co.uk/finance/economics/4840805/Moodys-predicts-default-rate-will-exceed-peaks-hit-in-Great-Depression.html) (26 Feb 09): "Moody's said it anticipated a tidal wave of defaults was approaching & that in the coming months more than 15pc of speculative-grade bonds and loans - all but the most highly-rated - would default on their debts. This peak is even higher than the peak reached in 1933, when bank after bank throughout America was collapsing, taking hoards of other companies with them. Back then, the default rate peaked at 15.4pc."

Title: Re: Meltdown
Post by: BachQ on February 27, 2009, 11:57:23 AM

The Shocking Truth about Canada's Housing Mkt-- MacLeans (http://blog.macleans.ca/2009/02/23/the-shocking-truth-about-the-value-of-your-home/) (23 Feb 09): "Thousands of people [are] getting buried in the rubble of Vancouver's collapsing [housing] prices; a dream market has turned into a nightmare, faster than anyone thought possible"

Title: Re: Meltdown
Post by: drogulus on February 27, 2009, 04:29:35 PM

From the Christian Science Monitor:

An ugly bias is back: blaming Jews for financial woes (http://www.csmonitor.com/2009/0227/p09s01-coop.html)

Title: Re: Meltdown
Post by: ezodisy on February 28, 2009, 01:33:02 AM

Quote from: drogulus on February 27, 2009, 04:29:35 PM
From the Christian Science Monitor:

An ugly bias is back: blaming Jews for financial woes (http://www.csmonitor.com/2009/0227/p09s01-coop.html)

Jews? I think you mean Americans :P

Title: Re: Meltdown
Post by: ezodisy on February 28, 2009, 03:13:11 AM

http://www.youtube.com/v/owH4vyyCeSA

Hendry interviewed by the FT last month

Title: Re: Meltdown
Post by: ezodisy on February 28, 2009, 03:23:53 AM

Jim's on Goldseek radio starting at hour 2

http://radio.goldseek.com/

Title: Re: Meltdown
Post by: ezodisy on February 28, 2009, 03:32:47 AM

another video website, looks like it's updated regularly: http://www.goud.com/

Title: Re: Meltdown
Post by: Coopmv on February 28, 2009, 05:31:55 AM

Quote from: ezodisy on February 28, 2009, 01:33:02 AM
Jews? I think you mean Americans :P

There are financial crooks from all background. They should all be locked up in jail for years ...

Title: Re: Meltdown
Post by: Coopmv on February 28, 2009, 05:35:12 AM

It looks like Europe is now well into its own meltdown phase ...

Read on, this is truly scary stuffs.

http://www.businessweek.com/magazine/content/09_10/b4122036855338.htm?chan=globalbiz_europe+index+page_top+stories

Title: Re: Meltdown
Post by: ezodisy on February 28, 2009, 10:03:29 AM

For those of you who only want to listen to Buffett, here you go

While Buffett and business partner Charlie Munger can't predict how stocks will perform in 2009, they're certain "that the economy will be in shambles throughout 2009 - and, for that matter, probably well beyond," he wrote. (http://www.bloomberg.com/apps/news?pid=20601087&sid=a1L50vuf_HiM&refer=home)

Title: Re: Meltdown
Post by: BachQ on February 28, 2009, 12:08:51 PM

Quote from: Coopmv on February 28, 2009, 05:35:12 AM
It looks like Europe is now well into its own meltdown phase ...

Read on, this is truly scary stuffs.

http://www.businessweek.com/magazine/content/09_10/b4122036855338.htm?chan=globalbiz_europe+index+page_top+stories

East-West divide plagues Europe -- Int'l Herald Tribune -- (http://www.iht.com/bin/printfriendly.php?id=20491260) "...Divisions between 'old' and 'new' member states, between east and west and north and south have been around for years. But the gaps are reopening with a vengeance as worries grow that Europe's vast single market will splinter under the pressures of classic beggar-thy-neighbor actions aimed at protecting specific industries and jobs within individual nations. To make matters worse, fears are growing of a financial crisis in Eastern Europe that could spark wider economic turbulence across Western Europe *** ...To add to the tensions, some East European nations are eager to speed up entry into the euro zone, which has provided a shield for weaker economies like Greece and Ireland. That might increase the burden on richer, older states if bailouts have to take place. Germany, the biggest contributor to the EU, is at pains to limit the scope of any pan-European bailouts and to prevent a major deterioration of public finances. ...

Title: Re: Meltdown
Post by: BachQ on February 28, 2009, 12:10:26 PM

California's unemployment rate jumps to 10.1%, its first double-digit jobless reading in a quarter-century ... (http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2009/02/27/financial/f112511S11.DTL&type=business)

Title: Re: Meltdown
Post by: BachQ on February 28, 2009, 12:13:33 PM

Dow index value less than half its peak -- AP -- (http://www.journalstar.com/articles/2009/02/27/news/business/doc49a871a84186d506209106.txt) 2009 has thus far been brutal for US stocks, as evidenced by the market stats:

— The Dow, at its lowest close since May 1, 1997, is now down 50.1 percent from its record high of 14,164.53 reached in October 2007. It came within 34 points of 7,000, a level it hasn't fallen below since October 1997.

— The Standard & Poor's 500 index breached its Nov. 21 trading low of 741.02, which came during the height of the credit crisis. Friday's finish was the lowest for the index since Dec. 18, 1996.

— The Dow's 11.7 percent loss in February was its worst monthly loss since 1933, when it fell 15.6 percent, and its sixth straight monthly drop. The half-year slide totals 38.8 percent, the worst since 1932, when it fell 45 percent.

The S&P 500 index fell 11 percent for the month. It was the second-worst February for the index, topped only by an 18.4 percent slide in 1933. It was the index's fifth monthly drop in six months; it managed a slender gain of 0.8 percent in December.

— The Dow Jones Wilshire 5000 index, which reflects nearly all stocks traded in America, is down 52.7 percent since its October 2007 peak.

Title: Re: Meltdown
Post by: BachQ on February 28, 2009, 12:15:49 PM

Quote from: ezodisy on February 28, 2009, 03:23:53 AM
Jim's on Goldseek radio starting at hour 2

http://radio.goldseek.com/

Jim Rogers: "Paulson was a disaster from the beginning ... Paulson was bad enough, but Geithner's even worse ... If I were Geithner, I'd resign, [but] he's going to go down in history as a gigantic disaster"

Title: Re: Meltdown
Post by: BachQ on February 28, 2009, 12:56:43 PM

Quote from: Coopmv on February 28, 2009, 05:35:12 AM
It looks like Europe is now well into its own meltdown phase ... Read on, this is truly scary stuffs.

Good summary of where Europe may be headed. Here's the 5-page article formatted for one page. (http://www.businessweek.com/print/magazine/content/09_10/b4122036855338.htm) While it's true that European banks did not issue subprime mortgages to the lethal extent that their US counterparts did, they did, however, finance "subprime countries" (e.g., Eastern Europe) instead. As to corporate debt maturing in 2009, European corporations owe roughly one-third more ($800B) than their U.S. counterparts.

Title: Re: Meltdown
Post by: BachQ on February 28, 2009, 01:58:42 PM

Quote from: Coopmv on February 28, 2009, 05:35:12 AM
It looks like Europe is now well into its own meltdown phase ... Read on, this is truly scary stuffs.

Currency devaluations on the way (http://network.nationalpost.com/np/blogs/tradingdesk/archive/2009/02/27/currency-devaluations-on-the-way.aspx)

QuoteRapid deterioration in trade-dependent nations—Japan, China, and Germany —suggest that these countries will have to resort to competitive devaluations to boost economic growth. ... China's exports are down by 20% since August 2008 ... Japan's exports fell 45% in January ... Germany's situation is perhaps worse than Japan's. If it wasn't for exports, Germany's GDP over the past decade might have been falling, according to Lombard Street Research. Now that exports haven fallen heavily over the past three months, it is, in recession that is. Throw in a banking crisis in Switzerland and Austria where billions in loans to emerging Europe are under threat and a weaker Euro looks like the only remedy for the sick man of Europe.

Title: Re: Meltdown
Post by: BachQ on February 28, 2009, 02:01:45 PM

Busy weekend for news.

Quote from: Coopmv on February 28, 2009, 05:35:12 AM
It looks like Europe is now well into its own meltdown phase ... Read on, this is truly scary stuffs.

http://www.businessweek.com/magazine/content/09_10/b4122036855338.htm?chan=globalbiz_europe+index+page_top+stories

The implosion of Ireland: Breaking point for the eurozone? Telegraph (http://www.telegraph.co.uk/news/4864532/Breaking-point-for-the-eurozone.html) (27 feb 09):"Ireland's 'miracle' economy has turned terrifyingly sour - and as it strains against the inflexibility of the euro, its next crisis may shake the entire EU. ... Jean-Claude Trichet [has] admitted that the 10-year-old eurozone was under 'extreme strain.' ... Joschka Fischer, Germany's former foreign minister, darkly suggested that we would soon find out whether the eurozone would turn out to be 'a disaster', while the German finance ministry is vacillating on whether it would be prepared to bail out insolvent states. ... The most startling fact ... is that the country which is seen as the most vulnerable, and therefore the most likely to ditch the euro, is not Slovenia, or Cyprus, or Greece, but Ireland."

QuoteAll of a sudden, Ireland's debt-fuelled economy, built largely on a construction boom, has collapsed in a more spectacular manner than almost any other in Europe. Irish government bonds are rated as the riskiest in the EU, and there has been panicky talk of Ireland as "the next Iceland". On the streets, there is a whiff of revolution, with 120,000 people staging Dublin's biggest mass rally in 30 years last weekend to protest at the government's handling of the economy and its decision to impose what amounted to a pay cut on public sector workers. The unions have now threatened a "Doomsday" strike next month if the prime minister, Brian Cowen, does not think again. As the celebrated Irish economist David McWilliams put it: "The entire Irish episode will be studied internationally in years to come as an example of how not to do things." ... Ireland now has up to 350,000 empty homes – more than its entire private rental market – many of them simply abandoned as builders went bust. House prices are expected to fall by 80 per cent.

Title: Re: Meltdown
Post by: Coopmv on February 28, 2009, 02:07:25 PM

Quote from: Dm on February 27, 2009, 11:56:22 AM
Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601087&sid=aECwrlIFIIYY&refer=home) RBS analyst: Corporate Bonds Are Next "Ugly Bubble" as default rates soar and more than half of issuers face multiple ratings cuts.

Moody's predicts default rate will exceed peaks hit in Great Depression -- Telegraph (http://www.telegraph.co.uk/finance/economics/4840805/Moodys-predicts-default-rate-will-exceed-peaks-hit-in-Great-Depression.html) (26 Feb 09): "Moody's said it anticipated a tidal wave of defaults was approaching & that in the coming months more than 15pc of speculative-grade bonds and loans - all but the most highly-rated - would default on their debts. This peak is even higher than the peak reached in 1933, when bank after bank throughout America was collapsing, taking hoards of other companies with them. Back then, the default rate peaked at 15.4pc."

The same thing is happening in Europe as well. Is the Swiss government finally done with the UBS bailout? Your guess is as good as mine. Perhaps UBS is in as much of a bottomless pit as Citigroup and BOA are in ...

Title: Re: Meltdown
Post by: Coopmv on February 28, 2009, 02:16:46 PM

The EU will have its hands full between dealing with the collapse of the economies of eastern and central Europe in addition to the imminent collapse of the European junk bond market. Mr. Trichet at the ECB will soon be flooding the market with Euros. Unfortunately, both the Feds and ECB have screwed up. Both central banks started cutting interest rates too late. At this point, they are both pushing on strings. We in the west thought our central banks were smarter than the Japanese central bank but our central banks have proven they are not any smarter. Timing is everything. Once that point of no return is passed, no amount of easing will do the job. I am afraid we have been way past that point of no return.

Title: Re: Meltdown
Post by: BachQ on February 28, 2009, 03:13:24 PM

Quote from: ezodisy on February 28, 2009, 03:32:47 AM
another video website, looks like it's updated regularly: http://www.goud.com/

Nice!. Marc Faber, Jim Rogers, Peter Schiff, Ron Paul ... plus many new faces.

Peter Schiff with an Obamic buzz: http://www.youtube.com/v/p-eE85uFv8k

(WARNING: POOR PICTURE QUALITY)

"Obama is determined to create spending out of thin air ... to create credit with the crank of a printing press ... and any country that's tried this, it's led to disaster ... Unfortunately, the ball is in motion, and all we can do is watch the Congress and the President completely destroy what's left of this economy and destroy whatever value is left in our money"

Kunstler: (http://jameshowardkunstler.typepad.com/clusterfuck_nation/2009/02/the-abyss-stares-back.html)"Is the USA in recession, depression, or collapse? People are at least beginning to ask. Nature's way of hinting that something truly creepy may be up is when both Paul Volcker and George Soros both declare on the same day that the economic landscape is looking darker than the Great Depression."

Martin D. Weiss (http://www.moneyandmarkets.com/red-alert-major-meltdown-imminent-your-escape-29835) Red Alert: Major Meltdown Imminent!

(http://www.cagle.com/working/090218/bok.jpg)

(http://www.cagle.com/working/090220/beattie.jpg)

Title: Re: Meltdown
Post by: BachQ on February 28, 2009, 03:25:42 PM

Quote from: ezodisy on February 28, 2009, 03:13:11 AM
Hendry interviewed by the FT last month

Hendry's laid-back yet forthright style reminds me of Jim Rogers. Meanwhile, Coopmv's BusinessWeek article emphasizes Hugh Hendry's point about the pitfalls of the euro and the likely need for country-specific currency devaluation:

QuoteThe European Union's economic problems are almost as diverse as its 27 members, ranging from slumping exports in Germany and Eastern Europe to anemic consumer spending in France to property bubbles in Britain, Ireland, and Spain. "It's the first downturn that affects the whole world with such violence," says Léo Apotheker, co-CEO of German software maker SAP. ... Before the introduction of the euro a decade ago, a country such as Spain could have let its currency fall to make its cars, wine, olive oil, and other goods more attractive to foreigners. That's not an option anymore. Instead, as Europe's highfliers are laid low, companies must cut wages to regain competitiveness. "People aren't aware that monetary union requires new ways to adjust to a recession," says Fernando Ballabriga, an economics professor at the ESADE business school in Barcelona.

Quote from: Coopmv on February 28, 2009, 02:16:46 PM
At this point, [the two central banks] are both pushing on strings.

If the central banks are out of ammunition and flailing in the wind, then the focus becomes "what long-term damage will the central banks inflict through their desperate, bandaid, short-sighted interventions (i.e., printing money / quantitative easing)"? As Jim Rogers and other have noted, this has never been done before (under similar conditions), so the potential downside remains unknown.

Title: Re: Meltdown
Post by: Coopmv on February 28, 2009, 03:38:18 PM

Quote from: Dm on February 28, 2009, 03:25:42 PM
Hendry's laid-back yet forthright style reminds me of Jim Rogers. Meanwhile, Coopmv's BusinessWeek article emphasizes Hugh Hendry's point about the pitfalls of the euro and the likely need for country-specific currency devaluation:

If the central banks are out of ammunition and flailing in the wind, then the focus becomes "what long-term damage will the central banks inflict through their desperate, bandaid, short-sighted interventions (i.e., printing money / quantitative easing)"? As Jim Rogers and other have noted, this has never been done before (under similar conditions), so the potential downside remains unknown.

The EMS is flawed because short of a full-fledged political union where all EU members relinquish their sovereignty and take order from a central government, the system cannot possibly meet the real stress test. Each country within the EU borders has its own unique economic problems which Brussels cannot even semi-adequately address.

Title: Re: Meltdown
Post by: BachQ on March 02, 2009, 03:11:38 AM

The US agreed Sunday night to provide another $30 billion to AIG as it prepares to report a record $61.7 billion Q4 loss today, the biggest quarterly loss in US corporate history, people involved in the discussions said Sunday night. (http://www.mercurynews.com/bailout/ci_11816270)

Title: Re: Meltdown
Post by: Coopmv on March 02, 2009, 05:54:35 AM

Quote from: Dm on March 02, 2009, 03:11:38 AM
The US agreed Sunday night to provide another $30 billion to AIG as it prepares to report a record $61.7 billion Q4 loss today, the biggest quarterly loss in US corporate history, people involved in the discussions said Sunday night.
(http://www.mercurynews.com/bailout/ci_11816270)

AIG got toast mainly because of the failure of the US regulators. AIG wrote too many credit-default swaps, which are essentially insurance policies on securities holdings the buyers of such insurance contracts have or may not have. It is foolhardy that speculators can buy CDS's on some securities when they do not even hold the securities. Since the contracts are legally binding, when the securities tank, the speculators of the CDS's demand to be paid and AIG is broke from having to pay out all these claims. Just imagine people can buy homeowner insurance policies when they do not even own the homes. This is foolishness to the nth degree ...

Title: Re: Meltdown
Post by: Coopmv on March 02, 2009, 07:31:07 AM

And the worldwide stock market meltdown continues ... ???

Title: Re: Meltdown
Post by: ezodisy on March 02, 2009, 08:55:35 AM

Quote from: Coopmv on March 02, 2009, 07:31:07 AM
And the worldwide stock market meltdown continues ... ???

of course. Surely you didn't expect it to rally with all of this horror news. Besides we stil await a selling climax before any possible rally.

Title: Re: Meltdown
Post by: Coopmv on March 02, 2009, 09:02:51 AM

Quote from: ezodisy on March 02, 2009, 08:55:35 AM
of course. Surely you didn't expect it to rally with all of this horror news. Besides we stil await a selling climax before any possible rally.

What selling climax? This has been a short-sellers show and there have been no buyers. Short-sellers are just speculators. They do not sell on fundamentals. Many of the short-sellers might also have commited crimes by spreading false rumors. The SEC enforcements division has been doing a lousy job for the past decade ...

Title: Re: Meltdown
Post by: ezodisy on March 02, 2009, 09:27:54 AM

lol! A little too much Bloomberg over there.

We all await the selling climax. When this thing pukes up a good 500-1000pts in a day then we might make a nice turn.

Shorters are innocent and have nothing to do with a selling climax mate.

Title: Re: Meltdown
Post by: Lethevich on March 02, 2009, 09:36:04 AM

A question: apparently the FTSE hit a "6 year low" today.

Now, from based on was going on in mine and my friends lives at the time, plus all the babble on TV, this time was in the middle of an economic boom. So why was it being so low then ok for the economy, but being so low now is bad?

Title: Re: Meltdown
Post by: bwv 1080 on March 02, 2009, 10:11:39 AM

Quote from: Lethe on March 02, 2009, 09:36:04 AM
A question: apparently the FTSE hit a "6 year low" today.

Now, from based on was going on in mine and my friends lives at the time, plus all the babble on TV, this time was in the middle of an economic boom. So why was it being so low then ok for the economy, but being so low now is bad?

Its not so bad if you have cash to buy today

For the US, projections of -3.5% real GDP growth in 2009 will bring total GDP to mid-2006 levels. Is this a catastrophe? Granted the population has grown since then, but three years ago was hardly the dark ages

Title: Re: Meltdown
Post by: Lethevich on March 02, 2009, 10:25:54 AM

Quote from: bwv 1080 on March 02, 2009, 10:11:39 AM
For the US, projections of -3.5% real GDP growth in 2009 will bring total GDP to mid-2006 levels. Is this a catastrophe? Granted the population has grown since then, but three years ago was hardly the dark ages

Hehe, indeed. Several decades ago a lot of people in the west were genuinely hard-up - problems buying food, let alone holidays. Crisis or not, people will still have disposable money to buy things that they like, they just can't be so extravagant. And this is coming from a materialist :P

Title: Re: Meltdown
Post by: Coopmv on March 02, 2009, 10:51:03 AM

Quote from: ezodisy on March 02, 2009, 09:27:54 AM
lol! A little too much Bloomberg over there.

We all await the selling climax. When this thing pukes up a good 500-1000pts in a day then we might make a nice turn.

Shorters are innocent and have nothing to do with a selling climax mate.

But your last post talked about a selling climax. My point is, the selling may be mostly done by the short-sellers these days and there is a total lack of buyers.
People who are selling now are 3000 points too late IMO ...

Title: Re: Meltdown
Post by: ezodisy on March 02, 2009, 11:36:00 AM

Quote from: Coopmv on March 02, 2009, 10:51:03 AM
But your last post talked about a selling climax. My point is, the selling may be mostly done by the short-sellers these days and there is a total lack of buyers.
People who are selling now are 3000 points too late IMO ...

no that's not the case. There are still many firms who are forced sellers and have to liquidate portfolios and close positions. They are genuine sellers, not new short sellers, most of whom are in from well, well up. When we get a real selling climax then we should see a turn.

Title: Re: Meltdown
Post by: Coopmv on March 02, 2009, 12:05:04 PM

Quote from: ezodisy on March 02, 2009, 11:36:00 AM
no that's not the case. There are still many firms who are forced sellers and have to liquidate portfolios and close positions. They are genuine sellers, not new short sellers, most of whom are in from well, well up. When we get a real selling climax then we should see a turn.

Many hedge funds will go belly up by the end of this year. The funding of these firms have basically dried up ...

Title: Re: Meltdown
Post by: PerfectWagnerite on March 02, 2009, 12:10:12 PM

Quote from: Coopmv on March 02, 2009, 12:05:04 PM
Many hedge funds will go belly up by the end of this year.

That's not a bad thing considering most of the people involved in these transactions are just plain thieves.

Title: Re: Meltdown
Post by: Coopmv on March 02, 2009, 01:12:38 PM

Quote from: ezodisy on March 02, 2009, 09:27:54 AM
Shorters are innocent and have nothing to do with a selling climax mate.

But there are shorters that have been spreading malicious rumors on companies in order to bolster their short positions in those companies' shares ...

Title: Re: Meltdown
Post by: ezodisy on March 02, 2009, 01:25:45 PM

Quote from: bwv 1080 on March 02, 2009, 10:11:39 AM
Its not so bad if you have cash to buy today

For the US, projections of -3.5% real GDP growth in 2009 will bring total GDP to mid-2006 levels. Is this a catastrophe? Granted the population has grown since then, but three years ago was hardly the dark ages

Quote from: Lethe on March 02, 2009, 10:25:54 AM
Hehe, indeed. Several decades ago a lot of people in the west were genuinely hard-up - problems buying food, let alone holidays. Crisis or not, people will still have disposable money to buy things that they like, they just can't be so extravagant. And this is coming from a materialist :P

fast forward to 4'45 and watch for a minute. Figures will get worse.

http://www.youtube.com/v/3dIqaiQeGfc&feature=channel_page

http://www.youtube.com/watch?v=3dIqaiQeGfc&feature=channel_page

Title: Re: Meltdown
Post by: BachQ on March 02, 2009, 02:17:15 PM

Some interesting developments for Monday as financial data for 2008 and 2009 emerge. Not a meltdown, but more of the same doom.

First, the bad news:

• Dow Index Drops Below 7,000 for First Time Since '97

• Asian Stocks Fall to Five-Year Low as Global Recession Deepens

• Canadian stocks dropped most in three months after its economy shrank 3.4% (annualized Q4), most since '91

• FTSE 100 slid 5.3% to lowest level since 2003

• Brit. pound slid to less than $1.40 as UK's bank stocks fell the most in nearly 25 yrs

• January U.K. house prices fell the most since at least 2001

• Japanese car sales plunged most in 35 years (32.4% in Feb.; 27.9% in Jan.)

• US Manufacturing Shrank for 13th Straight Month on Collapsing Sales

• US's revised Q4 GDP plunges most since 1982

• China's manufacturing shrank for a seventh month in February

• Europe's manufacturing industry shrank at a record pace in February

• U.K. manufacturing shrank for a 10th month and consumer lending rose at the slowest pace since at least 1993

• Italy's 2008 economy contracted most in 30 yrs, pushing its budget deficit near the EU's limit

• India's exports plunged most in over a decade

• PC Shipments to Fall the most ever (12%) in 2009, as Users Hold Off Purchases

• Australia May Cut Benchmark Rate to Lowest Since 1960 as Economy Stalls

• Dollar Advances to Highest Level Since 2006 as AIG Spurs Demand for Safety

• Goldman Sachs: New Zealand Economy to Shrink 2.9% in 2009

• Crude Oil Falls More Than $4 on Concern Recession Will Curb Fuel Demand

• EU Leaders Reject Pleas for Eastern European, Auto Aid on Budget Concerns

• Hungary's forint tumbled the most in nine weeks after Fitch Ratings cut the country's rating to negative.

• Mexico's currency tumbled to a record low for a third straight day

• Argentina's peso slid to its lowest since October 2002 and stocks and bonds plunged

• Brazilian stocks and currency tumbled, erasing gains for the year

• Russia, the worst-performing major stock market in 2008, was Europe's best last month as the ruble rose and reserves stabilized. Every neighboring market crumbled.

• Ryanair may charge for toilet use on planes

• Defaults by Franchisees Soar as the Recession Deepens

• US Deliquency Rates from many sectors Rise Sharply in Q4

• US Pension plans are imploding

• AIG sounds alarms on ratings, collateral calls, solvency

• US construction activity plunges far more than expected

Now, the good news: :D

• First Solar Inc., the world's largest maker of thin-film solar power modules, agreed to take over a portfolio of utility-sized projects from closely held OptiSolar for $400 million in stock to expand sales in the U.S.

• Time Magazine: (http://www.time.com/time/business/article/0,8599,1880880,00.html)Cobblers thrive as economy tanks

Title: Re: Meltdown
Post by: Coopmv on March 02, 2009, 02:24:28 PM

Quote from: Dm on March 02, 2009, 02:17:15 PM

Now, the good news: :D

• First Solar Inc., the world's largest maker of thin-film solar power modules, agreed to take over a portfolio of utility-sized projects from closely held OptiSolar for $400 million in stock to expand sales in the U.S.

• Time Magazine: (http://www.time.com/time/business/article/0,8599,1880880,00.html)Cobblers thrive as economy tanks

looks like you own shares in First Solar, Inc ... ;D

Title: Re: Meltdown
Post by: ezodisy on March 02, 2009, 02:26:28 PM

lol! Nice one Fibo

Title: Re: Meltdown
Post by: ezodisy on March 02, 2009, 11:14:16 PM

it's too small to read here so this is the link:

http://www.investorsinsight.com/cfs-filesystemfile.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/john_5F00_mauldins_5F00_outside_5F00_the_5F00_box/jmotb030209image0021_5F00_58672DEF.jpg

(http://www.investorsinsight.com/cfs-filesystemfile.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/john_5F00_mauldins_5F00_outside_5F00_the_5F00_box/jmotb030209image0021_5F00_58672DEF.jpg)

Title: Re: Meltdown
Post by: BachQ on March 03, 2009, 11:50:36 AM

Quote from: ezodisy on March 02, 2009, 11:14:16 PM
it's too small to read here so this is the link:

http://www.investorsinsight.com/cfs-filesystemfile.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/john_5F00_mauldins_5F00_outside_5F00_the_5F00_box/jmotb030209image0021_5F00_58672DEF.jpg

(http://www.investorsinsight.com/cfs-filesystemfile.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/john_5F00_mauldins_5F00_outside_5F00_the_5F00_box/jmotb030209image0021_5F00_58672DEF.jpg)

Excellent chart ... I've been searching for a comparison table like that. The US and UK are WORSE THAN UKRAINE! :o Actually, Ukraine's condition has worsened since the release of that chart. As of yesterday, Ukraine's (http://www.ft.com/cms/s/67fba682-075a-11de-9294-000077b07658,dwp_uuid=7c485a38-2f7a-11da-8b51-00000e2511c8,print=yes.html) credit default swap rate was hovering around 3,700, compared with about 1,000 for Latvia and 560 for Hungary (both on IMF support). I wonder whether Kiev will be able to pay its $400m bill to Gazprom this week? That chart is a great idea, and it should be updated weekly amid the dynamic conditions in the global economy.

(http://media.ft.com/cms/0877be22-075e-11de-9294-000077b07658.gif)

Title: Re: Meltdown
Post by: BachQ on March 03, 2009, 11:51:33 AM

Jim Rogers: Let AIG Go Bankrupt, Not America

http://www.cnbc.com/id/29476319

Title: Re: Meltdown
Post by: BachQ on March 03, 2009, 11:53:23 AM

"James Lovelock believes global warming is now irreversible, and that nothing can prevent large parts of the planet from becoming too hot to inhabit, or sinking underwater, resulting in mass migration, famine and epidemics. Britain is going to become a lifeboat for refugees from mainland Europe, so instead of wasting our time on wind turbines we need to start planning how to survive. ... He fears we won't invent the necessary technologies in time, and expects "about 80%" of the world's population to be wiped out by 2100." (http://www.guardian.co.uk/theguardian/2008/mar/01/scienceofclimatechange.climatechange)

Title: Re: Meltdown
Post by: BachQ on March 03, 2009, 11:55:44 AM

Worst performing companies by quarter

Ticker Company* Loss Period
($,bln)

AIG American International -61.7 Q4 2008
TWX Time Warner Inc. -54.2 Q1 2002
TWX Time Warner Inc. -44.9 Q4 2002
JDSU JDSU Uniphase Corp. -41.8 Q3 2001
GM General Motors Corp. -39.0 Q3 2007
COP ConocoPhillips -31.8 Q4 2008
S Sprint Nextel Corp. -29.5 Q4 2007
AIG American International -24.5 Q3 2008
Q Qwest Communications -23.6 Q1 2002
Q Qwest Communications -17.4 Q2 2002
C Citigroup Inc. -17.3 Q4 2008
TWX Time Warner Inc. -16.0 Q4 2008
GM General Motors Corp. -15.5 Q2 2008
FCX Freeport-McMoRan Copper -13.9 Q4 2008
CBS CBS Corp. -12.5 Q3 2008
JDSU JDSU Uniphase Corp. -12.4 Q4 2001
VRSN VeriSign -11.2 Q2 2001 (http://www.bloomberg.com/apps/news?pid=20601087&sid=a7xVYy0zCDGY&refer=home)

Title: Re: Meltdown
Post by: BachQ on March 03, 2009, 11:59:50 AM

Laws keeping North Carolina Symphony & other nonprofits from endowment money [--click--] (http://www.bostonherald.com/news/national/general/view.bg?articleid=1155580&srvc=rss)

Title: Re: Meltdown
Post by: BachQ on March 03, 2009, 12:02:22 PM

Quote from: ezodisy on March 02, 2009, 01:25:45 PM
fast forward to 4'45 and watch for a minute. Figures will get worse.

http://www.youtube.com/v/3dIqaiQeGfc&feature=channel_page

http://www.youtube.com/watch?v=3dIqaiQeGfc&feature=channel_page

Oscar is awesome. He nailed yesterday's S&P performance. Here's a CNBC video of uber-bear Louise Yamada, who predicts that because the Dow has pierced its support level (and violated its previous low threshold), Dow is now poised to fall as low as 4,000 (and S&P @ 400).

http://www.cnbc.com/id/15840232?video=1050302108&play=1

Title: Re: Meltdown
Post by: Coopmv on March 03, 2009, 05:26:18 PM

Quote from: Dm on March 03, 2009, 12:02:22 PM
Oscar is awesome. He nailed yesterday's S&P performance. Here's a CNBC video of uber-bear Louise Yamada, who predicts that because the Dow has pierced its support level (and violated its previous low threshold), Dow is now poised to fall as low as 4,000 (and S&P @ 400).

http://www.cnbc.com/id/15840232?video=1050302108&play=1

Only time will tell if these technicians or chartists are correct ...

Title: Re: Meltdown
Post by: ezodisy on March 04, 2009, 07:07:23 AM

black gold on the way back. Bring it on!!!!! (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Title: Re: Meltdown
Post by: BachQ on March 04, 2009, 07:56:10 PM

Quote from: Coopmv on February 28, 2009, 03:38:18 PM
The EMS is flawed because short of a full-fledged political union where all EU members relinquish their sovereignty and take order from a central government, the system cannot possibly meet the real stress test. Each country within the EU borders has its own unique economic problems which Brussels cannot even semi-adequately address.

Perhaps the final nail in the Eurozone's coffin will be the collapse of one or more of the PIIGS (Portugal, Italy, Ireland, Greece, Spain). Spain's February unemployment rates were released today, and, having soared past 15% (//http://) :o, the situation looks increasingly dire. Over 3.5 million Spaniards are now unemployed (the total having risen by more than 10% in the past two months; and by more than 50% year-to-year). The European Commission has predicted conservatively that Spain's unemployment rate will escalate to 16.1% in 2010 and 18.7% in 2011. With rising unemployment comes rising defaults, and rising bank failures, and contracting credit, and less consumer spending, and more unemployment ... and the cycle continues.

(http://newsimg.bbc.co.uk/media/images/45530000/jpg/_45530156_spain_unemploy466.jpg)

Spains residential and commercial real estate sector is perhaps the hardest hit. But a video is worth a 1000 words (the accompanying music is priceless):

small: http://www.youtube.com/v/ccJp6C1xdZ8

large: http://www.youtube.com/v/ccJp6C1xdZ8

Soto Del Henares (Spain's real estate collapse showing the rampant vacancies of apartments & condos)

Title: Re: Meltdown
Post by: BachQ on March 04, 2009, 07:57:48 PM

Quote from: ezodisy on March 04, 2009, 07:07:23 AM
black gold on the way back. Bring it on!!!!! (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

According to theoildrum (http://www.theoildrum.com/node/5154), Saudi Arabia's oil production peaked @ 9.6 mbpd in 2005. In 2008, Saudi Arabia's crude production dipped into the 9.3 mbd range. And the 2009-2010 forecast predicts that oil production will dip toward the 8.1 to 8.5 mbpd range. And then, after 2010, forecasters predict a sudden, steep plunge into the abyss (see chart below). If this is even close to accurate, then it's GAME OVER, and the global supply of oil will spiral downward, while the price rockets upward.

(http://www.theoildrum.com/files/ksa1r.gif)

Title: Re: Meltdown
Post by: BachQ on March 05, 2009, 03:49:57 AM

>:D

Quote from: ezodisy on November 06, 2008, 11:45:50 PM
I think the guy (or guys) who suggests 0 is way off the mark. BOE has never gone below 2. It ain't gonna happen now.

March 5 (Bloomberg) (http://www.bloomberg.com/apps/news?pid=20601087&sid=a.2NTU.IAU1A&refer=home#) -- The Bank of England reduced the benchmark interest rate to 0.5% (the lowest since the bank was founded in 1694; it has now reduced the benchmark rate 4.5% since October :o) and said it would start purchasing 75 billion pounds ($105 billion) in assets, "printing money to fight the recession." :D

Title: Re: Meltdown
Post by: ezodisy on March 05, 2009, 06:13:58 AM

oh come on you don't have to quote me every time! lol! ;D This country is screwed :(

Nice chart above by the way. Long oil and become filthy rich in the next 5 years (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Title: Re: Meltdown
Post by: ezodisy on March 05, 2009, 01:39:24 PM

Marc Faber taking calls on a Canadian TV station.

http://watch.bnn.ca/the-street/march-2009/the-street-march-5-2009/#clip146489

Title: Re: Meltdown
Post by: Coopmv on March 05, 2009, 04:21:00 PM

Quote from: Dm on March 05, 2009, 03:49:57 AM
>:D

March 5 (Bloomberg) (http://www.bloomberg.com/apps/news?pid=20601087&sid=a.2NTU.IAU1A&refer=home#) -- The Bank of England reduced the benchmark interest rate to 0.5% (the lowest since the bank was founded in 1694; it has now reduced the benchmark rate 4.5% since October :o) and said it would start purchasing 75 billion pounds ($105 billion) in assets, "printing money to fight the recession." :D

BOE is pushing on a string ...

Title: Re: Meltdown
Post by: Coopmv on March 05, 2009, 04:28:15 PM

Quote from: Dm on March 03, 2009, 11:59:50 AM
Laws keeping North Carolina Symphony & other nonprofits from endowment money [--click--]
(http://www.bostonherald.com/news/national/general/view.bg?articleid=1155580&srvc=rss)

This is nothing compared with how much the Harvard's endowments lost in 2008.

Title: Re: Meltdown
Post by: ezodisy on March 06, 2009, 04:15:57 AM

please let's see a big number over 1 million and then the market can puke and we can get a spring rally. That'll be the best thing for it now, because it ain't gonna sober up so long as it's holding it in

Title: Re: Meltdown
Post by: ezodisy on March 06, 2009, 04:24:18 AM

http://www.chartoftheday.com/20090306.htm?T

"Poor retail sales, doubts about GM's viability, and a clarification by the Chinese government that they would not add to its current $585 billion stimulus plan as some had hoped yesterday all helped push the market down 4% on the day. As a result of today's decline, the Dow closed at a new bear market low. The Dow is currently down 53.4% since peaking in October 2007. To put the magnitude of the current correction in perspective, today's chart illustrates the 15 worst corrections of the Dow since its inception in 1896. As today's chart illustrates, the current Dow correction already ranks as the second worst on record. Only the correction that began in 1929 was worse."

(http://www.chartoftheday.com/20090306.gif)

Title: Re: Meltdown
Post by: Coopmv on March 06, 2009, 06:16:15 PM

Quote from: ezodisy on March 06, 2009, 04:24:18 AM
http://www.chartoftheday.com/20090306.htm?T

"Poor retail sales, doubts about GM's viability, and a clarification by the Chinese government that they would not add to its current $585 billion stimulus plan as some had hoped yesterday all helped push the market down 4% on the day. As a result of today's decline, the Dow closed at a new bear market low. The Dow is currently down 53.4% since peaking in October 2007. To put the magnitude of the current correction in perspective, today's chart illustrates the 15 worst corrections of the Dow since its inception in 1896. As today's chart illustrates, the current Dow correction already ranks as the second worst on record. Only the correction that began in 1929 was worse."

(http://www.chartoftheday.com/20090306.gif)

The Chinese know how to spin too. Part of its plan to jump start its economy is to increase export. But which country has increased its orders to China, gimme a break. It is all hot air. I will be surprised if the Chinese economy can muster a 5% growth this year. Should the EU and the US continue to pare back Chinese import, we may see riots in the streets over there as 20M have already become unemployed since last year ...

Title: Re: Meltdown
Post by: BachQ on March 06, 2009, 07:35:42 PM

How times change ... This, from last May:

Quote from: bloomberg on June 06, 2008, 06:01:23 AM
U.S. Unemployment Rate Climbs to 5.5%, Most in 20 Years

Bloomberg (http://www.bloomberg.com/apps/news?pid=20601087&sid=aZ6VzqO8N1Ag&refer=home)

June 6 (Bloomberg) -- The U.S. lost jobs in May for a fifth month and the unemployment rate rose by the most in more than two decades, signaling the world's largest economy is stalling. Payrolls fell by 49,000, a smaller decline than forecast, after a 28,000 drop in April that was more than initially reported, the Labor Department said today in Washington. The jobless rate increased to 5.5 percent from 5 percent, the biggest jump since February 1986. *** ``We've never seen a run of negative payroll numbers like this without the economy being in a recession,'' Avery Shenfeld, senior economist at CIBC World Markets in Toronto, said before the report.

Now fast-forward to February, 2009:

MARCH 6, 2009, 9:28 AM
New York Times
Economic Roundup: The Unemployment Rate

By R.M. SCHNEIDERMAN
Updated 11:33 a.m. (http://economix.blogs.nytimes.com/2009/03/06/economic-roundup-the-unemployment-rate/)

The national unemployment rate rose to 8.1 percent in February, the highest rate in a quarter century, as the economy shed 651,000 jobs, the Bureau of Labor Statistics said on Friday. (More from Economix is here.)

Here is how some economists reacted to the news:

"The jump in unemployment should be seen more as evidence that prior figures may have understated the rate of deterioration than as something to be corrected in coming months." – Jan Hatzius, Goldman Sachs.

"Given the continuing slide in economic activity in the first quarter of 2009 there is a strong probability that over the next three months we will see a slow bleed in employment as the retail, financial and business services sector of the economy continue to shed jobs." - Joseph Brusuelas, Moody's Economy.com.

"The headline employment decline didn't meet the worst fears, but that doesn't make this report anything but awful. The labor-market remains in free-fall. There is no silver lining here." – Nigel Gault, IHS Global Insight.

"We are going to need a bigger stimulus." – Brad DeLong, The University of California-Berkeley.

"Job loss continues at a stunning pace – we haven't seen employment fall off a cliff like this in over thirty years." – Lawrence Mishel and Heidi Shierholz, Economic Policy Institute.

"Horrendous! There can be no other word to describe this employment report. It is unlikely to be long before we hear calls for more stimulus in Washington." — John Ryding and Conrad DeQuadros, RDQ Economics.

"Since the recession began in December 2007, the U.S. has lost 4.38 million jobs, with 75% of the drop occurring in the most recent six months. We expect labor market conditions to remain dreadful for many months to come, which will reinforce the decline in consumer spending that is occurring for other reasons as well." – Joshua Shapiro, MFR Inc.

"It just feels like we're in the teeth of the recession, and the bite is still very hard. This is economy-wide, industry-wide. It just shows the severity and the breadth of the job losses." – Stuart Hoffman, PNC Financial.

"The employment report indicated that the labor market continues to deteriorate at a rapid clip. We continue to look for the unemployment rate to approach 10 percent by the end of 2009." – David Greenlaw and Ted Wieseman, Morgan Stanley

"With more job losses on tap over coming months and an increasing share of workers relegated to part-time work, there will be little support for consumer spending over coming months. While the much vaunted stimulus package may help on the margins, it won't change this bottom line." – Richard F. Moody, Mission Residential LLC

Title: Re: Meltdown
Post by: BachQ on March 06, 2009, 07:40:59 PM

Volcker Urges Dividing Investment, Commercial Banks -- Bloomberg (6 mar 09) -- (http://www.bloomberg.com/apps/news?pid=20601087&sid=atSsZ5Fp8xuY&refer=home)Commercial banks would provide customers with depository services and access to credit and would be highly regulated, while securities firms would have the freedom to take on more risk and practice trading, "relatively free of regulation," thereby reinstating some of the divisions between commercial and investment banks that were removed by Congress's repeal in 1999 of the Glass-Steagall Act.

Title: Re: Meltdown
Post by: ezodisy on March 07, 2009, 12:59:08 AM

Quote from: Coopmv on March 06, 2009, 06:16:15 PM
Should the EU and the US continue to pare back Chinese import, we may see riots in the streets over there as 20M have already become unemployed since last year ...

over there? Several are already predicting civil unrest in your country

Title: Re: Meltdown
Post by: ezodisy on March 07, 2009, 01:31:18 AM

Quote from: Coopmv on March 06, 2009, 06:16:15 PM
Part of its plan to jump start its economy is to increase export. But which country has increased its orders to China, gimme a break. It is all hot air.

Without doubt they spin, but please watch these 2 short videos which state that the notion of the Chinese economy being export driven is just a fallacy. I'm sure Time & Newsweek and other such publications are trying to calm the American public by saying that China will implode as its exports collapse, that they're going to be far worse off, but that just isn't going to be the case.

China will have problems, lots, just not wishful ones.

Jim Rogers is guest host but it's the other guy who's interesting this time

http://www.youtube.com/v/y-_HqrARSEA

http://www.youtube.com/v/w8qsq38V9a0

you can see the entire thing here: http://financialtruth0.blogspot.com/

Title: Re: Meltdown
Post by: ezodisy on March 07, 2009, 06:47:09 AM

http://www.youtube.com/v/FSVN6U4OyJE

Title: Re: Meltdown
Post by: ezodisy on March 07, 2009, 09:09:49 AM

http://www.youtube.com/v/oPpNQhfH4i0&

Title: Re: Meltdown
Post by: Coopmv on March 07, 2009, 09:57:38 AM

Quote from: ezodisy on March 07, 2009, 01:31:18 AM
Without doubt they spin, but please watch these 2 short videos which state that the notion of the Chinese economy being export driven is just a fallacy. I'm sure Time & Newsweek and other such publications are trying to calm the American public by saying that China will implode as its exports collapse, that they're going to be far worse off, but that just isn't going to be the case.

China will have problems, lots, just not wishful ones.

Just do the math, what is the per capital income in China? The westerners only see the big glitzy cities of Shanghai and Beijing. How many of them have ever traveled to the interior of that country where people live in abject poverty. Jim Rogers has a vested interest in China and he will not offer any objective view on the country for sure. I want to hear what some neutral party has to say about the Chinese economy. Some economists think China will be lucky to get a 5% growth in its economy this year. While 5% growth is quite acceptable in any other western industrialized country, it is not in China with its exploding population and therefore the need for ever more jobs ...

Title: Re: Meltdown
Post by: Coopmv on March 07, 2009, 10:00:17 AM

Quote from: ezodisy on March 07, 2009, 12:59:08 AM
over there? Several are already predicting civil unrest in your country

Don't be so self-assured. The UK's economy is imploding and the economies of the former eastern bloc are collapsing and widespread unrest may be just a matter of time. Where are you going, into the Atlantic?

Title: Re: Meltdown
Post by: ezodisy on March 07, 2009, 10:49:11 AM

Self-assured? I think it was you who started to talk about riots in China. Considering how the 2 countries are run, it's probably much more likely to happen in the US than China.

The UK is screwed and eastern Europe is going down the toilet, but you seem to think that the US will be okay just because not much is happening right now. Well it won't happen overnight, but if the US dollar collapses, and if Asian countries stop funding the US, and if you get stuck into another war, then all these problems faced by other countries will look totally insignificant to the disaster that'll overcome the states. I am not hoping for it, but I think it's very likely, and I think a lot of Americans I've seen on the internet are underestimating what could happen, just as they have underestimated the market decline going on right now.

Quote from: Coopmv on March 07, 2009, 09:57:38 AM
Just do the math, what is the per capital income in China? The westerners only see the big glitzy cities of Shanghai and Beijing. How many of them have ever traveled to the interior of that country where people live in abject poverty. Jim Rogers has a vested interest in China and he will not offer any objective view on the country for sure. I want to hear what some neutral party has to say about the Chinese economy. Some economists think China will be lucky to get a 5% growth in its economy this year. While 5% growth is quite acceptable in any other western industrialized country, it is not in China with its exploding population and therefore the need for ever more jobs ...

Coop, Jim Rogers is not the one talking about China. Granted the guy speaking might not be a "neutral party" (not that that exists anywhere, of course), but he's stating a couple of facts which you seem to be ignoring. Speaking of sounding "self-assured", have you travelled to the interior of China?

I don't have a particular interest in China. It's just that some of the stuff you're talking about sounds like wishful thinking, starting with that exports comment

Title: Re: Meltdown
Post by: ezodisy on March 07, 2009, 10:58:22 AM

http://www.youtube.com/v/U4cr_eE--cI&

Schiff: US unemployment figures likely closer to 15% than 8.1%

Title: Re: Meltdown
Post by: Coopmv on March 07, 2009, 01:50:14 PM

Quote from: ezodisy on March 07, 2009, 10:49:11 AM
Self-assured? I think it was you who started to talk about riots in China. Considering how the 2 countries are run, it's probably much more likely to happen in the US than China.

The UK is screwed and eastern Europe is going down the toilet, but you seem to think that the US will be okay just because not much is happening right now. Well it won't happen overnight, but if the US dollar collapses, and if Asian countries stop funding the US, and if you get stuck into another war, then all these problems faced by other countries will look totally insignificant to the disaster that'll overcome the states. I am not hoping for it, but I think it's very likely, and I think a lot of Americans I've seen on the internet are underestimating what could happen, just as they have underestimated the market decline going on right now.

Coop, Jim Rogers is not the one talking about China. Granted the guy speaking might not be a "neutral party" (not that that exists anywhere, of course), but he's stating a couple of facts which you seem to be ignoring. Speaking of sounding "self-assured", have you travelled to the interior of China?

I don't have a particular interest in China. It's just that some of the stuff you're talking about sounds like wishful thinking, starting with that exports comment

I do not give much credence to those talking heads on TV and Jim Rogers is one of them. If someone preaches the same thing all the time, it will become true once in a while. A broken clock tells the right time twice a day. Riots in the street due to massive unemployment in China caused by the nosedive in export is not my idea, I read the analysis from some respected geo-political think tank. Just use your head, a country of 1.3B people, how many of its people come of age every year and who will need a job. The article I read basically said China needs to grow its economy on average 8% a year in order to create enough jobs to keep this ever growing population reasonably employed.

I am a semi-isolationist and thought it was a bad idea that the US even got involved in the Bosnian War, why the heck the Europeans could not take care of problems in their own backyard. I am not sure if we should have given a damn about the Asian crisis back in 98 either.

I have a number of friends who travel to China often on business and have another good friend originally from China whom I helped with his PhD thesis at Princeton (since his English was not that good) and certainly have more connections and know about events in China probably better than you do, unless you happen to be from the poverty-stricken rural China.

I think Americans should tighten their belts and drastically reduce the purchases of imported goods from Asia to slash those trade deficits (by the way, most Japanese cars are now built in the US or Canada in case you are not aware). I love to see how these countries will then fare. I wonder if the new-found prosperity in many of the Asian countries could have fallen out of the sky. The US needs its tax laws rewritten so people have more incentive to save. With a population of 300M, I just do not see why with a drastically enhanced personal savings rate, pensions and 401K plans contributions, we cannot finance our own deficits. Other measures that should be useful is to drastically reduce our foreign aids and contributions to the IMF.

Title: Re: Meltdown
Post by: ezodisy on March 07, 2009, 03:28:39 PM

I don't know what you have against Jim Rogers. He probably has the best investment record of anyone alive. Yeah, definitely one to ignore. lol!

Title: Re: Meltdown
Post by: ezodisy on March 07, 2009, 03:31:19 PM

Hey Fibo, check it out, possible big £ selling opportunity coming up (or down). Either immediately or very soon it looks like

edit: second one drawn on closing prices

Title: Re: Meltdown
Post by: BachQ on March 07, 2009, 08:21:13 PM

US Treasury Dep't in Shambles: "It's a G*ddamned mess." (http://spectator.org/archives/2009/03/06/treasury-these-moments)

...Annette Nazareth had withdrawn from consideration to serve as deputy Treasury secretary because "she simply lost confidence in [treasury Secretary Timothy] Geithner," says a colleague of Nazareth's at the law firm, Davis Polk & Wardwell. "There's a lot of that going around, we hear." ... "People think Wall Street and our economy are in a mess? They have nothing on what we're going through here," said a career Treasury Department official after learning of Nazareth's withdrawal.

"We have no one here. There is no leadership," says another senior career Treasury official. "I've never seen anything like it. We have a secretary who seems to have no understanding of what his job entails, and no one in the White House seems to either know it or want to acknowledge it. We have people making decisions who shouldn't be making decisions, and in positions where we should have people making decisions about our domestic economy, our banking system and our Wall Street recovery plan, we have no one. People should be alarmed by this, but no one seems to care."

*** Both Treasury officials who spoke on background say that there is a growing lack of confidence within the department over Geithner. One said, "He is a nice man, but he is out of his depth." On Wednesday, according to a senior Democratic leadership aide, Sen. Max Baucus, chairman of the Senate Finance Committee, was "underwhelmed" by Geithner's performance during testimony on the budget. "I think it's safe to say that at least the Senate Democratic leadership is less than pleased with the performance of this White House and this Treasury Department. It's a ***damned mess."

(http://johngaltfla.com/blog2/wp-content/uploads/2009/01/turbotimmyrocks.jpg)

(http://www.halfwaytoconcord.com/wp-content/uploads/2009/02/geithner-bank-plan-details.jpg)

Title: Re: Meltdown
Post by: BachQ on March 07, 2009, 08:22:47 PM

Telegraph: Obama too tired to give proper welcome to Gordon Brown (http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/4953523/Barack-Obama-too-tired-to-give-proper-welcome-to-Gordon-Brown.html)

Title: Re: Meltdown
Post by: Coopmv on March 07, 2009, 08:32:01 PM

Quote from: Dm on March 07, 2009, 08:22:47 PM
Telegraph: Obama too tired to give proper welcome to Gordon Brown
(http://www.telegraph.co.uk/news/worldnews/northamerica/usa/barackobama/4953523/Barack-Obama-too-tired-to-give-proper-welcome-to-Gordon-Brown.html)

At least if we are ending up with an inept administration, I had nothing to do with it since I did not vote for Obama. People who voted for him might be excused for not having any better alternatives. The US presidential electon has degenerated to the point that whoever is able to raise the most money, he wins. Issues and experience no long matter.

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on March 07, 2009, 11:42:12 PM

Quote from: ezodisy on March 07, 2009, 03:28:39 PM
I don't know what you have against Jim Rogers. He probably has the best investment record of anyone alive.

I don't know the details of his "investment record," but as I've mentioned before, I've been exposed to some of Rogers' "expertise" on the topic of Russia, and it left me distinctly unimpressed. I read his going-around-the-world trip a few years ago, and while it was entertaining, it felt like he had put himself into the difficult position of someone who has to say something smart and deep about every country he visits. Skepticism is warranted, IMHO.

Title: Re: Meltdown
Post by: ezodisy on March 08, 2009, 12:49:59 AM

Quote from: Spitvalve on March 07, 2009, 11:42:12 PM
I don't know the details of his "investment record," but as I've mentioned before, I've been exposed to some of Rogers' "expertise" on the topic of Russia, and it left me distinctly unimpressed. I read his going-around-the-world trip a few years ago, and while it was entertaining, it felt like he had put himself into the difficult position of someone who has to say something smart and deep about every country he visits. Skepticism is warranted, IMHO.

yeah I know, he's a salesman, and like them he probably talks about things he shouldn't. Still, the record is there for all to see. (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Title: Re: Meltdown
Post by: Coopmv on March 08, 2009, 01:11:12 PM

Quote from: Dm on March 07, 2009, 08:21:13 PM
US Treasury Dep't in Shambles: "It's a G*ddamned mess." (http://spectator.org/archives/2009/03/06/treasury-these-moments)

To have a treasury secretary who forgot to pay his income taxes a number of times who now has the oversight responsibility for the IRS certainly does not inspire much confidence.

Title: Re: Meltdown
Post by: BachQ on March 09, 2009, 03:12:04 AM

Quote from: Jim Rogers on March 03, 2009, 11:51:33 AM
Jim Rogers: Let AIG Go Bankrupt, Not America

http://www.cnbc.com/id/29476319

What Jim Rogers didn't mention is that in AIG's plea for a 4th bailout, AIG effectively held a gun to the head of the US Treasury, stating that either AIG be granted yet another bailout, or the world economy would collapse. Specifically, AIG (http://www.bloomberg.com/apps/news?pid=20601087&sid=a72q7hFPu5Cs&refer=home) demanded the immediate infusion of emergency funds from the Fed / Treasury to avert a "catastrophic" collapse worse than Lehman Brothers' demise, according to a "strictly confidential" memo circulated to federal and state regulators. Warning of global turmoil, AIG threatened: "it is questionable whether the economy could tolerate another shock to the system that a failure of AIG would produce." The memo said that a collapse could catalyze AIG's "immediate seizure'' by foreign regulators and could undermine "the entire insurance industry within certain regions.''

Bloomberg (http://www.bloomberg.com/apps/news?pid=20601087&sid=a72q7hFPu5Cs&refer=home)

Title: Re: Meltdown
Post by: BachQ on March 09, 2009, 03:13:34 AM

The Financial Times (8 mar 09): (http://www.ft.com/cms/s/0/3f9a2bd8-0c0e-11de-b87d-0000779fd2ac.html)Plunging assets erase $50 trillion; Asia hit disproportionately.

Title: Re: Meltdown
Post by: BachQ on March 09, 2009, 03:16:16 AM

Credit markets are seizing up again amid new anxieties about the global financial system.-- WSJ (9 mar 09) -- (http://online.wsj.com/article/SB123655494840465843.html#mod=testMod) The spread on junk bonds has climbed to 19 percentage points over Treasury bonds (up from 16 percentage points in February); The Libor has increased from 1.1% in mid-January to 1.3% on Friday, "reflecting banks' concerns about being paid back for even short-term loans." ... "The credit markets are a mess because the economy is a mess. There's fear out there that's driving down every asset class simultaneously. It illustrates a lack of investor confidence in the government's plan for fixing the financial infrastructure," says Thomas Priore, chief executive of ICP Capital, a New York fixed-income investment firm.

Title: Re: Meltdown
Post by: BachQ on March 09, 2009, 03:17:18 AM

International Herald Tribune: World Bank offers dire forecast for world economy (http://www.iht.com/articles/2009/03/08/business/econ.php)

Title: Re: Meltdown
Post by: BachQ on March 09, 2009, 03:21:03 AM

Quote from: ezodisy on March 07, 2009, 03:31:19 PM
Hey Fibo, check it out, possible big £ selling opportunity coming up (or down). Either immediately or very soon it looks like

edit: second one drawn on closing prices

Yeah, Karl D. agrees, and his chart interpretations suggest a distinct, nasty down-swing for Sterling. But I wonder how immediately this will transpire? Meanwhile, lots of news over the weekend ... such as the spate of articles on the predicted demise of the euro: Overvalued euro set to plunge 'within months' (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/4958831/Overvalued-euro-set-to-plunge-within-months.html) "In recent days, futures traders in the US have significantly increased their bets that the euro will fall against the dollar. Data released by the Washington-based Commodity Futures Trading Commission on Friday showed that the "net short position" of trades against the euro by hedge funds and speculators almost doubled in the week "Quite a significant correction in the euro is coming in the next few months. The European Central Bank (ECB) is behind the curve in getting to grips with its economic problems," said David Buik of BGC Partners.

Why it could be curtains for the euro -- Money & Markets.com (http://www.moneyandmarkets.com/why-it-could-be-curtains-for-the-euro-3-30050) -- The Euro's "lack of flexibility is not even the most dangerous problem the euro member countries are facing. Even more dangerous to the euro's future existence is the death-spiraling plunge of neighboring eastern and central European "non-euro" countries."

Title: Re: Meltdown
Post by: BachQ on March 09, 2009, 03:26:08 AM

Updated daily by dshort.com, (http://dshort.com/articles/2009/bear-turns-to-bull.html) this chart shows that, in nominal terms, the decline in the S&P 500 matches the Dow Crash of 1929 over the equivalent time frame. In real (inflation adjusted) terms, it has surpassed the Dow decline.

In this chart, the current bear market is in dark blue; the Great Depression I is in light grey.

(http://dshort.com/charts/bears/four-bears-large.gif)

Title: Re: Meltdown
Post by: BachQ on March 09, 2009, 03:31:33 AM

Quote from: Coopmv on March 07, 2009, 08:32:01 PM
At least if we are ending up with an inept administration, I had nothing to do with it since I did not vote for Obama. People who voted for him might be excused for not having any better alternatives. The US presidential electon has degenerated to the point that whoever is able to raise the most money, he wins. Issues and experience no long matter.

I knew that Obama would become a major deficit expander, but I had no idea that it would be this bad. And we're only just beginning. He was voted the most liberal member of the Senate in 2007, so we shouldn't be too surprised.

Title: Re: Meltdown
Post by: ezodisy on March 09, 2009, 07:06:04 AM

Who is Karl D? The £ is finished. Bloody hell and I wanted a rally up to the 1.60s at one point (just to sell further). lol. Are we going to sell oil when it hits $50? I think so

Title: Re: Meltdown
Post by: Coopmv on March 09, 2009, 04:58:33 PM

Quote from: ezodisy on March 09, 2009, 07:06:04 AM
Who is Karl D? The £ is finished. Bloody hell and I wanted a rally up to the 1.60s at one point (just to sell further). lol. Are we going to sell oil when it hits $50? I think so

And what is your native currency? Rupee or SGD?

Title: Re: Meltdown
Post by: ezodisy on March 09, 2009, 11:10:54 PM

My native currency? The £ of course. The £ rules for ever! It's just taking a wee little kicking right now (all the way down to 1/$1). lol

Title: Re: Meltdown
Post by: Que on March 09, 2009, 11:18:38 PM

Quote from: ezodisy on March 09, 2009, 07:06:04 AM
The £ is finished.

I guess so, but so is the US dollar, and the euro could fall as well. But in all three cases: fall against what?
I wouldn't bet on Swiss Frank either... ::)

Q

Title: Re: Meltdown
Post by: ezodisy on March 09, 2009, 11:43:38 PM

Yeah it's true they're all doomed. lol! So long as we take turns dooming one at a time, however, then it'll be okay. The £ can lead (and rightly so given its near divine status). Yesterday FT Alphaville had an article about increased short positions in the Euro and an overdue corrective tumble for it coming soon. Who knows if it'll come about though.

And don't forget gold should go back down to under $400 before taking off (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Title: Re: Meltdown
Post by: BachQ on March 10, 2009, 03:38:12 AM

Quote from: Coopmv on February 28, 2009, 05:35:12 AM
It looks like Europe is now well into its own meltdown phase ...

Read on, this is truly scary stuffs.

http://www.businessweek.com/magazine/content/09_10/b4122036855338.htm?chan=globalbiz_europe+index+page_top+stories

European Bank Leverage Ratios (http://shop.ceps.eu/downfree.php?item_id=1712)

Bank .................... Leverage ratio

Hypo Real Estate Holding ............ 83.0
Dexia ............ 64.4
Barclay's Bank ............ 61.3
Deutsche Bank ............ 59.1
ING Group ............ 48.8
UBS ............ 46.9
Credit Agricole ............ 40.5
Commerzbank ............ 39.9
Deutsche Postbank* ............ 38.2
BNP Paribas ............ 36.1
Lloyd's TSB ............ 34.1
Credit Suisse ............ 33.4
Fortis ............ 33.3
Societe Generale ............ 30.3
KBC ............ 24.4
HSBC ............ 20.1
BBV Argentaria ............ 20.1
Standard Chartered ............ 19.5
UniCredit ............ 19.0
RBS ............ 18.8
Banco Popular ............ 16.6
Intesa Sanpaolo* ............ 11.1

another link (http://keskustelu.plaza.fi/muropaketti/bbs/t442870,6075)

Title: Re: Meltdown
Post by: BachQ on March 10, 2009, 03:41:56 AM

Quote from: ezodisy on March 09, 2009, 07:06:04 AM
Who is Karl D?

I'll let you know after you post Oscar's Weekend Webinar from this past weekend. 8)

Quote from: ezodisy on March 09, 2009, 11:43:38 PM
And don't forget gold should go back down to under $400 before taking off (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

:D Yeah, gold will dip below $400 when the pigs eat my brother.

Title: Re: Meltdown
Post by: ezodisy on March 11, 2009, 12:57:36 AM

gold is going to $400 and I'm gonna buy down there

http://www.youtube.com/v/-yuwdsNpO_Y

lol! Check this one out

I'll go back and look at the weekend webinar if the answer is in there

Title: Re: Meltdown
Post by: Valentino on March 11, 2009, 01:38:35 AM

My employer is trying to get hold of some of that Obama money. >:D

Title: Re: Meltdown
Post by: BachQ on March 11, 2009, 07:35:43 AM

Quote from: ezodisy on March 11, 2009, 12:57:36 AM
gold is going to $400 and I'm gonna buy down there

http://www.youtube.com/v/-yuwdsNpO_Y

lol! Check this one out

I'll go back and look at the weekend webinar if the answer is in there

lol ... Thank you for that! :D

Title: Re: Meltdown
Post by: Coopmv on March 11, 2009, 07:20:00 PM

Quote from: Valentino on March 11, 2009, 01:38:35 AM
My employer is trying to get hold of some of that Obama money. >:D

Really, selling cement to the US?

Title: Re: Meltdown
Post by: Coopmv on March 11, 2009, 07:24:19 PM

I thought someone who just said a few days ago what this article is reporting now could not happen...

China's exports make record drop, but car sales up
China's exports make record plunge, but rising auto sales provide some cheer
Joe Mcdonald, AP Business Writer
Wednesday March 11, 2009, 11:07 am EDT

Buzz up! Print BEIJING (AP) -- The record decline in China's exports accelerated in February, but Asia's bleak picture was tempered by other news Wednesday of a jump in Chinese auto sales and a smaller-than-expected drop in Japanese machinery orders.

Most Asian stock markets surged after Wall Street staged a massive rally on news that Citigroup is turning a profit, a welcome respite after weeks of gloom -- although many analysts predict the market rebound will be short-lived.

Chinese trade figures highlighted again the region's dependence on Western consumers. Exports in February plunged 25.7 percent from a year earlier, according to customs data -- the sharpest decline reported by the government since it began keeping records in the 1990s. That adds pressure on Beijing to move quickly to carry out a multibillion-dollar stimulus package aimed at pumping up the world's third-largest economy.

"Exports will get worse before they get better. We could see contractions of up to 30 percent," said Royal Bank of Scotland economist Ben Simpfendorfer. "I do think the economy will struggle to bounce back."

The collapse in global demand has battered export-driven Asia, forcing employers to slash output and jobs in China, Japan, South Korea and other economies.

China's imports fell by 24.1 percent, less than January's stunning 43 percent plunge but still a blow to its trading partners, especially other Asian nations that supply its export industries with components and raw materials. The commerce minister warned Tuesday the slump is unlikely to end soon, saying trade will be a "grim picture" in coming months.

"The export figure is set to stay in the red so long as the major economies around the world remain in recession," Moody's Economy.com analyst Sherman Chan said in a report.

China's trade surplus narrowed to $4.8 billion in February as exports fell to $64.8 billion and imports dropped to $60 billion. Its politically sensitive trade gaps with the United States and Europe also shrank.

The collapse in global demand for Chinese toys, shoes and other goods has thrown 20 million migrants out of work. Communist leaders worry that more layoffs could spark unrest and are promising to spend heavily to create jobs.

China's 4 trillion yuan ($586 billion) stimulus is meant to reduce reliance on exports by pumping money into the economy through higher spending on public works.

Premier Wen Jiabao announced an official 2009 growth target of 8 percent last week, but private sector economists expect growth as low as 5 percent. That still would be the strongest of any major economy but well below 2008's 9 percent.

"There is no way fiscal stimulus can prop up growth until the second half. The fall in private sector demand is too sharp," said Simpfendorfer.

In a positive sign for China, sales of domestically made vehicles rose 25 percent in February from a year earlier to 827,600 units, following a tax cut on smaller cars, the China Association of Automobile Manufacturers reported.

"The forecast is that the situation in March will be even better than February," an official of the industry group, Xiong Chuanlin, told the official Shanghai Securities News newspaper.

Asian stock markets rallied as investors, desperate for good news, cheered a letter from Citigroup CEO Vikram Pandit saying the bank operated at a profit for the first two months of this year, its best performance since the third quarter of 2007.

Still, analysts say the bounce will likely be temporary amid investor fears that the scope of the region's slump might be bigger than expected.

In Japan, government data showed machinery orders, an indicator of company spending, fell for a fourth month in January, but the 3.2 percent decline was better than the 5.3 percent expected by analysts in a Kyodo News survey.

Orders from non-manufacturers, which include construction and power generation, rose 13.5 percent, while overseas orders plunged 49 percent, the Cabinet Office reported. Orders from manufacturers plunged 27.4 percent.

The Cabinet Office projected a 3.5 percent increase in orders for the January-March quarter compared to the previous three months.

Also Wednesday, China's government said spending on factories and other fixed assets picked up in January and February, rising by 26.5 percent as its stimulus sparked a jump in investments by state companies.

Spending by government companies rose 35.6 percent, the National Bureau of Statistics reported. Overall growth was up from December's 21.9 percent and the full-year 2008 rate of 25.5 percent.

AP Business Writers Elaine Kurtenbach in Shanghai, Tomoko A. Hosaka in Tokyo and Jeremiah Marquez in Hong Kong contributed to this report.

Title: Re: Meltdown
Post by: ezodisy on March 11, 2009, 11:22:57 PM

Quote from: Coopmv on March 11, 2009, 07:24:19 PM
I thought someone who just said a few days ago what this article is reporting now could not happen...

I don't see anything in that article which contradicts what I said.

Sure there could be riots, just as there could be riots in the states as official unemployment closes in on and perhaps passes 10%

Of course China's export (and import) figures have plunged. That doesn't change what the analyst mentioned about China not relying solely on exports.

Title: Re: Meltdown
Post by: ezodisy on March 12, 2009, 12:40:51 AM

(http://alphaville.ftdata.co.uk/lib/inc/getfile/5257.jpg)

(http://alphaville.ftdata.co.uk/lib/inc/getfile/5259.jpg)

http://ftalphaville.ft.com/blog/2009/03/12/53476/bubble-theory-and-uk-housing/

Title: Re: Meltdown
Post by: ezodisy on March 12, 2009, 01:19:27 AM

what a loser

http://www.youtube.com/v/-6u1kG7yuy4

Title: Re: Meltdown
Post by: BachQ on March 12, 2009, 04:17:36 AM

Quote from: Coopmv on March 11, 2009, 07:24:19 PM
Chinese trade figures highlighted again the region's dependence on Western consumers. Exports in February plunged 25.7 percent from a year earlier, according to customs data -- the sharpest decline reported by the government since it began keeping records in the 1990s. That adds pressure on Beijing to move quickly to carry out a multibillion-dollar stimulus package aimed at pumping up the world's third-largest economy.

"Exports will get worse before they get better. We could see contractions of up to 30 percent," said Royal Bank of Scotland economist Ben Simpfendorfer. "I do think the economy will struggle to bounce back."

The collapse in global demand has battered export-driven Asia, forcing employers to slash output and jobs in China, Japan, South Korea and other economies.

China's imports fell by 24.1 percent, less than January's stunning 43 percent plunge but still a blow to its trading partners, especially other Asian nations that supply its export industries with components and raw materials. The commerce minister warned Tuesday the slump is unlikely to end soon, saying trade will be a "grim picture" in coming months.

"The export figure is set to stay in the red so long as the major economies around the world remain in recession," Moody's Economy.com analyst Sherman Chan said in a report.

China's trade surplus narrowed to $4.8 billion in February as exports fell to $64.8 billion and imports dropped to $60 billion. Its politically sensitive trade gaps with the United States and Europe also shrank.

The collapse in global demand for Chinese toys, shoes and other goods has thrown 20 million migrants out of work. Communist leaders worry that more layoffs could spark unrest and are promising to spend heavily to create jobs.

Yeah, Coop, China's exports have fallen off a cliff. Pretty dramatic stuff, both in absolute terms and when compared to other nations, although there are some close contenders, to wit:

-- JAPAN's (http://www.bloomberg.com/apps/news?pid=20601087&sid=aqFrDhSR8l1E&refer=home) GDP shrank 12.1% last quarter on export collapse.

-- GERMANY's (http://news.bbc.co.uk/2/hi/business/7934402.stm) January exports plunged by nearly 21% from one year ago.

-- IRELAND's (http://news.bbc.co.uk/2/hi/europe/7935040.stm)economy will shrink by more than 6% and Unemployment will average about 11% in 2009, according Ireland's central bank.

-- UK's (http://www.independent.co.uk/news/business/news/uk-economy-set-for-worst-year-since-1931-as-output-collapses-1642201.html) economy is poised for the worst year since 1931 as output collapsed by a staggering 12%.

-- USA's (http://uk.reuters.com/article/economyNews/idUKTRE51Q2PK20090227) GDP shrank at a seasonally adjusted 6.2% Q4 2008, the steepest decline since 1982.

-- LATVIA's (http://www.bloomberg.com/apps/news?pid=20601095&sid=aTITqjUNuaA8&refer=east_europe) economy shrank 10.3% in Q4.

-- BRAZIL's (http://news.bbc.co.uk/2/hi/business/7935565.stm) Q4 GDP shrank 3.6%, most on record.

Title: Re: Meltdown
Post by: BachQ on March 12, 2009, 04:19:47 AM

CANADA's (http://www.theglobeandmail.com/servlet/story/RTGAM.20090311.wPOLbudget0311/BNStory/politics/home?cid=al_gam_mostemail) gross domestic income (GDI) plunged by a whopping 15.3% in Q4 (over Q3), a plunge ten times worse than the US's 1.5% decline. (Canada's Q4 GDP shrank by 3.4% annualized)

Title: Re: Meltdown
Post by: BachQ on March 12, 2009, 04:22:20 AM

Seems that the US housing market has a ways to go before it reaches bottom:

RealtyTrac: US (http://finance.yahoo.com/news/Foreclosures-up-30-percent-in-apf-14612908.html) Feb foreclosures rise by 30% over last year, whereupon 291,000 homes rec'd foreclosure notices (rising 6% from Jan.).

(http://us.news2.yimg.com/us.yimg.com/p/fi/21/41/02.jpg)

Dow Jones Newswire (11 mar 09): (http://www.easybourse.com/bourse-actualite/marches/us-feb-foreclosures-up-67prc-after-jan-drop-foreclosurescom-631419) US Feb foreclosures surge 67% to a record 121,700, setting a record for the housing crisis; Pre-foreclosure filings (i.e., indicators of future completed foreclosures), rocketed 27% to 207,703, beating the previous monthly high from December by 9%.

Title: Re: Meltdown
Post by: Coopmv on March 12, 2009, 05:14:38 PM

Quote from: ezodisy on March 11, 2009, 11:22:57 PM
I don't see anything in that article which contradicts what I said.

Sure there could be riots, just as there could be riots in the states as official unemployment closes in on and perhaps passes 10%

Of course China's export (and import) figures have plunged. That doesn't change what the analyst mentioned about China not relying solely on exports.

I am surprised you missed this paragraph. You did not think this nosedive in Chinese export could happen. I bet the worst has yet to come.

Chinese trade figures highlighted again the region's dependence on Western consumers. Exports in February plunged 25.7 percent from a year earlier, according to customs data -- the sharpest decline reported by the government since it began keeping records in the 1990s.

Title: Re: Meltdown
Post by: ezodisy on March 12, 2009, 11:37:54 PM

Quote from: Coopmv on March 12, 2009, 05:14:38 PM
You did not think this nosedive in Chinese export could happen.

Chinese trade figures highlighted again the region's dependence on Western consumers. Exports in February plunged 25.7 percent from a year earlier, according to customs data -- the sharpest decline reported by the government since it began keeping records in the 1990s.

Of course I thought the decline in exports could happen. But you are making the same mistake as a lot of other people. The article says, Chinese trade figures highlighted again the regions dependence on Western consumers. And then it goes on to list some figures. It does not explain to what extent China relies on "western consumers" or what % of GDP those exports make up. The interview I gave you, which is just one of many, at least puts it into context. You have to do your own research mate and not just believe unsubstantiated claims in an article which align with your bias.

QuoteI bet the worst has yet to come.

you are starting to pick up on the theme of this thread (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Title: Re: Meltdown
Post by: Coopmv on March 13, 2009, 05:26:41 PM

Quote from: ezodisy on March 12, 2009, 11:37:54 PM
Of course I thought the decline in exports could happen. But you are making the same mistake as a lot of other people. The article says, Chinese trade figures highlighted again the regions dependence on Western consumers. And then it goes on to list some figures. It does not explain to what extent China relies on "western consumers" or what % of GDP those exports make up. The interview I gave you, which is just one of many, at least puts it into context. You have to do your own research mate and not just believe unsubstantiated claims in an article which align with your bias.

you are starting to pick up on the theme of this thread (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Not really. I can understand you are from Asia and obviously have a vested interest in the region. The numbers quoted in this article came from the research done by economist(s) from HSBC, which has deeper root in Asia than ANY other non-Asian banks and thereby can be trusted for its research. Just wait, when the EU's economy starts to roll over big-time and even as the American economy starts to turn around, its demand for Chinese-made goods probably will never return to its former height.

Title: Re: Meltdown
Post by: ezodisy on March 14, 2009, 02:06:42 AM

Quote from: Coopmv on March 13, 2009, 05:26:41 PM
I can understand you are from Asia and obviously have a vested interest in the region.

You are racist, which in fact you already proved with your comment about Jim Rogers' wife being Chinese. She's not and neither am I. It's a shame that people with low intelligence are always like this.

Title: Re: Meltdown
Post by: BachQ on March 14, 2009, 03:24:49 AM

Surviving the Great Collapse
By Robert Kuttner,
The Boston Globe,
March 12, 2009 (http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2009/03/12/surviving_the_great_collapse/)

THIS ECONOMIC CRISIS doesn't have to be a second Great Depression - if government does nearly everything right, and soon. But if government doesn't do more, and fast, this could be worse than the 1930s. Why? Three big reasons:

Finance: A Doomsday Machine. The financial system is in far worse shape than it was when the stock market crashed in October 1929. In the 1920s, there was a stock market bubble, mainly because people could play the market "on margin," borrowing to invest in stocks. There were also scams like the original Mr. Ponzi's. Like in the present decade, the Federal Reserve helped to enable the game, with low interest rates and few rules.

But today, thanks to "securitization" of loans and the ability of insiders to create exotic and unfathomable financial instruments, the speculative system makes buying stocks on margin look like child's play. In the aftermath of the crash of 2008, the process of sorting it all out and getting banks functioning again is something that markets simply cannot do.

We are not even clear who owns what. The wise guys on Wall Street invented a doomsday machine from which there is no market escape.

In 1929 when the stock market crashed, the banking system was relatively healthy. Bank customers played these speculative games and took the losses, not banks. This time, the banks drank their own Kool-aid.

It took until the awful winter of 1932-'33 for the general depression to fully infect the banking system, and cause over 7,000 banks to fail. But Roosevelt's cure - deposit insurance and a temporary bank holiday to sort out good banks from bad - quickly got the financial system up and running again. Today, the banking mess is still dragging down the real economy, with no effective cure in sight.

Wealth, Deficits, and Demand. The economy now bears all the hallmarks of a depression. Between the housing collapse and the stock market crash, American households are out several trillion dollars (in the 1920s, there were no 401(k) plans and less than 2 percent of Americans owned stock).

When people are suddenly out a lot of money, they spend less. Weak demand in one sector is cascading into other sectors. People spend less on autos, air travel, hotels, restaurants, clothing - any optional purchase. Business sales and profits are down, which causes other layoffs, and the cycle deepens.

Roosevelt was said to be a big spender, but his biggest peacetime deficit was only about 6 percent of GDP. This year, the deficit will exceed 11 percent, and the recession will deepen all year. It took the truly massive deficits of World War II - nearly 30 percent of GDP - to finally end the Great Depression

A Debtor Nation. America in 1929 was a major international creditor. Today, we are the world's biggest debtor. The financial bubble created the illusion of prosperity.

During the bubble years, the foreign borrowing disguised domestic weaknesses, such as our much-diminished manufacturing sector. For now, foreigners are still willing to lend us vast sums, but that may not continue indefinitely.

All these economic calamities have solutions, but each is more radical than what's currently on offer. The government will have to temporarily nationalize major banks, sort out good assets from bad ones, and then return banks to responsible private ownership. To cure the housing collapse, government should directly refinance mortgages, rather than bribing banks to ease terms.

Deficits will have to be a lot larger before they can get smaller. That should not require a war; this is just as grave a national emergency. Those deficits could purchase much broader prosperity.

This crisis doesn't yet have a name. It has all the hallmarks of a depression, but people are understandably reluctant to use the D-word. So let me suggest one: The Great Collapse, since this was both a financial collapse and an ideological one.

Can America recover from a Great Collapse? Can we avert a second Great Depression? To coin a phrase, yes we can. But we need the right strategies and we don't have much time.

Robert Kuttner is co-editor of The American Prospect and author of "Obama's Challenge: America's Economic Crisis and the Power of a Transformative Presidency."

Title: Re: Meltdown
Post by: BachQ on March 14, 2009, 03:30:55 AM

Who would you want on your dartboard? ( Source (http://www.talkingpointsmemo.com/photofeatures/2009/03/villains-of-the-economic-crisis.php?img=1)). My choice is the dude who invented the derivative.

(http://www.talkingpointsmemo.com/images/photofeature-economicvillains10.jpg)

Joseph Cassano (http://www.talkingpointsmemo.com/images/photofeature-economicvillains1.jpg)

Joseph Cassano, former head of AIG's financial products division. That was the unit responsible for the disastrous credit default swaps that triggered AIG's collapse -- which we're still paying for. Back in August 07, Cassano declared that it was difficult to imagine "a scenario within any kind of realm of reason that would see us losing $1." Cassano left AIG in Febuary 2008, but was initially given a $1 million a month retainer -- which has since been terminated.

Ken Lewis (http://www.talkingpointsmemo.com/images/photofeature-economicvillains2.jpg)

Kenneth D. Lewis, Bank of America's embattled CEO. Lewis was subpoenaed last month in NY Attorney General Cuomo's investigation into the billion dollar bonuses awarded to Merrill Lynch execs just before the company came under Bank of America's control. Lewis continues to refuse to disclose information on these bonuses.

John Thain (http://www.talkingpointsmemo.com/images/photofeature-economicvillains3.jpg)

John Thain, former CEO of Merrill Lynch. Thain served as Merrill's CEO while it posted massive losses late last year, but still approved billions in bonuses for Merrill staffers. Thain also spent 1.2 million of Merrill's money on a redecoration of his office suites. After being ousted, Thain reportedly walked Merrill's halls declaring: "I don't know how these people can run this company without me."

Angelo Mozilo (http://www.talkingpointsmemo.com/images/photofeature-economicvillains4.jpg)

Angelo Mozilo (left), former CEO of Countrywide Financial. The SEC is investigating Mozilo and two other Countrywide executives for lying about credit risks-- a critical factor in the mortgage company's collapse.

Franklin D. Raines (http://www.talkingpointsmemo.com/images/photofeature-economicvillains5.jpg)

Franklin D. Raines, former CEO of Fannie Mae. Under Raines' leadership, Fannie approved many of the disastrous home loans that ultimately led to it being taken over by the federal goverment last summer. "Friends of Angelo," the group of VIPs Mozilo granted favorable mortgages to included Raines, who used VIP loans for nearly a million apiece to twice refinance his seven-bedroom home, which has a pool and movie theater.

Richard Fuld (http://www.talkingpointsmemo.com/images/photofeature-economicvillains6.jpg)

Richard Fuld, former CEO of Lehman Brothers. Under Fuld's leadership, Lehman went belly up last September, triggering the financial crisis we're still dealing with today. There is speculation that he sold his house to his wife, so as to keep it out of reach of potential lawsuits filed by shareholders. However, all is not lost for Fuld: he's considering "harnessing" his contacts in US companies to start "a small advisory boutique to help companies with strategic and financial issues."

Bernard Madoff (http://www.talkingpointsmemo.com/images/photofeature-economicvillains9.jpg)

Bernard Madoff, the former chair of NASDAQ and CEO of Bernard L. Madoff Investment Securities. Madoff pleaded guilty to orchestrating a ponzi scheme that defrauded Steven Spielberg, Elie Weisel's Foundation for Humanity, and Jewish retirees everywhere out of as much as $50 billion. "I always knew this day would come," he said while entering his guilty plea in court.

Title: Re: Meltdown
Post by: BachQ on March 14, 2009, 03:34:24 AM

US national debt growing by more than 10%/yr as tax receipts fall by 6.3%/yr & expenditures increase by 18.5%/yr.

(http://www.marketmonograph.com/a/goodman/200903/12derfTreasuryOut.gif)

Can you say "DOOM" ... ?

Title: Re: Meltdown
Post by: BachQ on March 14, 2009, 03:35:39 AM

Time (09 mar 09): (http://www.time.com/time/business/article/0,8599,1883785,00.html) The 10 Most Endangered Newspapers in America

The top 5:

1. The Philadelphia Daily News.
2. The Minneapolis Star Tribune.
3. The Miami Herald.
4. The Detroit News.
5. The Boston Globe.

Title: Re: Meltdown
Post by: BachQ on March 14, 2009, 03:37:18 AM

Physicist Joe Romm: (http://www.nytimes.com/2009/03/08/opinion/08friedman.html?_r=1&ref=opinion) "We created a way of raising standards of living that we can't possibly pass on to our children. You can get this burst of wealth that we have created from this rapacious behavior; But it has to collapse, unless adults stand up and say, 'This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate ...' Real wealth is something you can pass on in a way that others can enjoy."

Title: Re: Meltdown
Post by: BachQ on March 14, 2009, 03:38:05 AM

Scientist warns that global warming may trigger carbon 'time bomb' with billions of tonnes of carbon dioxide and methane being released from thawing Arctic soils -- Guardian (11 mar 09) -- (http://www.guardian.co.uk/environment/2009/mar/10/climate-change-copenhagen)

Title: Re: Meltdown
Post by: BachQ on March 14, 2009, 03:38:57 AM

Fortune: Washington plans for $500 billion in bank failures
(http://money.cnn.com/2009/03/06/news/dodd.fdic.fortune/index.htm)

WSJ (6 mar 09) (http://online.wsj.com/article/SB123630125365247061.html) ..."The FDIC's deposit-insurance fund has fallen precipitously with 25 bank failures in 2008 and 16 so far in 2009. Some bank failures have a bigger impact on the fund than others, as IndyMac's failure cost the fund more than $10 billion."

Title: Re: Meltdown
Post by: BachQ on March 14, 2009, 03:41:49 AM

Scientists to issue stark warning over dramatic new sea level figures
Rising sea levels pose a far bigger eco threat than previously thought. This week's climate change conference in Copenhagen will sound an alarm over new floodings - enough to swamp Bangladesh, Florida, the Norfolk Broads and the Thames estuary -- Guardian (08 mar 09) -- (http://www.guardian.co.uk/science/2009/mar/08/climate-change-flooding)

"Scientists will warn this week that rising sea levels, triggered by global warming, pose a far greater danger to the planet than previously estimated. There is now a major risk that many coastal areas around the world will be inundated by the end of the century because Antarctic and Greenland ice sheets are melting faster than previously estimated. Low-lying areas including Bangladesh, Florida, the Maldives and the Netherlands face catastrophic flooding, while, in Britain, large areas of the Norfolk Broads and the Thames estuary are likely to disappear by 2100. In addition, cities including London, Hull and Portsmouth will need new flood defences."

"It is now clear that there are going to be massive flooding disasters around the globe," said Dr David Vaughan, of the British Antarctic Survey. "Populations are shifting to the coast, which means that more and more people are going to be threatened by sea-level rises."

Title: Re: Meltdown
Post by: Cato on March 14, 2009, 03:42:41 AM

How about Chris Dodd and Barney Frank for your rogues gallery? $:)

Title: Re: Meltdown
Post by: Coopmv on March 14, 2009, 05:34:34 AM

Quote from: ezodisy on March 14, 2009, 02:06:42 AM
You are racist, which in fact you already proved with your comment about Jim Rogers' wife being Chinese. She's not and neither am I. It's a shame that people with low intelligence are always like this.

There is nothing racist about the remark I made you just quoted. Why are you so sensitized when one's ethnicity is mentioned - inferiority complex? There is absolutely nothing racist when no disparaging remarks are made about a particular ethnic group. People outside the US often knock us American and I have no qualm about hitting back once in a while. I have close to a PhD in math and went to an Ivy League university and I do not need you to offer an appraisal on my intelligence. You are a bit of a bigot yourself based on many of the comments you have made, shall I remind you? Have you heard that phrase thou shalt not cast a stone when you are in a glass house?

Title: Re: Meltdown
Post by: Coopmv on March 14, 2009, 05:37:06 AM

Quote from: Dm on March 14, 2009, 03:38:05 AM
Scientist warns that global warming may trigger carbon 'time bomb' with billions of tonnes of carbon dioxide and methane being released from thawing Arctic soils -- Guardian (11 mar 09) -- (http://www.guardian.co.uk/environment/2009/mar/10/climate-change-copenhagen)

Shall I point out this rapid climate change began after that myopic WTO agreement was signed? Perhaps you and I will be called racist for making this conclusion since we live in Europe and the US ...

Title: Re: Meltdown
Post by: Coopmv on March 14, 2009, 05:40:12 AM

Quote from: Cato on March 14, 2009, 03:42:41 AM
How about Chris Dodd and Barney Frank for your rogues gallery? $:)

These two are financial criminals and are largely responsible for the US housing mess in addition to the bubble-man Alan Greenspan. Both of them stonewalled the move in Congress to tighten mortgage lending standard back in 2006.

Title: Re: Meltdown
Post by: Coopmv on March 14, 2009, 05:43:47 AM

Quote from: Dm on March 14, 2009, 03:38:57 AM
Fortune: Washington plans for $500 billion in bank failures
(http://money.cnn.com/2009/03/06/news/dodd.fdic.fortune/index.htm)

WSJ (6 mar 09) (http://online.wsj.com/article/SB123630125365247061.html) ..."The FDIC's deposit-insurance fund has fallen precipitously with 25 bank failures in 2008 and 16 so far in 2009. Some bank failures have a bigger impact on the fund than others, as IndyMac's failure cost the fund more than $10 billion."

BTW, the FDIC insurance premium has gone up in response to this problem ...

http://www.aba.com/Press+Room/110206premiumratestoohigh.htm

Title: Re: Meltdown
Post by: Coopmv on March 14, 2009, 05:53:03 AM

Quote from: Dm on March 12, 2009, 04:17:36 AM

Yeah, Coop, China's exports have fallen off a cliff. Pretty dramatic stuff, both in absolute terms and when compared to other nations, although there are some close contenders, to wit:

-- JAPAN's (http://www.bloomberg.com/apps/news?pid=20601087&sid=aqFrDhSR8l1E&refer=home) GDP shrank 12.1% last quarter on export collapse.

-- GERMANY's (http://news.bbc.co.uk/2/hi/business/7934402.stm) January exports plunged by nearly 21% from one year ago.

-- IRELAND's (http://news.bbc.co.uk/2/hi/europe/7935040.stm)economy will shrink by more than 6% and Unemployment will average about 11% in 2009, according Ireland's central bank.

-- UK's (http://www.independent.co.uk/news/business/news/uk-economy-set-for-worst-year-since-1931-as-output-collapses-1642201.html) economy is poised for the worst year since 1931 as output collapsed by a staggering 12%.

-- USA's (http://uk.reuters.com/article/economyNews/idUKTRE51Q2PK20090227) GDP shrank at a seasonally adjusted 6.2% Q4 2008, the steepest decline since 1982.

-- LATVIA's (http://www.bloomberg.com/apps/news?pid=20601095&sid=aTITqjUNuaA8&refer=east_europe) economy shrank 10.3% in Q4.

-- BRAZIL's (http://news.bbc.co.uk/2/hi/business/7935565.stm) Q4 GDP shrank 3.6%, most on record.

Absolutely, I think China's worst nightmare scenario for its export may not have been realized yet as many of the countries you listed have been major importers of its goods. But many are still in denial. I certainly hope we Americans will have a permanent change in behavior by buying less imported goods or consume less in general. BTW, the US savings rate for the latest reporting period was up ...

http://www.marketwatch.com/news/story/savings-rate-rises-14-year-high/story.aspx?guid=%7B315493FB-70E7-495E-B8B1-81ADAE646F64%7D&dist=msr_4

Title: Re: Meltdown
Post by: ezodisy on March 14, 2009, 06:14:38 AM

Quote from: Coopmv on March 14, 2009, 05:34:34 AM
There is nothing racist about the remark I made you just quoted. Why are you so sensitized when one's ethnicity is mentioned - inferiority complex? There is absolutely nothing racist when no disparaging remarks are made about a particular ethnic group. People outside the US often knock us American and I have no qualm about hitting back once in a while. I have close to a PhD in math and went to an Ivy League university and I do not need you to offer an appraisal on my intelligence. You are a bit of a bigot yourself based on many of the comments you have made, shall I remind you? Have you heard that phrase thou shalt not cast a stone when you are in a glass house?

You don't get it. When you continually claim that someone's interest in and defence of something is solely due to their origin/nationality, you're racist. You don't have to believe it, but you've already shown how you think.

The other thing you don't get is that I am not disputing the export figures for China. You are missing the point that the exports can drop and drop but that it does not spell ruin for the country because it does not have such a big impact as you believe. The figures are correct, but you have not put them into context, and for some reason are unable to.

Just so you're aware, I grew up in the states for 20 years. Unfortunately I had to say that as you seem quite horribly ignorant about race and nationality

Title: Re: Meltdown
Post by: Coopmv on March 14, 2009, 06:33:43 AM

Quote from: ezodisy on March 14, 2009, 06:14:38 AM
You don't get it. When you continually claim that someone's interest in and defence of something is solely due to their origin/nationality, you're racist. You don't have to believe it, but you've already shown how you think.

The other thing you don't get is that I am not disputing the export figures for China. You are missing the point that the exports can drop and drop but that it does not spell ruin for the country because it does not have such a big impact as you believe. The figures are correct, but you have not put them into context, and for some reason are unable to.

Most people are racist, lets face it. As soon as you feel you are better than anyone that is different from you by way of ethnicity, you can be labeled a racist. It is plain and simple and there is no need to mince words about it. By that definition, you are as much a racist as I am.

I have good friends who are immigrants from the Ukraine, Russia, India, Singapore and China and do not need you to harp about my lack of exposure to other people from different culture. There are many ills in the US to be sure. I am sure whatever (I will leave out the continent here) country you are from is not perfect either.

There is no point to argue whether the nosediving export from China will have a ruinous effect on China - 20M newly unemployed due to shuttered factories provides the proof. Do you have any real appreciation for that number or was it invented by some western conspiracy?

Title: Re: Meltdown
Post by: ezodisy on March 14, 2009, 08:31:05 AM

well whatever, the world is tumbling down. One thing about Chinese exports falling is that China will have an incentive to depreciate its currency

http://www.ft.com/cms/s/0/f0b9ae7e-0f2a-11de-ba10-0000779fd2ac.html

Sentiment is a funny thing and can have an adverse effect on perspective. In the west and particularly in the states we are so used to thinking of China as some sort of politically backward state which just makes our stuff that we become blinded and maybe over focus on facets without contextualising them. In many ways China is in control and has something of supreme power over its destiny, and I think there are many people like you who will remain in active disbelief of its rising power for a long time to come.

Having said that, the trend is your (girl)friend and until there are clearer signs of reversal--more than just a lot of smart money heading east, as now--then I guess we're all safe in thinking we'll be okay

Title: Re: Meltdown
Post by: Valentino on March 14, 2009, 08:34:29 AM

Quote from: Coopmv on March 11, 2009, 07:20:00 PM
Really, selling cement to the US?

Concrete shoes... ...cyanide... ...neckties... ...contracts...

Title: Re: Meltdown
Post by: Coopmv on March 14, 2009, 08:51:32 AM

Quote from: ezodisy on March 14, 2009, 08:31:05 AM
well whatever, the world is tumbling down. One thing about Chinese exports falling is that China will have an incentive to depreciate its currency

http://www.ft.com/cms/s/0/f0b9ae7e-0f2a-11de-ba10-0000779fd2ac.html

Sentiment is a funny thing and can have an adverse effect on perspective. In the west and particularly in the states we are so used to thinking of China as some sort of politically backward state which just makes our stuff that we become blinded and maybe over focus on facets without contextualising them. In many ways China is in control and has something of supreme power over its destiny, and I think there are many people like you who will remain in active disbelief of its rising power for a long time to come.

Having said that, the trend is your (girl)friend and until there are clearer signs of reversal--more than just a lot of smart money heading east, as now--then I guess we're all safe in thinking we'll be okay

There were all kinds of arguments back in the 80's that Japan would dominate the world by now. It did not happen. The current argument about China doing the same has as much credibility as that argument about Japan back in the 80's. While there are some similarities between China today and the US in the 1930's (during the early days of the US ascendency), there are enough differences to not take the comparison seriously. Longer term, I believe India will end up doing better than China.

Title: Re: Meltdown
Post by: Lethevich on March 14, 2009, 09:57:37 AM

Quote from: Coopmv on March 14, 2009, 08:51:32 AM
Longer term, I believe India will end up doing better than China.

How come? India generally keeps reinforcing how chaotic (the recent car factory closures due to worker strikes) and comparatively slow to change (democracy) it is...

Title: Re: Meltdown
Post by: Coopmv on March 14, 2009, 10:06:38 AM

Quote from: Lethe on March 14, 2009, 09:57:37 AM
How come? India generally keeps reinforcing how chaotic (the recent car factory closures due to worker strikes) and comparatively slow to change (democracy) it is...

In short, it is a policy shift which started to happen late in the last administration and is no doubt continuing. The US wants to reduce its dependence on China. Many companies are shifting manufacturing to India and other lower-costs countries. There is also a preference to rely more on a democratic country which will serve as a counterweight to China in Asia.

Title: Re: Meltdown
Post by: Coopmv on March 14, 2009, 12:36:04 PM

Quote from: Dm on March 12, 2009, 04:22:20 AM
Seems that the US housing market has a ways to go before it reaches bottom:

RealtyTrac: US (http://finance.yahoo.com/news/Foreclosures-up-30-percent-in-apf-14612908.html) Feb foreclosures rise by 30% over last year, whereupon 291,000 homes rec'd foreclosure notices (rising 6% from Jan.).

(http://us.news2.yimg.com/us.yimg.com/p/fi/21/41/02.jpg)

Dow Jones Newswire (11 mar 09): (http://www.easybourse.com/bourse-actualite/marches/us-feb-foreclosures-up-67prc-after-jan-drop-foreclosurescom-631419) US Feb foreclosures surge 67% to a record 121,700, setting a record for the housing crisis; Pre-foreclosure filings (i.e., indicators of future completed foreclosures), rocketed 27% to 207,703, beating the previous monthly high from December by 9%.

DM,

It appears the industrial world will have to discuss the suspension of Basel II, the international banking accord named after your home-town. Implementation of Basel II in the midst of this global financial meltdown will be absolutely suicidal ...

http://en.wikipedia.org/wiki/Basel_II

Title: Re: Meltdown
Post by: BachQ on March 15, 2009, 03:25:46 AM

Quote from: ezodisy on March 14, 2009, 08:31:05 AM
well whatever, the world is tumbling down.

See below. (I didn't think things were quite this bad).

Quote from: Coopmv on March 11, 2009, 07:24:19 PM
Chinese trade figures highlighted again the region's dependence on Western consumers. Exports in February plunged 25.7 percent from a year earlier, according to customs data -- the sharpest decline reported by the government since it began keeping records in the 1990s.

Global Trade Collapsing WSJ MarketWatch: (http://www.marketwatch.com/newscommentary/firsttakes#5E877CF4-8D66-46A2-A144-3EE1FF6F6C37)Over the past five months since the credit crunch intensified, US's real exports have plunged at a 49% annual rate, while real imports have fallen at a 30% pace. The pace of the decline is unprecedented in modern times, economists say. "We doubt even during the Great Depression that trade collapsed with such ferocity," said David Greenlaw, an economist for Morgan Stanley.

Title: Re: Meltdown
Post by: BachQ on March 15, 2009, 03:27:54 AM

NYT (14 mar 09): (http://www.nytimes.com/2009/03/15/business/15AIG.html?_r=2) On March 15 (today), AIG will pay $165 million in new bonuses (up to $6.5 million per executive) in addition to previous bonuses of $121 million. AIG is now 80% taxpayer-owned after having received $170 billion in bailout funds.

Subsequent update: (http://www.bloomberg.com/apps/news?pid=20601087&sid=aZZaM2fBk3qk&refer=home) Despite Timmy Geithner's demands to cut bonuses, AIG "still plans to distribute about $165 million on March 15 because of legally binding contracts."

Title: Re: Meltdown
Post by: BachQ on March 15, 2009, 03:41:48 AM

Quote from: Cato on March 14, 2009, 03:42:41 AM
How about Chris Dodd and Barney Frank for your rogues gallery? $:)

Done.

Quote from: Coopmv on March 14, 2009, 05:40:12 AM
These two are financial criminals and are largely responsible for the US housing mess in addition to the bubble-man Alan Greenspan. Both of them stonewalled the move in Congress to tighten mortgage lending standard back in 2006.

Greenspan has been added.

Barney Frank & Chris Dodd (http://www4.pictures.gi.zimbio.com/Congress+Races+Hammer+Out+Deal+Bailout+Legislation+6UeCsJ939cll.jpg)

Barney Frank, as Chairman of the House Financial Services Committee and Chris Dodd, Chairman of the Senate Banking, Housing & Urban Affairs Committee, failed utterly to address the obvious problems in banking/finance, and failed utterly to implement any reforms despite the glaring deficiencies in regulation.

Nancy Pelosi & Harry Reid (http://alt-energystocks.com/blog/wp-content/uploads/2008/07/pelosireid.jpg)

This dynamic duo of deficit debauchery worked in tandem to deliver TARP and the worst budget deficits in the history of the planet.

And the debt quartet together: (http://media.washingtontimes.com/media/img/photos/2008/09/29/20080929-010054-pic-428067273.jpg)

Blythe Masters & Bill Demchak (http://www.womenworking.com/feature/photos/masters_sidebar_photo.jpg) (http://pix.sueddeutsche.de/wirtschaft/52/449777/135x135_thIEbqlizQ.gif)

Blythe Masters (http://www.guardian.co.uk/business/2008/sep/20/wallstreet.banking?gusrc=rss&feed=business) & Bill Demchak, co-developers of "Broad Index Secured Trust Offering" and co-inventors of the derivative, combined securitization and credit derivatives for the first time, thereby paving the way for the monstrous $700 trillion derivatives ticking timebomb devasting the global fiancial markets.

Alan Greenspan (http://upload.wikimedia.org/wikipedia/commons/9/98/Greenspan.jpg)

Greenspan's artificially low interest rates paved the way for the Internet and housing bubbles. Greenspan also applauded the deregulation which allowed for the derivative boom.

Title: Re: Meltdown
Post by: BachQ on March 15, 2009, 03:43:58 AM

US may be heading for insolvency --Charles Hugh Smith (09 mar 09) (http://www.oftwominds.com/blog.html) -- "So the nightmare scenario is this: the debt doubles over the next 4-5 years, causing interest payments to double from $450B to $900B a year. But interest rates also double due to the global shrinkage of surplus capital and the monumental rise in demand for capital (borrowing). The $900B in interest then doubles to $1.8 trillion--roughly equal to Medicare, Social Security and the Pentagon combined."

Link to blog: (http://www.oftwominds.com/blog.html)

Permalink to article (http://www.oftwominds.com/blogfeb09/insolvency03-09.html)

Title: Re: Meltdown
Post by: BachQ on March 15, 2009, 03:44:40 AM

"Sold Out: How Wall Street and Washington Betrayed America" (http://wallstreetwatch.org/soldoutreport.htm)

Title: Re: Meltdown
Post by: BachQ on March 15, 2009, 03:48:10 AM

Quote from: Coopmv on March 14, 2009, 05:53:03 AM
BTW, the US savings rate for the latest reporting period was up ...

http://www.marketwatch.com/news/story/savings-rate-rises-14-year-high/story.aspx?guid=%7B315493FB-70E7-495E-B8B1-81ADAE646F64%7D&dist=msr_4

Nice. A silver lining amid the meltdown. Of course, the Gov wants us to keeps borrowing and spending. ::)

Title: Re: Meltdown
Post by: BachQ on March 15, 2009, 03:54:40 AM

Quote from: soldout on March 15, 2009, 03:44:40 AM
"Sold Out: How Wall Street and Washington Betrayed America" (http://wallstreetwatch.org/soldoutreport.htm)

12 Key Policy Decisions Led to Cataclysm (http://wallstreetwatch.org/soldoutreport.htm)

Financial deregulation led directly to the current economic meltdown. For the last three decades, government regulators, Congress and the executive branch, on a bipartisan basis, steadily eroded the regulatory system that restrained the financial sector from acting on its own worst tendencies. "Sold Out" details a dozen key steps to financial meltdown, revealing how industry pressure led to these deregulatory moves and their consequences:

1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.

2. Regulatory rules permitted off-balance sheet accounting -- tricks that enabled banks to hide their liabilities.

3.The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives -- which became the basis for massive speculation.

4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.

5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.

6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal "risk-assessment models."

7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.

8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.

9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.

10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.

11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks.

12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.

link to article (http://wallstreetwatch.org/soldoutreport.htm)

link to 231 page pdf file (http://wallstreetwatch.org/reports/sold_out.pdf)

Title: Re: Meltdown
Post by: BachQ on March 15, 2009, 03:59:55 AM

Miami Herald: 1 in 5 home loans in Florida are delinquent
(http://johngaltfla.com/blog2/wp-content/uploads/2009/01/012908uttbuglyjumbomortgageswsj.jpg) (http://www.miamiherald.com/457/story/935313.html)

Title: Re: Meltdown
Post by: Coopmv on March 15, 2009, 04:32:05 AM

Quote from: Dm on March 15, 2009, 03:25:46 AM
See below. (I didn't think things were quite this bad).

Global Trade Collapsing WSJ MarketWatch: (http://www.marketwatch.com/newscommentary/firsttakes#5E877CF4-8D66-46A2-A144-3EE1FF6F6C37)Over the past five months since the credit crunch intensified, US's real exports have plunged at a 49% annual rate, while real imports have fallen at a 30% pace. The pace of the decline is unprecedented in modern times, economists say. "We doubt even during the Great Depression that trade collapsed with such ferocity," said David Greenlaw, an economist for Morgan Stanley.

This is pure speculation as I doubt reliable trade numbers from the 1930's are even available for any meaningful comparision against today numbers.

Title: Re: Meltdown
Post by: ezodisy on March 15, 2009, 06:30:21 AM

Quote from: Coopmv on March 15, 2009, 04:32:05 AM
This is pure speculation as I doubt reliable trade numbers from the 1930's are even available for any meaningful comparision against today numbers.

maybe, but there's no speculation about this:

QuoteOver the past five months since the credit crunch intensified, US's real exports have plunged at a 49% annual rate, while real imports have fallen at a 30% pace. The pace of the decline is unprecedented in modern times, economists say

lol!

Title: Re: Meltdown
Post by: Coopmv on March 15, 2009, 01:21:20 PM

Quote from: Dm on March 15, 2009, 03:59:55 AM
Miami Herald: 1 in 5 home loans in Florida are delinquent
(http://johngaltfla.com/blog2/wp-content/uploads/2009/01/012908uttbuglyjumbomortgageswsj.jpg) (http://www.miamiherald.com/457/story/935313.html)

There is quite a bit of foreign money in the Florida real estate market. There are also residents of the US who do not even live in FL but decided to speculate in that market. Those people would just go to the poor house ...

Title: Re: Meltdown
Post by: ezodisy on March 16, 2009, 06:22:20 AM

you've got to laugh at all those muppets on Bloomberg who keep talking about a bottom. You don't ever hear them talking about a top, do you?

Title: Re: Meltdown
Post by: BachQ on March 16, 2009, 11:56:26 AM

Quote from: NYT on March 15, 2009, 03:27:54 AM
NYT (14 mar 09): (http://www.nytimes.com/2009/03/15/business/15AIG.html?_r=2) On March 15 (today), AIG will pay $165 million in new bonuses (up to $6.5 million per executive) in addition to previous bonuses of $121 million. AIG is now 80% taxpayer-owned after having received $170 billion in bailout funds.

Subsequent update: (http://www.bloomberg.com/apps/news?pid=20601087&sid=aZZaM2fBk3qk&refer=home) Despite Timmy Geithner's demands to cut bonuses, AIG "still plans to distribute about $165 million on March 15 because of legally binding contracts."

WASHINGTON (AP) -- President Barack Obama declared Monday that insurance giant American International Group is in financial straits because of "recklessness and greed" and said he intends to stop it from paying out millions in executive bonuses. "It's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay," Obama said at the outset of an appearance to announce help for small businesses hurt by the deep recession. "How do they justify this outrage to the taxpayers who are keeping the company afloat," the president said.

(http://finance.yahoo.com/news/Obama-AIG-cant-justify-apf-14651862.html)

Quote from: ezodisy on March 16, 2009, 06:22:20 AM
you've got to laugh at all those muppets on Bloomberg who keep talking about a bottom. You don't ever hear them talking about a top, do you?

lol. :D Does an abyss really have a bottom? and if so, will we know it when we see it? (but yeah, I always wonder about people who obsessively focus on bottoms).

Title: Re: Meltdown
Post by: BachQ on March 16, 2009, 12:02:23 PM

Can anybody explain WTF this means:

Telegraph (16 Mar 09): (http://www.telegraph.co.uk/finance/financetopics/recession/4986287/IMF-poised-to-print-billions-of-dollars-in-global-quantitative-easing.html)The International Monetary Fund is poised to embark on what analysts have described as "global quantitative easing" by printing billions of dollars worth of a global "super-currency" in an unprecedented new effort to address the economic crisis.

WTF?

Title: Re: Meltdown
Post by: BachQ on March 16, 2009, 07:26:36 PM

Quote from: Ken Lewis on November 19, 2008, 09:23:11 AM
The credit card industry "may end up with possibly the highest credit card losses the industry has ever experienced," Bank of America Chief Executive Kenneth Lewis said on Tuesday. (http://www.cnbc.com/id/27791250)

U.S. credit card defaults rise to 20 year-high (http://www.reuters.com/article/ousivMolt/idUSTRE52F74Y20090316)

Title: Re: Meltdown
Post by: Coopmv on March 16, 2009, 07:30:34 PM

Quote from: Dm on March 16, 2009, 07:26:36 PM
U.S. credit card defaults rise to 20 year-high
(http://www.reuters.com/article/ousivMolt/idUSTRE52F74Y20090316)

The foolishness of these American bankers know no bounds. They have been offering truckloads of credit cards to college kids, who are the equivalent of subprime borrowers ...

Title: Re: Meltdown
Post by: Coopmv on March 16, 2009, 07:43:21 PM

Quote from: Dm on March 16, 2009, 11:56:26 AM

lol. :D Does an abyss really have a bottom? and if so, will we know it when we see it? (but yeah, I always wonder about people who obsessively focus on bottoms).

No one is smart enough to call the top or bottom of ANY market until it has been reached ...

Title: Re: Meltdown
Post by: ezodisy on March 17, 2009, 12:24:36 AM

Quote from: Coopmv on March 16, 2009, 07:43:21 PM
No one is smart enough to call the top or bottom of ANY market until it has been reached ...

Oscar called the top to within 1 point (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Title: Re: Meltdown
Post by: BachQ on March 17, 2009, 04:31:15 AM

Quote from: ezodisy on March 05, 2009, 01:39:24 PM
Marc Faber taking calls on a Canadian TV station.

http://watch.bnn.ca/the-street/march-2009/the-street-march-5-2009/#clip146489

http://www.youtube.com/v/-l_QLmbXCvs

Marc Faber: (http://www.cnbc.com/id/29720589/site/14081545) "US government bond market is a disaster waiting to happen [given that the govt's need] to cover its fiscal deficit will be very, very high"

Marc Faber: (http://www.cnbc.com/id/29720589/site/14081545) "we may still have a rally (in the S&P) until about the end of April and probably then a total collapse in the second half of the year ... when it becomes clear that the economy is a total disaster." :D

Title: Re: Meltdown
Post by: ezodisy on March 17, 2009, 04:55:23 AM

man I love Marc Faber. Did you see his interview with Bernie on Asian Bloomberg? It's on the front page of that channel (4 parts). Bernie's the only TV host with a (wicked) sense of humour (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Title: Re: Meltdown
Post by: BachQ on March 17, 2009, 05:25:35 AM

Thanks for the tip (see below).

Quote from: ezodisy on March 17, 2009, 04:55:23 AM
man I love Marc Faber. Did you see his interview with Bernie on Asian Bloomberg? It's on the front page of that channel (4 parts). Bernie's the only TV host with a (wicked) sense of humour (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Marc Faber in Hong Kong (Bloomberg 16 mar 09): "The global economy is really stuffed"

Part 1/4 http://www.youtube.com/v/IwQaHNm4adM

Part 2/4 http://www.youtube.com/v/WL-larBxL7k

Part 3/4 http://www.youtube.com/v/6jm1Hy2qfnk

Part 4/4 http://www.youtube.com/v/Aamfc_GGsIA

Bernie Lo is a funny guy! :D

Title: Re: Meltdown
Post by: BachQ on March 17, 2009, 05:27:35 AM

Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601109&sid=alwTE0Z5.1EA&refer=home) Hidden Pension Fiasco May Foment Another $1 Trillion Bailout

Title: Re: Meltdown
Post by: Coopmv on March 17, 2009, 05:35:14 PM

Quote from: Dm on March 17, 2009, 05:27:35 AM
Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601109&sid=alwTE0Z5.1EA&refer=home) Hidden Pension Fiasco May Foment Another $1 Trillion Bailout

Pension liabilities may force the local governments to follow what the private sector has been doing for the past 20 years. That is, stop offering pensions altogether and switching over to some defined contribution plans. After all, it is the tax dollars that pay for these generous pensions and there are only so many tax increases these local governments can make.

Like I have said before, the US should mind its own business and sharply rolls back on its contribution to the IMF funds and cut back on its foreign aids.

Title: Re: Meltdown
Post by: ezodisy on March 18, 2009, 03:05:37 AM

what we were saying a few pages back

Shell CEO: Unsure Whether Enough Oil Supply After Downturn
VIENNA -(Dow Jones)- Royal Dutch Shell PLC (RDSB.LN) Chief Executive Jeroen van de Veer said Wednesday the tailing off in oil exploration spending globally threatens to cause supply concerns once the global economic downturn recedes.
"It's not very clear that we (will) have enough supply after the economic crisis ends" to meet the recovery in crude demand, van de Veer told an energy conference here.
The economic crisis has forced many small- and medium-sized oil producers to delay or cancel projects, particularly in the U.S.
Van der Veer said such developments were putting the industry into its usual "boom and bust" cycle, in which a period of weak prices undermines investment and lays a foundation for higher prices as demand outpaces supply.

Title: Re: Meltdown
Post by: ezodisy on March 18, 2009, 03:08:53 AM

Quote from: Dm on March 16, 2009, 12:02:23 PM
Can anybody explain WTF this means:

Telegraph (16 Mar 09): (http://www.telegraph.co.uk/finance/financetopics/recession/4986287/IMF-poised-to-print-billions-of-dollars-in-global-quantitative-easing.html)The International Monetary Fund is poised to embark on what analysts have described as "global quantitative easing" by printing billions of dollars worth of a global "super-currency" in an unprecedented new effort to address the economic crisis.

WTF?

Special Drawing Rights?

I don't know what that's all about but it sounds good for gold and I'll be buying heavily at $400! lol

Title: Re: Meltdown
Post by: BachQ on March 18, 2009, 06:59:18 AM

Quote from: ezodisy on March 18, 2009, 03:05:37 AM
what we were saying a few pages back

Shell CEO: Unsure Whether Enough Oil Supply After Downturn
VIENNA -(Dow Jones)- Royal Dutch Shell PLC (RDSB.LN) Chief Executive Jeroen van de Veer said Wednesday the tailing off in oil exploration spending globally threatens to cause supply concerns once the global economic downturn recedes.
"It's not very clear that we (will) have enough supply after the economic crisis ends" to meet the recovery in crude demand, van de Veer told an energy conference here.
The economic crisis has forced many small- and medium-sized oil producers to delay or cancel projects, particularly in the U.S.
Van der Veer said such developments were putting the industry into its usual "boom and bust" cycle, in which a period of weak prices undermines investment and lays a foundation for higher prices as demand outpaces supply.

Yep, this is all very true. Matt Simmons had been warning about how this disinvestment in oil infrastructures (resulting from the economic collapse) will worsen the effects of peak oil ...

Speaking of peak oil, the oildrum (http://www.theoildrum.com/node/5177) declared yesterday that 2008 is the official year the planet reached peak oil -- i.e., the year that global oil production peaked. Why is this important? Because, given the geological limitations on extractable oil, once demand for oil reignites, production will be unable to meet demand, oil prices will skyrocket, and any efforts for economic recovery will be constrained correspondingly. There can be no economic growth/recovery without cheap energy (i.e., cheap oil).

(http://www.theoildrum.com/files/PeakOil1.png)

-- Using an expansive definition of oil, world oil production peaked in 2008 at 81.73 mbd (crude oil + lease condensate + oil sands + natural gas plant liquids).

-- Or, excluding natural gas plant liquids, world oil production peaked in 2008 at 73.79 mbd.

-- Or, excluding oil sands + natural gas plant liquids, considering only conventional crude oil, world oil production peaked in 2005 at 72.75 mbd.

Title: Re: Meltdown
Post by: BachQ on March 18, 2009, 07:01:44 AM

Eastern European countries (http://www.portfolio.hu/en/cikkek.tdp?cCheck=1&k=2&i=17177) most at risk of default (excluding Ukraine) based on 5-yr CDS spreads:

1. Romania
2. Bulgaria
3. Hungary
3. Croatia
5. Turkey
6. Poland
7. Czech Republic

(http://www.portfolio.hu/img/upload/090317CDS02.png) (http://www.portfolio.hu/en/cikkek.tdp?cCheck=1&k=2&i=17177)

Title: Re: Meltdown
Post by: BachQ on March 18, 2009, 07:03:54 AM

Coop, see also below ...

Quote from: Coopmv on March 17, 2009, 05:35:14 PM
Pension liabilities may force the local governments to follow what the private sector has been doing for the past 20 years. That is, stop offering pensions altogether and switching over to some defined contribution plans. After all, it is the tax dollars that pay for these generous pensions and there are only so many tax increases these local governments can make.

Like I have said before, the US should mind its own business and sharply rolls back on its contribution to the IMF funds and cut back on its foreign aids.

The Next Catastrophe (Feb 09): Think Fannie Mae and Freddie Mac were a politicized financial disaster? Just wait until pension funds implode. ... "State, local, and private pension plans covering millions of government employees and union workers with 'defined benefit' accounts are teetering on the brink of implosion, victims of both a sinking stock market and investment strategies influenced by political considerations."

(http://reason.com/news/show/130843)

QuoteFrom January to October 2008, defined benefit funds—those promising a predetermined amount of retirement money to the payee—averaged losses of 26 percent, according to Northern Trust Investment Risk and Analytical Services, making it the worst year on record for corporate and public pension funds. *** Companies with defined-benefit pensions may soon find themselves choosing between making payroll or pumping money into their pension plans. If companies are forced to make up the shortfall out of their assets, which seems likely, that would send profits tumbling even more, further destabilizing the stock market. And even with a cash infusion, many businesses might still have to freeze or even cut benefits.

Title: Re: Meltdown
Post by: BachQ on March 18, 2009, 07:05:57 AM

Coop, see below.

Quote from: Coopmv on March 17, 2009, 05:35:14 PM
Pension liabilities may force the local governments to follow what the private sector has been doing for the past 20 years. That is, stop offering pensions altogether and switching over to some defined contribution plans. After all, it is the tax dollars that pay for these generous pensions and there are only so many tax increases these local governments can make.

Like I have said before, the US should mind its own business and sharply rolls back on its contribution to the IMF funds and cut back on its foreign aids.

Pension plan woes for 2008:

-- Their value has tumbled the most in 20 years;
-- They are now underfunded by over $400 billion;
-- Underfunded pension plans force companies to invest their ever-dwindling cash reserves into pension plans rather than in their business operations, thereby jeopardizing the financial health and/or survival of the business.
-- This tradeoff entails an adverse feedback loop as follows: the economic meltdown causes pensions to become underfunded, which in turn forces businesses to divert scarce cash reserves toward pension obligations, which in turn deprives companies of funds necessary for growth and/or survival, which in turn worsens the overall financial meltdown, which in turn reinforces the adverse feedback loop.

(http://media3.washingtonpost.com/wp-dyn/content/graphic/2009/01/07/GR2009010701070.gif)

Business Week (http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db2009017_858862.htm?chan=top+news_top+news+index+-+temp_news+%2B+analysis)

Washington Post (http://www.washingtonpost.com/wp-dyn/content/article/2009/01/07/AR2009010701387.html)

Title: Re: Meltdown
Post by: ezodisy on March 19, 2009, 01:35:24 AM

well it should be fun to watch all of the Schiff/Faber/Rogers/Paul videos this weekend after that announcement last night.

What does one TRILLION dollars look like? (http://www.pagetutor.com/trillion/index.html)

Title: Re: Meltdown
Post by: Lethevich on March 19, 2009, 03:07:42 AM

Quote from: ezodisy on March 19, 2009, 01:35:24 AM
What does one TRILLION dollars look like? (http://www.pagetutor.com/trillion/index.html)

Surprisingly small :o

Edit: actually, epic fail on my part - I saw the second from last picture with "1 trillion" underneath it. Skim-reading is far from ideal :x

Title: Re: Meltdown
Post by: BachQ on March 19, 2009, 06:48:54 AM

Quote from: ezodisy on March 19, 2009, 01:35:24 AM
What does one TRILLION dollars look like? (http://www.pagetutor.com/trillion/index.html)

Recall what Copernicus said about printing too much money: it's one of the four worst disasters that can befall a country (along with war, famine, and disease), and one of the worst courses of action a country can embark upon. It's only a matter of time until China dumps US treasuries, and the US dollar tanks.

Gold and oil are looking pretty good ..... and deflation has just about run its course.

Quote from: ezodisy on March 19, 2009, 01:35:24 AM
well it should be fun to watch all of the Schiff/Faber/Rogers/Paul videos this weekend after that announcement last night.

I expect that we will see the very best commentary yet from Schiff, Rogers, Faber, and Ron Paul. Schiff will need to revisit the dosages of his high bloodpressure medication lest he have aneurysm.

They all predicted the Fed would do this ... so the question is how many more nails can the US coffin accommodate?

Title: Re: Meltdown
Post by: ezodisy on March 19, 2009, 07:13:31 AM

Quote from: Dm on March 19, 2009, 06:48:54 AM
Recall what Copernicus said about printing too much money: it's one of the four worst disasters that can befall a country (along with war, famine, and disease), and one of the worst courses of action a country can embark upon. It's only a matter of time until China dumps US treasuries, and the US dollar tanks.

Yeah and the spike last night on cable and eur/usd was amazing. Cable shot up about 300pips in 30 minutes! lol We might be looking at my hopeful retrace to the 1.60/1.70 region on cable.......The weekly candle is extremely bullish just now. Of course the £ is screwed, but the $ is finished 8)

QuoteGold and oil are looking pretty good ..... and deflation has just about run its course.

yean and with the oil recovery comes a revived interest in oil juniors which have been beaten down ridiculously. (http://operawebclub.com/papageno/style_emoticons/default/good.gif) target some with low debt, some cash and good assets and you can start to expect recovery and in some cases a takeover

Quote
They all predicted the Fed would do this ... so the question is how many more nails can the US coffin accommodate?

lol!

Title: Re: Meltdown
Post by: BachQ on March 19, 2009, 07:59:55 PM

Quote from: ezodisy on March 19, 2009, 07:13:31 AM
Yeah and the spike last night on cable and eur/usd was amazing. Cable shot up about 300pips in 30 minutes! lol We might be looking at my hopeful retrace to the 1.60/1.70 region on cable.......The weekly candle is extremely bullish just now. Of course the £ is screwed, but the $ is finished 8)

Just as we predicted:

Reuters: (http://www.reuters.com/article/newsOne/idUSTRE52H2CY20090318)U.N. panel says world should ditch dollar

Reuters: (http://www.reuters.com/article/usDollarRpt/idUSLJ93633020090319) China backs Russia's plan to ditch dollar as reserve currency

Looks like the Geithner-Obama-Bernanke (GOB) magical money making machine has run its course.

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on March 19, 2009, 10:38:09 PM

Some of you might enjoy James Fallows' speculative future history written in 2005, "Countdown to a Meltdown":

http://www.theatlantic.com/doc/200507/fallows

Title: Re: Meltdown
Post by: ezodisy on March 20, 2009, 03:25:08 AM

Quote from: Dm on March 19, 2009, 07:59:55 PM
Just as we predicted:

Reuters: (http://www.reuters.com/article/newsOne/idUSTRE52H2CY20090318)U.N. panel says world should ditch dollar

Reuters: (http://www.reuters.com/article/usDollarRpt/idUSLJ93633020090319) China backs Russia's plan to ditch dollar as reserve currency

Looks like the Geithner-Obama-Bernanke (GOB) magical money making machine has run its course.

well that is some pretty big news Fibo. I am looking for cable to retest the daily breakout around 1.43 and then shoot to the moon next week. Let's see how it plays out

Quote from: Spitvalve on March 19, 2009, 10:38:09 PM
Some of you might enjoy James Fallows' speculative future history written in 2005, "Countdown to a Meltdown":

http://www.theatlantic.com/doc/200507/fallows

cheers, will check it out this weekend

Title: Re: Meltdown
Post by: BachQ on March 20, 2009, 07:59:32 PM

Quote from: ezodisy on March 20, 2009, 03:25:08 AM
well that is some pretty big news Fibo. I am looking for cable to retest the daily breakout around 1.43 and then shoot to the moon next week. Let's see how it plays out

You've probably already read this (it's a month old): Prof. Willem Buiter (http://www.telegraph.co.uk/finance/4125947/Willem-Buiter-warns-of-massive-dollar-collapse.html) believes that the dollar will collapse in 2 to 5 years as foreign investors dump their US dollar assets.

QuoteThe US Federal government has taken on massive additional contingent liabilities through its bailout / underwriting of the US financial system (and possibly other bits of the US economic system that are too politically connected to fail). Together will the foreseeable increase in actual Federal government liabilities because of vastly increased future Federal deficits, this implies the need for a future private to public sector resource transfer [i.e., higher taxes or lower public spending] that is most unlikely to be politically feasible without recourse to inflation. The only alternative is default on the Federal debt. There is little doubt, in my view, that the Federal authorities will choose the inflation and currency depreciation route over the default route.

Title: Re: Meltdown
Post by: BachQ on March 20, 2009, 08:01:08 PM

Sea levels rising at nearly double previous estimates due to global warming

Scientists predict that global sea levels could rise nearly 40 inches by the end of the century, according to a recent report from the U.S. Environmental Protection Agency.The new estimates nearly double the worst-case scenario presented in 2007 by the Intergovernmental Panel on Climate Change, which projected a global sea level rise of 7 to 23 inches by the end of the century. Scientists are observing accelerated ice flow and melting in some glaciers and many studies now estimate the increased rise in global sea levels as a result, the EPA
reports.
(http://news.medill.northwestern.edu/uploadedImages/News/Chicago/Images/Science/EPAmap1.jpg)

[NOTE: This information is based on the EPA report titled "Coastal Sensitivity to Sea-level Rise: A Focus on the Mid-Atlantic Region," which involved the EPA, the U.S. Geological Survey and the National Oceanic and Atmospheric Administration, outlines the impact of sea-level rise and strategies for regional preparation. States in addition to New York are taking steps to address the predicted threat].

(http://news.medill.northwestern.edu/chicago/news.aspx?id=113477&print=1)

QuoteParts of New York City would be at risk of submersion even with roughly 16 inches of local sea-level rise, according to research from Columbia University. Because the additional water would weaken or destroy wetlands and flood protection, major storms could submerge Coney Island, much of southern Brooklyn and Queens, portions of Long Island City, Astoria, Flushing Meadows-Corona Park, Lower Manhattan, and eastern Staten Island, one study showed.

Title: Re: Meltdown
Post by: Coopmv on March 20, 2009, 08:29:06 PM

The Island of Singapore could be sunk by Tsunami, read on [/size] ...
Expert : Singapore not tsunami-proof

Batam, Riau province, (ANTARA News) - Singapore is not at all free from the risk of being devastated by a tsunami, an expert from the National Geography Department of the University of Singapore, Professor Wong Poh Poh, said here Saturday.

"It doesn`t take a tidal wave as high as the one that engulfed Aceh to destroy many key infrastructures in Singapore," he said in a talk with Channel News Asia monitored by Antara here.

Almost four years ago (December 26, 2008), a tsunami (10m high) hit Aceh and killed 168,000 people.

The problem in Singapore, said Wong, was that most of its infrastructures were located near beaches.

"It will only take a low tidal wave to hit and destroy those infrastructures and the areas around them," he said.

Prof Wong said Singapore`s international airport (Changi) could be easily destroyed by a tsunami, and so could housing complexes in the Petrokimia area, Jurong Island.

Besides Singapore, tourist resorts and residential areas on Batam Island`s beaches (about 20 km from Changi and Jurong were also vulnerable to the destructive force of a tsunami, he said. (*)

COPYRIGHT © 2008

Title: Re: Meltdown
Post by: Coopmv on March 20, 2009, 08:47:51 PM

Will other industrialized nations follow France and how will it impact the developing countries? ...
Renault moves production from Slovenia to France
By EMMA VANDORE

Renault SA said Friday it plans to create 400 jobs in France by moving production of its small Clio Campus model from Slovenia to the French site of Flins northwest of Paris.

The move raised concerns about protectionism at a European Union summit in Brussels. EU officials have warned French President Nicholas Sarkozy not to let his efforts to help the French auto industry cost jobs in other countries.

European Commission spokesman Jonathan Todd said that the EU's competition authorities find it "surprising" that a French government industry official linked the move to a decision to provide billions in aid to struggling French carmakers.

Sarkozy angered eastern European states earlier this year when he hinted that car makers getting large French government subsidies should think of shifting production back to France from low-wage countries.

He defended Renault's decision at a meeting of EU leaders on Friday, saying it had nothing to do with economic nationalism and all with common sense.

"It is exactly what I want," said Sarkozy after the summit. "We can defend production in France without costing one job in Slovenia," he said. "It makes me happy."

Renault, which is getting a euro3 billion ($4 billion) rescue loan from the French government, is bound by an agreement not to make forced redundancies in France this year and not to close factories.

Industry Minister Luc Chatel welcomed Renault's move in a radio interview Friday, calling it a "repatriation of the production" that is the "result" of government help to the automobile sector.

Renault spokeswoman Natalie Bourotte says the move will not entail any job losses at its Slovenian plant at Novo mesto, which makes the Twingo and Clio models and is at full capacity. Moving production of the Campus or Clio II model to the Flins plant is designed to absorb additional orders from European government programs designed to get people to buy more lower emission cars, she said.

Last year, the government announced a euro1,000 bonus for consumers trading in vehicles older than 10 years for new low-emission cars and Bourotte said the stimulus measure has boosted demand for small models, some of which are made in Slovenia.

The government is under pressure to show that it is helping ordinary people -- and not just rich bankers -- in its response to the crisis. Trade unions staged nationwide protests and strikes on Thursday that brought over 1 million people onto the streets.

But their efforts are doing little to help the economy, which the national statistics agency said Thursday is shrinking at the fastest pace in over 30 years.

The car industry -- which provides jobs for around 10 percent of the French work force -- has been hit particularly hard.

The CGT union said the 400 temporary jobs at Flins will be filled by Renault workers at other sites currently on reduced working time. In a statement, the union said Chatel is falsely trumpeting job creations and that "it's not by manipulating public opinion" that the government will soothe public feeling.

Bourotte said the decision to boost production at Flins was taken for business reasons to meet increased demand, allowing the Slovenian plant to increase production of the Twingo while the French plant makes more Clio Campus.

"Novo mesto has no more available capacity, which is why we took the decision," she said.

Renault expects to produce around 8,000 Clio Campus in Flins from June to October to meet this extra demand. The French site mostly produces the newer Clio III model.

Nevenka Basek Zildzovic, spokeswoman for Revoz, the Slovenian factory in Novo mesto, confirmed that no job cuts are expected.

"Given that there has been a significant jump in demand for the Twingo and Clio 2 and that Revoz cannot meet all this demand, the decision was taken that Revoz would step up production of the Twingo to the full," she said.

Revoz, which is Slovenia's biggest exporter, produced nearly 200,000 cars last year. Two-thirds of those were Twingo; the rest Clio Campus.

------

Title: Re: Meltdown
Post by: ezodisy on March 21, 2009, 01:03:38 AM

A.I.G. Sues U.S. for Return of $306 Million in Tax Payments (http://www.nytimes.com/2009/03/20/business/20aig.html?_r=3)

lol! You could hardly make it up

Title: Re: Meltdown
Post by: ezodisy on March 21, 2009, 04:09:03 AM

this is a long 5 part interview in which Marc Faber speaks freely and informally (at a cafe or somewhere). Part 3 in particular is good, so's the rest.

edit: check out the part 5 conclusion

http://www.youtube.com/v/q4Dl7JTLEQs

http://www.youtube.com/v/I3kCKebUkew

http://www.youtube.com/v/6LKZG2ShgXY

http://www.youtube.com/v/dBtGwXKvas4

http://www.youtube.com/v/Mp2EmOzxhV8

Title: Re: Meltdown
Post by: BachQ on March 21, 2009, 10:45:02 AM

Quote from: ezodisy on March 21, 2009, 04:09:03 AM
this is a long 5 part interview in which Marc Faber speaks freely and informally (at a cafe or somewhere). Part 3 in particular is good, so's the rest.

edit: check out the part 5 conclusion

Yep, Bernanke and Geithner are not only "clowns" ... but "they're TOTAL IDIOTS" ...

I love it! :D :D :D

Actually, I would have used the phrase "total f#cking idiots," but close enough. :-* >:D

(haven't reached part V yet)

Title: Re: Meltdown
Post by: BachQ on March 21, 2009, 10:52:04 AM

Quote from: Coopmv on March 20, 2009, 08:47:51 PM
Will other industrialized nations follow France and how will it impact the developing countries? ...
Renault moves production from Slovenia to France
By EMMA VANDORE

Renault SA said Friday it plans to create 400 jobs in France by moving production of its small Clio Campus model from Slovenia to the French site of Flins northwest of Paris.

The move raised concerns about protectionism at a European Union summit in Brussels. EU officials have warned French President Nicholas Sarkozy not to let his efforts to help the French auto industry cost jobs in other countries.

European Commission spokesman Jonathan Todd said that the EU's competition authorities find it "surprising" that a French government industry official linked the move to a decision to provide billions in aid to struggling French carmakers.

Sarkozy angered eastern European states earlier this year when he hinted that car makers getting large French government subsidies should think of shifting production back to France from low-wage countries.

He defended Renault's decision at a meeting of EU leaders on Friday, saying it had nothing to do with economic nationalism and all with common sense.

"It is exactly what I want," said Sarkozy after the summit. "We can defend production in France without costing one job in Slovenia," he said. "It makes me happy."

Renault, which is getting a euro3 billion ($4 billion) rescue loan from the French government, is bound by an agreement not to make forced redundancies in France this year and not to close factories.

Industry Minister Luc Chatel welcomed Renault's move in a radio interview Friday, calling it a "repatriation of the production" that is the "result" of government help to the automobile sector.

Renault spokeswoman Natalie Bourotte says the move will not entail any job losses at its Slovenian plant at Novo mesto, which makes the Twingo and Clio models and is at full capacity. Moving production of the Campus or Clio II model to the Flins plant is designed to absorb additional orders from European government programs designed to get people to buy more lower emission cars, she said.

Last year, the government announced a euro1,000 bonus for consumers trading in vehicles older than 10 years for new low-emission cars and Bourotte said the stimulus measure has boosted demand for small models, some of which are made in Slovenia.

The government is under pressure to show that it is helping ordinary people -- and not just rich bankers -- in its response to the crisis. Trade unions staged nationwide protests and strikes on Thursday that brought over 1 million people onto the streets.

But their efforts are doing little to help the economy, which the national statistics agency said Thursday is shrinking at the fastest pace in over 30 years.

The car industry -- which provides jobs for around 10 percent of the French work force -- has been hit particularly hard.

The CGT union said the 400 temporary jobs at Flins will be filled by Renault workers at other sites currently on reduced working time. In a statement, the union said Chatel is falsely trumpeting job creations and that "it's not by manipulating public opinion" that the government will soothe public feeling.

Bourotte said the decision to boost production at Flins was taken for business reasons to meet increased demand, allowing the Slovenian plant to increase production of the Twingo while the French plant makes more Clio Campus.

"Novo mesto has no more available capacity, which is why we took the decision," she said.

Renault expects to produce around 8,000 Clio Campus in Flins from June to October to meet this extra demand. The French site mostly produces the newer Clio III model.

Nevenka Basek Zildzovic, spokeswoman for Revoz, the Slovenian factory in Novo mesto, confirmed that no job cuts are expected.

"Given that there has been a significant jump in demand for the Twingo and Clio 2 and that Revoz cannot meet all this demand, the decision was taken that Revoz would step up production of the Twingo to the full," she said.

Revoz, which is Slovenia's biggest exporter, produced nearly 200,000 cars last year. Two-thirds of those were Twingo; the rest Clio Campus.

------

Coop, I have zero doubt that we will see growing protectionism and nationalism as countries fight for survival in an effort to protect the well-being of their citizens. And, as economies become increasingly desperate, I fear that this will culminate in war.

Global mess gives birth to new era National Post: (http://www.nationalpost.com/news/story.html?id=1387642) ... when you step back from the daily rash of economic news, you can see the current economic crisis is giving birth to a new perilous era. An era of protectionism, failed states and new wars. An era that has such diverse consequences as dealing a blow to Scottish nationalism, hampering al-Qaeda buying weapons and causing the deaths of millions of children. "This crisis is the first truly universal one in the history of humanity," Michel Camdessus, a former managing director of the IMF, told an Asian Development Bank forum in Manila this week. "No country escapes from it. It has not yet bottomed out."

Title: Re: Meltdown
Post by: Coopmv on March 21, 2009, 12:23:33 PM

Quote from: Dm on March 21, 2009, 10:52:04 AM
Coop, I have zero doubt that we will see growing protectionism and nationalism as countries fight for survival in an effort to protect the well-being of their citizens. And, as economies become increasingly desperate, I fear that this will culminate in war.

Global mess gives birth to new era National Post: (http://www.nationalpost.com/news/story.html?id=1387642) ... when you step back from the daily rash of economic news, you can see the current economic crisis is giving birth to a new perilous era. An era of protectionism, failed states and new wars. An era that has such diverse consequences as dealing a blow to Scottish nationalism, hampering al-Qaeda buying weapons and causing the deaths of millions of children. "This crisis is the first truly universal one in the history of humanity," Michel Camdessus, a former managing director of the IMF, told an Asian Development Bank forum in Manila this week. "No country escapes from it. It has not yet bottomed out."

We are going down that path, I am afraid this is just a matter of time. How will the national interests be aligned? I doubt it will be a replay of the two World Wars in terms of who were whose allies. In all likelihood, it will be the western industrialized nations plus Japan against the rest.

Title: Re: Meltdown
Post by: ezodisy on March 21, 2009, 12:40:05 PM

Quote from: Dm on March 21, 2009, 10:45:02 AM
Yep, Bernanke and Geithner are not only "clowns" ... but "they're TOTAL IDIOTS" ...

I love it! :D :D :D

Actually, I would have used the phrase "total f#cking idiots," but close enough. :-* >:D

(haven't reached part V yet)

In part V he predicts war. If you think he lays into them in that one you've got to hear the 4 part macalavanys interview posted on FinancialTruth: http://financialtruth0.blogspot.com/ That's another good one (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Title: Re: Meltdown
Post by: Coopmv on March 21, 2009, 12:48:18 PM

Quote from: Dm on March 21, 2009, 10:45:02 AM
Yep, Bernanke and Geithner are not only "clowns" ... but "they're TOTAL IDIOTS" ...

I love it! :D :D :D

Actually, I would have used the phrase "total f#cking idiots," but close enough. :-* >:D

(haven't reached part V yet)

Look, the Singaporean sovereign fund is run by a bunch of idiots as well. Didn't they fork over billions to buy a stake in the bankrupt Merrill Lynch. Boy, did they think they got the deal of the century? At least Warren Buffett was smarter. LOL ...

Title: Re: Meltdown
Post by: ezodisy on March 21, 2009, 01:02:50 PM

Quote from: ezodisy on March 21, 2009, 12:40:05 PM
In part V he predicts war. If you think he lays into them in that one you've got to hear the 4 part macalavanys interview posted on FinancialTruth: http://financialtruth0.blogspot.com/ That's another good one (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

people should really listen to that macalavanys interview with Faber, he talks about stuff you never hear elsewhere in the media.

Hey Coop, why do you have a hard-on for everything Asian?

Title: Re: Meltdown
Post by: Coopmv on March 21, 2009, 02:22:06 PM

Quote from: ezodisy on March 21, 2009, 01:02:50 PM

Hey Coop, why do you have a hard-on for everything Asian?

Do I have the rights to be amused at how a certifiably dumb American CEO of Merrill Lynch could have conned a group of supremely intelligent Singaporean investment officials at the government sovereign fund into sinking billions of dollars into a patently bankrupt company?

Title: Re: Meltdown
Post by: BachQ on March 21, 2009, 03:23:59 PM

Quote from: ezodisy on March 21, 2009, 01:03:38 AM
A.I.G. Sues U.S. for Return of $306 Million in Tax Payments (http://www.nytimes.com/2009/03/20/business/20aig.html?_r=3)

lol! You could hardly make it up

AIG has become one of the most despised companies in history:

Guardian -- AIG warns staff to travel in pairs after death threats over bonuses. (http://www.guardian.co.uk/business/2009/mar/21/aig-insurance) In a leaked company-wide memo, AIG's corporate security team this week warned AIG workers that their lives are at risk and urged them to "avoid wearing any AIG apparel (bags, shirts, umbrellas etc) with the company insignia [and] at night, when possible, travel in pairs and always park in well-lit areas."

Quote from: ezodisy on March 21, 2009, 01:03:38 AM
You could hardly make it up

No kidding. You can't make this stuff up. :D :D

Title: Re: Meltdown
Post by: Coopmv on March 21, 2009, 03:32:08 PM

Quote from: Dm on March 21, 2009, 03:23:59 PM
AIG has become one of the most despised companies in history:

Guardian -- AIG warns staff to travel in pairs after death threats over bonuses. (http://www.guardian.co.uk/business/2009/mar/21/aig-insurance) In a leaked company-wide memo, AIG's corporate security team this week warned AIG workers that their lives are at risk and urged them to "avoid wearing any AIG apparel (bags, shirts, umbrellas etc) with the company insignia [and] at night, when possible, travel in pairs and always park in well-lit areas."

No kidding. You can't make this stuff up. :D :D

If only because AIG has received the most bailout money to date. Merrill Lynch paid out $1.3B worth of bonus in December and 2 days later announced a $15B 4Q oss. I have not kept track of how much bailout money Merrill and its current corporate parents BOA have received in connection with the Merrill's toxic assets. But north of $50B is a pretty conservative estimate ...

Title: Re: Meltdown
Post by: BachQ on March 21, 2009, 03:40:30 PM

Quote from: Coopmv on March 21, 2009, 12:23:33 PM
We are going down that path, I am afraid this is just a matter of time. How will the national interests be aligned? I doubt it will be a replay of the two World Wars in terms of who were whose allies. In all likelihood, it will be the western industrialized nations plus Japan against the rest.

Not that Pravda (http://english.pravda.ru/world/americas/107263-usa_economy_debt-0) has any credibility in such matters, but according to several economists interviewed by Pravda, the USA has only two options to solve its catastrophic national debt: (1) default on the debt; or (2) launch a war.

Neither option is particularly attractive. And, technically, there are two additional options: (3) pay down the debt through taxation and spending cuts; or (4) hyper-inflate the currency (Zimbabwe).

Title: Re: Meltdown
Post by: Coopmv on March 21, 2009, 04:06:48 PM

Quote from: Dm on March 21, 2009, 03:40:30 PM
Not that Pravda (http://english.pravda.ru/world/americas/107263-usa_economy_debt-0) has any credibility in such matters, but according to several economists interviewed by Pravda, the USA has only two options to solve its catastrophic national debt: (1) default on the debt; or (2) launch a war.

Neither option is particularly attractive. And, technically, there are two additional options: (3) pay down the debt through taxation and spending cuts; or (4) hyper-inflate the currency (Zimbabwe).

At end of 2006, the total US retirement savings surpassed $16T. Granted that number has fallen back due to the terrible stock market returns in 2008, but new money has continued to flow in. To think that the US as a whole cannot fund its deficits is total non-sense. The private sector has to be convinced that the federal government has a game plan to reduce spending and rein in future deficits, then it will invest in more US debts. However, if US retirement savings begins to repatriate its investment money from overseas, then most Asian countries better watch out, their stock markets could collapse big-time ...

http://www.ici.org/stats/mf/fm-v16n3.pdf

Title: Re: Meltdown
Post by: ezodisy on March 22, 2009, 02:59:09 AM

Quote from: Coopmv on March 21, 2009, 04:06:48 PM
However, if US retirement savings begins to repatriate its investment money from overseas, then most Asian countries better watch out, their stock markets could collapse big-time ...

lol! Keep dreaming. The Nikkei is already way, way below where it stood in 1989, it's not going much lower, and neither will the rest. I think you are going to have a big shock in the next few years as you seem to totally disbelieve the current problems facing the US.

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 03:54:46 AM

Quote from: ezodisy on March 22, 2009, 02:59:09 AM
lol! Keep dreaming. The Nikkei is already way, way below where it stood in 1989, it's not going much lower, and neither will the rest. I think you are going to have a big shock in the next few years as you seem to totally disbelieve the current problems facing the US.

Did you read that link I attached in my previous post? That $16T retirement savings money is in private hands and has nothing to do with Uncle Sam and it is no US government propaganda.

When the US and Japan go down, your country will be in complete shambles and you may be begging in the street just like everyone else. If you think your future is secure, you live in fantasy land.

Title: Re: Meltdown
Post by: ezodisy on March 22, 2009, 04:26:38 AM

No I don't have time to read it, plus I most likely wouldn't understand most of it. Obviously the UK will go down with the US. They'll both tank. We're all stuffed unfortunately, like the $. It'll take several years, maybe a decade, maybe two, for a new order of power with the US and UK decidedly far behind the super powers.

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 04:49:26 AM

Quote from: ezodisy on March 22, 2009, 04:26:38 AM
No I don't have time to read it, plus I most likely wouldn't understand most of it. Obviously the UK will go down with the US. They'll both tank. We're all stuffed unfortunately, like the $. It'll take several years, maybe a decade, maybe two, for a new order of power with the US and UK decidedly far behind the super powers.

I am surprised to see this level of humility from you, which is like finding water in the Sahara. I have heard from other forum members that you enjoy arguing just for the sake of arguments. I do not back down like many others and arguments do not faze me. It is pure idiocy to think Asia can hold up on its own when its export markets like the US and Europe mainly shut down.

Show me some generally accepted views and not what you want people to believe, ezodisy. Marc Faber and Jim Rogers, give me a break. I heard so often back in the 80's that Japan would have dominated the world by now, has it happened? Which company makes the processor that powers your computer? It clearly was not made by any company in your country, mind you?

I love it when those geniuses at sovereign fund lost billions of dollars after they had sunk their taxpayer money into that rathole called Merrill Lynch. LOL

Title: Re: Meltdown
Post by: ezodisy on March 22, 2009, 05:32:13 AM

Quote from: Coopmv on March 22, 2009, 04:49:26 AM
I have heard from other forum members that you enjoy arguing just for the sake of arguments.

Sometimes you're a wee bit thick mate.

Anyway, it really doesn't matter, does it? It'll happen how it happens. My opinion is that in the next 30 years the world will be very different from how we know it now. People in the US will most likely have the same comfortable lifestyle as now. I mean aside from owning a car, or several cars, and taking a one week annual vacation in the next state over, people in the US are satisfied with pretty much nothing already, and that won't change anytime soon. I'd say it's more in a macroeconomic way with national and governmental power that a big shift will take place, and unfortunately it'll probably come about from another world war, this time with our allies losing in some way, I'd suspect. Hopefully that doesn't happen and we can just continue to witness the western world shoot itself in the foot.

I don't know what you mean by "generally accepted views". The "generally accepted views" of the people you listen to were telling you to keep buying equities and real estate in 2007. lol! You're going to have to listen to different voices if you want to know what's happening. Why are you so against the people who correctly predicted this? Unfortunately people who listen and believe in "generally accepted views" are always behind the curve, and always get screwed. But at least they all get screwed together, in a warm comfy herd. (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 05:37:47 AM

Quote from: ezodisy on March 22, 2009, 05:32:13 AM
Sometimes you're a wee bit thick mate.

Anyway, it really doesn't matter, does it? It'll happen how it happens. My opinion is that in the next 30 years the world will be very different from how we know it now. People in the US will most likely have the same comfortable lifestyle as now. I mean aside from owning a car, or several cars, and taking a one week annual vacation in the next state over, people in the US are satisfied with pretty much nothing already, and that won't change anytime soon. I'd say it's more in a macroeconomic way with national and governmental power that a big shift will take place, and unfortunately it'll probably come about from another world war, this time with our allies losing in some way, I'd suspect. Hopefully that doesn't happen and we can just continue to witness the western world shoot itself in the foot.

I don't know what you mean by "generally accepted views". The "generally accepted views" of the people you listen to were telling you to keep buying equities and real estate in 2007. lol! You're going to have to listen to different voices if you want to know what's happening. Why are you so against the people who correctly predicted this? Unfortunately people who listen and believe in "generally accepted views" are always behind the curve, and always get screwed. But at least they all get screwed together, in a warm comfy herd. (http://operawebclub.com/papageno/style_emoticons/default/good.gif)

Why should I listen to you anymore than I do with all the other talking heads such as Faber and Rogers? Show me your credentials. If your credentials are that impressive, you will have no time to hang out in this forum. End of the story.

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on March 22, 2009, 07:12:26 AM

Those of you who are talking about WAR >:D

Is this just a vague fear on your part, or have you thought about how it might actually play out?

Title: Re: Meltdown
Post by: ezodisy on March 22, 2009, 08:49:35 AM

Quote from: Coopmv on March 22, 2009, 05:37:47 AM
Why should I listen to you anymore than I do with all the other talking heads such as Faber and Rogers? Show me your credentials. If your credentials are that impressive, you will have no time to hang out in this forum. End of the story.

You don't have to listen to anyone Coop. Just be normal like everybody else.

Quote from: Spitvalve on March 22, 2009, 07:12:26 AM
Those of you who are talking about WAR >:D

Is this just a vague fear on your part, or have you thought about how it might actually play out?

I don't know, Faber has been talking about war as something quite likely and both Faber and Rogers talk about civil unrest. I really hope that that doesn't happen

Title: Re: Meltdown
Post by: BachQ on March 22, 2009, 09:29:05 AM

Eurozone industrial output plunged by 3.5% in January compared with the previous month, the biggest decline since records began in 1990, and dropped 17.3% from 2008 -- BBC (20 mar 09): (http://newsvote.bbc.co.uk/2/hi/business/7954627.stm)"The eurozone industrial production data for January is breathtakingly awful, adding to the evidence that manufacturing activity has fallen off a mountain rather than a mere cliff," said Howard Archer at Global Insight.

(http://www.marketoracle.co.uk/images/2009/Mar/industrial-17.jpg) (http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=9470)

Title: Re: Meltdown
Post by: BachQ on March 22, 2009, 09:30:36 AM

Rolling Stone: (http://www.rollingstone.com/politics/story/26793903/the_big_takeover/1)"It's over — we're officially, royally f*cked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire."

(continued [very long, but very good])

printer friendly (http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print)

Title: Re: Meltdown
Post by: BachQ on March 22, 2009, 09:31:28 AM

German Arsonists Torch Berlin Porsches, BMWs on Economic Woe -- Bloomberg -- (http://www.bloomberg.com/apps/news?pid=20601109&sid=auZeM63nrgzo&refer=home) According to Prof. Margit Mayer of Berlin's Free University, the worst recession since World War II is fueling anger among youths across Europe who "perceive their future as rather precarious. Whether you look at the Berlin events or these anarchist groups in other European cities and countries, they are all making reference to the deepening economic crisis and how the various governments are dealing with them. [Some groups are] very quick to attack whoever they can make out as responsible for having robbed them of decent life prospects."

Title: Re: Meltdown
Post by: BachQ on March 22, 2009, 09:32:05 AM

"The worst is yet to come," according to Howard Davidowitz, chairman of Davidowitz & Associates, who believes American's standard of living is undergoing a "permanent change" - and not for the better as a result of:

* An $8 trillion negative wealth effect from declining home values.
* A $10 trillion negative wealth effect from weakened capital markets.
* A $14 trillion consumer debt load amid "exploding unemployment", leading to "exploding bankruptcies. (http://finance.yahoo.com/tech-ticker/article/176478/%22Worst-Is-Yet-to-Come%22-Americans%27-Standard-of-Living-Permanently-Changed?tickers=WMT,WFMI,FDO)

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 09:47:28 AM

Quote from: ezodisy on March 22, 2009, 08:49:35 AM
You don't have to listen to anyone Coop. Just be normal like everybody else.

I don't know, Faber has been talking about war as something quite likely and both Faber and Rogers talk about civil unrest. I really hope that that doesn't happen

Faber is just the talking head making his wild speculation. There is always a possibility for war.

ezodisy, You have been the one that is proselytizing. I take most opinions with a grain of salt. Like I said, show me your credentials.

Title: Re: Meltdown
Post by: nut-job on March 22, 2009, 09:48:25 AM

Wealth is defined by economic capacity, and the capability of the world to produce goods and services is exactly the same as it was before the recent crisis. The problem is that the flow of currency through the financial system has suffered a disruption, which is preventing goods and services from being transferred from producers to consumers. The crisis was caused by excesses and imbalances in some sectors of the financial and economic systems. As long as the US government can pay the electric bill for the printing presses they use to print more money, the national debt will not be a major problem. The US government has had a lot more debt than it does now in the past.

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 10:17:13 AM

Quote from: Dm on March 22, 2009, 09:30:36 AM
Rolling Stone: (http://www.rollingstone.com/politics/story/26793903/the_big_takeover/1)"It's over — we're officially, royally f*cked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline — a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire."

(continued [very long, but very good])

printer friendly (http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print)

The US government should have taken over most of the liabilities of AIG and invite bidders for its assets and have winners of various AIG's assets share some percentage of the liabilities. There are no reasons to keep AIG in one piece. It is nothing but a bottomless pit ...

Lets go back to the dark ages when ones with the strongest military survived.

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on March 22, 2009, 10:18:19 AM

Quote from: Dm on March 22, 2009, 09:30:36 AM
Rolling Stone: (http://www.rollingstone.com/politics/story/26793903/the_big_takeover/1)"It's over — we're officially, royally f*cked. no empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. etc."

(continued [very long, but very good])

printer friendly (http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print)

Ah, the inimitable Matt Taibbi! Formerly of Moscow's notorious alternative paper, the eXile - where he did such unforgettable things as plaster the NY Times' correspondent in the face with a pie made of horse sperm...

We're gonna need stunts like that to keep us laughing in the next few years :D

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 10:24:49 AM

Will the Swiss banking sector survive when all the hot money from wealthy Europeans and Americans bail out of their secret Swiss accounts?

David Prosser: The end of Swiss banking? If so, it's about time too

Saturday, 14 March 2009

Outlook: So the credit crunch has achieved something the world had been trying to do for more than 70 years: getting the Swiss to give up more information on who has stashed what in the country's secret bank accounts.

It's not been the best few days for those keen to keep their affairs hidden from the prying eyes of their home country's tax authorities. On Thursday, Liechtenstein and Andorra said they were toning down their bank secrecy laws. Yesterday, Austria, Luxembourg and – the big one – Switzerland all said they would follow suit.

What has spooked these countries like never before is the threat of a concerted international attack on tax havens from the rest of the world. A crackdown on nations that enable other countries' residents to avoid – and evade – tax is one of the topics up for discussion at this weekend's meeting of the G20 nations' finance ministers.

Switzerland's banks are thought to have around $2 trillion stashed away on behalf of international depositors. Until now, they've got away with refusing to share the information about these accounts on the basis of a legal technicality concocted by Swiss legislators in 1934 (in the same laws as those that threaten heavy penalties, including prison sentences, for Swiss nationals who disclose banking secrets). Under Swiss law, the only circumstances in which banks can provide other countries with details of customers' accounts is if they receive a detailed claim about a specific individual with precise information about criminality of which they are suspected. Tax evasion – illegal everywhere else in the world but only a civil matter in Switzerland – doesn't count, by the way.

Understandably, many countries feel disgruntled about their citizens – the wealthiest of them, naturally – hiding their cash in Switzerland in order to get away with paying less tax back home. The US alone estimates it loses $100bn in tax revenues each year because of banking secrecy in Switzerland and other tax havens. The TUC reckons the equivalent figure for the UK might be £4bn a year.

Hans-Rudolf Merz, the Swiss Finance minister, said yesterday that he thought international co-operation on tax matters was more important these days, "given the globalisation of financial markets and in particular against the background of the financial crisis".

Mr Merz might, if he was being honest, have added that a $780m fine just copped by UBS, one of Switzerland's biggest banks, has also focused minds. UBS had to cough up the cash after an American investigation into US nationals thought to be hiding money through the bank. There's an ongoing row about 52,000 clients of UBS the Americans want to know more about.

The Swiss also don't like the idea of their names going on to an OECD blacklist, which was a distinct possibility before yesterday's concessions, though quite how it has avoided being named and shamed in this way until now is a mystery to most people.

The question now, of course, is just how honourable Switzerland's intentions really are. The Swiss have promised to share more information, making judgements on what they'll share on a case by case basis. If that's just hot air – and they're still muttering about tax amnesties and other bells and whistles – let's hope the OECD holds them to account sooner rather than later. If it's a genuine commitment, this might spell the end of Swiss banking, 75 years after the industry was invented.

That, by the way, might have one benefit for Switzerland. It is increasingly exercised about the soaring value of its currency, particularly against the euro – if all those tax evaders, avoiders and so on now depart for tax havens new, at least the Swiss franc might come down in value.

That's by the by, however. Imagine what good an extra £4bn of tax revenue could do in this country, if the TUC's estimate is correct. Let alone the $100bn the US reckons it might net annually. Why on earth should people get away with this level of tax evasion, let alone enjoy the acquiescence of a foreign government that purports to be a good friend and neighbour?

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 10:53:22 AM

It is pure fantasy that there will not be more massive job losses in Switzerland when all the wealthy Americans and Europeans repatriate their money in order to make peace with the tax departments in their respective countries, i.e. pay up on their overdue tax. If banking secrecy is gone, why bother with Switzerland? We Americans feel good about the Swiss sharing our brotherly pains. Join the Vioxx Club, anyone?

UBS cutting 5,000 management

Sun Mar 15, 9:21 am ETjobs:report

GENEVA (Reuters) – Switzerland's biggest bank UBS (UBSN.VX) plans to cut up to 5,000 senior and management jobs in the next few weeks, Swiss weekly SonntagsZeitung said on Sunday.

It said up to 2,500 management positions could go in UBS's dominant and profitable wealth management division, which accounts for 50,000 of the bank's total 77,000 staff.

A UBS spokesman declined to comment on the report.

Last week UBS said it was restructuring its Swiss business structure into four regions from eight, and trimming its top management. But it said the changes did not mean any more job cuts than the 600-800 positions it already plans to cut in Switzerland as part of thousands of job losses globally.

In February UBS said after announcing a record loss it would cut 2,000 jobs to take staff to about 75,000 by the middle of this year.

UBS is struggling to rebuild its once powerful brand and focus on its core Swiss business after massive investments in risky U.S. assets forced it to make more writedowns than any other European bank and accept government backing.

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 01:15:38 PM

My long-term investment in Novartis shares has been doing just fine. But its home country is not ...

March 17, 2009 - 10:10 AM Recession expected to worsen
The recession in Switzerland will be worse than expected in 2009 with the economy shrinking by 2.2 per cent, government forecasters say.
The State Secretariat for Economic Affairs (Seco) has adjusted its previous prediction that the gross domestic product would decline by 0.8 per cent, in a report released on Tuesday, but says there will be a 0.1 per cent recovery as of 2010.

Unemployment, which rose to 3.4 per cent in February, is expected to increase to 3.8 per cent in 2009 as a whole and to 5.2 per cent in 2010.

"The outlook of the global economy, already gloomy at the end of last year, has once again deteriorated considerably since the start of 2009," a Seco statement said.

Seco said it was aligning its forecast to that of the Swiss central bank which recently predicted GDP would decrease by up to three per cent.

Seco noted that the positive effects of the economic support measures taken around the world would take root "progressively" and stabilisation in the international financial markets "gives hope" that the global financial crisis will eventually be curbed. But a worsening in the situation globally would lead to an even greater recession in Switzerland.

Swiss industry suffered in the fourth quarter of 2008, the Federal Statistics Office said on Tuesday. Compared to the same quarter in 2007, production decreased by 5.9 per cent and sales also receded by 1.7 per cent.

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 01:29:20 PM

Another new member to the Recession Club ...

Singapore recession to deepen before Q4 rebound:
Posted: 16 March 2009 1310 hrs

SINGAPORE - Singapore is expected to slide deeper into recession this year before staging a weak recovery in the final quarter and registering mild growth in 2010, a central bank survey showed on Monday.

Gross domestic product (GDP) is likely to fall 8.5 per cent in the quarter to March from a year ago, more than double the 4.2 per cent shrinkage in the fourth quarter of 2008, according to the survey of professional economists.

Singapore slipped into recession in the third quarter of last year ahead of its Asian neighbours.

The GDP decline would likely continue in the second and third quarters this year at 6.9 per cent and 4.6 per cent, respectively, before output grows at 0.5 per cent in the final three months, the survey showed.

For 2009, the economy was expected to shrink by 4.9 per cent - just within the government's forecast contraction range of 2.0 and 5.0 per cent - which would make it the worst recession since independence in 1965.

A recovery is expected in 2010, with the economists forecasting an average of 3.3 per cent growth, the poll showed.

Singapore's trade-driven economy grew just 1.1 per cent last year from 7.8 per cent in 2007 after a worldwide economic downturn weakened demand for its exports and fewer travellers visited the country.

Manufacturing is likely to bear the brunt of the downturn, with the sector forecast to fall by 19.6 per cent in the first quarter this year, followed by the financial services sector, which is expected to drop 11 per cent.

Exports are projected to plunge 27.4 per cent during the quarter, according to the survey of 20 professional economists and analysts. Singapore's exports declined by 35 per cent, the largest drop on record, in January from a year earlier.

February figures will be released on Tuesday, with DBS Bank saying it expects exports to have fallen 23.6 per cent year-on-year. "The general expectation is that it will be another dreadful month," it said in a market commentary.

Minister Mentor Lee Kuan Yew warned this month that GDP may contract by as much as 10 per cent this year if exports continue to fall sharply. - AFP/vm

Title: Re: Meltdown
Post by: ezodisy on March 22, 2009, 03:46:51 PM

So Coop, how do you see things 5 years away? About the same as now?

Title: Re: Meltdown
Post by: Coopmv on March 22, 2009, 04:24:14 PM

Quote from: ezodisy on March 22, 2009, 03:46:51 PM
So Coop, how do you see things 5 years away? About the same as now?

I am not smart enough and do not pretend to be smart enough to predict the future. We cannot even forecast interest rate a year from now with much accuracy. If the talking heads are wrong, are they going to be held responsible for anything such as your bad investment decisions?

Title: Re: Meltdown
Post by: ezodisy on March 22, 2009, 11:15:10 PM

Quote from: Coopmv on March 22, 2009, 04:24:14 PM
If the talking heads are wrong, are they going to be held responsible for anything such as your bad investment decisions?

I think you know the answer to that. Most of those "talking heads" (that's a really irritating term by the way) are wrong when they speak on Bloomberg, CNBC, FOX, CNN and so on. Most. You could of course pay attention to the ones who have been correct, but that doesn't seem to be something you're interested in, and instead just want to dump every forecaster into the same pile (the "talking heads"). The funny thing is that there have been many, including Oscar, who called this spot on, so why don't you take advantage of it instead of continuing to imply that they're all idiots?

Title: Re: Meltdown
Post by: BachQ on March 23, 2009, 10:38:52 AM

UN predicts that the world population will balloon to 9.2 billion people by 2050 (http://www.worldchanging.com/archives/009603.html) (up from nearly 6.8 billion today).

(http://www.corrupt.org/data/files/overpopulation_myths/world-population-chart.jpg)

Title: Re: Meltdown
Post by: BachQ on March 23, 2009, 10:39:50 AM

MSNBC: (http://www.msnbc.msn.com/id/29619163/)U.S. banks suffer 149% rise in bad loans

Title: Re: Meltdown
Post by: BachQ on March 23, 2009, 10:41:08 AM

California jobless rate hits 10.5% (http://www.bloomberg.com/apps/news?pid=20601087&sid=ahasDYMBWmjg&refer=home), a 26yr high

California Unemployment Office Hiring 400 New Positions to meet Skyrocketing Demand (http://cbs13.com/local/unemloyment.edd.hiring.2.933210.html)

QuoteThe demand for unemployment in California has become so high that the unemployment office is planning to hire hundreds of people to keep up. The Employment Development Department is hiring for 400 positions because of a record number of unemployment claims from California residents, and more jobs may be opening in the future. "It's a very huge workload issue and certainly a great amount of work," said Lori Levy from the EDD. "We have never in California seen a month [with] over 500,000 initial claims in one month."

Title: Re: Meltdown
Post by: BachQ on March 23, 2009, 10:43:11 AM

Even Cave Dweller Can't Escape Recession: Between a Rock & a Hard Place, Man Living in Cave Faces Foreclosure ABC News: (http://abcnews.go.com/Business/Economy/Story?id=6941993&page=1) For nearly five years, Curt Sleeper and his family have lived in a cave. His mortgage is about to come due and, like millions of other Americans, he can't refinance.

(http://a.abcnews.com/images/Business/ht_Cavehouse18_090220_ssh.jpg)
(http://a.abcnews.com/images/Business/ht_Cavehouse9_090220_ssh.jpg)

Title: Re: Meltdown
Post by: Lethevich on March 23, 2009, 10:46:25 AM

Geithner Relies on Investors for $1 Trillion Plan (http://www.bloomberg.com/apps/news?pid=20601087&sid=aE.lfx34k8bI&refer=home)

An expensive, but seemingly potentially useful thing to do. Instead of continually throwing money at a problem, simply make one payment to move the problem away from where it is most damaging.

Title: Re: Meltdown
Post by: Coopmv on March 23, 2009, 04:48:13 PM

Quote from: Lethe on March 23, 2009, 10:46:25 AM
Geithner Relies on Investors for $1 Trillion Plan (http://www.bloomberg.com/apps/news?pid=20601087&sid=aE.lfx34k8bI&refer=home)

An expensive, but seemingly potentially useful thing to do. Instead of continually throwing money at a problem, simply make one payment to move the problem away from where it is most damaging.

Only time will tell if this latest move will work ...

Title: Re: Meltdown
Post by: Coopmv on March 23, 2009, 05:02:07 PM

High priced American lawyers will not be able to stop the Swiss banking secrecy from being torn down once and for all. With EU and the US on the same page and ready to take coordinated actions, the impact on the Swiss economy will be significant and lasting ...

Switzerland summons German ambassador
17 March 2009 | 09:32 | Source: EuroNews

BERN -- Switzerland and Germany are heading for a showdown after the German Finance Minister cast doubt on Bern's commitment to dealing with banking secrecy.

The German ambassador has been summoned to the Swiss foreign ministry in Bern.

It comes after Peer Steinbrück suggested Switzerland and Austria might not be fully committed to applying OECD transparency rules:

"All they need to know is that an OECD blacklist exists. If that makes people nervous and they ask themselves if they are likely to end up on that list well, then things start moving." he said in an interview.

Swiss officials described Steinbruck's remarks as unacceptable. President Hans-Rudolf Merz:

"For all those taxpayers who are Swiss residents, the banking protection will remain in place. No one can stick their nose into our bank accounts. However, banking secrecy laws cannot be used to cover up fraud."

Pressure from the G20 last week prompted promises of transparency from several countries, including Switzerland, Austria and Liechtenstein.

Switzerland in particular has been in the spotlight since US officials demanded its biggest bank, UBS, hand over the name of 52,000 clients suspected of tax fraud.

The Swiss government has hired a team of American lawyers to defend its position.

Title: Re: Meltdown
Post by: Coopmv on March 23, 2009, 05:06:54 PM

Quote from: Dm on March 23, 2009, 10:41:08 AM
California jobless rate hits 10.5% (http://www.bloomberg.com/apps/news?pid=20601087&sid=ahasDYMBWmjg&refer=home), a 26yr high

California Unemployment Office Hiring 400 New Positions to meet Skyrocketing Demand (http://cbs13.com/local/unemloyment.edd.hiring.2.933210.html)

Not surprising. CA was in big trouble back in the early 90's due to that last real estate bubble, though its economic problems were less severe. It has a very diverse economy and is still the 7th world's largest economy. It will bounce back over time.

Title: Re: Meltdown
Post by: Coopmv on March 23, 2009, 07:29:28 PM

Quote from: Dm on March 23, 2009, 10:39:50 AM
MSNBC: (http://www.msnbc.msn.com/id/29619163/)U.S. banks suffer 149% rise in bad loans

One has to wonder if UBS will continue in its current downward spiral. As a US taxpayer, I am quite annoyed at any payments US government made to foreign banks just because they were dumb enough to enter any collateral agreements with the likes of AIG or Lehman Brothers.

Title: Re: Meltdown
Post by: ezodisy on March 23, 2009, 11:26:15 PM

Quote from: Coopmv on March 23, 2009, 05:02:07 PM
President Hans-Rudolf Merz:

"For all those taxpayers who are Swiss residents, the banking protection will remain in place. No one can stick their nose into our bank accounts. However, banking secrecy laws cannot be used to cover up fraud."

exactly. The self-righteous yanks and europeans can piss off

Quote from: Lethe on March 23, 2009, 10:46:25 AM
Geithner Relies on Investors for $1 Trillion Plan (http://www.bloomberg.com/apps/news?pid=20601087&sid=aE.lfx34k8bI&refer=home)

An expensive, but seemingly potentially useful thing to do. Instead of continually throwing money at a problem, simply make one payment to move the problem away from where it is most damaging.

I like the "seemingly potentially" part Lethe.

Title: Re: Meltdown
Post by: Lethevich on March 24, 2009, 10:46:17 AM

Quote from: ezodisy on March 23, 2009, 11:26:15 PM
exactly. The self-righteous yanks and europeans can piss off

I like the "seemingly potentially" part Lethe.

I'll ditch the seemingly when I get a doctorate 0:)

Title: Re: Meltdown
Post by: ezodisy on March 24, 2009, 02:12:48 PM

Fibo, some time if you have 80 minutes to spare there's an outstanding 8 part Schiff lecture here which without doubt is the best thing I've heard from him, funny and brilliant

http://www.youtube.com/watch?v=eSVpio-3eBU

Title: Re: Meltdown
Post by: Coopmv on March 24, 2009, 05:06:36 PM

Quote from: ezodisy on March 23, 2009, 11:26:15 PM
exactly. The self-righteous yanks and europeans can piss off

I like the "seemingly potentially" part Lethe.

This has more to do with fairness than being self-righteous. Again, if you have more money than you know what to do with, you will not be hanging out in this forum. Lets face it, why shouldn't some tycoons in your country not pay their fair shares of taxes? This is not an American or European issue. The Swiss have done this for too long - helping the tax cheats to avoid paying their fair shares of taxes to their countries ...

Title: Re: Meltdown
Post by: ezodisy on March 24, 2009, 11:33:34 PM

Quote from: Coopmv on March 24, 2009, 05:06:36 PM

This has more to do with fairness than being self-righteous. Again, if you have more money than you know what to do with, you will not be hanging out in this forum. Lets face it, why shouldn't some tycoons in your country not pay their fair shares of taxes? This is not an American or European issue. The Swiss have done this for too long - helping the tax cheats to avoid paying their fair shares of taxes to their countries ...

Fairness? Is that the word you use to justify meddling into other people's business? typical

Title: Re: Meltdown
Post by: BachQ on March 25, 2009, 10:16:05 AM

California no longer worst housing market

Here's how February's bottom 10 shapes up: (http://lansner.freedomblogging.com/2009/03/24/calif-no-longer-worst-us-home-market-just-2nd-worst/17409/)

* Nevada, -26.19%
* California, -25.80%
* Arizona, -21.14%
* Florida, -18.75%
* Rhode Island, -17.26%
* Washington, -12.70%
* Oregon, -11.28%
* Illinois, -10.48%
* Maryland, -9.89%
* Michigan, -9.66%
* New Hampshire, -9.39%
* Minnesota, -9.31%

Title: Re: Meltdown
Post by: BachQ on March 25, 2009, 10:18:08 AM

Seriously, I don't see a problem with US monetary policy:

(http://kitsch-posh.com/wp-content/uploads/2008/10/m0-081010-graph.jpg)

Title: Re: Meltdown
Post by: BachQ on March 25, 2009, 10:19:25 AM

NJ sues Lehman execs for fraud to recoup state funds (http://www.reuters.com/article/ousiv/idUSTRE52G63920090317)

Title: Re: Meltdown
Post by: BachQ on March 25, 2009, 10:21:56 AM

http://in.reuters.com/article/oilRpt/idINN1729465720090317?pageNumber=1&virtualBrandChannel=0

L.A./Long Beach Feb port cargo down 36.6 pct yr/yr

LOS ANGELES, (Reuters) - February loaded oceangoing cargoes at the side-by-side ports of Los Angeles and Long Beach fell 36.6% from the previous February, the two ports showed in separate reports.

The slowdown for February is much more pronounced than it was in January, when the year-on-year decrease in cargo traffic at the two Southern California ports was 18.7 percent.

The ports are the two busiest in the United States, handling more than 40 percent of imported consumer goods.

The two ports showed inbound cargoes down 38.8 percent and outbound cargoes down 32.2 percent in February 2009 from February 2008.

The traffic fell as "consumer sales are down due to high unemployment rates," according to the Port of Los Angeles' report, which was issued last week.

The Long Beach report, issued on Tuesday, showed inbound cargo for February down a whopping 43.3 percent.

"Over the last 20-something years, we haven't had too many declines and surely not on the order we are seeing now," said port spokesman Art Wong.

Feb. 09 Feb. 08 Change
Loaded Inbound 149,299 263,231 -43.3%
Loaded Outbound 92,781 147,275 -37.0%
Empties 75,962 119,193 -36.3%
TOTAL (T.E.U.) 318,042 529,699 -40.0% (http://www.polb.com/economics/stats/latest_teus.asp)

Title: Re: Meltdown
Post by: BachQ on March 25, 2009, 10:24:56 AM

Quote from: ezodisy on March 24, 2009, 02:12:48 PM
Fibo, some time if you have 80 minutes to spare there's an outstanding 8 part Schiff lecture here which without doubt is the best thing I've heard from him, funny and brilliant

http://www.youtube.com/watch?v=eSVpio-3eBU

Thank you, I will watch this tonight and report back.

I still need to watch that 4th clip where Marc Faber mentions WAR!

Title: Re: Meltdown
Post by: ezodisy on March 25, 2009, 10:27:35 AM

Quote from: Dm on March 25, 2009, 10:16:05 AM
Here's how February's bottom 10 shapes up:[/url]

1) Nevada, -26.19%
2) California, -25.80%

that's funny. Those are the two states I got my real estate licenses in -- Nevada at 18, and California a year later. I remember how the NV market was booming back then in '98, and now I wouldn't be surprised by ghosttowns and dozens upon dozens of empty lots all over. What a sad state of affairs that is.

Nice chart by the way. lol

Title: Re: Meltdown
Post by: Coopmv on March 25, 2009, 05:56:09 PM

Quote from: ezodisy on March 24, 2009, 11:33:34 PM
Fairness? Is that the word you use to justify meddling into other people's business? typical

I bet your government is only too eager to join the US and the EU in cracking the whip on the tax cheats from your country ...

Title: Re: Meltdown
Post by: Coopmv on March 25, 2009, 06:03:04 PM

It is better late than never

Banking secrecy remains in question, despite government assurances
© Danièle LudwigCourt ruling undermines tax evasion policy
by Malcolm Curtis

Geneva - 19 March 2009 | 10:50

A banking lawyer is worried about a recent Swiss court decision that upholds the right of a Swiss bank to pass on account details of an American client to US authorities based on a blanket request for information about certain kinds of taxpayers. The ruling appears to uphold the kind of "fishing expeditions" explicitly ruled out by Switzerland's government under its new policy, intended to meet OECD concerns about tax evasion.

Bern is ruling out "fishing expeditions" by other governments seeking to track down tax evaders from their own countries with bank accounts in Switzerland, but a Geneva lawyer says a recent Swiss court ruling involving US taxpayers appears to have already approved such activity.

Under pressure from countries such as the United States and Germany, the Swiss President Hans-Rudolf Merz last week announced that the federal government was adopting OECD standards allowing for the exchange of tax information with other countries "in individual cases where a specific and justified request has been made."

The government said its new tax policy would maintain banking secrecy and not allow for general requests, commonly known as "fishing expeditions." But lawyer Henric Immink told Swisster a court ruling last week involving an American with a UBS account appeared to have allowed just that under the existing tax treaty between Switzerland and the US.

"That is scary to me," said Immink, a Geneva lawyer who specializes in banking law. The Federal Administrative Tribunal ruled that the US was within its rights in asking UBS to furnish a list of American clients who fit a certain class – those who set up structures, companies or trusts in Switzerland. Immink said the American request, which did not involve the specific names of clients, looked "very closely" like a fishing expedition.

The tribunal rejected an appeal made by an American client of UBS whose name had been sent onto US authorities. Although the decision does not set a precedent – each case is judged on its own merits – it appears to open the door to sweeping general requests from the American government for the banking details of US citizens, Immink said.

This decision "in the end it is very bad for our financial base," he said, referring to the Swiss banking industry.

Faced with the prospect of potentially losing its licence to conduct business in America, UBS, Switzerland's largest bank, agreed to pass on to US authorities the names of 250 to 300 American clients as part of an agreement to avoid prosecution for tax fraud. The bank also agreed to pay the government 780 million dollars.

The decision to pass on the names, approved by FINMA, Switzerland's banking authority, has led to a political storm, with concerns raised about the future of banking secrecy.

Other observers remain unsure about whether the Swiss government's move to change its policies on tax evasion will remove pressure for changes aimed at Switzerland's banking industry from countries such as the US and Germany. The government's policy no longer distinguishes between tax fraud – which in Switzerland has typically involved criminal activity such as forging documents – and tax evasion.

"The jury's still out," Martin Naville, CEO of the Swiss-American Chamber of Commerce, told Swisster when asked whether the government's policy change will satisfy critics. Naville said called the policy change "a good move" but said it is unclear whether countries such as Germany and the US will put extra pressure on Switzerland. A lot will depend on what happens in other countries targeted as "tax havens," Naville said.

While Switzerland has agreed to cooperate on tax information, it is maintaining its banking secrecy laws, dating from 1934, that enshrine bank-client confidentiality. "I think everybody has a right to privacy," Naville said, adding that holders of Swiss bank accounts should be treated as "innocent until proven guilty."

In addition to the information it has already obtained from UBS, the US justice department has launched legal action to obtain details of the accounts of more than 50,000 Americans with accounts at UBS, Switzerland's largest bank.

Naville said he believes this a specific case that follows an admission by the bank that its employees helped Americans evade paying taxes. This case should not be extended to a blanket request by the American government for information about all Swiss accounts held by American citizens, he said.

The Swiss government changed its policy on tax information under pressure from OECD member countries, who last fall called for the development of a blacklist of countries failing to show transparency in its banking practices. Angel Gurria, OECD secretary general, welcomed the changes outlined by Switzerland and other countries such as Austria, Luxembourg, Singapore and Hong Kong.

"These announcements mark a fundamental change and an important moment in the history of international tax cooperation," Gurria said in a statement. But Germany's finance minister Peer Steinbrück has angered Switzerland's politicians by saying the Swiss responded to OECD pressure like "Indians fleeing the cavalry" and concerns linger that the German government – concerned about lost taxes - may seek tougher measures on Swiss banking transparency.

In the US, meanwhile, Michigan Senator Carl Levin has reintroduced a "Stop Tax Haven Abuse Act" aimed at stemming a loss of an estimated 100 billion dollars in "offshore tax dodges." Levin, who has called for the revocation of UBS's license to operate in the US, is also targeting US multinationals that have set up in countries such as Switzerland to avoid paying American taxes.

But Naville said the latest proposed legislation is "too complicated to pass" and is facing a lot of resistance from American politicians.

James Nason, spokesman for the Swiss Bankers Association, said if the American government was really concerned about US taxpayers hiding their identity behind phoney offshore shell corporations, it should look at the thousands of shell companies incorporated in Delaware, Nevada and other states that offer complete anonymity to beneficial owners. "There is quite a bit of hypocrisy there."

On the issue of Swiss banking practices, Nason said that nothing will change for Swiss clients and the situation for foreigners will not change immediately. He noted that the Swiss government has agreed to renegotiate the double taxation treaties it has with more than 70 countries. These will be ratified by parliament and "may be subject to a referendum," Nason said.

He said that while no Swiss bank can have a "sustainable model" that relies solely on client confidentiality, respect for privacy is one of the legs upon which the banking industry is built, along with security, stability and competence. "Take one leg away and the industry would wobble," he acknowledged.

Title: Re: Meltdown
Post by: Coopmv on March 25, 2009, 06:33:14 PM

Gee, the Swiss are tripping all over themselves trying to negotiate with a bankrupt US?

Swiss to negotiate tax cooperation with US
Swiss government to start negotiating tax cooperation with US
Wednesday March 25, 2009, 1:37 pm EDT

BERN, Switzerland (AP) -- The Swiss government said Wednesday it would immediately start negotiating ground rules with the United States and Japan on how Switzerland will help them pursue alleged tax evaders with money in Swiss banks.

Switzerland will refuse to hand over banking information unless the other countries present compelling evidence of tax evasion by specific individuals, Swiss President Hans-Rudolf Merz said.

Negotiations with European countries will begin later, Merz said.

The Swiss government announced earlier this month that it will cooperate in international tax investigations, breaking with a long-standing tradition of protecting wealthy foreigners accused of hiding billions of dollars.

Switzerland has come under intense pressure, in particular from the United States, Britain, France and Germany. Most recently Switzerland has been involved in a dispute with the U.S. over wealthy Americans who have assets in its biggest bank, UBS AG.

Merz said that U.S. Treasury Secretary Timothy Geithner had called him within hours of his announcement of cooperation on March 13 and asked how the country was going to implement the move.

"Of course he's interested in starting as soon as possible and we have no problem with that," Merz told reporters in the capital of Bern.

Switzerland said it will adopt standards set in 2000 by the Paris-based Organization for Economic Cooperation and Development for countries working together against tax evasion.

The government has said it will include the OECD standards in tax treaties it holds with the U.S., Japan, European and other countries.

Merz said he did not know how long negotiating the agreement with the U.S. would take, but that it could be difficult.

"It's not something you do in two weeks," he said.

Japan is among the first countries Switzerland will deal with because negotiations were already under way before the Swiss government changed its position, Merz said.

Title: Re: Meltdown
Post by: Coopmv on March 25, 2009, 07:28:08 PM

UBS certainly does not look that much better than Citigroup.

Risks Abound at UBS
by: Robert Maltbie March 24, 2009 | about stocks: BAC / BCS / C / DB / GS / SCGLY.PK / UBS
Robert Maltbie

Risks abound on UBS's balance sheet, off the balance sheet, and across the pond. Yet, UBS trades at an astonishing premium to its peers. We are initiating a SELL rating.

INVESTMENT THESIS

Despite its de-risked balance sheet, UBS faces significant credit exposure to troubled assets, along with associated counterparty risk on insured and hedged products.

UBS trades at a huge premium to its peers when comparing earnings and book multiples. We expect its multiple to contract as further losses and write-downs mount in the face of a weakening global economy.

Our price target is based both on historical and peer group price-to-book multiples, from which UBS currently trades at an 81% premium.

Our forecast for 2009 is below the current consensus. With sustained profitability in question for 2009, even our bearish forecast could prove to be too positive.

RISKS TO OUR SHORT CALL

Like many governments around the world, the Swiss National Bank intervened on UBS's behalf last year, and could step in to assist UBS in the future if needed.

There is an all out blitz on short positions, including changes to up-tick rules, mark-to-market accounting, and speculation of government purchases of troubled assets. Whether perception or reality, headline risks are a plenty.

SUMMARY

Without question, the biggest banks in the world made some hideous decisions over the last few years. Even when they made seemingly good decisions, such as buying insurance on questionable securities, they lost money since many of these hedged and insured positions proved worthless themselves. By far the worst example of insurance gone wrong is AIG.

Reading through AIG's SEC filings is like watching a spoof on a horror movie – the blood is real, but it's hard not to laugh. In some instances, AIG could not even estimate its loss exposure to some of its special purpose entities. When AIG could estimate its potential losses, the numbers were often in the hundreds of billions. Unfortunately for many European banks, UBS included, AIG ventured across the pond to sell similar faux insurance as it did to US banks. As Chairman Bernanke illustrated last Sunday on 60 Minutes, bailing out AIG was a global necessity, despite the bitter after taste that is left after using tax payer money to attempt to fix asinine decisions.

This past Sunday, AIG released a document that detailed where the bailout money was going in the 4th quarter. Many of the expected names were on the list, including Goldman Sachs (GS), Bank of America (BAC), Merrill Lynch, and Citigroup (C). Yet, some of the biggest payouts (from September to December of 2008) went to non-US banks. Barclays (BCS) received over $8 billion; Societe Generale (SCGLY.PK) received over $12 billion; and Deutsche Bank (DB) received over $13 billion. UBS, while not as extreme, received $5 billion from AIG over this period. Nevertheless, in UBS's recently filed 20-F (annual filing), the company specifically mentions continued risks and potential further writedowns related to unreliable credit protection and deteriorating creditworthiness of monoline and other providers of credit protection.

While many US banks have been hit hard with writedowns, losses, and resulting drops in stock prices, many European banks continue to trade at premium multiples despite facing similar if not more extreme credit risks and losses. Despite losing over 20 billion CHF last year, issuing a cautious forecast for 2009, and facing existing exposure to credit losses and revaluations, UBS trades at a 105% premium to its peers' average price-to-book multiple (P/B), and a 18% premium to the group's average price-to-earnings multiple (P/E) for 2009. Furthermore, we believe UBS' core businesses will continue to struggle in the year ahead, particularly given the company's current cost structure, which does not match UBS's assets under management (AUM) or business activity.

We are issuing a 2009 earnings forecast well below the current consensus of $1.22. Our We are issuing a price target based on a lowered P/B multiple, decreasing consensus earnings expectations, and a reflection of the company's existing exposure to toxic assets in Europe and the US

Title: Re: Meltdown
Post by: Coopmv on March 25, 2009, 07:36:53 PM

Quote from: Dm on March 25, 2009, 10:24:56 AM
Thank you, I will watch this tonight and report back.

I still need to watch that 4th clip where Marc Faber mentions WAR!

I am watching with interest at how the Germans declare their financial war on the Swiss over this banking secrecy ...

Title: Re: Meltdown
Post by: Florestan on March 25, 2009, 11:57:04 PM

Quote from: Coopmv on March 25, 2009, 06:33:14 PM
Merz said that U.S. Treasury Secretary Timothy Geithner had called him within hours of his announcement of cooperation on March 13 and asked how the country was going to implement the move.

How sweet! The US Treasure Secretary (!) calls the President (!!) of a sovereign state (!!!) to ask him how his country is going to execute a US order... ;D

Title: Re: Meltdown
Post by: ezodisy on March 26, 2009, 01:00:32 AM

Quote from: Coopmv on March 25, 2009, 06:33:14 PM
Gee, the Swiss are tripping all over themselves trying to negotiate with a bankrupt US?

there's a difference between tax evaders and the rest. It's amazing how you try to twist information.

Quote from: Florestan on March 25, 2009, 11:57:04 PM
How sweet! The US Treasure Secretary (!) calls the President (!!) of a sovereign state (!!!) to ask him how his country is going to execute a US order... ;D

yeah, well, guys like that run Coop's country, and he thinks they're great. lol

Title: Re: Meltdown
Post by: BachQ on March 26, 2009, 01:53:20 PM

Quote from: ezodisy on March 25, 2009, 10:27:35 AM
that's funny. Those are the two states I got my real estate licenses in -- Nevada at 18, and California a year later. I remember how the NV market was booming back then in '98, and now I wouldn't be surprised by ghosttowns and dozens upon dozens of empty lots all over. What a sad state of affairs that is.

Nice chart by the way. lol

The downward pressure on Nevada's & California's home prices is immense, with foreclosures accounting for almost 60% of home sales. Arizona is just as bad. This house on Happy Valley Road (Scottsdale, AZ) is selling for $15M, but the cost to build it was $30M ($30M replacement cost).

(http://p.rdcpix.com/v03/l617dd741-m8x.jpg)

--> link <-- (http://www.realtor.com/realestateandhomes-detail/9422-E-Happy-Valley-Road_Scottsdale_AZ_85255_1104641377)

Title: Re: Meltdown
Post by: BachQ on March 26, 2009, 01:54:31 PM

Japan Exports Drop Record 49.4%; Shipments to the U.S. tumble an unprecedented 58.4%; automobile exports tumble 70.9% from a year earlier. (http://www.bloomberg.com/apps/news?pid=20601087&sid=a5ElP4y2JoH8&refer=home)

Title: Re: Meltdown
Post by: BachQ on March 26, 2009, 01:55:34 PM

UK's green energy plans in disarray as wind farm giant slashes investment

(http://business.timesonline.co.uk/multimedia/archive/00510/Windmill_510000a.jpg)

Britain's ambition to become a global leader in renewable energy suffered a major setback last night when the world's biggest investor in wind power said that it was slashing its investment programme. The announcement comes less than two months after ministers backed a string of huge gas-fired power stations, prompting concern that the Government cannot fulfil its promise of a green energy revolution.

Iberdrola Renewables' decision to cut its investment in Britain by more than 40 per cent, or £300 million — enough to build a wind farm powering 200,000 homes — is the latest obstacle to Gordon Brown's target of generating 35 per cent of the country's electricity from renewable sources by 2020. ... (http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5977714.ece)

Title: Re: Meltdown
Post by: BachQ on March 26, 2009, 01:57:08 PM

ABC News: Gerald Celente Predicts Economic Armageddon by 2012

http://www.youtube.com/v/Q2qDW34Fr64

Title: Re: Meltdown
Post by: BachQ on March 26, 2009, 01:58:23 PM

US jobless claims set new record; 4Q GDP sinks to a 6.3% annual contraction -- (http://news.yahoo.com/s/ap/20090326/ap_on_bi_go_ec_fi/economy) The total number of people claiming benefits jumped to 5.56 million, worse than economists' projections of 5.48 million, a ninth straight record and the highest total on records dating back to 1967.

Title: Re: Meltdown
Post by: Lethevich on March 26, 2009, 02:18:00 PM

Quote from: Dm on March 26, 2009, 01:55:34 PM
UK's green energy plans in disarray as wind farm giant slashes investment

(http://business.timesonline.co.uk/multimedia/archive/00510/Windmill_510000a.jpg)

Britain's ambition to become a global leader in renewable energy suffered a major setback last night when the world's biggest investor in wind power said that it was slashing its investment programme. The announcement comes less than two months after ministers backed a string of huge gas-fired power stations, prompting concern that the Government cannot fulfil its promise of a green energy revolution.

Iberdrola Renewables' decision to cut its investment in Britain by more than 40 per cent, or £300 million — enough to build a wind farm powering 200,000 homes — is the latest obstacle to Gordon Brown's target of generating 35 per cent of the country's electricity from renewable sources by 2020. ...
(http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5977714.ece)

The idiocy will never end... This is all down to the POS government doing almost nothing to encourage the industry. Any change of leadership would be perfect now, even UKIP ( ::) ) might be less inept than Brown and Co.

Title: Re: Meltdown
Post by: Coopmv on March 26, 2009, 05:23:42 PM

Quote from: ezodisy on March 25, 2009, 10:27:35 AM
that's funny. Those are the two states I got my real estate licenses in -- Nevada at 18, and California a year later. I remember how the NV market was booming back then in '98, and now I wouldn't be surprised by ghosttowns and dozens upon dozens of empty lots all over. What a sad state of affairs that is.

Nice chart by the way. lol

So it looks like you were once an illegal who managed to get some real estate licenses but ended up getting deported. No wonder you have such a vendetta against the US. All deportees hate the US, which is understandable ...

Title: Re: Meltdown
Post by: Coopmv on March 26, 2009, 05:41:51 PM

KOF Swiss Economic Institute believe Recession may last "at least two years" in Switzerland and that forecast may prove overly optimistic due to the worsening conditions in its financial sector. How about a run on UBS?

March 26, 2009 - 5:48 PM

Recession to last "at least two years"

The prognosis for the Swiss economy continues to worsen with forecasters now fearing the deepening recession will last a minimum of two years.

The KOF Swiss Economic Institute said on Thursday that the economy would shrink by 2.4 per cent this year, exports would continue to slump and the jobless rate would rise to 4.8 per cent (nearly 200,000 out of work) in 2010.

The KOF spring forecast was significantly worse than in December when the institute predicted a fall in gross domestic product (GDP) of 0.5 per cent.

Mindful of previous rosier assessments that have had to be revised, the report also warned "the assumptions upon which this forecast is based could easily prove to be too optimistic".

"One of our assumptions is that we won't a see a bank run in Europe. We can't rule out that there will not be another Lehman Brothers [the collapsed United States investment bank] but we assume there won't be," KOF head Jan-Egbert Sturm told swissinfo.

Export collapse
Other headline figures in the new forecast predict a 12 per cent decline in exports this year and a slight decline in the previously robust consumer spending. KOF expects 2010 to continue the negative slide with a 0.3 per cent year-on-year drop in GDP.

The report blamed the decline in Swiss economic fortunes on the dramatic "collapse" of the export industry in the last three months of 2008 as the impact of recession in other countries suddenly hit home.

"In the summer and early autumn [of last year] the Swiss economy performed relatively better than other economies," Sturm said. "That was in part due to a relatively robust domestic economy. But ultimately we are an open economy and we have to be affected by the world economy. Switzerland has caught up with Europe."

The Swiss government and central bank have tried to halt the slide with economic stimulus packages and a rapid lowering of interest rates to virtually zero.

But KOF was cautious about predicting the impact of these measures with the recession showing no signs of abating.

"It will help to a limited extent, but it is very difficult for a fiscal policy to support the export market. It is difficult to say how this may affect the Swiss economy in the near future," Sturm said.

Up and down
KOF also recognised that the ongoing row over tax evasion and promises by Switzerland to reform banking secrecy could have a negative effect on the financial industry.

The report predicted this would "further shrink the foreign private wealth managed by Swiss banks".

The one hope that Sturm could see for the Swiss economy was a reversal of the adage that "what goes up must come down".

"We have already reached the bottom in some sectors, so it must go upwards. Many firms around the world have put their investment plans on hold, but that doesn't mean they can't be reactivated when the global economy picks up," he said.

swissinfo, Matthew Allen in Zurich

Title: Re: Meltdown
Post by: Coopmv on March 26, 2009, 06:14:28 PM

These Swiss watchmakers certainly sound as confident as the homebuilders in the US. The game is over, the bankrupt Americans will not be gobbling up all the Swiss watches, but these watchmakers are blind to reality ...

March 26, 2009 - 1:31 PM Crisis forces watch industry to "reset" values

As the doors open to Baselworld 2009, the biggest event of the watchmaking calendar, organisers of the show are upbeat about the industry's outlook.

François Thiébaud, president of the Swiss exhibitors committee, tells swissinfo the industry will start to recover from the effects of the global financial crisis as of May and the general feeling of pessimism will subside.

The industry will "reset" its watches as it returns to traditional values, he says. The sector is currently experiencing its first slowdown after five years of record growth.

Baselworld 2009 is the world's leading showcase for watches and jewellery. It was opened by Interior Minister Pascal Couchepin on Thursday.

swissinfo: The world is suffering under the global financial crisis. What's ailing the watch industry?
François Thiébaud: It's certainly not an incurable disease. The watch sector has been affected by the world financial crisis, but it's more a crisis of confidence. People don't have any cash, bank credit is blocked, and as the media tend to relay the morose climate, clients are delaying with their purchases.

The Swatch Group, to which I belong, has numerous shops around the world. We are seeing that consumer spending hasn't stopped, even if unfortunately there has been an increase in unemployment. But with the G20 countries about to meet in London there are some signs of recovery. I hope the engine will be able to restart quickly.

swissinfo: You are confident about the future, that there will be talk of "after the crisis"...
F.T.: This is definitely the biggest crisis the world has faced since the 1930s, but that means than attitudes are going to change. We are going to return to the true value of things. We'll move away from the extravagances of the past few years. Notably with regard to prices. We will head more toward real values, toward watchmaking traditions and the development of artisanal work. We are going to reset our watches.

François Thiébaud (Keystone)swissinfo: In which regions of the world has this industry been most affected?
F.T.: It is especially in the Americas, north and south, and in the United States in particular, where we are noticing orders drop by 20, 30, even 60 per cent. A lot of businesses are going bankrupt. In Europe, Spain in particular has been hit over the past year because of the property market. On the other hand, the Arab countries remain stable.

There is also talk of a property crisis in the United Arab Emirates but the hotels are full for the coming Easter holidays. There are fewer Russian tourists and the shops are less busy but, as far as we are concerned, sales are comparable to the previous year. In Asia, Japan is the country most affected. China, on the other hand, this year expects growth of eight per cent.

swissinfo: The turnover figures being cited by the watchmaking industry, a drop of 22.4 per cent in February 2009 compared with 2008, are misleading because they relate to exports and not necessarily sales. What about stock?
F.T.: It's true that the export figures mentioned do not mean that these watches were sold. These watches were exported from Switzerland but are they just sitting with wholesalers, distributors or in retail outlets? Are these watches reaching the end customer? We do not know.

But I think the sharp decline recorded as of October 2008 means that stocks are running low. Figures for March show that we are on the way up again and that May and June should show a recovery. It will not be impressive, but I think the pessimism should begin to subside in the months ahead.

swissinfo: Baselworld is a good barometer of the status of the watchmaking industry. The number of exhibitors has increased - 40 companies have invested in new stands - and the jewellery industry had few cancellations.
F.T.: The number of visitors and journalists who will visit the show by April 2 should give us some other clues. The watchmaking industry is at the heart of the luxury market, a sector hit directly by the crisis. The press will be able to observe trends. If the media perceives a sign of recovery, it will send a fantastic signal to the entire industry.

swissinfo: Will the crisis in the watchmaking industry lead to cutbacks in the promotion of sport through sponsorship?
F.T.: So far the brands that I represent have not reduced any budgets, even if it is true that the time is not conducive for making new commitments. On the one hand, we have signed binding contracts. On the other hand, [stopping sponsorship] would send a negative signal to the public.

Instead savings should be made on purchase costs, travel and representation. Today it is necessary to protect know-how and personnel, not to rush into redundancies.

swissinfo: What about the so-called "grey market", the distribution of products through unofficial channels. Are you equipped to fight this scourge?
F.T.: When everything is going well, parallel imports are also good. So when things do not go as well, the grey market should also be losing steam. But it is true that some retailers will try to resell goods at considerable discounts. If one market is underperforming, a distributor could be tempted to sell his stock at slashed prices.

This phenomenon has caused the rot to set in with some brands. But there are distribution contracts that guarantee the monitoring of products and after-sales service. Stepping outside the regular circuit involves risk, for the customer as well. Stocking up via the grey market or buying fakes contributes to the destabilisation of the economy.

It is better to work with people who earn an honest living than to support criminals, those who exploit children or employers who do not have social safety net. We must focus on quality and the Swiss label.

swissinfo-interview: Olivier Grivat in Basel

Title: Re: Meltdown
Post by: Coopmv on March 26, 2009, 06:48:03 PM

Quote from: Florestan on March 25, 2009, 11:57:04 PM
How sweet! The US Treasure Secretary (!) calls the President (!!) of a sovereign state (!!!) to ask him how his country is going to execute a US order... ;D

The president of Switzerland taking orders from the American and German? You have got to be kidding ...

Title: Re: Meltdown
Post by: BachQ on March 27, 2009, 11:46:28 AM

Quote from: BBC on March 22, 2009, 09:29:05 AM
Eurozone industrial output plunged by 3.5% in January compared with the previous month, the biggest decline since records began in 1990, and dropped 17.3% from 2008 -- BBC (20 mar 09): (http://newsvote.bbc.co.uk/2/hi/business/7954627.stm)"The eurozone industrial production data for January is breathtakingly awful, adding to the evidence that manufacturing activity has fallen off a mountain rather than a mere cliff," said Howard Archer at Global Insight.

European Industrial Orders Plunge 34%, Most on Record (Update1)
By Jurjen van de Pol

March 27 (Bloomberg) -- European industrial orders dropped the most on record in January as the global recession forced manufacturers to cut production, reducing demand for equipment and machinery.

Industrial orders in the euro area fell 34 percent from the year-earlier month, the European Union statistics office in Luxembourg said today. The January drop was the biggest since the data series started in 1996 and exceeded the 28 percent decline economists forecast in a Bloomberg News survey. From the prior month, January orders fell 3.4 percent.

Demand for factory equipment is declining as the credit crunch and economic slump prompt companies worldwide to shut plants and put off investments. The European Central Bank on March 5 lowered its key interest rate by a half percentage point to a record low of 1.5 percent and signaled a further cut may be needed to spur lending and boost the economy.

"Indications for manufacturing activity across the euro zone have been dreadful," said Howard Archer, chief U.K. and European economist at IHS Global Insight in London. Companies "are being hammered both by a collapse in domestic and global demand."

Industrial production plunged 17 percent in January, the most since the data series began in 1986, and the jobless rate increased to the highest in more than two years. Europe's manufacturing industry contracted for a 10th straight month in March and job cuts accelerated, data showed this week.

5,000 Workers

Germany's Heidelberger Druckmaschinen AG, the world's largest maker of printing presses, said yesterday that it plans to fire 5,000 workers, about a quarter of the workforce, as it lowers costs to counter slumping orders. Heidelberger's orders in the three months through December fell 42 percent.

Continental AG, Europe's second-biggest auto-parts manufacturer, said on March 11 it plans to eliminate at least 1,900 jobs over the next 12 months and reduce tire-making in the region because of falling vehicle sales.

The global slump in auto demand poses an "existential threat" to carmakers and component suppliers, Daimler AG Chief Executive Officer Dieter Zetsche said on March 25. Daimler, the world's second-largest maker of luxury cars, will reduce hours for 68,000 German workers beginning next month to cope with what Zetsche called a "Darwin year" of survival for the industry.

(http://www.bloomberg.com/apps/news?pid=20601085&sid=a6Z6MmEnPvuw&refer=europe)

(http://www.marketoracle.co.uk/images/2009/Mar/industrial-17.jpg) (http://www.marketoracle.co.uk/index.php?name=News&file=article&sid=9470)

Title: Re: Meltdown
Post by: BachQ on March 27, 2009, 11:49:14 AM

Family who are 'too fat to work' say £22,000 worth of benefits is not enough -- The Chawners haven't worked in 11 years, claiming that their weight is a hereditary condition and the money they receive is insufficient to live on. Mr Chawner said: "What we get barely covers the bills and puts food on the table. It's not our fault we can't work. We deserve more."

(http://www.telegraph.co.uk/telegraph/multimedia/archive/01367/fatfamily_1367600c.jpg)

L'il Emma said: "I'm a student and don't have time to exercise. We all want to lose weight to stop the abuse we get in the street, but we don't know how." (http://www.telegraph.co.uk/news/newstopics/howaboutthat/5004431/Family-who-are-too-fat-to-work-say-22000-worth-of-benefits-is-not-enough.html)

Title: Re: Meltdown
Post by: BachQ on March 27, 2009, 11:58:46 AM

Solar update:

-- Solar Power Capacity Grows 17% in the U.S.

-- Solarbuzz Reports World Solar Photovoltaic Market Grew to 5.95 Gigawatts in 2008: World solar photovoltaic (PV) market installations reached a record high of 5.95 gigawatts (GW) in 2008, representing growth of 110% over the previous year.

http://www.solarbuzz.com/Marketbuzz2009-intro.htm

http://www.solarbuzz.com/Marketbuzz2009.htm

Title: Re: Meltdown
Post by: Lethevich on March 27, 2009, 01:01:31 PM

Quote from: Dm on March 27, 2009, 11:49:14 AM
L'il Emma said: "I'm a student and don't have time to exercise. We all want to lose weight to stop the abuse we get in the street, but we don't know how."

People seem to need a manual just to tell them to lay off the cake.

Title: Re: Meltdown
Post by: BachQ on March 30, 2009, 07:59:36 PM

NYT (29 mar 09): (http://www.nytimes.com/2009/03/30/us/30walkaway.html?_r=4)Banks Starting to Walk Away on Foreclosures

Title: Re: Meltdown
Post by: Guido on March 31, 2009, 02:36:44 AM

Not sure if this has been posted already: http://www.rollingstone.com/politics/story/26793903/the_big_takeover

Title: Re: Meltdown
Post by: Coopmv on March 31, 2009, 04:52:48 PM

Quote from: Guido on March 31, 2009, 02:36:44 AM
Not sure if this has been posted already: http://www.rollingstone.com/politics/story/26793903/the_big_takeover

The biggest fear has been the almost unquantifiable counterparty risk that AIG poses to all its counterparties and thereby to the world financial system. Much of the AIG bailout money was used to pay off these counterparties and Goldman Sachs was among the biggest beneficiary and UBS was not far behind. Hey, Hank Paulson, the ex-treasury secretary, who was the ex-CEO of GS, was not about to let his former employer, which probably still owes him millions in pension payments, to go under. Letting Lehman go down was also a good way to eliminate a competitor for GS. Speaking of conflict of interest.

Title: Re: Meltdown
Post by: ezodisy on April 01, 2009, 10:49:19 PM

Fibo, if you want to read more about Kondratieff's theory of waves, Marc Faber wrote a report in 2006 which included it. You can download it for free from his website, it's the one on the right: "Bull & Bear Markets in International Tensions".

http://www.gloomboomdoom.com/public/pSTD.cfm?pageSPS_ID=1000

Title: Re: Meltdown
Post by: BachQ on April 02, 2009, 08:32:32 PM

Quote from: Guido on March 31, 2009, 02:36:44 AM
Not sure if this has been posted already: http://www.rollingstone.com/politics/story/26793903/the_big_takeover

Thanks!

Quote from: ezodisy on April 01, 2009, 10:49:19 PM
Fibo, if you want to read more about Kondratieff's theory of waves, Marc Faber wrote a report in 2006 which included it. You can download it for free from his website, it's the one on the right: "Bull & Bear Markets in International Tensions".

http://www.gloomboomdoom.com/public/pSTD.cfm?pageSPS_ID=1000

According to Kondratieff, "wars themselves occur because of an increase in the tempo and tensions of economic life, and intensification of the economic struggle for markets and raw materials." And, in Marc Faber's words: "when markets are glutted and over-supplied, no one is going to fight in order to satisfy his demand. Conversely, when markets are characterised by acute shortages, people will fight and go to war in order to secure their required supplies, particularly when the shortages that might arise or that have already arisen threaten the physical and economic survival of the groups or countries involved. ... Rising commodity prices are a manifestation of shortages."

This framework works great for explaining historical patterns, but ... I would argue that, while it's true commodity prices have historically followed a wave pattern, this will soon come to an abrupt end as the planet experiences a PERMANENT SHORTAGE of (most) commodities, principally oil.

When this happens, (1) commodity prices will display a permanent upward trend (with occasional downward dips as economies enter recessions); (2) there will be a PERMANENT shift in power away from those who use commodities towards those who possess commodities; and (3) at such time as indispensable commodities experience acute shortages, countries will go to WAR ... they will have NO OPTION. As Faber stresses: "when markets are characterised by acute shortages, people will fight and go to war in order to secure their required supplies, particularly when the shortages that might arise or that have already arisen threaten the physical and economic survival of the groups or countries involved...."

A k-wave analysis works great as long as the planet doesn't experience permanent commodity shortages. But I don't see how k-waves can have any predictive power once commodities experience permanent declines in supplies (e.g., when oil production peaks; when uranium extraction peaks; etc.).

And while we're on this topic: :D

Russia has announced plans to set up a military force to protect its interests in the oil-rich Arctic. Canada, Denmark, Norway and the US, all of whom have an Arctic coastline, dispute Russia's sovereignty over parts of the region. (http://news.bbc.co.uk/2/hi/europe/7967973.stm)

Report: Chinese Develop Special "Kill Weapon" to Destroy U.S. Aircraft Carriers -- (https://www.usni.org/forthemedia/ChineseKillWeapon.asp) With tensions already rising due to the Chinese navy becoming more aggressive in asserting its territorial claims in the South China Sea, the U.S. Navy seems to have yet another reason to be deeply concerned. After years of conjecture, details have begun to emerge of a "kill weapon" developed by the Chinese to target and destroy U.S. aircraft carriers.

Russia Keeps Troops in Georgia, Defying Deal (http://www.nytimes.com/2009/04/03/world/europe/03georgia.html?hp)

Russia warns US on Georgia (http://www.google.com/hostednews/ap/article/ALeqM5j7BCcjwQoFKKVK-rmNvEpZXk-q6AD97AEER00)

Title: Re: Meltdown
Post by: BachQ on April 02, 2009, 08:38:36 PM

Social Security Stunner; Bankruptcy of Nation Moved Up Several Years (http://www.chrismartenson.com/blog/social-security-stunner-bankruptcy-nation-moved-several-years/15944)... "The US government itself is hurtling towards bankruptcy. Not only are debts exploding - moving smartly past "unsustainable" and into "ruinous" - but revenues (tax receipts) are falling like a rock. Yesterday it was reported that the difference between Social Security income (taxes) and outlays (benefits payments), which is known in Washington-speak as "the SS surplus", would shrink to zero next year. ..."

Title: Re: Meltdown
Post by: Coopmv on April 03, 2009, 06:50:22 PM

Quote from: Dm on April 02, 2009, 08:32:32 PM

Report: Chinese Develop Special "Kill Weapon" to Destroy U.S. Aircraft Carriers -- With tensions already rising due to the Chinese navy becoming more aggressive in asserting its territorial claims in the South China Sea, the U.S. Navy seems to have yet another reason to be deeply concerned. After years of conjecture, details have begun to emerge of a "kill weapon" developed by the Chinese to target and destroy U.S. aircraft carriers.
(https://www.usni.org/forthemedia/ChineseKillWeapon.asp)

It may be interesting to see some thermonuclear exchange.

Title: Re: Meltdown
Post by: Coopmv on April 03, 2009, 06:52:48 PM

Lips service can only go so far ...

ZURICH, April 2 (Reuters) - Switzerland will keep defending its strict banking secrecy after making some concessions but expects more pressure from a global crackdown on tax havens due to the economic crisis, a minister said on Thursday.

Swiss Economy Minister Doris Leuthard made the comments in a speech in Zurich as the G20 summit in London announced it wanted to fight tax havens that did not share information.

Switzerland, the world's biggest offshore centre, agreed last month to comply with international rules on sharing information about foreign savers on a case-by-case basis, but not automatically, as many countries want.

Leuthard said Switzerland had made this concession because it did not want Swiss exporters to suffer being blacklisted, but it expected more pressure in future.

"Because in difficult years every finance minister cares about the hair-shirt of their own tax payer, we cannot assume that we will now be left in peace," she said.

The government will continue to fight the automatic exchange of information about bank clients, she said, but added it was important that the Swiss financial industry was "clean" and could compete due to its "quality, efficiency and expertise".

German Finance Minister Peer Steinbrueck, who has angered Switzerland with his fierce rhetoric on the need to clamp down on tax evasion, said at the G20 in London he was interested to see what offers Switzerland would come with on tax cooperation.

(Reporting by Emma Thomasson; Editing by Ron Askew)

Title: Re: Meltdown
Post by: Coopmv on April 03, 2009, 07:05:09 PM

This is the beginning of the end for UBS. A criminal indictment by the DOJ against Arthur Andersen, once the largest American accounting firm, put that firm out of business during the Enron investigation ...

By Pascal Fletcher

MIAMI, April 2 (Reuters) - U.S. authorities on Thursday arrested and charged an accountant in Florida in the first of what they said could be a series of tax evasion prosecutions of American clients of Swiss bank UBS AG (UBSN.VX) (UBS.N).

Steven Michael Rubinstein, who worked for a company in the yacht-building business, was accused of filing at least one false tax return that failed to disclose he had an account with UBS or made any money from it , the Justice Department said.

Rubinstein, an American who also had a South African passport, was arrested at his home in Boca Raton, Florida, which the charge against him says he built with the help of funds from his UBS account. A Fort Lauderdale judge ordered him to be detained pending a bond hearing scheduled for next Tuesday.

The criminal complaint filed by Internal Revenue Service (IRS) Special Agent Scott Johnson said Rubinstein's arrest resulted from information provided by UBS to U.S. authorities on the identities and account information of American clients who were using their Swiss bank accounts to evade U.S. taxes.

"Today is the first of the prosecutions resulting from that disclosure, but it will not be the last," Alexander Acosta, U.S. Attorney for the Southern District of Florida, said in the statement announcing the charges against Rubinstein.

Rubinstein's lawyer, Miami-based Robert Panoff, was not available for comment.

Acting Assistant Attorney General John A. DiCicco of the Justice Department's Tax Division said his unit was "committed to helping the IRS to ferret out and hold accountable taxpayers who are hiding assets in undisclosed foreign accounts."

Rubinstein was charged only hours after The New York Times reported that the Justice Department had opened about 100 criminal investigations into wealthy American clients of UBS, Switzerland's largest bank.

In February, UBS acknowledged responsibility for helping U.S. clients conceal assets from the U.S. government. It agreed to pay a $780 million fine and to identify some U.S. clients.

But, fearing they might get only a limited number of names, U.S. authorities are suing UBS to try to obtain identification of 52,000 undeclared accounts holding billions of dollars that they allege are held by the Swiss bank for U.S. customers.

The arrest of the Boca Raton chartered accountant came as world leaders of the G20 nations, meeting in London, agreed to crack down on countries serving as tax havens.

But in Zurich, Swiss Economy Minister Doris Leuthard said Switzerland would keep defending its strict banking secrecy after making some concessions, but she expected more pressure on her country over the issue of tax havens.

"Because in difficult years every finance minister cares about the hair-shirt of their own tax payer, we cannot assume that we will now be left in peace," she said.

The IRS complaint accused Rubinstein of using his South African passport to open UBS accounts in the name of a nominee British Virgin Islands company, Hybridge International Ltd.

Prosecutors allege that from 2001 through 2008, Rubinstein communicated with UBS bankers about the purchase and sale of securities worth more than 4.5 million Swiss francs, moving investments from U.S. dollars to British pounds and bringing some $3 million into the United States to buy property.

"By opening the accounts in the name of the nominee entity, Steven Michael Rubinstein attempted to conceal his offshore assets and income from the IRS," the IRS affidavit said.

It added: "Each year, (he) failed to report on these tax returns any income earned on his UBS Swiss bank accounts ... (and) failed to disclose he had an interest in or a signature or other authority over a financial account in Switzerland".

UBS has argued the information sought by the United States is protected by Swiss financial privacy laws.

The IRS affidavit said Rubinstein held several face-to-face meetings with UBS bankers. "These meetings took place at various locations, including Art Basel Miami, a shopping center in West Palm Beach, (his) personal residence, and various restaurants throughout South Florida," it said.

IRS Commissioner Doug Shulman urged other Americans in the same situation as Rubinstein to give themselves up.

"Today's actions show the IRS is committed to pursuing people hiding income offshore ... It's better to come clean now instead of waiting and facing a heavier price later," he said. (Reporting by Pascal Fletcher; Additional reporting by Diane Bartz in Washington and Emma Thomasson in Zurich; editing by Tom Brown, Carol Bishopric, Toni Reinhold)

Title: Re: Meltdown
Post by: BachQ on April 03, 2009, 07:32:21 PM

U.S. unemployment jumps to 8.5% in March, the highest since 1983 as employers slashed 663,000 jobs.

(http://www.periol.com/ADP.JPG) (http://www.latimes.com/business/la-fi-unemployment-march4-2009apr04,0,5509869.story)

Title: Re: Meltdown
Post by: BachQ on April 03, 2009, 07:33:45 PM

Russian economy shrinks 7 percent in 1st quarter MOSCOW - A senior government minister said Russia's economy shrank by 7 percent in the first quarter, a news agency reported Thursday, marking a staggering downturn after eight years of oil-fueled growth. ... "These figures are worse than we expected," Deputy Economic Minister Andrei Klepach was quoted as saying by ITAR-Tass during a conference in Kiev, Ukraine. He was citing preliminary figures.
(http://www.businessweek.com/ap/financialnews/D97AE3V00.htm)

Title: Re: Meltdown
Post by: Coopmv on April 03, 2009, 08:17:00 PM

Tax Haven Grey List Makes Switzerland Sweat

Friday, 3 April 2009

The naming of Switzerland on an international "grey list" of tax havens shows that powerful critics still mean business despite a Swiss climbdown, experts believe.

But while politicians and bankers have taken great exception to the perceived slight, observers say there is nothing to worry about provided Switzerland implements its promises in a timely fashion.

Switzerland joined more than 30 other countries on the Organisation for Economic Cooperation and Development (OECD) grey list at the G20 meeting of the world's most influential political leaders on Thursday.

Jörg Walker, a partner at tax specialists KPMG, told swissinfo that the grey list represents a message that Switzerland would be closely watched.

"It is understood that Switzerland intends to change. But so far we have only seen words and not actions, so there is some time pressure to implement. There is no need to panic, but it is also no time to be lazy," he said.

Devil in the details
The lists follow an intense year of coordinated international political pressure on Switzerland to stop harbouring the assets of tax dodgers from other countries.

Last month, Switzerland – along with other countries – agreed to conform to OECD standards of tax cooperation. Swiss officials will renegotiate tax treaties to provide information on suspected tax cheats who are hiding their cash in Swiss banks.

The question is how far Switzerland is prepared to go to meet the demands of other countries.

Walker said there were issues to be resolved, such as how strong the claim of tax evasion had to be, the time frame of the investigation, if there would be an amnesty and from where the information was to come.

"It is important to know how concrete the case has to be for information to be provided. There could be some quite heavy discussion."

Previously, Swiss banking secrecy laws and a refusal to recognise tax evasion as a crime have hampered international investigations. These laws would remain in force, but the new treaties would drive a hole through these barriers in the case of tax evasion.

« It leaves a bad taste that bigger countries are not doing this inside their own countries. » Peter V Kunz, Bern University
Public resentment
"The distinction between tax evasion and fraud will be made obsolete when the double taxation treaties are renegotiated. Switzerland would be totally in compliance with the OECD tax convention if these changes are implemented in the next two years or so," Peter V Kunz, a tax expert at Bern University, told swissinfo.

But Kunz warned that outside impatience to get the reforms implemented could derail efforts in Switzerland to get them passed. The changes are expected to go to a referendum.

"The Swiss population is in favour of these concessions, but there is a danger that the mood could change if more pressure is put on Switzerland from abroad in the next few months," he said.

Many Swiss have accused other countries, such as the United States and Britain, of double standards as they turn a blind to different tax evasion schemes – Trusts and "shell" companies – operating inside their own borders.

"It leaves a bad taste that bigger countries are not doing this inside their own countries," Kunz said.

swissinfo, Matthew Allen

Friday, 3 April 2009

Title: Re: Meltdown
Post by: Coopmv on April 03, 2009, 08:20:05 PM

Quote from: Dm on April 03, 2009, 07:33:45 PM
Russian economy shrinks 7 percent in 1st quarter MOSCOW - A senior government minister said Russia's economy shrank by 7 percent in the first quarter, a news agency reported Thursday, marking a staggering downturn after eight years of oil-fueled growth. ... "These figures are worse than we expected," Deputy Economic Minister Andrei Klepach was quoted as saying by ITAR-Tass during a conference in Kiev, Ukraine. He was citing preliminary figures.

(http://www.businessweek.com/ap/financialnews/D97AE3V00.htm)

Just what can one expect from a one-trick pony? Russia has few things to offer other than oil. But having used energy as a weapon against the Europeans has left a good taste in the mouth for the Europeans who are probably not so eager to help bail out the Russians ...

Title: Re: Meltdown
Post by: ezodisy on April 10, 2009, 12:55:23 AM

Quote from: Coopmv on April 03, 2009, 08:20:05 PM
Russia has few things to offer other than oil. ...

gas, women, blini

Gold and Economic Freedom

by Dr. Alan Greenspan

The Objectivist

1966 (http://www.financialsense.com/metals/greenspan1966.html)

Title: Re: Meltdown
Post by: ezodisy on April 10, 2009, 09:29:59 AM

Fibo, you've got to hear this Hugh Hendry two-part interview. I think he's going to be right about much of it. The audio quality is rubbish so you'll have to strain a bit.

http://www.citywire.co.uk/professional/-/video/manager-news/content.aspx?ID=334440

http://www.citywire.co.uk/professional/-/video/manager-news/content.aspx?ID=334597

I put a buy order in for gold at $500. See you there 8)

Title: Re: Meltdown
Post by: Coopmv on April 10, 2009, 10:02:03 AM

China's economic muscle 'shrinks'

Despite China's boom, tweaks are needed to keep it running smoothly
China's economy, the world's second largest, is not as big as was thought, a report by the World Bank has claimed. According to the bank, previous calculations have overestimated the size of China's economy by about 40%.

The revelation came after the bank updated the way it calculated the country's gross domestic product (GDP).

The bank said the findings meant China would not become the world's biggest economy in 2012 as forecast. It also meant China was poorer than estimated.

This in turn would influence future aid and investment plans, the World Bank said.

China gains extra aid from international institutions and has asked for help in climate change talks because of its status as a developing country.

Adjusting figures

BIGGEST ECONOMIES
US
China
Japan
Germany
India
Source: World Bank

Based on the World Bank's new research, China's economy is now worth some $5.33 trillion (£2.64trillion). Despite the drop in size, the economy was still the world's second largest, the bank said.

The US, at $12 trillion, is the world's largest economy.

The method used for the calculations is called "purchasing power parity", and corrects for differences in prices, which are lower in China than in Western countries, for the same goods.

However, the figures show that average incomes in China are still just 10% of those in the US. China averages $4,091 per person, while average income in the US is $41,000.

MOST EXPENSIVE NATIONS
Iceland
Denmark
Switzerland
Norway
Ireland
Source: World Bank

Based on current exchange rates, China's economy is only half as big, at $2.24 trillion.

In previous years, economists have tried to adjust their figures to take into account local prices in developing nations because they were often significantly lower than those in more industrialised countries.

However, the bank said that many of the prices which were being used were out of date and gave distorted GDP figures.

This time it has used updated prices to create more accurate figures.

Global shift

In its report, the World Bank found that five nations - the US, China, Japan, Germany and India - accounted for nearly half of the world's total GDP.

But they were not amongst the five most expensive places to live, with that honour going to Iceland, Denmark, Switzerland, Norway and Ireland.

In Africa, the main drivers of growth were South Africa, Egypt, Nigeria, Morocco and Sudan, which accounted for almost two-thirds of the continent's output.

Title: Re: Meltdown
Post by: Lethevich on April 10, 2009, 10:03:47 AM

No posts in this thread for five days, I thought Sidoze and Dm had died (or possibly eloped)...

Welcome back, doom :)

Title: Re: Meltdown
Post by: ezodisy on April 10, 2009, 01:28:41 PM

I'm sure we're both revelling in G&D as usual, just been too busy to come on and will be again now, so here's a spate

Nobel economist Paul Krugman: "Indeed, these days America is looking like the Bernie Madoff of economies: for many years it was held in respect, even awe, but it turns out to have been a fraud all along." (http://www.nytimes.com/2009/03/30/opinion/30krugman.html?_r=3&ref=opinion)

Nobel economist Joseph Stiglitz: "Quite frankly, this amounts to robbery of the American people. I don't think it's going to work because I think there'll be a lot of anger about putting the losses so much on the shoulder of the American taxpayer." (http://www.cnbc.com/id/29848741)

Nobel Economist Ed Prescott: "I do predict the U.S. will lose a decade of growth. Marginal tax rates will be increased. Productivity-depressing policies will be adopted. Don't subsidize inefficiency. Cut tax rates to get people to work more. This financial stuff is much ado about nothing. I don't see any reason for the taxpayers to bail out Goldman Sachs in a roundabout way. Let these businesses go bankrupt. They gambled, they lost. That's part of life." (http://www.businessweek.com/the_thread/economicsunbound/archives/2009/03/harsh_predictio.html)

Worsening economic figures are being used to confirm that more bailouts are needed rather than that previous ones might be failing. The logic is much like medieval blood letting: The patient died because we didn't drain enough of his blood. (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/04/04/INR316Q4F5.DTL)

Senior S&L Regulator Says Government Engaging in Massive Cover-Up of Economic Crisis: "The entire strategy is to keep people from getting the facts" (http://www.washingtonsblog.com/2009/04/senior-s-regulator-says-government.html)

"Technically, the U.S. is already bankrupt because it has a debt that is almost four times the size of its economy" (http://www.cnbc.com/id/15840232/?video=1065391533&play=1)

Title: Re: Meltdown
Post by: Coopmv on April 10, 2009, 04:34:05 PM

From last week business week. $200B a month annualized to $2.4T. If Americans can cut consumptions by $200B a month, there is still hope. This is bad news for many retailers and for many foreign countries that dump their products here. From the Rolexes of Switzerland to the cheap Chinese-made products ...

Bigger U.S. Savings Than Official Stats Suggest

A closer look at BEA numbers shows that Americans reduced spending by 3.1% in the past year, indicating that the savings rate has risen to 6.4%

By Michael Mandel

How much have Americans cut back?

On the face of it, not much. The official data from the Bureau of Economic Analysis say that in February personal spending was down 0.4%, or $40 billion, from the year before. Certainly any drop is bad news, since consumer spending rarely decreases—but $40 billion out of total spending of $10 trillion doesn't seem like enough to wreak economic havoc.

A closer look, however, shows that Americans have tightened their belts more sharply than the numbers report. The reason? Official figures for personal spending include a lot of categories, such as Medicare outlays, that are not under the control of households. They also include items, such as education spending, that should be treated as investment in the future rather than current consumption.

After removing these spending categories from the data, let's call what's left "pocketbook" spending—the money that consumers actually lay out at retailers and other businesses. By this measure, Americans have cut consumption by $200 billion, or 3.1%, over the past year. This explains why the downturn has hit Main Street hard.

Since savings are what's left from disposable income after subtracting outlays, a deeper fall in consumption means a bigger jump in the savings rate. The same analysis implies that the "pocketbook" personal savings rate has risen from near zero a year ago to around 6.4%, rather than the official 4.2%. Thus, households may have gotten a great start on repairing their balance sheets.

Let's break down the spending numbers. Over the past year, outlays on durable goods such as automobiles decreased by a deep 10.8%. Spending for nondurable goods such as clothing fell by 4.2%.

The tricky issue comes with spending on services, which seems to be up by 3.3%, or $200 billion, since February 2008. That number includes a hodgepodge of expenditures that don't correspond to what we mean by "consumer spending." For example, health-care spending, including prescription drugs, is up by $112 billion. But roughly 85% of such spending is funded by government or employer health insurance plans, neither of which directly comes out of the pockets of consumers.

Similarly, the consumer spending numbers include outlays by religious groups and nonprofit foundations, such as the Bill & Melinda Gates Foundation, which is increasing its outlays by about 15% in 2009, to $3.8 billion. The BEA estimates that religious and foundation spending have risen by about 3% from the past year, pushing up reported consumer spending.

CURIOUS CATEGORIES
Another quirk: Spending on education is considered consumption rather than investment in human capital. As a result, more people going back to school during the downturn leads to a reduction in the savings rate. That doesn't make much sense.

Finally, for technical reasons the BEA throws in some "spending" categories where no money actually changes hands. The biggest is "rent on owner-occupied housing," the money that people supposedly pay themselves for living in their own homes. Despite the housing bust, this number rose by 2.6% over the past year, to $1.1 trillion.

The BEA will make some changes this summer, which will improve the calculation of the savings rate for households. But for now, suffice it to say that Americans have taken thrift to heart much more than the official numbers show.

For a full explanation of how the pocketbook savings rate was calculated, see my blog Economics Unbound at businessweek.com/the_thread/economicsunbound/

Mandel is chief economist for BusinessWeek.

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on April 11, 2009, 03:16:52 AM

Quote from: Lethe on April 10, 2009, 10:03:47 AM
No posts in this thread for five days, I thought Sidoze and Dm had died (or possibly eloped)...

I took that as a good sign - no more bad news for a while :)

Title: Re: Meltdown
Post by: BachQ on April 11, 2009, 03:21:59 AM

Quote from: Spitvalve on April 11, 2009, 03:16:52 AM
Quote from: Lethe
No posts in this thread for five days, I thought Sidoze and Dm had died (or possibly eloped)...

I took that as a good sign - no more bad news for a while :)

:D Sorry, the doom continues unabated! :D

Friday, April 10, 2009
U.S. Budget Disaster Strikes – March Outlays 2.5 Times Income!! March deficit hits $192 billion ($2.3 trillion annualized) as receipts drop 28%, outlays rise 41% ... "This is truly an EPIC collapse of government receipts, and maybe one of the most important stories of this time. Failing banks are one thing, failing governments is another. ... We simply are piling debt on top of debt and we do not have the cash to pay our current bills much less those of the past."

US DEBT CLOCK:

QuoteThe deficit is well on its way to the [predicted] $1.75 trillion -- or 12.3% of gross domestic product. ... The deficit through the first six months is more than three times higher than it was at this time last year. The government has borrowed $1 trillion from the public so far this fiscal year. In March, the deficit widened to $192.3 billion from $48.2 billion in March 2008. Outlays rose 41% to $321.2 billion from $227 billion, while receipts dropped 28% to $129 billion from $178.8 billion.

Receipts from individual income taxes fell 27% in March, versus year-earlier figures. Individual refunds are up 14% so far this year. Compared with a year earlier, corporate income tax receipts fell 90% to $3.4 billion.

Title: Re: Meltdown
Post by: BachQ on April 11, 2009, 03:24:27 AM

New York Times in freefall

(http://www.vanityfair.com/politics/features/2009/05/new-york-times200905?printable=true&currentPage=all)

Quote ...In 2001, The New York Times celebrated its 150th anniversary. In the years that have followed, Arthur Sulzberger has steered his inheritance into a ditch. As of this writing, Times Company stock is officially classified as junk. Arthur made a catastrophic decision in the 1990s to start aggressively buying back shares ($1.8 billion worth from 2000 to 2004 alone). This was considered a good investment at the time, and had the effect of increasing the stock's value. Shares were going for more than $50. Now they are slipping below $4—less than the price of the Sunday Times. Arthur's revenues are in free fall: the bottom has dropped out of both newspaper and Internet advertising. ...

Title: Re: Meltdown
Post by: BachQ on April 11, 2009, 03:25:41 AM

CNN: Malls shedding stores at record pace -- Vacancy rates at strip malls accelerate dramatically. (http://money.cnn.com/2009/04/10/news/economy/retail_malls/index.htm?postversion=2009041014)

Title: Re: Meltdown
Post by: BachQ on April 11, 2009, 03:27:04 AM

Art prices fall 35% as collectors cash in

By Deborah Brewster in New York

Published: April 7 2009 01:53 | Last updated: April 7 2009 01:53

Art prices plunged during the first quarter of the year as cash-strapped collectors looked to unload works by postwar masters that had earlier boomed in price along with the stock market. The Mei Moses index, set for release on Tuesday, shows art prices fell 35 per cent in the first quarter, having held up during earlier months of the financial crisis. ... The decline accelerated as people who lost money in the financial crisis, including victims of the Madoff fraud, put up works for sale, often at a loss, several art world insiders said.

The selling has particularly hit works by postwar and contemporary artists, they said.
(http://www.ft.com/cms/s/0/95280728-230b-11de-9c99-00144feabdc0.html)

Title: Re: Meltdown
Post by: BachQ on April 11, 2009, 03:32:10 AM

Quote from: ezodisy on April 10, 2009, 09:29:59 AM
Fibo, you've got to hear this Hugh Hendry two-part interview. I think he's going to be right about much of it. The audio quality is rubbish so you'll have to strain a bit.

http://www.citywire.co.uk/professional/-/video/manager-news/content.aspx?ID=334440

http://www.citywire.co.uk/professional/-/video/manager-news/content.aspx?ID=334597

I put a buy order in for gold at $500. See you there 8)

Indeed, some interesting predictions ... such as 20 years of deflation ... and the dollar bottoming in a few months (and, thereafter, reaching parity with the euro :-*). It's interesting that he thinks the dollar will become increasingly "scarce" as the $58 trillion debt bubble collapses ....

Hendry's hedge fund made over 32% in 2008 (when the stock market lost 50%), so he's doing something right. 0:)

Title: Re: Meltdown
Post by: BachQ on April 11, 2009, 03:34:07 AM

Telegraph -- (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5110578/Swiss-slide-into-deflation-signals-the-next-chapter-of-this-global-crisis.html) ... "We don't fully realise in the West what a catastrophic collapse Japan has suffered," says Albert Edwards, global strategist at Société Générale. "The West has dumped a large part of its economic downturn onto Japan by devaluing against the yen."

This is about to go into reverse as Tokyo hits the ping-pong ball back across the net. "As the unfolding collapse in the yen gathers pace, the West will see its green shoots incinerated to dust," he said. Japan's industrial output fell 38pc in February (year-on-year), mostly concentrated into the last four months. No major economy imploded at this speed in the 1930s.

Title: Re: Meltdown
Post by: BachQ on April 11, 2009, 03:36:01 AM

Quote from: Coopmv on April 03, 2009, 08:20:05 PM
Just what can one expect from a one-trick pony? Russia has few things to offer other than oil. But having used energy as a weapon against the Europeans has left a good taste in the mouth for the Europeans who are probably not so eager to help bail out the Russians ...

http://www.bloomberg.com/apps/news?pid=20601087&sid=a4zThUFpjMOY&refer=home
Russia Banks' Bad Loans May Reach $70 Billion as Crisis Deepens

By Emma O'Brien and William Mauldin

April 9 (Bloomberg) -- Russian banks' bad loans will quadruple to $70 billion this year, deepening the country's worst
financial crisis since the government's 1998 debt default, a Bloomberg survey shows. Non-performing loans will increase to 12.8 percent of the 18.4 trillion rubles ($549 billion) owed by Russian companies and individuals by the end of this year, from 3.2 percent in March.

Title: Re: Meltdown
Post by: BachQ on April 11, 2009, 03:37:19 AM

U.S. Total Credit Market Debt by Sector: 1929-2008

(http://static.seekingalpha.com/uploads/2009/3/24/saupload_debt_trend_breakdown_2.jpg)

Title: Re: Meltdown
Post by: Coopmv on April 11, 2009, 04:32:46 AM

Quote from: Dm on April 11, 2009, 03:21:59 AM
I took that as a good sign - no more bad news for a while :)

:D Sorry, the doom continues unabated! :D

Friday, April 10, 2009
U.S. Budget Disaster Strikes – March Outlays 2.5 Times Income!! (http://economicedge.blogspot.com/2009/04/us-budget-disaster-strikes-march.html) March deficit hits $192 billion ($2.3 trillion annualized) as receipts drop 28%, outlays rise 41% ... "This is truly an EPIC collapse of government receipts, and maybe one of the most important stories of this time. Failing banks are one thing, failing governments is another. ... We simply are piling debt on top of debt and we do not have the cash to pay our current bills much less those of the past."

The US will probably take many countries down with it, particularly those that are overly dependent on export if it does go down. On the other hand, if US taxpayers are indeed putting money into savings at an annualized rate of $2.4T, which can handily replace the debt financing the foreigners have been providing, then things can eventually turn around.

Title: Re: Meltdown
Post by: Lethevich on April 11, 2009, 07:47:33 PM

Just stumbled across THIS (http://www.order-order.com/2009/03/flashback-brown-visits-america-2008-v/) - old news, but funny.

Title: Re: Meltdown
Post by: ezodisy on April 17, 2009, 05:32:36 AM

Stiglitz

The Obama administration's bank- rescue efforts will probably fail because the programs have been designed to help Wall Street rather than create a viable financial system, Nobel Prize-winning economist Joseph Stiglitz said. (http://www.bloomberg.com/apps/news?pid=20601087&sid=afYsmJyngAXQ&refer=home)

Title: Re: Meltdown
Post by: BachQ on April 17, 2009, 06:57:15 AM

Quote from: ezodisy on April 17, 2009, 05:32:36 AM
Stiglitz

The Obama administration's bank- rescue efforts will probably fail because the programs have been designed to help Wall Street rather than create a viable financial system, Nobel Prize-winning economist Joseph Stiglitz said. (http://www.bloomberg.com/apps/news?pid=20601087&sid=afYsmJyngAXQ&refer=home)

Quote from: Joseph StiglitzThe people who designed the plans are "either in the pocket of the banks or they're incompetent."

Actually, BOTH are true: the feds are both incompetent, and they're in the pocket of banks.

There's no doubt that the US federal government is completely out of control. And under Obama's massive expansion of federal government, tensions have reached a breaking point. Which is why the below video is so damn refreshing:

http://www.youtube.com/v/0LHrIxc-QyE

Texas Gov. affirms Texas' sovereignty under the 10th Amendment AUSTIN – Gov. Rick Perry today joined state Rep. Brandon Creighton and sponsors of House Concurrent Resolution (HCR) 50 in support of states' rights under the 10th Amendment to the U.S. Constitution.

"I believe that our federal government has become oppressive in its size, its intrusion into the lives of our citizens, and its interference with the affairs of our state," Gov. Perry said. "That is why I am here today to express my unwavering support for efforts all across our country to reaffirm the states' rights affirmed by the Tenth Amendment to the U.S. Constitution. I believe that returning to the letter and spirit of the U.S. Constitution and its essential 10th Amendment will free our state from undue regulations, and ultimately strengthen our Union."

Title: Re: Meltdown
Post by: ezodisy on April 17, 2009, 03:22:05 PM

US house prices fell by a record 19% in January compared with a year earlier, according to a closely-watched index. (http://news.bbc.co.uk/1/hi/business/7974653.stm)

Title: Re: Meltdown
Post by: BachQ on April 23, 2009, 10:23:19 AM

Auditors: A record 25% of US companies may not be "going concerns" in 2009 -- A research firm predicts 3,589 public companies will report that their auditors doubt they will continue as going concerns. Grant Thornton CEO Ed Nussbaum predicts that auditors will issue "an unprecedented number of going-concern disclosures ...." (http://www.cfo.com/article.cfm/13525910/c_13526548?f=home_todayinfinance)

Title: Re: Meltdown
Post by: BachQ on May 15, 2009, 07:37:04 PM

China's yuan "set to usurp US dollar" as world's reserve currency (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5325805/Chinas-yuan-set-to-usurp-US-dollar-as-worlds-reserve-currency.html)

US budget deficit to reach $1.84 trillion, 4 times 2008's record. (http://finance.yahoo.com/news/White-House-Budget-deficit-to-apf-15199183.html?.v=8)

Title: Re: Meltdown
Post by: Coopmv on May 16, 2009, 05:32:42 AM

Quote from: Dm on April 23, 2009, 10:23:19 AM
Auditors: A record 25% of US companies may not be "going concerns" in 2009 -- A research firm predicts 3,589 public companies will report that their auditors doubt they will continue as going concerns. Grant Thornton CEO Ed Nussbaum predicts that auditors will issue "an unprecedented number of going-concern disclosures ...."
(http://www.cfo.com/article.cfm/13525910/c_13526548?f=home_todayinfinance)

Most of these are retailers anyway. This is a good thing since conspicuous consumptions will be PERMANENTLY reigned in and since most retailers sell imported goods anyway, this will go a long way to attack the trade deficits.

Title: Re: Meltdown
Post by: BachQ on May 17, 2009, 04:49:49 AM

Quote from: Coopmv on April 11, 2009, 04:32:46 AM
The US will probably take many countries down with it, particularly those that are overly dependent on export if it does go down.

Coop, given data released yesterday relating to 1st Qtr 2009, it seems that you are spot on with your prediction. For example, the Eurozone (http://www.telegraph.co.uk/finance/economics/5331129/Europe-in-deepest-recession-since-War-as-Germany-suffers.html) is amid its deepest recession since WW II (e.g., German GDP plunged -4%); and Russia's (http://news.bbc.co.uk/2/hi/business/8052457.stm) GDP fell a staggering 23.2% in 1st Qtr 2009. Singapore's economy (http://www.forbes.com/feeds/afx/2009/05/15/afx6426974.html) (which has historically been the strongest economy in Asia on a per capita basis) has likewise severely contracted so far in 2009.

Title: Re: Meltdown
Post by: Coopmv on May 17, 2009, 05:06:30 AM

Quote from: Dm on May 17, 2009, 04:49:49 AM
Coop, given data released yesterday relating to 1st Qtr 2009, it seems that you are spot on with your prediction. For example, the Eurozone (http://www.telegraph.co.uk/finance/economics/5331129/Europe-in-deepest-recession-since-War-as-Germany-suffers.html) is amid its deepest recession since WW II (e.g., German GDP plunged -4%); and Russia's (http://news.bbc.co.uk/2/hi/business/8052457.stm) GDP fell a staggering 23.2% in 1st Qtr 2009. Singapore's economy (http://www.forbes.com/feeds/afx/2009/05/15/afx6426974.html) (which has historically been the strongest economy in Asia on a per capita basis) has likewise severely contracted so far in 2009.

The picture is not pretty for Germany, which sells close to 50% of its Mercedes and BMW's and a host of other high value-added goods to the US. It probably is bad for Italy as well since it sells a lot of products to the US restaurants, whose business have gone off a cliff. The price of crude is just about right, under $60 and perhaps should be a tad lower since the industrial demand is not there and people are driving a bit less. A country like Venezuela needs oil price to be around $80 to order to pay all the promised social programs or Hugo Chavez is toast. I do not know what that price point is for Russia, which is just another one-trick pony - almost 100% dependency on oil export. It appears oil price of under $60 is not good for it either.

Title: Re: Meltdown
Post by: BachQ on May 19, 2009, 05:19:01 AM

Quote from: Coopmv on May 16, 2009, 05:32:42 AM
Most of these are retailers anyway. This is a good thing since conspicuous consumptions will be PERMANENTLY reigned in and since most retailers sell imported goods anyway, this will go a long way to attack the trade deficits.

Coop, the charts below demonstrate how dramatic & widespread (beyond retail) the contraction has been.

(http://www.ritholtz.com/blog/wp-content/uploads/2009/05/20090515.gif)

"Today's chart ... provides some perspective as to the magnitude of the current economic decline [and] illustrates that 12-month, as-reported S&P 500 earnings have declined over 90% over the past 20 months (with over 90% of S&P 500 companies having reported for Q1 2009), making this by far the largest decline on record (the data goes back to 1936). In fact, real earnings have dropped to a record low and if current estimates hold, Q3 2009 will see the first 12-month period during which S&P 500 earnings are negative." (http://www.ritholtz.com/blog/2009/05/sp-500-earnings-decline-90/)

How much have profits fallen? (http://www.ritholtz.com/blog/2009/05/normalizing-earnings/)

(http://www.ritholtz.com/blog/wp-content/uploads/2009/05/5-15-09-sp-earnings.gif)

Title: Re: Meltdown
Post by: Coopmv on May 19, 2009, 04:21:41 PM

Quote from: Dm on May 19, 2009, 05:19:01 AM
Coop, the charts below demonstrate how dramatic & widespread (beyond retail) the contraction has been.

(http://www.ritholtz.com/blog/wp-content/uploads/2009/05/20090515.gif)

"Today's chart ... provides some perspective as to the magnitude of the current economic decline [and] illustrates that 12-month, as-reported S&P 500 earnings have declined over 90% over the past 20 months (with over 90% of S&P 500 companies having reported for Q1 2009), making this by far the largest decline on record (the data goes back to 1936). In fact, real earnings have dropped to a record low and if current estimates hold, Q3 2009 will see the first 12-month period during which S&P 500 earnings are negative." (http://www.ritholtz.com/blog/2009/05/sp-500-earnings-decline-90/)

How much have profits fallen? (http://www.ritholtz.com/blog/2009/05/normalizing-earnings/)

(http://www.ritholtz.com/blog/wp-content/uploads/2009/05/5-15-09-sp-earnings.gif)

Financial companies made up some 20% of the S&P 500 index by weights. Adding in all the retailers, it is easy to see why the earnings have nosedived.

Title: Re: Meltdown
Post by: BachQ on May 20, 2009, 03:19:59 AM

Quote from: Coopmv on May 17, 2009, 05:06:30 AM
The price of crude is just about right, under $60 and perhaps should be a tad lower since the industrial demand is not there and people are driving a bit less. A country like Venezuela needs oil price to be around $80 to order to pay all the promised social programs or Hugo Chavez is toast. I do not know what that price point is for Russia, which is just another one-trick pony - almost 100% dependency on oil export. It appears oil price of under $60 is not good for it either.

Given the long-term supply constraints, it's not clear how much longer oil will remain below $60 (it's at $60.50/bbl as I type). If there's any hint of a recovery (with the attendant increase in demand), oil prices will once again spike.

world crude oil production (May, 2009) (http://www.theoildrum.com/node/5395)

(http://www.theoildrum.com/files/ccst20090515.png)
click for larger image (http://www.theoildrum.com/files/ccst20090515.png)

"World oil production peaked in July 2008 at 74.82 million barrels/day (mbd) and now has fallen to about 71 mbd. It is expected that oil production will decline slowly to about December 2010 as OPEC production increases while non-OPEC production decreases. After 2010 the resulting annual production decline rate increases to 3.4% as OPEC production is unable to offset cumulative non-OPEC declines. The forecast from the IEA WEO 2008 is also shown for comparison." (http://www.theoildrum.com/node/5395)

(http://www.theoildrum.com/files/cclt20090516.png)
Click for larger image (http://www.theoildrum.com/files/cclt20090516.png)

"As oil production declines, a possible solution is to secure long term oil supply contracts ahead of the next oil price shock (which China has doing). ... As oil remains critical for economic activity there is a high probability that some countries will act more aggressively in securing oil supplies, even to the extent of oil resource wars. In mid May 2009, Russia raised the prospect of war to enforce its claims on Arctic oil and gas riches." (http://www.theoildrum.com/node/5395)

Title: Re: Meltdown
Post by: Coopmv on May 20, 2009, 02:49:23 PM

Quote from: Dm on May 20, 2009, 03:19:59 AM
Given the long-term supply constraints, it's not clear how much longer oil will remain below $60 (it's at $60.50/bbl as I type). If there's any hint of a recovery (with the attendant increase in demand), oil prices will once again spike.

world crude oil production (May, 2009) (http://www.theoildrum.com/node/5395)

(http://www.theoildrum.com/files/ccst20090515.png)
click for larger image (http://www.theoildrum.com/files/ccst20090515.png)

"World oil production peaked in July 2008 at 74.82 million barrels/day (mbd) and now has fallen to about 71 mbd. It is expected that oil production will decline slowly to about December 2010 as OPEC production increases while non-OPEC production decreases. After 2010 the resulting annual production decline rate increases to 3.4% as OPEC production is unable to offset cumulative non-OPEC declines. The forecast from the IEA WEO 2008 is also shown for comparison." (http://www.theoildrum.com/node/5395)

(http://www.theoildrum.com/files/cclt20090516.png)
Click for larger image (http://www.theoildrum.com/files/cclt20090516.png)

"As oil production declines, a possible solution is to secure long term oil supply contracts ahead of the next oil price shock (which China has doing). ... As oil remains critical for economic activity there is a high probability that some countries will act more aggressively in securing oil supplies, even to the extent of oil resource wars. In mid May 2009, Russia raised the prospect of war to enforce its claims on Arctic oil and gas riches." (http://www.theoildrum.com/node/5395)

No problems. I already own a good amount of ExxonMobil and ConocoPhillips shares and unfortunately missed BP when it hit $35/share.

Title: Re: Meltdown
Post by: BachQ on May 21, 2009, 03:24:13 AM

Quote from: Coopmv on May 20, 2009, 02:49:23 PM
No problems. I already own a good amount of ExxonMobil and ConocoPhillips shares and unfortunately missed BP when it hit $35/share.

Excellent! 8)

Bloomberg:U.K. Credit-Rating Outlook Lowered to 'Negative' by S&P on Debt --- UK's 2009 budget deficit "will reach 175 billion pounds ($273 billion), or 12.4% of GDP, Chancellor of the Exchequer Alistair Darling said on April 22. A downgrade would make Britain at least the fifth European Union nation to be cut this year because of the economic slump, joining Ireland, Greece, Portugal and Spain. The U.K. plans to sell a record 220 billion pounds of bonds in the fiscal year through March 2010 as the recession cuts revenue and forces the government to raise spending. "We have revised the outlook on the U.K. to negative due to our view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100 percent of gross domestic product and remain near that level in the medium term," S&P analysts including David Beers in London, said in a report today. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aitqeOKGAqpo&refer=home)

Title: Re: Meltdown
Post by: Coopmv on May 21, 2009, 04:17:15 PM

Quote from: Dm on May 21, 2009, 03:24:13 AM
Excellent! 8)

Bloomberg:U.K. Credit-Rating Outlook Lowered to 'Negative' by S&P on Debt --- UK's 2009 budget deficit "will reach 175 billion pounds ($273 billion), or 12.4% of GDP, Chancellor of the Exchequer Alistair Darling said on April 22. A downgrade would make Britain at least the fifth European Union nation to be cut this year because of the economic slump, joining Ireland, Greece, Portugal and Spain. The U.K. plans to sell a record 220 billion pounds of bonds in the fiscal year through March 2010 as the recession cuts revenue and forces the government to raise spending. "We have revised the outlook on the U.K. to negative due to our view that, even assuming additional fiscal tightening, the net general government debt burden could approach 100 percent of gross domestic product and remain near that level in the medium term," S&P analysts including David Beers in London, said in a report today.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aitqeOKGAqpo&refer=home)

I think the Brits have taught their fellow Europeans a valuable lesson that it can be fatal to their financial well-being by blindly following the American style financial alchemy ...

Title: Re: Meltdown
Post by: drogulus on May 21, 2009, 04:48:52 PM

Quote from: Coopmv on May 21, 2009, 04:17:15 PM

I think the Brits have taught their fellow Europeans a valuable lesson that it can be fatal to their financial well-being by blindly following the American style financial alchemy ...

This is curious. The tulip mania didn't begin in the U.S.

I got this from the PBS Frontline site:

· Tulipmania (1634-1638)

Perhaps the most famous example of a speculative bubble is the "tulipmania" that struck 17th century Holland. Known for their passionate love of flowers, the Dutch highly prized the tulip upon its introduction to Western Europe in the mid-16th century. Dutch collectors devised a hierarchy of tulip varieties based upon their species and coloring, assigning values to the various flowers. Because it was impossible to determine which variegation would bloom from a particular bulb, the tulip became an object of speculation. During their earliest years in Europe, the bulbs were primarily of interest to the wealthy, but by the mid-1630s the craze caught on with middle-class and poorer families. The increased demand caused the price of the bulbs to soar.1

The market reached its height in late 1636 and early 1637, after the bulbs had been planted to bloom the following spring. People mortgaged their homes and industries in order to buy the bulbs for resale at higher prices. Charles Mackay, in his definitive history of early financial bubbles, Extraordinary Popular Delusions and the Madness of Crowds (1841), published a list of objects (and their prices) which were exchanged for "one single root of the rare species called the Viceroy":

* Two lasts of wheat (448 florins)
* Four lasts of rye (558 florins)
* Four fat oxen (480 florins)
* Eight fat swine (240 florins)
* Twelve fat sheep (120 florins)
* Two Hogsheads of wine (70 florins)
* Four tuns of beer (32 florins)
* Two tuns of butter (192 florins)
* One thousands lbs. of cheese (120 florins)
* A complete bed (100 florins)
* A suit of clothes (80 florins)
* A silver drinking-cup (60 florins)2

In February 1637, as spring drew near and the bulbs were close to flowering, consumer confidence evaporated and the market suddenly crashed. As the price structure collapsed, Mackay reported that "hundreds who, a few months previously, had begun to doubt that there was such a thing as poverty in the land suddenly found themselves the possessors of a few bulbs, which nobody would buy, even though they offered them at one quarter of the sums they had paid for them."3 Litigation ensued, and a government commission ruled in May 1638 that tulip contracts could be annulled upon the payment of 3.5 percent of the agreed price.

· The Mississippi Bubble (1719-1720)

The Mississippi Bubble -- which derives its name from the French Mississippi Company -- grew out of France's dire economic situation in the early 18th century. By the time of Louis XIV's death in 1715, the treasury was in shambles, with the value of metallic currency fluctuating wildly. The following year, the French regent turned to a Scotsman named John Law for help. Law, a gambler who had been forced into exile in France as the result of a duel, suggested the Banque Royale take deposits and issue banknotes payable in the value of the metallic currency at the time the banknotes were issued. Law's strategy helped the French convert from metallic to paper currency, and resulted in a period of financial stability, as well as his own increased fame and power.

In August 1717, Law incorporated the Companie des Indes (commonly known as the Mississippi Company), to which the French regent gave a monopoly on trading rights with French colonies, including what was then known as "French Louisiana." In August 1719, Law devised a scheme in which the Mississippi Company subsumed the entire French national debt, and launched a plan whereby portions of the debt would be exchanged for shares in the company. Based upon the expected riches from the trading monopoly, Law promised 120 percent profit for shareholders, and there were at least 300,000 applicants for the 50,000 shares offered.4 As the demand for shares continued to rise, the Banque Royale -- which was owned by the French government but effectively controlled by Law -- continued to print paper banknotes, causing inflation to soar.

The bubble burst in May 1720 when a run on the Banque Royale forced the government to acknowledge that the amount of metallic currency in the country was not quite equal to half the total amount of paper currency in circulation.5 On May 21, the government issued an edict that would gradually depreciate Mississippi Company shares, so that by the end of the year they would be valued at half their nominal worth. The public outcry was such that one week later, on May 27, the Regent's Council issued another edict restoring the shares to their original value. On the same day, however, the Banque Royale stopped payment in specie. When the Banque Royale reopened in June, the bank runs continued. By November, shares in the Mississippi Company were worthless, the company was eventually divested of its remaining assets, and Law was forced to flee the country.

· The South Sea Bubble (1720)

During the same period that French speculators were driving up the price of shares in the Mississippi Company, English speculators were purchasing stock in the South Sea Company. Formed in 1711 by Robert Harley, the South Sea Company was created to convert £10 million of government war debt (incurred during the War of Spanish Succession) into its own shares. In exchange, the company would receive annual interest payments from the government and a monopoly on trade with the South Seas and South America. The exchange was successful and although the expected trade riches never materialized, the company continued with several other debt conversions.

In 1720, following John Law's example in France, the company proposed to take over the entire British national debt. As soon as the plan was announced to Parliament, the company's share prices began to rise as speculators gambled on the conversion plan. The House of Lords approved the plan on April 7, 1720, after government officials had been bribed with secret allocations of shares. In order to make the deal more attractive, the company inflated the value of its stock. On April 14, £2 million of South Sea Company stock was offered to the public at £300 per share and the subscription sold out within an hour. The company made several more stock offerings, all of which sold out, with the subscribers representing all social classes.

The apparent success of the South Sea Company's scheme led to the appearance of many new joint-stock companies, which became known as "bubble" companies. Charles Mackay described some of the new companies:

One of them was for a wheel for perpetual motion -- capital one million; another was 'for encouraging the breed of horses in England, and improving of glebe and church lands, and repairing and rebuilding parsonage and vicarage houses.' ... But the most absurd and preposterous of all, and which shewed, more completely than any other, the utter madness of the people, was one started by an unknown adventurer, entitled, "A company for carrying on an undertaking of great advantage, but nobody to know what it is." Were not the fact stated by scores of credible witnesses, it would be impossible to believe that any person could have been duped by such a project.6

Mackay notes that the subscription for this final company sold out, and the satisfied entrepreneur promptly disappeared to the Continent. Worried about the competition from the bubble companies and in an attempt to sustain their share price, the South Sea Company convinced the government to pass the Bubble Act in June 1720. The act prevented the establishment of new companies without government permission, and allowed existing companies only to carry out those activities that were prescribed by their charters.

The price of South Sea stock peaked at £1050 in late June of 1720, before the scheme began to fall apart. The first large drop in the market occurred in August, as foreigners and other investors began to withdraw from the market. British domestic credit was stretched to its limit and the scheme finally collapsed at the beginning of September, with the stock having fallen by 75 percent in four weeks. Parliament conducted an investigation, corrupt politicians and businessmen were imprisoned, and over £2 million was confiscated from South Sea Company directors.

· The Bull Market of the Roaring Twenties (1924-1929)

The raging U.S. stock market of the late 1920s was hailed by many as evidence of a "new era" of economic fundamentals. Proponents of this theory pointed to evidence such as the establishment of the Federal Reserve in 1913; Coolidge administration policies including the extension of free trade, anti-inflation measures, and the relaxation of anti-trust laws; and corporate improvements such as increased worker productivity and expanded research and development.

In reality, the driving factor behind both the inflation and the bursting of the speculative bubble was the expanding use of leverage (i.e., debt) by individuals as well as corporations. The decade was marked by an enormous expansion of consumer credit, which Americans used to finance purchases of new products such as automobiles and radios, which were created using new techniques of mass production that additionally helped to drive down prices. Consumers also used credit to purchase stocks, and as the stock market escalated, investors began to take advantage of margin loans provided by their brokers. Their primary targets were industries involving new technologies, such as the automobile, motion picture, and aircraft industries. Radio stocks boomed, rising by 400 percent in 1928 alone,7 and the stock market attracted an immense public following.

On Sept. 3, 1929, the Dow Jones reached its high for the year before the bubble began to deflate. Oct. 24, which became known as "Black Thursday," marked the beginning of the stock market's downturn, remembered as the "Crash of 1929." Almost 13 million shares were traded on that day as an unexpected panic affected the markets. Although the following Friday was quieter, the Dow fell by a record 38 points on Monday, Oct. 28, and another 30 points on the infamous "Black Tuesday," Oct. 29, when a record 16.5 million shares changed hands. Following the chaos of October, the market briefly rallied through spring 1930 before plummeting again during the early 1930s.

· The Japanese "Bubble Economy" (1984-1989)

From the 1960s to the 1980s, Japan had one of the highest economic growth rates in the world. In the 1970s, the government began to deregulate financial markets, which allowed banks to actively seek out new customers. During the mid-1980s, Japan took a loose approach to monetary policy, which caused the money supply to increase and interest rates to fall. The combination of these two actions was important to the creation of a speculative bubble: with low interest rates and easier access to credit, new actors entered the financial markets.

The stock market bubble was fueled by a Japanese corporate invention, known as "zaitech," or "financial engineering," by which speculation became an integral part of corporate earnings statements. After obtaining low-interest loans, corporations were easily able to raise funds on the markets. While these funds sometimes fueled capital investment, they often were recycled back into further speculative market activities. As the Nikkei kept zooming higher and higher, corporations were able to report their speculative profits as higher earnings. Investors would then rush to purchase their stock, driving earnings even higher and providing more funds for the company's speculative actions. At the end of the decade, speculation dominated the activities of some businesses: it is estimated that perhaps 50% percent of total reported profits from Japan's largest corporations were derived from zaitech.

Land speculation was another important part of the bubble economy. Japanese land prices were traditionally high, partly due to the mountainous island nation's small amount of available land. Because of its high value, banks often accepted property as collateral for loans, and land served as the engine of credit for the entire economy.

By 1989, Japanese government officials were growing uneasy about the skyrocketing values of the Nikkei and land valuations. In May 1989, it tightened monetary policy by raising interest rates, and ordered another hike on Dec. 25. While the Nikkei reached its all-time high on Dec. 31, stock prices began to plummet in January. The government increased interest rates five more times before August 1990, to try and halt the continued rise of property prices. But as the Nikkei kept falling, it was forced to intervene in a futile attempt to try and revive the market and stave off recession. Throughout the 1990s, Japan experienced slower growth than any other major industrial nation.

* * *

So, is the U.S. actually to blame? I would say governments are always to blame when they look the other way. Bubble psychology means everyone enjoys the ride too much to bring it to a halt. So though I suppose blaming the U.S. has a more rational basis than blaming Jews or other traditional scapegoats, the real responsibility lies with regulators in many countries.

Title: Re: Meltdown
Post by: Coopmv on May 21, 2009, 06:58:47 PM

In a nutshell, over-deregulation of the American financial industry has been a disaster.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 04:46:26 AM

Considering the UK financial crisis is almost as bad as the US and UK is a much smaller country with much less resources, it is strange that the British Pound has actually risen some 12% against the USD over the past month ... ???

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 05:26:34 AM

Screw California. No bailout. It can no longer afford to give students almost free college education. Its property tax is also the lowest among the big states. It needs a good-sized tax increase ...

http://www.chicagotribune.com/news/nationworld/chi-california_22may22,0,4131420.story

Title: Re: Meltdown
Post by: mahler10th on May 22, 2009, 05:33:37 AM

QuoteDROGULOUS: So, is the U.S. actually to blame?

Yes.
>:(

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 05:36:19 AM

The dysfunctional political system of the US's wealthiest state represents all that remains broken in American politics[/size]

Pascal Zachary guardian.co.uk, Thursday 21 May 2009 17.53 BST Article history

While the new Obama administration is commanding global attention, America's future may be written – as so many times before – in and by its largest state. Once the lodestar for American optimism and achievement, California now illustrates the difficulties confronting the US – and how much more can still go wrong domestically.

The most populous and wealthiest of America's 50 states, California has long been a beacon of opportunity for talented and enterprising people from all over the world. One in every four California residents was born in a foreign country. California's two most famous industries, Silicon Valley and Hollywood, depend on infusions of talent from abroad. Its robust agricultural sector is a massive exporter of food, benefiting from the growing appetites of consumers in developing countries.

Yet California's technological and entrepreneurial might – standing alone, the state would be the world's eighth largest economy – coexists with a dysfunctional political system that has brought it to the edge of fiscal bankruptcy. On 19 May, the state's voters, in a special election, rejected an array of tax increases and spending cuts required to balance its budget. Now, California faces either an embarrassing federal bailout or a prolonged period of rule by judges, who under California law have the power to vacate labour agreements, abrogate contracts, and generally restructure the state's financial commitments.

For President Barack Obama, California's crisis imperils his own reform agenda. Because other American states also face tough fiscal conditions, the political price of bailing out California may be bailing out dozens of other states too.

A massive state bailout, while adding enormously to pressure on Obama's government, would expose the weak link in the US system of governance. So-called "unitary" nations such as Britain, France, China, or Kenya essentially have a single set of government obligations: one national police force, one employer for all public school teachers, one overall pension system, etc. By contrast, the US has an "asymmetric" form of government, which allows many overlapping government entities – 7,000 in California alone – to incur debts, hire and fire employees, and impose taxes.

Making sense of these asymmetries is difficult. When financial markets concentrate on the fiscal health of the federal government, they miss the extent of government obligations as a whole.

The complexity of American governance threatens the benefits of Obama's decision to stimulate the economy through deficit spending. While the national government expands, state governments, such as California's, contract.

Moreover, California's crisis is more than an economic one. California is the most diverse US state; more than half of its 37 million people are non-white. For believers in the benefits of diversity, California represents the largest social experiment in human history, bringing people of different backgrounds together in a way unimaginable in, say, Germany, China, or Brazil.

California's governor, Arnold Schwarzenegger, was an immigrant (from Austria) before he was a movie star. In his six years in office he has repeatedly tried to bypass a polarised state legislature – even the annual budget requires a two-thirds majority – by appealing directly to voters. Ballot initiatives were created 100 years ago to empower ordinary citizens, but in recent decades the process has been captured by self-serving elites.

Even as California's roads fall apart and public institutions decline – the result of too little spending and public workers who are too expensive – the state continues to operate the finest set of public universities in the US. But the secret of the University of California's success is its ability to obtain ever-higher amounts of funding from private sources and the federal government.

Disengagement from the California polity also is true of the state's economic engines. Intel, the world's biggest chip maker and a Silicon Valley mainstay, hasn't built a factory in California for more than 20 years. Hollywood shoots an increasing number of films elsewhere. Agriculture relies heavily on illegal workers from Mexico, who live temporarily near the fields and take their earnings back home.

How to forge a single community out of a state so diverse remains an elusive challenge. Some influential people, including Schwarzenegger, say the state needs a new constitution that would restrict ballot initiatives and make budgets easier to pass. More radical thinkers insist that California is ungovernable and should be broken into two or even three states.

Creating more Californias would of course require the approval of the federal government in Washington, where elected representatives from California – mainly from Obama's Democratic party – have more power today than at perhaps any time in US history. Nancy Pelosi, the House majority leader, is from San Francisco. Californians run the two most powerful House committees, Energy and Commerce and Education and Labor. Two of the most influential senators also come from California.

Why these Washington politicians are idle while their state slides towards ruin says much about what's broken in American politics. Schwarzenegger is a Republican, so Democrats privately wish him to fail. There's a deeper problem: politicians across the spectrum, beholden to special interests, are habituated to denying serious problems.

Obama will be forced to help craft a compromise to keep the state financially afloat. Yet as a condition, he may insist that Californians, who are already among the most heavily taxed Americans, pay more. If Californians refuse, Obama could face a widening revolt against the idea of expanded government as the chief response to what ails America at home.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 05:37:54 AM

Quote from: John on May 22, 2009, 05:33:37 AM
Yes.
>:(

As a fair-minded American, I totally agree. This is a case study of deregulation that has gone amok ...

Title: Re: Meltdown
Post by: BachQ on May 22, 2009, 05:54:15 AM

Quote from: Coopmv on May 16, 2009, 05:32:42 AM
Most of these are retailers anyway. This is a good thing since conspicuous consumptions will be PERMANENTLY reigned in and since most retailers sell imported goods anyway, this will go a long way to attack the trade deficits.

WSJ: Recession Turns Malls Into Ghost Towns (http://online.wsj.com/article/SB124294047987244803.html#mod=article-outset-box)

(http://s.wsj.net/public/resources/images/P1-AQ004_DEADMA_NS_20090521191222.gif)

Title: Re: Meltdown
Post by: BachQ on May 22, 2009, 05:57:20 AM

Quote from: Coopmv on April 11, 2009, 04:32:46 AM
The US will probably take many countries down with it, particularly those that are overly dependent on export if it does go down.

Three of the US's largest trading partners are indeed reeling from the US's contraction:

WSJ: Yesterday Mexico announced that its GDP fell at an annualized rate of 21.5% in 1Q, the worst performance since the 1995 peso crisis. Mexico's decline followed by a day Japan's report that its economy contracted in the first quarter at a 15.2% clip, its worst performance since 1955. Last week, Germany said its first quarter decline in GDP, an annualized 14.4%, was the worst since 1970. (http://online.wsj.com/article/SB124286297167741263.html)

Title: Re: Meltdown
Post by: BachQ on May 22, 2009, 06:02:35 AM

Quote from: Coopmv on May 22, 2009, 05:36:19 AM
The dysfunctional political system of the US's wealthiest state represents all that remains broken in American politics[/size]

Pascal Zachary guardian.co.uk, Thursday 21 May 2009 17.53 BST Article history

While the new Obama administration is commanding global attention, America's future may be written – as so many times before – in and by its largest state. Once the lodestar for American optimism and achievement, California now illustrates the difficulties confronting the US – and how much more can still go wrong domestically.

The most populous and wealthiest of America's 50 states, California has long been a beacon of opportunity for talented and enterprising people from all over the world. One in every four California residents was born in a foreign country. California's two most famous industries, Silicon Valley and Hollywood, depend on infusions of talent from abroad. Its robust agricultural sector is a massive exporter of food, benefiting from the growing appetites of consumers in developing countries.

Yet California's technological and entrepreneurial might – standing alone, the state would be the world's eighth largest economy – coexists with a dysfunctional political system that has brought it to the edge of fiscal bankruptcy. On 19 May, the state's voters, in a special election, rejected an array of tax increases and spending cuts required to balance its budget. Now, California faces either an embarrassing federal bailout or a prolonged period of rule by judges, who under California law have the power to vacate labour agreements, abrogate contracts, and generally restructure the state's financial commitments.

For President Barack Obama, California's crisis imperils his own reform agenda. Because other American states also face tough fiscal conditions, the political price of bailing out California may be bailing out dozens of other states too.

A massive state bailout, while adding enormously to pressure on Obama's government, would expose the weak link in the US system of governance. So-called "unitary" nations such as Britain, France, China, or Kenya essentially have a single set of government obligations: one national police force, one employer for all public school teachers, one overall pension system, etc. By contrast, the US has an "asymmetric" form of government, which allows many overlapping government entities – 7,000 in California alone – to incur debts, hire and fire employees, and impose taxes.

Making sense of these asymmetries is difficult. When financial markets concentrate on the fiscal health of the federal government, they miss the extent of government obligations as a whole.

The complexity of American governance threatens the benefits of Obama's decision to stimulate the economy through deficit spending. While the national government expands, state governments, such as California's, contract.

Moreover, California's crisis is more than an economic one. California is the most diverse US state; more than half of its 37 million people are non-white. For believers in the benefits of diversity, California represents the largest social experiment in human history, bringing people of different backgrounds together in a way unimaginable in, say, Germany, China, or Brazil.

California's governor, Arnold Schwarzenegger, was an immigrant (from Austria) before he was a movie star. In his six years in office he has repeatedly tried to bypass a polarised state legislature – even the annual budget requires a two-thirds majority – by appealing directly to voters. Ballot initiatives were created 100 years ago to empower ordinary citizens, but in recent decades the process has been captured by self-serving elites.

Even as California's roads fall apart and public institutions decline – the result of too little spending and public workers who are too expensive – the state continues to operate the finest set of public universities in the US. But the secret of the University of California's success is its ability to obtain ever-higher amounts of funding from private sources and the federal government.

Disengagement from the California polity also is true of the state's economic engines. Intel, the world's biggest chip maker and a Silicon Valley mainstay, hasn't built a factory in California for more than 20 years. Hollywood shoots an increasing number of films elsewhere. Agriculture relies heavily on illegal workers from Mexico, who live temporarily near the fields and take their earnings back home.

How to forge a single community out of a state so diverse remains an elusive challenge. Some influential people, including Schwarzenegger, say the state needs a new constitution that would restrict ballot initiatives and make budgets easier to pass. More radical thinkers insist that California is ungovernable and should be broken into two or even three states.
Creating more Californias would of course require the approval of the federal government in Washington, where elected representatives from California – mainly from Obama's Democratic party – have more power today than at perhaps any time in US history. Nancy Pelosi, the House majority leader, is from San Francisco. Californians run the two most powerful House committees, Energy and Commerce and Education and Labor. Two of the most influential senators also come from California.

Why these Washington politicians are idle while their state slides towards ruin says much about what's broken in American politics. Schwarzenegger is a Republican, so Democrats privately wish him to fail. There's a deeper problem: politicians across the spectrum, beholden to special interests, are habituated to denying serious problems.

Obama will be forced to help craft a compromise to keep the state financially afloat. Yet as a condition, he may insist that Californians, who are already among the most heavily taxed Americans, pay more. If Californians refuse, Obama could face a widening revolt against the idea of expanded government as the chief response to what ails America at home.

California desperately needs a new constitution; it is completely dysfunctional with its current framework. If CA doesn't receive a federal bailout, things will get very, very interesting.

If CA does get a bailout, at least 47 other states will be in line for federal bailouts. What a can of worms.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 06:06:15 AM

Quote from: Dm on May 22, 2009, 05:54:15 AM
WSJ: Recession Turns Malls Into Ghost Towns (http://online.wsj.com/article/SB124294047987244803.html#mod=article-outset-box)

(http://s.wsj.net/public/resources/images/P1-AQ004_DEADMA_NS_20090521191222.gif)

General Growth, the second largest American mall owner/operator filed for CH11 not long ago. The reason is simple, people are not shopping and stores in malls across the US are closing in record numbers. The loss of stores means mall owners cannot collect rent and therefore they start to default on their mortgages.

http://finance.yahoo.com/news/Why-Commercial-Real-Estate-minyanville-15275531.html?.v=1

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 06:08:19 AM

Quote from: Dm on May 22, 2009, 06:02:35 AM
California desperately needs a new constitution; it is completely dysfunctional with its current framework. If CA doesn't receive a federal bailout, things will get very, very interesting.

If CA does get a bailout, at least 47 other states will be in line for federal bailouts. What a can of worms.

No bailout for CA!!!

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 06:16:26 AM

Quote from: Dm on May 22, 2009, 05:57:20 AM
Three of the US's largest trading partners are indeed reeling from the US's contraction:

WSJ: Yesterday Mexico announced that its GDP fell at an annualized rate of 21.5% in 1Q, the worst performance since the 1995 peso crisis. Mexico's decline followed by a day Japan's report that its economy contracted in the first quarter at a 15.2% clip, its worst performance since 1955. Last week, Germany said its first quarter decline in GDP, an annualized 14.4%, was the worst since 1970. (http://online.wsj.com/article/SB124286297167741263.html)

The NAFTA has been a farce from day 1. It should have included ONLY the US and Canada. Only our politicians were foolish enough to include a third-world country where most of its citizens want to bolt from that country and form some economic alliance with it. NAFTA has not cured the illegal immigration problem. The EU was smart enough not to have approved membership for Turkey and has taken a while before memberships were approved for the poorer Southern European and Eastern European countries. Rich and poor countries to belong in the same economic bloc never makes any sense ...

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 06:26:44 AM

Quote from: Dm on May 22, 2009, 05:57:20 AM
Three of the US's largest trading partners are indeed reeling from the US's contraction:

WSJ: Yesterday Mexico announced that its GDP fell at an annualized rate of 21.5% in 1Q, the worst performance since the 1995 peso crisis. Mexico's decline followed by a day Japan's report that its economy contracted in the first quarter at a 15.2% clip, its worst performance since 1955. Last week, Germany said its first quarter decline in GDP, an annualized 14.4%, was the worst since 1970. (http://online.wsj.com/article/SB124286297167741263.html)

The US must significantly beef up its border patrol in view of this grim economic news from Mexico, which is entering a depresssion given the 20+% decline in GDP ...

Title: Re: Meltdown
Post by: BachQ on May 22, 2009, 06:49:18 AM

Quote from: Coopmv on May 22, 2009, 06:26:44 AM

The US must significantly beef up its border patrol in view of this grim economic news from Mexico, which is entering a depresssion given the 20+% decline in GDP ...

You nailed it, Coop. Mexico will be entering a steep downward spiral ... soon! I have no idea what the solution is in terms of border patrol.

Within a few years (or a few months), Mexico will experience a major crisis as its oil exports plummet. In April, 2009, production from Mexico's largest oil field (Cantarell) plunged 18.2% to levels unseen since 1990. (http://www.upstreamonline.com/live/article179174.ece)

QuoteOil revenues are a key plank of Mexico's economy and the slide in exports was the latest gloomy data for a country already knocked into recession by a drop in US demand for its factory exports. Tourism revenues have also been dented this year by the H1N1 flu outbreak.

Mexico's oil output is down 7.4% (http://in.reuters.com/article/oilRpt/idINN2129128920090521?sp=true) in the 1st 4 months of 2009. This is a very dire situation that receives remarkably little press coverage.

Title: Re: Meltdown
Post by: Lethevich on May 22, 2009, 07:07:59 AM

Dm - do you still have the same doom-thoughts about civilisation being unready for the running out of oil, or does this current much reduced demand without us turning into cavemen ease your worries? :P

The UK government is still playing silly buggers in avoiding a sensible stab at making a sizable amount of energy consumption fueled by renewables. Some ministers need a sharp slap about the head to bring them out of their stupor - low oil prices at the moment do NOT mean "wow we can get away with not investing in boring tidal energy projects" - it means they have time to before things screw up. Obama's potentially wonderful "green jobs" plan has been adopted and promoted by the local Green party, but even in times like this they will not make any headway (as usual)...

Edit: Typo fix. I am good at those - both the typos and the fixes. Kind of.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 07:26:42 AM

Quote from: Lethe on May 22, 2009, 07:07:59 AM
Dm - do you still have the same doom-thoughts about civilisation being unready for the running out of oil, or does this current much reduced demand without us turning into cavemen ease your worries? :P

The UK government is still playing silly buggers in avoiding a sensible stab at making a sizable about of energy consumption fueled by renewables. Some ministers need a sharp slap about the head to bring them out of their stupor - low oil prices at the moment do NOT mean "wow we can get away with not investing in boring tidal energy projects" - it means they have time to before things screw up. Obama's potentially wonderful "green jobs" plan has been adopted and promoted by the local Green party, but even in times like this they will not make any headway (as usual)...

I have read that with prices of crude down more than 50% from its peak, the UK politicians are starting to waver on all the proposed green projects offshore, which all have steep price tags. At $150 oil, those price tags can be stomached. But at $60 oil? I don't for a moment feel bad for many of those onetime US ethanol millionaire farmers, many of whom are now bankrupt due to over-expansion and plunging corn prices. Diverting corn from animal feed and other food production to ethanol production and in the process sending food prices through the roof is just lousy policy - robbing Peter to pay Paul - where the consumers are the biggest losers. Biofuel must not be derived from food source.

Title: Re: Meltdown
Post by: BachQ on May 22, 2009, 07:30:14 AM

Quote from: Lethe on May 22, 2009, 07:07:59 AM
Dm - do you still have the same doom-thoughts about civilisation being unready for the running out of oil, or does this current much reduced demand without us turning into cavemen ease your worries? :P

The UK government is still playing silly buggers in avoiding a sensible stab at making a sizable about of energy consumption fueled by renewables. Some ministers need a sharp slap about the head to bring them out of their stupor - low oil prices at the moment do NOT mean "wow we can get away with not investing in boring tidal energy projects" - it means they have time to before things screw up. Obama's potentially wonderful "green jobs" plan has been adopted and promoted by the local Green party, but even in times like this they will not make any headway (as usual)...

Good question, Lethe.

A funny thing happened on the way to running out of oil: the global economic house-of-cards collapsed, oil demand plummeted, and all politicians became focused on bailouts and stimulus packages. As you mentioned, as far as politicians are concerned, low oil prices have placed all concerns about peak oil on the back burner.

This is a very bad result for several reasons: (1) the next several months will be society's last clear chance to undertake a transition from a cheap-oil world to a world constrained by ever-increasing oil prices; (2) investments in alternative energies have declined; and (3) investments in oil/petroleum infrastructures have been put on hold given tight credit and low oil prices. We have set ourselves up for the perfect storm.

Amid these plunging oil prices, the reality and significance of peak oil hasn't changed (i.e., the geological fact of limited oil reserves coupled with society's utter dependence on oil hasn't changed). Only our flawed perceptions of the imminence and immediacy of peak oil has changed. And we will pay the price for this.

I am far more doomy about peak oil than I was when oil was at $147/bbl, because now the US and Eurozone are deeply in debt, their economies have contracted the most in modern times, and they have squandered valuable time putting out financial fires while the ultimate threat of peak oil has grown more severe.

The global economies have bankrolled banksters and bailed out dysfunctional car companies instead of investing in alternative energies, mass transit, energy efficient homes, and the like.

The doom is only months away. 8)

Title: Re: Meltdown
Post by: Lethevich on May 22, 2009, 07:33:37 AM

Hehe thanks. Bring the doom, I say! I'll welcome it with Dvořák at full blast.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 07:35:55 AM

Quote from: Lethe on May 22, 2009, 07:33:37 AM
Hehe thanks. Bring the doom, I say! I'll welcome it with Dvořák at full blast.

Enjoy the good music while you still can ... ;D

Title: Re: Meltdown
Post by: DavidRoss on May 22, 2009, 08:23:23 AM

Quote from: Zachary, posted by Coopmv on May 22, 2009, 05:36:19 AM
Even as California's roads fall apart and public institutions decline – the result of too little spending and public workers who are too expensive – the state continues to operate the finest set of public universities in the US. But the secret of the University of California's success is its ability to obtain ever-higher amounts of funding from private sources and the federal government.

UC is not operated by the state, but by a board of regents, only four of whom are state officials (out of 29).

From the UC Regents website (http://www.universityofcalifornia.edu/regents/about.html):

QuoteThe University is governed by The Regents, which under Article IX, Section 9 of the California Constitution has "full powers of organization and governance" subject only to very specific areas of legislative control. The article states that "the university shall be entirely independent of all political and sectarian influence and kept free therefrom in the appointment of its Regents and in the administration of its affairs."

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 08:30:40 AM

Quote from: DavidRoss on May 22, 2009, 08:23:23 AM
UC is not operated by the state, but by a board of regents, only four of whom are state officials (out of 29).

From the UC Regents website (http://www.universityofcalifornia.edu/regents/about.html):

But who controls the purse string? If UC becomes a private university like Harvard or Yale, then it will not be subject to any state funding restrictions.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 12:07:08 PM

CA has the worst credit rating among the states. The state is toast if the voters there keep voting down tax increases and refuse to face up to reality ...

Michigan's April jobless rate was highest in US
44 states lost jobs in April, led by payroll cuts in California, Texas, Michigan, Ohio

Jeannine Aversa, AP Economics Writer
On Friday May 22, 2009, 3:04 pm EDT

WASHINGTON (AP) -- Forty-four states lost jobs in April, led by California where employers slashed 63,700 positions, as the recession took a further toll on U.S. workers.

Trailing California in over-the-month job losses were: Texas, which saw 39,500 jobs vanish; Michigan, which lost 38,400 jobs; and Ohio, where payrolls fell 25,200, according to a U.S. Labor Department report issued Friday.

The few winners included Arkansas and Montana, followed by Florida -- a dose of good news for a state that's been battered by the housing collapse.

California's unemployment rate dipped to 11 percent last month, fifth-highest in the country. Michigan's jobless rate was the highest at 12.9 percent, followed by Oregon at 12 percent, South Carolina at 11.5 percent and Rhode Island at 11.1 percent.

As the recession eats into sales and profits, companies have laid off workers and turned to other cost-cutting measures, such as holding down hours and freezing or trimming pay.

Since the recession began in December 2007, the U.S. has lost a net total of 5.7 million jobs. The nationwide unemployment rate now stands at 8.9 percent, a quarter-century high.

Federal Reserve Chairman Ben Bernanke and some economists hope the pace of layoffs will moderate as the recession eases its grip and likely ends later this year.

But even if employers reduce firings, the nationwide unemployment rate is expected to hit double digits by year's end. Employers won't be in any mood to ramp up hiring until they feel confident that any recovery has staying power, economists say.

In Friday's report, Arkansas and Montana tied for the biggest over-the-month payroll gains at 1,500 a piece. They were followed by Florida, which saw an increase of 1,300 jobs.

On the hiring front, North Dakota again registered the nation's lowest unemployment rate -- 4 percent. It was followed by Nebraska with a 4.4 percent jobless rate, Wyoming at 4.5 percent and South Dakota with 4.8 percent.

In another bit of mildly encouraging news, the Labor Department reported that mass layoffs -- job cuts of 50 or more by a single employer -- dipped to 2,712 in April, from a record-high of 2,933 in March. Still, more than 271,000 workers were fired in last month's cuts, more than double the total from April 2008.

Layoffs in manufacturing, construction and retail are common threads running through the states with the highest unemployment rates. Another thread: difficulties faced by South Carolina, Michigan, Rhode Island and other states, to lure new types of companies to help cushion the loss of manufacturing jobs and retrain laid-off factory workers for other kinds of employment.

Nearly 6.7 million people nationwide are drawing state unemployment insurance, the highest on records dating to 1967, the federal government reported Thursday. The crush has exhausted unemployment funds in California, New York and elsewhere, forcing them to tap the federal government for money to keep paying benefits.

States are hurting as the recession cuts into revenues.

Saddled with a $21.3 billion budget deficit, California Gov. Arnold Schwarzenegger has said thousands of state employees must be laid off and billions of dollars must be slashed from the budget. His administration has started sending layoff notices to 5,000 state employees with the goal of cutting the general work force by 5 percent.

Since December, California has led the nation in monthly job losses, according to the U.S. Labor Department.

Against that backdrop, Californians' personal income fell statewide for the first time since 1938, leading to a sharp drop in tax revenue.

One in every 138 California households received a foreclosure filing last month, according to RealtyTrac Inc. That was the third-highest rate in the country behind Nevada's one in every 68 households, and Florida's one in every 135 households.

If California tries to borrow more to help pay its bills, it will be costly. The state has the worst credit rating in the nation. The state treasurer's office estimates that California would pay an extra $500 million to $1 billion in lender fees on a $15 billion short-term loan.

Title: Re: Meltdown
Post by: Lilas Pastia on May 22, 2009, 02:52:34 PM

So have most world currencies. Actually they haven't risen, it's the greenback that slipped. Time to place that big BRO order... ::)

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 02:58:39 PM

Quote from: Lilas Pastia on May 22, 2009, 02:52:34 PM
So have most world currencies. Actually they haven't risen, it's the greenback that slipped. Time to place that big BRO order... ::)

There is nothing to gain from buying from BRO since BRO has to first convert the increasingly worthless Dollar into Pound or Euro in order to build its inventory. After all, there are few US classical labels that are worth buying. Certainly Telarc is not in my book to be worth buying.

Title: Re: Meltdown
Post by: Lilas Pastia on May 22, 2009, 03:10:35 PM

Wrong. That's not how these things work.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2009, 03:15:26 PM

Quote from: Lilas Pastia on May 22, 2009, 03:10:35 PM
Wrong. That's not how these things work.

How so? Do you expect BRO to sell you CD's at a loss? If it has to fork over more dollars to buy its CD's from Europe, why would it not pass the added costs along? You need to explain your reasoning ...

Title: Re: Meltdown
Post by: BachQ on May 23, 2009, 04:01:05 AM

Quote from: Coopmv on May 22, 2009, 06:08:19 AM
No bailout for CA!!!

NYT Golden State bailout. (http://www.nytimes.com/2009/05/22/opinion/22mathews.html?_r=1&ref=opinion)

Title: Re: Meltdown
Post by: Coopmv on May 23, 2009, 04:07:57 AM

Quote from: Dm on May 23, 2009, 04:01:05 AM

NYT Golden State bailout.
(http://www.nytimes.com/2009/05/22/opinion/22mathews.html?_r=1&ref=opinion)

Indeed, CA has been a slow-motion train wreck, a fiscal disaster waiting to happen. It is one state I will NEVER move to, though two of my sisters live there ...

Title: Re: Meltdown
Post by: Coopmv on May 23, 2009, 07:39:12 AM

INTEL last built plants in CA over twenty years ago and I do not doubt if it will shut down its remaining plants and move them to other states. All INTEL's plants built over the past few years were built in Oregon, New Mexico, etc. This clearly is a vote of no-confidence for CA ...

Title: Re: Meltdown
Post by: DavidRoss on May 23, 2009, 08:21:24 AM

Quote from: Coopmv on May 22, 2009, 08:30:40 AM
But who controls the purse string? If UC becomes a private university like Harvard or Yale, then it will not be subject to any state funding restrictions.

The valid point about UC made by Zachary in his article for The Guardian is that UC's private fundraising and corporate & Federal research grants make it far less dependent on the state than most public institutions. The error I corrected concerns who runs UC--not the state, but an independent board of regents constitutionally insulated from political concerns.

Quote from: Coopmv on May 23, 2009, 04:07:57 AM
Indeed, CA has been a slow-motion train wreck, a fiscal disaster waiting to happen. It is one state I will NEVER move to, though two of my sisters live there ...

California sucks! Tell everyone you know. Convince your sisters to leave and take all their friends and family with them. The 20 million people who've moved here in the past 50 years should all get the hell out and go someplace where things are great--like New York!

Title: Re: Meltdown
Post by: Coopmv on May 23, 2009, 08:58:36 AM

Quote from: DavidRoss on May 23, 2009, 08:21:24 AM
The 20 million people who've moved here in the past 50 years should all get the hell out and go someplace where things are great--like New York!

Now what percentage of those 20 million people are illegals? Do they not use services provided by the state or even receive financial assistance?

Title: Re: Meltdown
Post by: DavidRoss on May 23, 2009, 09:06:26 AM

Quote from: Coopmv on May 23, 2009, 08:58:36 AMNow what percentage of those 20 million people are illegals? Do they not use services provided by the state or even receive financial assistance?

Estimates average around 4 million illegals. Yes they do.

Title: Re: Meltdown
Post by: Coopmv on May 23, 2009, 09:13:12 AM

Quote from: DavidRoss on May 23, 2009, 09:06:26 AM
Estimates average around 4 million illegals. Yes they do.

There you go. We have to wonder what kind of financial burdens the illegals have placed on not only CA but on many other states as well. I don't believe for a minute when the fed put the estimate for total illegals at 9M. I think the actual number is much higher, perhaps as high as 20M.

Title: Re: Meltdown
Post by: DavidRoss on May 23, 2009, 09:32:09 AM

Quote from: Coopmv on May 23, 2009, 09:13:12 AM
There you go. We have to wonder what kind of financial burdens the illegals have placed on not only CA but on many other states as well. I don't believe for a minute when the fed put the estimate for total illegals at 9M. I think the actual number is much higher, perhaps as high as 20M.

Even 20MM may be significantly underestimating the numbers. Note that defenders of illegal immigration say that their contributions to society outweigh their costs to it. A California state study on the matter estimated the net effect to the state as a deficit in the range of -$7600 to -$8000 per illegal, comprising 22% of state expenditures. An interesting site for perspectives on these issues is Negative Population Growth.org. (http://www.npg.org/CAPS.html)

This is one of the toughest problems for our nation to deal with, right up there with the unsustainability of the SSI Ponzi scheme. And like SSI, because unscrupulous politicians (redundant, I know) see personal advantage in milking the situation, it was not dealt with in a timely manner and now has grown so much that it's probably beyond our capacity to solve.

Title: Re: Meltdown
Post by: Lilas Pastia on May 23, 2009, 10:14:52 AM

Quote from: Coopmv on May 22, 2009, 03:15:26 PM
How so? Do you expect BRO to sell you CD's at a loss? If it has to fork over more dollars to buy its CD's from Europe, why would it not pass the added costs along? You need to explain your reasoning ...

If you buy something from the UK , Canada or Europe, chances are you'll be able to pay in USD.

Large american retailers pay their imports in USD. If they have to pay in a foreign currency will on a regular basis, they will hedge the risk through future contracts. When trading with the USA, it's normally the seller that supports a currency risk. This is something we know very well here in Canada. We export 70% of our goods to the US. When the USD sinks like now, our exports become more expensive and trade volume shrinks. Americans will turn to a cheaper supplier and voilà. It's business as usual.

If BRO finds EU imports too expensive they'll either insist on paying in USD or just wait until it's more affordable. Or possibly they have euro hedged contracts with their bank (the owners are jewish, they know a thing or two about the subject). Meanwhile BRO has tons of US made discs to sell to their customers. At no loss of course.

Title: Re: Meltdown
Post by: Coopmv on May 23, 2009, 11:58:28 AM

Quote from: Lilas Pastia on May 23, 2009, 10:14:52 AM
If you buy something from the UK , Canada or Europe, chances are you'll be able to pay in USD.

Large american retailers pay their imports in USD. If they have to pay in a foreign currency will on a regular basis, they will hedge the risk through future contracts. When trading with the USA, it's normally the seller that supports a currency risk. This is something we know very well here in Canada. We export 70% of our goods to the US. When the USD sinks like now, our exports become more expensive and trade volume shrinks. Americans will turn to a cheaper supplier and voilà. It's business as usual.

If BRO finds EU imports too expensive they'll either insist on paying in USD or just wait until it's more affordable. Or possibly they have euro hedged contracts with their bank (the owners are jewish, they know a thing or two about the subject). Meanwhile BRO has tons of US made discs to sell to their customers. At no loss of course.

No doubt, multi-national companies hedge their exchange rate exposure via forward currency options contracts. But this is not without risk and there are certainly costs involved. These days, we have seen many companies taking hits to their Q1 earnings due to their currency hedging contracts. Is BRO a large enough business operation to justify these costs? I am not sure ...

I have never bought from BRO, but are there that many interesting US made discs it has to offer? Almost 100% of my purchases are imports.

Title: Re: Meltdown
Post by: Lilas Pastia on May 23, 2009, 01:01:09 PM

Future contracts were originally designed as a form of currency fluctuations insurance. Like any insurance poliy, it has a cost but the aim is to get a protection when the risk is deemed high enough. What has happened lately is that many derivatives were used for speculating purposes or by people who failed to realize the risks involved (including the banks that offered them without sufficient guarantees).

For one, you should never purchase a future if you can't pay the contract in cash at maturity. When I was trading them in the early eighties, a contract maturing in 6 months was always backed by a cash position (TBills, Bankers' acceptances or term deposits) of the same duration. No bank worthy of its name will provide the derivatives without the appropriate collateral. Unfortunately the banking system has failed to uphold their own golden rules.

BRO imports and distributes dozens of labels, most of them domestic, and most of non-classical music. They have a very well diversified product base. I would be very surprised if they experienced cash flow problems. But one never knows of course...

Title: Re: Meltdown
Post by: BachQ on May 24, 2009, 06:39:46 AM

CNBC: -- (http://www.cnbc.com/id/30886432) Why US Debt Rating Poses Such a Big Worry to Investors

Title: Re: Meltdown
Post by: Coopmv on May 24, 2009, 08:24:19 AM

Quote from: Dm on May 24, 2009, 06:39:46 AM
CNBC: -- (http://www.cnbc.com/id/30886432) Why US Debt Rating Poses Such a Big Worry to Investors

At least there is no talk about bailing out the commercial real estate developers and the mall developers/operators. Let them go down and hopefully the banks are well prepared for these write-offs. There are too many retail stores and too many commercial buildings. Who are these developers trying to kid? The writing has been on the wall for many years ...

Title: Re: Meltdown
Post by: Coopmv on May 24, 2009, 12:45:52 PM

Quote from: DavidRoss on May 23, 2009, 09:32:09 AM

This is one of the toughest problems for our nation to deal with, right up there with the unsustainability of the SSI Ponzi scheme. And like SSI, because unscrupulous politicians (redundant, I know) see personal advantage in milking the situation, it was not dealt with in a timely manner and now has grown so much that it's probably beyond our capacity to solve.

You hit it right on the nail. The SSI and any of the so called "pay-as-your-go" benefits such as Medicare are legalized Ponzi schemes, as are all the treasury securities, which are never paid off but are simply rolled over. No wonder the federal deficits just snowball.

Title: Re: Meltdown
Post by: Coopmv on May 24, 2009, 02:21:46 PM

Good news is in ultra short supply

Recession suddenly humbles high-tech sector

Food pantries in ritzy communities: Recession's sudden arrival humbles the high-tech sector

Martha Mendoza, AP National Writer
On Sunday May 24, 2009, 1:11 pm EDT

LOS GATOS, Calif. (AP) -- The $1.6 million red Bugatti crouches in the showroom, flanked by Lamborghinis, Bentleys and a Rolls-Royce all polished to a shimmer. The nearby potted plants, however, are dusty and wilting. With super-luxury car sales here just half of what they used to be, they had to cut something.

"We wash our own windows now, take care of the plants ourselves," says Ryan Dohogne, general manager of Silicon Valley Auto Group. Although they haven't laid anyone off, yet, Dohogne said they're saving everywhere they can.

Five miles away, former indoor plant specialist Michael A. Jones is having what he calls "a humbling experience" at a nonprofit food pantry, choosing dented cans of corn and tuna, a crunched box of Rice Krispies and some soon-to-expire milk to supplement his food stamps.

Jones used to gross $12,000 a month as an indoor horticulturist for high tech companies, restaurants and car dealerships, although not Silicon Valley Auto Group. Then "everyone cut back all at once and we had to shut down," he said. "It happened fast."

Very fast. In fact, nowhere in the country has the bust arrived more abruptly.

The Associated Press Economic Stress Index, a month-by-month analysis of foreclosure, bankruptcy and unemployment rates in more than 3,000 U.S. counties, shows that last year, as the national economy tanked, high tech economic centers from California's Silicon Valley to North Carolina's Research Triangle were apparently "recession-proof" with increasing jobs and stable housing prices.

Last fall, everything changed. When previously invested funds petered out, there was no new capital. Bankruptcies, foreclosures and unemployment in high tech regions spiked, and are now at some of the highest levels in the country.

For example:

-- Santa Clara County, home to Silicon Valley, saw bankruptcies soar 59 percent in the past 12 months, and projections are that they're still climbing;

-- North Carolina's unemployment has doubled since early 2008 to a record 10.7 percent, with close to 200,000 jobs lost in the state, 20 percent of those in Research Triangle, a high tech hot spot near Durham, Raleigh, and Chapel Hill.

-- Foreclosures in once-booming tech neighborhoods around Boston are on track to reach a record high this year after tripling since last summer.

Simply put, these regions "are seeing their strength strangled as investors hold on to whatever funds they have left," said digital economy expert Ed Malecki, an Ohio State University professor. "Everyone's portfolio is smaller than a year or two ago, and venture capital -- and even more, pre-venture angel financing -- lives off of private wealth," said Malecki. "There is simply less private wealth around right now."

High tech regions, which throughout most of 2008 were far more economically secure than the rest of the country, are now seeing unemployment, foreclosure and bankruptcy rates on par with national averages, and in some cases even higher.

Even the most optimistic high tech community leaders have had to face facts.

"We had hoped we might stay insulated from the global economic crisis, and for a long time we were," said Silicon Valley Network president Russell Hancock. "But then it caught up with us and now everyone is laying off."

Everyone?

"There isn't anybody who isn't laying off," he said, then draws a long breath before reciting this list: "Microsoft, Intel, Hewlett Packard, Sun, Yahoo, Apple, Google." He pauses a moment to consider that. "Google. When Google is laying off you know something is going very wrong."

Social workers and volunteers trying to house, feed and clothe the area's newly devastated residents recognize that the economic disaster has arrived.

"It's alarming us to no end," said David Ujita, a director at the nonprofit service center West Valley Community Services Inc. in Cupertino, Calif. He said they've seen a 27 percent increase in first-time food pantry visitors since the fall.

"Folks believe that because we're in the Silicon Valley with million-dollar homes and billion-dollar businesses, hunger and homelessness don't exist. But in fact it's getting much worse, and it's just really frightening," he said.

The agency helps a hidden population: educated, motivated homeowners whose steep mortgages quickly overtook their savings accounts when they were laid off. They live in some of the most expensive communities in the country, places like Cupertino, home of Apple Inc., and neighboring Saratoga, where the average home costs more than $1 million. This month Ujita said they'd arranged with a church to open a new food pantry in Los Gatos, where the median income is $175,000.

"This doesn't look like the stereotypical inner-city plight, but it's just as devastating," said Ujita. Behind him three out-of-work men -- all with master's degrees on their resumes -- searched online job postings from the agency's computers.

A few miles away, almost every seat in the bankruptcy courtroom is full.

Joel Gonzalez, 42, who used to make $100,000 a year installing hardwood floors, earned "about 400 bucks" in March doing odd jobs. His life began falling apart in the fall when his boss, distraught about his failing business, committed suicide. Suddenly out of work, Gonzalez saw the adjustable payments on his $360,000 home loan increase from $2,400 to $3,200. Two months later his savings ran out and he found himself talking to a bankruptcy attorney.

"This is culture shock for me," he said, tugging at his dress shirt outside the federal courthouse. "But after my boss' death, I'm trying to keep it in perspective. I have a money problem, and I'll get through it."

Bankruptcy attorney Sam Taherian, juggling an armload of files, said his caseload is steadily increasing, but he's sure -- based on how many people are coming in for initial free consultations -- that they're nowhere near the peak.

"It usually takes someone a month or two after meeting with us to make their decision," he said. "And we're having a lot of meetings."

Foreclosures have kept pace with bankruptcy filings in this region, but they're far less obvious. In a new townhouse complex just a few miles from Intel Corp.'s Santa Clara headquarters, close to 10 percent of the units are on the market as foreclosure sales. But wander down the dreamy streets -- Inspiration Place, Meditation Place, Fascination Place -- and you would never know.

"They don't hang out signs because they want to be discreet," says Robert Lei, who holds a master's degree in semiconductor device physics but now works as a specialist in foreclosure sales. "They don't want so many people to see so many 'for sale' signs and get scared away, like there's something wrong here."

Resident Jeff Nelson, 27, a firefighter, said he and his wife, a teacher, would like to move their growing family into one of many low priced single family homes now on the market, but they're stuck in this complex, he said.

The numbers just don't add up: They bought their unit three years ago for $527,000, they owe $500,000 and his foreclosed neighbors are selling their places for less than $450,000.

"We thought owning our own place would get us somewhere," he said. "But now we've got to stay. It's either stay, foreclose, or short sell."

There are a few businesses thriving on the downturn.

In January, Pinkberry Inc., the tart and trendy South Korean frozen yogurt chain, opened its first Northern California store in downtown San Jose, a move considered something of a snub to San Franciscans.

It was a prescient decision, said store manager Farid Biglari, smiling at customers who line up before the store even opens. "People around here don't have a lot of money, but they still want to have a good time," he said.

College student Jarmine Kaur and her mother stopped by for a treat after stopping by Macy's to pay down a credit card.

"We looked at bags and we looked at dresses, but we don't buy anything anymore," said Kaur, pointing her spoon at a cup of the soft, sweet stuff. "So here's our luxury."

Title: Re: Meltdown
Post by: Coopmv on May 25, 2009, 05:14:40 AM

This optimism may be misguided at worst and premature at best. With Germany so dependent on exporting high-value added goods, who are the customers these days - unemployed Wall Streeters for their high-end Mercedes?

German business confidence hits six-month high
By Richard Carter – 4 hours ago

BERLIN (AFP) — Confidence among German firms rose to a six-month high in May, a key sentiment index showed on Monday, suggesting that Europe's top economy might be pulling out of its worst slump in over 60 years.

The closely watched Ifo indicator rose for the second consecutive month to 84.2 from 83.7 in April, adding to evidence that sentiment is again on the up in Germany, the world's top exporter.

The result was slightly worse than expected, however. Analysts surveyed by Dow Jones Newswires had expected the index to rise to 85.0.

The survey "points to a gradual stabilisation of economic output at a low level," the Ifo institute's head Hans-Werner Sinn said in a statement.

Economists see the index as a key leading indicator to gauge the future health of the economy. It had been falling steadily -- with occasional blips -- since June 2008 as sentiment among firms plummeted due to the financial crisis.

"The good news clearly is that German companies will leave the valley of tears in a few months' time," said Andreas Rees, from Italy's UniCredit bank.

Tempering the optimism, however, was a sub-index showing that companies' view of the current situation in Germany dropped in May to 82.5, its lowest level ever.

Rees said this sub-index showed that the German economy was unlikely to recover from the slump as quickly as it plunged into it.

"Looking at the current assessment reading, one thing has also become crystal-clear: The recession will continue for the time being," he said.

Marco Bargel, an analyst at Postbank, also drew a sharp distinction between the two indices.

"All in all, the survey results suggest that we are over the worst of this downturn," he said.

"But the renewed bad assessment of the current situation shows that the way out of this recession will be difficult and definitely not smooth."

Nevertheless, brighter signals are increasingly emerging from Germany to pierce the overall gloom surrounding Europe's economic powerhouse.

Industrial orders and exports recently showed their first increases after falling for several consecutive months.

And another closely watched sentiment index, which measures the outlook of players in the financial markets, also rose to a near three-year high in May after a seventh rise in a row, data from the ZEW institute showed on Tuesday.

Economists said the outlook for Germany's heavily export-driven economy was brightening as signs of recovery spread around the world with more positive news also from Japan and the United States.

Last Monday, US Treasury Secretary Timothy Geithner said the US economy had begun to stabilise, although he warned that a recovery would be "bumpy" and "fragile."

And Japan's central bank offered a more optimistic view of prospects for the world's second-largest economy earlier Monday, saying it saw a gradual leveling-out.

Despite the brighter outlook for the economy, some top policymakers have been at pains to point out that any return to growth will only come next year.

While a scheme to allow firms to put workers on temporary contracts rather than lay them off has kept a lid on unemployment, jobless numbers are up, ensuring the economy will be a major battleground in elections in September.

The German government is expecting the economy to shrink by an eye-watering six percent this year -- the worst contraction in modern German history -- only creeping back into the black in 2010, with output up by a measly 0.5 percent.

The president of the country's powerful central bank, Axel Weber, was quoted as saying on Friday that the recession in Germany would continue until to the end of the year with any recovery coming only next year.

Title: Re: Meltdown
Post by: Coopmv on May 25, 2009, 06:11:00 AM

Another credit meltdown that will shake the Forbidden City

(http://images.china.cn/attachement/jpg/site1040/20090504/0019b91eca160b68dbda39.jpg)

Worries Grow about China's Loan Cascade
Ratings agency Fitch points to early warning signs that indicate asset quality is deteriorating
By Daniel Inman

This year, China's banks have opened the floodgates of credit: between January and the end of April, $757 billion worth of new loans were dished out, equivalent to 17% of the GDP in 2008. As such, China's banks are enjoying a rate of growth that their Western peers would kill for. The increase in lending is the government's doing, since it has given banks the task of financing the infrastructure spending that forms a large part of China's stimulus package.

Looking to the medium- to long-term, however, analysts are beginning to air concerns about what effect such a rapid increase in lending could have on the quality of the banks' loan portfolios.

A report released yesterday by Fitch Ratings highlights issues with the banking sector's $4.2 trillion corporate loan portfolio. The worry arises from the fact that China's banks are increasing their corporate exposure at a time when corporate profits are declining.

"Ordinarily, falling corporate earnings are met with tightened lending, but in China precisely the reverse is happening," said the report. This illustrates that "despite years of reform Chinese banks still retain an important policy function in upholding local enterprises".

Infrastructure spending is not the only thing underlying the loan growth, according to the report. All the banks set a profit growth target. Since interest rates are down, the only way that banks can possibly meet their targets is by focusing purely on volumes. In the process of increasing the number of loans, it is more likely that money will be lent to commercially unviable projects. However, the banks don't see this as a problem, since there is an implicit assumption that any coming losses will be paid for by the government.

Although bank earnings have held up well so far, Fitch points to what it calls "early warning signals" that indicate asset quality could be deteriorating.

One sign is that the banks are increasing the assessment rate for how much money should be kept aside for losses against unimpaired loans, which suggests that they expect greater losses to come from the loans that are currently considered performing. The banks are also reclassifying more special mention loans, a category of weak loans just one step from being a non-performing loan (NPL), into NPLs. Finally, the foreign banks, which have better risk management systems than the local banks, saw a rise in their NPLs in the first quarter.

But the full extent of the problem of future credit losses may not come to light for some time, for several reasons, said the report. The structure of corporate debt is such that the inability of the borrower to pay will not become apparent until the principal is due, which will often be years after the loan was made. Furthermore, it is a common practice in China to roll over loans by extending the maturity, which in effect postpones the bad news and allows the loan to remain classified as adequate.

Title: Re: Meltdown
Post by: Coopmv on May 25, 2009, 07:56:43 AM

The European bankers that have made big loans to Gazprom must be quaking in their wingtips ...

Gazprom Woes May Hit European Consumers

Financial strains on the Russian natural gas giant could prompt contract renegotiations and an expansion of its role in European energy markets
By Valentina Pop

With Gazprom's profits dwindling and its debt rising, supply contracts with EU countries could be renegotiated and pipeline politics are likely to sharpen, energy experts have told Euobserver.

Russian state-owned gas producer Gazprom (GAZP.RTS) on Monday said it would slash its dividends sevenfold compared to last year, as it struggles with falling profits and rising debt.

The gas giant said its net profit in the fourth quarter of 2008 had fallen 84 percent to €811 million, while its net debt was €30 billion at the end of the year, making it Russia's biggest debtor.

Adding to the falling demand and plummeting gas prices, Gazprom lost some €1.5 billion in the first two weeks of January, when it halted gas exports through Ukraine due to a pricing dispute.

"The price Gazprom receives from the European contracts is indexed to the price of oil with a six-month lag. The price of gas is now collapsing at the exact rate that the price of oil was collapsing six months ago," energy expert Pierre Noel from the European Council on Foreign Relations, a London-based think-tank, told this website.

But with European demand on the decline, Gazprom's situation is not likely to immediately affect the EU consumer.

"We'll see in a year's time, if the crisis persists, that there might be some pressure to renegotiate the contracts in Europe," Mr Noel said.

A similar view was expressed by Polish expert Agata Loskot-Strachota, head of the energy project at the Centre for Eastern Studies in Warsaw. The troubled monopoly could try to change the terms of existing contracts and "increase its grip by entering the internal markets of EU member states," she said.

"The crisis may also mean the expansion of Russian business" in central and eastern Europe, Ms Loskot said, citing the recent selling of Austria's OMV shares in Hungary's MOL to Russia's Surgutneftegaz (SNGS.RTS) – a move denounced by the new Hungarian premier.

Shell (RDSA) intends to do the same with its shares in Ceska Refinerska, this time to another Russian company – Lukoil, Ms Loskot added.

All of this would not be of any concern for European consumers if companies like Gazprom were functioning by market rules, an American expert said.

"We don't really know what the true financial strain on Gazprom is because the company should be considered as an arm of the Russian government, where money can flow from one part to another without people on the outside knowing what's going on," said Alexandros Petersen from the Atlantic Council of the United States, a Washington-based think-tank.

Pipeline politics and PR

For every move the Europeans are making in the attempt to reduce their energy dependency on Russia, Moscow is countering with rival pipelines and "PR tricks", Mr Peterson said.

On Friday, Russian premier Vladimir Putin and his Italian counterpart, Silvio Berlusconi, made headlines with their agreement to double the capacity of South Stream, a pipeline planned to run on the seabed of the Black Sea and seen as competition to the EU-backed Nabucco which would carry Caspian gas directly to Europe via Turkey.

"South Stream should be considered a gambit to block other projects like Nabucco," the US expert said, noting that the agreement was signed a week after an energy summit in Prague that gave a slight boost to Nabucco.

The race between South Stream and Nabucco was openly stated by the Russian side.

"I consider South Stream to have every chance of being realised earlier than Nabucco," Russia's Energy Minister Sergei Shmatko told reporters on Monday.

The EU however maintains that the two projects are not rivals and that the bloc would benefit from both diversification of suppliers and routes.

South Stream threat to Ukraine

If built, South Stream would however pose serious problems to Ukraine, a transit land for 80 percent of Russia's gas deliveries to Europe.

"Most of this gas will substitute gas currently crossing Ukraine, and some new gas," Paolo Scaroni, chief executive of Italian company ENI (E), Gazprom's partner in South Stream said on Friday.

Former German chancellor Gerhard Schroeder, an advocate for Gazprom projects, also made the case for South Stream and blamed Ukraine for all the gas cuts Europe had experienced.

"When we get Russian gas, the problem is not the supplier, but the fact that 80 percent of the pipeline is located in the Ukraine. We should look for independence not from Russia, but from such transit schemes," he was quoted by RIA Novosti on Monday.

In March, the EU signed an agreement with Ukraine to modernise its gas transportation system without Russia's involvement, which prompted Moscow to threaten it would "review EU-Russian relations."

Title: Re: Meltdown
Post by: BachQ on May 25, 2009, 11:51:29 AM

NYT: -- Job Losses Push Safer Mortgages to Foreclosure -- (http://www.nytimes.com/2009/05/25/business/economy/25foreclose.html?_r=2) According to Mark Zandi, chief economist at Moody's Economy.com. "We're right in the middle of this third wave, and it's intensifying. That loss of jobs and loss of overtime hours and being forced from a full-time to part-time job is resulting in defaults. They're coast to coast."

Title: Re: Meltdown
Post by: BachQ on May 25, 2009, 11:53:37 AM

Quote from: Coopmv on May 25, 2009, 07:56:43 AM
The European bankers that have made big loans to Gazprom must be quaking in their wingtips ...

Gazprom Woes May Hit European Consumers

Financial strains on the Russian natural gas giant could prompt contract renegotiations and an expansion of its role in European energy markets
By Valentina Pop

With Gazprom's profits dwindling and its debt rising, supply contracts with EU countries could be renegotiated and pipeline politics are likely to sharpen, energy experts have told Euobserver.

Russian state-owned gas producer Gazprom (GAZP.RTS) on Monday said it would slash its dividends sevenfold compared to last year, as it struggles with falling profits and rising debt.

The gas giant said its net profit in the fourth quarter of 2008 had fallen 84 percent to €811 million, while its net debt was €30 billion at the end of the year, making it Russia's biggest debtor.

Adding to the falling demand and plummeting gas prices, Gazprom lost some €1.5 billion in the first two weeks of January, when it halted gas exports through Ukraine due to a pricing dispute.

"The price Gazprom receives from the European contracts is indexed to the price of oil with a six-month lag. The price of gas is now collapsing at the exact rate that the price of oil was collapsing six months ago," energy expert Pierre Noel from the European Council on Foreign Relations, a London-based think-tank, told this website.

But with European demand on the decline, Gazprom's situation is not likely to immediately affect the EU consumer.

"We'll see in a year's time, if the crisis persists, that there might be some pressure to renegotiate the contracts in Europe," Mr Noel said.

A similar view was expressed by Polish expert Agata Loskot-Strachota, head of the energy project at the Centre for Eastern Studies in Warsaw. The troubled monopoly could try to change the terms of existing contracts and "increase its grip by entering the internal markets of EU member states," she said.

"The crisis may also mean the expansion of Russian business" in central and eastern Europe, Ms Loskot said, citing the recent selling of Austria's OMV shares in Hungary's MOL to Russia's Surgutneftegaz (SNGS.RTS) – a move denounced by the new Hungarian premier.

Shell (RDSA) intends to do the same with its shares in Ceska Refinerska, this time to another Russian company – Lukoil, Ms Loskot added.

All of this would not be of any concern for European consumers if companies like Gazprom were functioning by market rules, an American expert said.

"We don't really know what the true financial strain on Gazprom is because the company should be considered as an arm of the Russian government, where money can flow from one part to another without people on the outside knowing what's going on," said Alexandros Petersen from the Atlantic Council of the United States, a Washington-based think-tank.

Pipeline politics and PR

For every move the Europeans are making in the attempt to reduce their energy dependency on Russia, Moscow is countering with rival pipelines and "PR tricks", Mr Peterson said.

On Friday, Russian premier Vladimir Putin and his Italian counterpart, Silvio Berlusconi, made headlines with their agreement to double the capacity of South Stream, a pipeline planned to run on the seabed of the Black Sea and seen as competition to the EU-backed Nabucco which would carry Caspian gas directly to Europe via Turkey.

"South Stream should be considered a gambit to block other projects like Nabucco," the US expert said, noting that the agreement was signed a week after an energy summit in Prague that gave a slight boost to Nabucco.

The race between South Stream and Nabucco was openly stated by the Russian side.

"I consider South Stream to have every chance of being realised earlier than Nabucco," Russia's Energy Minister Sergei Shmatko told reporters on Monday.

The EU however maintains that the two projects are not rivals and that the bloc would benefit from both diversification of suppliers and routes.

South Stream threat to Ukraine

If built, South Stream would however pose serious problems to Ukraine, a transit land for 80 percent of Russia's gas deliveries to Europe.

"Most of this gas will substitute gas currently crossing Ukraine, and some new gas," Paolo Scaroni, chief executive of Italian company ENI (E), Gazprom's partner in South Stream said on Friday.

Former German chancellor Gerhard Schroeder, an advocate for Gazprom projects, also made the case for South Stream and blamed Ukraine for all the gas cuts Europe had experienced.

"When we get Russian gas, the problem is not the supplier, but the fact that 80 percent of the pipeline is located in the Ukraine. We should look for independence not from Russia, but from such transit schemes," he was quoted by RIA Novosti on Monday.

In March, the EU signed an agreement with Ukraine to modernise its gas transportation system without Russia's involvement, which prompted Moscow to threaten it would "review EU-Russian relations."

Moscow Times: No Kremlin Guarantee of Gas to EU -- (http://www.moscowtimes.ru/article/600/42/377366.htm) "Russia cannot guarantee that there will be no halts in gas supplies to Europe, President Dmitry Medvedev warned at a news conference closing an EU-Russia summit in Khabarovsk on Friday. Further raising the specter of a new gas shut-off, Prime Minister Vladimir Putin separately indicated that the country would not extend any loans to Ukraine. Ukraine's failure to pay for Russian gas resulted in the halt of deliveries to more than 20 European countries in January."

Title: Re: Meltdown
Post by: Coopmv on May 25, 2009, 12:30:30 PM

Quote from: Dm on May 25, 2009, 11:53:37 AM
Moscow Times: No Kremlin Guarantee of Gas to EU -- (http://www.moscowtimes.ru/article/600/42/377366.htm) "Russia cannot guarantee that there will be no halts in gas supplies to Europe, President Dmitry Medvedev warned at a news conference closing an EU-Russia summit in Khabarovsk on Friday. Further raising the specter of a new gas shut-off, Prime Minister Vladimir Putin separately indicated that the country would not extend any loans to Ukraine. Ukraine's failure to pay for Russian gas resulted in the halt of deliveries to more than 20 European countries in January."

This will be a vicious cycle. When European banks shut off credit to Gazprom since the latter is behind in making debt payments and therefore cannot keep operating for lack of funds. This leads to no gas supply to the Europeans and no revenues to Gazprom. This negative feedback loop is almost impossible to break. For Russia and Venezuela to break even, crude has to be around $80. I think crude may have problems staying above $60.

Title: Re: Meltdown
Post by: Coopmv on May 25, 2009, 12:32:13 PM

Quote from: Dm on May 25, 2009, 11:51:29 AM
NYT: -- Job Losses Push Safer Mortgages to Foreclosure -- (http://www.nytimes.com/2009/05/25/business/economy/25foreclose.html?_r=2) According to Mark Zandi, chief economist at Moody's Economy.com. "We're right in the middle of this third wave, and it's intensifying. That loss of jobs and loss of overtime hours and being forced from a full-time to part-time job is resulting in defaults. They're coast to coast."

This was expected. The question is whether Washington has any tools to effectively deal with this.

Title: Re: Meltdown
Post by: BachQ on May 26, 2009, 04:14:01 AM

UK Telegraph (Ambrose Evans Pritchard): US bonds sale faces market resistance – "The US Treasury is facing an ordeal by fire this week as it tries to sell $100bn (£62bn) of bonds to a deeply sceptical market amid growing fears of a sovereign bond crisis in the Anglo-Saxon world." (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5379733/US-bonds-sale-faces-market-resistance.html%5B/url)

Title: Re: Meltdown
Post by: BachQ on May 26, 2009, 04:14:45 AM

Quote from: Coopmv on May 25, 2009, 12:32:13 PM
The question is whether Washington has any tools to effectively deal with this.

As always, Obama/Pelosi/Frank/Geithner will be tempted to throw more billions at any problem. But, for the first time, even Obama now admits that "We're out of money." (http://www.examiner.com/x-3704-Columbia-Conservative-Examiner~y2009m5d23-BREAKINGObama-admits-were-out-of-money)

Title: Re: Meltdown
Post by: BachQ on May 26, 2009, 04:46:15 AM

Quote from: Coopmv on May 20, 2009, 02:49:23 PM
Quote from: Coopmv on May 17, 2009, 05:06:30 AM
The price of crude is just about right, under $60 and perhaps should be a tad lower since the industrial demand is not there and people are driving a bit less. A country like Venezuela needs oil price to be around $80 to order to pay all the promised social programs or Hugo Chavez is toast. I do not know what that price point is for Russia, which is just another one-trick pony - almost 100% dependency on oil export. It appears oil price of under $60 is not good for it either.

Given the long-term supply constraints, it's not clear how much longer oil will remain below $60 (it's at $60.50/bbl as I type). If there's any hint of a recovery (with the attendant increase in demand), oil prices will once again spike.

world crude oil production (May, 2009) (http://www.theoildrum.com/node/5395)

(http://www.theoildrum.com/files/ccst20090515.png)
click for larger image (http://www.theoildrum.com/files/ccst20090515.png)

"World oil production peaked in July 2008 at 74.82 million barrels/day (mbd) and now has fallen to about 71 mbd. It is expected that oil production will decline slowly to about December 2010 as OPEC production increases while non-OPEC production decreases. After 2010 the resulting annual production decline rate increases to 3.4% as OPEC production is unable to offset cumulative non-OPEC declines. The forecast from the IEA WEO 2008 is also shown for comparison." (http://www.theoildrum.com/node/5395)

(http://www.theoildrum.com/files/cclt20090516.png)
Click for larger image (http://www.theoildrum.com/files/cclt20090516.png)

"As oil production declines, a possible solution is to secure long term oil supply contracts ahead of the next oil price shock (which China has doing). ... As oil remains critical for economic activity there is a high probability that some countries will act more aggressively in securing oil supplies, even to the extent of oil resource wars. In mid May 2009, Russia raised the prospect of war to enforce its claims on Arctic oil and gas riches." (http://www.theoildrum.com/node/5395)

No problems. I already own a good amount of ExxonMobil and ConocoPhillips shares and unfortunately missed BP when it hit $35/share.

Saudi's warn of huge Oil price spike beyond $150/bbl -- (http://uk.reuters.com/article/businessNews/idUKTRE54O2LC20090525?sp=true)"we could see within two-to-three years another price spike similar to or worse than what we witnessed in 2008."

Title: Re: Meltdown
Post by: BachQ on May 26, 2009, 04:47:36 AM

Business Week: (http://www.businessweek.com/lifestyle/content/may2009/bw20090521_006557.htm?chan=rss_topStories_ssi_5) Why a GM Bankruptcy Would Be a Disaster

print version (http://www.businessweek.com/print/lifestyle/content/may2009/bw20090521_006557.htm)

Title: Re: Meltdown
Post by: Coopmv on May 26, 2009, 04:18:58 PM

Quote from: Dm on May 26, 2009, 04:47:36 AM
Business Week: (http://www.businessweek.com/lifestyle/content/may2009/bw20090521_006557.htm?chan=rss_topStories_ssi_5) Why a GM Bankruptcy Would Be a Disaster

print version (http://www.businessweek.com/print/lifestyle/content/may2009/bw20090521_006557.htm)

It will take a miracle for GM to avert bankruptcy filing ...

Title: Re: Meltdown
Post by: Bulldog on May 26, 2009, 04:24:52 PM

Quote from: Coopmv on May 26, 2009, 04:18:58 PM
It will take a miracle for GM to avert bankruptcy filing ...

I think it's a miracle that GM lasted into the 21st Century.

Title: Re: Meltdown
Post by: Coopmv on May 26, 2009, 04:26:20 PM

To get a perspective on why the US is so fiscally mismanaged, look no further than Barbara Box, who bounced more checks than anyone else when she was in the House. Yet she was elected to the US Senate. If someone who could not even balance her checkbook, can she be trusted to help manage the nations's finance. See excerpt below, followed by full webpage.

House Banking Scandal
The PBS onlineNewshour summarizes the House Banking Scandal, also known as Rubbergate: "In 1992, many House members were suspected of bouncing checks from accounts they held at the so-called "House Bank" -- a loose operation that allowed member of Congress to cash their checks but kept shoddy records and often were quite delayed in recording deposits or withdrawals. Although the lawmakers had broken no laws and many did not even know they were bouncing checks, several took advantage of the bank system and many voters viewed the scandal as a blatant abuse of power. Of the 296 sitting representatives and 59 former members who had overdrafted their personal accounts in the preceding 39 months, the House Ethics Committee released a list of the 24 worst abusers."[1]

Boxer was among the top 24 involved in the House bank scandal. On March 1, 1992 the Sacramento Bee quoted Boxer as admitting she didn't pay enough attention to her House bank account. More specifically, that meant 143 bad checks totaling $41,417 over a three-year period that she had written on the House bank.

Full Article (http://www.sourcewatch.org/index.php?title=Barbara_Boxer#House_Banking_Scandal)

Title: Re: Meltdown
Post by: Lilas Pastia on May 26, 2009, 04:27:43 PM

Quote from: Bulldog on May 26, 2009, 04:24:52 PM
I think it's a miracle that GM lasted into the 21st Century.

Agreed. What about the consumers who kept buying their dismal products?

Title: Re: Meltdown
Post by: Coopmv on May 26, 2009, 04:29:36 PM

Quote from: Lilas Pastia on May 26, 2009, 04:27:43 PM
Agreed. What about the consumers who kept buying their dismal products?

Misguided patriotism. I have never bought a car made by the Detroit Three.

Title: Re: Meltdown
Post by: Bulldog on May 26, 2009, 04:36:16 PM

Quote from: Lilas Pastia on May 26, 2009, 04:27:43 PM
Agreed. What about the consumers who kept buying their dismal products?

It's those consumers who kept the company kicking.

I've had a few American and foreign cars; in my experience, the American cars sucked.

Title: Re: Meltdown
Post by: Lilas Pastia on May 26, 2009, 04:37:17 PM

QuoteMisguided patriotism. I have never bought a car made by the Detroit Three.

Neither did I (don't count me as a patriot, I'm not American). But many 'misguided' consumers did...

Title: Re: Meltdown
Post by: Coopmv on May 26, 2009, 04:41:46 PM

Quote from: Lilas Pastia on May 26, 2009, 04:37:17 PM
Neither did I (don't count me as a patriot, I'm not American). But many 'misguided' consumers did...

A patriot also should be realistic. Had the Carter Administration let Chrysler go down, GM and Ford would have been far more competitive today ...

Title: Re: Meltdown
Post by: Lilas Pastia on May 26, 2009, 04:57:01 PM

From the rear-view mirror everything appears so simple, so limpid...

Title: Re: Meltdown
Post by: Coopmv on May 26, 2009, 06:28:46 PM

Quote from: Dm on May 26, 2009, 04:14:45 AM
As always, Obama/Pelosi/Frank/Geithner will be tempted to throw more billions at any problem. But, for the first time, even Obama now admits that "We're out of money." (http://www.examiner.com/x-3704-Columbia-Conservative-Examiner~y2009m5d23-BREAKINGObama-admits-were-out-of-money)

The Democrats always believe in throwing money at problems. Unfortunately, the previous occupant of the White House, a Republican, seemed to agree with the Democrats as well ...

Title: Re: Meltdown
Post by: BachQ on May 27, 2009, 04:33:56 AM

Quote from: Coopmv on May 20, 2009, 02:49:23 PM
Quote from: Coopmv on May 17, 2009, 05:06:30 AM
The price of crude is just about right, under $60 and perhaps should be a tad lower since the industrial demand is not there and people are driving a bit less. A country like Venezuela needs oil price to be around $80 to order to pay all the promised social programs or Hugo Chavez is toast. I do not know what that price point is for Russia, which is just another one-trick pony - almost 100% dependency on oil export. It appears oil price of under $60 is not good for it either.

Given the long-term supply constraints, it's not clear how much longer oil will remain below $60 (it's at $60.50/bbl as I type). If there's any hint of a recovery (with the attendant increase in demand), oil prices will once again spike.

world crude oil production (May, 2009) (http://www.theoildrum.com/node/5395)

(http://www.theoildrum.com/files/ccst20090515.png)
click for larger image (http://www.theoildrum.com/files/ccst20090515.png)

"World oil production peaked in July 2008 at 74.82 million barrels/day (mbd) and now has fallen to about 71 mbd. It is expected that oil production will decline slowly to about December 2010 as OPEC production increases while non-OPEC production decreases. After 2010 the resulting annual production decline rate increases to 3.4% as OPEC production is unable to offset cumulative non-OPEC declines. The forecast from the IEA WEO 2008 is also shown for comparison." (http://www.theoildrum.com/node/5395)

(http://www.theoildrum.com/files/cclt20090516.png)
Click for larger image (http://www.theoildrum.com/files/cclt20090516.png)

"As oil production declines, a possible solution is to secure long term oil supply contracts ahead of the next oil price shock (which China has doing). ... As oil remains critical for economic activity there is a high probability that some countries will act more aggressively in securing oil supplies, even to the extent of oil resource wars. In mid May 2009, Russia raised the prospect of war to enforce its claims on Arctic oil and gas riches." (http://www.theoildrum.com/node/5395)

No problems. I already own a good amount of ExxonMobil and ConocoPhillips shares and unfortunately missed BP when it hit $35/share.

QuoteSaudi's warn of huge Oil price spike beyond $150/bbl -- (http://uk.reuters.com/article/businessNews/idUKTRE54O2LC20090525?sp=true)"we could see within two-to-three years another price spike similar to or worse than what we witnessed in 2008."

Bloomberg: Oil rises above $63/bbl to 6-month high on Saudi Minister's comments (http://www.bloomberg.com/apps/news?pid=20601087&sid=aZGSeUKKYblo&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 27, 2009, 06:44:23 AM

Washington Post: Amid Obama's soaring deficits, a US national sales tax (VAT) is gaining support -- Sen. Kent Conrad (D-N.D.) says: "There is a growing awareness of the need for fundamental tax reform; ... VAT and a high-end income tax have got to be on the table." (http://www.washingtonpost.com/wp-dyn/content/article/2009/05/26/AR2009052602909_pf.html)

Title: Re: Meltdown
Post by: DavidRoss on May 27, 2009, 07:24:56 AM

Quote from: Dm on May 27, 2009, 06:44:23 AM
Washington Post: Amid Obama's soaring deficits, a US national sales tax (VAT) is gaining support -- Sen. Kent Conrad (D-N.D.) says: "There is a growing awareness of the need for fundamental tax reform; ... VAT and a high-end income tax have got to be on the table." (http://www.washingtonpost.com/wp-dyn/content/article/2009/05/26/AR2009052602909_pf.html)

We already have a VAT in the form of federal excise taxes. Obama & his fellow Democratic Party Leaders, with the fawning support of their ignorant rank & file, seem determined to kill and eat the goose who lays golden eggs. Who will pay the taxes they impose when they have destroyed our nation's economic base by crushing it under unsustainable burdens? Or--since the promoters of these policies are themselves rich and use their power in elected office to make themselves richer at public expense--do they even care, as long as they and theirs are well-provided for?

Title: Re: Meltdown
Post by: BachQ on May 27, 2009, 11:49:17 AM

Quote from: Coopmv on May 26, 2009, 04:18:58 PM
It will take a miracle for GM to avert bankruptcy filing ...

Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601087&sid=a4k25ShgsIBE&refer=home) GM Bankruptcy Is Considered `Inevitable' as Bondholders Reject Swap Offer

... and, in other news ...

Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601087&sid=aFHP2y.nOgJo&refer=home) "Problem banks" rise 21% to 15-yr record. "The FDIC classified 305 banks as "problem" and their total assets rose 38 percent to $220 billion, the highest since 1993, the agency said without identifying any lender. The FDIC said its insurance fund slumped 25 percent to the lowest level in 15 years. "

MSNBC: (http://www.msnbc.msn.com/id/30855847/from/ET/?ref=patrick.net)Budget crises swamp state after state (California's situation is worst, but nearly every state fighting tide of red ink)

USA Today: (http://www.usatoday.com/money/perfi/taxes/2009-05-26-irs-tax-revenue-down_N.htm) IRS tax revenue plunged a "staggering" 34% in April vs. a year ago — the biggest April drop since 1981

Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601087&sid=a45Qh5jy68zU&refer=home)Amid a saturated oversupply, the Yield on 10-year treasuries rose eight basis points to 3.64%. Ten-year Treasury fell the most last week since June 2008 as investors speculated a record supply of Treasuries to pay for a mounting budget deficit may jeopardize the U.S.'s AAA credit rating.

Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601087&sid=aw90LMfkBOeU&refer=home) Mortgage-Bond Yields Soar, Jeopardizing Fed's Housing Effort

MarketWatch: (http://www.marketwatch.com/story/jp-morgan-sees-credit-card-losses-near-9) JP Morgan sees credit card losses @ 9%; 18%-24% for WaMu.

Marc Faber: (http://www.bloomberg.com/apps/news?pid=20601087&sid=acRDinBK0db0&refer=home) US economy to enter hyperinflation

Title: Re: Meltdown
Post by: Coopmv on May 27, 2009, 05:13:36 PM

Quote from: DavidRoss on May 27, 2009, 07:24:56 AM
We already have a VAT in the form of federal excise taxes. Obama & his fellow Democratic Party Leaders, with the fawning support of their ignorant rank & file, seem determined to kill and eat the goose who lays golden eggs. Who will pay the taxes they impose when they have destroyed our nation's economic base by crushing it under unsustainable burdens? Or--since the promoters of these policies are themselves rich and use their power in elected office to make themselves richer at public expense--do they even care, as long as they and theirs are well-provided for?

One knotty issue is how the fed will do the revenue sharing with the states once a national VAT has been enacted. I cannot imagaine sales tax at the state level can continue to exist once the national VAT kicks in ...

Title: Re: Meltdown
Post by: BachQ on May 28, 2009, 07:36:28 AM

Bloomberg: 1st Qtr 2009 mortgage delinquencies in US jumped to a record 9.12%; US foreclosures rose to record 1.37%; US Mtg rates jumped to 4.91%; new home sales fell 34% from Apr 2008. (http://www.bloomberg.com/apps/news?pid=20601087&sid=anKvgNsd6mO8&refer=home)

Title: Re: Meltdown
Post by: BachQ on May 28, 2009, 07:38:02 AM

CHART OF THE DAY: The Stunning Jobs Collapse

(http://static.10gen.com/www.businessinsider.com/~~/f?id=4a1d8bd814b9b9ef009b5c2d)

"As today's chart shows, the severity of the jobs collapse blows away what we've seen in the recessions of the past 40 years." (http://www.businessinsider.com/chart-of-the-day-decline-from-peak-employment-2009-5)

Title: Re: Meltdown
Post by: Lilas Pastia on May 28, 2009, 07:11:23 PM

Quote from: DavidRoss on May 27, 2009, 07:24:56 AM
We already have a VAT in the form of federal excise taxes. Obama & his fellow Democratic Party Leaders, with the fawning support of their ignorant rank & file, seem determined to kill and eat the goose who lays golden eggs. Who will pay the taxes they impose when they have destroyed our nation's economic base by crushing it under unsustainable burdens? Or--since the promoters of these policies are themselves rich and use their power in elected office to make themselves richer at public expense--do they even care, as long as they and theirs are well-provided for?

The image of the golden goose is simplistic. It lays golden eggs when the country's economy is expanding. An excise tax is a tax on domestically produced goods. The goose had already started losing weigth and laying smaller eggs when Obama was elected (read: recession had been underway for a year and getting worse at an alarming pace).

The unsustainable burden is that imposed on the capitalist system by dogmatic free traders. They allowed it to be overtaken by rampant greed and vanity, themselves being the predictable result of deregulation. They left the house in ruins after partying non stop for years. What are the cleaners to do? Clean up the mess with a box of kleenex and a bottle of windex? Bring in Ty Pennington, I say.

Title: Re: Meltdown
Post by: Coopmv on May 28, 2009, 07:14:55 PM

Quote from: Lilas Pastia on May 28, 2009, 07:11:23 PM
The image of the golden goose is simplistic. It lays golden eggs when the country's economy is expanding. An excise tax is a tax on domestically produced goods. The goose had already started losing weigth and laying smaller eggs when Obama was elected (read: recession had been underway for a year and getting worse at an alarming pace).

The unsustainable burden is that imposed on the capitalist system by dogmatic free traders. They allowed it to be overtaken by rampant greed and vanity, themselves being the predictable result of deregulation. They left the house in ruins after partying non stop for years. What are the cleaners to do? Clean up the mess with a box of kleenex and a bottle of windex? Bring in Ty Pennington, I say.

Some mainstream economists like Paul Samuelson have recently started to question if they have erred in pushing free trade after all.

Title: Re: Meltdown
Post by: BachQ on May 29, 2009, 07:10:45 AM

Houston Chronicle: (http://www.chron.com/disp/story.mpl/headline/biz/6446586.html)Oil races past $66/bbl, leaping towards the biggest monthly gain since 1999, while OPEC ministers expect the rally to continue through 2010 ! ! !

(http://www.filmreference.com/images/sjff_01_img0214.jpg)

Title: Re: Meltdown
Post by: BachQ on May 29, 2009, 02:18:06 PM

San Francisco Chronicle: -- (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/28/MN4417SV8H.DTL) Facing a staggering $24.3 billion deficit, Schwarzenegger slashes CA employees' pay by an additional 5%, for a grand total of almost 15%.

San Francisco Chronicle: -- (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/28/MNLE17S12M.DTL) Schwarzenegger plans to close 80% (223 out of 279) of CA's state parks.

Title: Re: Meltdown
Post by: BachQ on May 29, 2009, 02:19:48 PM

Quote from: Coopmv on May 28, 2009, 07:14:55 PM
Some mainstream economists like Paul Samuelson have recently started to question if they have erred in pushing free trade after all.

Coop, could you elaborate? What do you propose?

Title: Re: Meltdown
Post by: Coopmv on May 29, 2009, 05:15:23 PM

Quote from: Dm on May 29, 2009, 07:10:45 AM
Houston Chronicle: (http://www.chron.com/disp/story.mpl/headline/biz/6446586.html)Oil races past $66/bbl, leaping towards the biggest monthly gain since 1999, while OPEC ministers expect the rally to continue through 2010 ! ! !

(http://www.filmreference.com/images/sjff_01_img0214.jpg)

The Arabs have never been known to be too bright when it comes to oil pricing. Rapidly rising crude prices can easily lead to a double dips in a number of major economies, then crude will crash again ... ???

Title: Re: Meltdown
Post by: Coopmv on May 29, 2009, 06:01:37 PM

Quote from: Dm on May 29, 2009, 02:19:48 PM
Coop, could you elaborate? What do you propose?

Mike P. McKeever asserts that balanced trade is better than free trade. The argument really makes a lot of sense ...

read link (http://www.mkeever.com/essay.html)

Title: Re: Meltdown
Post by: Coopmv on May 29, 2009, 06:03:25 PM

Quote from: Dm on May 29, 2009, 02:18:06 PM
San Francisco Chronicle: -- (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/28/MN4417SV8H.DTL) Facing a staggering $24.3 billion deficit, Schwarzenegger slashes CA employees' pay by an additional 5%, for a grand total of almost 15%.

San Francisco Chronicle: -- (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/28/MNLE17S12M.DTL) Schwarzenegger plans to close 80% (223 out of 279) of CA's state parks.

CA was the epicenter of the subprime mortgage-driven housing bubble and is clearly paying a very steep price for it ...

Title: Re: Meltdown
Post by: Lilas Pastia on May 29, 2009, 08:18:24 PM

California is a likely candidate for State bankruptcy. It would take years for the financial system to absorb the losses. The darwinian outcome would be a most unusual by-product of the ultra-free-trade collapse.

Title: Re: Meltdown
Post by: Coopmv on May 29, 2009, 08:29:47 PM

Quote from: Lilas Pastia on May 29, 2009, 08:18:24 PM
California is a likely candidate for State bankruptcy. It would take years for the financial system to absorb the losses. The darwinian outcome would be a most unusual by-product of the ultra-free-trade collapse.

CA is also the world 8th largest economy. The state is dominated by Democrats who actually want Schwarzenegger to fail. Unfortunately, I do not see what they have to gain to see Schwarzenegger go down after Gray Davis has already failed miserably. CA is simply not governable. If big tech companies such as INTEL and ORACLE decide to bolt ...

Title: Re: Meltdown
Post by: Coopmv on May 29, 2009, 08:41:10 PM

Quote from: Lilas Pastia on May 28, 2009, 07:11:23 PM
The image of the golden goose is simplistic. It lays golden eggs when the country's economy is expanding. An excise tax is a tax on domestically produced goods. The goose had already started losing weigth and laying smaller eggs when Obama was elected (read: recession had been underway for a year and getting worse at an alarming pace).

The unsustainable burden is that imposed on the capitalist system by dogmatic free traders. They allowed it to be overtaken by rampant greed and vanity, themselves being the predictable result of deregulation. They left the house in ruins after partying non stop for years. What are the cleaners to do? Clean up the mess with a box of kleenex and a bottle of windex? Bring in Ty Pennington, I say.

In all honesty, I see free trade as more of a massive wealth re-distribution between nations, say from the US to China. That notion of an expanding pie is a mirage, period. There is no doubt most middle-class Americans will agree to this assessment.

Title: Re: Meltdown
Post by: Florestan on May 30, 2009, 04:58:35 AM

Quote from: Lilas Pastia on May 28, 2009, 07:11:23 PM
They allowed it to be overtaken by rampant greed and vanity, themselves being the predictable result of deregulation.

Greed and vanity are not the result of deregulation. They are universal human flaws that will always be found everywhere, even in the most regulated economy. As long as humans will last, greed and vanity will last as well.:)

Title: Re: Meltdown
Post by: Coopmv on May 30, 2009, 05:03:31 AM

Quote from: Florestan on May 30, 2009, 04:58:35 AM
Greed and vanity are not the result of deregulation. They are universal human flaws that will always be found everywhere, even in the most regulated economy. As long as humans will last, greed and vanity will last as well.:)

No doubt. In countries that are heavily regulated and practice comand & control such as the former eastern bloc and Communist China, only the politically well-connected people can engage themselves in such "activities".

Title: Re: Meltdown
Post by: Florestan on May 30, 2009, 05:09:45 AM

Quote from: Coopmv on May 30, 2009, 05:03:31 AM
No doubt. In countries that are heavily regulated and practice comand & control such as the former eastern bloc and Communist China, only the politically well-connected people can engage themselves in such "activities".

Exactly. And, as a citizen of a former Communist country, I can assure you that their greed and vanity was at least on a par with the greed and vanity of the most ferocious capitalist.

Title: Re: Meltdown
Post by: Coopmv on May 30, 2009, 05:20:13 AM

Quote from: Florestan on May 30, 2009, 05:09:45 AM
Exactly. And, as a citizen of a former Communist country, I can assure you that their greed and vanity was at least on a par with the greed and vanity of the most ferocious capitalist.

Exactly, if the firing squads at these countries could not stamp out greed and corruption, the capitalist west has even smaller chance of success since most are more concerned with the rights of these white-collar criminals than their victims. Look no further than Bernie Madoff ...

Title: Re: Meltdown
Post by: Coopmv on May 30, 2009, 07:47:24 AM

Quote from: Dm on May 29, 2009, 02:18:06 PM
San Francisco Chronicle: -- (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/28/MN4417SV8H.DTL) Facing a staggering $24.3 billion deficit, Schwarzenegger slashes CA employees' pay by an additional 5%, for a grand total of almost 15%.

San Francisco Chronicle: -- (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/05/28/MNLE17S12M.DTL) Schwarzenegger plans to close 80% (223 out of 279) of CA's state parks.

What a year, with both GM and CA going bankrupt. Where is Speaker Pelosi? Her home state is going down in flame. These CA Democrats are just despicable. They do not have interests of their voters in mind as all they want to do is to take down Schwarzenegger ...

Title: Re: Meltdown
Post by: Florestan on May 30, 2009, 08:25:05 AM

Quote from: Coopmv on May 30, 2009, 05:20:13 AM
Exactly, if the firing squads at these countries could not stamp out greed and corruption, the capitalist west has even smaller chance of success since most are more concerned with the rights of these white-collar criminals than their victims. Look no further than Bernie Madoff ...

All the firing squads of the world, working together under the most strictly regulated, anti-free trade economy will not be able to stamp out greed and corruption, not even in a thousand years. :)

Title: Re: Meltdown
Post by: Coopmv on May 30, 2009, 08:46:23 AM

We Americans have a lot to thank the Clinton and the Bush Admininstrations for selling us down the river over the 16 years when they were in office ... >:(

Geithner wields little leverage in China talks

Geithner meeting with Chinese comes at a vulnerable time for US and global economies

Martin Crutsinger, AP Economics Writer

WASHINGTON (AP) -- Timothy Geithner's first trip to China as treasury secretary comes at a vulnerable time for the Obama administration.

Mired in a brutal recession, the United States needs Beijing to buy more American goods, allow its currency rise and make other moves to narrow an enormous trade gap. The U.S. also needs China's help to confront any military threat from North Korea.

Yet Washington's leverage has waned just as China's power over the U.S. has grown.

China is now America's biggest creditor. As of March, it held $768 billion of Treasury securities -- about 10 percent of publicly traded debt.

The U.S. needs China's money to finance U.S. budget deficits, which are soaring as Washington tries to end the recession and bolster the banking system. The administration estimates the budget deficit will hit $1.84 trillion this year. That's four times last year's deficit.

Geithner, who left Saturday for meetings Monday and Tuesday with Chinese leaders, carried an ambitious U.S. goal of persuading the Chinese government to adopt policies that would transform its nation of savers into spenders.

The current U.S. administration, just like the Clinton and Bush administrations, is convinced that the key to a prosperous global economy rests heavily with China. The U.S. wants Beijing to rely more on domestic spending and less on its exports to power its own economy -- and the world's.

That shift would uncork enormous buying power and help rebalance world trade. It could hasten an end to the global recession and narrow America's huge trade gap because the Chinese would buy more American products.

China would benefit, too.

"Beijing really wants Washington to be successful in bringing the U.S. economy out of this recession as fast as it can because it is critical to Beijing's own economic growth," said Kenneth Lieberthal, a China expert at the Brookings Institution.

For the Chinese, there is growing nervousness about the explosion of U.S. borrowing. Like any bank worried about its loans, the Chinese have fretted over America's budget gap. In March, Premier Wen Jiabao said, "We've lent a huge amount of money to the U.S. Of course, we are concerned about the safety of our assets."

Those comments, plus remarks by the head of China's central bank about whether the world needs a new top reserve currency to replace the U.S. dollar, jolted financial markets.

The administration insists it isn't worried that the mound of debt it's creating will jeopardize America's sterling AAA bond rating. But treasury officials said Geithner still intends to reassure the Chinese.

Geithner plans to stress that the administration sees the $1 trillion-plus deficits for this and next year as temporary. The deficits are necessary to fund a stimulus plan to help lift America out of recession and invigorate a wobbly U.S. banking system, officials say. Once those needs are met, the administration says it will make deficit reduction a priority.

Security tensions in Asia have flared since North Korea's recent nuclear weapons tests and missile firings. Because China is viewed as a critical player in any successful resolution of a North Korea standoff, Geithner is expected to address the topic with Chinese leaders.

In addition to talks with President Hu Jintao and other leaders, Geithner plans a speech Monday at Peking University, where he studied Mandarin Chinese during two summers when he was in college.

Geithner will hold an event at a Ford Foundation program in Beijing to support the study of economics in the U.S. The program was started by his father when the elder Geithner was based in Asia as a foundation official.

That the chief U.S. economic policymaker is going hat-in-hand to the Chinese to explain the soaring deficits shows how much has changed since President George W. Bush's treasury secretary, Henry Paulson, met with the Chinese in 2006.

Paulson managed to arm-twist China into agreeing to a new round of economic talks aimed at prodding Beijing to move faster to let its currency, the yuan, rise in value against the dollar. Doing so would make U.S. exports cheaper for the Chinese to buy.

But this time, Geithner is expected to adopt a softer tone even though some U.S. lawmakers want tough penalties on China and other countries deemed to manipulate currencies to gain trade advantages.

American manufacturers see the undervalued yuan as the major culprit in the trade deficit with the Chinese, which last year hit $266 billion, the highest recorded with one country.

The Chinese agreed in 2005 to begin letting their currency rise against the dollar, and it has risen about 20 percent. But those gains stopped last summer. China had begun to fear that a stronger yuan was reducing its export sales, already hurt by the global downturn.

Though the crisis has given Geithner a weak hand, treasury officials said he will seek to push this bargain:

The U.S. will work to reduce its budget deficits once the crisis ends, urge Americans to save more and shrink the trade deficits. To replace diminished U.S. spending, the Chinese will be asked to step up spending and stop saving so much. The administration says this can be done if Beijing improves pensions and health insurance so Chinese households don't feel pressured to save so much.

Geithner is expected to point out that U.S. consumers already are rebuilding their retirement savings. The Chinese have pledged to redirect their economy to boost domestic growth. But many private economists question how serious China is about it.

Analysts said they expect Geithner and the Chinese to pledge to do all it takes to end the recession. Both sides know any hint of discord between the world's largest and third-largest economies probably will unsettled financial markets.

That's one reason analysts aren't expecting the new administration to press hard on the currency issue. As a candidate, President Barack Obama pledged to crack down on countries seen as cheating on global trade rules and hurting U.S. companies and workers.

Last month, though, the administration chose not to cite China as a currency manipulator. That disappointed U.S. manufacturers and labor unions.

But Frank Vargo, vice president for international affairs at the National Association of Manufacturers, said he understood the change in tone. "They talked a tougher line during the campaign, but the world changed," Vargo said. "It is a much more delicate time now."

Title: Re: Meltdown
Post by: Coopmv on May 30, 2009, 12:00:38 PM

This article brings very sobering thoughts to those who are fans of the Sun Belt. No, thank you, yours truly love the Snow Belt with its four seaons.

Has twilight come to the Sun Belt?
After the crash, has the sun set on America's 'Sun Belt'?
Todd Lewan, AP National Writer

On Saturday May 30, 2009, 1:27 pm EDT

ORLANDO, Fla. (AP) -- We first heard the term decades ago: The "Sun Belt" was just starting a run of phenomenal growth -- and no wonder. It conjured a sunny state of mind as well as a balmy place on the map.

Everybody, it seemed, wanted a spot in the sun.

Industries such as aerospace, defense and oil set up shop across America's southernmost tier, capitalizing on the low involvement of labor unions and the proximity of military bases that paid handsomely, and reliably, for their products and services.

Later, San Jose, Calif., and Austin, Texas, developed into high-tech nerve centers; Houston grew into a hub for the oil industry; Nashville became a mecca for music recording and production; Charlotte, N.C., transformed itself into a center for low-cost banking and finance; and then there were the new Dixie Detroits, places like Canton, Miss., Georgetown, Ky., and Spartanburg, S.C., that began rolling out Titans, Camrys and BMWs.

Meanwhile, other warm-weather havens offered their own variants of the Sun Belt dream -- as Fountains of Youth for 60-and-up duffers, as Magic Kingdoms for fun-seekers, as Cape Canaverals for middle-aged northerners looking to launch their second acts.

Air conditioning, bug spray and drainage canals that transformed marshes into golf-course subdivisions -- these innovations, plus the availability of flat, low-taxed land attracted migrants from Brooklyn and Cleveland, Havana and Mexico City to locales once dismissed as too hot, too swampy, too dry, too backwater-ish.

"We Give Years to Your Life and Life to Your Years!" That was the sort of slogan you'd hear from developers pitching the promise that a new start in the Sun Belt might even, in the best of circumstances, extend one's time on Earth.

In this way, for a generation or more, the Sun Belt thrived like no other region in America -- a growth so steady it felt as though the boom would never end. But now it has, replaced by a bust that has left some swaths of the region suffering as severely as anywhere in the current recession.

What brought the dark clouds to the Sun Belt, and are they here to stay?

Interviews with economists and demographers across the region, and data from The Associated Press Economic Stress Index, a month-by-month analysis of foreclosure, bankruptcy and unemployment rates in more than 3,000 U.S. counties, suggest that the answers are not all encouraging.

Some cities -- Las Vegas, Phoenix, Fort Myers are good examples -- hitched their floats to housing bubbles and got caught up in development that depended largely on, well, development itself, rather than sustainable, scalable, productive industry, economic analysts say.

It's in these places where the economic meltdown "will likely find its fullest bloom," Richard Florida, the urbanist and author, wrote recently in an Atlantic Monthly article titled "How the Crash Will Reshape America."

AP Stress Index figures, which calculate the economic impact of the recession on a scale of 1 to 100, illustrate how the downturn has played out in some of these communities:

--In Maricopa County, home to Phoenix, the Stress Index more than doubled from 5.12 at the beginning of the recession in December 2007 to 12.67 in March 2009, worsened by a foreclosure rate that nearly tripled.

--Mounting foreclosures in Las Vegas' Clark County drove up its Stress Index score from 10.5 at the start of the recession to 19.3 in March 2009.

--In Lee County, home to Fort Myers, unemployment has doubled and foreclosures have soared 75 percent since the recession began, lifting its Stress Index from 10.5 to 19.98.

The boom in parts of the Sun Belt was, Florida wrote in the Atlantic, a "giant Ponzi scheme" -- a growth machine that banked on wishful thinking, on the hope that an unending stream of new arrivals would forever inject their money into construction and real estate.

But as often is the case with such schemes, there comes a day when the engine sputters, gasps, and conks out. A day when the faithful stop turning up.

In the Sun Belt's newer, shallow-rooted communities, the roadkill is most evident: Where once there were "boomburbs," there now stand "ghostdivisions." Where property-flipping was once almost a middle-class sport, joblessness and "For Sale by Owner" signs reign.

The fallout is traceable in other ways, too. Nevada -- the only state with a lower proportion of native residents than Florida -- has seen net migration plunge 61 percent in two years; Arizona, 55 percent.

Were it not for immigrants, many of them from Latin America, and for fertility, the Sunshine State would actually have lost population last year -- an "astounding development in the Florida experience," says Bill Frey, a senior fellow and demographer at the Brookings Institution in Washington, D.C.

He said the end of steady movement of people into the Sun Belt is part of a broader trend of curtailed migration during this downturn. "The merry-go-round has stopped, in terms of people moving from place to place."

Does this mean we've witnessed the Rise and Fall of the Sun Belt? Will those who swept into these Miracle-Gro states get swept out just as quickly, leaving behind a sprawl of hollow houses, cul-de-sac moonscapes and mosquito-infested pools -- the stucco ghettos of the 21st century?

Or will the latest downturn merely force the Sun Belt to reinvent itself again?

The housing bubble in many places revealed an obsolescent model of economic life, in which cheap real estate encouraged low-density sprawl and created a work force "stuck in place, anchored by houses that cannot be profitably sold," Florida wrote in his March article.

These places, he says, include older, factory towns across the northern Rust Belt but also countless communities in the Sun Belt whose prosperity was built on "fictitious wealth."

What to do? Scrap policies that encourage homebuying, he suggests, and give incentives to more mobile renters who can go where the jobs are.

In the digital age, he says, industries will likely cluster in "mega-regions" of multiple cities and their surrounding suburban rings (e.g., the Boston-New York-Washington corridor). These areas will surge, lifted by the brainpower of educated professionals and creative thinkers that turn out "products and services faster than talented people in other places can."

In short: Those that can draw talented, young people with high-quality, higher education will reap the spoils.

There is some evidence to suggest an imbalance in American educational achievement across regions. According to research by two Harvard economists, Edward Glaeser and Christopher Berry, educational attainment is no longer as evenly spread across America as it was in the '70s.

Places such as San Francisco, Boston and Seattle now turn out two to three times the college graduates of, say, Akron or Buffalo. When examining postgraduate achievement, the researchers found even greater disparities.

If locales that boast premium universities will be able to more quickly pick themselves off the mat, a question arises. In the Sun Belt's "sand cities," their expansion now halted, where will the tax money come from to pay for college upgrades?

Parts of Arizona, Nevada and the Los Angeles exurb of Riverside overbuilt and overstretched, said Anthony Sanders, a professor of finance and economics at Arizona State University.

Like Looney Toons characters who, suspended in mid-air, look down to behold they've run off a cliff, officials are scrambling to reverse course -- either by scrapping government services they'd promised or, at the very least, by hiking taxes to pay for services created in expectation of bigger suburbs, exurbs.

Phoenix is in this fix. Shocked by a 33 percent plunge in home values between October 2007 and October 2008 alone, the city is running a $200 million budget deficit, a shortfall that's only expected to grow. (It has petitioned the federal government for funds.)

California has an even wider hole in its battered canoe.

That state "went on a spending spree that was incredible," said Sanders. Now, at a time when many resident retirees are in no mood, or shape, for tax increases, "they're having to raise taxes or cut back services, both of which are making moving to California a lot less desirable than it has been in previous decades."

Other Sun Belt states are making similar "mistakes," Sanders said, adding: "Unless we lower the tax burden, making it simpler for businesses to do more operations, and freeing up the ability to attract workers, the economy here is not going to come back."

The challenges don't end there.

Even before the Crash of '08, the Sun Belt was being buffeted by outmigration of factory jobs abroad. In the Carolinas, for example, industries that linked up the economy, society and culture for more than a century -- furniture making, tobacco and textiles -- had been gutted by a decade of decline.

And although the overall expansion of the Sun Belt's economy has been dramatic, the distribution of the region's prosperity has been uneven; of the 25 metropolitan areas with the lowest per capita income in 1990, 23 were in the Sun Belt.

That has to change, said Warren Brown, a demographer at the University of Georgia, although he noted that the Sun Belt's unbridled growth in the '80s and '90s was "unsustainable, bound to cool off," and not just because of bursting housing or migration bubbles.

The limits of natural resources were poised to put the brakes on development in the Land of Sunny Dreams anyway, he said. Two biggies: oil and water.

"Long before we run out of land, we'll be running out of water," he said. "Water is a major issue right now."

Doomsaying pundits have played the Sun Belt dirge before.

In 1981, for example, Time magazine declared Florida, a "Paradise Lost." The state then embarked on an epic boom, in which the Miami-Fort Lauderdale-West Palm Beach corridor ballooned into the seventh-largest metro area in America.

Granted, today's news from the Sunshine State is hardly cheery: It ranks near the top in foreclosures and near the bottom in high-school graduation rates. There's a water crisis, an insurance crisis, a budget crisis.

So why do some experts caution that talk of Florida's demise -- and the Sun Belt's -- is exaggerated?

Among other things, Frey, the Brookings demographer, notes that outmigration from metro Miami actually fell last year, and in years to come "we're going to have large numbers of immigrants in the United States who are going to help us in all kinds of ways," he says.

Stan Smith, a professor of economics and director of the Bureau of Economic and Business Research at the University of Florida, says tourism, the "momentum" of decades of population growth, and already extensive networks of personal connections will again draw more migrants to Florida.

Frozen credit won't last, he says. Real estate price declines -- as much as 70 percent in some Sun Belt counties -- will encourage buyers. And with home heating costs in the "Frost Belt" only expected to rise, Smith says, the attraction of warm weather to retiring Baby Boomers can't be overestimated.

Florida is one of only nine states without an income tax. Couple that with the fact that its taxes on corporations and financial transactions have many exemptions, he says, and "the effects of the positive factors will continue to outweigh the negative."

Recovery will take time, though, and few economists see any significant growth in the Sun Belt before 2010. Steve Malanga, a senior fellow at the Manhattan Institute in New York City, agrees that states that have piled up surplus housing "are not going to solve it in this budget cycle or the next budget cycle. It's going to be with them for five, six, seven years, no doubt about it."

And yet, to say all areas across the Sun Belt are in for long-term decline is simplistic, he says. Scanning the most recent employment maps put out by the Bureau of Labor Statistics reveals "a 'belt' in the middle of the country -- Texas is part of it -- that is doing quite well." (The AP Stress Map backs up that finding, revealing a swath of comparatively unscathed counties starting in North Dakota, stretching through South Dakota, Nebraska and Kansas and ending in Oklahoma and Texas.)

Out of the nation's 100 fastest-growing counties, the majority were in Texas (19), Georgia (14), North Carolina (11) or Utah (nine), according to U.S. Census figures last year. Raleigh-Cary, N.C., and Austin-Round Rock, Texas, were the nation's fastest-growing metro areas, registering growth rates of 4.3 percent and 3.8 percent, respectively. Both high-tech centers, the two metros are also sites of major college campuses that helped cushion them.

Dallas-Fort Worth and Houston registered the biggest numerical gains, the census figures show. Phoenix and Atlanta ranked third and fourth in growth, respectively, followed by Los Angeles, despite the housing slump.

"Obviously, the best situation is a state that hasn't had a residential meltdown, still has a low-cost advantage, and has a weather advantage," Malanga says. High-tax states, such as California, are going to take longer to rebound.

And yet, Sun Belt states will have to offer more than tax incentives to reel in companies in the new, global economy, says Keith Schwer, executive director of the Center for Business and Economic Research at the University of Nevada.

Quality health care, quality recreation, quality education -- companies and individuals consider the caliber of amenities before relocating. Cosmetic fixes don't help, he says. "You can't hide your warts."

Does all of this mean the Sun Belt will have to reinvent itself to grow again?

Rethink may be a better term.

As an example, Caron St. John, director of the Spiro Institute for Entrepreneurship at Clemson University in South Carolina, says Sun Belt states now rationing funds ought to consider returning to "First Principles" -- that is, channeling what little money they have toward elementary and high schools rather than higher education.

"Elementary and high school children -- we can't scar their lives because of a budget crisis. That has to be the first priority."

The question is whether the Sun Belt will show the rest of the nation how to retool schools, save water and energy, and better plan its suburbs and exurbs in an era of less.

"By necessity, we're already being forced to address these issues," says Schwer, of the University of Nevada. "This crisis is an opportunity, more than anything else, to reset things, to put some balance back into our lives."

Title: Re: Meltdown
Post by: BachQ on May 31, 2009, 05:06:32 AM

US national debt soared to $546,668 per household (http://www.usatoday.com/money/economy/2009-05-28-debt_N.htm) in 2008, a 12% spike in just one year. The US govt assumed $6.8 trillion in new debt last year, pushing its total debt to a record $63.8 trillion.

USA Today link (http://www.usatoday.com/money/economy/2009-05-28-debt_N.htm)

One wonders how much this will increase under Obama ... $750,000/household by 2011? When will the American government or the American people open their eyes to this?

Title: Re: Meltdown
Post by: BachQ on May 31, 2009, 05:15:38 AM

Quote from: Coopmv on May 29, 2009, 06:01:37 PM
Mike P. McKeever asserts that balanced trade is better than free trade. The argument really makes a lot of sense ...

read link (http://www.mkeever.com/essay.html)

Coop, good summary. By forbidding an excess of imports, the home nation ensures that productive capital and jobs will be preserved and bolstered within the home country, thereby encouraging the development of internal productive capacities, manufacturing, R & D, employment, agriculture, etc.

One of the key elements of any new paradigm must be to demonstrate how the consumer benefits:

Quote ... Balanced trade requires that a country import as much as it exports; it allows for and encourages the maximum amount of international trade and so it benefits both consumers and multinational companies. Consumers benefit from trade and from an increase of domestic jobs, if the economy was in a trade deficit before reducing imports. Consumers benefit even though they may pay higher prices than world pries for any particular good, their incomes are higher as a result of the higher level of economic activity - high enough to offset slightly higher prices. Consumers in countries with a surplus of exports benefit from the increased imports available to buy.

However, implementing this policy for the US would be a daunting (impossible) task. Americans have grown too accustomed to purchasing the bulk of their goods from Asia (China, Japan, India ...), and the productive capacities and technologies for manufacturing these goods have shifted from the US to Asia. When is the last time the US has manufactured a TV or DVD player? Moreover, because the US imports 25% of the world's oil, when the price of oil again spikes, the US trade imbalance will once again swell. So somehow the US must wean itself of its dependence upon foreign oil.

Nevertheless, even if the US cannot adopt balanced trade wholesale, it can take incremental steps toward ultimately reaching that goal. And I think it should ... and fast. US unemployment will likely exceed 9% in May, (http://www.bloomberg.com/apps/news?pid=20601087&sid=aSc829RcWzSc&refer=home) and this will begin to have serious social consequences that will erode the very fabric of society. Moreover, since many Asian countries have mercantilist economies (rather than free trade economies), the US will disproportionately reward these non-free trade economies by blindly following unrestrained free trade.

How bad will things need to get in the US (and Europe) before the wisdom of balanced trade becomes obvious and inevitable?

Title: Re: Meltdown
Post by: BachQ on May 31, 2009, 05:17:56 AM

NYT: -- (http://www.nytimes.com/2009/05/30/business/economy/30charts.html?_r=1&ref=business) Distressed bank loans soar to a record high of 7.75% (up from 4.1% a year earlier). "The quality of loans is deteriorating at the fastest pace ever ... [and] the percentage that are at least 90 days overdue, or on which the bank has stopped accruing interest or written off, is also higher than at any time [on record]."

Title: Re: Meltdown
Post by: BachQ on May 31, 2009, 05:21:23 AM

Diminishing oil field discoveries:
(http://www.theoildrum.com/files/May09Fig.png)

(http://www.theoildrum.com/files/LHdiscoveries200810_0.gif)

... I don't see a problem ...

Title: Re: Meltdown
Post by: Coopmv on May 31, 2009, 05:43:22 AM

Quote from: Dm on May 31, 2009, 05:15:38 AM

One of the key elements of any new paradigm must be to demonstrate how the consumer benefits:

However, implementing this policy for the US would be a daunting (impossible) task. Americans have grown too accustomed to purchasing the bulk of their goods from Asia (China, Japan, India ...), and the productive capacities and technologies for manufacturing these goods have shifted from the US to Asia. When is the last time the US has manufactured a TV or DVD player? Moreover, because the US imports 25% of the world's oil, when the price of oil again spikes, the US trade imbalance will once again swell. So somehow the US must wean itself of its dependence upon foreign oil.

Nevertheless, even if the US cannot adopt balanced trade wholesale, it can take incremental steps toward ultimately reaching that goal. And I think it should ... and fast. US unemployment will likely exceed 9% in May, (http://www.bloomberg.com/apps/news?pid=20601087&sid=aSc829RcWzSc&refer=home) and this will begin to have serious social consequences that will erode the very fabric of society. Moreover, since many Asian countries have mercantilist economies (rather than free trade economies), the US will disproportionately reward these non-free trade economies by blindly following unrestrained free trade.

How bad will things need to get in the US (and Europe) before the wisdom of balanced trade becomes obvious and inevitable?

The problem is the Anglo-Saxons business model is broken - the US and UK companies have taken the lead to outsource jobs to countries such as China and India with the implicit blessings of their governments. Lo and behold, their Japanese and continental European competitors have no choice but to follow, which has led to an avalanche of job losses in the western industrialized world. Nothing is off limits to this outsourcing wave. At some point, even the US Army joined the outsourcing parade by ordering berets from China until the US Congress found out and shot the deal down. Some sensitive ballistic missile technologies have in fact been transferred to China as the Clinton Administration allowed some subsidiary of GM that made those products to be taken over by some Chinese company (probably a front for the People's Liberation Army) and China now has ICBM that can reach the US west coast and probably further. The French, as usual have marched to their own drumbeat and that is, no sensitive or core technologies can be outsourced. The French policies for outsourcing are definitely a lot smarter. The decision makers in the US bought the argument that manufacturing does not matter as service jobs pay better. The argument is bunk since the US itself got to where it is through manufacturing. Moreover, only some service jobs pay well. That is if one is a physician or lawyer or a stock broker or an investment banker. But then 12MM jobs in the fast food industry are service jobs too and are those jobs well-paid? It makes my blood boil to see how foolish and myopic these policy makers have been. It will take a catastrophe for them to change their way ...

Title: Re: Meltdown
Post by: Coopmv on May 31, 2009, 05:46:02 AM

Quote from: Dm on May 31, 2009, 05:17:56 AM
NYT: -- (http://www.nytimes.com/2009/05/30/business/economy/30charts.html?_r=1&ref=business) Distressed bank loans soar to a record high of 7.75% (up from 4.1% a year earlier). "The quality of loans is deteriorating at the fastest pace ever ... [and] the percentage that are at least 90 days overdue, or on which the bank has stopped accruing interest or written off, is also higher than at any time [on record]."

Yeah, now the commericial real estate and credit card meltdowns are happening due to the recession. There should be no bailout for the commercial real estate developers such as Trump. Let them auction off those skyscrapers and luxury condo buildings for $100 a piece ...

Title: Re: Meltdown
Post by: Coopmv on May 31, 2009, 10:55:21 AM

There are supposed to be some 3000+ spies from China scattered across the US in various government and private-sector labs, which also include many universities, ready and willing to pilfer all kinds of technologies, from DNA research to new supercomputer designs. The US has been blind to this for the last twenty years ...

First economic espionage trial set in Calif.

First economic espionage trial set in California for Chinese-born engineer Dongfan Chung

Gillian Flaccus, Associated Press Writer

On Sunday May 31, 2009, 1:24 pm EDT

SANTA ANA, Calif. (AP) -- Dongfan "Greg" Chung developed a reputation as an innovator during his three decades as an engineer for Boeing Co. and Rockwell International.

Federal prosecutors say he was also a hardworking spy.

On Tuesday, Chung is scheduled to become the first person to stand trial under the Economic Espionage Act, which was passed more than a decade ago.

Prosecutors say the Chinese-born Chung, 73, stole hundreds of thousands of pages of highly sensitive documents on the U.S. space shuttle, Delta IV rockets and the C-17 military troop transport, then relayed the secrets to contacts in China.

He is free on $250,000 bail after pleading not guilty to eight counts of economic espionage, three counts of lying to a federal agent and one count each of conspiracy, acting as a foreign agent and obstruction of justice.

Prosecutors filed a motion late last week asking the judge to drop two economic espionage charges related to the C-17 transport plane and two counts of lying to a federal agent.

U.S. District Judge Cormac J. Carney, who will hear the case in a non-jury trial, has yet to rule on the request.

Prosecutors declined to comment about the upcoming trial. Chung's defense lawyers did not return calls or e-mails seeking comment.

Experts in trade secrets litigation and U.S.-China relations who have followed the case say the scope of the alleged spy work since the late 1970s likely led the government to prosecute Chung under the tougher statute to send a message to other spies and to China.

Richard Fisher, a senior fellow with the Virginia-based nonpartisan International Assessment and Strategy Center, said Chung's expertise and long tenure at Boeing would make him particularly dangerous.

"This man had a deep breadth of experience in some of the most classified, high-tech, cutting-edge American aerospace programs you can imagine," Fisher said.

Six other cases have been charged under the Economic Espionage Act since it passed in 1996, and all have settled before trial. Another case, involving the alleged export of sensitive computer chips to China, is scheduled for trial June 17 in U.S. District Court in San Jose.

The legislation was crafted to address what law enforcement believed were an increasing number of foreign countries trying to steal U.S. intellectual property, both military and commercial.

Edward J. Appel, a former FBI agent and former director of counterintelligence programs for the National Security Council, said the alleged activities by Chung could be terribly damaging for the U.S. and for Boeing.

"Since about 1990, we've been engaged in a huge economic war (with China). We've gotten hurt, we've really gotten beat up," said Appel, now chief executive of a private intelligence company called iNameCheck LLC.

"Not all countries play this intellectual economic game the same way ... and it's very easy to steal information from a company if you are a trusted insider," he added.

Appel worked to pass the counterespionage legislation in the 1990s.

Boeing spokesman Daniel Beck declined to comment on the case, except to say the company had cooperated with the investigation.

Court papers filed by Chung's defense lawyers suggest they might seek to prove the information he is accused of taking did not qualify as trade secrets or that he did not know it was secret.

The papers also indicate his attorneys might argue that Boeing did not do enough to protect the information.

Chung worked for Rockwell International until it was bought by Boeing in 1996 and remained with the aerospace giant until he was laid off in 2002. He was brought back as a consultant on stress analysis after the Columbia space shuttle disaster in 2003 and was fired when the FBI began its probe in 2006.

The government believes Chung began spying for the Chinese in the late 1970s, just a few years after he became a U.S. citizen and was hired by Rockwell.

In a letter cited in court documents, Chung allegedly explains to a Chinese contact that he sent three sets of volumes dealing with flight stress analysis to China via sea freight and discusses what prosecutors say is his motive.

"Having been a Chinese compatriot for over thirty years and being proud of the achievements by the people's efforts for the motherland, I am regretful for not contributing anything," according to the letter to the contact at the Harbin Institute of Technology in northern China. "I would like to make an effort to contribute to the Four Modernizations of China."

Prosecutors say they discovered Chung's activities while investigating the case of another suspected Chinese spy, Chi Mak. Searches of Mak's house turned up an address book and a letter containing Chung's name, authorities say.

Mak was convicted in 2007 of conspiracy to export U.S. defense technology to China and sentenced to more than 24 years in prison.

When agents searched Chung's house in the fall of 2006, they discovered more than 225,000 pages of documents on Boeing-developed aerospace and defense technologies, according to trial briefs.

The technologies dealt with a phased-array antenna being developed for radar and communications on the U.S. space shuttle and a $16 million fueling mechanism for the Delta IV booster rocket, used to launch manned space vehicles.

Agents also found documents on the C-17 Globemaster troop transport used by the U.S. Air Force as well as militaries in Britain, Australia and Canada, the documents state.

Title: Re: Meltdown
Post by: BachQ on June 01, 2009, 05:55:36 AM

GM files for bankruptcy (http://www.latimes.com/business/la-fi-gm-bankruptcy2-2009jun02,0,7013631.story)

Title: Re: Meltdown
Post by: BachQ on June 01, 2009, 06:07:23 AM

Coop, as the article mentions, the housing bubble in the Sun Belt (esp. Florida, Arizona, Nevada, and Southern California) was a giant Ponzi scheme.

Quote from: Coopmv on May 30, 2009, 12:00:38 PM
In the Sun Belt's newer, shallow-rooted communities, the roadkill is most evident: Where once there were "boomburbs," there now stand "ghostdivisions." Where property-flipping was once almost a middle-class sport, joblessness and "For Sale by Owner" signs reign.

The fallout is traceable in other ways, too. Nevada -- the only state with a lower proportion of native residents than Florida -- has seen net migration plunge 61 percent in two years; Arizona, 55 percent.

Were it not for immigrants, many of them from Latin America, and for fertility, the Sunshine State would actually have lost population last year -- an "astounding development in the Florida experience," says Bill Frey, a senior fellow and demographer at the Brookings Institution in Washington, D.C.

He said the end of steady movement of people into the Sun Belt is part of a broader trend of curtailed migration during this downturn. "The merry-go-round has stopped, in terms of people moving from place to place."

Does this mean we've witnessed the Rise and Fall of the Sun Belt? Will those who swept into these Miracle-Gro states get swept out just as quickly, leaving behind a sprawl of hollow houses, cul-de-sac moonscapes and mosquito-infested pools -- the stucco ghettos of the 21st century?

Or will the latest downturn merely force the Sun Belt to reinvent itself again?

The housing bubble in many places revealed an obsolescent model of economic life, in which cheap real estate encouraged low-density sprawl and created a work force "stuck in place, anchored by houses that cannot be profitably sold," Florida wrote in his March article.

These places, he says, include older, factory towns across the northern Rust Belt but also countless communities in the Sun Belt whose prosperity was built on "fictitious wealth."

What to do? Scrap policies that encourage homebuying, he suggests, and give incentives to more mobile renters who can go where the jobs are.

In the digital age, he says, industries will likely cluster in "mega-regions" of multiple cities and their surrounding suburban rings (e.g., the Boston-New York-Washington corridor). These areas will surge, lifted by the brainpower of educated professionals and creative thinkers that turn out "products and services faster than talented people in other places can."

In short: Those that can draw talented, young people with high-quality, higher education will reap the spoils.

There is some evidence to suggest an imbalance in American educational achievement across regions. According to research by two Harvard economists, Edward Glaeser and Christopher Berry, educational attainment is no longer as evenly spread across America as it was in the '70s.

Places such as San Francisco, Boston and Seattle now turn out two to three times the college graduates of, say, Akron or Buffalo. When examining postgraduate achievement, the researchers found even greater disparities.

If locales that boast premium universities will be able to more quickly pick themselves off the mat, a question arises. In the Sun Belt's "sand cities," their expansion now halted, where will the tax money come from to pay for college upgrades?

Parts of Arizona, Nevada and the Los Angeles exurb of Riverside overbuilt and overstretched, said Anthony Sanders, a professor of finance and economics at Arizona State University.

Like Looney Toons characters who, suspended in mid-air, look down to behold they've run off a cliff, officials are scrambling to reverse course -- either by scrapping government services they'd promised or, at the very least, by hiking taxes to pay for services created in expectation of bigger suburbs, exurbs.

Phoenix is in this fix. Shocked by a 33 percent plunge in home values between October 2007 and October 2008 alone, the city is running a $200 million budget deficit, a shortfall that's only expected to grow. (It has petitioned the federal government for funds.)

California has an even wider hole in its battered canoe.

That state "went on a spending spree that was incredible," said Sanders. Now, at a time when many resident retirees are in no mood, or shape, for tax increases, "they're having to raise taxes or cut back services, both of which are making moving to California a lot less desirable than it has been in previous decades."

Other Sun Belt states are making similar "mistakes," Sanders said, adding: "Unless we lower the tax burden, making it simpler for businesses to do more operations, and freeing up the ability to attract workers, the economy here is not going to come back."

The challenges don't end there.

Even before the Crash of '08, the Sun Belt was being buffeted by outmigration of factory jobs abroad. In the Carolinas, for example, industries that linked up the economy, society and culture for more than a century -- furniture making, tobacco and textiles -- had been gutted by a decade of decline.

And although the overall expansion of the Sun Belt's economy has been dramatic, the distribution of the region's prosperity has been uneven; of the 25 metropolitan areas with the lowest per capita income in 1990, 23 were in the Sun Belt.

That has to change, said Warren Brown, a demographer at the University of Georgia, although he noted that the Sun Belt's unbridled growth in the '80s and '90s was "unsustainable, bound to cool off," and not just because of bursting housing or migration bubbles.

The limits of natural resources were poised to put the brakes on development in the Land of Sunny Dreams anyway, he said. Two biggies: oil and water.

"Long before we run out of land, we'll be running out of water," he said. "Water is a major issue right now."

Doomsaying pundits have played the Sun Belt dirge before.

In 1981, for example, Time magazine declared Florida, a "Paradise Lost." The state then embarked on an epic boom, in which the Miami-Fort Lauderdale-West Palm Beach corridor ballooned into the seventh-largest metro area in America.

Granted, today's news from the Sunshine State is hardly cheery: It ranks near the top in foreclosures and near the bottom in high-school graduation rates. There's a water crisis, an insurance crisis, a budget crisis.

So why do some experts caution that talk of Florida's demise -- and the Sun Belt's -- is exaggerated?

Among other things, Frey, the Brookings demographer, notes that outmigration from metro Miami actually fell last year, and in years to come "we're going to have large numbers of immigrants in the United States who are going to help us in all kinds of ways," he says.

Stan Smith, a professor of economics and director of the Bureau of Economic and Business Research at the University of Florida, says tourism, the "momentum" of decades of population growth, and already extensive networks of personal connections will again draw more migrants to Florida.

Frozen credit won't last, he says. Real estate price declines -- as much as 70 percent in some Sun Belt counties -- will encourage buyers. And with home heating costs in the "Frost Belt" only expected to rise, Smith says, the attraction of warm weather to retiring Baby Boomers can't be overestimated.

Florida is one of only nine states without an income tax. Couple that with the fact that its taxes on corporations and financial transactions have many exemptions, he says, and "the effects of the positive factors will continue to outweigh the negative."

Recovery will take time, though, and few economists see any significant growth in the Sun Belt before 2010. Steve Malanga, a senior fellow at the Manhattan Institute in New York City, agrees that states that have piled up surplus housing "are not going to solve it in this budget cycle or the next budget cycle. It's going to be with them for five, six, seven years, no doubt about it."

And yet, to say all areas across the Sun Belt are in for long-term decline is simplistic, he says. Scanning the most recent employment maps put out by the Bureau of Labor Statistics reveals "a 'belt' in the middle of the country -- Texas is part of it -- that is doing quite well." (The AP Stress Map backs up that finding, revealing a swath of comparatively unscathed counties starting in North Dakota, stretching through South Dakota, Nebraska and Kansas and ending in Oklahoma and Texas.)

Out of the nation's 100 fastest-growing counties, the majority were in Texas (19), Georgia (14), North Carolina (11) or Utah (nine), according to U.S. Census figures last year. Raleigh-Cary, N.C., and Austin-Round Rock, Texas, were the nation's fastest-growing metro areas, registering growth rates of 4.3 percent and 3.8 percent, respectively. Both high-tech centers, the two metros are also sites of major college campuses that helped cushion them.

Dallas-Fort Worth and Houston registered the biggest numerical gains, the census figures show. Phoenix and Atlanta ranked third and fourth in growth, respectively, followed by Los Angeles, despite the housing slump.

"Obviously, the best situation is a state that hasn't had a residential meltdown, still has a low-cost advantage, and has a weather advantage," Malanga says. High-tax states, such as California, are going to take longer to rebound.

And yet, Sun Belt states will have to offer more than tax incentives to reel in companies in the new, global economy, says Keith Schwer, executive director of the Center for Business and Economic Research at the University of Nevada.

Quality health care, quality recreation, quality education -- companies and individuals consider the caliber of amenities before relocating. Cosmetic fixes don't help, he says. "You can't hide your warts."

Does all of this mean the Sun Belt will have to reinvent itself to grow again?

Rethink may be a better term.

As an example, Caron St. John, director of the Spiro Institute for Entrepreneurship at Clemson University in South Carolina, says Sun Belt states now rationing funds ought to consider returning to "First Principles" -- that is, channeling what little money they have toward elementary and high schools rather than higher education.

"Elementary and high school children -- we can't scar their lives because of a budget crisis. That has to be the first priority."

The question is whether the Sun Belt will show the rest of the nation how to retool schools, save water and energy, and better plan its suburbs and exurbs in an era of less.

"By necessity, we're already being forced to address these issues," says Schwer, of the University of Nevada. "This crisis is an opportunity, more than anything else, to reset things, to put some balance back into our lives."

Lost Vegas (youtube video): (http://www.youtube.com/watch?v=rFTZ3flsipE)

http://www.youtube.com/v/rFTZ3flsipE

Las Vegas Constable: "We used to have people move here by the thousands per month; now, they're moving away by the thousands"

WSJ: Up To 75% Of Modified Mortgages To Re-Default -Fitch (http://online.wsj.com/article/BT-CO-20090526-710374.html)

"The Worst Is Yet to Come": If You're Not Petrified, You're Not Paying Attention
(http://finance.yahoo.com/tech-ticker/article/248398/%22The-Worst-Is-Yet-to-Come%22-If-You%27re-Not-Petrified-You%27re-Not-Paying-Attention?tickers=%94DJI,%94GSPC,DDR,XLF,GM,RWR?sec=topStories&pos=9&asset=&ccode)

Title: Re: Meltdown
Post by: Lethevich on June 01, 2009, 06:48:07 AM

Quote from: Dm on June 01, 2009, 05:55:36 AM
GM files for bankruptcy
(http://www.latimes.com/business/la-fi-gm-bankruptcy2-2009jun02,0,7013631.story)

Man, I read that as GMG for a second ::)

Title: Re: Meltdown
Post by: Dr. Dread on June 01, 2009, 06:50:08 AM

I remember when Dm discussed music. That's how long I've been here.

Title: Re: Meltdown
Post by: BachQ on June 01, 2009, 10:17:04 AM

Quote from: Lethe on June 01, 2009, 06:48:07 AM
Man, I read that as GMG for a second ::)

Actually, Lethe, with all of the salaries, perks, and bonuses being funneled to GMG's moderators, Rob might need a bailout soon ... :D

Quote from: MN Dave on June 01, 2009, 06:50:08 AM
I remember when Dm discussed music. That's how long I've been here.

FYI, among the pieces on today's playlist:

Vaughan Williams: "Doom" from Scott of the Antarctic
Berlioz: "Ride to the Abyss"
Bruckner: "Apocalyptic" Symphony
Messiaen: "Quartet for the End of Time"
Weigl: Symphony no. 5 "Apocalyptic", 4th mvt ("The Four Horsemen")
Lyadov: "From the Apocalypse"

Feel free to suggest additional entries. :D

Title: Re: Meltdown
Post by: BachQ on June 01, 2009, 10:18:07 AM

Jeff Rubin (former chief economist of CIBC World Markets): (http://www.theglobeandmail.com/news/opinions/the-recession-first-there-was-expensive-oil/article1160647/) "... Between 2005 and 2007, soaring oil prices transferred roughly a trillion dollars from consumers' wallets throughout the OECD to OPEC producers. ... The subprime mortgage crisis wasn't the cause of the today's economic crisis. Instead it was a symptom of a much bigger crisis - an energy crisis. If indeed oil, and not subprime mortgages, lies at the heart of our current economic malaise, we may be sicker than we know. ... If the recession is really about triple-digit oil prices, then the recovery is going to be a lot more challenging. No magic tandem of fiscal and monetary policy can boost world oil production, or for that matter alter our seemingly insatiable appetite for the stuff. ..."

Title: Re: Meltdown
Post by: Florestan on June 01, 2009, 10:45:13 AM

Quote from: Dm on June 01, 2009, 10:17:04 AM
Feel free to suggest additional entries. :D

Some Boccherini and a bottle of red wine... otherwise you'll soon be given Prozac and Xanax. ;D

Title: Re: Meltdown
Post by: Coopmv on June 01, 2009, 04:43:02 PM

Quote from: Dm on June 01, 2009, 10:18:07 AM
Jeff Rubin (former chief economist of CIBC World Markets): (http://www.theglobeandmail.com/news/opinions/the-recession-first-there-was-expensive-oil/article1160647/) "... Between 2005 and 2007, soaring oil prices transferred roughly a trillion dollars from consumers' wallets throughout the OECD to OPEC producers. ... The subprime mortgage crisis wasn't the cause of the today's economic crisis. Instead it was a symptom of a much bigger crisis - an energy crisis. If indeed oil, and not subprime mortgages, lies at the heart of our current economic malaise, we may be sicker than we know. ... If the recession is really about triple-digit oil prices, then the recovery is going to be a lot more challenging. No magic tandem of fiscal and monetary policy can boost world oil production, or for that matter alter our seemingly insatiable appetite for the stuff. ..."

World consumers will get no break. Oil may head back toward $200 once the global recession ends. Pick your poison ... :(

Title: Re: Meltdown
Post by: SonicMan46 on June 01, 2009, 04:51:06 PM

Quote from: MN Dave on June 01, 2009, 06:50:08 AM
I remember when Dm discussed music. That's how long I've been here.

Dave - LOL! ;D Those were the days, but Dm came back w/ a 'blow by blow' listening schedule, so still in the game! ;) :D Dave

Title: Re: Meltdown
Post by: Coopmv on June 01, 2009, 04:53:11 PM

Quote from: SonicMan on June 01, 2009, 04:51:06 PM
Dave - LOL! ;D Those were the days, but Dm came back w/ a 'blow by blow' listening schedule, so still in the game! ;) :D Dave

I have yet to see any CD reviews by DM since I joined GMG ... ;D

Title: Re: Meltdown
Post by: Lilas Pastia on June 01, 2009, 06:01:09 PM

Jeff Rubin has long been a fixture of the canadian economic scene. A brilliant mind, he's been right on target a couple of times, way off at others. He was forced to leave CIBC World Markets, as the firm didn't want to be associated with his views as he outlines them in his latest book. Since this article aims at expounding on his book's conclusions, I think associating him with CIBC is dishonest. Think of him as a freelance author and economist. Like thousands of others.

Title: Re: Meltdown
Post by: BachQ on June 02, 2009, 08:51:05 AM

Quote from: Coopmv on May 31, 2009, 05:46:02 AM

Yeah, now the commericial real estate and credit card meltdowns are happening due to the recession. There should be no bailout for the commercial real estate developers such as Trump. Let them auction off those skyscrapers and luxury condo buildings for $100 a piece ...

According to Mike Shedlock (Mish), the bottom of the housing bubble "is still years away although the rate of decline is slowing. ... The effect of household deleveraging on housing, consumption and the stock market is going to be far greater than most realize. This bubble will not be reblown, just as the Nasdaq bubble was not reblown after the tech crash. ... It took a decade to blow the bubble. It is going to take more than a few years to clear it. ..."
(http://globaleconomicanalysis.blogspot.com/2009/05/mortgage-meltdown-more-pain-to-come.html)

Mish also has some scary charts (http://globaleconomicanalysis.blogspot.com/2009/05/mortgage-meltdown-more-pain-to-come.html) on his website.

Title: Re: Meltdown
Post by: BachQ on June 02, 2009, 08:55:32 AM

Quote from: Lilas Pastia on June 01, 2009, 06:01:09 PM
Jeff Rubin has long been a fixture of the canadian economic scene. A brilliant mind, he's been right on target a couple of times, way off at others. He was forced to leave CIBC World Markets, as the firm didn't want to be associated with his views as he outlines them in his latest book. Since this article aims at expounding on his book's conclusions, I think associating him with CIBC is dishonest. Think of him as a freelance author and economist. Like thousands of others.

Having been named Canada's top economist on ten separate occasions, it's interesting that Jeff Rubin now believes that "oil scarcity will change the global economy even more profoundly" (http://www.thestar.com/Business/article/609497) than the global financial meltdown.

Quote from: Florestan on June 01, 2009, 10:45:13 AM
Some Boccherini and a bottle of red wine... otherwise you'll soon be given Prozac and Xanax. ;D

I took your advice and listened to some Boccherini cello music yesterday ... then I shifted gears and listened to these works: :D

Tchaikovsky, Pathétique Symphony (no. 6), Op. 74
http://uk.youtube.com/v/1g16kYMukds

Mahler, Tragic Symphony (no. 6)
http://uk.youtube.com/v/7c5SLbRkTxg&feature=related

Berlioz, Ride Into the Abyss:
http://www.youtube.com/v/gfXKRIR1Syo

Title: Re: Meltdown
Post by: BachQ on June 02, 2009, 08:59:28 AM

Geithner laughed at while speaking before an audience of Chinese students: (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5423650/Geithner-insists-Chinese-dollar-assets-are-safe.html)

Geithner: "Chinese assets are very safe."

Audience: loud laughter

Title: Re: Meltdown
Post by: BachQ on June 02, 2009, 09:02:01 AM

ABC News (tonight on TV :o):"Experts have a stark warning: that unless we change course, the 'perfect storm' of population growth, dwindling resources and climate change has the potential to converge in the next century with catastrophic results." (http://abcnews.go.com/Technology/Earth2100/story?id=7697237&page=1)

Title: Re: Meltdown
Post by: Coopmv on June 02, 2009, 04:41:15 PM

Quote from: Dm on June 02, 2009, 08:59:28 AM
Geithner laughed at while speaking before an audience of Chinese students: (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5423650/Geithner-insists-Chinese-dollar-assets-are-safe.html)

Geithner: "Chinese assets are very safe."

Audience: loud laughter

The Chinese students probably thought, "what a fool?"

Title: Re: Meltdown
Post by: Coopmv on June 02, 2009, 04:42:21 PM

Quote from: Dm on June 02, 2009, 09:02:01 AM
ABC News (tonight on TV :o):"Experts have a stark warning: that unless we change course, the 'perfect storm' of population growth, dwindling resources and climate change has the potential to converge in the next century with catastrophic results."
(http://abcnews.go.com/Technology/Earth2100/story?id=7697237&page=1)

I don't think we even need to wait till the next century.

Title: Re: Meltdown
Post by: Coopmv on June 02, 2009, 04:46:05 PM

Quote from: Dm on June 02, 2009, 08:51:05 AM
According to Mike Shedlock (Mish), the bottom of the housing bubble "is still years away although the rate of decline is slowing. ... The effect of household deleveraging on housing, consumption and the stock market is going to be far greater than most realize. This bubble will not be reblown, just as the Nasdaq bubble was not reblown after the tech crash. ... It took a decade to blow the bubble. It is going to take more than a few years to clear it. ..."
(http://globaleconomicanalysis.blogspot.com/2009/05/mortgage-meltdown-more-pain-to-come.html)

Mish also has some scary charts (http://globaleconomicanalysis.blogspot.com/2009/05/mortgage-meltdown-more-pain-to-come.html) on his website.

Lets see how the credit card earnings for the banks and credit card companies will be like going forward. I should have dumped all my American Express shares a while back but did not. >:(

Title: Re: Meltdown
Post by: Coopmv on June 02, 2009, 05:01:06 PM

A number of American corporate giants such as IBM and GM have been so poorly run. Yet they certainly are great at unloading dogs to the eager and ignorant Chinese who are flush with cash. Where is Lenovo now after it bought the IBM PC business a few years ago with much fanfare? Instead of gaining market shares, it is losing them. Perhaps GM even unloaded Hummer at a great price ... ;D

GM to sell Hummer to Chinese company

GM to sell Hummer to Chinese manufacturer amid efforts to exit bankruptcy quickly

Tom Krisher and Bree Fowler, AP Auto Writers

On Tuesday June 2, 2009, 6:30 pm EDT

DETROIT (AP) -- General Motors Corp. took a key step toward its downsizing on Tuesday, striking a tentative deal to sell its Hummer brand to a Chinese manufacturer, while also revealing that it has potential buyers for its Saturn and Saab brands.

China's Sichuan Tengzhong Heavy Industrial Machinery Co. said Tuesday afternoon that it reached an agreement to acquire the brand from GM for an undisclosed ammount. The Detroit automaker had announced Tuesday morning that it had a memorandum of understanding to sell the brand of rugged SUVs, but it didn't identify the buyer.

Sichuan Tengzhong deals in road construction, plastics, resins and other industrial products, but Hummer would be its first step into the automotive business.

GM said the sale will likely save more than 3,000 U.S. jobs in manufacturing, engineering and at various Hummer dealerships. Tengzhong said it will assume GM's existing agreements with Hummer dealers.

"We will be investing in the Hummer brand and its research and development capabilities, which will allow Hummer to better meet demand for new products such as more fuel-efficient vehicles in the U.S," Chief Executive Yang Yi said in a statement.

As part of the proposed transaction, Hummer will continue to contract vehicle manufacturing and business services from GM during a transitional period. For example, GM's Shreveport, La., assembly plant would continue to contract to assemble the H3 and H3T through at least 2010, GM said. AM General LLC in Mishawaka, Ind., makes the larger H2 under contract for GM.

Hummer will keep its existing management team and remain based in the United States, the companies said. Tengzhong said it expects to expand the brand's dealer network worldwide, including to China.

"GM is close to a sale of its Hummer brand, which is good news for the 3,000 Americans who will be able to keep their jobs, the two American plants that will remain open and the more than 100 Hummer dealers that should be able to stay in business all around the country," White House spokesman Bill Burton said earlier in the day.

On Monday, the Shreveport plant, which has about 800 workers, escaped being among 12 plants that GM said would be shut down by next year. The plant, which employed 3,000 several years ago, also produces Chevrolet and GMC pickups.

Johnny Bell, 59, who has worked at GM for 28 years, said many workers are still concerned about the plant's long-term future.

"Good news is good news, but we want all the news," he said. "We're concerned about what happens after 2010."

Morgan Johnson, head of the United Auto Workers local at the plant, said GM indicated to the union that pickup assembly would continue in Shreveport through 2012.

"We're just happy that the doors are still open considering all the plant closings," said Sharon Brock, 52, who has worked at the sprawling plant for 26 years.

GM also said Tuesday that it has 16 buyers interested in purchasing its Saturn brand, while three parties are interested in the Swedish Saab brand.

Chief Financial Officer Ray Young told reporters and industry analysts on a conference call that GM is continuing to pursue manufacturing agreements with a new Saturn buyer.

GM would like to sell the money-losing Saturn brand's dealership network, contracting with the new buyer to make some of its cars while the buyer gets other vehicles from different manufacturers.

At the same time, bridge loan discussions with the Swedish government are progressing, Young said.

GM, which filed for Chapter 11 bankruptcy protection in New York on Monday, is racing to remake itself as a smaller, leaner automaker. In addition to its plan to sell the Hummer, Saab and Saturn brands, GM will also phase out its Pontiac brand, concentrating on its Chevrolet, Cadillac, Buick and GMC nameplates.

The company hopes to follow the lead of fellow U.S. automaker Chrysler LLC by transforming its most profitable assets into a new company in just 30 days and emerging from bankruptcy protection soon after.

But GM is much larger and complex than its Auburn Hills-based rival and isn't up against Chrysler's tight June 15 deadline to close its deal with Fiat Group SpA.

Sharon Lindstrom, managing director at business consulting firm Protiviti, said the companies pose different challenges. But as with Chrysler, she notes that the Treasury Department made sure many of GM's moving parts were in order ahead of time so a quick bankruptcy reorganization might be possible.

"They had a lot of their ducks in a row because the terms of the government financing forced them to get all the parties to the table in a very, very short period of time," Lindstrom said.

Separately, the German government said Tuesday it paid out the first euro300 million ($425 million) in bridge loans to GM's Adam Opel GmbH division. The loans are part of a deal to shrink GM's stake in Opel and shield it from GM's bankruptcy protection filing in the U.S.

Canadian auto supplier Magna International Inc. and Russian-owned Sberbank will acquire 55 percent of Opel.

A sale of the Hummer brand had been expected. Chief Executive Fritz Henderson had said in April that the automaker was expecting final bids from three potential buyers within the month.

Eric Lane, vice president of Baton Rouge, La.-based Gerry Lane Enterprises, which has four dealerships -- including one offering Hummers -- welcomed the sale.

Lane said a lack of new products and the recession figured into the Hummer equation much more than last year's runup in gasoline prices. "I haven't had a single owner complain about mileage. Nobody buys a Hummer because of the gas. You don't buy a vehicle for $60,000 and worry about the price of gas."

Critics had seized on the rugged but fuel-inefficient Hummer as a symbol of excess as GM's financial troubles grew and gas prices rose. Sales at Hummer, which is known for models with military-vehicle roots, have been in a steep slide since gasoline prices rose to record heights last summer. For the first five months of this year, Hummer sales are down 64 percent.

GM nailed down deals with its union and a majority of its bondholders and arranged the Opel deal in order to appear in court Monday with a near-complete plan to quickly emerge with a chance to become profitable.

The government has said it expects GM to come out of bankruptcy protection within 60 to 90 days. By comparison, the judge overseeing Chrysler's case approved the sale of its assets to a group led by Italy's Fiat in just over a month. Some industry observers think Chrysler could emerge as early as this week.

During Monday's hearing, GM attorney Harvey Miller stressed the magnitude of the case and the importance of moving GM through court oversight as fast as possible. He noted that the automaker only has about $2 billion in cash left.

"If there's going to be a recovery of value, it's absolutely crucial that a sale take place as soon as possible," Miller said in his opening statement.

The automaker wants to sell the bulk of its assets to a new company in which the U.S. government will take a 60 percent ownership stake. The Canadian government would take 12.5 percent of the "New GM," with the United Auto Workers union getting 17.5 percent and unsecured bondholders receiving 10 percent. Existing shareholders are expected to be wiped out.

U.S. Judge Robert Gerber moved swiftly through more than 25 mostly procedural motions during the automaker's first-day Chapter 11 hearing.

Gerber set GM's sale hearing for June 30, putting it on a path similar to that of Chrysler. Objections are due on June 19, with any competing bids required to be submitted by June 22.

Gerber also gave GM immediate access to $15 billion in government financing to get it through the next few weeks, and interim approval for use of a total $33.3 billion in financing, with final approval slated to be ruled on June 25. The funds are contingent on GM's sale being approved by July 10. Gerber also approved motions allowing the company to pay certain prebankruptcy wages, along with supplier and shipping costs.

The sheer size of GM makes it a more complicated case than Chrysler.

GM made twice as many vehicles as Chrysler's 1.5 million last year and employs 235,000 people compared with Chrysler's 54,000. GM also has plants and operations in many more countries, meaning it will likely have to strike separate deals to navigate the bankruptcy laws of those places.

Henderson said GM has learned a few things by watching Chrysler's case.

"Certainly the court showed that it can address 363 (sale) transactions in an expeditious fashion," Henderson said at a news conference Monday. "Particularly in our case with what will be a very large 363 transaction."

GM's filing for Chapter 11 bankruptcy protection is the largest ever for an industrial company. GM, which said it has $172.81 billion in debt and $82.29 billion in assets, had received about $20 billion in low-interest loans before entering bankruptcy protection.

Fowler reported from New York. AP Auto Writer Dan Strumpf in New York and Associated Press writers Holbrook Mohr in Shreveport, La., Alan Sayre in New Orleans, and Joe McDonald in Beijing contributed to this report.

Title: Re: Meltdown
Post by: Coopmv on June 02, 2009, 05:32:02 PM

DM

read this (http://www.thestreet.com/story/10507752/1/insana-dont-misread-the-tea-leaves.html)

Title: Re: Meltdown
Post by: DavidRoss on June 03, 2009, 04:50:08 AM

Quote from: Dm on June 02, 2009, 09:02:01 AM
ABC News (tonight on TV :o):"Experts have a stark warning: that unless we change course, the 'perfect storm' of population growth, dwindling resources and climate change has the potential to converge in the next century with catastrophic results."
(http://abcnews.go.com/Technology/Earth2100/story?id=7697237&page=1)

This is news? And requires expert divination? We understood as much and discussed the issues frequently in high school classes back in the '60s even before Professor Erhlich's The Population Bomb was published. Since that time, when serious efforts were underway toward eco-friendly energy, resource conservation, and achieving zero population growth, almost nothing has changed--except that there are now twice as many people in the world:

(http://www.ecofriendlymag.com/wp-content/plugins/wp-o-matic/cache/95d52_World-Population-Growth-2050.JPG)

Title: Re: Meltdown
Post by: BachQ on June 03, 2009, 04:58:21 AM

New York Times: -- Eurozone jobless rate rises to 9.2% (up from 8.9% in March; 7.3% in 2008). (http://www.nytimes.com/2009/06/03/business/global/03euro.html?_r=1&ref=business)

Title: Re: Meltdown
Post by: BachQ on June 03, 2009, 05:00:09 AM

WSJ: -- States' Budget Woes Are Poised to Worsen -- (http://online.wsj.com/article/SB124398568837379031.html)"This is an awful time for states fiscally, but they're even more worried about 2011, 2012, 2013, 2014."

Title: Re: Meltdown
Post by: BachQ on June 03, 2009, 05:06:29 AM

The Big Collapse Could Be Very Near
(http://www.globalresearch.ca/index.php?context=va&aid=13826)

Quote from: DavidRoss on June 03, 2009, 04:50:08 AM
This is news? And requires expert divination? We understood as much and discussed the issues frequently in high school classes back in the '60s even before Professor Erhlich's The Population Bomb was published. Since that time, when serious efforts were underway toward eco-friendly energy, resource conservation, and achieving zero population growth, almost nothing has changed--except that there are now twice as many people in the world:

(http://www.ecofriendlymag.com/wp-content/plugins/wp-o-matic/cache/95d52_World-Population-Growth-2050.JPG)

Yes, it's very frustrating when a concept SO OBVIOUS (i.e., exponential population growth amid limited resources) eludes SO MANY people for SO LONG. This cluelessness is mind-boggling, really.

Title: Re: Meltdown
Post by: BachQ on June 03, 2009, 05:09:18 AM

Quote from: Coopmv on June 02, 2009, 05:32:02 PM
DM

read this (http://www.thestreet.com/story/10507752/1/insana-dont-misread-the-tea-leaves.html)

Coop, some nuggets of wisdom in that article.

As far as inflation/deflation ===> Should oil prices once again rebound dramatically (which they will), we could have inflation even amid falling home prices, rampant unemployment, and underutilization of global capacity (i.e., we could have "stagflation"). Oil drives everything, and when oil once again spikes, we will eventually experience global systemic inflation (remember when oil-price spikes caused Dow Chemical to raise prices by 20% last May, and then another 25% in July? -- that's a sign of things to come!). Insana recognizes this (indirectly) when he observes that "even with the U.S. running record budget deficits and the dollar dropping, an inflationary spiral would need some other catalyst to gain any meaningful traction."

Title: Re: Meltdown
Post by: BachQ on June 03, 2009, 05:11:56 AM

U.S. business bankruptcies soar 40% in May (http://www.reuters.com/article/ousiv/idUSTRE5516FX20090602)

Title: Re: Meltdown
Post by: DavidRoss on June 03, 2009, 07:53:21 AM

Quote from: Dm on June 03, 2009, 05:06:29 AM
Yes, it's very frustrating when a concept SO OBVIOUS (i.e., exponential population growth amid limited resources) eludes SO MANY people for SO LONG. This cluelessness is mind-boggling, really.

In the land of the blind, the one-eyed man is king--and two-eyed men must learn to laugh amidst their tears.

Title: Re: Meltdown
Post by: snyprrr on June 03, 2009, 11:19:21 AM

That show last night on NBC, "Earth 2100"?

wow, I felt like I was in some Orwellian kindergarten

Seven degrees of seperation: both this show, and robnewman, mentioned Easter Island! Point taken!!!

Of COURSE there will be pockets of affluence... what do you think "they" are doing right now but getting their "lifestyles" bunkers ready, their "strangelove" bunkers with their hormonized blonde virgins! oy oy oy...my fav part of the show was when they went to New York (@2050), and, of course, New York was paradise on earth, the eco-lovers dream.... oh crap, just crap crap crap. Oh yea, and everyone got along...oooooo hoo hoo!!!

I always said, the only reason communism "failed" (yea right) was that they didn't know the mind control power of blue jeans and mtv.

I remember even the late 70s and early 80s there was a romantic notion about the year 1999. Weren't we expecting robots and all kinds of sci fi life? My favorite game was trying to predict which sci fi movie ABOUT 1999 actually was the closest to the truth. Seems Blade Runner and its ilk are edging out Things to Come (talk about propaganda!).

The frog is slowly boiling to death... welcome to the middle ages, America.

Just one second for me to express my loathing for Harley Davidson and you "freedom loving" hoggers.

**** *** *** ****** ************... **** *** ********!!!

I feel better now... now if Texas will only sec...

Title: Re: Meltdown
Post by: DavidRoss on June 03, 2009, 11:31:17 AM

You should probably see someone about adjusting your meds.

Title: Re: Meltdown
Post by: snyprrr on June 03, 2009, 11:41:54 AM

I refer you to the Smoke Enders thread.

Don't mess with me.

Seriously, those kinds of comments...mm..mm... have you stopped beating your wife?

Title: Re: Meltdown
Post by: DavidRoss on June 03, 2009, 11:58:37 AM

Quote from: snyprrr on June 03, 2009, 11:19:21 AM
That show last night on NBC, "Earth 2100"?

wow, I felt like I was in some Orwellian kindergarten

Seven degrees of seperation: both this show, and robnewman, mentioned Easter Island! Point taken!!!

Of COURSE there will be pockets of affluence... what do you think "they" are doing right now but getting their "lifestyles" bunkers ready, their "strangelove" bunkers with their hormonized blonde virgins! oy oy oy...my fav part of the show was when they went to New York (@2050), and, of course, New York was paradise on earth, the eco-lovers dream.... oh crap, just crap crap crap. Oh yea, and everyone got along...oooooo hoo hoo!!!

I always said, the only reason communism "failed" (yea right) was that they didn't know the mind control power of blue jeans and mtv.

I remember even the late 70s and early 80s there was a romantic notion about the year 1999. Weren't we expecting robots and all kinds of sci fi life? My favorite game was trying to predict which sci fi movie ABOUT 1999 actually was the closest to the truth. Seems Blade Runner and its ilk are edging out Things to Come (talk about propaganda!).

The frog is slowly boiling to death... welcome to the middle ages, America.

Just one second for me to express my loathing for Harley Davidson and you "freedom loving" hoggers.

**** *** *** ****** ************... **** *** ********!!!

I feel better now... now if Texas will only sec...

Sure looks manic from here...and then some. But suit yourself.

Title: Re: Meltdown
Post by: karlhenning on June 03, 2009, 12:10:35 PM

QuoteBank of America announced today that it has raised almost $33 billion toward the $33.9 billion capital buffer identified by the Federal Reserve.

Title: Re: Meltdown
Post by: Coopmv on June 03, 2009, 04:12:00 PM

Quote from: DavidRoss on June 03, 2009, 11:31:17 AM
You should probably see someone about adjusting your meds.

I hope not many take Prozac as part of their breakfast ...

(http://upload.wikimedia.org/wikipedia/commons/thumb/a/ae/Fluoxetin_Structural_Formulae_of_both_enantiomers.png/200px-Fluoxetin_Structural_Formulae_of_both_enantiomers.png)

(http://upload.wikimedia.org/wikipedia/commons/thumb/f/f5/S-fluoxetine-3D-vdW.png/200px-S-fluoxetine-3D-vdW.png)

Title: Re: Meltdown
Post by: Coopmv on June 03, 2009, 05:32:25 PM

The fundamentals of the world economy just does not support $60+ crude. As long as Europe and the US are mired in recession, it does not matter how much China tries to pump up its manufacturing economy, there will be few buyers of its additional goods. I love to see some of those oil speculators lose their shirts once again ...

Worse-than-expected economic data thwarts rally
Stocks fall, breaking 4-day rise, on worse-than-expected data on factory orders, services

Madlen Read and Sara Lepro, AP Business Writers
On Wednesday June 3, 2009, 5:33 pm EDT

NEW YORK (AP) -- The problem with rising expectations is they get tougher to beat.

Investors broke the stock market's four-day rally and sold off after data on the services industry and factory orders came in below forecasts. Factory orders actually rose in April, but the report disappointed investors who anticipated a larger increase.

The Dow Jones industrial average fell almost 66 points, or 0.8 percent, while the Standard & Poor's 500 index fell 1.4 percent. The Nasdaq composite index, which has been outperforming the other indicators this year, fell just 0.6 percent.

Optimism about the economy stabilizing has lifted the Dow 32.5 percent from its 12-year low reached in early March. Over those three months, topping investors' expectations meant clearing a relatively low bar.

Alan Gayle, senior investment strategist at RidgeWorth Capital Management, said he began increasing his stock holdings in March on signs that economic data was becoming "less bad."

Now, Gayle said, "'less bad' is not good enough."

Even Federal Reserve Chairman Ben Bernanke was no longer emphasizing signs of economic stabilization on Wednesday, as he has done in recent months. In testimony to Congress, Bernanke focused instead on the government's growing debt load, saying that failing to ease the deficit could undermine efforts to revitalize the economy.

In the last hour of trading, however, some traders bought back into the stock market to take advantage of reduced prices, said Ryan Larson, senior equity trader at Voyageur Asset Management. It's the tactic known as bargain hunting, or "buying the dips," and the move signaled that many market participants still believe the rally has legs.

"At some point, it's hard to fight the trend, and the trend over the last couple of months has been up," Larson said. "People don't want to be left out."

The Dow fell 65.63, or 0.8 percent, to 8,675.24. The Standard & Poor's 500 index fell 12.98, or 1.4 percent, to 931.76. The Nasdaq composite index fell 10.88, or 0.6 percent, to 1,825.92.

The S&P 500 index and Nasdaq pulled back from their highest levels so far this year, reached Tuesday. Both the S&P and Nasdaq are still up for the year, but the Dow has yet to break back into positive territory for 2009. It got within 35 points, or 0.4 percent, of that break-even point on Tuesday.

There were more than twice as many losing stocks as winners on the New York Stock Exchange Wednesday, where consolidated volume was 5.2 billion shares, down from 5.8 billion a day earlier.

Some of the biggest declines were in energy, industrial and material stocks -- all areas that have benefited in recent days from gains in commodity prices.

Oil prices pulled back Wednesday after a weeklong rally as the government reported a big jump in crude storage levels, signaling continued weak demand.

As crude shed $2.43 to finish at $66.12 a barrel on the New York Mercantile Exchange, Valero Energy Corp. sank $3.98, or 17.8 percent, to $18.40, and Sunoco Inc. dropped $2.27, or 7.5 percent, to $28.03.

Investors in both stocks and energy were displeased with the Commerce Department report showing a smaller-than-expected rise in factory orders. Though it was the second gain in the past three months, orders rose just 0.7 percent in April when analysts had called for a 0.9 percent increase.

Also, the Institute for Supply Management, a trade group of purchasing executives, said the services sector shrank in May at the slowest pace since October. The barometer was below economists' estimates and marked the eighth straight monthly decline.

The rally's staying power will face more tests this week as retailers report May sales results Thursday and as the Labor Department releases jobs data Friday. The monthly jobs report is one of the most closely watched indicators of the economy's health.

Matt King, chief investment officer of Oakland, Calif.-based Bell Investment Advisors, said the market's dips are an opportunity for investors to increase their stock holdings.

"We're trying to caution people that just because the market pulls back doesn't mean we're heading back to the bottom," he said.

Still, analysts are keeping a close eye on rising Treasury yields and a weakening dollar. Investors are concerned those factors, largely an outcome of the government's massive stimulus efforts and the improved outlook on the economy, could also hinder a robust recovery.

Rising yields could lead to higher interest rates on mortgages and other types of consumer loans to which they are linked, while a falling dollar could trigger inflation and restrict the buying power of consumers.

On Wednesday, however, both Treasurys and the dollar rebounded.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, slipped to 3.54 percent from 3.62 percent. Last week, the 10-year yield surged to a six-month high of 3.75 percent.

The dollar gained ground against the euro and the British pound, while gold prices sank.

The Russell 2000 index of smaller companies fell 3.92, or 0.7 percent, to 522.71.

Overseas, Japan's Nikkei stock average added 0.4 percent, Britain's FTSE 100 fell 2.1 percent, Germany's DAX index fell 1.7 percent, and France's CAC-40 fell 2.0 percent.

Title: Re: Meltdown
Post by: Coopmv on June 03, 2009, 06:18:06 PM

Game over?

Work Visa Bill Threatens Indian Outsourcers
Moira Herbst
On Wednesday June 3, 2009, 8:08 am EDT

A new bill in Washington aimed at tightening the rules for companies in the U.S. that hire skilled workers from abroad could threaten the business model for outsourcing firms such as Wipro Technologies (NYSE:WIT - News), Infosys Technologies (NasdaqGS:INFY - News), and Tata Consultancy Services (TCS.BO). Top executives at those firms say the legislation could also escalate into a trade dispute between India and the U.S.

The bill, introduced by Senators Dick Durbin (D-Ill.) and Charles Grassley (R-Iowa), would change many of the rules companies must follow to obtain temporary work visas, known as H-1Bs and L-1s. The most controversial new rule would bar companies with more than 50 U.S. employees from getting any additional work visas if more than 50% of their U.S. workforce is made up of H-1B or L-1 visa holders.

The 50/50 Rule

Grassley says the "50/50" provision would help protect American jobs at a time of rising unemployment. "The original rationale (for the visa program) was that we needed to allow importation of managers and technical people when there weren't enough Americans available," he said in an interview. "It seems to me ridiculous that companies now have more than half of their workers on (these visas) when there are certainly a lot of workers in the U.S. who can fill in some of those positions."

Som Mittal, president of the NASSCOM trade group that represents India's software and services companies, says the Durbin-Grassley bill has some valuable elements, including tougher oversight to prevent visa fraud. But he says the 50/50 provision is misguided and dangerous. If enacted, the legislation would stop virtually all of the major Indian outsourcing firms from bringing new employees into the U.S., jeopardizing their work for American clients. "Both U.S. and Indian industry would suffer," says Mittal. "A lot of disruption would happen."

Azim Premji, executive chairman of Wipro, says the Indian government is likely to take action if the legislation passes in its current form. The technology-services sector is critical to India's economy, with software and services together accounting for about a quarter of the country's exports. "There is no way our government can take it lightly," says Premji. "It's a vital piece of the economy." NASSCOM and its member companies are also making their case to American lawmakers and the Obama Administration.

The Indian Outsourcing Model

The work visa program was established nearly 20 years ago to allow U.S. companies to bring workers with rare skills into the country. Among the most active participants are Microsoft (NasdaqGS:MSFT - News) and IBM (NYSE:IBM - News), as well as Wipro, Infosys, and Tata. But American tech companies tend to use work visas differently than Indian outsourcers. While companies like Microsoft and Google (NasdaqGS:GOOG - News) often use the temporary visas as a stepping stone to permanent residency for talented workers, outsourcing firms typically post visa workers in the U.S. on a short-term basis, in many cases about 18 months. The workers then return to India, where they continue to work for the outsourcer on behalf of U.S. clients.

The outsourcing firms' business model, developed over the past decade, has worked well for them and their American clients. When they win contracts to manage the technology, accounting, or other operations for U.S. corporations, the Indian firms typically handle the work with about 20% to 30% of the employees in the U.S. and 70% to 80% offshore. The mix allows the companies to benefit from the lower wage rates offshore, while doing the most critical work, such as testing software applications, on-site. In the past several years, offshore outsourcing firms, particularly from India, have dominated the list of companies awarded H-1B visas.

Mittal says outsourcing firms and visa workers have helped American companies -- and by extension the U.S. economy. "They have added to the competitiveness of the U.S.," he says. "They are extremely important to U.S. companies seeking to lower costs."

But U.S. tech worker groups say this arrangement allows outsourcers to displace American workers both while the visa holders are in the U.S. and when they return home. They say the visas depress wages in the U.S. by increasing the supply of workers. An April 2009 report written by Prasanna Tambe of New York University's Stern School of Business and Lorin Hitt of the Wharton School at the University of Pennsylvania estimates that H-1B admissions at the current levels are associated with a 5% to 6% drop in wages for computer programmers and systems analysts over time. Durbin and Grassley say their legislation is aimed at halting the use of U.S. work visas to send jobs overseas and lower wages.

Options for Outsourcers

If the bill were to pass in its current form, outsourcing firms could change their practices in several ways to reduce the ratio of visa holders to total employees in the U.S. Options include hiring more American workers, creating more jobs overseas, acquiring other companies to dilute visa holder ratios, or some combination of these moves. Infosys CEO Kris Gopalakrishnan says that if the bill passes, his company will pursue a mixed strategy: "We will have to increase our recruitment in the U.S., and some work that's now done on-site will have to shift to offshore locations." Gopalakrishnan says that while the business model would change, he is confident that the bill wouldn't affect the company's financials in the long term.

Wipro's Premji says that passage of the bill would mean "transition periods during which business will suffer". Like Gopalakrishnan, his strategy would be a combination of more U.S. hiring with more hiring offshore. His company would likely reduce its onshore staff for U.S. work from 25% to between 10% and 12%. He says that in anticipation of visa law changes, Wipro has already started hiring more Americans at its centers in Atlanta and Troy, Mich. Other outsourcing firms may follow suit: An analyst report by UBS (NYSE:UBS - News) estimates that Cognizant Technology Solutions (NasdaqGS:CTSH - News) would need to hire 4,300 to 6,500 additional American employees to meet the legislation's requirement.

There is no guarantee that the Durbin-Grassley bill will become law. It is likely to be considered in Congress alongside proposals for comprehensive immigration reform. The bill would still need to pass the Senate and the House, and it could be modified along the way. However, its chances of passing likely will increase if the unemployment rate in the U.S. continues to rise. Executives at the outsourcing firms vow to fight the legislation and particularly the 50/50 provision, which they say is an unfair restriction of Indian companies' ability to compete in the U.S. "It certainly does surprise us that the U.S., being so capitalist, is now going in the opposite direction," says Natarajan Chandrashekaran, chief operating officer of Tata Consultancy. "We certainly have to be watchful."

Title: Re: Meltdown
Post by: BachQ on June 04, 2009, 06:28:29 AM

This is great: an interactive California budget balancer that allows you to selectively cut spending and raise taxes. (http://www.latimes.com/news/local/la-statebudget-fl,0,95571.htmlstory)

A $24 billion deficit is nearly impossible to manage (I would not want to be governor).

Title: Re: Meltdown
Post by: BachQ on June 04, 2009, 10:00:20 AM

No wonder NY wanted to can Eliot Spitzer: he actually has a clue what's up @ Wall Street.

Eliot Spitzer: Green Shoots, Red Ink, Black Hole (http://www.slate.com/id/2219599/pagenum/all/)

QuoteI have an unfortunate sense that the "green shoots" in the economy that everyone is talking about are nothing but dandelions. Sure, forcing $1 trillion of taxpayer money—in direct capital, guarantees, and diminished cost of borrowing—into the banking sector has permitted the major banks to claim solvency for the moment. Yet we should not forget that this solvency has come not through a much needed deleveraging of the banking sector but rather from a massive transfer of the obligations of private banks to the public, with the debt accruing to future generations. And overall loan quality at U.S. banks is still the worst in 25 years and deteriorating at the fastest pace ever. *** The longer we fight the creative destruction of the marketplace by resuscitating dying companies, the slower our ability to shift capital to truly creative sectors in the economy will be.

Title: Re: Meltdown
Post by: BachQ on June 04, 2009, 10:03:37 AM

For the 'funemployed,' unemployment is welcome -- (http://www.latimes.com/news/local/la-me-funemployment4-2009jun04,0,7581684.story)"...Buoyed by severance, savings, unemployment checks or their parents, the funemployed do not spend their days poring over job listings. They travel on the cheap for weeks. They head back to school or volunteer at the neighborhood soup kitchen. And at least till the bank account dries up, they're content living for today. ..." :D

Title: Re: Meltdown
Post by: Lilas Pastia on June 04, 2009, 03:59:58 PM

Scotiabank is predicting rosier days - soon (http://www.globeinvestor.com/servlet/story/RTGAM.20090604.wforecast0604/GIStory/).

Extracts:

Quote"The global economy is transitioning from recession to recovery, with renewed output growth just around the corner," the bank's economists say in a forecast released Thursday. "Canada, and many other countries around the world, are expected to piggyback on the renewed momentum being generated by the globe's primary economic engines, the United States and China."

Global growth should amount to 2.6 per cent in 2010 – a half percentage point higher than in the bank's previous forecast.

Quote"I don't look at this is as a particularly cheerful forecast," chief economist Warren Jestin said in an interview. "What's happened is we became so glum in the period between last September and probably April, that we got into a mindset suggesting this would never go away. And I think our forecast is suggesting, yes it will go away, but it's not going to be business as usual."

QuoteStill, the bank does not foresee a quick return to the likes of pre-crisis days. The largest contributor to growth in most countries will be the government sector.

"The private sector will be constrained by household deleveraging, industrial restructuring, and a more cautious banking sector," the forecast says.

The upward revisions from Scotiabank will likely prove to be the first in a string of more optimistic forecasts due to be published soon, said Aron Gampel, the bank's deputy chief economist.

"I think you'll see that there will be a shift going on," he said in an interview.

Title: Re: Meltdown
Post by: Coopmv on June 04, 2009, 04:31:28 PM

Quote from: Lilas Pastia on June 04, 2009, 03:59:58 PM
Scotiabank is predicting rosier days - soon (http://www.globeinvestor.com/servlet/story/RTGAM.20090604.wforecast0604/GIStory/).

Extracts:

The Canadian banks were much smarter than their American counterpart. ;D

Title: Re: Meltdown
Post by: Coopmv on June 04, 2009, 04:32:25 PM

Quote from: Dm on June 04, 2009, 10:00:20 AM
No wonder NY wanted to can Eliot Spitzer: he actually has a clue what's up @ Wall Street.

Eliot Spitzer: Green Shoots, Red Ink, Black Hole (http://www.slate.com/id/2219599/pagenum/all/)

Indeed, he was also client #9 ... ;D

Title: Re: Meltdown
Post by: BachQ on June 05, 2009, 04:47:16 AM

SEC files suit against Angelo Mozilo (of Countrywide Fin'l) for fraud. (http://blogs.wsj.com/economics/2009/06/04/mozilo-on-8020-loans-pay-option-arms/)

Mozilo knew of massive fraud.

QuoteMozilo [was] aware as early as June 2006 that a significant percentage of borrowers who were taking out stated income loans were engaged in mortgage fraud. On June 1, 2006, Mozilo advised Sambol in an email that he had become aware that the Pay-Option ARM portfolio was largely underwritten on a reduced documentation basis and that there was evidence that borrowers were lying about their income in the application process. On June 2, 2006, Sambol received an email reporting on the results of a quality control audit at Countrywide Bank that showed that 50% of the stated income loans audited by the bank showed a variance in income from the borrowers' IRS filings of greater than 10%. Of those, 69 % had an income variance of greater than 50%. These material facts were never disclosed to investors.

(http://blog.rebeltraders.net/wp-content/uploads/2009/05/angelo-mozilo.jpg)
Angelo Mozilo, CEO of Countrywide Financial

Title: Re: Meltdown
Post by: BachQ on June 05, 2009, 04:48:31 AM

Federal & state benefits (e.g., Social Security, food stamps, unemployment insurance and health care) soared 19% in Q1 2009, accounting for 16.2% of total personal income -- the highest percentage since records began in 1929. The $2+ trillion to be spent in 2009 averages $17,000/household. (http://www.usatoday.com/news/washington/2009-06-03-benefits_N.htm)

Title: Re: Meltdown
Post by: BachQ on June 05, 2009, 04:49:47 AM

Oil just spiked over $70/bbl ($70.25 NYMEX WTIC July delivery)

Title: Re: Meltdown
Post by: Coopmv on June 05, 2009, 04:11:34 PM

Quote from: Dm on June 05, 2009, 04:47:16 AM
SEC files suit against Angelo Mozilo (of Countrywide Fin'l) for fraud. (http://blogs.wsj.com/economics/2009/06/04/mozilo-on-8020-loans-pay-option-arms/)

Mozilo knew of massive fraud.
(http://blog.rebeltraders.net/wp-content/uploads/2009/05/angelo-mozilo.jpg)
Angelo Mozilo, CEO of Countrywide Financial

I have long been telling my friends this white-collar Mafioso should go to jail. I have no doubt criminal indictment will come soon.

Title: Re: Meltdown
Post by: ezodisy on June 06, 2009, 09:33:08 AM

Has this thread had a new title for long? I checked in from time to time and couldn't find it....

Anyway there is not much change to the world forecast and little reason to take off one's tinted ashtray-thick gloom-and-doom glasses just yet.

This week as soon as I saw the BBC publish an article about the £ reaching a seven month high against the $, I realised it was time to sell rallies. The media is always behind the curve. USDX is into support territory and cable is way overbought at c.38.2% retracement of the entire down move from high and now with bearish confirmation in the form of three black crows in daily candles and a weekly bearish shooting star at resistance. I still think the £ will have the dubious honour of being the first major currency to have a crisis and sell off below long-term historical support of 1.35, down to 1.2 or even parity with the dollar. I don't think the $'s time for a crash has come yet, there's too much strength there and these things usually don't occur overnight. Sterling looks set up for a mauling though IMO.

So how'd they fix the non-farm numbers down to -345k yesterday?

Title: Re: Meltdown
Post by: Coopmv on June 06, 2009, 10:38:20 AM

These dynamic duo should become cell-mates at the big house ...

Title: Re: Meltdown
Post by: BachQ on June 06, 2009, 11:55:44 AM

Quote from: ezodisy on June 06, 2009, 09:33:08 AM
Has this thread had a new title for long? I checked in from time to time and couldn't find it....

Anyway there is not much change to the world forecast and little reason to take off one's tinted ashtray-thick gloom-and-doom glasses just yet.

This week as soon as I saw the BBC publish an article about the £ reaching a seven month high against the $, I realised it was time to sell rallies. The media is always behind the curve. USDX is into support territory and cable is way overbought at c.38.2% retracement of the entire down move from high and now with bearish confirmation in the form of three black crows in daily candles and a weekly bearish shooting star at resistance. I still think the £ will have the dubious honour of being the first major currency to have a crisis and sell off below long-term historical support of 1.35, down to 1.2 or even parity with the dollar. I don't think the $'s time for a crash has come yet, there's too much strength there and these things usually don't occur overnight. Sterling looks set up for a mauling though IMO.

So how'd they fix the non-farm numbers down to -345k yesterday?

Hey, Ezodisy ... Welcome back to the abyss! >:D

Quote from: ezodisy on June 06, 2009, 09:33:08 AM
Has this thread had a new title for long? I checked in from time to time and couldn't find it....

Yeah, I changed it about a month ago. I was debating between "Meltdown" vs. "The Abyss" ... >:D

Quote from: ezodisy on June 06, 2009, 09:33:08 AM
So how'd they fix the non-farm numbers down to -345k yesterday?

lol. The gov's "fudged" unemployment rate for May (vs. April) jumped from 8.9% to 9.4%. The U6 unemployment figure jumped from 15.8% to 16.4% (one year ago, the rate was 9.4% :o).

Quote from: ezodisy on June 06, 2009, 09:33:08 AM
I still think the £ will have the dubious honour of being the first major currency to have a crisis and sell off below long-term historical support of 1.35, down to 1.2 or even parity with the dollar. I don't think the $'s time for a crash has come yet, there's too much strength there and these things usually don't occur overnight. Sterling looks set up for a mauling though IMO.

Interesting. I agree that the dollar's crash time isn't quite yet ... meanwhile, China is still buying US treasuries ( :D :D :D). It seems the dollar (80), oil ($68), and gold ($955) have the jitters ... and are waiting for the next shoe to drop.

(http://quotes.ino.com/chart/history.gif?s=NYBOT_DX&t=l&w=15&a=50&v=d12)

Title: Re: Meltdown
Post by: Coopmv on June 06, 2009, 12:00:36 PM

Quote from: ezodisy on June 06, 2009, 09:33:08 AM
This week as soon as I saw the BBC publish an article about the £ reaching a seven month high against the $, I realised it was time to sell rallies.

Now that is totally inexplicable. Why is the British Pound rallying like gangbusters, on fundamentals? The fundamentals are terrible in the UK. The meltdown in the real estate market - US style, the bank runs and all the bank bailouts and yet its economy is nowhere as diverse as the US, which would have helped cushion its economic downturn somewhat. ???

Title: Re: Meltdown
Post by: BachQ on June 06, 2009, 12:01:08 PM

Quote from: Coopmv on June 05, 2009, 04:11:34 PM

I have long been telling my friends this white-collar Mafioso should go to jail. I have no doubt criminal indictment will come soon.

Good point. Securities fraud is a crime, and I would love to see this sleazebag go to the pokey. The US also needs new laws aimed at mortgage fraud.

Quote from: Coopmv on June 06, 2009, 10:38:20 AM
These dynamic duo should become cell-mates at the big house ...

Title: Re: Meltdown
Post by: Coopmv on June 06, 2009, 12:03:44 PM

Quote from: Dm on June 06, 2009, 11:55:44 AM

Interesting. I agree that the dollar's crash time isn't quite yet ... meanwhile, China is still buying US treasuries ( :D :D :D). It seems the dollar (80), oil ($68), and gold ($955) have the jitters ... and are waiting for the next shoe to drop.

China has already lost 20MM manufacturing jobs. It has no choice but to keep buying US treasuries since that is the only way the US can turn around to buy the Chinese-made goods ...

Title: Re: Meltdown
Post by: Coopmv on June 06, 2009, 12:07:44 PM

Quote from: Dm on June 06, 2009, 12:01:08 PM
Good point. Securities fraud is a crime, and I would love to see this sleazebag go to the pokey. The US also needs new laws aimed at mortgage fraud.

:D

A few European banks such as UBS have gotten clobbered because they bought big chunks of mortgage securities that originated from these CountryWide mortgages pushed by this sleazebag.

Title: Re: Meltdown
Post by: BachQ on June 06, 2009, 12:20:14 PM

Quote from: ezodisy on June 06, 2009, 09:33:08 AM
I don't think the $'s time for a crash has come yet, there's too much strength there and these things usually don't occur overnight.

BTW, Ezodisy, US Treasury yields have been edging upwards, forcing mortgage rates to reach 6% ... meanwhile, the dollar's long-term prospects must confront some fundamental US fiscal/monetary policy concerns. Even Obama, Geithner and now Bernanke admit there are major problems with unbridled national debt. They're worried.

Of course, Russia, China and Brazil can't wait to ditch the dollar.

WASHINGTON (Reuters) - (http://www.reuters.com/article/pressReleasesMolt/idUSTRE5537RL20090604) According to the non-partisan Cong'l Bgt Off. (CBO), the U.S. budget deficit soared toward $1 trillion through May, hitting an estimated $984 billion (tripling the $319 billion deficit for last year); corporate tax receipts dropped by 61%.

CNN bailout-stimulus tracker: $2.7 trillion spent; $10.5 trillion committed (as of 5 Jun 2009).
(http://money.cnn.com/news/storysupplement/economy/bailouttracker/index.html)

NYT:Russian Warns Against Relying on Dollar -- (http://www.nytimes.com/2009/06/06/business/global/06ruble.html?ref=global) ST. PETERSBURG, Russia — President Dmitri A. Medvedev said wobbly American policies have made the dollar an undesirable currency for reserves held by central banks.

Quote from: Coopmv on June 06, 2009, 12:07:44 PM
A few European banks such as UBS have gotten clobbered because they bought big chunks of mortgage securities that originated from these CountryWide mortgages pushed by this sleazebag.

Absolutely, and they're pissed as hell. :D

Title: Re: Meltdown
Post by: BachQ on June 06, 2009, 12:33:11 PM

Quote from: Coopmv on June 06, 2009, 12:03:44 PM
China has already lost 20MM manufacturing jobs. It has no choice but to keep buying US treasuries since that is the only way the US can turn around to buy the Chinese-made goods ...

Yeah, like any dysfunctional co-dependent relationship, (http://www.nytimes.com/2009/05/17/magazine/17china-t.html?_r=1&pagewanted=3&ref=magazine) the stronger party must eventually break away or suffer the consequences. It seems like the US and China are Siamese twins, where the two conjoined twins are complete opposites (one spends; the other saves ... one imports, the other exports ... one consumes, the other manufactures).

Title: Re: Meltdown
Post by: Coopmv on June 06, 2009, 12:41:33 PM

Quote from: Dm on June 06, 2009, 12:33:11 PM
Yeah, like any dysfunctional co-dependent relationship, (http://www.nytimes.com/2009/05/17/magazine/17china-t.html?_r=1&pagewanted=3&ref=magazine) the stronger party must eventually break away or suffer the consequences. It seems like the US and China are Siamese twins, where the two conjoined twins are complete opposites (one spends; the other saves ... one imports, the other exports ... one consumes, the other manufactures).

How long will it take China to develop a middle-class similar to the western industrialized nations is anyone's guess? Until that consuming middle-class is in place, it has no choice but to keep exporting to keep its people employed. Can it afford to have another 20MM people unemployed? If this happens, the Communist Party will collapse ...

Title: Re: Meltdown
Post by: Coopmv on June 06, 2009, 06:28:25 PM

I never realized there are this many mindless Americans until this housing meltdown hit . :o

Foreclosure: Now an Upscale Blight

Rising job losses and falling home prices are dragging down people who never dreamed they would get in trouble

With the U.S. economy and financial markets showing signs of life, optimistic analysts are looking for a recovery in the all-important housing sector. They got some ammunition on June 2 from the National Association of Realtors, which said that its Pending Home Sales Index jumped in April by the most in more than seven years.

But housing can't revive as long as the market is being flooded with homes that are falling into foreclosure. And far from going away, the problem is broadening. It's not just about subprime anymore. Now, people with excellent credit who never dreamed of getting in financial trouble are being dragged down by a dangerous cycle of rising unemployment and falling home prices. That is going to prolong the foreclosure crisis and, inevitably, inhibit the recovery of the rest of the economy.

Any illusion that prime loans would emerge unscathed was shattered by a May 28 report from the Mortgage Bankers Assn. "For the first time since the rapid growth of subprime lending, prime fixed-rate loans now represent the largest share of new foreclosures," the bankers said. The grime in prime was responsible for the worst performance on record for the U.S. mortgage sector in the first quarter: Nearly 13% of loans were delinquent or in foreclosure, the most since the bankers started keeping tabs in 1972. The problems were worst in the bubble states of California, Florida, Arizona, and Nevada.

The biggest factor in this second wave of foreclosures is the inability of distressed homeowners to sell in order to pay off their debts. Prices in bubble cities such as Los Angeles, Phoenix, and Miami are down less at the high end of the market than at the bottom, according to data from Standard & Poor's/Case-Shiller home price indexes. But that's cold comfort to people who haven't managed to sell at all. According to research by the National Association of Realtors, there are enough $750,000-plus homes on the market to cover more than 40 months' worth of demand at the current rate of sales. That's four times the rate of oversupply in the housing market as a whole.

Unemployment is exacerbating the problems at the top of the market. The jobless rate for adults with a bachelor's degree or more may not sound too high at 4.4% in April given the overall April jobless rate of 8.9%. But it's more than double the rate of 2% a year earlier. And many families in that segment of the population built their finances on the assumption of continuous full employment, so they can't cover the mortgage when even one spouse is out of work.

Consider the plight of Stephanie and Bob Walker, who bought a $799,000, three-bedroom home in Los Angeles with a view of the Hollywood sign in 2006 but are losing it because last year Bob stopped getting computer consulting work that used to pull in about $240,000 a year. Bob eventually landed a job paying $60,000, and Stephanie found work as a $13-an-hour temp, but it wasn't enough to cover their mortgage and credit-card debt, which was swelled by about $130,000 worth of home renovations. They listed the house last year for an "optimistic" $875,000 but didn't get any takers. After months of price cuts and threats of foreclosure from the bank, they're days from closing on a sale at $700,000 that will assuage their primary mortgage lender—but leave them under pressure from other creditors. "We had no expectation things would come crashing down as fast as they did," says Stephanie. "We had no one to blame but ourselves. We didn't have a backup plan if he lost his job."

The economics at the top of the market aren't as advantageous as they are at the bottom, where first-time home buyers are flocking to lower-priced homes, spurred by low interest rates, temporary tax credits, and a drop in prices that has made owning cheaper than renting in many cities. At the high end, homes are too expensive for most first-time buyers, and move-up buyers can't purchase a home without selling property they already own. What's more, financing is far costlier, if it's available at all, because private investors have lost their appetite for big mortgages. Rates on "jumbo" loans—that is, those too big to be purchased by Fannie Mae (FNM) or Freddie Mac (FRE)—are roughly a percentage point higher than those for loans that conform to Fannie and Freddie's purchase limits. (Those limits range from $417,000 to $730,000, depending on local housing costs.)

An inflation panic in the fixed-income market is the latest blow to homeowners who are trying to sell to avoid foreclosure, because it's pushing up mortgage rates and pushing potential buyers out of the market. Rates on 30-year fixed, conforming mortgage loans jumped nearly half a percentage point, to 5.25%, in the week ended May 29 from a week earlier, according to the Mortgage Bankers Assn. Meanwhile, the market is unlikely to get much help from the Obama Administration's foreclosure-prevention program. Although it's somewhat more ambitious than the Bush Administration's program, it is voluntary for lenders and is off to a slow start since its March inception.

When will this second wave of foreclosures crest? David Crowe, chief economist of the National Association of Home Builders, doesn't see the peak coming until 2011, later than most other experts predict. Foreclosures typically top out after unemployment does, and Crowe doesn't expect that to occur until late this year. After that, Crowe says, more people will lose their homes because of upward resets on adjustable-rate mortgages. Credit Suisse says mid-2010 is the peak for scheduled resets, and resets will stay high well into 2012. While most of the subprime loans issued during the boom years have been washed out by now, there are still about half a trillion dollars' worth of option ARMs, which allow borrowers to add unpaid interest to the principal they owe. There's an even more alarming $2.5 trillion in "alt-A" loans, which are between prime and subprime and include a big chunk of the mortgages that required little or no proof of income or assets. Most of these loans were issued to people with relatively good credit who were buying more expensive homes.

A key unknown is how many middle- and upper-income homeowners will simply walk away from homes that are worth less than the mortgages on them. So far few have. Whitney R. Tilson, managing partner of New York investment firm T2 Partners and co-author of the book More Mortgage Meltdown, expects the ranks of walk-aways to increase, exacerbating foreclosures. But Rick Sharga, senior vice-president of RealtyTrac, a foreclosure data specialist, disagrees. "To sign a contract for a house and then walk away from it runs counter to everything we were taught," says Sharga, who predicts foreclosures will dip slightly in 2010.

Even if foreclosures don't rise, the rate is already so high that it will put considerable pressure on the national housing market for at least two more years, says Mark Hanson, managing director of Field Check Group, a Menlo Park (Calif.) research firm.

While forecasts differ in detail, the clear message is that foreclosure is going upscale. And that means the housing bust won't end anytime soon.

Title: Re: Meltdown
Post by: Lilas Pastia on June 07, 2009, 04:16:06 AM

Where is this article from, Coop?

Title: Re: Meltdown
Post by: Coopmv on June 07, 2009, 04:25:57 AM

Quote from: Lilas Pastia on June 07, 2009, 04:16:06 AM
Where is this article from, Coop?

I am a subscriber to BusinessWeek, US edition. I suspect it is the North American edition as well.

Title: Re: Meltdown
Post by: BachQ on June 07, 2009, 07:00:17 AM

Quote from: Coopmv on June 03, 2009, 06:18:06 PM
Game over?

Work Visa Bill Threatens Indian Outsourcers
Moira Herbst
On Wednesday June 3, 2009, 8:08 am EDT

A new bill in Washington aimed at tightening the rules for companies in the U.S. that hire skilled workers from abroad could threaten the business model for outsourcing firms such as Wipro Technologies (NYSE:WIT - News), Infosys Technologies (NasdaqGS:INFY - News), and Tata Consultancy Services (TCS.BO). Top executives at those firms say the legislation could also escalate into a trade dispute between India and the U.S.

The bill, introduced by Senators Dick Durbin (D-Ill.) and Charles Grassley (R-Iowa), would change many of the rules companies must follow to obtain temporary work visas, known as H-1Bs and L-1s. The most controversial new rule would bar companies with more than 50 U.S. employees from getting any additional work visas if more than 50% of their U.S. workforce is made up of H-1B or L-1 visa holders.

The 50/50 Rule

Grassley says the "50/50" provision would help protect American jobs at a time of rising unemployment. "The original rationale (for the visa program) was that we needed to allow importation of managers and technical people when there weren't enough Americans available," he said in an interview. "It seems to me ridiculous that companies now have more than half of their workers on (these visas) when there are certainly a lot of workers in the U.S. who can fill in some of those positions."

Som Mittal, president of the NASSCOM trade group that represents India's software and services companies, says the Durbin-Grassley bill has some valuable elements, including tougher oversight to prevent visa fraud. But he says the 50/50 provision is misguided and dangerous. If enacted, the legislation would stop virtually all of the major Indian outsourcing firms from bringing new employees into the U.S., jeopardizing their work for American clients. "Both U.S. and Indian industry would suffer," says Mittal. "A lot of disruption would happen."

Azim Premji, executive chairman of Wipro, says the Indian government is likely to take action if the legislation passes in its current form. The technology-services sector is critical to India's economy, with software and services together accounting for about a quarter of the country's exports. "There is no way our government can take it lightly," says Premji. "It's a vital piece of the economy." NASSCOM and its member companies are also making their case to American lawmakers and the Obama Administration.

The Indian Outsourcing Model

The work visa program was established nearly 20 years ago to allow U.S. companies to bring workers with rare skills into the country. Among the most active participants are Microsoft (NasdaqGS:MSFT - News) and IBM (NYSE:IBM - News), as well as Wipro, Infosys, and Tata. But American tech companies tend to use work visas differently than Indian outsourcers. While companies like Microsoft and Google (NasdaqGS:GOOG - News) often use the temporary visas as a stepping stone to permanent residency for talented workers, outsourcing firms typically post visa workers in the U.S. on a short-term basis, in many cases about 18 months. The workers then return to India, where they continue to work for the outsourcer on behalf of U.S. clients.

The outsourcing firms' business model, developed over the past decade, has worked well for them and their American clients. When they win contracts to manage the technology, accounting, or other operations for U.S. corporations, the Indian firms typically handle the work with about 20% to 30% of the employees in the U.S. and 70% to 80% offshore. The mix allows the companies to benefit from the lower wage rates offshore, while doing the most critical work, such as testing software applications, on-site. In the past several years, offshore outsourcing firms, particularly from India, have dominated the list of companies awarded H-1B visas.

Mittal says outsourcing firms and visa workers have helped American companies -- and by extension the U.S. economy. "They have added to the competitiveness of the U.S.," he says. "They are extremely important to U.S. companies seeking to lower costs."

But U.S. tech worker groups say this arrangement allows outsourcers to displace American workers both while the visa holders are in the U.S. and when they return home. They say the visas depress wages in the U.S. by increasing the supply of workers. An April 2009 report written by Prasanna Tambe of New York University's Stern School of Business and Lorin Hitt of the Wharton School at the University of Pennsylvania estimates that H-1B admissions at the current levels are associated with a 5% to 6% drop in wages for computer programmers and systems analysts over time. Durbin and Grassley say their legislation is aimed at halting the use of U.S. work visas to send jobs overseas and lower wages.

Options for Outsourcers

If the bill were to pass in its current form, outsourcing firms could change their practices in several ways to reduce the ratio of visa holders to total employees in the U.S. Options include hiring more American workers, creating more jobs overseas, acquiring other companies to dilute visa holder ratios, or some combination of these moves. Infosys CEO Kris Gopalakrishnan says that if the bill passes, his company will pursue a mixed strategy: "We will have to increase our recruitment in the U.S., and some work that's now done on-site will have to shift to offshore locations." Gopalakrishnan says that while the business model would change, he is confident that the bill wouldn't affect the company's financials in the long term.

Wipro's Premji says that passage of the bill would mean "transition periods during which business will suffer". Like Gopalakrishnan, his strategy would be a combination of more U.S. hiring with more hiring offshore. His company would likely reduce its onshore staff for U.S. work from 25% to between 10% and 12%. He says that in anticipation of visa law changes, Wipro has already started hiring more Americans at its centers in Atlanta and Troy, Mich. Other outsourcing firms may follow suit: An analyst report by UBS (NYSE:UBS - News) estimates that Cognizant Technology Solutions (NasdaqGS:CTSH - News) would need to hire 4,300 to 6,500 additional American employees to meet the legislation's requirement.

There is no guarantee that the Durbin-Grassley bill will become law. It is likely to be considered in Congress alongside proposals for comprehensive immigration reform. The bill would still need to pass the Senate and the House, and it could be modified along the way. However, its chances of passing likely will increase if the unemployment rate in the U.S. continues to rise. Executives at the outsourcing firms vow to fight the legislation and particularly the 50/50 provision, which they say is an unfair restriction of Indian companies' ability to compete in the U.S. "It certainly does surprise us that the U.S., being so capitalist, is now going in the opposite direction," says Natarajan Chandrashekaran, chief operating officer of Tata Consultancy. "We certainly have to be watchful."

The Coming Economic Collapse, Part 1-- (05 Jun 2009) (http://seekingalpha.com/article/141605-the-coming-economic-collapse-part-1?source=article_sb_popular) In this 3-part article, the author explains "[1] why I expect this fall (3Q09) to be as bad, if not worse, than last year's in real terms, [2] why Obama's stimulus plan is too small to accomplish anything, [3] why the US is entering a Depression, possibly a Great Depression, and [4] what is the most likely outcome for the US in financial terms going forward."

Excerpt from Part I (below):

Quote ... The seeds of today's crisis were first sown in 1971 when the US formally opened trade with China. In an effort to boost profits, large scale US manufacturers and other multinational firms began outsourcing their manufacturing jobs to the People's Republic soon after.... Outsourcing moved up the corporate food chain until even R&D jobs and other high-level, high-skill set jobs were shifted to Asia. ... Chinese per-capita income doubled from 1978 to 1987 and again from 1987 to 1996. Now, fewer jobs in the US means lower US incomes ( weekly US incomes peaked in October 1972 and have since fallen 15%). ...

QuoteCredit creates the illusion of wealth (or in the US's case for the last 30 years, the illusion of maintaining the same standard of living) because you're able to spend more than you make or spend money without paying upfront. Americans, earning less and facing rising costs of living, gradually began their descent into indebtedness: between 1980 and 1990, credit card spending average household credit card balances quadrupled.

In this manner, the average American didn't notice that his or her quality of life was deteriorating at a rate of about 2-3% a year. Similarly, he or she didn't notice that more and more jobs (of greater and greater technical expertise) were shifting overseas. And thus began the epic shift in American wealth to Wall Street (the rise in the financial industry) and China (the producer of cheap goods we had to buy due to the drop in incomes)

Title: Re: Meltdown
Post by: BachQ on June 07, 2009, 07:03:32 AM

With personal income taxes down 22.6% amid a calamitous budget fiasco, Michigan is forced to shut 8 prisons-- (http://money.cnn.com/2009/06/05/news/economy/Michigan_closes_prisons/index.htm?postversion=2009060516) "It's a trend we'll be seeing more and more of in coming months given the dire revenue situation states are in," said Sujit CanagaRetna, senior fiscal analyst at the Council of State Governments, a research group.

Title: Re: Meltdown
Post by: BachQ on June 07, 2009, 07:05:48 AM

Quote from: Coopmv on June 06, 2009, 06:28:25 PM
I never realized there are this many mindless Americans until this housing meltdown hit . :o

Foreclosure: Now an Upscale Blight

Rising job losses and falling home prices are dragging down people who never dreamed they would get in trouble

With the U.S. economy and financial markets showing signs of life, optimistic analysts are looking for a recovery in the all-important housing sector. They got some ammunition on June 2 from the National Association of Realtors, which said that its Pending Home Sales Index jumped in April by the most in more than seven years.

But housing can't revive as long as the market is being flooded with homes that are falling into foreclosure. And far from going away, the problem is broadening. It's not just about subprime anymore. Now, people with excellent credit who never dreamed of getting in financial trouble are being dragged down by a dangerous cycle of rising unemployment and falling home prices. That is going to prolong the foreclosure crisis and, inevitably, inhibit the recovery of the rest of the economy.

Any illusion that prime loans would emerge unscathed was shattered by a May 28 report from the Mortgage Bankers Assn. "For the first time since the rapid growth of subprime lending, prime fixed-rate loans now represent the largest share of new foreclosures," the bankers said. The grime in prime was responsible for the worst performance on record for the U.S. mortgage sector in the first quarter: Nearly 13% of loans were delinquent or in foreclosure, the most since the bankers started keeping tabs in 1972. The problems were worst in the bubble states of California, Florida, Arizona, and Nevada.

The biggest factor in this second wave of foreclosures is the inability of distressed homeowners to sell in order to pay off their debts. Prices in bubble cities such as Los Angeles, Phoenix, and Miami are down less at the high end of the market than at the bottom, according to data from Standard & Poor's/Case-Shiller home price indexes. But that's cold comfort to people who haven't managed to sell at all. According to research by the National Association of Realtors, there are enough $750,000-plus homes on the market to cover more than 40 months' worth of demand at the current rate of sales. That's four times the rate of oversupply in the housing market as a whole.

Unemployment is exacerbating the problems at the top of the market. The jobless rate for adults with a bachelor's degree or more may not sound too high at 4.4% in April given the overall April jobless rate of 8.9%. But it's more than double the rate of 2% a year earlier. And many families in that segment of the population built their finances on the assumption of continuous full employment, so they can't cover the mortgage when even one spouse is out of work.

Consider the plight of Stephanie and Bob Walker, who bought a $799,000, three-bedroom home in Los Angeles with a view of the Hollywood sign in 2006 but are losing it because last year Bob stopped getting computer consulting work that used to pull in about $240,000 a year. Bob eventually landed a job paying $60,000, and Stephanie found work as a $13-an-hour temp, but it wasn't enough to cover their mortgage and credit-card debt, which was swelled by about $130,000 worth of home renovations. They listed the house last year for an "optimistic" $875,000 but didn't get any takers. After months of price cuts and threats of foreclosure from the bank, they're days from closing on a sale at $700,000 that will assuage their primary mortgage lender—but leave them under pressure from other creditors. "We had no expectation things would come crashing down as fast as they did," says Stephanie. "We had no one to blame but ourselves. We didn't have a backup plan if he lost his job."

The economics at the top of the market aren't as advantageous as they are at the bottom, where first-time home buyers are flocking to lower-priced homes, spurred by low interest rates, temporary tax credits, and a drop in prices that has made owning cheaper than renting in many cities. At the high end, homes are too expensive for most first-time buyers, and move-up buyers can't purchase a home without selling property they already own. What's more, financing is far costlier, if it's available at all, because private investors have lost their appetite for big mortgages. Rates on "jumbo" loans—that is, those too big to be purchased by Fannie Mae (FNM) or Freddie Mac (FRE)—are roughly a percentage point higher than those for loans that conform to Fannie and Freddie's purchase limits. (Those limits range from $417,000 to $730,000, depending on local housing costs.)

An inflation panic in the fixed-income market is the latest blow to homeowners who are trying to sell to avoid foreclosure, because it's pushing up mortgage rates and pushing potential buyers out of the market. Rates on 30-year fixed, conforming mortgage loans jumped nearly half a percentage point, to 5.25%, in the week ended May 29 from a week earlier, according to the Mortgage Bankers Assn. Meanwhile, the market is unlikely to get much help from the Obama Administration's foreclosure-prevention program. Although it's somewhat more ambitious than the Bush Administration's program, it is voluntary for lenders and is off to a slow start since its March inception.

When will this second wave of foreclosures crest? David Crowe, chief economist of the National Association of Home Builders, doesn't see the peak coming until 2011, later than most other experts predict. Foreclosures typically top out after unemployment does, and Crowe doesn't expect that to occur until late this year. After that, Crowe says, more people will lose their homes because of upward resets on adjustable-rate mortgages. Credit Suisse says mid-2010 is the peak for scheduled resets, and resets will stay high well into 2012. While most of the subprime loans issued during the boom years have been washed out by now, there are still about half a trillion dollars' worth of option ARMs, which allow borrowers to add unpaid interest to the principal they owe. There's an even more alarming $2.5 trillion in "alt-A" loans, which are between prime and subprime and include a big chunk of the mortgages that required little or no proof of income or assets. Most of these loans were issued to people with relatively good credit who were buying more expensive homes.

A key unknown is how many middle- and upper-income homeowners will simply walk away from homes that are worth less than the mortgages on them. So far few have. Whitney R. Tilson, managing partner of New York investment firm T2 Partners and co-author of the book More Mortgage Meltdown, expects the ranks of walk-aways to increase, exacerbating foreclosures. But Rick Sharga, senior vice-president of RealtyTrac, a foreclosure data specialist, disagrees. "To sign a contract for a house and then walk away from it runs counter to everything we were taught," says Sharga, who predicts foreclosures will dip slightly in 2010.

Even if foreclosures don't rise, the rate is already so high that it will put considerable pressure on the national housing market for at least two more years, says Mark Hanson, managing director of Field Check Group, a Menlo Park (Calif.) research firm.

While forecasts differ in detail, the clear message is that foreclosure is going upscale. And that means the housing bust won't end anytime soon.

Good catch, Coop.

QuoteAny illusion that prime loans would emerge unscathed was shattered by a May 28 report from the Mortgage Bankers Assn. "For the first time since the rapid growth of subprime lending, prime fixed-rate loans now represent the largest share of new foreclosures," the bankers said. The grime in prime was responsible for the worst performance on record for the U.S. mortgage sector in the first quarter: Nearly 13% of loans were delinquent or in foreclosure, the most since the bankers started keeping tabs in 1972. The problems were worst in the bubble states of California, Florida, Arizona, and Nevada.

Title: Re: Meltdown
Post by: Lilas Pastia on June 07, 2009, 09:13:13 AM

Quote from: Dm on June 07, 2009, 07:00:17 AM
The Coming Economic Collapse, Part 1-- (05 Jun 2009) (http://seekingalpha.com/article/141605-the-coming-economic-collapse-part-1?source=article_sb_popular) In this 3-part article, the author explains "[1] why I expect this fall (3Q09) to be as bad, if not worse, than last year's in real terms, [2] why Obama's stimulus plan is too small to accomplish anything, [3] why the US is entering a Depression, possibly a Great Depression, and [4] what is the most likely outcome for the US in financial terms going forward."

Excerpt from Part I (below):

Good article. Summers points to what in retrospect is quite obvious. What he states is less scary than the fact that few people (in government, the media, the intelligentsia) are still in denial over this. So, good job. It would be of more value if leads or solutions were put forward though. In the coming articles maybe?

Title: Re: Meltdown
Post by: Coopmv on June 07, 2009, 10:03:50 AM

Quote from: Dm on June 07, 2009, 07:00:17 AM
The Coming Economic Collapse, Part 1-- (05 Jun 2009) (http://seekingalpha.com/article/141605-the-coming-economic-collapse-part-1?source=article_sb_popular) In this 3-part article, the author explains "[1] why I expect this fall (3Q09) to be as bad, if not worse, than last year's in real terms, [2] why Obama's stimulus plan is too small to accomplish anything, [3] why the US is entering a Depression, possibly a Great Depression, and [4] what is the most likely outcome for the US in financial terms going forward."

Excerpt from Part I (below):

Let me just quote from the previous post ...

... The seeds of today's crisis were first sown in 1971 when the US formally opened trade with China. In an effort to boost profits, large scale US manufacturers and other multinational firms began outsourcing their manufacturing jobs to the People's Republic soon after.... Outsourcing moved up the corporate food chain until even R&D jobs and other high-level, high-skill set jobs were shifted to Asia. ... Chinese per-capita income doubled from 1978 to 1987 and again from 1987 to 1996. Now, fewer jobs in the US means lower US incomes ( weekly US incomes peaked in October 1972 and have since fallen 15%). ...

The US could have averted the current disaster if another idiot named GHW Bush had cracked down after the Tiananmen Square massacre, which would have sent the Chinese economy into a tailspin from which it would not recover for decades. But the idiot pleaded for engagement (i.e. staying the course) and that would change the behavior of the Communists. Then under the next idiotic administration, untold amount of technologies, both military and civilian, were pilfered from the US, such as critical technologies for ICBM and NASA. HuaWei, the networking company stole technologies left and right from CISCO and in fact its users manuals were virtual photocopies of what CISCO had. The ascent of HuaWei has a lot to do with the demise of Nortel and the serious troubles Lucent/Alcatel has been facing since HuaWei just underprices all the telecom equipment makers in the west. There is reason to believe HuaWei is controlled by the People's Liberation Army since its founder was a colonel or major at the PLA. There is no point to dwell on how the last genius that started that borrowing binge from China so he could finance the $1.5T Iraq War. >:(

Title: Re: Meltdown
Post by: Coopmv on June 07, 2009, 01:53:04 PM

It is a sign of the times ...

More women going from jobless to topless
Psychotherapist: 'Desperate measures are becoming far more acceptable' (http://www.msnbc.msn.com/id/29824663//)

Title: Re: Meltdown
Post by: Lilas Pastia on June 07, 2009, 03:32:25 PM

Coop, how do you define a 'crackdown' on China?

Title: Re: Meltdown
Post by: Coopmv on June 07, 2009, 03:41:03 PM

Quote from: Lilas Pastia on June 07, 2009, 03:32:25 PM
Coop, how do you define a 'crackdown' on China?

Economic sanction and cut off of all US investments. That was what the then Democrats-controlled Congress wanted to do.

Title: Re: Meltdown
Post by: BachQ on June 08, 2009, 06:56:36 AM

Goldman Sachs (http://www.dailyfinance.com/2009/06/04/goldman-sach-sees-economic-recovery-pushing-oil-to-85-in-2009/) sees economic recovery pushing oil to $85 in 2009.

(http://latimesblogs.latimes.com/.a/6a00d8341c630a53ef011570cf9783970b-pi)

Bloomberg -- (http://www.bloomberg.com/apps/news?pid=20601087&sid=atsXGDwfFA_E)'Stagflation Scenario' Stalks U.S. as Commodity Prices Jump -- "a 60 percent jump in gasoline prices this year may cause inflation to soar as it did in 2008 and throw another roadblock in the way of recovery"

Moscow (http://www.upstreamonline.com/live/article180269.ece) warns of $150/bbl oil

LA Times -- (http://latimesblogs.latimes.com/money_co/2009/06/oils-surge-to-near-70-a-barrel-has-stoked-fresh-debate-about-whats-driving-the-market----and-where-prices-may-be-headed-if.html) The rise and fall ... and rise of oil.

Oil: $200/bbl vs. $25/bbl (http://seekingalpha.com/article/141745-oil-up-to-200-or-down-to-25)

Title: Re: Meltdown
Post by: BachQ on June 08, 2009, 06:59:32 AM

Poisoning the green shoots -- "in today's poor economic conditions, even relatively less toxic poisons will work with the more deadly ones destroying green shoots"

(http://seekingalpha.com/article/141771-poisoning-the-green-shoots?source=article_sb_picks)

QuoteOur recovery is being poisoned. The drugs being given to "help" reduce the effects of recession have side effects. Pile this on top of the deteriorating economic conditions since 2000 which have never been addressed. The soaring debt is the greatest poison. It is one thing to have a large debt in a rapidly growing and young country, it is another to have a large and growing debt in a maturing country facing an aging population which will place huge strains on the social networks.

QuoteWhat happens to companies who do not invest in themselves? They slowly wither on the vine. Our poison is greed. We are choosing to maximize profits today at the expense of having new profitable profits in the future. The corporate CEOs will do whatever is possible to bolster earnings (to drive stock prices up). When you shift into survival mode, your are at a disadvantage to companies (or countries) which continue to invest in new products. Do you think investment as a percentage of GDP is declining in Asia? Goodbye jobs. ... Lack of jobs not only create a drag on the social support network, but prevent the economy to reach its potential.

(http://static.seekingalpha.com/uploads/2009/6/6/226469-124430143093541-Steven-Hansen_origin.jpg)

(http://static.seekingalpha.com/uploads/2009/6/6/226469-124430151439996-Steven-Hansen_origin.jpg)

Title: Re: Meltdown
Post by: BachQ on June 08, 2009, 07:02:39 AM

California contemplates killing welfare programs (http://www.sacbee.com/topstories/story/1917387.html)

Quote Could California become the first state in the nation to do away with welfare? That doomsday scenario is on the table as lawmakers wrestle with a staggering $24.3 billion budget deficit. County welfare directors are "in shock" at the very idea of getting rid of CalWORKs, which has been widely viewed as one of the most successful social programs in the state's history, said Bruce Wagstaff, director of the Department of Human Assistance in Sacramento.

"It's difficult to come up with the right adjective to react to this," Wagstaff said. "It would be devastating to the people we serve." H.D. Palmer, a spokesman for the state Department of Finance, said California is in an unprecedented fiscal situation that has made all programs, from education to human services, vulnerable to deep and painful reductions.

Sacramento County proposing to radically cut 300 sheriff deputies -- Sheriff John McGinness confirmed that the cuts "will have an absolutely profound impact on the quality of life throughout the Sacramento County region. ... There will be crimes that won't be investigated at all if this holds true. There will be calls for service to which we will not respond," McGinness said. "If your home is burglarized, if you sustain a property loss, we'll document that over the telephone and will not waste our scarce resources because they'll be too preoccupied with crimes against persons, homicides, assaults, rapes and so forth." (http://www.news10.net/news/local/story.aspx?storyid=60652&provider=top)

Title: Re: Meltdown
Post by: BachQ on June 08, 2009, 07:04:14 AM

Obama promises more than 600,000 stimulus jobs -- (http://www.msnbc.msn.com/id/31165217/) "Obama is ramping up his stimulus program this week even as his advisers are ramping down expectations about when the spending plan will affect a continuing rise in the nation's unemployment." According to Senate Minority Leader Mitch McConnell (R-Ky):"I think the economy is just as likely to begin to recover on its own, wholly aside from this, before much of this has an impact. So I'm very skeptical that this massive sort of spending binge that we've engaged in is going to have much of an impact."

Title: Re: Meltdown
Post by: Lilas Pastia on June 08, 2009, 05:28:13 PM

Quote from: Coopmv on June 07, 2009, 03:41:03 PM
Economic sanction and cut off of all US investments. That was what the then Democrats-controlled Congress wanted to do.

With all due respect, this is tantamount to a mild slap on the wrist. A 'crackdown' is what happened at Tian an men's Square. The virtuous outrage and meaningless 'economic sanctions' were nothing but bluster. Not that I disagree with them, but for a just notion of what can be done in such a situation, one only has to see what happened after Bush (and other outraged western leaders) vowed to 'crack down' on Beijing: hundreds of thousands of jobs were exported from the industrial heartland to China. What did Bush do about China and Tian an men when he had a Republican Congress? Press more chinese businessmen flesh ! Forget about the "Demo-controlled Congress wanted to do" (sorry, but what a limp argument!). In that respect there's strictly no difference between Democrats and Republicans. Money talks.

I'm strictly against protectionism ( a masturbatory infantile reflex). What happened to China between 1989-2009 is pure economic darwinism. When one coolly assesses the economic, demographic and geopolitical forces at play, there's no other conclusion. Summers' description of america's descent into 4th Century Roman complacency and corruption is very much to the point - and that applies to much of the Western World as well: there are no political or geographic distinctions when it comes to human greed.

The only way for the US to regain first position is to wage a global war. That would buy it time, but very little - the forces of demography are strongly tilting in the other direction. But it would squander whatever sympathy for the US is left after 8 years of W Bush administration (with a small 'a').

In terms of the economic recession, it will come to pass, probably next year. China and the rest of Asia will pull us out of it.

Title: Re: Meltdown
Post by: Coopmv on June 08, 2009, 06:45:36 PM

Quote from: Dm on June 08, 2009, 07:02:39 AM
California contemplates killing welfare programs (http://www.sacbee.com/topstories/story/1917387.html)

Sacramento County proposing to radically cut 300 sheriff deputies -- Sheriff John McGinness confirmed that the cuts "will have an absolutely profound impact on the quality of life throughout the Sacramento County region. ... There will be crimes that won't be investigated at all if this holds true. There will be calls for service to which we will not respond," McGinness said. "If your home is burglarized, if you sustain a property loss, we'll document that over the telephone and will not waste our scarce resources because they'll be too preoccupied with crimes against persons, homicides, assaults, rapes and so forth."
(http://www.news10.net/news/local/story.aspx?storyid=60652&provider=top)

I will believe when I see it. CA Democrats will NEVER kill their welfare program.

Title: Re: Meltdown
Post by: Coopmv on June 08, 2009, 07:15:25 PM

Quote from: Lilas Pastia on June 08, 2009, 05:28:13 PM

I'm strictly against protectionism ( a masturbatory infantile reflex). What happened to China between 1989-2009 is pure economic darwinism. When one coolly assesses the economic, demographic and geopolitical forces at play, there's no other conclusion. Summers' description of america's descent into 4th Century Roman complacency and corruption is very much to the point - and that applies to much of the Western World as well: there are no political or geographic distinctions when it comes to human greed.

In all honesty, few countries really believe or even practice free trade. The Chinese just practice managed trade. It is an official policy that France will NEVER outsource critical technologies and France certainly has a protectionist streak. Want some recent example, look no further than Rio Tinto, after a shareholders revolt, Rio Tinto management terminated that partnership deal with the Chinese company. It does not matter what kind of money the Chinese have, do you think the US government would allow the Chinese to buy IBM or ExxonMobil? The original ambition Lenovo had when it purchased the IBM PC division is pretty much up in smoke now, as most of IBM PC divison's former corporate clients have turned to Dell and HP. I also wonder if the US government is buying many PC's from Lenovo. While IBM, one of my ex-employers, has never learned to sell to retail consumers, it was smart to unload its dog.

Title: Re: Meltdown
Post by: Lilas Pastia on June 09, 2009, 03:53:38 AM

QuoteIn all honesty, few countries really believe or even practice free trade. The Chinese just practice managed trade. It is an official policy that France will NEVER outsource critical technologies and France certainly has a protectionist streak.

Absolutely true. Many countries that have 'sensitive' sectors will protect them in ione way or another. The unending Canada-US trade wars are all about perceived protectionist measures. It may make some sense at home (these people vote) but in the end it defeats the purpose. Stemming the tide when the waters keep going up is just buying time in a losing battle.

Title: Re: Meltdown
Post by: BachQ on June 09, 2009, 02:54:24 PM

Oakland, Calif., considering bankruptcy amid unmanageable $100M deficit. :o
(http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/09/BARI183DJB.DTL&tsp=1)

This is somewhat surprising, given that Oakland is one of the wealthiest US cities, with a median home price of $609,000 (2002).

Title: Re: Meltdown
Post by: Lilas Pastia on June 09, 2009, 03:03:14 PM

If real estate taxes were low, that could explain it. Cities that for years have followed the course of 'no new taxes' or keep taxes as low as possible are caught with a spiral of housing expansion (2004-2007), which requires new services. Those in turn cannot be financed by the low real estate taxes of those new houses. Real estate bubble helps to get taxes in, but it's a smoke screen. They start issuing bonds to bridge the gap. As real estate values decline (2008-09) and foreclosures mushroom, fewer tax dollars flow in, bond ratings go down and fixed expenses cannot be met - payroll, pension fund expenditures, social benefits, road and building maintenance, etc.

IOW not enough income to pay for the city's 'lifestyle'. Are you surprised?

Title: Re: Meltdown
Post by: Coopmv on June 09, 2009, 04:32:49 PM

Quote from: Dm on June 09, 2009, 02:54:24 PM
Oakland, Calif., considering bankruptcy amid unmanageable $100M deficit. :o
(http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/06/09/BARI183DJB.DTL&tsp=1)

This is somewhat surprising, given that Oakland is one of the wealthiest US cities, with a median home price of $609,000 (2002).

SF is probably the same story. The unbridled escalation of home prices has actually sown the seeds of financial destruction for CA IMO.

Title: Re: Meltdown
Post by: Lilas Pastia on June 09, 2009, 04:52:05 PM

I think that the republican's sacrosanct motto of 'no new taxes' is the source of this axis of evil. When will Americans realize that taxes in all their forms are the national income?

Title: Re: Meltdown
Post by: bwv 1080 on June 09, 2009, 05:33:23 PM

Quote from: Lilas Pastia on June 09, 2009, 04:52:05 PM
I think that the republican's sacrosanct motto of 'no new taxes' is the source of this axis of evil. When will Americans realize that taxes in all their forms are the national income?

The national income is gross domestic product -the value of all goods and services produced by the economy, not taxes. Taxes are an expense to maintain the infrastructure that supports the economy.

Title: Re: Meltdown
Post by: Lilas Pastia on June 09, 2009, 05:43:54 PM

Taxes]http://en.wikipedia.org/wiki/Tax]Taxes (http://en.wikipedia.org/wiki/Tax) are what keep governments functioning. GDP (http://en.wikipedia.org/wiki/Gross_domestic_product) is the monetary value of the economic output.

I know I was grossly simplifying, but I wanted to make a point*. Look at the 'Ethics of taxation' in that article.

* The point being that the strict rightwing view of 'no more taxes' is in the long run severely detrimental to the common good.

Title: Re: Meltdown
Post by: Coopmv on June 09, 2009, 05:59:37 PM

Quote from: Lilas Pastia on June 09, 2009, 05:43:54 PM

* The point being that the strict rightwing view of 'no more taxes' is in the long run severely detrimental to the common good.

Another misguided notion championed by the same group and successfully sold to both political parties that service jobs generally pay better and that manufacturing jobs are dispensable is what has gotten the US into such trouble where traders and investment bankers effectively run the country.

Title: Re: Meltdown
Post by: BachQ on June 10, 2009, 09:58:03 AM

June 10 (Bloomberg) – (http://www.bloomberg.com/apps/news?pid=20601087&sid=aA7e3oMFCMn8) Yields on 10-yr Treasuries rose to the highest level since October, and 30-year bond yields touched 4.77% (the highest in a year). In addition to concerns about US debt and inflation, the bond market reacted to a Russian central bank official's statement that Russia may buy IMF bonds in lieu of US Treasuries. "It's the same situation of overwhelming supply versus spotty demand," said John Spinello, chief technical strategist in New York at Jefferies Group Inc., a brokerage for institutional investors. "The trend is still against the market."

WSJ -- Art Laffer: Get Ready for Inflation and Higher Interest Rates (http://online.wsj.com/article/SB124458888993599879.html)

QuoteHere we stand more than a year into a grave economic crisis with a projected budget deficit of 13% of GDP. That's more than twice the size of the next largest deficit since World War II. ... [Current] unfunded liabilities of federal programs -- such as Social Security, civil-service and military pensions, the Pension Benefit Guarantee Corporation, Medicare and Medicaid -- are over the $100 trillion mark. With U.S. GDP and federal tax receipts at about $14 trillion and $2.4 trillion respectively, such a debt all but guarantees higher interest rates, massive tax increases, and partial default on government promises.

But as bad as the fiscal picture is, panic-driven monetary policies portend to have even more dire consequences. We can expect rapidly rising prices and much, much higher interest rates over the next four or five years, and a concomitant deleterious impact on output and employment not unlike the late 1970s.

(http://s.wsj.net/public/resources/images/ED-AJ638A_laffe_NS_20090609175213.gif)

"The percentage increase in the monetary base is the largest increase in the past 50 years by a factor of 10 ... It is so far outside the realm of our prior experiential base that historical comparisons are rendered difficult if not meaningless"

Reuters -- U.S. mortgage demand withers as loan rates spike -- NEW YORK, June 10 (Reuters) -- (http://www.reuters.com/article/marketsNews/idUSN1042923420090610) "Spiking U.S. mortgage rates drove down total home loan applications last week as demand for refinancing shriveled to the lowest level since November, the Mortgage Bankers Association said onWednesday. ... Borrowing costs have soared as bond yields have risen, even as the Federal Reserve has sopped up hundreds of billions of dollars in bonds to keep rates low and stimulate the housing market."

Title: Re: Meltdown
Post by: BachQ on June 10, 2009, 04:57:24 PM

Calif's Controller John Chiang: California nears financial "meltdown" as May revenues tumble by 17.7%. "Without immediate solutions from the governor and legislature, we are less than 50 days away from a meltdown of state government," Chiang said in a statement. (http://www.reuters.com/article/newsOne/idUSTRE55974820090610)

Title: Re: Meltdown
Post by: Coopmv on June 10, 2009, 05:52:05 PM

Quote from: Dm on June 10, 2009, 09:58:03 AM
June 10 (Bloomberg) – (http://www.bloomberg.com/apps/news?pid=20601087&sid=aA7e3oMFCMn8) Yields on 10-yr Treasuries rose to the highest level since October, and 30-year bond yields touched 4.77% (the highest in a year). In addition to concerns about US debt and inflation, the bond market reacted to a Russian central bank official's statement that Russia may buy IMF bonds in lieu of US Treasuries. "It's the same situation of overwhelming supply versus spotty demand," said John Spinello, chief technical strategist in New York at Jefferies Group Inc., a brokerage for institutional investors. "The trend is still against the market."

The yields on the 10-year treasuries are really low compared with yields of the 10-year treasuries from the 1980's. People are just too used to Tsy yielding so low and that is why Uncle Sam keeps borrowing. Higher yields will force these politicians to get their acts together.

Title: Re: Meltdown
Post by: ezodisy on June 11, 2009, 08:37:42 AM

Quote from: Lilas Pastia on June 09, 2009, 04:52:05 PM
I think that the republican's sacrosanct motto of 'no new taxes' is the source of this axis of evil. When will Americans realize that taxes in all their forms are the national income?

the national income comes from the Fed, not taxes. This is a good read:

http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986395/ref=sr_1_1?ie=UTF8&s=books&qid=1244738228&sr=1-1

Title: Re: Meltdown
Post by: BachQ on June 11, 2009, 09:01:37 AM

Quote from: Coopmv on June 10, 2009, 05:52:05 PM
The yields on the 10-year treasuries are really low compared with yields of the 10-year treasuries from the 1980's. People are just too used to Tsy yielding so low and that is why Uncle Sam keeps borrowing. Higher yields will force these politicians to get their acts together.

Yeah, Coop, in terms of absolute numbers, the 1980's interest rates were higher than 2009 figures. But the key is to view these figures in context, namely, that in 2009: (1) the federal funds rate is effectively at zero (in the range 0.0% to 0.25%, which is unprecedented) vs. 19% in 1981; (2) in 2009, in an unprecedented move in modern times, the Fed embarked on large-scale quantitative easing (printing money) with the express goal of keeping interest rates LOW; (3) the deficits running in 2009 are quadruple the record deficits of 2008; as a result, even minute increases in Treasury yields will cause overall interest expenses to swell; (4) in 2008-09, the US has been in a sustained period of deflation and deleveraging (versus rampant inflation of the early 1980's); and (5) the current fragile real estate market is highly sensitive to interest rates, and increases in Treasury yields translate to increases in mortgage rates, which will kill off the green shoots that Obama has spent trillions of dollars to nurture.

(http://upload.wikimedia.org/wikipedia/commons/thumb/7/7d/Federal_Funds_Rate_%28effective%29.svg/640px-Federal_Funds_Rate_%28effective%29.svg.png)

Quote from: Coopmv on June 10, 2009, 05:52:05 PM
Higher yields will force these politicians to get their acts together.

Yes!

Title: Re: Meltdown
Post by: karlhenning on June 11, 2009, 09:05:21 AM

Quote from: Dm on June 11, 2009, 09:01:37 AM

Quote from: CoopHigher yields will force these politicians to get their acts together.

Yes!

Could be, but it'll never last (the state of politicians having their act together, I mean) 8)

Title: Re: Meltdown
Post by: BachQ on June 11, 2009, 09:14:49 AM

Yesterday (Wednesday), crude oil broke the $71/bbl barrier, and today it broke the $73/bbl barrier. :o

Title: Re: Meltdown
Post by: BachQ on June 11, 2009, 02:16:09 PM

Quote from: Coopmv on June 10, 2009, 05:52:05 PM
The yields on the 10-year treasuries are really low compared with yields of the 10-year treasuries from the 1980's. People are just too used to Tsy yielding so low and that is why Uncle Sam keeps borrowing. Higher yields will force these politicians to get their acts together.

Bloomberg -- (http://www.bloomberg.com/apps/news?pid=20601087&sid=ahLaaXr3qinM)Fixed U.S. mortgage rates jumped to 5.59% (from 5.29% a week ago), rising to the highest rate since November, signaling that the Fed's plan to lower borrowing costs is backfiring.

Chart of the day: Household equity

(http://blogs.reuters.com/felix-salmon/files/2009/06/equity.png) (http://blogs.reuters.com/felix-salmon/2009/06/09/chart-of-the-day-household-equity/)

Title: Re: Meltdown
Post by: Coopmv on June 11, 2009, 05:37:09 PM

Under Greenspan the Bubble man, the calculations for the core inflation rate were adjusted to remove the volatile components such as food and energy and probably added such once-every-three-to-four-years purchase such as personal computers. Now, it does not take a rocket scientist to figure out why the published inflation rate has been so tame the last few years (even as the crude hit almost $150/bbl) while back in the 1970's, the inflation rate hit double digits when the calculations were a bit more honest. ::)

Title: Re: Meltdown
Post by: Lilas Pastia on June 11, 2009, 06:38:49 PM

Quote from: ezodisy on June 11, 2009, 08:37:42 AM
the national income comes from the Fed, not taxes. This is a good read:

http://www.amazon.com/Creature-Jekyll-Island-Federal-Reserve/dp/0912986395/ref=sr_1_1?ie=UTF8&s=books&qid=1244738228&sr=1-1

I'm sure it's a good book. This is from the article I quoted:

QuoteTaxation in the United States is a complex system which may involve payment to at least four different levels of government and many methods of taxation. United States taxation includes local government, possibly including one or more of municipal, township, district and county governments. It also includes regional entities such as school and utility, and transit districts as well as including state and federal government.

The National Bureau of Economic Research has concluded that the combined federal, state, and local government average marginal tax rate for most workers to be about 40% of income.[1][2] The Tax Foundation concluded that government at all levels will collect 30.8% of the nation's income for 2008.[3] Tax Day, the day by which tax returns are due, is usually April 15.

and:

QuoteFederal income tax
Main article: Income tax in the United States

As of June 2001, the income tax forms the bulk of taxes collected by the U.S. government

I don't know how taxation is understood from one country to another, but I'm sure everybody will agree that governements may function only through money collected from its collectivity (individuals and corporations). The income the government gets is from those varius taxes, levies and tariffs. Without income, there would be no expenditures. The White House First Couple couldn't even wipe their ass without taxpayer-paid toilet paper.

Title: Re: Meltdown
Post by: BachQ on June 12, 2009, 06:57:01 AM

Job openings plummet, with 5.4 unemployed workers competing for each vacancy (up from 1.7 in Dec. 2007), reported the Bureau of Labor Statistics.

(http://www.epi.org/page/-/img/20090609jolts600.gif)

"At the start of the recession in December 2007, there were 4.4 million job openings, but that number has declined dramatically. This morning's data release by the Bureau of Labor Statistics shows that in April job openings declined 102,000 to 2.5 million, a drop of over 42% since the start of the recession. ... There were 13.7 million unemployed workers in April, which means there were 5.4 unemployed workers for every available job. At the start of the recession, an unemployed worker had a much better chance of finding a job, with only 1.7 job seekers per job opening, but the line of applicants waiting for each job is now three times longer. ... [For May,] the number of job seekers per job opening will be 5.7-to-1." (http://www.epi.org/publications/entry/jolts_20090609/)

Title: Re: Meltdown
Post by: BachQ on June 12, 2009, 06:58:24 AM

Official Press Release: Majority of House of Representatives endorse the "Audit the Fed Bill" (HR 1207) (http://www.house.gov/apps/list/press/tx14_paul/audit.shtml)

Title: Re: Meltdown
Post by: BachQ on June 12, 2009, 07:09:55 AM

CNBC -- (12 Jun 09): (http://www.cnbc.com/id/31310024) Amid 17.4% unemployment and a glut of 600,000 unsold homes, Spain's economy is predicted to shrink by 3.6% in 2009 (2% more than prior forecast).

Title: Re: Meltdown
Post by: BachQ on June 12, 2009, 04:21:05 PM

Financial Times -- (http://www.ft.com/cms/s/0/d5c7a272-3434-11de-9eea-00144feabdc0.html?nclick_check=1) "The volume of commercial mortgages at risk of default has quintupled since the beginning of 2008 as a deteriorating economy has made it increasingly difficult for shops and businesses to keep up with their payments."

Commercial loan delinquencies are ON THE RISE ....

(http://retailtrafficmag.com/charts/cmbs-delinquencies-continue-upward-climb-0518.jpg)

The overall delinquent balance for April 09 represents a 329% increase from April 2008, and a 700% increase from March 2007.

(http://retailtrafficmag.com/charts/cmbs-delinquencies-continue-upward-climb-0518/)

Title: Re: Meltdown
Post by: Coopmv on June 12, 2009, 04:51:22 PM

It is not exactly a pretty picture across the pond either. Where is the global recovery?

Euro zone industrial output in record fall

Euro zone industrial output slumps by record 21.6 percent in year to April
Pan Pylas, AP Business Writer

On Friday June 12, 2009, 9:52 am EDT

LONDON (AP) -- Industrial production in the 16 countries that use the euro slumped in the year to April, official figures showed Friday, more indication that the euro zone may emerge from recession later than the United States or Britain.

The European Union's statistics office Eurostat said industrial output a record 21.6 percent annually from March's 19.3 percent.

Europe's export-driven economy relies heavily on industrial output and its recovery, whenever it comes, will provide a clear indication that the worst of the recession is over. Sharply lower industrial output was blamed for the massive 2.5 percent quarterly fall in the euro zone's first quarter gross domestic product.

The recession in Germany, the euro zone's biggest single economy, was even greater as demand for its high-value exports, such as cars and heavy machinery, slumped amid the collapse in global trade.

Earlier this week, figures for Britain, which is outside the euro zone, showed that industry may be picking up. Many economists think Britain's manufacturers may be benefiting from the pound's fall against the euro and the dollar and that conversely Europe's exporters are struggling as the euro remains stronger in the foreign exchange markets.

A similar picture has emerged in the U.S. where a run of better than expected economic indicators have helped the stock markets rally around the world -- the world economy is highly dependent on how soon the U.S. emerges from recession.

"The rebound in risk appetite reflects hopes of a stabilisation or recovery in the global economy," said Daniele Antonucci, an economist at Capital Economics.

"But with less convincing signs of improvement, the recovery in the euro zone will lag behind," said Antonucci.

This seemingly multi-speed recovery could well raise tensions that this weekend's gathering of G-8 finance ministers in Lecce, Italy.

Despite apparently agreeing to a raft of initiatives at the G-20 summit of world leaders in London in April, splits seem to have emerged among policymakers over tax and monetary policies in the last few weeks.

Europe, especially Germany, has appeared increasingly at odds with the U.S. and Britain, particularly over the policies being enacted by the U.S. Federal Reserve and the Bank of England. Both banks have embraced quantitative easing -- pumping newly created money into the economy by buying government and corporate bonds -- unlike the European Central Bank.

Meanwhile, there are some worries in the U.S. and Britain that continental Europe has not done enough to deal with the recession -- hence the continuing dearth of resurgent signs in the euro zone economy.

"The Americans believe that the Europeans are 'free riding' on the back of American monetary and fiscal stimulus," said Neil Mackinnon, chief economist at ECU Group.

And Britain's finance minister Alistair Darling suggested to the Financial Times newspaper Friday that some European governments have failed to clean up their banks as much as was needed.

"If there is a problem, it doesn't get any better by walking around it and hoping it will go away," he told the newspaper in an interview.

Capital Economics' Antonucci said the banking sector could turn out to be one of the euro zone's main vulnerabilities, echoing recent warnings from the International Monetary Fund, which has estimated that the banks in the single currency zone have so far incurred just a fifth of their potential losses.

"With measures to help the banking sector still disappointing, the risk is that the euro zone has yet to feel the worst of the credit crunch," said Antonucci.

Title: Re: Meltdown
Post by: Coopmv on June 12, 2009, 06:36:45 PM

Quote from: Dm on June 12, 2009, 06:58:24 AM
Official Press Release: Majority of House of Representatives endorse the "Audit the Fed Bill" (HR 1207) (http://www.house.gov/apps/list/press/tx14_paul/audit.shtml)

Unfortunately, it was the Bubble Man Alan Greenspan who politicized his job and thereby makes things difficult for his successor. The best fed chief of the past 50 years has to be Paul Volcker, who raised fed funds rate to 15+% that subequently broke the back of double digit inflation and sent his boss Jimmy Carter packing as well. Reagan made the mistake of appointing Greenspan for sure.

Title: Re: Meltdown
Post by: Coopmv on June 12, 2009, 07:06:16 PM

Has UBS fully written off its toxic papers? I think it may get killed once again by the commercial real estate meltdown in the US ...

Switzerland's Economy Shrinks Most in 15 Years

Published: 6/2/2009 8:24:03 AM

By: TradingEconomics.com, Bloomberg

Switzerland's economy contracted at the fastest pace in almost 15 years in the first quarter after companies cut spending to weather a slump in exports.

Gross domestic product dropped 0.8 percent from the fourth quarter, when it declined a revised 0.6 percent, the State Secretariat for Economic Affairs in Bern said today. That's the worst performance since the second quarter of 1994, according to Bloomberg data. Exports plunged 5.4 percent from the fourth quarter and gross fixed capital spending fell 0.4 percent.

The worst global economic slump since World War II has eroded demand for Swiss exports, forcing companies to slash output and eliminate jobs. Clariant AG, which makes chemicals for the textile and automotive industries, on May 6 reported a 24 percent drop in first-quarter sales. The Swiss central bank has lowered its key interest rate close to zero and purchased foreign currencies to bolster the economy.

Imports were unchanged in the first quarter from the previous three months and consumer spending increased 0.1 percent. Spending on equipment such as machinery increased 0.1 percent and construction investment dropped 1 percent.

From a year earlier, GDP shrank 2.4 percent in the first quarter, more than the 1.7 percent forecast of economists.

The 16-member euro area economy, which buys more than half of Swiss exports, contracted 2.5 percent in the first quarter, the biggest decline since data were first compiled in 1995. In Germany, Europe's largest economy, GDP shrank by a record.

Swiss unemployment rose to the highest in almost three years in April.

There are some signs of stabilization. Manufacturing shrank at the slowest pace in seven months in May, according to a report today, while investors grew more optimistic.

Still, the SNB expects the economy to shrink as much as 3 percent this year, which would be its biggest contraction since 1975.

Title: Re: Meltdown
Post by: Coopmv on June 13, 2009, 07:16:36 AM

Quote from: Dm on June 11, 2009, 09:14:49 AM
Yesterday (Wednesday), crude oil broke the $71/bbl barrier, and today it broke the $73/bbl barrier. :o

DM, I just bought more energy stocks in order to hedge my exposure. If the Fed did not see the recession coming, I doubt it will react fast enough to keep the inflation in check.

Title: Re: Meltdown
Post by: Coopmv on June 13, 2009, 08:18:36 AM

Leading edge nanotech research in Albany. Well, it is Albany, NY, not Albany, CA. This is a major slap on the face for CA, as leading edge research preferred to step up shop in NY instead of CA. If even NY ranks ahead of CA, CA has problems ...

Monday, June 8, 2009, 4:57pm EDT | Modified: Tuesday, June 9, 2009, 12:01pm

AlbanyNanoTech investments top $5B

The Business Review (Albany)

Private, federal and state investments at the University at Albany's College of Nanoscale Science and Engineering have topped $5 billion, the college reported today.

Employment at Albany NanoTech, which is 10 years old this year, has also exceeded the 2,500-mark. That's the number of scientists, researchers, engineers, students and faculty that now work at the 800,000-square-foot complex. With an average salary of $81,000, those numbers translate to an annual payroll of $202 million.

Albany NanoTech opened its fourth building, NanoFab 300 East, this past spring. The facility lays claim to being one of the world's most advanced centers for next-generation computer chips.

Some of the private companies that work at the site include: IBM Corp. (NYSE: IBM), Advanced Micro Devices Inc. (NYSE: AMD), GlobalFoundries, Sematech, Toshiba, Applied Materials, Tokyo Electron, ASML, Vistec Lithography and Atotech.

Title: Re: Meltdown
Post by: BachQ on June 13, 2009, 09:10:08 AM

Good catch, Coop.

Quote from: Coopmv on June 12, 2009, 04:51:22 PM
Euro zone industrial output in record fall

[snip]

The recession in Germany, the euro zone's biggest single economy, was even greater as demand for its high-value exports, such as cars and heavy machinery, slumped amid the collapse in global trade.

Earlier this week, figures for Britain, which is outside the euro zone, showed that industry may be picking up. Many economists think Britain's manufacturers may be benefiting from the pound's fall against the euro and the dollar and that conversely Europe's exporters are struggling as the euro remains stronger in the foreign exchange markets.

Here are graphs for Germany and the UK. Notice Germany's steep decline (Germany is blue; UK is green):

(http://4.bp.blogspot.com/_Et4TQ-a0gGU/SjI_N5NYdqI/AAAAAAAACLQ/LtZF43ezlSI/s320/IP_chart.png)

"Industrial production may have found its bottom in the UK, but not in Germany! Germany, the Eurozone's biggest economy, helped to push the Eurozone's industrial production down 21.6% in April." (http://www.rgemonitor.com/us-monitor/257056/world_economic_reports_june_5_-_12_waiting_on_the_sidelines)

Quote from: Coopmv on June 12, 2009, 04:51:22 PM
Euro zone industrial output in record fall

Eurozone industrial production has been diving off a cliff since January.

Here's through March:

(http://www.finfacts.ie/artman/uploads/2/Eurozone-industrial-production-may132009.JPG)

The monthly index fell by 1.9% in April, compared with March's already steep decline; on monthly basis, Eurozone production of capital goods fell by 2.7% in April.

Of course, the fall in industrial production is not limited to the Eurozone:

(http://www.marketoracle.co.uk/images/2009/Mar/industrial-17.jpg)

Title: Re: Meltdown
Post by: BachQ on June 13, 2009, 09:17:33 AM

Quote from: Coopmv on June 12, 2009, 04:51:22 PM
It is not exactly a pretty picture across the pond either. Where is the global recovery?

Euro zone industrial output in record fall

Euro zone industrial output slumps by record 21.6 percent in year to April
Pan Pylas, AP Business Writer

On Friday June 12, 2009, 9:52 am EDT

LONDON (AP) -- Industrial production in the 16 countries that use the euro slumped in the year to April, official figures showed Friday, more indication that the euro zone may emerge from recession later than the United States or Britain.

The European Union's statistics office Eurostat said industrial output a record 21.6 percent annually from March's 19.3 percent.

Europe's export-driven economy relies heavily on industrial output and its recovery, whenever it comes, will provide a clear indication that the worst of the recession is over. Sharply lower industrial output was blamed for the massive 2.5 percent quarterly fall in the euro zone's first quarter gross domestic product.

The recession in Germany, the euro zone's biggest single economy, was even greater as demand for its high-value exports, such as cars and heavy machinery, slumped amid the collapse in global trade.

Earlier this week, figures for Britain, which is outside the euro zone, showed that industry may be picking up. Many economists think Britain's manufacturers may be benefiting from the pound's fall against the euro and the dollar and that conversely Europe's exporters are struggling as the euro remains stronger in the foreign exchange markets.

A similar picture has emerged in the U.S. where a run of better than expected economic indicators have helped the stock markets rally around the world -- the world economy is highly dependent on how soon the U.S. emerges from recession.

"The rebound in risk appetite reflects hopes of a stabilisation or recovery in the global economy," said Daniele Antonucci, an economist at Capital Economics.

"But with less convincing signs of improvement, the recovery in the euro zone will lag behind," said Antonucci.

This seemingly multi-speed recovery could well raise tensions that this weekend's gathering of G-8 finance ministers in Lecce, Italy.

Despite apparently agreeing to a raft of initiatives at the G-20 summit of world leaders in London in April, splits seem to have emerged among policymakers over tax and monetary policies in the last few weeks.

Europe, especially Germany, has appeared increasingly at odds with the U.S. and Britain, particularly over the policies being enacted by the U.S. Federal Reserve and the Bank of England. Both banks have embraced quantitative easing -- pumping newly created money into the economy by buying government and corporate bonds -- unlike the European Central Bank.

Meanwhile, there are some worries in the U.S. and Britain that continental Europe has not done enough to deal with the recession -- hence the continuing dearth of resurgent signs in the euro zone economy.

"The Americans believe that the Europeans are 'free riding' on the back of American monetary and fiscal stimulus," said Neil Mackinnon, chief economist at ECU Group.

And Britain's finance minister Alistair Darling suggested to the Financial Times newspaper Friday that some European governments have failed to clean up their banks as much as was needed.

"If there is a problem, it doesn't get any better by walking around it and hoping it will go away," he told the newspaper in an interview.

Capital Economics' Antonucci said the banking sector could turn out to be one of the euro zone's main vulnerabilities, echoing recent warnings from the International Monetary Fund, which has estimated that the banks in the single currency zone have so far incurred just a fifth of their potential losses.

"With measures to help the banking sector still disappointing, the risk is that the euro zone has yet to feel the worst of the credit crunch," said Antonucci.

A report (http://news.bbc.co.uk/2/hi/business/8013980.stm) compiled for the German Economy Ministry forecasts that for 2009, Germany's economy will shrink by 6%; Germany's unemployment will reach 10%; and German exports will drop by 22.6%.

Ambrose Evans-Pritchard: (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5209033/Germanys-slump-risks-explosive-mood-as-second-banking-crisis-looms.html) Germany's slump risks 'explosive' mood as second banking crisis looms ... . "Social unrest can no longer be ruled out," said Michael Sommer, head of the DGB trade union federation, and describing the latest wave of sackings a "declaration of war" against Germany's workers.

Title: Re: Meltdown
Post by: Coopmv on June 13, 2009, 09:24:24 AM

Quote from: Dm on June 13, 2009, 09:10:08 AM
Good catch, Coop.

Here are graphs for Germany and the UK. Notice Germany's steep decline (Germany is blue; UK is green):

(http://4.bp.blogspot.com/_Et4TQ-a0gGU/SjI_N5NYdqI/AAAAAAAACLQ/LtZF43ezlSI/s320/IP_chart.png)

"Industrial production may have found its bottom in the UK, but not in Germany! Germany, the Eurozone's biggest economy, helped to push the Eurozone's industrial production down 21.6% in April." (http://www.rgemonitor.com/us-monitor/257056/world_economic_reports_june_5_-_12_waiting_on_the_sidelines)

Eurozone industrial production has been diving off a cliff since January.

Here's through March:

(http://www.finfacts.ie/artman/uploads/2/Eurozone-industrial-production-may132009.JPG)

The monthly index fell by 1.9% in April, compared with March's already steep decline; on monthly basis, Eurozone production of capital goods fell by 2.7% in April.

Of course, the fall in industrial production is not limited to the Eurozone:

(http://www.marketoracle.co.uk/images/2009/Mar/industrial-17.jpg)

So where are the green shoots for the global economy the politicians on both sides of the pond have been talking about? The Chinese will not be able to pull both the EU and the US out of the recession ...

Title: Re: Meltdown
Post by: Coopmv on June 13, 2009, 09:27:31 AM

Quote from: Dm on June 13, 2009, 09:17:33 AM
A report (http://news.bbc.co.uk/2/hi/business/8013980.stm) compiled for the German Economy Ministry forecasts that for 2009, Germany's economy will shrink by 6%; Germany's unemployment will reach 10%; and German exports will drop by 22.6%.

Ambrose Evans-Pritchard: (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5209033/Germanys-slump-risks-explosive-mood-as-second-banking-crisis-looms.html) Germany's slump risks 'explosive' mood as second banking crisis looms ... . "Social unrest can no longer be ruled out," said Michael Sommer, head of the DGB trade union federation, and describing the latest wave of sackings a "declaration of war" against Germany's workers.

Against this backdrop, the Euro is way overvalued relative to the Dollar IMO. I am not sure if the Pound is appropriately valued either.

Title: Re: Meltdown
Post by: BachQ on June 13, 2009, 09:47:31 AM

Quote from: Coopmv on June 13, 2009, 09:24:24 AM
So where are the green shoots for the global economy the politicians on both sides of the pond have been talking about? The Chinese will not be able to pull both the EU and the US out of the recession ...

China's exports plunge a record 26% in May -- The export figures were worse than market expectations for the second month running, slumping 26.4 per cent from a year earlier -- and exceeding last month's fall of 22.6%. Imports also fell sharply, plummeting 25.2 per cent, surpassing April's 23 per cent decline. The latest figures have cast fresh doubts on China's economy and increased pressure on the government to boost domestic consumption. "This was the worst (export) performance in at least six years, and well below the consensus for 23 per cent," ANZ Bank analyst Chang Wie Liang said.

(http://www.theaustralian.news.com.au/business/story/0,28124,25622777-643,00.html)

Quote from: Coopmv on June 13, 2009, 09:24:24 AM
So where are the green shoots for the global economy the politicians on both sides of the pond have been talking about? The Chinese will not be able to pull both the EU and the US out of the recession ...

Relax, Coop. Japan will save us!

Japan's Rebound May Be Derailed By Demand Dearth (http://www.bloomberg.com/apps/news?pid=20601101&sid=aVka35Syxx.A)

QuoteJune 12 (Bloomberg) -- A rebound in Japan's economy from the worst contraction on record may be short-lived amid tepid global demand and as government stimulus spending wears off. The world's second-largest economy will grow at an annual 1.5 percent pace in the second quarter after contracting a record 14.2 percent in the first, according to economists surveyed by Bloomberg News. After peaking at 2 percent in the third quarter, growth will grind to a halt in the middle of 2010, the survey shows.

MarketWatch-- (http://www.marketwatch.com/news/story/japans-trade-surplus-dives-99/story.aspx?guid=%7B2FFA3454-000B-4F92-8E02-26FB6C0F4C82%7D&siteid=rss#comments=)Japan's trade surplus dives 99% in March as exports plunge

Title: Re: Meltdown
Post by: Coopmv on June 13, 2009, 09:52:46 AM

Quote from: Dm on June 13, 2009, 09:47:31 AM
China's exports plunge a record 26% in May -- The export figures were worse than market expectations for the second month running, slumping 26.4 per cent from a year earlier -- and exceeding last month's fall of 22.6%. Imports also fell sharply, plummeting 25.2 per cent, surpassing April's 23 per cent decline. The latest figures have cast fresh doubts on China's economy and increased pressure on the government to boost domestic consumption. "This was the worst (export) performance in at least six years, and well below the consensus for 23 per cent," ANZ Bank analyst Chang Wie Liang said.

Relax, Coop. Japan will save us!

[url=http://www.bloomberg.com/apps/news?pid=20601101&sid=aVka35Syxx.A]Japan's Rebound May Be Derailed By Demand Dearth (http://www.theaustralian.news.com.au/business/story/0,28124,25622777-643,00.html)

MarketWatch-- (http://www.marketwatch.com/news/story/japans-trade-surplus-dives-99/story.aspx?guid=%7B2FFA3454-000B-4F92-8E02-26FB6C0F4C82%7D&siteid=rss#comments=)Japan's trade surplus dives 99% in March as exports plunge

The Chinese need to spend a big chunk of its $1.5T to get its economy moving. It has already lost 20MM jobs as of early this year due to the nosedive of its exports. It cannot afford to lose another 10MM jobs or there will be massive unrest and end to the Communist Party ...

Title: Re: Meltdown
Post by: Lethevich on June 13, 2009, 10:02:02 AM

Quote from: Coopmv on June 13, 2009, 09:24:24 AM
So where are the green shoots for the global economy the politicians on both sides of the pond have been talking about? The Chinese will not be able to pull both the EU and the US out of the recession ...

It's news like this (http://news.bbc.co.uk/1/hi/business/8092780.stm) which has spurred thought that the worst might be more or less over at least for the UK. It's helped that the pound has devalued so that additional exports have cushioned the impact.

Title: Re: Meltdown
Post by: Coopmv on June 13, 2009, 10:15:05 AM

Quote from: Lethe on June 13, 2009, 10:02:02 AM
It's news like this (http://news.bbc.co.uk/1/hi/business/8092780.stm) which has spurred thought that the worst might be more or less over at least for the UK. It's helped that the pound has devalued so that additional exports have cushioned the impact.

The Pound has risen against the Dollar by over 10% in the past month alone. If that trend is not reversed, it will have a negative impact on its export to the US. I am watching how I am spending at MDT very closely.

Title: Re: Meltdown
Post by: BachQ on June 13, 2009, 02:49:06 PM

Quote from: Coopmv on June 13, 2009, 08:18:36 AM
Leading edge nanotech research in Albany. Well, it is Albany, NY, not Albany, CA. This is a major slap on the face for CA, as leading edge research preferred to step up shop in NY instead of CA. If even NY ranks ahead of CA, CA has problems ...

Monday, June 8, 2009, 4:57pm EDT | Modified: Tuesday, June 9, 2009, 12:01pm

AlbanyNanoTech investments top $5B

The Business Review (Albany)

Private, federal and state investments at the University at Albany's College of Nanoscale Science and Engineering have topped $5 billion, the college reported today.

Employment at Albany NanoTech, which is 10 years old this year, has also exceeded the 2,500-mark. That's the number of scientists, researchers, engineers, students and faculty that now work at the 800,000-square-foot complex. With an average salary of $81,000, those numbers translate to an annual payroll of $202 million.

Albany NanoTech opened its fourth building, NanoFab 300 East, this past spring. The facility lays claim to being one of the world's most advanced centers for next-generation computer chips.

Some of the private companies that work at the site include: IBM Corp. (NYSE: IBM), Advanced Micro Devices Inc. (NYSE: AMD), GlobalFoundries, Sematech, Toshiba, Applied Materials, Tokyo Electron, ASML, Vistec Lithography and Atotech.

Yeah, Coop, Given the mess in Calif., I wouldn't be surprised if several Silicon Valley companies vacated California en masse. BTW, some leading chip-makers and nano-tech companies appear poised to branch out into solar cells, battery technology, and related technologies.

NYT -- Seeking Growth Market, Chip Maker Eyes Solar Cells -- (http://www.nytimes.com/2009/06/13/business/energy-environment/13chip.html?_r=2&hpw)

QuoteHSINCHU, Taiwan — Taiwan Semiconductor Manufacturing, or TSMC, has seen the light and now wants to make some. The world's largest for-hire chip maker could soon start manufacturing solar cells and LED lights. The company's entry into these nascent industries will catch the attention of existing makers, which could find themselves battling one of the most formidable manufacturers on the planet. Taiwan Semiconductor could drive down prices, as it did for computer chips. But the lower prices could also stimulate demand for what are now expensive technologies.

*** With close to $7 billion in cash, the company can finance solar and LED projects that would tap into some of the manufacturing skills learned in the chip business. While there is considerable interest in green technologies, governments around the world have had to subsidize the purchase of solar cells and LED lights to stimulate demand. The costs of such devices are still not low enough to justify substituting them for existing technologies. Pointedly, Mr. Tsai said its intentions in either area would be to create profitable businesses that could operate without government subsidies. "You have to get the costs down really fast," he said. "You don't want to count on governments all the time for the viability of the business."

Title: Re: Meltdown
Post by: Coopmv on June 13, 2009, 03:23:17 PM

Quote from: Dm on June 13, 2009, 02:49:06 PM
Yeah, Coop, Given the mess in Calif., I wouldn't be surprised if several Silicon Valley companies vacated California en masse. BTW, some leading chip-makers and nano-tech companies appear poised to branch out into solar cells, battery technology, and related technologies.

NYT -- Seeking Growth Market, Chip Maker Eyes Solar Cells -- (http://www.nytimes.com/2009/06/13/business/energy-environment/13chip.html?_r=2&hpw)

I have been looking at the stock of TSM (Taiwan Semi), which has a current yield of close to 4% and the company is financially rock-solid. On a total return basis, it looks very attactive.

Title: Re: Meltdown
Post by: Coopmv on June 14, 2009, 06:29:28 AM

Is it too little too late or better late than never? This should have been done 20 years ago when Wall Street started to trade derivatives in earnest ...

Obama Seeks to Overhaul Financial Rules
By JIM KUHNHENN, AP
posted: 1 HOUR 17 MINUTES AGO

WASHINGTON (June 14) - President Barack Obama is ready to roll out an overhaul of the intricate rules and systems that govern America's troubled financial institutions, proposing the most ambitious revision since the Great Depression.

The goal is to prevent a recurrence of the economic crisis that erupted in the United States and exploded last fall with devastating consequences still reverberating around the world.

Skip over this content Unlike the government's temporary ownership stake in automakers and major financial companies, the regulatory changes set to be announced Wednesday are designed to be permanent. They could result in a major realignment of power and authority among government agencies that set the rules for banking, lending and investing and touch American lives through daily transactions, from credit cards to mortgages and mutual funds.

The proposals already are the source of a spirited debate in Congress over whether Obama's measures will prove too timid or place too heavy a hand on the levers of capitalism.

At issue is a 21st century system of high-stakes swaps and trades, bets and losses where trillions of dollars worth of investment products have grown too intricate for a 20th century regulatory structure.

In devising new regulations and oversight, the administration is looking to address four perceived weaknesses in the current system:

-The need for an all-seeing government entity to detect institutional stresses that threaten the entire financial system. Think of the mortgage-backed securities that are still weighing down bank balance sheets.

-The inability to step in and unwind large and complex institutions before they fail and become the thread that unravels the fabric of the system.

-The undercapitalization of large financial institutions. Heading into the financial crisis, too many banks were leveraged with significantly more debt than equity.

-Consumers and lenders whose unwitting or reckless credit and borrowing decisions placed families under staggering debts and contributed to the instability of the financial system. Obama is likely to recommend creation a financial services consumer protection body with oversight powers over mortgages and credit cards and other consumer financial products.

Title: Re: Meltdown
Post by: BachQ on June 14, 2009, 01:13:50 PM

Quote from: Coopmv on June 14, 2009, 06:29:28 AM
Is it too little too late or better late than never? This should have been done 20 years ago when Wall Street started to trade derivatives in earnest ...

Obama Seeks to Overhaul Financial Rules
By JIM KUHNHENN, AP
posted: 1 HOUR 17 MINUTES AGO

WASHINGTON (June 14) - President Barack Obama is ready to roll out an overhaul of the intricate rules and systems that govern America's troubled financial institutions, proposing the most ambitious revision since the Great Depression.

The goal is to prevent a recurrence of the economic crisis that erupted in the United States and exploded last fall with devastating consequences still reverberating around the world.

Skip over this content Unlike the government's temporary ownership stake in automakers and major financial companies, the regulatory changes set to be announced Wednesday are designed to be permanent. They could result in a major realignment of power and authority among government agencies that set the rules for banking, lending and investing and touch American lives through daily transactions, from credit cards to mortgages and mutual funds.

The proposals already are the source of a spirited debate in Congress over whether Obama's measures will prove too timid or place too heavy a hand on the levers of capitalism.

At issue is a 21st century system of high-stakes swaps and trades, bets and losses where trillions of dollars worth of investment products have grown too intricate for a 20th century regulatory structure.

In devising new regulations and oversight, the administration is looking to address four perceived weaknesses in the current system:

-The need for an all-seeing government entity to detect institutional stresses that threaten the entire financial system. Think of the mortgage-backed securities that are still weighing down bank balance sheets.

-The inability to step in and unwind large and complex institutions before they fail and become the thread that unravels the fabric of the system.

-The undercapitalization of large financial institutions. Heading into the financial crisis, too many banks were leveraged with significantly more debt than equity.

-Consumers and lenders whose unwitting or reckless credit and borrowing decisions placed families under staggering debts and contributed to the instability of the financial system. Obama is likely to recommend creation a financial services consumer protection body with oversight powers over mortgages and credit cards and other consumer financial products.

Coop,

Maybe something good will come of this, but I can't help but be deeply skeptical. Given the degree of unconstrained freedom which financial institutions have enjoyed since Greenspan & Co., the banks will resist any onerous regulations tooth and nail. And given that Bernanke, Geithner, Obama & Co. are in bed with the major banking institutions (esp. Goldman Sachs & JP Morgan), whatever regulations ultimately emerge will be watered down and rife with loopholes.

The very persons who got us into this mess are the ones in charge of crafting and overseeing the "regulations" ... it's a lot like the fox watching the henhouse. There cannot be fundamental reform as long as this dysfunctional framework is in place. As a GMG poster had mentioned earlier on this thread, what is needed is an extreme makeover ... requiring at a minimum uprooting the greedy corruption that currently permeates Wall Street. Without addressing the ROOT causes, all regulatory efforts will be doomed to failure.

Moreover, as long as Obama & Congress are obsessed with economic recovery, they will be reluctant to put the reins on the economy's circulatory system (i.e., financial institutions).

Meanwhile, the taxpayers will continue to be duped into paying AIG bonuses and buying toxic assets of corrupt lenders. ..... and it's only a matter of time until Congress adopts a massive VAT tax, thereby allowing several more layers of federal control to permeate a sickly and over-taxed consumer-driven economy.

Since the fall of 2008, the extremely low oil prices have granted a reprieve to Europe and the US, giving them one final opportunity to get their act together (e.g., to build an oil-independent infrastructure focused on wind, solar, battery, and other green technologies ... as well as to nurture mass transit and energy efficient buildings). Instead, $10+ trillion has been wasted bailing out dysfunctional corpses.

When oil prices again skyrocket, these Western powers will perhaps see the folly of their ways.

Title: Re: Meltdown
Post by: Coopmv on June 14, 2009, 01:30:30 PM

Quote from: Dm on June 14, 2009, 01:13:50 PM
Coop,

Maybe something good will come of this, but I can't help but be deeply skeptical. Given the degree of unconstrained freedom which financial institutions have enjoyed since Greenspan & Co., the banks will resist any onerous regulations tooth and nail. And given that Bernanke, Geithner, Obama & Co. are in bed with the major banking institutions (esp. Goldman Sachs & JP Morgan), whatever regulations ultimately emerge will be watered down and rife with loopholes.

The very persons who got us into this mess are the ones in charge of crafting and overseeing the "regulations" ... it's a lot like the fox watching the henhouse. There cannot be fundamental reform as long as this dysfunctional framework is in place. As a GMG poster had mentioned earlier on this thread, what is needed is an extreme makeover ... requiring at a minimum uprooting the greedy corruption that currently permeates Wall Street. Without addressing the ROOT causes, all regulatory efforts will be doomed to failure.

Moreover, as long as Obama & Congress are obsessed with economic recovery, they will be reluctant to put the reins on the economy's circulatory system (i.e., financial institutions).

Meanwhile, the taxpayers will continue to be duped into paying AIG bonuses and buying toxic assets of corrupt lenders. ..... and it's only a matter of time until Congress adopts a massive VAT tax, thereby allowing several more layers of federal control to permeate a sickly and over-taxed consumer-driven economy.

Since the fall of 2008, the extremely low oil prices have granted a reprieve to Europe and the US, giving them one final opportunity to get their act together (e.g., to build an oil-independent infrastructure focused on wind, solar, battery, and other green technologies ... as well as to nurture mass transit and energy efficient buildings). Instead, $10+ trillion has been wasted bailing out dysfunctional corpses.

When oil prices again skyrocket, these Western powers will perhaps see the folly of their ways.

Many of the problems are with the elected officials who write the laws. Bernanke and Geithner are both appointed. The lobbyists from the financial industry know exactly the loopholes they want and which power broker lawmakers they can pay off. The system is hopeless ...

Title: Re: Meltdown
Post by: BachQ on June 15, 2009, 03:41:04 PM

Quote from: Coopmv on June 06, 2009, 06:28:25 PM
I never realized there are this many mindless Americans until this housing meltdown hit . :o

Foreclosure: Now an Upscale Blight

Rising job losses and falling home prices are dragging down people who never dreamed they would get in trouble

With the U.S. economy and financial markets showing signs of life, optimistic analysts are looking for a recovery in the all-important housing sector. They got some ammunition on June 2 from the National Association of Realtors, which said that its Pending Home Sales Index jumped in April by the most in more than seven years.

But housing can't revive as long as the market is being flooded with homes that are falling into foreclosure. And far from going away, the problem is broadening. It's not just about subprime anymore. Now, people with excellent credit who never dreamed of getting in financial trouble are being dragged down by a dangerous cycle of rising unemployment and falling home prices. That is going to prolong the foreclosure crisis and, inevitably, inhibit the recovery of the rest of the economy.

Any illusion that prime loans would emerge unscathed was shattered by a May 28 report from the Mortgage Bankers Assn. "For the first time since the rapid growth of subprime lending, prime fixed-rate loans now represent the largest share of new foreclosures," the bankers said. The grime in prime was responsible for the worst performance on record for the U.S. mortgage sector in the first quarter: Nearly 13% of loans were delinquent or in foreclosure, the most since the bankers started keeping tabs in 1972. The problems were worst in the bubble states of California, Florida, Arizona, and Nevada.

The biggest factor in this second wave of foreclosures is the inability of distressed homeowners to sell in order to pay off their debts. Prices in bubble cities such as Los Angeles, Phoenix, and Miami are down less at the high end of the market than at the bottom, according to data from Standard & Poor's/Case-Shiller home price indexes. But that's cold comfort to people who haven't managed to sell at all. According to research by the National Association of Realtors, there are enough $750,000-plus homes on the market to cover more than 40 months' worth of demand at the current rate of sales. That's four times the rate of oversupply in the housing market as a whole.

Unemployment is exacerbating the problems at the top of the market. The jobless rate for adults with a bachelor's degree or more may not sound too high at 4.4% in April given the overall April jobless rate of 8.9%. But it's more than double the rate of 2% a year earlier. And many families in that segment of the population built their finances on the assumption of continuous full employment, so they can't cover the mortgage when even one spouse is out of work.

Consider the plight of Stephanie and Bob Walker, who bought a $799,000, three-bedroom home in Los Angeles with a view of the Hollywood sign in 2006 but are losing it because last year Bob stopped getting computer consulting work that used to pull in about $240,000 a year. Bob eventually landed a job paying $60,000, and Stephanie found work as a $13-an-hour temp, but it wasn't enough to cover their mortgage and credit-card debt, which was swelled by about $130,000 worth of home renovations. They listed the house last year for an "optimistic" $875,000 but didn't get any takers. After months of price cuts and threats of foreclosure from the bank, they're days from closing on a sale at $700,000 that will assuage their primary mortgage lender—but leave them under pressure from other creditors. "We had no expectation things would come crashing down as fast as they did," says Stephanie. "We had no one to blame but ourselves. We didn't have a backup plan if he lost his job."

The economics at the top of the market aren't as advantageous as they are at the bottom, where first-time home buyers are flocking to lower-priced homes, spurred by low interest rates, temporary tax credits, and a drop in prices that has made owning cheaper than renting in many cities. At the high end, homes are too expensive for most first-time buyers, and move-up buyers can't purchase a home without selling property they already own. What's more, financing is far costlier, if it's available at all, because private investors have lost their appetite for big mortgages. Rates on "jumbo" loans—that is, those too big to be purchased by Fannie Mae (FNM) or Freddie Mac (FRE)—are roughly a percentage point higher than those for loans that conform to Fannie and Freddie's purchase limits. (Those limits range from $417,000 to $730,000, depending on local housing costs.)

An inflation panic in the fixed-income market is the latest blow to homeowners who are trying to sell to avoid foreclosure, because it's pushing up mortgage rates and pushing potential buyers out of the market. Rates on 30-year fixed, conforming mortgage loans jumped nearly half a percentage point, to 5.25%, in the week ended May 29 from a week earlier, according to the Mortgage Bankers Assn. Meanwhile, the market is unlikely to get much help from the Obama Administration's foreclosure-prevention program. Although it's somewhat more ambitious than the Bush Administration's program, it is voluntary for lenders and is off to a slow start since its March inception.

When will this second wave of foreclosures crest? David Crowe, chief economist of the National Association of Home Builders, doesn't see the peak coming until 2011, later than most other experts predict. Foreclosures typically top out after unemployment does, and Crowe doesn't expect that to occur until late this year. After that, Crowe says, more people will lose their homes because of upward resets on adjustable-rate mortgages. Credit Suisse says mid-2010 is the peak for scheduled resets, and resets will stay high well into 2012. While most of the subprime loans issued during the boom years have been washed out by now, there are still about half a trillion dollars' worth of option ARMs, which allow borrowers to add unpaid interest to the principal they owe. There's an even more alarming $2.5 trillion in "alt-A" loans, which are between prime and subprime and include a big chunk of the mortgages that required little or no proof of income or assets. Most of these loans were issued to people with relatively good credit who were buying more expensive homes.

A key unknown is how many middle- and upper-income homeowners will simply walk away from homes that are worth less than the mortgages on them. So far few have. Whitney R. Tilson, managing partner of New York investment firm T2 Partners and co-author of the book More Mortgage Meltdown, expects the ranks of walk-aways to increase, exacerbating foreclosures. But Rick Sharga, senior vice-president of RealtyTrac, a foreclosure data specialist, disagrees. "To sign a contract for a house and then walk away from it runs counter to everything we were taught," says Sharga, who predicts foreclosures will dip slightly in 2010.

Even if foreclosures don't rise, the rate is already so high that it will put considerable pressure on the national housing market for at least two more years, says Mark Hanson, managing director of Field Check Group, a Menlo Park (Calif.) research firm.

While forecasts differ in detail, the clear message is that foreclosure is going upscale. And that means the housing bust won't end anytime soon.

California's 90-day foreclosure freeze (http://www.fresnobee.com/local/story/1470115.html) begins Monday. Says Mike Shedlock:

(http://globaleconomicanalysis.blogspot.com/2009/06/california-foreclosure-moratoriums.html)

Quote"This bill is no more likely to work than a bill declaring poverty to be illegal or the sky to be green. Home prices will bottom when they bottom, unemployment will bottom when it bottoms, and foreclosures will stop when they stop. Those are simple economic facts. The 90 day extension gives anyone sitting on the edge of walking away as well as those wanting a reduction in principle an incentive to stop paying their mortgage, safe and secure in the fact they cannot be thrown out of their house for another 90 days."

Title: Re: Meltdown
Post by: BachQ on June 15, 2009, 03:41:35 PM

Bloomberg: -- (http://www.bloomberg.com/apps/news?pid=20601087&sid=aIsDZV9.NkVs)Foreign investment in China slid 17.8% in May after falling 22.5% in April.

Title: Re: Meltdown
Post by: BachQ on June 15, 2009, 03:45:14 PM

Venture Capital Bubble Set to Burst, Kedrosky Says
Posted Jun 12, 2009 05:03pm EDT by Aaron Task in Software and Services, Valley Buzz

Investment by venture capital funds is going to shrink by as much as 50% from 2007's $25 billion, according to a recent report by the Kauffman Foundation, entitled: "Right-Sizing the U.S. Venture Capital Industry."

As Paul Kedrosky, a senior fellow at the foundation, explains the in accompanying video, the VC industry is about to suffer a major comedown.

With the last of the bubble-era IPOs (or "exits" in VC speak) coming out of the performance figures, the industry's 10-year average return is set to turn "dramatically negative," Kedrosky says. He predicts 10-year returns will go from up 25% or 30% to negative 7%, which is going to have a major impact on investors' willingness to put money in the VC sector, certainly not those investors who fueled the industry's surge at the end of the dot.com era.

[cont'd] (http://finance.yahoo.com/tech-ticker/article/yftt_263336/Venture-Capital-Bubble-Set-to-Burst,-Kedrosky-Says?tickers=OPEN,XLK,%5EIXIC,QQQQ)

Title: Re: Meltdown
Post by: BachQ on June 15, 2009, 03:46:25 PM

Quote from: Coopmv on June 14, 2009, 01:30:30 PM
The system is hopeless ...

YES!

Title: Re: Meltdown
Post by: Coopmv on June 15, 2009, 04:32:04 PM

Quote from: Dm on June 15, 2009, 03:45:14 PM
Venture Capital Bubble Set to Burst, Kedrosky Says
Posted Jun 12, 2009 05:03pm EDT by Aaron Task in Software and Services, Valley Buzz

Investment by venture capital funds is going to shrink by as much as 50% from 2007's $25 billion, according to a recent report by the Kauffman Foundation, entitled: "Right-Sizing the U.S. Venture Capital Industry."

As Paul Kedrosky, a senior fellow at the foundation, explains the in accompanying video, the VC industry is about to suffer a major comedown.

With the last of the bubble-era IPOs (or "exits" in VC speak) coming out of the performance figures, the industry's 10-year average return is set to turn "dramatically negative," Kedrosky says. He predicts 10-year returns will go from up 25% or 30% to negative 7%, which is going to have a major impact on investors' willingness to put money in the VC sector, certainly not those investors who fueled the industry's surge at the end of the dot.com era.

[cont'd]
(http://finance.yahoo.com/tech-ticker/article/yftt_263336/Venture-Capital-Bubble-Set-to-Burst,-Kedrosky-Says?tickers=OPEN,XLK,%5EIXIC,QQQQ)

Tree does not grow to the sky and apparently most venture capitalists do not believe in that. Just because they have bankrolled the likes of Apple, Sun Micro, Google and a few other names where they made out like bandits, they believe the gravy train will roll on. I think this credit crunch will be a game-changing event for anything that is financial ...

Title: Re: Meltdown
Post by: Coopmv on June 15, 2009, 04:34:02 PM

Quote from: Dm on June 15, 2009, 03:41:35 PM
Bloomberg: -- (http://www.bloomberg.com/apps/news?pid=20601087&sid=aIsDZV9.NkVs)Foreign investment in China slid 17.8% in May after falling 22.5% in April.

China does not need any more foreign investments. With some $1.5T in foreign reserves, the government should be able to finance any projects.

Title: Re: Meltdown
Post by: Coopmv on June 15, 2009, 05:02:47 PM

The banks are left holding the bag again - commercial real estate

Extended Stay Hotels files Chapter 11

Orlando Business Journal

Extended Stay Hotels has filed for Chapter 11 bankruptcy protection, buckling under debt as its revenue dries up in the recession.

The Spartanburg, S.C.-based company filed its Chapter 11 petition Monday in the Southern District of New York. Extended Stay - which operates under the brands of Extended Stay America, Crossland Economy Studios, Extended Stay Deluxe and Homestead Studio Suites — operates 15 hotels in the Orlando area.

According to the filing, Extended Stay had about $7.1 billion in assets and $7.6 billion in liabilities at the end of 2008.

Lakewood, N.J.-based Lightstone Group bought Extended Stay from Blackstone Group in 2007 for $8 billion. The deal was highly leveraged, making Extended Stay especially vulnerable to a market downturn, according to The Wall Street Journal. Creditors that hold debt from the buyout include Bank of America Corp. and its Merrill Lynch & Co. subsidiary, as well as Wachovia Corp., which is owned by San-Francisco-based Wells Fargo & Co. (NYSE: WFC), the newspaper reported.

Extended Stay bills itself as the largest operator of mid-priced extended-stay hotels in the nation.

"Since the typical Extended Stay customer seeks a lengthy stay based on commercial relocation, the contraction of construction and new business development began to significantly and adversely affected Extended Stay's revenue stream," the filing states.

The company said its average revenue per room dropped about 23 percent in the first five months of the year compared with the same period of 2008. As a result, it was unable to deal with its debt burden with cash flow and is seeking a "comprehensive restructuring of the entire capital structure."

Extended Stay said it plans to continue operating under a lender-approved arrangement using cash collateral. Debtor-in-possession financing won't be needed, the company says.

Here is some of the inside scoop from Wall Street Journal. Any meaningful financial reform will have to put the kibosh on any future leveraged buyout where the buyout artists put down little of their own money.

In one of the biggest real-estate bankruptcies in the current slump, the Extended Stay Hotels chain filed for Chapter 11 protection Monday, collapsing under the debt from its $8 billion top-of-the-market buyout in 2007.

But David Lichtenstein, whose Lightstone Group LLC led the buyout group, appears to be surviving Extended Stay's meltdown relatively unscathed. Lightstone contributed only $200 million of equity and borrowed a chunk of that for the deal, according to people familiar with the matter.

Under a proposed restructuring plan with major creditors, the 48-year-old Mr. Lichtenstein would avoid personal guarantees in the original loan agreement. He would ...

In one of the biggest real-estate bankruptcies in the current slump, the Extended Stay Hotels chain filed for Chapter 11 protection Monday, collapsing under the debt from its $8 billion top-of-the-market buyout in 2007.

But David Lichtenstein, whose Lightstone Group LLC led the buyout group, appears to be surviving Extended Stay's meltdown relatively unscathed. Lightstone contributed only $200 million of equity and borrowed a chunk of that for the deal, according to people familiar with the matter.

Under a proposed restructuring plan with major creditors, the 48-year-old Mr. Lichtenstein would avoid personal guarantees in the original loan agreement.

Title: Re: Meltdown
Post by: Coopmv on June 15, 2009, 05:29:04 PM

It will be very interesting to see how many years Madoff gets to spend at the big house ...

Madoff victims describe pain of fraud to judge

Sentencing letters to judge chronicle anguish of Bernard Madoff's investors

Larry Neumeister, Associated Press Writer
On Monday June 15, 2009, 8:05 pm EDT

NEW YORK (AP) -- More than 100 victims of failed financier Bernard Madoff's multibillion-dollar fraud urged a judge Monday to sentence him harshly, saying he ruined their lives, leaving many of them depressed, bitter and hopeless.

In 113 statements, the victims from across the country repeatedly referred to the 71-year-old Madoff as a "monster" who, as one victim put it, has "no soul, no remorse, no conscience."

Letter after letter urged U.S. District Judge Denny Chin to sentence Madoff to the maximum 150 years in prison after he pleaded guilty in March to securities fraud, perjury and other charges.

Madoff, who has been jailed since he entered his guilty plea, is scheduled to be sentenced on June 29.

Thousands of people lost billions of dollars investing with Madoff, who authorities say confessed to his sons in early December that he had been running a giant Ponzi scheme for decades in which early investors were paid with money collected from later investors.

In the letters, victims urged Chin to show no mercy for the man they described alternately as "wicked," "cruel," "amoral," "heartless, "ruthless," and "arrogant." One letter called Madoff one of the most hated men in the world.

Some of them criticized the government for not doing more to help them. And they reacted angrily at being portrayed in some published reports as greedy, saying they passed up riskier investments that promised higher returns for the steady profits reported by Madoff.

They also urged investigators to keep pursuing probes of Madoff's family members on the belief that some of them had to know about the fraud or had a role in it.

Ira Sorkin, Madoff's lawyer, said any comment he would make in response to the letters would be made in writing to the judge prior to the sentencing.

Dozens of retired investors said they were forced to look for work to survive after the loss of their investments had forced them to put their homes up for sale. Several said they had heard of suicides as a result of the extreme anguish caused by the loss of life savings.

"I can use every superlative in the dictionary, but none would suffice to tell you how damaging Madoff's scheme was," a letter from Ronnie Sue and Dominic Ambrosino said.

Ronnie Sue Ambrosino said the couple had so much faith in Madoff that they put their entire life savings in his hands and even took out a loan to buy a motor home rather than pay for it outright because they did not want to withdraw any of their money from Madoff.

She said when she learned of Madoff fraud she felt numb.

"The air in the room was thick and there was silence. The birds that had been chirping stopped singing. The squirrels stopped scurrying. The sun stopped shining. There was a void," she wrote. She said her decision to attend Madoff's plea brought her even more pain when she was hit by a van and was left in a cast for eight weeks.

Kathleen Bignell of Gunnison, Colorado, said she told her 89-year-old father he cannot die because she no longer has money to bury him. She said Madoff "ought to be able to look forward to just exactly what he has done to us. No hope, no future and no forgiveness."

Morton J. Chalek of Port Jefferson Station, New York, wrote: "I am 86 years old. I have a broken knee, I have lung cancer and thanks to Madoff, I am now bankrupt."

Jesse L. Cohen of Summit, New Jersey, told Chin to give him one year off his sentence "for every one billion dollars of hidden money that he reveals. In lieu of that, please make sure that the facility in which he rots is extremely uncomfortable."

"I am broke -- robbed by `The Madoff gang,'" wrote Emma De Vita of Chalfont, Pennsylvania.

Caren Low of Harrison, New York, wrote that her family's name is on buildings at the Albert Einstein College of Medicine, the Hebrew Home for the Aged in New Rochelle and the Hebrew University in Jerusalem. She said they are benefactors of Lincoln Center and founders of the Simon Wiesenthal Center in Los Angeles.

She said she went on anti-depressants after she learned what Madoff had done and that now she is looking for work.

"It's absolutely revolting," she wrote. "I guess one lesson learned is not to give away too much money before you die as you never know what can happen."

Title: Re: Meltdown
Post by: BachQ on June 16, 2009, 02:01:09 PM

Quote from: Coopmv on March 16, 2009, 07:30:34 PM
The foolishness of these American bankers know no bounds. They have been offering truckloads of credit cards to college kids, who are the equivalent of subprime borrowers ...

Reuters-- (http://www.reuters.com/article/ousiv/idUSTRE55E5GQ20090615)U.S. credit card defaults rose to record highs in May, with a steep deterioration of Bank of America Corp's lending portfolio, in another sign that consumers remain under severe stress.

Reuters -- (http://www.reuters.com/article/wtUSInvestingNews/idESBNG2809220090615)Bank of America Corp (BAC.N) is experiencing "horrific" loan losses and may set aside $46 billion in loan loss provisions this year, analyst Richard Bove said.

NYT -- (http://www.nytimes.com/2009/06/16/your-money/credit-and-debit-cards/16credit.html?_r=1&ref=business) Credit card companies slashing deliquent balances by up to 50%. "As they confront unprecedented numbers of troubled customers, credit card companies are increasingly doing something they have historically scorned: settling delinquent accounts for substantially less than the amount owed. ... In recent months, with unemployment topping 9 percent and more people having trouble paying their bills, experts say this approach has risen drastically."

Martin Weiss: New Hard Evidence of Continuing Debt Collapse -- (http://www.moneyandmarkets.com/new-hard-evidence-of-continuing-debt-collapse-3-34207)" the Fed's numbers demonstrate, beyond a shadow of a doubt, that the credit market meltdown, which struck with full force after the Lehman Brothers failure last September, actually got a lot worse in the first quarter of 2009 [&] the credit market shutdown actually gained tremendous momentum in the first quarter ... No government, even one run amuck with spending and money printing, can replace $13.87 trillion in losses by households. ... The nearly $14 trillion in financial losses suffered by U.S. households has inevitable consequences. And massive, nonstop borrowings by the U.S. Treasury in the months ahead — driving interest rates still higher — can only make them worse."

Title: Re: Meltdown
Post by: BachQ on June 16, 2009, 02:03:50 PM

"You can't drink yourself sober and you can't leverage your way out of excess leverage." - Barry Ritholtz

(http://static.seekingalpha.com/uploads/2009/6/13/saupload_clip_image014_285_29_thumb1.png)

The Debt Conundrum, by James Quinn.
(http://seekingalpha.com/article/143010-the-debt-conundrum-part-i?source=article_sb_popular)

QuoteMortgage delinquencies as a percentage of loans stayed between 2% and 3% from 1979 through 2007. I would categorize this as normal. The Mortgage Bankers Association just reported a delinquency rate of 9.12% on all mortgage loans, the highest since the MBA started keeping records in 1972. Also, the delinquency rate only includes late loans (30-days or more), but not loans in foreclosure. In the first quarter, the percentage of loans in foreclosure was 3.85%, an increase of 55 basis points from the prior quarter and 138 basis points from a year ago. Both the overall percentage and the quarter-to-quarter increase are records. The combined percentage of loans in foreclosure and at least one payment late is 12.07%, another record. Delinquencies on subprime mortgage loans rose to 24.95% from 21.88% in the fourth quarter of 2008. Prime loan delinquencies rose to 6.06% from 5.06% one quarter ago, a significant and disturbing increase from a group of borrowers that aren't expected to default. With the 30-year mortgage rate approaching 5.7%, mortgage refinancing activity has plunged about 60% in the last two months. Mortgage applications for new home purchases collapsed at a 20% annual rate in May too. Normality in the mortgage market appears to be a few years away.

Title: Re: Meltdown
Post by: BachQ on June 16, 2009, 02:04:25 PM

Reuters -- (http://www.reuters.com/article/wtUSInvestingNews/idUSTRE55D1ON20090614)Manhattan condo sales plunge 71% (April 09 vs. April 08)

Title: Re: Meltdown
Post by: BachQ on June 16, 2009, 02:05:01 PM

Jeff Rubin: -- (http://www.hilltimes.com/html/index.php?display=story&full_path=2009/june/15/qa_rubin/&c=2)Global economy to get 'shock of its life' when oil hits triple digits

Title: Re: Meltdown
Post by: BachQ on June 16, 2009, 02:08:25 PM

This is scary: waves #3, #4, and #5 are yet to come. :o

HENRY BLODGET: The Five Waves of Housing Collapse (http://www.businessinsider.com/henry-blodget-the-five-waves-of-the-housing-collapse-2009-6)

Quote

The Past: Losses Mostly Behind Us:

• Wave #1: Borrowers committing (or the victim of) fraud & speculators, who defaulted quickly. Timing: beginning in late 2006 (as soon as home prices started to fall) into 2008. Mostly behind us.

• Wave #2: Borrowers who defaulted when their mortgages reset due to payment shock. Timing: early 2007 (as two-year teaser subprime loans written in early 2005 started to reset) to the present. Now tapering off as low interest rates mitigate payment shock.

The Future: Losses Mostly Ahead of Us

• Wave #3: Prime loans (most of which are owned or guaranteed by the GSEs) defaulting due to job loss and home price declines (i.e., underwater homeowners). Timing: started to surge in early 2008 to the present.

• Wave #4: Jumbo prime, second lien and HELOCs (most of which are on banks' books) defaulting due to job loss and home price declines/underwater homeowners. Timing: started to surge in early 2008 to the
present.

• Wave #5: Losses among loans outside of the housing sector, the largest of which will be in the $3.5 trillion area of commercial real estate. Timing: started to surge in early 2008 to the present.

Title: Re: Meltdown
Post by: BachQ on June 16, 2009, 02:11:41 PM

5,115 retired California government workers receive pensions in excess of $100,000/yr from CalPERS (http://www.californiapensionreform.com/calpers/)

Title: Re: Meltdown
Post by: BachQ on June 16, 2009, 02:14:33 PM

Quote from: Coopmv on June 15, 2009, 05:29:04 PM
It will be very interesting to see how many years Madoff gets to spend at the big house ...

Coop, no doubt ... Madoff's sentencing will be quite the event ... one should plan to have plenty of popcorn handy.

Quote from: Coopmv on June 15, 2009, 05:29:04 PM
*** In 113 statements, the victims from across the country repeatedly referred to the 71-year-old Madoff as a "monster" who, as one victim put it, has "no soul, no remorse, no conscience." Letter after letter urged U.S. District Judge Denny Chin to sentence Madoff to the maximum 150 years in prison after he pleaded guilty in March to securities fraud, perjury and other charges. ***In the letters, victims urged Chin to show no mercy for the man they described alternately as "wicked," "cruel," "amoral," "heartless, "ruthless," and "arrogant." One letter called Madoff one of the most hated men in the world.

Title: Re: Meltdown
Post by: BachQ on June 16, 2009, 04:13:50 PM

Quote from: Coopmv on May 22, 2009, 06:08:19 AM
No bailout for CA!!!

Washington Post (16 Jun 09) -- US tells California: "NO BAILOUT" (http://www.washingtonpost.com/wp-dyn/content/article/2009/06/15/AR2009061503249.html)

"After a series of meetings, Treasury Secretary Timothy F. Geithner, top White House economists Lawrence Summers and Christina Romer, and other senior officials have decided that California could hold on a little longer and should get its budget in order rather than rely on a federal bailout." ... California Controller John Chiang had warned last week that CA was "less than 50 days away from a meltdown of state government."

Title: Re: Meltdown
Post by: Coopmv on June 16, 2009, 05:11:12 PM

Quote from: Dm on June 16, 2009, 02:11:41 PM
5,115 retired California government workers receive pensions in excess of $100,000/yr from CalPERS
(http://www.californiapensionreform.com/calpers/)

With pension benefits like these, no wonder CA is going bankrupt. Not a tear should be shed for such folly ...

Title: Re: Meltdown
Post by: Coopmv on June 16, 2009, 05:17:02 PM

Quote from: Dm on June 16, 2009, 04:13:50 PM

Washington Post (16 Jun 09) -- US tells California: "NO BAILOUT" (http://www.washingtonpost.com/wp-dyn/content/article/2009/06/15/AR2009061503249.html)

"After a series of meetings, Treasury Secretary Timothy F. Geithner, top White House economists Lawrence Summers and Christina Romer, and other senior officials have decided that California could hold on a little longer and should get its budget in order rather than rely on a federal bailout." ... California Controller John Chiang had warned last week that CA was "less than 50 days away from a meltdown of state government."

Remember now, one of the US Senators Barbara Boxer, who represents CA, was back in the 90's the worst check bouncer of the House Bank. Yet people in CA decided to put her in the US Senate, speaking of having no common sense. With US Senator like Boxer, no wonder this country is in debt up to its eyeballs. Boxer and Pelosi, what a dynamic duo ...

Title: Re: Meltdown
Post by: BachQ on June 17, 2009, 02:39:28 PM

Christian Science Monitor -- Retail GAS prices rise for 50 consecutive days, setting a record.
(http://features.csmonitor.com/economyrebuild/2009/06/17/crude-falls-but-us-gas-prices-up-record-50-days-in-a-row/)

Title: Re: Meltdown
Post by: BachQ on June 17, 2009, 02:47:21 PM

Reuters -- Cantarell, the world's 4th largest oil field, is in steep decline amid drastic efforts to squeeze remaining drops from the dying field. Meanwhile, yields have fallen at annualized rates of more than 35%. :o (http://www.reuters.com/article/reutersComService_3_MOLT/idUSTRE55F4HK20090616)

Title: Re: Meltdown
Post by: BachQ on June 17, 2009, 02:48:44 PM

Quote from: Coopmv on June 14, 2009, 06:29:28 AM
In devising new regulations and oversight, the administration is looking to address four perceived weaknesses in the current system:

[... snip ...]

-Consumers and lenders whose unwitting or reckless credit and borrowing decisions placed families under staggering debts and contributed to the instability of the financial system. Obama is likely to recommend creation a financial services consumer protection body with oversight powers over mortgages and credit cards and other consumer financial products.

CHART OF THE DAY: Credit Card Debt Swallows American Households
(http://static.10gen.com/www.businessinsider.com/~~/f?id=4a16d68e4b54374f00f68c7f&maxX=610&maxY=370) (http://www.businessinsider.com/chart-of-the-day-credit-card-debt-vs-median-household-income-2009-5)

Title: Re: Meltdown
Post by: BachQ on June 17, 2009, 02:57:39 PM

Quote from: Coopmv on June 16, 2009, 05:11:12 PM
With pension benefits like these, no wonder CA is going bankrupt. Not a tear should be shed for such folly ...

It's pure madness. Firefighters in San Francisco earning $350K/yr; police officers in Oakland CA with starting salaries of $75,000/yr ... utter folly ... and now they want the federal gov to bail them out so they can continue to spend improvidently.

Quote from: Coopmv on June 16, 2009, 05:17:02 PM
Boxer and Pelosi, what a dynamic duo ...

lol

Title: Re: Meltdown
Post by: Coopmv on June 17, 2009, 04:43:03 PM

Quote from: Dm on June 17, 2009, 02:47:21 PM
Reuters -- Cantarell, the world's 4th largest oil field, is in steep decline amid drastic efforts to squeeze remaining drops from the dying field. Meanwhile, yields have fallen at annualized rates of more than 35%. :o
(http://www.reuters.com/article/reutersComService_3_MOLT/idUSTRE55F4HK20090616)

Another big reason the US MUST beef up border controls, as a wave of illegals will stream across the border when the Mexican national oil revenues dry up and the government can no longer afford the social programs ...

Title: Re: Meltdown
Post by: Coopmv on June 17, 2009, 04:46:56 PM

Quote from: Dm on June 17, 2009, 02:57:39 PM
It's pure madness. Firefighters in San Francisco earning $350K/yr; police officers in Oakland CA with starting salaries of $75,000/yr ... utter folly ... and now they want the federal gov to bail them out so they can continue to spend improvidently.

lol

My two sisters decided CA was to place to be. I wonder whether they are having second thoughts now. I was NEVER attracted to CA - as a place to live ...

Title: Re: Meltdown
Post by: BachQ on June 18, 2009, 03:39:20 PM

Quote from: Coopmv on June 12, 2009, 04:51:22 PM
It is not exactly a pretty picture across the pond either. Where is the global recovery?

BBC -- UK public borrowing rises past record levels, now totalling 54.7% of UK GDP.

(http://newsimg.bbc.co.uk/media/images/45690000/gif/_45690537_uk_budget466x280_2.gif)

In May 09, UK corporate tax receipts fell by 27%, VAT revenues were down 18%, and income tax fell 11% compared with May 2008. "The public finances for May were absolutely dire, deteriorating even more than feared as tax revenues continued to be decimated across the board," said Howard Archer of IHS Global Insight. (http://news.bbc.co.uk/2/hi/business/8106607.stm)

Title: Re: Meltdown
Post by: BachQ on June 18, 2009, 03:41:08 PM

Quote from: Coopmv on June 08, 2009, 07:15:25 PM
In all honesty, few countries really believe or even practice free trade. The Chinese just practice managed trade.

Quote from: Coopmv on May 31, 2009, 05:43:22 AM
The problem is the Anglo-Saxons business model is broken - the US and UK companies have taken the lead to outsource jobs to countries such as China and India with the implicit blessings of their governments ... which has led to an avalanche of job losses in the western industrialized world. Nothing is off limits to this outsourcing wave.

Coop, China seems poised to increase its protectionism with its new "Buy China" policy. (http://www.ft.com/cms/s/0/66454774-5a7c-11de-8c14-00144feabdc0.html?nclick_check=1) Interesting how China insists that the US must maximize its free-trade policies (remember when Beijing derided Obama's proposed "Buy American" clause in his stimulus package?), while at the same time taking steps to further entrench its own protectionistic policies.

Title: Re: Meltdown
Post by: Coopmv on June 18, 2009, 04:53:12 PM

Quote from: Dm on June 18, 2009, 03:39:20 PM
BBC -- UK public borrowing rises past record levels, now totalling 54.7% of UK GDP.

(http://newsimg.bbc.co.uk/media/images/45690000/gif/_45690537_uk_budget466x280_2.gif)

In May 09, UK corporate tax receipts fell by 27%, VAT revenues were down 18%, and income tax fell 11% compared with May 2008. "The public finances for May were absolutely dire, deteriorating even more than feared as tax revenues continued to be decimated across the board," said Howard Archer of IHS Global Insight.
(http://news.bbc.co.uk/2/hi/business/8106607.stm)

The UK is in a more precarious position than the US because of its less diversified economy. There is no doubt Wall Street will never be the same again and there will be repercussion on the London financial district since most of the employers there are American financial firms ...

Title: Re: Meltdown
Post by: Coopmv on June 18, 2009, 06:40:50 PM

Quote from: Dm on June 18, 2009, 03:41:08 PM
Coop, China seems poised to increase its protectionism with its new "Buy China" policy. (http://www.ft.com/cms/s/0/66454774-5a7c-11de-8c14-00144feabdc0.html?nclick_check=1) Interesting how China insists that the US must maximize its free-trade policies (remember when Beijing derided Obama's proposed "Buy American" clause in his stimulus package?), while at the same time taking steps to further entrench its own protectionistic policies.

DM. For years, the western industrialized powers believed only the Russian communists were evil. In truth, the only good communists are the dead communists. The myopia of the west has helped build up China and engineer the greatest transfer of wealth from the west to China. Much of the US GDP IMO is hot air - all debt driven prosperity and now the payment is due. It is pure idiocy to believe that the service economy is the ticket to higher standard of living when an over-emphasis in financial engineering has created a lot of jobs that perform nothing but shovel papers in some form of IOU's around. >:(

Title: Re: Meltdown
Post by: BachQ on June 19, 2009, 03:26:08 PM

6 States Hitting Residents With Big Tax Hikes

The top honor goes to California, which is projecting that it will fall about $25 billion short come fiscal 2010. Taking second place is New York with a projected $17.6 billion deficit for fiscal 2010.

California:

State deficit estimate for fiscal 2010: $24.7 billion
Percent of general fund budget: 22.3%
State and local tax burden: 10.5%; Rank: 6

New York:

State deficit estimate for fiscal 2010: $17.6 billion
Percent of general fund budget: 31.9%
State and local tax burden: 11.7%; Rank: 2

Florida:

State deficit estimate for fiscal 2010: $6 billion
Percent of general fund budget: 27%
State and local tax burden: 7.4%; Rank: 47

Massachusetts

State deficit estimate for fiscal 2010: $3 billion
Percent of general fund budget: 11.2%
State and local tax burden: 9.5%; Rank: 23 (http://finance.yahoo.com/taxes/article/107205/6-states-hitting-residents-big-tax-hikes.html?mod=taxes-advice_strategy)

Title: Re: Meltdown
Post by: BachQ on June 19, 2009, 03:30:36 PM

Reuters -- Moody's warning of a significant ("multi-notch") downgrade on California's debt stuns CA officials (http://www.reuters.com/article/domesticNews/idUSTRE55I52L20090619) CA's current debt rating is just five notches above speculative grade, thus Moody's has sounded the alarm that CA's debt rating may plunge into "junk" status if CA lawmakers fail to reach a budget deal soon. Said Moody's: "If the legislature does not take action quickly, the state's cash situation will deteriorate to the point where the controller will have to delay most non-priority payments in July. Lack of action could result in a multi-notch downgrade."

QuoteCalifornia's leasing debt and other state-related debt are also on review, affecting a total of $72 billion of debt. A downgrade could push California's borrowing costs up at time when state officials expect to issue up to $9 billion in revenue anticipation notes as soon as possible after a budget agreement is notched -- a deal whose timing is in doubt.

"I cannot remember reading a ratings note that raised the specter of a multi-notch downgrade," said H.D. Palmer, a spokesman for Schwarzenegger on state finance matters. "It's another clear warning from the financial markets that there will be substantial and costly consequences if the legislature does not send the governor a budget that he can sign."

Title: Re: Meltdown
Post by: Coopmv on June 19, 2009, 05:01:52 PM

Well, the over 11% unemployment rate in CA obviously does not count the illegals who were thrown out of work. Since they could not file for unemployment for obvious reason, they are not counted ...

Jobless rate in Western US tops 10 percent

Jobless rate in Western US tops 10 percent in May, first time since 1983; 8 states set records

By Jeannine Aversa, AP Economics Writer
On Friday June 19, 2009, 6:39 pm EDT

WASHINGTON (AP) -- The housing bust sent the unemployment rate in the West bolting past 10 percent in May -- the first time in more than 25 years that a region of the United States has suffered double-digit joblessness.

A Labor Department report released Friday showed the West absorbing the worst of the recession, which is now the longest since World War II. California, Nevada and Oregon endured particularly heavy job losses in construction, manufacturing and tourism.

The region has been pounded because it was the epicenter of the housing boom that collapsed. As home values plummeted, the West lost jobs and wealth, and consumers grew skittish about spending.

"The West is where houses are being abandoned most quickly because it has the largest percentage of the population under water -- owing more on their houses than they're worth," said Robert Reich, labor secretary under President Bill Clinton and now a professor at the University of California, Berkeley. "They lose their capacity to borrow. All of that means that they can't buy very much."

The West reported the highest regional jobless rate for May: 10.1 percent. The last time any region had an unemployment rate of at least 10 percent was in September 1983, when the economy was emerging from a severe recession.

The region's problems also go beyond housing. Cutbacks on businesses travel are hitting hard in Arizona and Nevada.

"It's difficult to keep major projects going -- like casinos -- in Las Vegas. That's pretty much come to a halt," said Steve Cochrane, managing director at Moody's Economy.com.

In California, the jobless rate jumped to 11.5 percent last month. In Nevada, it rose to 11.3 percent, and in Oregon, to 12.4 percent. All three figures were records, based on documentation going back to 1976.

In Oregon, makers of plywood, window sashes and doors have suffered from reduced demand. The state also has lost jobs in high-tech industries and at factories that make heavy trucks and recreational vehicles.

At a training center in a blue-collar Portland neighborhood, 36-year-old construction worker Michael Clark said he lost a job with a property management company in December.

"When I was laid off 2 1/2 years ago, you could mail out resumes, and you'd be getting four, five calls a week, and they'd be hiring," Clark said. These days, he said, the response is, "Thanks for your interest." And then silence.

Even as jobs have vanished, people who find Oregon a desirable destination keep moving into the state, and those already there are hesitant to leave, state labor economists say. That means more competition among job seekers for the few positions that come available.

In addition, many Oregon households that once had a single earner now have two people seeking work as spouses of laid-off workers have entered the labor market. And analysts say retirees seeking to replenish their shrunken 401(k) accounts are re-entering the work force, too.

What's more, hard-to-get credit has cooled once-hot real estate markets in the Portland area and in central Oregon, where the sunny desert climate has long attracted retirees from rainier parts of the Northwest and people cashing out of pricey California homes.

In Arizona, which along with Florida suffered the largest percentage drop in jobs last month, the losses were spread across many industries, including health care and government, said Marshall Vest, director of the University of Arizona's Economic and Business Research Center.

After the West, the Midwest had the second-highest unemployment rate, at 9.8 percent. The South's jobless rate was 8.9 percent. The Northeast had the lowest, 8.3 percent.

The government report showed employment conditions deteriorating in 48 states and the District of Columbia last month.

Michigan, the heart of the sinking auto industry, had the highest unemployment rate: 14.1 percent.

Eight states had record-high jobless rates. Only two -- Nebraska and Vermont -- reported no increases. Nebraska's jobless rate dipped, and Vermont's was flat.

The five other states that set new unemployment highs were North Carolina, Oregon, Rhode Island, South Carolina, Florida and Georgia.

After Arizona and Florida, the next-largest percentage drop in jobs last month was Oklahoma, followed by Arkansas, Kentucky and Michigan.

Nationwide, the jobless rate stands at a quarter-century high of 9.4 percent. Analysts say companies are unlikely to ramp up hiring until they feel sure their sales are rebounding and that any economic recovery will have staying power.

Some economists say the nation's jobless rate could rise as high as 11 percent by the summer of next year before it starts a slow descent. The highest rate since World War II was 10.8 percent at the end of 1982.

North Dakota and Nebraska reported the lowest unemployment rates: 4.4 percent each. North Dakota has been helped by the oil business. Nebraska has been supported by farm businesses.

Neither state ever got carried away by the housing boom, either, so they never suffered huge hits to household wealth. Nebraska also has benefited from the relative strength of two of its main industries: agriculture and food-production.

Title: Re: Meltdown
Post by: Coopmv on June 19, 2009, 08:04:58 PM

Quote from: Dm on June 17, 2009, 02:48:44 PM

CHART OF THE DAY: Credit Card Debt Swallows American Households
(http://static.10gen.com/www.businessinsider.com/~~/f?id=4a16d68e4b54374f00f68c7f&maxX=610&maxY=370)
(http://www.businessinsider.com/chart-of-the-day-credit-card-debt-vs-median-household-income-2009-5)

On paper, the US GDP was something like $12T before the recession began. But the US economy has always been heavily debt-driven. Just how much borrowing is required to produce this kind of economic output and how does the GDP net of borrowing and costs of borrowing compare with Germany and Japan?

Title: Re: Meltdown
Post by: Lethevich on June 19, 2009, 11:56:11 PM

Quote from: Dm on June 19, 2009, 03:26:08 PM
6 States Hitting Residents With Big Tax Hikes

The top honor goes to California, which is projecting that it will fall about $25 billion short come fiscal 2010. Taking second place is New York with a projected $17.6 billion deficit for fiscal 2010.

California:

State deficit estimate for fiscal 2010: $24.7 billion
Percent of general fund budget: 22.3%
State and local tax burden: 10.5%; Rank: 6

New York:

State deficit estimate for fiscal 2010: $17.6 billion
Percent of general fund budget: 31.9%
State and local tax burden: 11.7%; Rank: 2

Florida:

State deficit estimate for fiscal 2010: $6 billion
Percent of general fund budget: 27%
State and local tax burden: 7.4%; Rank: 47

Massachusetts

State deficit estimate for fiscal 2010: $3 billion
Percent of general fund budget: 11.2%
State and local tax burden: 9.5%; Rank: 23
(http://finance.yahoo.com/taxes/article/107205/6-states-hitting-residents-big-tax-hikes.html?mod=taxes-advice_strategy)

A question: one or two people in this thread have said that it is Democrats who are preventing California from making budget cuts to deal with this problem. Given how many Democrat politicians there are elected New York, why is NY not in the same "imminent catastrophe" trouble that California is? Their deficit looks huge as well.

Title: Re: Meltdown
Post by: Coopmv on June 20, 2009, 03:49:26 AM

Quote from: Lethe on June 19, 2009, 11:56:11 PM
A question: one or two people in this thread have said that it is Democrats who are preventing California from making budget cuts to deal with this problem. Given how many Democrat politicians there are elected New York, why is NY not in the same "imminent catastrophe" trouble that California is? Their deficit looks huge as well.

CA is a lot more generous with the pay and pension for its state and municipal employees as well as for a host of other benefits than NY (perhaps except NYC). NY has the highest property tax rate in the country - one big reason I bailed out of NY. OTOH, CA property tax is ridiculously low for a state of its size and the level of services it provides - it is time to face reality on that front. BTW, CA income tax is also nowhere near the top of 50 states. IIRC from an article I read a few years back, NY, MA, MD, WI and MN all rank ahead of CA when it comes to income tax. Besides, CA still heavily subsidizes college tuitions for its residents who attend the UC systems which few other states do. CA just needs to hike both its income and property tax as well as the tuition at the UC system plus cutting back on benefits in order to balance its books.

Title: Re: Meltdown
Post by: Lethevich on June 20, 2009, 09:14:49 AM

Coolie, that makes sense. Thanks!

Title: Re: Meltdown
Post by: BachQ on June 20, 2009, 11:52:11 AM

Quote from: Lethe on June 19, 2009, 11:56:11 PM
A question: one or two people in this thread have said that it is Democrats who are preventing California from making budget cuts to deal with this problem. Given how many Democrat politicians there are elected New York, why is NY not in the same "imminent catastrophe" trouble that California is? Their deficit looks huge as well.

Lethe, in addition to Coop's comments ...

Unlike NY, California is saddled with a draconian constitution that, among other things, allows for voter initiatives. For example, "Proposition 13" (passed by the voters) requires: (1) two-thirds supermajority legislative approval for tax hikes for state tax rates and (2) two-thirds supermajority approval for tax hikes for local governments seeking to raise special taxes. In addition, California budgets require 2/3 supermajority legislative approval. This makes passing a budget in times of crisis a nightmare, especially when there is a deeply divided legislature, and the Governor is constantly threatening a veto. The voters, meanwhile, have refused to allow for tax hikes in recent initiatives. As Coop mentions, CA's tax code (devised in the 1930's) also needs to be totally revamped.

Writing in the San Francisco Chronicle, (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/20/ED4812EHIR.DTL) one commentator condemns this two-thirds majority requirement for passing budgets as being a structural defect:

"California is the only state that has not passed a budget this year. While the budget battle rages, no other legislative matter gets real attention, despite an armada of problems requiring state attention -- water, education, roads, prisons, health care, housing, economic policies and more. If this were a rare occurrence, then we could look the other way, but it has happened 18 of the past 22 years! The chief reason is that only Rhode Island, Arkansas and California have a constitutional requirement of two-thirds legislative budget approval, which in California is nearly impossible. Republicans contend this threshold is their only check on Democrats' profligate spending, but if Democrats do overreach, more Republicans would be elected."

Thus, given a two-thirds majority requirement, a small handful of Republican legislators can delay the budget process into perpetuity.

In addition, "Proposition 13" put a 1% cap on real property taxes: "the maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value of such property ..." As a result, CA property tax rates were slashed by an average of 57%.

Meanwhile, CA voters have been quick to approve increases in spending for prisons and law enforcement (remember "3 strikes"?), as well as welfare, education, and social programs. The problem is that CA voters don't like to pay for their social nirvana.

In both NY and CA, during boom years, the democrats were eager to expand social programs while refusing to cut them during bust years. This leads to an ever-expanding state government. These same legislators also seem oblivious to the concept of a "rainy day fund."

Title: Re: Meltdown
Post by: Coopmv on June 20, 2009, 03:24:01 PM

Quote from: Dm on June 20, 2009, 11:52:11 AM
Lethe, in addition to Coop's comments ...

Unlike NY, California is saddled with a draconian constitution as a result of the voters' passage of "Proposition 13" that requires (1) two-thirds supermajority legislative approval for tax hikes for state tax rates and (2) two-thirds supermajority approval for tax hikes for local governments seeking to raise special taxes. In addition, California budgets require 2/3 supermajority legislative approval. This makes passing a budget in times of crisis a nightmare, especially when there is a deeply divided legislature, and the Governor is constantly threatening a veto. The voters, meanwhile, have refused to allow for tax hikes in recent initiatives. As Coop mentions, CA's tax code (devised in the 1930's) also needs to be totally revamped.

Writing in the San Francisco Chronicle, (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/08/20/ED4812EHIR.DTL) one commentator condemns this two-thirds majority requirement for passing budgets as being a structural defect:

"California is the only state that has not passed a budget this year. While the budget battle rages, no other legislative matter gets real attention, despite an armada of problems requiring state attention -- water, education, roads, prisons, health care, housing, economic policies and more. If this were a rare occurrence, then we could look the other way, but it has happened 18 of the past 22 years! The chief reason is that only Rhode Island, Arkansas and California have a constitutional requirement of two-thirds legislative budget approval, which in California is nearly impossible. Republicans contend this threshold is their only check on Democrats' profligate spending, but if Democrats do overreach, more Republicans would be elected."

Thus, given a two-thirds majority requirement, a small handful of Republican legislators can delay the budget process into perpetuity.

In addition, "Proposition 13" put a 1% cap on real property taxes: "the maximum amount of any ad valorem tax on real property shall not exceed One percent (1%) of the full cash value of such property ..." As a result, CA property tax rates were slashed by an average of 57%.

Meanwhile, CA voters have been quick to approve increases in spending for prisons and law enforcement (remember "3 strikes"?), as well as welfare, education, and social programs. The problem is that CA voters don't like to pay for their social nirvana.

In both NY and CA, during boom years, the democrats were eager to expand social programs while refusing to cut them during bust years. This leads to an ever-expanding state government. These same legislators also seem oblivious to the concept of a "rainy day fund."

The fiscal fiasco in CA is a godsend for the Republicans as no GOP presidential candidate has won the state since Ronald Reagan and they have little to lose to vote against a bailout or if there is one, force the Democrats to swallow the bitter pill. For Democrats outside of CA, if they vote for the bailout, the payback will come next year since voters in the other forty-nine states are fed up with any bailout. The fiscal train wreck in CA has been many years in the making. Yeah, Prop 13 is the new math - low tax and generous everything provided by CA ....

Title: Re: Meltdown
Post by: Coopmv on June 20, 2009, 05:19:42 PM

On a different note, check out the following article from AOL Daily Finance ...

Are sky-high oil prices ahead?
Joseph Lazzaro

Jun 19th 2009 at 3:00PM

One thing about the oil market: it's bound to hold your attention, whether you're an investor looking for growth plays or just a typical car owner.

Certainly if you're an American driver, oil is holding your attention. Just take a look at that gas pump price: a national-average, regular unleaded gasoline price that's risen about 60 percent (!) in six short months, to about $2.63 per gallon, according to data compiled by gasbuddy.com. Moreover, the price rise is all-the-more exasperating because it's occurred while the U.S. economy is in recession, with millions of drivers taken off the road, due to belt-tightening and job-layoffs.

Most of the roughly $1 per gallon rise in gasoline prices stems from the $35 per barrel increase in oil's price since December 2008, to about $71 per barrel on Friday.

Why has the price of oil basically doubled despite the fact that the U.S. and global economies are still in recessions? Among other factors, institutional investors, citing 'green shoots,' are calculating that each recession has bottomed - the recoveries may have already started - and that implies increasing oil demand in the quarters ahead, hence they're positioning themselves in what they believe will be a high-return asset: oil.

Are sky-high oil prices ahead...again?

What? Another period of sky-high oil prices? (As if $70 wasn't high enough!) The aforementioned is likely to be greeted by Americans with the same enthusiasm as a resurgence of the H1N1 flu. American consumers and business executives know what a high oil price does to the U.S. economy: it severely reduces consumers' disposable income and increases business costs at virtually every stage of the production process. It also increases inflation. And sky-high oil price eras - the world's three oil shocks - have been major factors in the U.S. recessions of 1973-74, 1979-80, and 2008-9. Further, the U.S. is still recovering from the effects of $147.27 per barrel oil surge of 2008: a second run at $100-oil would be like a left hook from former heavyweight boxing champ 'Smokin' Joe Frasier: a devastating blow. Are we destined to experienced another, prolonged period of $100 oil, or even worse? Here are two competing arguments.

Veteran oil analyst Matt Simmons says we are. Simmons, founder of Simmons & Co., argues oil's price plunge from record-highs last year to below $50 took many oil fields out of production. The low oil price forced many oil companies to delay projects, decrease the number of rigs deployed, consolidate operations/lay-off staff, and above all, to abandon expensive projects. That deceased production, plus aging oil fields and the credit crunch's impact on oil exploration, help set the stage for the current price rise. What's more the price rise will continue, Simmons argues, because producers will not be able to increase global oil supply fast enough to keep up with soon-to-be rising global oil demand. Simmons believes the average daily price of oil in 2010 will be $200 per barrel (in 2005 dollars).

Bloomberg Columnist William Pesek says visions of $200 or $250 per barrel oil represent a stretch, at best. Much of that rise in oil's price, Pesek says, hinges on China's ability to drive global growth. However, a considerable portion of that China-based demand is for raw materials, and will not lead to large, spin-off growth effects for economies in Asia, or globally. In other words, China's economy is not going to create demand for parts and other goods assembled outside China, and once investors realize China's still-export-oriented economy can not grow more than 6 percent per year, the commodity bubble or "bubble of belief" will burst, and so will oil's price. The key point in Pesek's thesis is a frugal consumer era, led by reduced consumption in the United States – a major market for China's exports. Once it's clear exports will not return to pre-recession days, China's lopsided economy will be exposed, and down goes the price of oil and commodities. Those calculating that a China boom will lead to $250 oil are in for a disappointment, Pesek said.

Oil Analysis: Columnist Pesek offers evidence that dispels notions that China's economy, currently structured, will be the global growth engine that many expect it to be, but it's awful hard to take a position against Matt Simmons, one the oil industry's best analysts. Further, oil's vault to $70 in a macroeconomic eye-blink, amid the recession, is alarming, so the bias here tilts toward Simmons' analysis. From a U.S. standpoint, that only underscores the need for a national energy policy, and President Obama's policy to increase vehicle fuel efficiency and conservation by businesses and homes represents a good first step.

Title: Re: Meltdown
Post by: Coopmv on June 20, 2009, 08:00:44 PM

Back to meltdown in CA. Here is an interesting article

The Atlantic

Megan McArdle

Is California Too Big to Fail?
19 May 2009 05:48 pm

So what about California? A reader asks. Ummm, that's a tough one. No, wait, it's not: California is completely, totally, irreparably hosed. And not a little garden hose. More like this. Their outflow is bigger than their inflow. You can blame Republicans who won't pass a budget, or Democrats who spend every single cent of tax money that comes in during the booms, borrow some more, and then act all surprised when revenues, in a totally unprecedented, inexplicable, and unforeseaable chain of events, fall during a recession. You can blame the initiative process, and the uneducated voters who try to vote themselves rich by picking their own pockets. Whoever is to blame, the state was bound to go broke one day, and hey, today's that day!

There is a surprisingly sizeable blogger contingent arguing that we have to bail them out because however regrettable the events that lead here, we now have no choice. But actually, we do have a choice: we could let them go bankrupt. And we probably should.

I am not under the illusion that this will be fun. For starters, the rest of you sitting smugly out there in your snug homes, preparing to enjoy the spectacle, should prepare to enjoy the higher taxes you're going to pay as a result. Your states and municipalities will pay higher interest on their bonds if California is allowed to default. Also, the default is going to result in a great deal of personal misery, more than a little of which is going to end up on the books of Federal unemployment insurance and other such programs.

Then there are the actual people involved. Whatever you think of, say, children who decided to be born poor, right now they are dependent on government programs, and will be put in danger if those programs are interrupted.

On the other hand, I don't really see another way out of it. If Uncle Sugar bails out California, California will not fix its problems. Perhaps you want Obama to make it fix the problems, using the same competence, power, and can-do spirit with which he has repaired all the holes in the banking and auto manufacturing sectors. But Obma is not in a good position to do this. California Democrats are a huge part of his governing coalition. All Obama can do is shovel money into the bottomless pit of California's political system.

Moreover, even if the administration could fix any of the core problems of California--and New York--and the banks--and the automakers--and the energy industry--they can't fix them all. Especially given how thinly staffed Treasury is. The president and his cabinet only have so much attention, more than all of which seems to be occupied by the problems already on their plate. They don't really have the time, knowledge, energy, or staff to take on running a whole 'nother government.

California will go bankrupt, muni and state debt will spike, the federal government will backstop humanitarian programs and very possibly all state and local debt, and eventually, California will figure out whether it wants higher taxes or lower spending. But we will not actually make the world a better place by enabling the lunatics in Sacramento to pretend they can have both.

Title: Re: Meltdown
Post by: Coopmv on June 21, 2009, 05:55:59 AM

Europe bank chief warns on debt

Existing stimulus measures are "completely extraordinary', Mr Trichet said
Governments that have borrowed heavily to fight the economic crisis should not accumulate any more debt, the president of the European Central Bank has said.

Jean-Claude Trichet said existing stimulus packages were "sufficient".

"There is a moment where you cannot spend more and accumulate more debts. We are at that moment," he said.

Mr Trichet added that global economic activity should come "close to stability" later this year, and that some growth would be seen in 2010.

'Extraordinary'

Stimulus packages are, essentially, government spending aimed at jump-starting economies.

Speaking to France's Europe-1 radio, Mr Trichet said that any new stimulus packages offered by governments would would only drive further into debt that would have implications for future generations.

He added that the stimulus packages already in place were "completely extraordinary".

"In our analysis, this is sufficient," Mr Trichet said.

Many European countries have indicated that they will not be offering further economic stimulus, despite continued spending in the US.

In February, US Congress approved President Obama's $787bn stimulus package.

Title: Re: Meltdown
Post by: BachQ on June 21, 2009, 12:25:10 PM

Quote from: Coopmv on June 20, 2009, 08:00:44 PM
Back to meltdown in CA. Here is an interesting article

The Atlantic

Megan McArdle

Is California Too Big to Fail?
19 May 2009 05:48 pm

So what about California? A reader asks. Ummm, that's a tough one. No, wait, it's not: California is completely, totally, irreparably hosed. And not a little garden hose. More like this. Their outflow is bigger than their inflow. You can blame Republicans who won't pass a budget, or Democrats who spend every single cent of tax money that comes in during the booms, borrow some more, and then act all surprised when revenues, in a totally unprecedented, inexplicable, and unforeseaable chain of events, fall during a recession. You can blame the initiative process, and the uneducated voters who try to vote themselves rich by picking their own pockets. Whoever is to blame, the state was bound to go broke one day, and hey, today's that day!

There is a surprisingly sizeable blogger contingent arguing that we have to bail them out because however regrettable the events that lead here, we now have no choice. But actually, we do have a choice: we could let them go bankrupt. And we probably should.

I am not under the illusion that this will be fun. For starters, the rest of you sitting smugly out there in your snug homes, preparing to enjoy the spectacle, should prepare to enjoy the higher taxes you're going to pay as a result. Your states and municipalities will pay higher interest on their bonds if California is allowed to default. Also, the default is going to result in a great deal of personal misery, more than a little of which is going to end up on the books of Federal unemployment insurance and other such programs.

Then there are the actual people involved. Whatever you think of, say, children who decided to be born poor, right now they are dependent on government programs, and will be put in danger if those programs are interrupted.

On the other hand, I don't really see another way out of it. If Uncle Sugar bails out California, California will not fix its problems. Perhaps you want Obama to make it fix the problems, using the same competence, power, and can-do spirit with which he has repaired all the holes in the banking and auto manufacturing sectors. But Obma is not in a good position to do this. California Democrats are a huge part of his governing coalition. All Obama can do is shovel money into the bottomless pit of California's political system.

Moreover, even if the administration could fix any of the core problems of California--and New York--and the banks--and the automakers--and the energy industry--they can't fix them all. Especially given how thinly staffed Treasury is. The president and his cabinet only have so much attention, more than all of which seems to be occupied by the problems already on their plate. They don't really have the time, knowledge, energy, or staff to take on running a whole 'nother government.

California will go bankrupt, muni and state debt will spike, the federal government will backstop humanitarian programs and very possibly all state and local debt, and eventually, California will figure out whether it wants higher taxes or lower spending. But we will not actually make the world a better place by enabling the lunatics in Sacramento to pretend they can have both.

Coop, as you've noted, California's train wreck was totally foreseeable, and totally inevitable. The CA voters asked for it. The CA voters got it. Now the CA voters want a federal bailout, so they can continue to live in their illusion of low taxes and high spending.

Title: Re: Meltdown
Post by: BachQ on June 21, 2009, 12:30:35 PM

Quote from: Coopmv on June 21, 2009, 05:55:59 AM
"There is a moment where you cannot spend more and accumulate more debts. We are at that moment," he said.

Cool ... it appears that there is at least one central banker who isn't TOTALLY CLUELESS.

Title: Re: Meltdown
Post by: Coopmv on June 21, 2009, 12:31:47 PM

Quote from: Dm on June 21, 2009, 12:25:10 PM
Coop, as you've noted, California's train wreck was totally foreseeable, and totally inevitable. The CA voters asked for it. The CA voters got it. Now the CA voters want a federal bailout, so they can continue to live in their illusion of low taxes and high spending.

I think the bailout price may be as draconian as the one GM has to accept. CA will not come out of this unscathed. If the Democrats across the country all vote for uncondtional bailout, the Republicans may be able to come back much faster than anyone has expected in next year election ...

Title: Re: Meltdown
Post by: BachQ on June 21, 2009, 12:33:35 PM

Excellent, Coop.

Quote from: Coopmv on June 20, 2009, 05:19:42 PM
American consumers and business executives know what a high oil price does to the U.S. economy: it severely reduces consumers' disposable income and increases business costs at virtually every stage of the production process. It also increases inflation. And sky-high oil price eras - the world's three oil shocks - have been major factors in the U.S. recessions of 1973-74, 1979-80, and 2008-9. Further, the U.S. is still recovering from the effects of $147.27 per barrel oil surge of 2008: a second run at $100-oil would be like a left hook from former heavyweight boxing champ 'Smokin' Joe Frasier: a devastating blow. Are we destined to experienced another, prolonged period of $100 oil, or even worse? Here are two competing arguments.

Economic recovery –> increase in demand for oil & other fossil fuels –> increase in price of oil & related energy (inflation) –> higher costs of production –> people drive less, fly less, spend less –> marginal businesses fold; businesses cut-back –> increase in unemployment –> decrease in consumption & spending –> increase in defaults and foreclosures –> increase in bank distress = decrease in credit –> further decreases in consumption and spending & further increases in unemployment ==> stagflation ==> Collapse II.

For as long as fossil fuels remain the primary source of energy, this cycle will repeat (Collapse III)... and repeat (Collapse IV)... and repeat (Collapse V).

Quote from: Coopmv on June 20, 2009, 05:19:42 PM
Are sky-high oil prices ahead...again?
...

Veteran oil analyst Matt Simmons says we are. Simmons, founder of Simmons & Co., argues oil's price plunge from record-highs last year to below $50 took many oil fields out of production. The low oil price forced many oil companies to delay projects, decrease the number of rigs deployed, consolidate operations/lay-off staff, and above all, to abandon expensive projects. That deceased production, plus aging oil fields and the credit crunch's impact on oil exploration, help set the stage for the current price rise. What's more the price rise will continue, Simmons argues, because producers will not be able to increase global oil supply fast enough to keep up with soon-to-be rising global oil demand. Simmons believes the average daily price of oil in 2010 will be $200 per barrel (in 2005 dollars).

I agree with Simmons. Implicit in his argument is that the Earth is endowed with only a limited amount of oil. In 2008, we reached the point of having consumed over 50% of the recoverable oil available for production ("peak oil"); thus, hereafter, every barrel of oil extracted now costs more than the previous barrel. Because oil is non-renewable, and because oil is the life-blood of the economy, the long-term trend for oil is ineluctable: oil will become more scarce, and thus more expensive.

There will be temporary pockets of low oil prices when economies crumble under the pressure of high oil prices (like what we experienced from Sept. 08 - present), but as economies pick up steam, oil will once again skyrocket and economies will once again collapse. Rinse and repeat.

Western (and Eastern) powers have spent trillions to stimulate their economies seeking the Holy Grail of "growth" ... but you CANNOT have growth without cheap energy (look at history). No cheap energy = no growth.

Quote from: Coopmv on June 20, 2009, 05:19:42 PM
And sky-high oil price eras - the world's three oil shocks - have been major factors in the U.S. recessions of 1973-74, 1979-80, and 2008-9.

BINGO!

Title: Re: Meltdown
Post by: Coopmv on June 21, 2009, 01:39:08 PM

But when it comes to skyrocketing oil price and what to do about it, most European political leaders are clueless as well. Is that right, DM?

Title: Re: Meltdown
Post by: Coopmv on June 21, 2009, 05:03:48 PM

The folly of Prop 13. These Calfornians somehow believe there is free lunch in life. They deserve what they are getting ...

Budget crisis forces deep cuts at Calif. schools

Calif. budget crisis forces schools to slash programs, fire teachers, expand class sizes

By Terence Chea, Associated Press Writer
On Sunday June 21, 2009, 3:30 pm EDT

RICHMOND, Calif. (AP) -- California's historic budget crisis threatens to devastate a public education system that was once considered a national model but now ranks near the bottom in school funding and academic achievement.

Deep budget cuts are forcing California school districts to lay off thousands of teachers, expand class sizes, close schools, eliminate bus service, cancel summer school programs, and possibly shorten the academic year.

Without a strong economic recovery, which few experts predict, the reduced school funding could last for years, shortchanging millions of students, driving away residents and businesses, and darkening California's economic future.

"California used to lead the nation in education," U.S. Education Secretary Arne Duncan said during a recent visit to San Francisco. "Honestly, I think California has lost its way, and I think the long-term consequences of that are very troubling."

The budget cuts will be especially painful for struggling schools such as Richmond High School, where more than half of its 1,700 students are English learners and three-quarters are considered poor. The East Bay area school has failed to meet academic standards set by the federal No Child Left Behind Act for more than four years.

Now Richmond High stands to lose 10 percent of its 80 teachers. Electives such as French and woodshop will be scrapped. Some classes will expand to more than 40 students. And many special education and English-language students will be placed in mainstream classes.

"We're going to see more and more students slipping through the cracks as those class sizes increase," said Assistant Principal Jen Bender.

Richmond High students are worried about how the cuts will affect their education and ability to attend college.

"I think we won't be able to learn as much," said freshman Andrew Taylor, 15. "They should put more money into schools. If you take money away from schools, you're going to end up with more people going to jail."

Slammed by an epic housing bust and massive job losses, California faces a $24 billion budget deficit and could run out of cash by late July if Gov. Arnold Schwarzenegger and the Legislature cannot reach a budget deal.

To balance the budget, the governor has proposed closing more than 200 state parks, releasing prisoners early, selling state property, laying off state workers and cutting health care.

Under the governor's plan, K-12 schools and community colleges would lose $5.3 billion over the coming year -- on top of billions of dollars in recent reductions and payment delays.

The state would spend $7,806 per K-12 student in 2009-10, almost 10 percent less than two years ago, according to the Legislative Analyst's Office.

Federal stimulus funds have prevented deeper cuts to a public school system that educates 6.3 million children, of which about a quarter do not speak English well, and nearly half are considered poor under federal guidelines.

School districts have already issued layoff notices to more than 30,000 teachers and other employees, and they could issue more pink slips this summer, according to the state Department of Education.

"All of the things that make schools vibrant and help students learn are on the chopping block, if they haven't been cut already," Robin Swanson, a spokeswoman for the Education Coalition, which advocates funding increases. "When school doors open in the fall, it's going to be a very different public school system."

Many Democrats and school advocates are calling for tax increases to lessen the impact on schools, but Republicans oppose raising taxes. They say California should live within its means and school districts should be given more flexibility to spend their funds.

"You can't spend what you don't have, and you can't spend what the taxpayers don't have," said State Sen. Bob Huff, R-Diamond Bar, vice chair of the Senate Education Committee.

The unprecedented budget cuts mark a new low for a once highly regarded public school system that began its decline in 1978, when voters approved Proposition 13, which undercut counties' ability to raise property taxes and generate revenue. The ballot measure shifted the responsibility of funding schools to the state and made it more difficult to increase education funding.

California schools now rank at or near the bottom nationally in academic performance, student-teacher ratios in middle and high school, access to guidance counselors and the percentage of seniors who go directly to four-year colleges, according to a February report by UCLA's Institute for Democracy, Education and Access.

In its annual survey this year, Education Week magazine ranked California 47th in per-pupil spending and gave the state a D in academic achievement.

In recent decades, California developed a robust, innovative economy by importing educated workers from other states and countries. But a recent report by the Public Policy Institute of California projected that the state would face a shortage of nearly 1 million college-educated workers in 2025.

State education officials say the budget cuts threaten recent gains in raising test scores and closing a persistent achievement gap between black and Latino students and their white and Asian counterparts.

Democrats are now proposing to eliminate the high school exit exam as a graduation requirement. Jack O'Connell, the state schools chief, has says the exam is essential to helping identify students who fall behind.

The state's budget crisis is taking a heavy toll on school districts such as West Contra Costa Unified, whose financial troubles made it the first school district to be taken over by the state in 1991. Officials say the district, which has large numbers of poor students and English language learners, could face another state takeover if it cannot overcome a $16 million budget shortfall.

"The system is broken," said school board member Antonio Medrano. "We are being forced to cut all kinds of programs."

The cuts are expected to lead to sharp reductions or complete elimination of after-school programs, summer school, adult education, guidance counselors, and electives such as art and music. Class sizes are set to expand from 20 to more than 30 students for kindergarten through third grade.

The teachers union is threatening to strike to protest layoffs of 125 teachers, larger class sizes and proposed cuts to their health care benefits.

"We can't cut our way out of this. We really can't. There will be nothing left of education," said Pixie Hayward-Schickele, who heads the teachers union.

Richmond High School students are bracing for crowded classrooms, fewer course offerings and fewer teachers.

"This school is already overcrowded," said junior Jessica Ledesma, 17. "If there are more students, it's going to be harder to pay attention because it will be loud and crowded and stuffy in there."

Title: Re: Meltdown
Post by: BachQ on June 22, 2009, 01:37:34 PM

Quote from: Coopmv on June 21, 2009, 05:03:48 PM
The folly of Prop 13. These Calfornians somehow believe there is free lunch in life. They deserve what they are getting ...

Budget crisis forces deep cuts at Calif. schools

Calif. budget crisis forces schools to slash programs, fire teachers, expand class sizes

By Terence Chea, Associated Press Writer
On Sunday June 21, 2009, 3:30 pm EDT

RICHMOND, Calif. (AP) -- California's historic budget crisis threatens to devastate a public education system that was once considered a national model but now ranks near the bottom in school funding and academic achievement.

Deep budget cuts are forcing California school districts to lay off thousands of teachers, expand class sizes, close schools, eliminate bus service, cancel summer school programs, and possibly shorten the academic year.

Without a strong economic recovery, which few experts predict, the reduced school funding could last for years, shortchanging millions of students, driving away residents and businesses, and darkening California's economic future.

"California used to lead the nation in education," U.S. Education Secretary Arne Duncan said during a recent visit to San Francisco. "Honestly, I think California has lost its way, and I think the long-term consequences of that are very troubling."

The budget cuts will be especially painful for struggling schools such as Richmond High School, where more than half of its 1,700 students are English learners and three-quarters are considered poor. The East Bay area school has failed to meet academic standards set by the federal No Child Left Behind Act for more than four years.

Now Richmond High stands to lose 10 percent of its 80 teachers. Electives such as French and woodshop will be scrapped. Some classes will expand to more than 40 students. And many special education and English-language students will be placed in mainstream classes.

"We're going to see more and more students slipping through the cracks as those class sizes increase," said Assistant Principal Jen Bender.

Richmond High students are worried about how the cuts will affect their education and ability to attend college.

"I think we won't be able to learn as much," said freshman Andrew Taylor, 15. "They should put more money into schools. If you take money away from schools, you're going to end up with more people going to jail."

Slammed by an epic housing bust and massive job losses, California faces a $24 billion budget deficit and could run out of cash by late July if Gov. Arnold Schwarzenegger and the Legislature cannot reach a budget deal.

To balance the budget, the governor has proposed closing more than 200 state parks, releasing prisoners early, selling state property, laying off state workers and cutting health care.

Under the governor's plan, K-12 schools and community colleges would lose $5.3 billion over the coming year -- on top of billions of dollars in recent reductions and payment delays.

The state would spend $7,806 per K-12 student in 2009-10, almost 10 percent less than two years ago, according to the Legislative Analyst's Office.

Federal stimulus funds have prevented deeper cuts to a public school system that educates 6.3 million children, of which about a quarter do not speak English well, and nearly half are considered poor under federal guidelines.

School districts have already issued layoff notices to more than 30,000 teachers and other employees, and they could issue more pink slips this summer, according to the state Department of Education.

"All of the things that make schools vibrant and help students learn are on the chopping block, if they haven't been cut already," Robin Swanson, a spokeswoman for the Education Coalition, which advocates funding increases. "When school doors open in the fall, it's going to be a very different public school system."

Many Democrats and school advocates are calling for tax increases to lessen the impact on schools, but Republicans oppose raising taxes. They say California should live within its means and school districts should be given more flexibility to spend their funds.

"You can't spend what you don't have, and you can't spend what the taxpayers don't have," said State Sen. Bob Huff, R-Diamond Bar, vice chair of the Senate Education Committee.

The unprecedented budget cuts mark a new low for a once highly regarded public school system that began its decline in 1978, when voters approved Proposition 13, which undercut counties' ability to raise property taxes and generate revenue. The ballot measure shifted the responsibility of funding schools to the state and made it more difficult to increase education funding.

California schools now rank at or near the bottom nationally in academic performance, student-teacher ratios in middle and high school, access to guidance counselors and the percentage of seniors who go directly to four-year colleges, according to a February report by UCLA's Institute for Democracy, Education and Access.

In its annual survey this year, Education Week magazine ranked California 47th in per-pupil spending and gave the state a D in academic achievement.

In recent decades, California developed a robust, innovative economy by importing educated workers from other states and countries. But a recent report by the Public Policy Institute of California projected that the state would face a shortage of nearly 1 million college-educated workers in 2025.

State education officials say the budget cuts threaten recent gains in raising test scores and closing a persistent achievement gap between black and Latino students and their white and Asian counterparts.

Democrats are now proposing to eliminate the high school exit exam as a graduation requirement. Jack O'Connell, the state schools chief, has says the exam is essential to helping identify students who fall behind.

The state's budget crisis is taking a heavy toll on school districts such as West Contra Costa Unified, whose financial troubles made it the first school district to be taken over by the state in 1991. Officials say the district, which has large numbers of poor students and English language learners, could face another state takeover if it cannot overcome a $16 million budget shortfall.

"The system is broken," said school board member Antonio Medrano. "We are being forced to cut all kinds of programs."

The cuts are expected to lead to sharp reductions or complete elimination of after-school programs, summer school, adult education, guidance counselors, and electives such as art and music. Class sizes are set to expand from 20 to more than 30 students for kindergarten through third grade.

The teachers union is threatening to strike to protest layoffs of 125 teachers, larger class sizes and proposed cuts to their health care benefits.

"We can't cut our way out of this. We really can't. There will be nothing left of education," said Pixie Hayward-Schickele, who heads the teachers union.

Richmond High School students are bracing for crowded classrooms, fewer course offerings and fewer teachers.

"This school is already overcrowded," said junior Jessica Ledesma, 17. "If there are more students, it's going to be harder to pay attention because it will be loud and crowded and stuffy in there."

Coop, that's really sad. A lot of people are going to suffer because of CA's dysfunctional, broken government.

Meanwhile, NY seems eager to join the soap opera:

Reuters -- Amid stalemate in Senate, NY Gov orders emergency special session to address NY's budget & pension reforms: "Government has been inoperable because of a political battle," Gov Paterson told a news conference. "The Senate has been unable to deliberate, has refused any outside intervention ... has rarely met and only in acrimonious circumstances," he said, calling its conduct "laughable." "I will call the New York State Senate ... into extraordinary session on Tuesday," said Paterson, who said he was acting with the authority of the state's constitution. (http://www.reuters.com/article/politicsNews/idUSTRE55K1R720090621)

Title: Re: Meltdown
Post by: Coopmv on June 22, 2009, 04:46:26 PM

Quote from: Dm on June 22, 2009, 01:37:34 PM
Coop, that's really sad. A lot of people are going to suffer because of CA's dysfunctional, broken government.

Meanwhile, NY seems eager to join the soap opera:

Reuters -- Amid stalemate in Senate, NY Gov orders emergency special session to address NY's budget & pension reforms: "Government has been inoperable because of a political battle," Gov Paterson told a news conference. "The Senate has been unable to deliberate, has refused any outside intervention ... has rarely met and only in acrimonious circumstances," he said, calling its conduct "laughable." "I will call the New York State Senate ... into extraordinary session on Tuesday," said Paterson, who said he was acting with the authority of the state's constitution.
(http://www.reuters.com/article/politicsNews/idUSTRE55K1R720090621)

Many of the states like NY and CA that have overly generous pensions need to think long and hard, as taxpayers, most of whom do not receive pensions themselves, cannot forever be willing and able to fund any pension shortfalls via additional income taxes and property taxes. Most public pensions are now underwater due to the stock market debacle over the past two years. But according to pension law, the underfunded pensions must be made up. This is getting very ugly. No wonder NYC mayor Mike Bloomberg has demanded some pension giveback. He even made the cynical remark that Bernie Madoff could not have made the kind of returns the NYC Teachers Unions have been making in their pension benefits. The unions have to agree some meaningful pension giveback or face thousands of layoffs.

Title: Re: Meltdown
Post by: Coopmv on June 22, 2009, 07:03:29 PM

One has to wonder if the growth in China is for real or all smoke and mirrors. How can a country that until last year has overwhelmingly relied on export to suddenly shift to emphaize domestic consumptions and expect all the surplus outputs to be mopped up by its citizens whose per capital income is still significantly below $10,000. It is just fantasy. All the recent economic growth in China has been stoked by the hoarding of raw materials in anticipation of economic rebound in the west, which may come VERY slowly and may NEVER return to the level of former demand for Chinese-made goods ...

World Bank cuts 2009 global growth forecast

World Bank cuts 2009 global growth forecast, says world economy to shrink by 2.9 percent

By Joe Mcdonald, AP Business Writer
On Monday June 22, 2009, 6:36 am EDT

BEIJING (AP) -- The World Bank has cut its 2009 global growth forecast, saying the world economy will shrink by 2.9 percent and warning that a drop in investment in developing countries will increase poverty.

"The global recession has deepened," the Washington-based multilateral lender said in a report.

Global trade is expected to plunge by 9.7 percent this year, while total gross domestic product for high-income countries contracts by 4.2 percent, the bank said. It said economic growth in developing countries should slow to 1.2 percent -- but excluding relatively strong China and India, developing economies will contract by 1.6 percent.

The bank's latest forecast is a sharp reduction from its March prediction of a 1.7 percent global contraction, which it said then would be the worst on record.

Economic damage to developing countries "has been much deeper and broader than previous crises," warned the report, issued Sunday in Washington.

"Unemployment is on the rise, and poverty is set to increase in developing economies," it said.

The global economy should start to grow again in late 2009, but "the expected recovery is projected to be much less vigorous than normal," the report said. It said banks' ability to finance investment and consumer spending would be hampered by the overhang of unpaid loans and devalued assets.

"To break the cycle and revive lending and growth, bold policy measures, along with substantial international coordination, are needed," the World Bank said.

Investment and other financial flows to developing countries plunged by an estimated 39 percent in 2008 to $707 billion, the World Bank said. It said foreign direct investment in developing countries is projected to drop by 30 percent this year to $385 billion.

Eastern Europe and Central Asia have been hit hardest and the region's gross domestic product is expected to plunge by 4.7 percent this year, the bank said. It said growth should recover next year to 1.6 percent.

GDP in Latin America and the Caribbean should shrink by 2.3 percent this year before rebounding to expand by 2 percent in 2010, the report said.

In the Middle East and North Africa, growth is expected to fall by half this year to 3.1 percent, while that of sub-Saharan Africa will drop to 1 percent from an annual average of 5.7 percent over the past three years, the bank said.

East Asia should post a 5 percent expansion, supported in part by China's stimulus-fueled growth, the bank said.

Title: Re: Meltdown
Post by: BachQ on June 23, 2009, 02:31:08 PM

Quote from: Coopmv on June 21, 2009, 05:03:48 PM
The folly of Prop 13. These Calfornians somehow believe there is free lunch in life. They deserve what they are getting ...

Budget crisis forces deep cuts at Calif. schools

Calif. budget crisis forces schools to slash programs, fire teachers, expand class sizes

By Terence Chea, Associated Press Writer
On Sunday June 21, 2009, 3:30 pm EDT

RICHMOND, Calif. (AP) -- California's historic budget crisis threatens to devastate a public education system that was once considered a national model but now ranks near the bottom in school funding and academic achievement.

Deep budget cuts are forcing California school districts to lay off thousands of teachers, expand class sizes, close schools, eliminate bus service, cancel summer school programs, and possibly shorten the academic year.

Without a strong economic recovery, which few experts predict, the reduced school funding could last for years, shortchanging millions of students, driving away residents and businesses, and darkening California's economic future.

"California used to lead the nation in education," U.S. Education Secretary Arne Duncan said during a recent visit to San Francisco. "Honestly, I think California has lost its way, and I think the long-term consequences of that are very troubling."

The budget cuts will be especially painful for struggling schools such as Richmond High School, where more than half of its 1,700 students are English learners and three-quarters are considered poor. The East Bay area school has failed to meet academic standards set by the federal No Child Left Behind Act for more than four years.

Now Richmond High stands to lose 10 percent of its 80 teachers. Electives such as French and woodshop will be scrapped. Some classes will expand to more than 40 students. And many special education and English-language students will be placed in mainstream classes.

"We're going to see more and more students slipping through the cracks as those class sizes increase," said Assistant Principal Jen Bender.

Richmond High students are worried about how the cuts will affect their education and ability to attend college.

"I think we won't be able to learn as much," said freshman Andrew Taylor, 15. "They should put more money into schools. If you take money away from schools, you're going to end up with more people going to jail."

Slammed by an epic housing bust and massive job losses, California faces a $24 billion budget deficit and could run out of cash by late July if Gov. Arnold Schwarzenegger and the Legislature cannot reach a budget deal.

To balance the budget, the governor has proposed closing more than 200 state parks, releasing prisoners early, selling state property, laying off state workers and cutting health care.

Under the governor's plan, K-12 schools and community colleges would lose $5.3 billion over the coming year -- on top of billions of dollars in recent reductions and payment delays.

The state would spend $7,806 per K-12 student in 2009-10, almost 10 percent less than two years ago, according to the Legislative Analyst's Office.

Federal stimulus funds have prevented deeper cuts to a public school system that educates 6.3 million children, of which about a quarter do not speak English well, and nearly half are considered poor under federal guidelines.

School districts have already issued layoff notices to more than 30,000 teachers and other employees, and they could issue more pink slips this summer, according to the state Department of Education.

"All of the things that make schools vibrant and help students learn are on the chopping block, if they haven't been cut already," Robin Swanson, a spokeswoman for the Education Coalition, which advocates funding increases. "When school doors open in the fall, it's going to be a very different public school system."

Many Democrats and school advocates are calling for tax increases to lessen the impact on schools, but Republicans oppose raising taxes. They say California should live within its means and school districts should be given more flexibility to spend their funds.

"You can't spend what you don't have, and you can't spend what the taxpayers don't have," said State Sen. Bob Huff, R-Diamond Bar, vice chair of the Senate Education Committee.

The unprecedented budget cuts mark a new low for a once highly regarded public school system that began its decline in 1978, when voters approved Proposition 13, which undercut counties' ability to raise property taxes and generate revenue. The ballot measure shifted the responsibility of funding schools to the state and made it more difficult to increase education funding.

California schools now rank at or near the bottom nationally in academic performance, student-teacher ratios in middle and high school, access to guidance counselors and the percentage of seniors who go directly to four-year colleges, according to a February report by UCLA's Institute for Democracy, Education and Access.

In its annual survey this year, Education Week magazine ranked California 47th in per-pupil spending and gave the state a D in academic achievement.

In recent decades, California developed a robust, innovative economy by importing educated workers from other states and countries. But a recent report by the Public Policy Institute of California projected that the state would face a shortage of nearly 1 million college-educated workers in 2025.

State education officials say the budget cuts threaten recent gains in raising test scores and closing a persistent achievement gap between black and Latino students and their white and Asian counterparts.

Democrats are now proposing to eliminate the high school exit exam as a graduation requirement. Jack O'Connell, the state schools chief, has says the exam is essential to helping identify students who fall behind.

The state's budget crisis is taking a heavy toll on school districts such as West Contra Costa Unified, whose financial troubles made it the first school district to be taken over by the state in 1991. Officials say the district, which has large numbers of poor students and English language learners, could face another state takeover if it cannot overcome a $16 million budget shortfall.

"The system is broken," said school board member Antonio Medrano. "We are being forced to cut all kinds of programs."

The cuts are expected to lead to sharp reductions or complete elimination of after-school programs, summer school, adult education, guidance counselors, and electives such as art and music. Class sizes are set to expand from 20 to more than 30 students for kindergarten through third grade.

The teachers union is threatening to strike to protest layoffs of 125 teachers, larger class sizes and proposed cuts to their health care benefits.

"We can't cut our way out of this. We really can't. There will be nothing left of education," said Pixie Hayward-Schickele, who heads the teachers union.

Richmond High School students are bracing for crowded classrooms, fewer course offerings and fewer teachers.

"This school is already overcrowded," said junior Jessica Ledesma, 17. "If there are more students, it's going to be harder to pay attention because it will be loud and crowded and stuffy in there."

Time -- (http://www.time.com/time/nation/article/0,8599,1904936,00.html?imw=Y) "After voters rejected a slew of convoluted budget-balancing measures, the governor has proposed cuts to programs that would make California more like a struggling Third World state than 21st century America: welfare subsistence benefits would end, 1 million poor children would lose health care, college aid for the state's best and brightest would be phased out, nonviolent prisoners would be released, hundreds of state parks would be shuttered, and thousands of teachers would lose their jobs." "California could become the only state in the First World without subsistence benefits for poor children," says Frank Mecca, executive director of the County Welfare Directors Association of California.

Title: Re: Meltdown
Post by: BachQ on June 23, 2009, 02:33:16 PM

Quote from: Coopmv on June 22, 2009, 07:03:29 PM
One has to wonder if the growth in China is for real or all smoke and mirrors. How can a country that until last year has overwhelmingly relied on export to suddenly shift to emphaize domestic consumptions and expect all the surplus outputs to be mopped up by its citizens whose per capital income is still significantly below $10,000. It is just fantasy. All the recent economic growth in China has been stoked by the hoarding of raw materials in anticipation of economic rebound in the west, which may come VERY slowly and may NEVER return to the level of former demand for Chinese-made goods ...

World Bank cuts 2009 global growth forecast

World Bank cuts 2009 global growth forecast, says world economy to shrink by 2.9 percent

By Joe Mcdonald, AP Business Writer
On Monday June 22, 2009, 6:36 am EDT

BEIJING (AP) -- The World Bank has cut its 2009 global growth forecast, saying the world economy will shrink by 2.9 percent and warning that a drop in investment in developing countries will increase poverty.

"The global recession has deepened," the Washington-based multilateral lender said in a report.

Global trade is expected to plunge by 9.7 percent this year, while total gross domestic product for high-income countries contracts by 4.2 percent, the bank said. It said economic growth in developing countries should slow to 1.2 percent -- but excluding relatively strong China and India, developing economies will contract by 1.6 percent.

The bank's latest forecast is a sharp reduction from its March prediction of a 1.7 percent global contraction, which it said then would be the worst on record.

Economic damage to developing countries "has been much deeper and broader than previous crises," warned the report, issued Sunday in Washington.

"Unemployment is on the rise, and poverty is set to increase in developing economies," it said.

The global economy should start to grow again in late 2009, but "the expected recovery is projected to be much less vigorous than normal," the report said. It said banks' ability to finance investment and consumer spending would be hampered by the overhang of unpaid loans and devalued assets.

"To break the cycle and revive lending and growth, bold policy measures, along with substantial international coordination, are needed," the World Bank said.

Investment and other financial flows to developing countries plunged by an estimated 39 percent in 2008 to $707 billion, the World Bank said. It said foreign direct investment in developing countries is projected to drop by 30 percent this year to $385 billion.

Eastern Europe and Central Asia have been hit hardest and the region's gross domestic product is expected to plunge by 4.7 percent this year, the bank said. It said growth should recover next year to 1.6 percent.

GDP in Latin America and the Caribbean should shrink by 2.3 percent this year before rebounding to expand by 2 percent in 2010, the report said.

In the Middle East and North Africa, growth is expected to fall by half this year to 3.1 percent, while that of sub-Saharan Africa will drop to 1 percent from an annual average of 5.7 percent over the past three years, the bank said.

East Asia should post a 5 percent expansion, supported in part by China's stimulus-fueled growth, the bank said.

Quote from: Coopmv on March 11, 2009, 07:24:19 PM
China's exports make record drop, but car sales up
China's exports make record plunge, but rising auto sales provide some cheer
Joe Mcdonald, AP Business Writer
Wednesday March 11, 2009, 11:07 am EDT

Buzz up! Print BEIJING (AP) -- The record decline in China's exports accelerated in February, but Asia's bleak picture was tempered by other news Wednesday of a jump in Chinese auto sales and a smaller-than-expected drop in Japanese machinery orders.

NYT -- With China's exports reeling and unemployment rising because of the global slowdown, there is growing evidence that factories are ignoring or evading a new ontract labor law. (http://www.nytimes.com/2009/06/23/business/global/23labor.html?ref=business)

Title: Re: Meltdown
Post by: BachQ on June 23, 2009, 02:35:12 PM

Moody's commercial real estate index sinking like a rock.

(http://static.seekingalpha.com/uploads/2009/6/22/saupload_real.png)

* The National — All Property Type Aggregate Index measured an 8.6% decline in April 2009. The index now stands 29.5% below the peak measured in October 2007. April's large price decline on the heels of a 5.5% monthly decline in January hints at an ongoing process of capitulation.
* Transaction volume continues to fall in both repeat-sales and the overall market.
* The South was the worst performing region overall. All four property types saw annual value declines of more than 20%, with industrial measuring a decline of 28.8%.
* The three major office markets measured significant annual declines. In the East, both New York and Washington DC outperformed the eastern office market, with annual declines of 12.9% and 21.1% respectively.
* The Florida apartment market, like the apartment market in the South on the whole, has experienced three straight years of falling prices. Florida apartment values are now down 31% from the peak. (http://seekingalpha.com/article/144681-u-s-commercial-real-estate-showing-signs-of-capitulation)

Title: Re: Meltdown
Post by: BachQ on June 23, 2009, 02:36:27 PM

(http://www.inhabitat.com/wp-content/uploads/saharaforest1.jpg)

June 22, 2009 -- World's Largest Solar Project Planned for Saharan Desert

(http://www.inhabitat.com/wp-content/uploads/csp-ed01.jpg)

PRICETAG: €400bn

"If just 0.3% of the Saharan Desert was used for a concentrating solar plant, it would produce enough power to provide all of Europe with clean renewable energy. That is why 20 blue chip German companies are gathering together next month to discuss plans and investments to create such a massive project. Both the meeting and project are being promoted by the Desertec Foundation, which is proposing to erect 100 GW of concentrating solar power plants throughout Northern Africa." (http://www.inhabitat.com/2009/06/22/worlds-largest-solar-project-sahara-desert/)

Title: Re: Meltdown
Post by: BachQ on June 23, 2009, 02:38:33 PM

Quote from: Coopmv on June 20, 2009, 05:19:42 PM
On a different note, check out the following article from AOL Daily Finance ...

Are sky-high oil prices ahead?
Joseph Lazzaro

Jun 19th 2009 at 3:00PM

One thing about the oil market: it's bound to hold your attention, whether you're an investor looking for growth plays or just a typical car owner.

Certainly if you're an American driver, oil is holding your attention. Just take a look at that gas pump price: a national-average, regular unleaded gasoline price that's risen about 60 percent (!) in six short months, to about $2.63 per gallon, according to data compiled by gasbuddy.com. Moreover, the price rise is all-the-more exasperating because it's occurred while the U.S. economy is in recession, with millions of drivers taken off the road, due to belt-tightening and job-layoffs.

Most of the roughly $1 per gallon rise in gasoline prices stems from the $35 per barrel increase in oil's price since December 2008, to about $71 per barrel on Friday.

Why has the price of oil basically doubled despite the fact that the U.S. and global economies are still in recessions? Among other factors, institutional investors, citing 'green shoots,' are calculating that each recession has bottomed - the recoveries may have already started - and that implies increasing oil demand in the quarters ahead, hence they're positioning themselves in what they believe will be a high-return asset: oil.

Are sky-high oil prices ahead...again?

What? Another period of sky-high oil prices? (As if $70 wasn't high enough!) The aforementioned is likely to be greeted by Americans with the same enthusiasm as a resurgence of the H1N1 flu. American consumers and business executives know what a high oil price does to the U.S. economy: it severely reduces consumers' disposable income and increases business costs at virtually every stage of the production process. It also increases inflation. And sky-high oil price eras - the world's three oil shocks - have been major factors in the U.S. recessions of 1973-74, 1979-80, and 2008-9. Further, the U.S. is still recovering from the effects of $147.27 per barrel oil surge of 2008: a second run at $100-oil would be like a left hook from former heavyweight boxing champ 'Smokin' Joe Frasier: a devastating blow. Are we destined to experienced another, prolonged period of $100 oil, or even worse? Here are two competing arguments.

Veteran oil analyst Matt Simmons says we are. Simmons, founder of Simmons & Co., argues oil's price plunge from record-highs last year to below $50 took many oil fields out of production. The low oil price forced many oil companies to delay projects, decrease the number of rigs deployed, consolidate operations/lay-off staff, and above all, to abandon expensive projects. That deceased production, plus aging oil fields and the credit crunch's impact on oil exploration, help set the stage for the current price rise. What's more the price rise will continue, Simmons argues, because producers will not be able to increase global oil supply fast enough to keep up with soon-to-be rising global oil demand. Simmons believes the average daily price of oil in 2010 will be $200 per barrel (in 2005 dollars).

Bloomberg Columnist William Pesek says visions of $200 or $250 per barrel oil represent a stretch, at best. Much of that rise in oil's price, Pesek says, hinges on China's ability to drive global growth. However, a considerable portion of that China-based demand is for raw materials, and will not lead to large, spin-off growth effects for economies in Asia, or globally. In other words, China's economy is not going to create demand for parts and other goods assembled outside China, and once investors realize China's still-export-oriented economy can not grow more than 6 percent per year, the commodity bubble or "bubble of belief" will burst, and so will oil's price. The key point in Pesek's thesis is a frugal consumer era, led by reduced consumption in the United States – a major market for China's exports. Once it's clear exports will not return to pre-recession days, China's lopsided economy will be exposed, and down goes the price of oil and commodities. Those calculating that a China boom will lead to $250 oil are in for a disappointment, Pesek said.

Oil Analysis: Columnist Pesek offers evidence that dispels notions that China's economy, currently structured, will be the global growth engine that many expect it to be, but it's awful hard to take a position against Matt Simmons, one the oil industry's best analysts. Further, oil's vault to $70 in a macroeconomic eye-blink, amid the recession, is alarming, so the bias here tilts toward Simmons' analysis. From a U.S. standpoint, that only underscores the need for a national energy policy, and President Obama's policy to increase vehicle fuel efficiency and conservation by businesses and homes represents a good first step.

$80 oil could spell doom for recovery -- (http://www.subseaworld.com/news/80-dollar-oil-could-trigger-a-new-recession-03111.html) Says Steven Kopits, Douglas-Westwood's LLC Managing Director: "Our research suggests that a return to $80 oil could kill the present recovery and trigger a new recession – today's oil prices means we are again teetering on the edge. "Looking ahead, our own firm and others have the view that the world is likely to reach a peak of oil production capacity within the next five years and that will, of course, have massive implications for oil prices. Should oil return to $150/barrel, as Saudi Oil Minister, al-Naimi, and others have warned, the statistics are not ambiguous. Expect a recession, and a severe one at that."

Title: Re: Meltdown
Post by: BachQ on June 23, 2009, 02:39:23 PM

Here we go again ...

London Times -- "A summer gas war is brewing in Ukraine, threatening another cut-off of Russian gas supplies into Europe and a worsening of the cash squeeze on Gazprom, Russia's biggest company." (http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6558055.ece)

Title: Re: Meltdown
Post by: BachQ on June 23, 2009, 02:41:54 PM

Quote from: Coopmv on June 20, 2009, 05:19:42 PM
On a different note, check out the following article from AOL Daily Finance ...

Are sky-high oil prices ahead?
Joseph Lazzaro

Jun 19th 2009 at 3:00PM

One thing about the oil market: it's bound to hold your attention, whether you're an investor looking for growth plays or just a typical car owner.

Certainly if you're an American driver, oil is holding your attention. Just take a look at that gas pump price: a national-average, regular unleaded gasoline price that's risen about 60 percent (!) in six short months, to about $2.63 per gallon, according to data compiled by gasbuddy.com. Moreover, the price rise is all-the-more exasperating because it's occurred while the U.S. economy is in recession, with millions of drivers taken off the road, due to belt-tightening and job-layoffs.

Most of the roughly $1 per gallon rise in gasoline prices stems from the $35 per barrel increase in oil's price since December 2008, to about $71 per barrel on Friday.

Why has the price of oil basically doubled despite the fact that the U.S. and global economies are still in recessions? Among other factors, institutional investors, citing 'green shoots,' are calculating that each recession has bottomed - the recoveries may have already started - and that implies increasing oil demand in the quarters ahead, hence they're positioning themselves in what they believe will be a high-return asset: oil.

Are sky-high oil prices ahead...again?

What? Another period of sky-high oil prices? (As if $70 wasn't high enough!) The aforementioned is likely to be greeted by Americans with the same enthusiasm as a resurgence of the H1N1 flu. American consumers and business executives know what a high oil price does to the U.S. economy: it severely reduces consumers' disposable income and increases business costs at virtually every stage of the production process. It also increases inflation. And sky-high oil price eras - the world's three oil shocks - have been major factors in the U.S. recessions of 1973-74, 1979-80, and 2008-9. Further, the U.S. is still recovering from the effects of $147.27 per barrel oil surge of 2008: a second run at $100-oil would be like a left hook from former heavyweight boxing champ 'Smokin' Joe Frasier: a devastating blow. Are we destined to experienced another, prolonged period of $100 oil, or even worse? Here are two competing arguments.

Veteran oil analyst Matt Simmons says we are. Simmons, founder of Simmons & Co., argues oil's price plunge from record-highs last year to below $50 took many oil fields out of production. The low oil price forced many oil companies to delay projects, decrease the number of rigs deployed, consolidate operations/lay-off staff, and above all, to abandon expensive projects. That deceased production, plus aging oil fields and the credit crunch's impact on oil exploration, help set the stage for the current price rise. What's more the price rise will continue, Simmons argues, because producers will not be able to increase global oil supply fast enough to keep up with soon-to-be rising global oil demand. Simmons believes the average daily price of oil in 2010 will be $200 per barrel (in 2005 dollars).

Bloomberg Columnist William Pesek says visions of $200 or $250 per barrel oil represent a stretch, at best. Much of that rise in oil's price, Pesek says, hinges on China's ability to drive global growth. However, a considerable portion of that China-based demand is for raw materials, and will not lead to large, spin-off growth effects for economies in Asia, or globally. In other words, China's economy is not going to create demand for parts and other goods assembled outside China, and once investors realize China's still-export-oriented economy can not grow more than 6 percent per year, the commodity bubble or "bubble of belief" will burst, and so will oil's price. The key point in Pesek's thesis is a frugal consumer era, led by reduced consumption in the United States – a major market for China's exports. Once it's clear exports will not return to pre-recession days, China's lopsided economy will be exposed, and down goes the price of oil and commodities. Those calculating that a China boom will lead to $250 oil are in for a disappointment, Pesek said.

Oil Analysis: Columnist Pesek offers evidence that dispels notions that China's economy, currently structured, will be the global growth engine that many expect it to be, but it's awful hard to take a position against Matt Simmons, one the oil industry's best analysts. Further, oil's vault to $70 in a macroeconomic eye-blink, amid the recession, is alarming, so the bias here tilts toward Simmons' analysis. From a U.S. standpoint, that only underscores the need for a national energy policy, and President Obama's policy to increase vehicle fuel efficiency and conservation by businesses and homes represents a good first step.

(http://www.theoildrum.com/files/Net%20Hubbert_4.png)

"According to the original Hubbert curve, 50% of the energy resource is remaining when production levels reach the peak, but this is quite different for the Net Hubbert curve. Due to declining EROI, by the time peak production is reached, 73% of the net energy available is already used. The implications of these results are vast, but in general, declining EROI is going to make it very difficult to meet the net energy needs of future society. Although this study may not be very precise, it does imply that if we have reached Peak Oil (and I think we have), that society has already spent quite a bit more than half of the net (or discretionary) oil energy that will ever be available." (http://netenergy.theoildrum.com/node/5500#more)

(http://www.theoildrum.com/files/REmainingUS48_vs_treasurydebt.png) (http://netenergy.theoildrum.com/node/5500#comments_top)

Title: Re: Meltdown
Post by: BachQ on June 23, 2009, 02:42:58 PM

Quote from: theglobeandmail on March 12, 2009, 04:19:47 AM
CANADA's (http://www.theglobeandmail.com/servlet/story/RTGAM.20090311.wPOLbudget0311/BNStory/politics/home?cid=al_gam_mostemail) gross domestic income (GDI) plunged by a whopping 15.3% in Q4 (over Q3), a plunge ten times worse than the US's 1.5% decline. (Canada's Q4 GDP shrank by 3.4% annualized)

June 23 (Bloomberg) -- Bank of Canada Governor Mark Carney said Canada's recession is now as deep as in the U.S., with Canada's output shrinking at a 5.4% annualized pace in 1Q09 (vs. 5.7% for US). Canada's GDP will shrink an estimated 3% in 09, the largest plunge since 1933. (http://www.bloomberg.com/apps/news?pid=20601087&sid=anKkA8gdr1No)

Title: Re: Meltdown
Post by: Coopmv on June 23, 2009, 04:40:32 PM

Quote from: Dm on June 23, 2009, 02:33:16 PM

NYT -- With China's exports reeling and unemployment rising because of the global slowdown, there is growing evidence that factories are ignoring or evading a new ontract labor law.
(http://www.nytimes.com/2009/06/23/business/global/23labor.html?ref=business)

Shame on Disney. I am sure most of these western companies just want the cheapest prices on everything. What do they care?

Title: Re: Meltdown
Post by: Coopmv on June 23, 2009, 04:46:10 PM

Quote from: Dm on June 23, 2009, 02:38:33 PM

$80 oil could spell doom for recovery -- (http://www.subseaworld.com/news/80-dollar-oil-could-trigger-a-new-recession-03111.html) Says Steven Kopits, Douglas-Westwood's LLC Managing Director: "Our research suggests that a return to $80 oil could kill the present recovery and trigger a new recession – today's oil prices means we are again teetering on the edge. "Looking ahead, our own firm and others have the view that the world is likely to reach a peak of oil production capacity within the next five years and that will, of course, have massive implications for oil prices. Should oil return to $150/barrel, as Saudi Oil Minister, al-Naimi, and others have warned, the statistics are not ambiguous. Expect a recession, and a severe one at that."

OPEC is shooting itself in the foot if it lets oil price go toward $80 and beyond. But the likes of Russia, which is not an OPEC member and Venezeula, $80 oil is the minimum they need to maintain their spendings on social programs, which are essential to keep their citizens contented. These two countries are between a rock and a hard place in the current global economy.

Title: Re: Meltdown
Post by: Coopmv on June 23, 2009, 04:48:52 PM

It looks like trade war may erupt between the US and EU on one side and China on the other side ...

US case against China export curbs signals tension
Administration files unfair-trade case against China, reflects economic tensions with Beijing

By Martin Crutsinger, AP Economics Writer
On Tuesday June 23, 2009, 4:16 pm EDT

WASHINGTON (AP) -- Long-simmering economic tensions between the U.S. and China boiled over Tuesday as the Obama administration filed its first unfair-trade case against Beijing, accusing it of restricting exports of materials needed to produce steel, aluminum and other products.

The administration vowed to protect the rights of American companies, and it got backing from the European Union, which filed its own case on the issue.

Some trade experts suggested China might settle the dispute rather than endure a prolonged hearing process before the Geneva-based World Trade Organization, the arbiter of global trade rules.

Analysts expect the fight over China's export restrictions will be just one of many trade cases the administration files against China. Obama made campaign pledges to take a tougher approach with U.S. trading partners in the face of soaring job losses and the longest U.S. recession since World War II.

The materials at issue include coke, bauxite, magnesium and silicon metal, the U.S. complaint notes. The U.S. and EU complaints say China's export restrictions give its companies an unfair edge over their foreign rivals by giving them access to cheaper materials, despite WTO rules against export curbs.

U.S. Trade Representative Ron Kirk said the Obama administration decided to pursue a WTO case after two years of talks between the Chinese and the Bush administration had failed to reach a resolution. He said China's actions were endangering American jobs.

"The United States believes that China is unfairly restricting exports of raw materials," Kirk said. "These actions are hurting American steel, aluminum and chemical manufacturers, among other industries, that desperately need these material to make their products."

The U.S. and EU filed separate complaints with the WTO, a step that triggers a 60-day consultation period. If the dispute is not resolved, they can formally request a WTO hearing panel. At that point, the cases likely would be merged.

If the U.S. and EU prevail at a WTO hearing -- a process that can take up to a year -- and China still refuses to lift the export restrictions, the two would be given a go-ahead to impose economic sanctions on China. Those sanctions would be equal to the harm inflicted on their companies by Beijing's actions.

"The United States has a strong case," said Dan Griswold, a trade economist at the Cato Institute, a Washington think tank. "And it certainly adds weight to the U.S. case that the two largest trading entities in the WTO have joined together. That should get China's attention."

Officials from the U.S. and EU sought to protect their domestic companies' collective ability to compete on a global scale.

"The Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn," EU Trade Commissioner Catherine Ashton said in a statement.

Ashton and Kirk expressed hope the issue could be resolved during the consultation period. But if that doesn't happen, Kirk said the U.S. will go forward with a WTO case.

"Dialogue is our preferred course of action, but despite raising this issue with China repeatedly, China has not changed its policies," Kirk said.

Wei Xin, a spokeswoman for the Chinese embassy in Washington, had no immediate comment on the U.S. action.

The American Iron and Steel Institute --whose members include Nucor Corp. and United States Steel Corp. -- the United Steel Workers and other industry groups released a joint statement praising the administration's decision to pursue a WTO case against China.

"When China joined the WTO in 2001, it committed to removing these restrictions," the groups said. They called the barriers on the export of raw materials and minerals "just another way in which China favors its domestic manufacturing industries at the expense of the rest of the world."

The U.S. complaint contends that China maintains measures that restrain the export of raw materials for products -- such as coke, a key ingredient in steel production -- for which it's the world's largest producer, or near the top.

A U.S. fact sheet said "a prime example of the highly distortive effects of China's export restraints" was its decision to limit exports of coke from 336 million metric tons in 2008 down to current annual exports of only 12 million metric tons. Before the export controls were imposed, China accounted for about 60 percent of global coke production.

Title: Re: Meltdown
Post by: BachQ on June 24, 2009, 03:54:14 PM

Quote from: Coopmv on June 21, 2009, 05:03:48 PM
The folly of Prop 13. These Calfornians somehow believe there is free lunch in life. They deserve what they are getting ...

Budget crisis forces deep cuts at Calif. schools

Calif. budget crisis forces schools to slash programs, fire teachers, expand class sizes

By Terence Chea, Associated Press Writer
On Sunday June 21, 2009, 3:30 pm EDT

RICHMOND, Calif. (AP) -- California's historic budget crisis threatens to devastate a public education system that was once considered a national model but now ranks near the bottom in school funding and academic achievement.

Deep budget cuts are forcing California school districts to lay off thousands of teachers, expand class sizes, close schools, eliminate bus service, cancel summer school programs, and possibly shorten the academic year.

Without a strong economic recovery, which few experts predict, the reduced school funding could last for years, shortchanging millions of students, driving away residents and businesses, and darkening California's economic future.

"California used to lead the nation in education," U.S. Education Secretary Arne Duncan said during a recent visit to San Francisco. "Honestly, I think California has lost its way, and I think the long-term consequences of that are very troubling."

The budget cuts will be especially painful for struggling schools such as Richmond High School, where more than half of its 1,700 students are English learners and three-quarters are considered poor. The East Bay area school has failed to meet academic standards set by the federal No Child Left Behind Act for more than four years.

Now Richmond High stands to lose 10 percent of its 80 teachers. Electives such as French and woodshop will be scrapped. Some classes will expand to more than 40 students. And many special education and English-language students will be placed in mainstream classes.

"We're going to see more and more students slipping through the cracks as those class sizes increase," said Assistant Principal Jen Bender.

Richmond High students are worried about how the cuts will affect their education and ability to attend college.

"I think we won't be able to learn as much," said freshman Andrew Taylor, 15. "They should put more money into schools. If you take money away from schools, you're going to end up with more people going to jail."

Slammed by an epic housing bust and massive job losses, California faces a $24 billion budget deficit and could run out of cash by late July if Gov. Arnold Schwarzenegger and the Legislature cannot reach a budget deal.

To balance the budget, the governor has proposed closing more than 200 state parks, releasing prisoners early, selling state property, laying off state workers and cutting health care.

Under the governor's plan, K-12 schools and community colleges would lose $5.3 billion over the coming year -- on top of billions of dollars in recent reductions and payment delays.

The state would spend $7,806 per K-12 student in 2009-10, almost 10 percent less than two years ago, according to the Legislative Analyst's Office.

Federal stimulus funds have prevented deeper cuts to a public school system that educates 6.3 million children, of which about a quarter do not speak English well, and nearly half are considered poor under federal guidelines.

School districts have already issued layoff notices to more than 30,000 teachers and other employees, and they could issue more pink slips this summer, according to the state Department of Education.

"All of the things that make schools vibrant and help students learn are on the chopping block, if they haven't been cut already," Robin Swanson, a spokeswoman for the Education Coalition, which advocates funding increases. "When school doors open in the fall, it's going to be a very different public school system."

Many Democrats and school advocates are calling for tax increases to lessen the impact on schools, but Republicans oppose raising taxes. They say California should live within its means and school districts should be given more flexibility to spend their funds.

"You can't spend what you don't have, and you can't spend what the taxpayers don't have," said State Sen. Bob Huff, R-Diamond Bar, vice chair of the Senate Education Committee.

The unprecedented budget cuts mark a new low for a once highly regarded public school system that began its decline in 1978, when voters approved Proposition 13, which undercut counties' ability to raise property taxes and generate revenue. The ballot measure shifted the responsibility of funding schools to the state and made it more difficult to increase education funding.

California schools now rank at or near the bottom nationally in academic performance, student-teacher ratios in middle and high school, access to guidance counselors and the percentage of seniors who go directly to four-year colleges, according to a February report by UCLA's Institute for Democracy, Education and Access.

In its annual survey this year, Education Week magazine ranked California 47th in per-pupil spending and gave the state a D in academic achievement.

In recent decades, California developed a robust, innovative economy by importing educated workers from other states and countries. But a recent report by the Public Policy Institute of California projected that the state would face a shortage of nearly 1 million college-educated workers in 2025.

State education officials say the budget cuts threaten recent gains in raising test scores and closing a persistent achievement gap between black and Latino students and their white and Asian counterparts.

Democrats are now proposing to eliminate the high school exit exam as a graduation requirement. Jack O'Connell, the state schools chief, has says the exam is essential to helping identify students who fall behind.

The state's budget crisis is taking a heavy toll on school districts such as West Contra Costa Unified, whose financial troubles made it the first school district to be taken over by the state in 1991. Officials say the district, which has large numbers of poor students and English language learners, could face another state takeover if it cannot overcome a $16 million budget shortfall.

"The system is broken," said school board member Antonio Medrano. "We are being forced to cut all kinds of programs."

The cuts are expected to lead to sharp reductions or complete elimination of after-school programs, summer school, adult education, guidance counselors, and electives such as art and music. Class sizes are set to expand from 20 to more than 30 students for kindergarten through third grade.

The teachers union is threatening to strike to protest layoffs of 125 teachers, larger class sizes and proposed cuts to their health care benefits.

"We can't cut our way out of this. We really can't. There will be nothing left of education," said Pixie Hayward-Schickele, who heads the teachers union.

Richmond High School students are bracing for crowded classrooms, fewer course offerings and fewer teachers.

"This school is already overcrowded," said junior Jessica Ledesma, 17. "If there are more students, it's going to be harder to pay attention because it will be loud and crowded and stuffy in there."

Dr. Martin D. Weiss -- California Collapsing. (http://www.moneyandmarkets.com/california-collapsing-34271)

LA Times -- California lawmakers reject budget fix; state could begin issuing IOUs next week -- Controller John Chiang described CA's cash-flow disaster as unlike anything "since the Great Depression." "Schwarzenegger has been telling Democrats for weeks that they should drop any hope of tax hikes and instead embrace his plan of deep cuts to education, prisons and the social safety net, including the elimination of some health and welfare programs."
(http://www.latimes.com/news/local/la-me-budget25-2009jun25,0,1060005.story)

Title: Re: Meltdown
Post by: BachQ on June 24, 2009, 03:56:04 PM

Quote from: Coopmv on June 23, 2009, 04:48:52 PM
It looks like trade war may erupt between the US and EU on one side and China on the other side ...

US case against China export curbs signals tension
Administration files unfair-trade case against China, reflects economic tensions with Beijing

By Martin Crutsinger, AP Economics Writer
On Tuesday June 23, 2009, 4:16 pm EDT

WASHINGTON (AP) -- Long-simmering economic tensions between the U.S. and China boiled over Tuesday as the Obama administration filed its first unfair-trade case against Beijing, accusing it of restricting exports of materials needed to produce steel, aluminum and other products.

The administration vowed to protect the rights of American companies, and it got backing from the European Union, which filed its own case on the issue.

Some trade experts suggested China might settle the dispute rather than endure a prolonged hearing process before the Geneva-based World Trade Organization, the arbiter of global trade rules.

Analysts expect the fight over China's export restrictions will be just one of many trade cases the administration files against China. Obama made campaign pledges to take a tougher approach with U.S. trading partners in the face of soaring job losses and the longest U.S. recession since World War II.

The materials at issue include coke, bauxite, magnesium and silicon metal, the U.S. complaint notes. The U.S. and EU complaints say China's export restrictions give its companies an unfair edge over their foreign rivals by giving them access to cheaper materials, despite WTO rules against export curbs.

U.S. Trade Representative Ron Kirk said the Obama administration decided to pursue a WTO case after two years of talks between the Chinese and the Bush administration had failed to reach a resolution. He said China's actions were endangering American jobs.

"The United States believes that China is unfairly restricting exports of raw materials," Kirk said. "These actions are hurting American steel, aluminum and chemical manufacturers, among other industries, that desperately need these material to make their products."

The U.S. and EU filed separate complaints with the WTO, a step that triggers a 60-day consultation period. If the dispute is not resolved, they can formally request a WTO hearing panel. At that point, the cases likely would be merged.

If the U.S. and EU prevail at a WTO hearing -- a process that can take up to a year -- and China still refuses to lift the export restrictions, the two would be given a go-ahead to impose economic sanctions on China. Those sanctions would be equal to the harm inflicted on their companies by Beijing's actions.

"The United States has a strong case," said Dan Griswold, a trade economist at the Cato Institute, a Washington think tank. "And it certainly adds weight to the U.S. case that the two largest trading entities in the WTO have joined together. That should get China's attention."

Officials from the U.S. and EU sought to protect their domestic companies' collective ability to compete on a global scale.

"The Chinese restrictions on raw materials distort competition and increase global prices, making things even more difficult for our companies in this economic downturn," EU Trade Commissioner Catherine Ashton said in a statement.

Ashton and Kirk expressed hope the issue could be resolved during the consultation period. But if that doesn't happen, Kirk said the U.S. will go forward with a WTO case.

"Dialogue is our preferred course of action, but despite raising this issue with China repeatedly, China has not changed its policies," Kirk said.

Wei Xin, a spokeswoman for the Chinese embassy in Washington, had no immediate comment on the U.S. action.

The American Iron and Steel Institute --whose members include Nucor Corp. and United States Steel Corp. -- the United Steel Workers and other industry groups released a joint statement praising the administration's decision to pursue a WTO case against China.

"When China joined the WTO in 2001, it committed to removing these restrictions," the groups said. They called the barriers on the export of raw materials and minerals "just another way in which China favors its domestic manufacturing industries at the expense of the rest of the world."

The U.S. complaint contends that China maintains measures that restrain the export of raw materials for products -- such as coke, a key ingredient in steel production -- for which it's the world's largest producer, or near the top.

A U.S. fact sheet said "a prime example of the highly distortive effects of China's export restraints" was its decision to limit exports of coke from 336 million metric tons in 2008 down to current annual exports of only 12 million metric tons. Before the export controls were imposed, China accounted for about 60 percent of global coke production.

Good. It's about time the US and EU filed complaints. ... "just another way in which China favours its domestic manufacturing industries at the expense of the rest of the world."

Title: Re: Meltdown
Post by: Coopmv on June 24, 2009, 04:25:16 PM

DM, Can the Swiss government shoot down this deal since the company to be acquired is based in Switzerland?

China's Sinopec makes $7.2B grab for Addax
China's Sinopec puts up $7.2 billion for Addax Petroleum; largest overseas bid so far

By Rob Gillies, Associated Press Writer
On Wednesday June 24, 2009, 4:54 pm EDT

TORONTO (AP) -- Sinopec of China will acquire oil explorer Addax Petroleum for $7.2 billion in what would be the country's largest overseas takeover, with Beijing again flexing it's economic clout.

China has been aggressively pursuing major acquisitions and investments in commodity companies and the push-back from other countries has just as forceful.

Four years ago, China National Offshore Oil Company Ltd. withdrew an $18.5 billion bid for the Unocal Corp. because of a tremendous backlash in Washington.

This month, miner Rio Tinto PLC of Australia turned away a $19.5 billion investment from the Aluminum Corp. of China after it caused a political firestorm. Lawmakers lambasted a deal, saying Australia would lose control over an enormous amount of natural resources to a state-controlled company in China.

Sinopec, a refiner, would gain access to substantial reserves in West Africa and the Middle East if the takeover of Addax is approved.

Geneva-based Addax, which previously said it was considering a sale, said Wednesday its board unanimously backed the deal, which still must be approved by regulators. The company is listed on exchanges in London and Toronto.

Addax said it produced 134.7 million barrels a day of crude oil in the first quarter of this year.

Beijing is pushing hard to lock up precious commodities as its economy grows.

Beijing-based Sinopec, which is formally known as China Petroleum & Chemical Corp., is China's biggest refiner by capacity.

If the company can add exploration and production capacity, it would help cushion against spikes in global crude oil prices. The company has posted billions in losses in recent years due to caps on domestic fuel prices.

"There's no secret that China has made a policy that it wants its firms to go forth and secure the natural resources that China believes it needs for its development," said Brad Setser, a fellow at the Council on Foreign Relations.

Chinese companies are becoming more competitive globally, but they can't compete with majors such as Exxon Mobil Corp. and Royal Dutch Shell.

So the companies are going into places that oil majors are less likely to go, said Erica Downs, Chinese Energy Fellow at Brookings Institution Washington.

That includes places like Gabon and Sudan, where China is a top trading partner.

With Addax also comes a presence in northern Iraq, where leaders of the self-ruled Kurdish region have been signing oil contracts that the central government calls illegal.

"Good reserves in stable places have been locked up by the big multinationals," said Nick Lardy, an expert on China's economy at the Peterson Institute, a Washington think tank. "If you're a new player and you have a substantial appetite for access to oil on some long-term basis, then you are more or less forced to go into high risk places where the majors are not willing to tread."

Sinopec, a wholly owned subsidiary of China Petrochemical Corp., will pay $46.17 per share.

The offer is a 47 percent premium to closing market price for Addax on June 5, the day prior to it's public announcement of sales talks.

Shares of Addax Petroleum Corp. jumped more than eight percent to $49.74 Canadian ($43.31) in early afternoon trading on the Toronto stock exchange.

Title: Re: Meltdown
Post by: Coopmv on June 24, 2009, 04:26:53 PM

Quote from: Dm on June 24, 2009, 03:56:04 PM
Good. It's about time the US and EU filed complaints. ... "just another way in which China favours its domestic manufacturing industries at the expense of the rest of the world."

The US and EU will need to take much tougher actions than just filing complaints since I don't think complaints will work ...

Title: Re: Meltdown
Post by: Coopmv on June 24, 2009, 06:33:02 PM

DM; Not sure if you saw this article from a good few months ago. The Chinese Communists want to have it both ways. While it wants to expand overseas and buy foreign assets, it does not allow foreign countries to buy Chinese assets. BTW, did you know that St Bernard puppies have been bought from Switzerland to be slaughtered in China for meat? This is an outrage since I own three dachshunds ...

RTTNews) - Beverages giant The Coca-Cola Co.'s (KO | Quote | Chart | News | PowerRating) efforts to establish itself in one of the world's fastest growing consumer markets received a setback on Wednesday, with the Chinese government deciding to block the company's US$2.4 billion takeover of China Huiyuan Juice Group Ltd. (CYUNF.PK) on anti-monopoly grounds.

China's Commerce Ministry has said in its Web site that the proposed acquisition would have been bad for competition, as it could eliminate smaller players and raise prices for consumers. Coca-Cola was earlier asked for solutions to minimize the adverse impact, but the company's suggestions were not sufficient for the government to approve the deal. The rejection was based on a law passed last year and Coca-Cola cannot appeal the decision.

If approved, the deal would have been the largest-ever buyout of a Chinese company by a foreign competitor. The two companies together would have had about 40% of China's fruit juice market.

China is Coke's fourth-largest market, where it faces stiff competition from arch rival PepsiCo Inc. (PEP | Quote | Chart | News | PowerRating). Huiyuan is a successful homegrown brand. It reportedly has over a 10% share in the Chinese fruit and vegetable juice market and holds 42% of China's pure juice market.

Last year, an attempt by U.S. investment firm Carlyle Group to buy control of construction equipment maker Xugong Group had to be dropped on regulatory concerns as well as opposition from Xugong's domestic rivals.

The latest decision has added fuel to a prevalent view of the Chinese government being increasingly protective of domestic businesses. It may have an impact on the efforts of Chinese companies to buy foreign firms.

Last month, China's biggest aluminum producer, Aluminum Corp. of China (ACH | Quote | Chart | News | PowerRating), or Chinalco, and Anglo-Australian miner Rio Tinto plc (RTP, RIO.L) entered into a strategic partnership worth US$19.5 billion. The announcement led to criticism that the country's resource wealth is being taken abroad. Monday, Australian Foreign Investment Review Board reportedly decided to delay its decision to endorse the deal.

Four years ago, China National Offshore Oil Corp. had tried to buy American oil company Unocal Corp. However, the offer did not reach completion on fears of endangering American energy security.

It was in September 2008 that Coca-Cola announced its intention to acquire Huiyuan Juice for HK$12.20 per share in cash, leading to protests by nationalists as well as rival juice producers who complained that the U.S. company would have a larger control of the Chinese beverage market.

It is assumed that the Chinese government's decision might have been influenced by the economic crisis that is gripping the world. One of the strategies of the country is to develop home grown competitive brands that will have an upper hand in the domestic market after the world recovers from the slump.

Meanwhile, Coca-Cola said it was disappointed with the decision, but would respect it. The company added that it would focus on growing its existing brands in China and that its long-term commitment to the local market would continue.

Earlier this month, Coca-Cola had announced that the company would invest $2 billion in China over the next three years to build new bottling plants and distribution infrastructure, which was perceived by many as an attempt to muster Chinese support for the acquisition of Huiyuan.

KO closed Tuesday's regular trade at $41.45, up from the previous close of $41.27, on 10.12 million shares.

Title: Re: Meltdown
Post by: BachQ on June 25, 2009, 03:59:04 PM

Quote from: Coopmv on June 12, 2009, 04:51:22 PM
Euro zone industrial output slumps by record 21.6 percent in year to April

LONDON (AP) -- Industrial production in the 16 countries that use the euro slumped in the year to April, official figures showed Friday, more indication that the euro zone may emerge from recession later than the United States or Britain.

The European Union's statistics office Eurostat said industrial output a record 21.6 percent annually from March's 19.3 percent.

Europe's export-driven economy relies heavily on industrial output and its recovery, whenever it comes, will provide a clear indication that the worst of the recession is over. Sharply lower industrial output was blamed for the massive 2.5 percent quarterly fall in the euro zone's first quarter gross domestic product.

The recession in Germany, the euro zone's biggest single economy, was even greater as demand for its high-value exports, such as cars and heavy machinery, slumped amid the collapse in global trade.

Earlier this week, figures for Britain, which is outside the euro zone, showed that industry may be picking up. Many economists think Britain's manufacturers may be benefiting from the pound's fall against the euro and the dollar and that conversely Europe's exporters are struggling as the euro remains stronger in the foreign exchange markets.

A similar picture has emerged in the U.S. where a run of better than expected economic indicators have helped the stock markets rally around the world -- the world economy is highly dependent on how soon the U.S. emerges from recession.

"The rebound in risk appetite reflects hopes of a stabilisation or recovery in the global economy," said Daniele Antonucci, an economist at Capital Economics.

"But with less convincing signs of improvement, the recovery in the euro zone will lag behind," said Antonucci.

This seemingly multi-speed recovery could well raise tensions that this weekend's gathering of G-8 finance ministers in Lecce, Italy.

Despite apparently agreeing to a raft of initiatives at the G-20 summit of world leaders in London in April, splits seem to have emerged among policymakers over tax and monetary policies in the last few weeks.

Europe, especially Germany, has appeared increasingly at odds with the U.S. and Britain, particularly over the policies being enacted by the U.S. Federal Reserve and the Bank of England. Both banks have embraced quantitative easing -- pumping newly created money into the economy by buying government and corporate bonds -- unlike the European Central Bank.

Meanwhile, there are some worries in the U.S. and Britain that continental Europe has not done enough to deal with the recession -- hence the continuing dearth of resurgent signs in the euro zone economy.

"The Americans believe that the Europeans are 'free riding' on the back of American monetary and fiscal stimulus," said Neil Mackinnon, chief economist at ECU Group.

And Britain's finance minister Alistair Darling suggested to the Financial Times newspaper Friday that some European governments have failed to clean up their banks as much as was needed.

"If there is a problem, it doesn't get any better by walking around it and hoping it will go away," he told the newspaper in an interview.

Capital Economics' Antonucci said the banking sector could turn out to be one of the euro zone's main vulnerabilities, echoing recent warnings from the International Monetary Fund, which has estimated that the banks in the single currency zone have so far incurred just a fifth of their potential losses.

"With measures to help the banking sector still disappointing, the risk is that the euro zone has yet to feel the worst of the credit crunch," said Antonucci.

http://www.guardian.co.uk/business/feedarticle/8575956

25 Jun 2009 – Euro zone industrial new orders plunge by a third y/y in April, the steepest annual drop since comparable records began in 1995; orders for intermediate and capital goods, which reflect on investment trends, fell 38.3% and 39.1% year-on-year respectively, underlining the depth of the economic recession.

Japan's exports tumble at a faster pace in May, plunging 41% (vs. 39% in April), extending Japan's deepest trade slump since World War II. (http://www.bloomberg.com/apps/news?pid=20601087&sid=amEI68_34_YI)

Telegraph -- (http://www.telegraph.co.uk/finance/financetopics/recession/5603771/Most-UK-businesses-freeze-pay-as-recession-bites-CBI-says.html) 60% of UK companies plan to freeze pay or negotiate cuts; 60% of UK businesses have frozen recruitment across all or part of their operations.

Title: Re: Meltdown
Post by: BachQ on June 25, 2009, 04:01:47 PM

Quote from: Reuters on June 19, 2009, 03:30:36 PM
Reuters -- Moody's warning of a significant ("multi-notch") downgrade on California's debt stuns CA officials (http://www.reuters.com/article/domesticNews/idUSTRE55I52L20090619) CA's current debt rating is just five notches above speculative grade, thus Moody's has sounded the alarm that CA's debt rating may plunge into "junk" status if CA lawmakers fail to reach a budget deal soon. Said Moody's: "If the legislature does not take action quickly, the state's cash situation will deteriorate to the point where the controller will have to delay most non-priority payments in July. Lack of action could result in a multi-notch downgrade."

QuoteCalifornia's leasing debt and other state-related debt are also on review, affecting a total of $72 billion of debt. A downgrade could push California's borrowing costs up at time when state officials expect to issue up to $9 billion in revenue anticipation notes as soon as possible after a budget agreement is notched -- a deal whose timing is in doubt.

"I cannot remember reading a ratings note that raised the specter of a multi-notch downgrade," said H.D. Palmer, a spokesman for Schwarzenegger on state finance matters. "It's another clear warning from the financial markets that there will be substantial and costly consequences if the legislature does not send the governor a budget that he can sign."

Quote from: Coopmv on June 20, 2009, 03:24:01 PM
The fiscal fiasco in CA is a godsend for the Republicans as no GOP presidential candidate has won the state since Ronald Reagan and they have little to lose to vote against a bailout or if there is one, force the Democrats to swallow the bitter pill. For Democrats outside of CA, if they vote for the bailout, the payback will come next year since voters in the other forty-nine states are fed up with any bailout. The fiscal train wreck in CA has been many years in the making. Yeah, Prop 13 is the new math - low tax and generous everything provided by CA ....

25 Jun 09-- LA TIMES: Fitch downgrades Calif. one step closer to junk status — (http://latimesblogs.latimes.com/money_co/2009/06/californias-credit-rating-today-suffered-the-first-of-what-is-likely-to-be-a-series-of-new-cuts-amid-the-states-disastrous.html) "The downgrade to A-minus is based on the magnitude of the state's financial and institutional challenges and persistent economic and revenue weakening. Fitch expects the state's finances will continue to be strained through fiscal year 2010 and beyond regardless of any likely outcome to the current budget impasse." Last week, Standard & Poor's and Moody's Investors Service both put California on notice that they may cut their ratings on the state's debt.

Another clear signal that CA needs to get its sh!t together ASAP.

Title: Re: Meltdown
Post by: BachQ on June 25, 2009, 04:09:04 PM

Coop, protectionism is looking mighty tempting.

Quote from: Coopmv on June 24, 2009, 06:33:02 PM
DM; Not sure if you saw this article from a good few months ago. The Chinese Communists want to have it both ways. While it wants to expand overseas and buy foreign assets, it does not allow foreign countries to buy Chinese assets. BTW, did you know that St Bernard puppies have been bought from Switzerland to be slaughtered in China for meat? This is an outrage since I own three dachshunds ...

RTTNews) - Beverages giant The Coca-Cola Co.'s (KO | Quote | Chart | News | PowerRating) efforts to establish itself in one of the world's fastest growing consumer markets received a setback on Wednesday, with the Chinese government deciding to block the company's US$2.4 billion takeover of China Huiyuan Juice Group Ltd. (CYUNF.PK) on anti-monopoly grounds.

China's Commerce Ministry has said in its Web site that the proposed acquisition would have been bad for competition, as it could eliminate smaller players and raise prices for consumers. Coca-Cola was earlier asked for solutions to minimize the adverse impact, but the company's suggestions were not sufficient for the government to approve the deal. The rejection was based on a law passed last year and Coca-Cola cannot appeal the decision.

If approved, the deal would have been the largest-ever buyout of a Chinese company by a foreign competitor. The two companies together would have had about 40% of China's fruit juice market.

China is Coke's fourth-largest market, where it faces stiff competition from arch rival PepsiCo Inc. (PEP | Quote | Chart | News | PowerRating). Huiyuan is a successful homegrown brand. It reportedly has over a 10% share in the Chinese fruit and vegetable juice market and holds 42% of China's pure juice market.

Last year, an attempt by U.S. investment firm Carlyle Group to buy control of construction equipment maker Xugong Group had to be dropped on regulatory concerns as well as opposition from Xugong's domestic rivals.

The latest decision has added fuel to a prevalent view of the Chinese government being increasingly protective of domestic businesses. It may have an impact on the efforts of Chinese companies to buy foreign firms.

Last month, China's biggest aluminum producer, Aluminum Corp. of China (ACH | Quote | Chart | News | PowerRating), or Chinalco, and Anglo-Australian miner Rio Tinto plc (RTP, RIO.L) entered into a strategic partnership worth US$19.5 billion. The announcement led to criticism that the country's resource wealth is being taken abroad. Monday, Australian Foreign Investment Review Board reportedly decided to delay its decision to endorse the deal.

Four years ago, China National Offshore Oil Corp. had tried to buy American oil company Unocal Corp. However, the offer did not reach completion on fears of endangering American energy security.

It was in September 2008 that Coca-Cola announced its intention to acquire Huiyuan Juice for HK$12.20 per share in cash, leading to protests by nationalists as well as rival juice producers who complained that the U.S. company would have a larger control of the Chinese beverage market.

It is assumed that the Chinese government's decision might have been influenced by the economic crisis that is gripping the world. One of the strategies of the country is to develop home grown competitive brands that will have an upper hand in the domestic market after the world recovers from the slump.

Meanwhile, Coca-Cola said it was disappointed with the decision, but would respect it. The company added that it would focus on growing its existing brands in China and that its long-term commitment to the local market would continue.

Earlier this month, Coca-Cola had announced that the company would invest $2 billion in China over the next three years to build new bottling plants and distribution infrastructure, which was perceived by many as an attempt to muster Chinese support for the acquisition of Huiyuan.

KO closed Tuesday's regular trade at $41.45, up from the previous close of $41.27, on 10.12 million shares.

Quote from: Coopmv on June 24, 2009, 04:25:16 PM
DM, Can the Swiss government shoot down this deal since the company to be acquired is based in Switzerland?

China's Sinopec makes $7.2B grab for Addax
China's Sinopec puts up $7.2 billion for Addax Petroleum; largest overseas bid so far

By Rob Gillies, Associated Press Writer
On Wednesday June 24, 2009, 4:54 pm EDT

TORONTO (AP) -- Sinopec of China will acquire oil explorer Addax Petroleum for $7.2 billion in what would be the country's largest overseas takeover, with Beijing again flexing it's economic clout.

China has been aggressively pursuing major acquisitions and investments in commodity companies and the push-back from other countries has just as forceful.

Four years ago, China National Offshore Oil Company Ltd. withdrew an $18.5 billion bid for the Unocal Corp. because of a tremendous backlash in Washington.

This month, miner Rio Tinto PLC of Australia turned away a $19.5 billion investment from the Aluminum Corp. of China after it caused a political firestorm. Lawmakers lambasted a deal, saying Australia would lose control over an enormous amount of natural resources to a state-controlled company in China.

Sinopec, a refiner, would gain access to substantial reserves in West Africa and the Middle East if the takeover of Addax is approved.

Geneva-based Addax, which previously said it was considering a sale, said Wednesday its board unanimously backed the deal, which still must be approved by regulators. The company is listed on exchanges in London and Toronto.

Addax said it produced 134.7 million barrels a day of crude oil in the first quarter of this year.

Beijing is pushing hard to lock up precious commodities as its economy grows.

Beijing-based Sinopec, which is formally known as China Petroleum & Chemical Corp., is China's biggest refiner by capacity.

If the company can add exploration and production capacity, it would help cushion against spikes in global crude oil prices. The company has posted billions in losses in recent years due to caps on domestic fuel prices.

"There's no secret that China has made a policy that it wants its firms to go forth and secure the natural resources that China believes it needs for its development," said Brad Setser, a fellow at the Council on Foreign Relations.

Chinese companies are becoming more competitive globally, but they can't compete with majors such as Exxon Mobil Corp. and Royal Dutch Shell.

So the companies are going into places that oil majors are less likely to go, said Erica Downs, Chinese Energy Fellow at Brookings Institution Washington.

That includes places like Gabon and Sudan, where China is a top trading partner.

With Addax also comes a presence in northern Iraq, where leaders of the self-ruled Kurdish region have been signing oil contracts that the central government calls illegal.

"Good reserves in stable places have been locked up by the big multinationals," said Nick Lardy, an expert on China's economy at the Peterson Institute, a Washington think tank. "If you're a new player and you have a substantial appetite for access to oil on some long-term basis, then you are more or less forced to go into high risk places where the majors are not willing to tread."

Sinopec, a wholly owned subsidiary of China Petrochemical Corp., will pay $46.17 per share.

The offer is a 47 percent premium to closing market price for Addax on June 5, the day prior to it's public announcement of sales talks.

Shares of Addax Petroleum Corp. jumped more than eight percent to $49.74 Canadian ($43.31) in early afternoon trading on the Toronto stock exchange.

Coop, we're witnessing the unfolding of a very deliberate trend: China is buying up commodity-rich companies to secure its future resource needs. Extremely, extremely smart move on China's part. While the Western superpowers have been preoccupied bailing out failed companies and greedy banksters, China has been busy tightening its stranglehold over coveted industrial commodities.

Part of the motivation is to corner the market on sought-after resources. For example, earlier this month, China bought companies to enable it to control of 95% of the market for rare-earth metals. (http://www.globalresearch.ca/index.php?context=va&aid=13853) By any definition, when you own 95% of the mining and production of rare industrial elements, you have CORNERED THE MARKET. This is highly significant since rare-earth metals are essential for solar panels, wind turbines, and other green technologies. As the Times Online notes: "The weight and magnetic properties of rare-earth metals have made them important for wind turbines, essential to hybrid cars, and indispensable if the world ever hopes to covert to fully electric vehicles..." ("Rare earth oxides go into these super magnets that are a key part of these hybrid and electric cars," notes metals analyst John Kaiser.)

Part of the motivation is to enable China to diversify out of the dollar and into industrial commodities. (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5160120/A-Copper-Standard-for-the-worlds-currency-system.html)

China is "definitely buying metals to diversify out of US Treasuries and dollar holdings," said Jim Lennon, head of commodities at Macquarie Bank. Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can: "China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years."

And part of the motivation is China's unquenchable thirst for oil ... (http://www.theglobeandmail.com/globe-investor/chinas-unquenchable-thirst-for-oil/article1195713/)

QuoteChina's cash-rich, state-controlled oil companies and its state development bank are on a buying spree, taking advantage of low crude prices and shrunken credit markets to snap up global assets that will help feed the country's enormous appetite for energy. The Chinese are the most aggressive deal makers in the international oil industry right now, either through straight acquisitions or through innovative loans to foreign oil companies with crude as the currency of repayment.

*** But there is a nagging concern that China may hoard resources if supplies tighten or the conflict in the Middle East threatens production there, and that the booming Asian giant would meet its energy security needs at the expense of Western nations. Sinopec's purchase of Addax Petroleum is one of the strongest signs yet that China's international resources grab is real and gaining momentum.

... and natural gas ... (http://www.boston.com/news/world/europe/articles/2009/06/25/china_turkmenistan_seal_landmark_energy_deal/)

ASHGABAT, Turkmenistan—China signed a 30-year deal to increase purchases of natural gas from Turkmenistan by 30 percent, state media reported Thursday -- a landmark agreement for Beijing as it competes with Moscow for access to Central Asia's energy wealth.

... and gold ... (http://commoditytradealert.com/blog/?p=1276) China "funded a second strategic petroleum reserve and they plan to buy $80 billion worth of gold. That's two Fort Knox's. Both of those investments only make sense if you expect significant dollar inflation."

... and global assets ... (http://www.worldtribune.com/worldtribune/WTARC/2009/ea_china0343_04_30.asp)

"Beijing is trying to use its treasure trove of U.S. debt, its holdings of some $2 trillion in currency reserves, mostly in dollars, to go bargain-hunting for assets in the worldwide credit crunch and recession. ... Chinese oil and mining companies, all either directly or indirectly government-owned, already have made $23.2 billion in overseas acquisitions this year."

Title: Re: Meltdown
Post by: Coopmv on June 25, 2009, 05:17:35 PM

Very thought provoking article. What can I say, America, the land of the spendthrift fools ...

Charles Wheelan, Ph.D. The Naked Economist

Posted on Tuesday, June 23, 2009, 12:00AM

Ben Franklin supposedly said that it's better to skip supper and go to bed hungry than it is to wake up in debt. Ben would be quite disappointed in us. We Americans didn't skip dinner; instead, we opted over the past decade to gorge at the buffet and then charge it.

We woke up as the world's largest debtor -- so deeply in debt that our global creditors are getting nervous, and rightfully so.

Here are some economic realities associated with our deepening fiscal hole.

It's bad. As in, $11 trillion bad. That number alone doesn't mean much, at least without context. So here is some context. First, that's roughly $40,000 for every man, woman, and child in the country. Second, our debt is projected to grow to roughly 100 percent of GDP by 2010, meaning that, if we were to devote everything we produce as a nation to paying down debt, it would take us an entire year to pay off what we owe.

Eating Up the Global Capital Pool

Other countries have become more indebted as a percentage of GDP, but they were small countries, so they sucked up less of the global capital pool. There is only so much money in the world, and we have borrowed a shocking proportion of it. The only other time the U.S. has been so indebted was at the end of World War II.

Big debt means big interest payments. The Chinese haven't loaned us a trillion dollars because we're good-looking; they've loaned us a trillion dollars because we pay for the privilege of using that capital. Interest payments now make up more than 8 percent of the federal budget -- meaning that nearly one of every 10 of your tax dollars gets you absolutely nothing in return. No schools, no bridges, no domestic wiretaps. That's just the cost of servicing the debt we've run up.

And we've done nothing terribly productive with all that borrowed money. Debt, after all, is not inherently bad. If you borrow $100,000 to go to medical school, then you've probably done a very smart thing. When you graduate, your earning potential will be higher, enabling you to live better even after you pay off the loans (with interest). In this case, you used borrowed money to invest in something that made you more productive.

Now suppose that you borrowed $100,000 to sustain a lifestyle that you could not otherwise afford: to pay the rent, to buy nice clothes, and to make the payments on your luxury car. When that bill comes due (with interest), you're no more productive than you were when you started borrowing. You borrowed used money for consumption, not investment.

Unfortunately, America's borrowing resembles the latter more than the former. We haven't upgraded our transportation infrastructure or made major investments in alternative energy or financed education for those who could not otherwise afford it.

Stop the Bickering

We need to stop bickering about who got us here. Was it the Bush tax cuts (yes) or the Obama stimulus (yes) or profligate Congressional spending (yes) or voters who continually reward pork more than parsimony (yes)? But analyzing just overcomplicates things. We are deeply in debt because we have routinely spent more than we collect in taxes. That's just a mathematical reality that has become needlessly confounded with politics.

If you're a small government conservative, that's great. But let's say enough of the tax cuts without corresponding spending cuts. Those aren't tax cuts; they are tax postponements. You've just left the bill for future taxpayers, with interest.

And if you believe that government can and should build a stronger America, terrific. I'm sympathetic: I like early childhood education and the high-speed rail and Army sharpshooters who kill pirates. If you want those things, then pay for them.

Big government or small government, the revenues need to equal the expenditures. It really is that simple.

When the Big Bills Come Due

The big bills haven't even come due yet. If the U.S. were a family, we'd be crouched over the kitchen table trying to figure out how to pay the Amex and Visa bills -- and the gigantic Mastercard bill would still be in the mail.

The big bill still in the mail for the United States is for our entitlement programs -- primarily Social Security and Medicare. We've made huge commitments to these programs that are not adequately funded. That Social Security check you're counting on when you turn 65 doesn't show up in the debt figures, but it's still money that we will owe. Lots and lots of money.

And the Chinese are worried U.S. debt, as they should be. All debtors have creditors; ours are all over the world. The biggest one is the Chinese government, which has been buying up U.S. Treasury bonds with all the vigor and foresight of a 1990s Las Vegas real estate developer.

If we don't honor our bonds, China doesn't get to repossess the White House or the national parks; they don't get to carve their own leaders on Mt. Rushmore. Treasury debt is secured by the "full faith and credit of the U.S. government" -- which won't command much at auction, if it comes to a foreclosure type situation.

Chinese officials aren't worried about bankruptcy because the U.S. has an easier and more insidious option -- we can print our way out of the problem. Our debt is denominated in dollars, and the U.S. government has the authority to print those dollars. We could take a page from the Zimbabwe policy manual and just print money to pay our bills -- thereby debasing the currency, creating inflation, and devaluing the real value of what we owe.

Is that a sensible solution? No, as it imposes the costs of inflation on all of us. I don't know anyone eager to revisit the 1970s (in terms of economic performance or fashion).

Is it a possibility? You bet. In fact, I'm surprised that long-term interest rates haven't climbed more than they have. (When long-term lenders fear inflation, they demand higher interest rates to protect against that contingency.)

The solution to all this is straightforward: Spend less than we take in, and use the surplus to pay down debt. At the risk of lapsing into economics jargon, yes, this is going to suck. Think about it: Americans don't like their current tax bills -- which aren't even high enough to pay for our current spending, let alone the bills we've run up from the past. In the future, we will have to pay more and get less.

But we've done it before. We paid off the debt accumulated during World War II. In fact, the ensuing decades saw some of the most impressive gains in wealth and productivity in American history. But it will require a radical change from what we're doing now.

An economic recovery will help. But we can't pretend that will be enough. We need to raise taxes, cut spending, and/or reform our entitlement programs. Probably all three, and in a serious way.

Will that dampen economic growth in the short run? Yes. Will it jeopardize important social programs? Yes. Will it compromise our ability to make important public investments? Yes. Does it limit what we can spend on healthcare reform? Yes.

But as Ben Franklin would have pointed out, we should have thought about that before ordering room service and then charging it to a credit card.

Title: Re: Meltdown
Post by: Coopmv on June 25, 2009, 05:24:45 PM

Quote from: Dm on June 25, 2009, 04:09:04 PM
Coop, protectionism is looking mighty tempting.

Coop, we're witnessing the unfolding of a very deliberate trend: China is buying up commodity-rich companies to secure its future resource needs. Extremely, extremely smart move on China's part. While the Western superpowers have been preoccupied bailing out failed companies and greedy banksters, China has been busy tightening its stranglehold over coveted industrial commodities.

Part of the motivation is to corner the market on sought-after resources. For example, earlier this month, China bought companies to enable it to control of 95% of the market for rare-earth metals. (http://www.globalresearch.ca/index.php?context=va&aid=13853) By any definition, when you own 95% of the mining and production of rare industrial elements, you have CORNERED THE MARKET. This is highly significant since rare-earth metals are essential for solar panels, wind turbines, and other green technologies. As the Times Online notes: "The weight and magnetic properties of rare-earth metals have made them important for wind turbines, essential to hybrid cars, and indispensable if the world ever hopes to covert to fully electric vehicles..." ("Rare earth oxides go into these super magnets that are a key part of these hybrid and electric cars," notes metals analyst John Kaiser.)

Part of the motivation is to enable China to diversify out of the dollar and into industrial commodities. (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5160120/A-Copper-Standard-for-the-worlds-currency-system.html)

China is "definitely buying metals to diversify out of US Treasuries and dollar holdings," said Jim Lennon, head of commodities at Macquarie Bank. Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can: "China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years."

And part of the motivation is China's unquenchable thirst for oil ... (http://www.theglobeandmail.com/globe-investor/chinas-unquenchable-thirst-for-oil/article1195713/)

... and natural gas ... (http://www.boston.com/news/world/europe/articles/2009/06/25/china_turkmenistan_seal_landmark_energy_deal/)

ASHGABAT, Turkmenistan—China signed a 30-year deal to increase purchases of natural gas from Turkmenistan by 30 percent, state media reported Thursday -- a landmark agreement for Beijing as it competes with Moscow for access to Central Asia's energy wealth.

... and gold ... (http://commoditytradealert.com/blog/?p=1276) China "funded a second strategic petroleum reserve and they plan to buy $80 billion worth of gold. That's two Fort Knox's. Both of those investments only make sense if you expect significant dollar inflation."

... and global assets ... (http://www.worldtribune.com/worldtribune/WTARC/2009/ea_china0343_04_30.asp)

"Beijing is trying to use its treasure trove of U.S. debt, its holdings of some $2 trillion in currency reserves, mostly in dollars, to go bargain-hunting for assets in the worldwide credit crunch and recession. ... Chinese oil and mining companies, all either directly or indirectly government-owned, already have made $23.2 billion in overseas acquisitions this year."

The Chinese Communists cheated their way into the WTO and manipulated the WTC rules to build itself up the best it can over the past decade. Will they adhere by the WTC rules? Absolutely not! When was the last time any communists ever keep their words? How can the WTO rules be possibly enforced? Not a fat chance.

Title: Re: Meltdown
Post by: BachQ on June 26, 2009, 03:44:44 PM

Quote from: Coopmv on June 25, 2009, 05:17:35 PM
Big debt means big interest payments. The Chinese haven't loaned us a trillion dollars because we're good-looking; they've loaned us a trillion dollars because we pay for the privilege of using that capital. Interest payments now make up more than 8 percent of the federal budget -- meaning that nearly one of every 10 of your tax dollars gets you absolutely nothing in return. No schools, no bridges, no domestic wiretaps. That's just the cost of servicing the debt we've run up. *** In fact, I'm surprised that long-term interest rates haven't climbed more than they have. (When long-term lenders fear inflation, they demand higher interest rates to protect against that contingency.)

This is worrisome. If interest rates reach elevated levels, the money spent for debt service will crowd-out money available for other essential govt services; there will be a full-blown fiscal crisis, which will only worsen as the govt racks up more and more debt. Interest payments are already 8% of the federal budget ... but what happens when that reaches 15%? 20%? 25%?

Title: Re: Meltdown
Post by: Coopmv on June 27, 2009, 09:03:35 AM

DM, The head of GE has now acknowledged that outsourcing has gone too far and intends to reverse the trend at his company. Who knows, if many fortune 500 companies start to do the same, this will surely become very interesting as GE is perceived as a corporate leader in the US. Perhaps the better paid jobs in China and India will start to go flat and then decline. The European countries will probably follow since they have followed the American lead in the outscourcing movement of the past decade. This is really the silver lining to this financial debacle. With most companies share prices at decade lows, insourcing jobs now will hardly hurt any further ... ;D

GE's CEO calls for American manufacturing rebirth
General Electric's Immelt says manufacturing jobs should comprise 20 percent of US employment

By Jim Irwin, Associated Press Writer
On Friday June 26, 2009, 6:22 pm EDT

BIRMINGHAM, Mich. (AP) -- The United States should aim to have manufacturing jobs comprise at least 20 percent of total employment, about twice what it is now, General Electric Co. Chairman and CEO Jeffrey Immelt said Friday.

Speaking to the Economic Club of Detroit, Immelt outlined what he called an American industrial renewal driven by emphasis on manufacturing and exports, investment in new technology and research and development, innovations in clean energy and affordable health care.

The U.S. has faltered as it has moved toward a service- and consumption-based economy, Immelt said. He singled out financial services, which he said comprise 45 percent of earnings of companies on the Standard & Poor's 500 index, up from 10 percent a quarter-century earlier.

American manufacturing can be reinvigorated through investment in research and development, infrastructure and training, and by fostering public-private partnerships, Immelt said.

There is nothing "predestined or inevitable about the industrial decline of the U.S., if we as a people are prepared to reverse it," he said.

"We would do much better to observe the example of China. They've been growing fast because they invest in technology and they make things. They have no intention of letting up in manufacturing in order to evolve into a service economy.

"They know where the money is and they aim to get there first," Immelt said. "America has to get back in that game."

Earlier Friday, Immelt announced GE is developing a $100 million research and development facility in Wayne County's Van Buren Township, 25 miles west of Detroit. About 1,200 scientists and engineers initially will be hired to develop manufacturing technologies for GE's renewable energy, aircraft engine, gas turbine and other products.

Title: Re: Meltdown
Post by: BachQ on June 27, 2009, 01:20:51 PM

Quote from: Coopmv on June 27, 2009, 09:03:35 AM
DM, The head of GE has now acknowledged that outsourcing has gone too far and intends to reverse the trend at his company. Who knows, if many fortune 500 companies start to do the same, this will surely become very interesting as GE is perceived as a corporate leader in the US. Perhaps the better paid jobs in China and India will start to go flat and then decline. The European countries will probably follow since they have followed the American lead in the outscourcing movement of the past decade. This is really the silver lining to this financial debacle. With most companies share prices at decade lows, insourcing jobs now will hardly hurt any further ... ;D

GE's CEO calls for American manufacturing rebirth
General Electric's Immelt says manufacturing jobs should comprise 20 percent of US employment

By Jim Irwin, Associated Press Writer
On Friday June 26, 2009, 6:22 pm EDT

BIRMINGHAM, Mich. (AP) -- The United States should aim to have manufacturing jobs comprise at least 20 percent of total employment, about twice what it is now, General Electric Co. Chairman and CEO Jeffrey Immelt said Friday.

Speaking to the Economic Club of Detroit, Immelt outlined what he called an American industrial renewal driven by emphasis on manufacturing and exports, investment in new technology and research and development, innovations in clean energy and affordable health care.

The U.S. has faltered as it has moved toward a service- and consumption-based economy, Immelt said. He singled out financial services, which he said comprise 45 percent of earnings of companies on the Standard & Poor's 500 index, up from 10 percent a quarter-century earlier.

American manufacturing can be reinvigorated through investment in research and development, infrastructure and training, and by fostering public-private partnerships, Immelt said.

There is nothing "predestined or inevitable about the industrial decline of the U.S., if we as a people are prepared to reverse it," he said.

"We would do much better to observe the example of China. They've been growing fast because they invest in technology and they make things. They have no intention of letting up in manufacturing in order to evolve into a service economy.

"They know where the money is and they aim to get there first," Immelt said. "America has to get back in that game."

Earlier Friday, Immelt announced GE is developing a $100 million research and development facility in Wayne County's Van Buren Township, 25 miles west of Detroit. About 1,200 scientists and engineers initially will be hired to develop manufacturing technologies for GE's renewable energy, aircraft engine, gas turbine and other products.

Awesome, Coop! I would like to read Immelt's entire speech. Hopefully this clarion call will wake up other companies (and legislatures) to impel them to action and to cease their self-destructive ways.

The root causes of the "downfall" of Western powers is so obvious, yet it needs to be understood and acted upon by every CEO and every legislator. It's too bad that it took a total collapse of the financial sector to draw attention to this problem, but Immelt is correct that one key solution would be to move jobs away from a service economy into a manufacturing/technology infrastructure.

It's not too late to reverse the current trend.

The problem, of course, is that (1) Westerners have become accustomed to their service-oriented consumerism; and (2) rebuilding a technological/industrial/manufacturing infrastructure will be expensive. IOW, this redirection will take lots of WORK & MONEY. As one commentator notes: (http://247wallst.com/2009/06/27/ges-ge-flawed-vision-of-the-new-economy/)

QuoteConverting America back to a manufacturing economy that could be a net exporter of goods would cost in the trillions of dollars. This would have to be done during a period when the national budget is already remarkably stretched and large corporations are unlikely to make massive capital expenditure. It would have to be done with a large decrease in the cost of US labor, which would undermine consumer spending by cutting American wages. *** The manufacturing and industrial part of the American economy has been leaving the country for decades. It is impossible to raise the capital to create it again. By encouraging growth of the sectors of US businesses that are still doing well, and protecting their interests worldwide by the rule of law, the American economy can rebound strongly and have an opportunity for sustained GDP growth.

To accomplish this will require an extreme commitment and concerted effort by govt, investors, and businesses. It would require an overhaul of the tax code, and would entail protectionist policies.

In a free market economy, every country must exploit its respective competitive advantage. For the US, that comparative advantage resides in research & development, intellectual property, and innovative technologies. The US cannot "pretend" that it can succeed in manufacturing if other countries (China, Japan, India, Korea ...) have an inherent comparative advantage in manufacturing.

So step one is to fully understand the home country's comparative advantages:

Quote"US companies are still the major providers of software around the world. The most successful online companies are almost entirely US based. The tech consulting business is a major part of the American employment and tax base. A large portion of the world's medical and aerospace industries are still in America. Most of the premium media content comes from US studios and television properties."

Under Bush/Cheney, the US had a great opportunity to become a leader in renewable and alternative energy technologies (solar panels; wind turbines; battery technologies; mass transit). Bush/Cheney, of course, were utterly obsessed with oil, Iraq, Halliburton, etc. Let's hope that Obama, Gordon Brown, and others will not squander this opportunity ... and hopefully Obama and Gordon Brown will read and act upon Immelt's speech. 0:)

Title: Re: Meltdown
Post by: Coopmv on June 27, 2009, 01:35:10 PM

Quote from: Dm on June 27, 2009, 01:20:51 PM
Awesome, Coop! I would like to read Immelt's entire speech. Hopefully this clarion call will wake up other companies (and legislatures) to impel them to action and to cease their self-destructive ways.

The root causes of the "downfall" of Western powers is so obvious, yet it needs to be understood and acted upon by every CEO and every legislator. It's too bad that it took a total collapse of the financial sector to draw attention to this problem, but Immelt is correct that one key solution would be to move jobs away from a service economy into a manufacturing/technology infrastructure.

It's not too late to reverse the current trend.

The problem, of course, is that (1) Westerners have become accustomed to their service-oriented consumerism; and (2) rebuilding a technological/industrial/manufacturing infrastructure will be expensive. IOW, this redirection will take lots of WORK & MONEY. As one commentator notes: (http://247wallst.com/2009/06/27/ges-ge-flawed-vision-of-the-new-economy/)

To accomplish this will require an extreme commitment and concerted effort by govt, investors, and businesses. It would require an overhaul of the tax code, and would entail protectionist policies.

In a free market economy, every country must exploit its respective competitive advantage. For the US, that comparative advantage resides in research & development, intellectual property, and innovative technologies. The US cannot "pretend" that it can succeed in manufacturing if other countries (China, Japan, India, Korea ...) have an inherent comparative advantage in manufacturing.

So step one is to fully understand the home country's comparative advantages:

Under Bush/Cheney, the US had a great opportunity to become a leader in renewable and alternative energy technologies (solar panels; wind turbines; battery technologies; mass transit). Bush/Cheney, of course, were utterly obsessed with oil, Iraq, Halliburton, etc. Let's hope that Obama, Gordon Brown, and others will not squander this opportunity ... and hopefully Obama and Gordon Brown will read and act upon Immelt's speech. 0:)

The Bush-Cheney Administration was every bit as bad as the Carter-Mondale Administration with the exception that there was no military debacle like the failed rescue mission in the Iranian desert due to savage cutbacks in the military made in the mid 70's. That said, there are few good things the last regime has accomplished. Its over-emphasis on the service economy, especially the finance industry, was how the US landed in the current predicament. To be sure, the Clinton-Gore Adminstration sold the seeds of destruction, which unfortunately the Bush-Cheney Administration never worked hard to avert. The Clinton-Gore Administration was also largely responsible for 9/11 because Clinton did not want to confront the bin Laden threat early on ...

Title: Re: Meltdown
Post by: Coopmv on June 27, 2009, 03:02:24 PM

Quote from: Dm on June 25, 2009, 04:09:04 PM
Coop, protectionism is looking mighty tempting.

Coop, we're witnessing the unfolding of a very deliberate trend: China is buying up commodity-rich companies to secure its future resource needs. Extremely, extremely smart move on China's part. While the Western superpowers have been preoccupied bailing out failed companies and greedy banksters, China has been busy tightening its stranglehold over coveted industrial commodities.

Part of the motivation is to corner the market on sought-after resources. For example, earlier this month, China bought companies to enable it to control of 95% of the market for rare-earth metals. (http://www.globalresearch.ca/index.php?context=va&aid=13853) By any definition, when you own 95% of the mining and production of rare industrial elements, you have CORNERED THE MARKET. This is highly significant since rare-earth metals are essential for solar panels, wind turbines, and other green technologies. As the Times Online notes: "The weight and magnetic properties of rare-earth metals have made them important for wind turbines, essential to hybrid cars, and indispensable if the world ever hopes to covert to fully electric vehicles..." ("Rare earth oxides go into these super magnets that are a key part of these hybrid and electric cars," notes metals analyst John Kaiser.)

Part of the motivation is to enable China to diversify out of the dollar and into industrial commodities. (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5160120/A-Copper-Standard-for-the-worlds-currency-system.html)

China is "definitely buying metals to diversify out of US Treasuries and dollar holdings," said Jim Lennon, head of commodities at Macquarie Bank. Nobu Su, head of Taiwan's TMT group, which ships commodities to China, said Beijing is trying to extricate itself from dollar dependency as fast as it can: "China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves. They get ten times the impact, and can cover their infrastructure for 50 years."

And part of the motivation is China's unquenchable thirst for oil ... (http://www.theglobeandmail.com/globe-investor/chinas-unquenchable-thirst-for-oil/article1195713/)

... and natural gas ... (http://www.boston.com/news/world/europe/articles/2009/06/25/china_turkmenistan_seal_landmark_energy_deal/)

ASHGABAT, Turkmenistan—China signed a 30-year deal to increase purchases of natural gas from Turkmenistan by 30 percent, state media reported Thursday -- a landmark agreement for Beijing as it competes with Moscow for access to Central Asia's energy wealth.

... and gold ... (http://commoditytradealert.com/blog/?p=1276) China "funded a second strategic petroleum reserve and they plan to buy $80 billion worth of gold. That's two Fort Knox's. Both of those investments only make sense if you expect significant dollar inflation."

... and global assets ... (http://www.worldtribune.com/worldtribune/WTARC/2009/ea_china0343_04_30.asp)

"Beijing is trying to use its treasure trove of U.S. debt, its holdings of some $2 trillion in currency reserves, mostly in dollars, to go bargain-hunting for assets in the worldwide credit crunch and recession. ... Chinese oil and mining companies, all either directly or indirectly government-owned, already have made $23.2 billion in overseas acquisitions this year."

Here is one of the few things the Bush-Cheney Administration did right, Containing China? (http://www.voanews.com/english/archive/2006-08/US-India-China2006-08-07-voa68.cfm?CFID=245704763&CFTOKEN=93874380&jsessionid=de30499b718b64601a586077a11c5114b181), which I am sure the Obama Administration will religiously follow ...

Title: Re: Meltdown
Post by: Coopmv on June 27, 2009, 08:24:36 PM

It will be interesting to see what impact this bill will have on Chinese imports to the US. The insourcing of jobs (back to the US), if it becomes a trend, will no doubt have an impact on both China and India ...

Analysis: Climate bill may spur energy revolution
Analysis: Climate bill would spur US energy revolution, affecting every aspect of daily life

By H. Josef Hebert, Associated Press Writer
On Saturday June 27, 2009, 7:41 pm EDT

WASHINGTON (AP) -- Congress has taken its first step toward an energy revolution, with the prospect of profound change for every household, business, industry and farm in the decades ahead.

It was late Friday when the House passed legislation that would, for the first time, require limits on pollution blamed for global warming -- mainly carbon dioxide from burning fossil fuels. Now the Senate has the chance to change the way Americans produce and use energy.

What would the country look like a decade from now if the House-passed bill -- or, more likely, a water-down version -- were to become the law of the land?

"It will open the door to a clean energy economy and a better future for America," President Barack Obama said Saturday.

But what does that mean to the average person?

Energy touches every corner of the economy and in countless ways can alter people's lives.

Such a law would impact how much people pay to heat, cool and light their homes (it would cost more); what automobiles they buy and drive (smaller, fuel efficient and hybrid electric); and where they will work (more "green" jobs, meaning more environmentally friendly ones).

Critics of the House bill brand it a "jobs killer." Yet it would seem more likely to shift jobs. Old, energy-intensive industries and businesses might scale back or disappear. Those green jobs would emerge, propelled by the push for nonpolluting energy sources.

That could mean making or installing solar panels, repairing wind turbines, producing energy-efficient light bulbs, working for an environmental engineering firm or waste recycler, making equipment that harnesses carbon from coal burning and churning out energy-saving washing machines or air conditioners.

Assembly line workers at factories that made gas-guzzling cars might see their future in producing the next generation of batteries or wind turbine blades -- an emerging shift, though on a relatively small scale today. On Wall Street, commodity brokers would trade carbon pollution credits alongside oil futures.

Farmers would see the cost of fertilizer and electricity go up. More windmills would dot their pastures. And a new source of income could come from selling pollution credits by planting trees or changing farming methods to absorb more carbon dioxide.

Energy would cost more because it would become more expensive to produce. For the first time there would be a price on the greenhouse gas pollution created when coal, natural gas or oil are burned. Energy companies would have to pay for technologies that can capture the carbon emissions, purchase pollution allowances or shift to cleaner energy sources.

It all costs.

Investors would see a new line item on companies financial reports: the cost of carbon permits.

Some increases would be reflected in the prices of goods and services, economics say. It might mean shelling out more for a toy because plastic, a petroleum based product, is more expensive, or paying more for a house because of new efficiency requirements.

Not all the higher energy cost would show up in people's utility bills. Households, as well as business and factories -- including those, for example, making plastic for toys -- could use less energy, or at least use it more efficiently. The poorest of homes could get a government check as a rebate for high energy costs. That money would come from selling pollution allowances for industry.

Energy experts in government and industry say a price on carbon pollution would lead to new ways to make renewable energy less expensive, while emphasizing how people can use it more wisely.

Potential changes to how homes are built and even financed seem likely as energy efficiency is taken into account in building codes and the cost of mortgages. With the cost of energy increasing, homeowners and businesses would have greater incentive to use more energy efficient lighting, windows and insulation.

But don't think that the traditional sources of energy would disappear.

Coal, which today accounts for half the electricity produced, would continue as a major energy source, though a less polluting one, energy experts forecast. That would mean capturing the carbon released when coal is burned.

It's a technological hurdle with a complication: "not in my back yard" complaints over what to do with the billions of tons of carbon dioxide captured from power plants and pumped beneath the earth. Would people feel comfortable having it stored near or under their homes, factories and businesses?

Scientists studying climate change say carbon capture from power plants is essential if the country is to take up the challenge against global warming.

The cleaner energy economy also put nuclear energy front and center. Does the U.S. build new power plants? If so, where, and where does all the waste go? Nuclear energy makes up about one-fifth of the nation's electricity today.

The House-passed bill contains provisions to make it easier to get loan guarantees and expands the nuclear industry's access to loans for reactor construction. An Environmental Protection Agency analysis that shows modest future costs from a low-climate energy world assumes a significant expansion of nuclear energy. The Senate could add more incentives for the nuclear industry.

The new energy world would rely more on natural gas. This abundant fossil fuel emits carbon but is relatively clean when compared with coal. But people would have to decide whether to accept new pipelines that are needed to ship the gas around the country -- just as they would have to deal with the need for new power lines to move solar and wind energy to where it's needed.

Title: Re: Meltdown
Post by: Lethevich on June 28, 2009, 01:32:52 AM

Quote from: Coopmv on June 27, 2009, 08:24:36 PM
Critics of the House bill brand it a "jobs killer."

I've noticed this 'opposition on ground of job losses' thing being used by Republican politicians quite often - what happened to the tough-love Darwinian economy that they theoretically support? Or perhaps it is fishing for public support...

Title: Re: Meltdown
Post by: Coopmv on June 28, 2009, 03:57:37 AM

Quote from: Lethe on June 28, 2009, 01:32:52 AM
I've noticed this 'opposition on ground of job losses' thing being used by Republican politicians quite often - what happened to the tough-love Darwinian economy that they theoretically support? Or perhaps it is fishing for public support...

They said the same thing back in the late 70's when the first CAFE (fuel economy) standard was imposed and were proven wrong. They and many Democrats from the auto-heavy states jumped on the bandwagon of the Detroit Three to resist any further raises in the fuel standard since that would kill the truck/SUV sales. Had that needed action been taken, GM would not have filed for bankruptcy this month. The same group also oversold the benefits of financial deregulation back in the late 90's when they pushed for wholesale dereguation in the financial industry. We have all witnessed what this over-dereg has done to the world economy.

Title: Re: Meltdown
Post by: BachQ on June 28, 2009, 03:41:42 PM

Quote from: Coopmv on June 28, 2009, 03:57:37 AM
They said the same thing back in the late 70's when the first CAFE (fuel economy) standard was imposed and were proven wrong. They and many Democrats from the auto-heavy states jumped on the bandwagon of the Detroit Three to resist any further raises in the fuel standard since that would kill the truck/SUV sales. Had that needed action been taken, GM would not have filed for bankruptcy this month. The same group also oversold the benefits of financial deregulation back in the late 90's when they pushed for wholesale dereguation in the financial industry. We have all witnessed what this over-dereg has done to the world economy.

Yeah, Coop ... predictably, John Dingell from Detroit is fighting against this legislation.

Cap and Trade Is A Tax and It's a Great Big One - John Dingell (D-MI)
by heritage.org
Fact Sheet #27

Cap and Trade Top Ten List

--- Cap and Trade Is a Massive Energy Tax.
--- It Will Not Make A Substantive Impact on the Environment.
--- It Will Kill Jobs.
--- It Will Cause Electricity Bills and Gas Prices to Sharply Increase
--- It Will Outsource Manufacturing Jobs and Hurt Free Trade
--- It Will Make You Choose Between Energy, Groceries, Clothing, and Haircuts
--- It Will Be Highly Susceptible to Fraud and Corruption
--- It Will Hurt Senior Citizens, the Poor, and the Unemployed the Worst.
--- It Will Cost American Families Over $3,000 a Year.
--- President Obama Admitted "Electricity Rates Would Necessarily Skyrocket" under a cap-and-trade program (January 2008)

http://www.heritage.org/Press/FactSheet/fs0027.cfm (http://www.heritage.org/Press/FactSheet/fs0027.cfm)

Title: Re: Meltdown
Post by: BachQ on June 28, 2009, 03:43:17 PM

Telegraph -- UK's debt will quadruple unless drastic steps are taken, says S&P (http://www.telegraph.co.uk/finance/economics/5665043/UKs-debt-will-quadruple-unless-drastic-steps-are-taken-says-SandP.html)

Title: Re: Meltdown
Post by: Coopmv on June 28, 2009, 04:01:05 PM

Quote from: Dm on June 28, 2009, 03:41:42 PM
Yeah, Coop ... predictably, John Dingell from Detroit is fighting against this legislation.

Cap and Trade Is A Tax and It's a Great Big One - John Dingell (D-MI)
by heritage.org
Fact Sheet #27

Cap and Trade Top Ten List

--- Cap and Trade Is a Massive Energy Tax.
--- It Will Not Make A Substantive Impact on the Environment.
--- It Will Kill Jobs.
--- It Will Cause Electricity Bills and Gas Prices to Sharply Increase
--- It Will Outsource Manufacturing Jobs and Hurt Free Trade
--- It Will Make You Choose Between Energy, Groceries, Clothing, and Haircuts
--- It Will Be Highly Susceptible to Fraud and Corruption
--- It Will Hurt Senior Citizens, the Poor, and the Unemployed the Worst.
--- It Will Cost American Families Over $3,000 a Year.
--- President Obama Admitted "Electricity Rates Would Necessarily Skyrocket" under a cap-and-trade program (January 2008)

http://www.heritage.org/Press/FactSheet/fs0027.cfm
(http://www.heritage.org/Press/FactSheet/fs0027.cfm)

DM,

I can see why the US and EU have reservations about the Kyoto Treaty, as countries like China and Brazil, the most industrialized of the BRIC countries, are exempted. Perhaps one way to force the emission reduction on China is for the US and EU to permanently reduce their imports from China.

Title: Re: Meltdown
Post by: Lethevich on June 29, 2009, 02:16:48 AM

Quote from: Dm on June 28, 2009, 03:43:17 PM
Telegraph -- UK's debt will quadruple unless drastic steps are taken, says S&P
(http://www.telegraph.co.uk/finance/economics/5665043/UKs-debt-will-quadruple-unless-drastic-steps-are-taken-says-SandP.html)

THANK YOU, IDIOT GOVERNMENT.

Title: Re: Meltdown
Post by: BachQ on June 29, 2009, 11:26:52 AM

Quote from: Coopmv on June 15, 2009, 05:29:04 PM
It will be very interesting to see how many years Madoff gets to spend at the big house ...

Madoff victims describe pain of fraud to judge

Sentencing letters to judge chronicle anguish of Bernard Madoff's investors

Larry Neumeister, Associated Press Writer
On Monday June 15, 2009, 8:05 pm EDT

NEW YORK (AP) -- More than 100 victims of failed financier Bernard Madoff's multibillion-dollar fraud urged a judge Monday to sentence him harshly, saying he ruined their lives, leaving many of them depressed, bitter and hopeless.

In 113 statements, the victims from across the country repeatedly referred to the 71-year-old Madoff as a "monster" who, as one victim put it, has "no soul, no remorse, no conscience."

Letter after letter urged U.S. District Judge Denny Chin to sentence Madoff to the maximum 150 years in prison after he pleaded guilty in March to securities fraud, perjury and other charges.

Madoff, who has been jailed since he entered his guilty plea, is scheduled to be sentenced on June 29.

Thousands of people lost billions of dollars investing with Madoff, who authorities say confessed to his sons in early December that he had been running a giant Ponzi scheme for decades in which early investors were paid with money collected from later investors.

In the letters, victims urged Chin to show no mercy for the man they described alternately as "wicked," "cruel," "amoral," "heartless, "ruthless," and "arrogant." One letter called Madoff one of the most hated men in the world.

Some of them criticized the government for not doing more to help them. And they reacted angrily at being portrayed in some published reports as greedy, saying they passed up riskier investments that promised higher returns for the steady profits reported by Madoff.

They also urged investigators to keep pursuing probes of Madoff's family members on the belief that some of them had to know about the fraud or had a role in it.

Ira Sorkin, Madoff's lawyer, said any comment he would make in response to the letters would be made in writing to the judge prior to the sentencing.

Dozens of retired investors said they were forced to look for work to survive after the loss of their investments had forced them to put their homes up for sale. Several said they had heard of suicides as a result of the extreme anguish caused by the loss of life savings.

"I can use every superlative in the dictionary, but none would suffice to tell you how damaging Madoff's scheme was," a letter from Ronnie Sue and Dominic Ambrosino said.

Ronnie Sue Ambrosino said the couple had so much faith in Madoff that they put their entire life savings in his hands and even took out a loan to buy a motor home rather than pay for it outright because they did not want to withdraw any of their money from Madoff.

She said when she learned of Madoff fraud she felt numb.

"The air in the room was thick and there was silence. The birds that had been chirping stopped singing. The squirrels stopped scurrying. The sun stopped shining. There was a void," she wrote. She said her decision to attend Madoff's plea brought her even more pain when she was hit by a van and was left in a cast for eight weeks.

Kathleen Bignell of Gunnison, Colorado, said she told her 89-year-old father he cannot die because she no longer has money to bury him. She said Madoff "ought to be able to look forward to just exactly what he has done to us. No hope, no future and no forgiveness."

Morton J. Chalek of Port Jefferson Station, New York, wrote: "I am 86 years old. I have a broken knee, I have lung cancer and thanks to Madoff, I am now bankrupt."

Jesse L. Cohen of Summit, New Jersey, told Chin to give him one year off his sentence "for every one billion dollars of hidden money that he reveals. In lieu of that, please make sure that the facility in which he rots is extremely uncomfortable."

"I am broke -- robbed by `The Madoff gang,'" wrote Emma De Vita of Chalfont, Pennsylvania.

Caren Low of Harrison, New York, wrote that her family's name is on buildings at the Albert Einstein College of Medicine, the Hebrew Home for the Aged in New Rochelle and the Hebrew University in Jerusalem. She said they are benefactors of Lincoln Center and founders of the Simon Wiesenthal Center in Los Angeles.

She said she went on anti-depressants after she learned what Madoff had done and that now she is looking for work.

"It's absolutely revolting," she wrote. "I guess one lesson learned is not to give away too much money before you die as you never know what can happen."

Madoff sentenced to 150 years

June 29 (Bloomberg) -- Bernard Madoff was sentenced to 150 years in federal prison for masterminding the largest Ponzi scheme in history, a penalty six times longer than those meted out to the chief executives of WorldCom Inc. and Enron Corp.

Madoff appeared today before U.S. District Judge Denny Chin in New York for the first time since his March 12 guilty plea in an epic swindle that may have reached $65 billion in both real and phantom investments.

"I don't ask for any forgiveness," said Madoff, 71, wearing a single-breasted charcoal gray suit and navy blue tie as he stood before the judge. The money manager said he deceived his brothers, his two sons and his wife, none of whom was in the courtroom. The audience burst into applause as Chin imposed the maximum sentence. Madoff was then led off by U.S. marshals.

The judge cited Madoff's failure to identify accomplices, which has made it harder for prosecutors to build cases against others. The receiver of his firm, Bernard L. Madoff Investment Securities LLC, has also said Madoff hasn't substantially helped his problem, complicating efforts to locate assets.

Madoff pleaded guilty to securities fraud, mail fraud, wire fraud, investment adviser fraud, three counts of money laundering, false statements, perjury, false filings with the U.S. Securities and Exchange Commission and theft from an employee benefit plan.

Madoff sat silently as nine former investors assailed him for a fraud that cost many their life savings.

The disgraced money manager has shown "no remorse," said victim Carla Hirschhorn, of Manalapan, New Jersey. She told Chin her life is a "living hell," her mother is dependent on Social Security and her daughter works two jobs to pay tuition.

"Don't fail us," Hirschhorn told the judge before he pronounced Madoff's sentence.

Sharon Lissauer, a model who lives in Manhattan, said Madoff "shattered my dreams" and lost her mother's inheritance. Miriam Siegman, of Stamford, Connecticut, said Madoff "discarded me like road kill," and that she now relies on food stamps, collecting recyclable cans and digging through Dumpsters.

Madoff apologized to his victims in his statement to the court, saying he "left a legacy of shame," and that he lives "in a tormented state." The financier said he couldn't admit his error in judgment while the scheme grew, and thought he could "work his way out."

(continued -- click here) (http://www.bloomberg.com/apps/news?pid=20601087&sid=aDfw04jMqjws)

Title: Re: Meltdown
Post by: BachQ on June 29, 2009, 11:29:24 AM

Quote from: Coopmv on June 28, 2009, 04:01:05 PM
DM,

I can see why the US and EU have reservations about the Kyoto Treaty, as countries like China and Brazil, the most industrialized of the BRIC countries, are exempted. Perhaps one way to force the emission reduction on China is for the US and EU to permanently reduce their imports from China.

Coop, it looks like BRIC (Brazil, Russia, India, China) will be able to pour as much CO2 into the air as they please. Meanwhile, the US competitive advantage viz. BRIC will slip further behind.

Obama Warns Against Trade Penalties in Energy Bill

By JOHN M. BRODER
Published: June 28, 2009

WASHINGTON — President Obama on Sunday praised the energy bill passed by the House late last week as an "extraordinary first step," but he spoke out against a provision that would impose trade penalties on countries that do not accept limits on global warming pollution.

"At a time when the economy worldwide is still deep in recession and we've seen a significant drop in global trade," Mr. Obama said, "I think we have to be very careful about sending any protectionist signals out there."

He added, "I think there may be other ways of doing it than with a tariff approach."

The passage of the House bill on Friday night was an important, if tentative, victory for the president, becoming the first time either chamber of Congress had approved a mandatory ceiling on the gases linked to global warming.

(continued -- click here) (http://www.nytimes.com/2009/06/29/us/politics/29climate.html?_r=2)

15 reasons to oppose climate bill. (http://www.clubforgrowth.org/2009/06/15_reasons_to_oppose_climate_b.php)

Title: Re: Meltdown
Post by: BachQ on June 29, 2009, 11:30:55 AM

China's banks are an accident waiting to happen (Fitch Ratings has been warning for some time that China's lenders are wading into dangerous water) -- China "is resorting to hazardous methods to keep excess factories humming: issuing a "Buy China" decree: using a plethora of export subsidies; holding down the price of coke, bauxite, zinc and other resources to lower production costs (prompting a complaint from America and Europe); and suppressing the yuan, again." (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5675198/Chinas-banks-are-an-accident-waiting-to-happen-to-every-one-of-us.html)

Title: Re: Meltdown
Post by: Coopmv on June 29, 2009, 04:03:23 PM

Quote from: Dm on June 29, 2009, 11:30:55 AM
China's banks are an accident waiting to happen (Fitch Ratings has been warning for some time that China's lenders are wading into dangerous water) -- China "is resorting to hazardous methods to keep excess factories humming: issuing a "Buy China" decree: using a plethora of export subsidies; holding down the price of coke, bauxite, zinc and other resources to lower production costs (prompting a complaint from America and Europe); and suppressing the yuan, again."
(http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/5675198/Chinas-banks-are-an-accident-waiting-to-happen-to-every-one-of-us.html)

Producing excess goods to be stored away for exports in five years? At any rate, does the communist government have a choice? If it does not create some smoke-and-mirrors prosperity, that 20MM unemployed will only grow in rank. It cannot afford to have a replay of Tiananmen Square ...

Title: Re: Meltdown
Post by: Coopmv on June 29, 2009, 04:53:00 PM

Quote from: Dm on June 28, 2009, 03:43:17 PM
Telegraph -- UK's debt will quadruple unless drastic steps are taken, says S&P
(http://www.telegraph.co.uk/finance/economics/5665043/UKs-debt-will-quadruple-unless-drastic-steps-are-taken-says-SandP.html)

But the Pound has been very strong and has surged close to 20% against the Dollar from its March or April lows ... ???

Title: Re: Meltdown
Post by: BachQ on June 30, 2009, 03:51:47 PM

Quote from: Coopmv on June 29, 2009, 04:53:00 PM
But the Pound has been very strong and has surged close to 20% against the Dollar from its March or April lows ... ???

That's because UK's fundamentals are looking GREAT! :D

UK First-Quarter GDP Drops 2.4%, Most Since 1958‎ - (http://www.bloomberg.com/apps/news?pid=20601085&sid=aFWcEQBUXiMY)

Foreigners unloading UK debt at a record pace: "a record sell-off of UK government debt by overseas investors is fuelling City anxieties over the Treasury's ability to fund soaring public borrowing that is set to top £150 billion over this year and next. The surge in foreign selling of gilt-edged bonds and short-term UK Treasury bills is also reinforcing growing fears over the effectiveness of the Bank of England's controversial quantitative easing (QE) scheme to pump newly created money through the economy. Bank of England figures released on Monday highlighted record overseas sales of UK government debt during the three months from March to May." (http://business.timesonline.co.uk/tol/business/economics/article6605502.ece)

Title: Re: Meltdown
Post by: BachQ on June 30, 2009, 03:52:30 PM

No progress as Calif. lawmakers struggle to meet midnight deadline (http://www.sacbee.com/topstories/story/1989544.html)

Title: Re: Meltdown
Post by: BachQ on June 30, 2009, 03:57:03 PM

Quote from: Coopmv on June 06, 2009, 06:28:25 PM
I never realized there are this many mindless Americans until this housing meltdown hit . :o

Foreclosure: Now an Upscale Blight

Rising job losses and falling home prices are dragging down people who never dreamed they would get in trouble

With the U.S. economy and financial markets showing signs of life, optimistic analysts are looking for a recovery in the all-important housing sector. They got some ammunition on June 2 from the National Association of Realtors, which said that its Pending Home Sales Index jumped in April by the most in more than seven years.

But housing can't revive as long as the market is being flooded with homes that are falling into foreclosure. And far from going away, the problem is broadening. It's not just about subprime anymore. Now, people with excellent credit who never dreamed of getting in financial trouble are being dragged down by a dangerous cycle of rising unemployment and falling home prices. That is going to prolong the foreclosure crisis and, inevitably, inhibit the recovery of the rest of the economy.

Any illusion that prime loans would emerge unscathed was shattered by a May 28 report from the Mortgage Bankers Assn. "For the first time since the rapid growth of subprime lending, prime fixed-rate loans now represent the largest share of new foreclosures," the bankers said. The grime in prime was responsible for the worst performance on record for the U.S. mortgage sector in the first quarter: Nearly 13% of loans were delinquent or in foreclosure, the most since the bankers started keeping tabs in 1972. The problems were worst in the bubble states of California, Florida, Arizona, and Nevada.
The biggest factor in this second wave of foreclosures is the inability of distressed homeowners to sell in order to pay off their debts. Prices in bubble cities such as Los Angeles, Phoenix, and Miami are down less at the high end of the market than at the bottom, according to data from Standard & Poor's/Case-Shiller home price indexes. But that's cold comfort to people who haven't managed to sell at all. According to research by the National Association of Realtors, there are enough $750,000-plus homes on the market to cover more than 40 months' worth of demand at the current rate of sales. That's four times the rate of oversupply in the housing market as a whole.

Unemployment is exacerbating the problems at the top of the market. The jobless rate for adults with a bachelor's degree or more may not sound too high at 4.4% in April given the overall April jobless rate of 8.9%. But it's more than double the rate of 2% a year earlier. And many families in that segment of the population built their finances on the assumption of continuous full employment, so they can't cover the mortgage when even one spouse is out of work.

Consider the plight of Stephanie and Bob Walker, who bought a $799,000, three-bedroom home in Los Angeles with a view of the Hollywood sign in 2006 but are losing it because last year Bob stopped getting computer consulting work that used to pull in about $240,000 a year. Bob eventually landed a job paying $60,000, and Stephanie found work as a $13-an-hour temp, but it wasn't enough to cover their mortgage and credit-card debt, which was swelled by about $130,000 worth of home renovations. They listed the house last year for an "optimistic" $875,000 but didn't get any takers. After months of price cuts and threats of foreclosure from the bank, they're days from closing on a sale at $700,000 that will assuage their primary mortgage lender—but leave them under pressure from other creditors. "We had no expectation things would come crashing down as fast as they did," says Stephanie. "We had no one to blame but ourselves. We didn't have a backup plan if he lost his job."

The economics at the top of the market aren't as advantageous as they are at the bottom, where first-time home buyers are flocking to lower-priced homes, spurred by low interest rates, temporary tax credits, and a drop in prices that has made owning cheaper than renting in many cities. At the high end, homes are too expensive for most first-time buyers, and move-up buyers can't purchase a home without selling property they already own. What's more, financing is far costlier, if it's available at all, because private investors have lost their appetite for big mortgages. Rates on "jumbo" loans—that is, those too big to be purchased by Fannie Mae (FNM) or Freddie Mac (FRE)—are roughly a percentage point higher than those for loans that conform to Fannie and Freddie's purchase limits. (Those limits range from $417,000 to $730,000, depending on local housing costs.)

An inflation panic in the fixed-income market is the latest blow to homeowners who are trying to sell to avoid foreclosure, because it's pushing up mortgage rates and pushing potential buyers out of the market. Rates on 30-year fixed, conforming mortgage loans jumped nearly half a percentage point, to 5.25%, in the week ended May 29 from a week earlier, according to the Mortgage Bankers Assn. Meanwhile, the market is unlikely to get much help from the Obama Administration's foreclosure-prevention program. Although it's somewhat more ambitious than the Bush Administration's program, it is voluntary for lenders and is off to a slow start since its March inception.

When will this second wave of foreclosures crest? David Crowe, chief economist of the National Association of Home Builders, doesn't see the peak coming until 2011, later than most other experts predict. Foreclosures typically top out after unemployment does, and Crowe doesn't expect that to occur until late this year. After that, Crowe says, more people will lose their homes because of upward resets on adjustable-rate mortgages. Credit Suisse says mid-2010 is the peak for scheduled resets, and resets will stay high well into 2012. While most of the subprime loans issued during the boom years have been washed out by now, there are still about half a trillion dollars' worth of option ARMs, which allow borrowers to add unpaid interest to the principal they owe. There's an even more alarming $2.5 trillion in "alt-A" loans, which are between prime and subprime and include a big chunk of the mortgages that required little or no proof of income or assets. Most of these loans were issued to people with relatively good credit who were buying more expensive homes.

A key unknown is how many middle- and upper-income homeowners will simply walk away from homes that are worth less than the mortgages on them. So far few have. Whitney R. Tilson, managing partner of New York investment firm T2 Partners and co-author of the book More Mortgage Meltdown, expects the ranks of walk-aways to increase, exacerbating foreclosures. But Rick Sharga, senior vice-president of RealtyTrac, a foreclosure data specialist, disagrees. "To sign a contract for a house and then walk away from it runs counter to everything we were taught," says Sharga, who predicts foreclosures will dip slightly in 2010.

Even if foreclosures don't rise, the rate is already so high that it will put considerable pressure on the national housing market for at least two more years, says Mark Hanson, managing director of Field Check Group, a Menlo Park (Calif.) research firm.

While forecasts differ in detail, the clear message is that foreclosure is going upscale. And that means the housing bust won't end anytime soon.

June 30 (Bloomberg) -- Delinquency rates on the least-risky mortgages more than doubled in the first quarter from a year earlier as U.S. efforts to help homeowners failed to keep pace with job losses that pushed more borrowers toward foreclosure.

Prime mortgages 60 days or more past due climbed to 2.9 percent of such loans through March 31 from 1.1 percent at the same point in 2008, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said today in a report. First-time foreclosure filings on the loans rose 22 percent from the fourth quarter, the report said.

(con't)
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aDkTqrdlECCo)

Title: Re: Meltdown
Post by: Coopmv on June 30, 2009, 04:30:09 PM

Quote from: Dm on June 30, 2009, 03:51:47 PM
That's because UK's fundamentals are looking GREAT! :D

UK First-Quarter GDP Drops 2.4%, Most Since 1958‎ - (http://www.bloomberg.com/apps/news?pid=20601085&sid=aFWcEQBUXiMY)

Foreigners unloading UK debt at a record pace: "a record sell-off of UK government debt by overseas investors is fuelling City anxieties over the Treasury's ability to fund soaring public borrowing that is set to top £150 billion over this year and next. The surge in foreign selling of gilt-edged bonds and short-term UK Treasury bills is also reinforcing growing fears over the effectiveness of the Bank of England's controversial quantitative easing (QE) scheme to pump newly created money through the economy. Bank of England figures released on Monday highlighted record overseas sales of UK government debt during the three months from March to May."
(http://business.timesonline.co.uk/tol/business/economics/article6605502.ece)

BOE is in a box. It cannot have an overly strong Pound, or its exports will be choked off. Paying higher yields on it bills and bonds is equivalent to raising interest rates in this lousy economy ...

Title: Re: Meltdown
Post by: Coopmv on June 30, 2009, 04:52:09 PM

Quote from: Dm on June 30, 2009, 03:57:03 PM

June 30 (Bloomberg) -- Delinquency rates on the least-risky mortgages more than doubled in the first quarter from a year earlier as U.S. efforts to help homeowners failed to keep pace with job losses that pushed more borrowers toward foreclosure.

Prime mortgages 60 days or more past due climbed to 2.9 percent of such loans through March 31 from 1.1 percent at the same point in 2008, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said today in a report. First-time foreclosure filings on the loans rose 22 percent from the fourth quarter, the report said.

(con't)

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aDkTqrdlECCo)

Yeah, I read somewhere that the McMansion folks are in trouble ...

Title: Re: Meltdown
Post by: Coopmv on June 30, 2009, 04:57:06 PM

Will anyone buys bonds from this idiot Hugo Chavez? If crude does not go over $80 and stays there, Chavez is in serious trouble since that is the breakeven point for him to pay for all those social programs that have kept him in power ...

Venezuela to sell $5B in bonds to offset oil drop
Venezuela's government to sell $5 billion in bonds domestically to offset drop in oil revenue

On Tuesday June 30, 2009, 7:20 pm EDT

CARACAS, Venezuela (AP) -- President Hugo Chavez's government plans to use bond sales to raise more than $5 billion by September, saying the proceeds will be used to bolster the economy as falling world oil prices shrink its revenues.

The Finance Ministry said Monday that it will issue domestic bonds worth 11 billion bolivars, or $5.1 billion, to be sold between July and September. It didn't say whether the bonds will be denominated in dollars or local bolivars, when they will mature or what interest they will pay.

The ministry's statement said the proceeds would be used to encourage production and "maintain economic growth." Venezuela says the economy grew just 0.3 percent in the first three months of the year, down from a 5 percent rise in the same quarter of 2008.

Chavez relies on oil sales for 93 percent of Venezuela's export revenue and government income has been crimped with world petroleum prices down 52 percent from last July's peak.

Chavez announced in March that Venezuela would sell an additional $10.2 billion in bonds locally this year to cope with the sharp decline in oil income, raising the government's plan for new bond sales this year to $15.8 billion.

The Finance Ministry has not published official figures for Venezuela's total debt sales this year. But in April and June, the government issued $5.5 billion in domestic bonds to finance public spending, Monday's statement said.

The government also approved bond sales worth $1 billion in March to restructure the public debt and $244.5 million to finance public projects.

At the end of last year, the government's domestic debt stood at $14 billion, while its debts to foreigners stood at $29.9 billion, according to the ministry.

Title: Re: Meltdown
Post by: Coopmv on June 30, 2009, 05:09:03 PM

The big test will come next year when the Obama Administration puts the big squeeze on these credit card issuers ...

Credit card losses hit record 10.4%
By Saskia Scholtes in New York

Published: June 30 2009 23:59 | Last updated: June 30 2009 23:59

Losses on US credit cards hit a record 10.44 per cent in June, squeezing profit margins for credit card securitisations to a 10-year low, according to Fitch Ratings.

Profits from off-balance sheet vehicles backed by credit loans in June fell below the 5 per cent threshold for the first time since November 1998, said Fitch.

Credit card securitisations have built-in triggers that force early repayment when profits fall below zero. Such triggers are designed to protect investors from prolonged exposure to bad credit card loans.

Rising losses on credit cards have in recent months pushed big US banks to come to the rescue of the off-balance sheet vehicles they use to transform hundreds of billions of dollars of consumer loans into securities sold to investors.

Banks have also raised interest rates on credit cards in a bid to counter rising borrower defaults, late payments and boost profitability, underscoring how the deteriorating health of the US consumer is opening new fronts in the financial crisis.

On Tuesday JPMorgan Chase said that, from August, some of its customers would see their minimum required payments rise from 2 per cent to 5 per cent of their unpaid monthly balances.

Most credit card loans are placed into pools – structured as trusts – that are used to back bonds sold to investors. The banks retain a small interest and manage the trust.

As credit card loans held in trusts are paid off, the money is used to fund new lending, while interest and other charges are used to compensate bondholders and cover any losses. Any remaining funds are profits and are paid to the issuing bank.

Mounting credit card losses are depleting those funds, however, prompting banks to support the securitisation trusts.

Banks rely on such securitisations to fund their huge levels of credit card lending while keeping risk off their books.

The doomsday scenario facing banks is that credit card losses will rise to levels that force the vehicles to repay bondholders early.

Deteriorating performance has forced some credit card vehicles to divert cashflows into special reserve accounts that are used to ensure investors are repaid. Fitch tracks six vehicles that are diverting cashflows in this way.

However, Michael Dean, analyst at Fitch, said the banks had thus far been able to maintain profits at levels above the danger zone and had prepared the securitisations for further losses, or charge-offs, meaning that ratings downgrades could be avoided.

Citigroup, Bank of America, JPMorgan Chase and credit card lender American Express have all provided support for their credit card securities in recent months.

Title: Re: Meltdown
Post by: Coopmv on June 30, 2009, 06:29:42 PM

Quote from: Dm on June 29, 2009, 11:29:24 AM
Coop, it looks like BRIC (Brazil, Russia, India, China) will be able to pour as much CO2 into the air as they please. Meanwhile, the US competitive advantage viz. BRIC will slip further behind.

15 reasons to oppose climate bill. (http://www.clubforgrowth.org/2009/06/15_reasons_to_oppose_climate_b.php)

I am afraid the Club for Growth is a mouthpiece for corporate America, much the same as the US Chamber of Business.

Title: Re: Meltdown
Post by: BachQ on July 01, 2009, 03:03:17 AM

Quote from: Coopmv on June 30, 2009, 04:52:09 PM
Yeah, I read somewhere that the McMansion folks are in trouble ...

Maybe you read it here @ the Business Insider: Next Segment Of The Housing Market To Crash: $1+ Million McMansions (http://www.businessinsider.com/henry-blodget-next-segment-of-the-housing-market-to-crash-1-million-mcmansions-2009-6)

Title: Re: Meltdown
Post by: BachQ on July 01, 2009, 03:10:06 AM

For the first time EVER, China has surpassed the US in dependence on foreign oil. :o

China thirsty for foreign oil

Steve Ladurantaye

INVESTMENT REPORTER — From Tuesday's Globe and Mail Last updated on Tuesday, Jun. 30, 2009 11:53AM EDT

China's dependence on foreign oil has surpassed that of the United States, as consumers race to the pumps to fill their new cars with gas and the country feverishly stockpiles supplies to take advantage of weak markets. The country's increasing appetite has driven it to spend billions to acquire foreign oil producers and construct vast storage facilities to safeguard future needs. It also helps explain a rapid rise in oil prices this year, which many attribute to speculators gambling on an economic recovery.

... China relied on imports for 57% of its petroleum production in May while the U.S. imported 55% of its needs. China's import dependency was less than 40% in 2003, and averaged 50% in 2008. ... Chinese imports surpassed four million barrels a day for the first time in May.

(http://www.theglobeandmail.com/report-on-business/china-thirsty-for-foreign-oil/article1202004/)

Quote from: Coopmv on June 30, 2009, 06:29:42 PM
I am afraid the Club for Growth is a mouthpiece for corporate America, much the same as the US Chamber of Business.

Oh, I know ... I included it to augment John Dingell's 10-point analysis.

Title: Re: Meltdown
Post by: BachQ on July 01, 2009, 03:37:38 PM

Quote from: Coopmv on June 29, 2009, 04:53:00 PM
But the Pound has been very strong and has surged close to 20% against the Dollar from its March or April lows ... ???

Ireland's jobless rate up 90% in one year. (http://www.rte.ie/business/2009/0701/jobless.html)

UK faces 'reposession timebomb' Treasury spokesman Vince Cable said: "Repossession is a ticking time bomb. "The numbers of repossessions are likely to soar in the next two years because of rising unemployment. Temporary Government schemes are deferring the problem, not solving it." And he warned: "If interest rates start to rise next year, the problem will become even more severe." Almost 1,000 home owners are being evicted every week, according to the Council of Mortgage Lenders. Repossession numbers reached 12,800 in the first three months of this year, a rise of more than 50 per cent from 8,500 this time last year. (http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/5700963/Just-six-families-helped-by-government-Mortgage-Rescue-Scheme.html)

Title: Re: Meltdown
Post by: Coopmv on July 01, 2009, 04:52:48 PM

Quote from: Dm on July 01, 2009, 03:03:17 AM
Maybe you read it here @ the Business Insider: Next Segment Of The Housing Market To Crash: $1+ Million McMansions
(http://www.businessinsider.com/henry-blodget-next-segment-of-the-housing-market-to-crash-1-million-mcmansions-2009-6)

Indeed, I read the article. Murphy's Law once again applies here ...

Title: Re: Meltdown
Post by: Coopmv on July 01, 2009, 05:04:21 PM

Quote from: Dm on July 01, 2009, 03:10:06 AM
For the first time EVER, China has surpassed the US in dependence on foreign oil. :o

China thirsty for foreign oil

Steve Ladurantaye

INVESTMENT REPORTER — From Tuesday's Globe and Mail Last updated on Tuesday, Jun. 30, 2009 11:53AM EDT

China's dependence on foreign oil has surpassed that of the United States, as consumers race to the pumps to fill their new cars with gas and the country feverishly stockpiles supplies to take advantage of weak markets. The country's increasing appetite has driven it to spend billions to acquire foreign oil producers and construct vast storage facilities to safeguard future needs. It also helps explain a rapid rise in oil prices this year, which many attribute to speculators gambling on an economic recovery.

... China relied on imports for 57% of its petroleum production in May while the U.S. imported 55% of its needs. China's import dependency was less than 40% in 2003, and averaged 50% in 2008. ... Chinese imports surpassed four million barrels a day for the first time in May.

Oh, I know ... I included it to augment John Dingell's 10-point analysis.
(http://www.theglobeandmail.com/report-on-business/china-thirsty-for-foreign-oil/article1202004/)

The US could and did fight the Gulf War. How willing will China be to go to war for oil and when will it be capable to fight a faraway war if its major oil supply is disrupted? It is trying to beef up its lousy navy by buying submarines, destroyers and perhaps even an aircraft carrier from the willing Russians. But its naval personnels are totally inexperienced. Some article I read a while back said if China is to invade Taiwan and the US lives up to its commitment to the Treaty of Taiwan, the US 6th Fleet can sink the entire Chinese navy in very short order ...

Title: Re: Meltdown
Post by: Coopmv on July 01, 2009, 05:43:21 PM

Game over for California. For Californians, there are only two options: Either put up with the pains or bail out of the state ...

California government declares fiscal emergency over budget

SAN FRANCISCO (Reuters) – California Gov. Arnold Schwarzenegger on Wednesday declared a fiscal emergency to force lawmakers into a special session to tackle a state budget gap that has widened to $26.3 billion from $24.3 billion after they failed to close it on Tuesday.

Lawmakers debated late into the night Tuesday but could not agree on a plan to balance California's budget for its new fiscal year, which began early Wednesday morning.

That cleared the way for state officials to suspend payments owed to vendors and local agencies, who instead will get "IOU" notes promising payment.

The notes would mark the first time in 17 years the most populous U.S. state's government would have to resort to the unusual and dramatic measure -- and would follow warnings by Wall Street that the state's credit ratings may be lowered, which would increase its borrowing costs.

"Though the legislature failed to solve our budget problem yesterday, rest assured that solving the entire deficit remains my first and only priority, and I will not rest until we get it done. I will not be a part of pushing this crisis down the road -- the road stops here," Schwarzenegger said in a statement.

While California lawmakers struggle with budget deadlines nearly every year, this budget fight is taking place amid the state's worst drop in revenues from personal income taxes since the Great Depression as recession and rising joblessness worsen damage done to the state economy from the housing slump.

Democrats, who control the legislature, could not convince Republicans to either back their plans to tackle the shortfall or make a stopgap effort to ward off the IOUs. The two sides agree on the need for spending cuts, but are split over whether to raise taxes to help fill the gap.

Democrats have pushed for new revenues while Republican lawmakers and Schwarzenegger, also a Republican, have ruled out tax increases. They want deep spending cuts to balance the budget. Democrats say that would slash the state's safety net for the needy to the bone.

California bonds due in 10 to 30 years traded stronger in the secondary municipal market as it priced in a missed budget deadline, said Municipal Market Data analyst Domenic Vonella.

"We've seen Cal GO paper widen for the last three weeks or so ... Today things are a few basis points better," added Parker Colvin, head of municipal securities trading at Stone & Youngberg in San Francisco.

CASH CRISIS LOOMS

White House spokesman Robert Gibbs said the Obama administration is keeping a close eye on California's woes. State officials have proposed the U.S. government help with financial aid or by vouching for state debt. "We continue to watch the situation and we'll see as it develops," Gibbs said.

In Sacramento, California's capital, State Treasurer Bill Lockyer's office is preparing plans to issue short-term debt assuming Washington will not guarantee it.

"We've been operating since May under the assumption that there will be no help forthcoming," said Lockyer spokesman Tom Dresslar. "We did not ask for a bailout, repeat, we did not ask for a bailout. We wanted the federal government to step in and provide a backstop for our cash-flow borrowing."

Meanwhile, the lack of a budget may trigger action by Wall Street credit ratings agencies.

Fitch last week downgraded its rating on California's general obligation debt by one notch to A-minus, placing it four notches above speculative, or "junk" status, and making it the lowest rating of any U.S. state.

Fitch also warned of further downgrades, just as Standard & Poor's has warned of possible downgrades to California's general obligation debt. Moody's has said the state could see a multinotch downgrade of its A2 rating.

Moody's had no immediate comment on California's IOU plan or its failure to pass a budget. Fitch and S&P analysts were not immediately available to comment.

In Sacramento, tempers flared in the state Senate as the midnight start of the new fiscal year and IOUs neared.

"There is no excuse to hold this whole state hostage," state Senate President Pro Tem Darrell Steinberg told Republicans during a floor debate.

Senate Republican Leader Dennis Hollingsworth countered that major cuts are urgently needed. Otherwise, "there will be entire programs that will have to be lopped off," he said.

Due to its steep decline in revenue, California risks running out of cash later this month to pay all of its bills unless its books are balanced quickly. To conserve cash, State Controller John Chiang plans to issue IOUs by Thursday to state vendors, some local agencies and various recipients of state aid, including the elderly, disabled and college students.

Chiang plans to send $3.36 billion in IOUs this month to help make $10.9 billion in other payments, including money owed to investors holding California's debt. "The general obligation bonds will be paid," he told Reuters. "California has never defaulted on its debt obligation and we don't plan to do so."

California, which had the eighth largest economy in the world in 2006, according it its Legislative Analysts' Office, now needs to reassure Wall Street because state officials see the need to sell $7 billion to $9 billion of short-term debt once there is a budget agreement.

Title: Re: Meltdown
Post by: Coopmv on July 01, 2009, 06:35:38 PM

China may be a nation of prudent speculators. Wouldn't it be fun to see its $1.5T reserves disappear with these bubbles ... ;D

SHANGHAI – China risks frittering away its stimulus spending on speculation in stocks and real estate, reports said Monday, citing economists who say surging bank loans risk inflating risky asset bubbles.

The comments by prominent economists came as Shanghai's benchmark Composite Index hit another high for the year, gaining 1.6 percent, or 47.10 points, to 2,975.31. The index has gained more than 60 percent since the beginning of the year.

While recent gains in shares and property prices are a welcome respite for investors, putting funds meant for stimulus projects into speculative investments could undermine the government's effort to boost growth and reduce the economy's heavy reliance on exports.

About 20 percent of bank lending is going into stock speculation, and another 30 percent or so is going into the property market, state-run newspapers cited Wei Jianing, an economist with a Cabinet-level think tank, as saying.

China's economic planners have urged banks to issue loans to support the government's 4 trillion yuan ($586 billion) stimulus program, aimed at protecting the economy from the global slowdown by pumping money into spending on building airports and other public works.

Wei and other economists told a conference in Beijing that the huge flow of money into shares and property could be fueling risky, unsustainable price increases, China Business News and other reports said.

Through an intermediary, Wei refused requests Monday for comment. The reports said Wei cited estimates based on his research, but noted that his comments were his own personal opinion, not that of the Development Research Center, which is affiliated with China's State Council, or Cabinet.

State media reports last week said new bank lending in June is estimated to have surged by 1.2 trillion yuan ($175.7 billion).

Added to the 5.8 trillion yuan ($849 billion) in new bank loans in January-May, that would push new lending in the first half of the year to about 7 trillion yuan (over $1 trillion).

That is more than the total annual new lending for China for any year.

But warnings against misuse of such funds for other purposes, such as stock speculation, are appearing increasingly frequently in the state-controlled media — including one in Monday's People's Daily, mouthpiece of the ruling Communist Party.

"Extraordinary times call for extraordinary measures," said the commentary, which noted that much of the spending, even on construction projects, was unlikely to yield much of a return.

"However we must at the same time improve the lending structure and guard against risks to ensure that lending supports good quality economic development," it said.

Title: Re: Meltdown
Post by: BachQ on July 02, 2009, 03:09:43 AM

Quote from: Coopmv on June 30, 2009, 05:09:03 PM
The big test will come next year when the Obama Administration puts the big squeeze on these credit card issuers ...

Credit card losses hit record 10.4%
By Saskia Scholtes in New York

Published: June 30 2009 23:59 | Last updated: June 30 2009 23:59

Losses on US credit cards hit a record 10.44 per cent in June, squeezing profit margins for credit card securitisations to a 10-year low, according to Fitch Ratings.

Profits from off-balance sheet vehicles backed by credit loans in June fell below the 5 per cent threshold for the first time since November 1998, said Fitch.

Credit card securitisations have built-in triggers that force early repayment when profits fall below zero. Such triggers are designed to protect investors from prolonged exposure to bad credit card loans.

Rising losses on credit cards have in recent months pushed big US banks to come to the rescue of the off-balance sheet vehicles they use to transform hundreds of billions of dollars of consumer loans into securities sold to investors.

Banks have also raised interest rates on credit cards in a bid to counter rising borrower defaults, late payments and boost profitability, underscoring how the deteriorating health of the US consumer is opening new fronts in the financial crisis.

On Tuesday JPMorgan Chase said that, from August, some of its customers would see their minimum required payments rise from 2 per cent to 5 per cent of their unpaid monthly balances.

Most credit card loans are placed into pools – structured as trusts – that are used to back bonds sold to investors. The banks retain a small interest and manage the trust.

As credit card loans held in trusts are paid off, the money is used to fund new lending, while interest and other charges are used to compensate bondholders and cover any losses. Any remaining funds are profits and are paid to the issuing bank.

Mounting credit card losses are depleting those funds, however, prompting banks to support the securitisation trusts.

Banks rely on such securitisations to fund their huge levels of credit card lending while keeping risk off their books.

The doomsday scenario facing banks is that credit card losses will rise to levels that force the vehicles to repay bondholders early.

Deteriorating performance has forced some credit card vehicles to divert cashflows into special reserve accounts that are used to ensure investors are repaid. Fitch tracks six vehicles that are diverting cashflows in this way.

However, Michael Dean, analyst at Fitch, said the banks had thus far been able to maintain profits at levels above the danger zone and had prepared the securitisations for further losses, or charge-offs, meaning that ratings downgrades could be avoided.

Citigroup, Bank of America, JPMorgan Chase and credit card lender American Express have all provided support for their credit card securities in recent months.

Coop, 10.44% is pretty amazing ... and some economists predict the default rate will reach 12% within a year. :o

Financial Times: Debt is capitalism's dirty little secret: "excessive lending was the only way to maintain the living standards of the vast bulk of the population at a time when wealth was being concentrated in the hands of an elite."

(http://www.ft.com/cms/s/0/e23c6d04-659d-11de-8e34-00144feabdc0.html?nclick_check=1)

Quote
... Put simply, the benefits of economic growth have gone into the pockets of plutocrats rather than the bulk of the population. So why has there been no revolution? Because there was a solution: debt. If you couldn't earn it, you could borrow it. Cheap financing was made widely available. Financial innovations such as the asset-backed securities market aided this process, as did government-sponsored agencies such as Fannie Mae and Freddie Mac. Regulators welcomed it all while perhaps taking insufficient account of the moral hazard problem it posed: that ever-increasing leverage meant the authorities had to keep interest rates low, otherwise the debt burden would cripple consumption. This prompted more leverage, which exacerbated the problem. ...

Continued (http://www.ft.com/cms/s/0/e23c6d04-659d-11de-8e34-00144feabdc0.html?nclick_check=1)

Title: Re: Meltdown
Post by: Coopmv on July 02, 2009, 07:06:18 PM

Quote from: Dm on July 02, 2009, 03:09:43 AM
Coop, 10.44% is pretty amazing ... and some economists predict the default rate will reach 12% within a year. :o

Financial Times: Debt is capitalism's dirty little secret: "excessive lending was the only way to maintain the living standards of the vast bulk of the population at a time when wealth was being concentrated in the hands of an elite."

[url=http://www.ft.com/cms/s/0/e23c6d04-659d-11de-8e34-00144feabdc0.html?nclick_check=1] Continued
(http://www.ft.com/cms/s/0/e23c6d04-659d-11de-8e34-00144feabdc0.html?nclick_check=1)

DM,

Thanks for the great article. The only problem is a serious financial retrenchment by middle-class Americans will badly hurt such European companies like BMW, MB, Rolex and Louis Vuitton, etc, purveyors of luxury goods very badly. Not to mention those newly rich Chinese whose companies depend on exports to the US to make their millions. This negative feedback loop will in turn curb the appetitie in emerging markets for luxury goods. IMO, this retrenchment is long over due ...

Title: Re: Meltdown
Post by: Coopmv on July 02, 2009, 07:26:37 PM

Crude at $70+/bbl cannot be justified in this lousy global economy, as EU and the US together probably consume some 50% of the global supply. I will not be surprised if the price drops back to the 50's ...

Oil falls below $67 a barrel as dollar gains on euro, US unemployment rate rises to 9.5 pct

By Chris Kahn, AP Energy Writer
On Thursday July 2, 2009, 3:20 pm EDT

NEW YORK (AP) -- Oil prices tumbled to their lowest level in a month Thursday following the release of woeful job numbers in Europe and the U.S.

Benchmark crude for August delivery fell $2.58, nearly 4 percent, to settle at $66.73 a barrel on the New York Mercantile Exchange.

Crude hit an eight-month high in midday trading Tuesday, but prices have fallen at the close for five straight days now.

Nymex is closed Friday for the July Fourth holiday.

On Thursday, a Labor Department report showed the economy lost a larger-than-expected 467,000 jobs in June. The unemployment rate climbed to 9.5 percent from 9.4 percent in May, underscoring concerns about the pace of economic recovery.

Since the recession began in December 2007, the economy has lost a net total of 6.5 million jobs.

That has destroyed demand for energy on numerous levels. Employees who have lost jobs or are in fear of losing jobs are driving less and buying fewer goods, many of them petroleum based. Factories also have curbed production and are using less natural gas and electricity.

U.S. stores of natural gas continue to grow as energy demand has weakened. The government reported that the nation's surplus grew more than expected last week, and it's now 21 percent above the five-year average.

The job numbers in the U.S. came on the heels of an awful employment picture in Europe.

Unemployment in the 16 countries that use the euro spiked to a ten-year high in May. The seasonally adjusted unemployment rate for the euro zone in May stood at 9.5 percent.

After rising 41 percent in the second quarter, which ended Tuesdsay, energy prices are now showing signs of a retreat.

Oil prices have doubled since March, when the Fed committed $1.2 trillion dollars to prop up the banking industry. Investors poured money into commodities like oil as a hedge against inflation, and foreign traders found they had more buying power as the dollar weakened.

How long the weak dollar can support energy prices, if demand is still weak, remains to be seen.

But energy prices are still a relative bargain and if there is any benefit from the awful economy, it can be found at the pump.

Retail gas prices have been slipping since Father's Day. They lost less than a penny overnight to a new national average of $2.629 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Pump prices are 10.4 cents more per gallon than a month ago. At this time last year, gasoline cost $4.09 per gallon.

In other Nymex trading, gasoline for August delivery fell 6.82 cents to settle at $1.7908 a gallon and heating oil lost 6.41 cents to settle at $1.7016 a gallon. Natural gas for August delivery dropped 18 cents to settle at $3.615 per 1,000 cubic feet.

In London, Brent prices dropped $2.14 to settle at $66.66 a barrel on the ICE Futures exchange.

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 05:08:22 AM

It is just pathetic that many US states do not have adequate rainy days funds to sustain them through an economic downturn. The fact that major check-bouncers such as Barbara Boxer was elected to the US Senate speaks volumes about the intelligence of our voters ... :o

States set to ring in Independence Day sans budget
States beleaguered by budget woes set to ring in Independence Day without fiscal game plan

By Andrew Welsh-Huggins, Associated Press Writer
On Friday July 3, 2009, 4:07 am EDT

COLUMBUS, Ohio (AP) -- Several states are facing the prospect of government shutdowns and program cuts as they enter the first weekend of the fiscal year and July Fourth holiday without a budget in place.

"This downturn, even more so than previous downturns, really is affecting every state right now," said Brian Sigritz, a staff associate with the National Association of State Budget Officers.

The Washington-based organization says 42 states wrestled with budget deficits this spring, the most since it began tracking budgets 30 years ago.

States weathered similar problems in the recessions of the early 1980s, 1990s and earlier this decade. The confluence of so many problems hammering the economy at once make the present situation seem dire.

"Numerous things look worse than some past recessions," said Bert Waisanen, a fiscal analyst with the Denver-based National Conference of State Legislatures. "The housing market is worse. Industrial production is worse. Wages are nearly worse."

The sputtering economy has created an across-the-board drop in tax collections. Taxes ranging from sales to personal income to property are all down, Sigritz said.

California Gov. Arnold Schwarzenegger declared a fiscal emergency and ordered state offices closed three days a month to save money as state officials began paying bills with IOUS on Thursday.

Deep budget cuts have already forced California school districts to cancel summer school programs, moves that have affected -- among others -- elementary and middle school students in Los Angeles, which has the country's second largest district.

School officials in North Carolina, Oregon, Florida and other states have also cut or limited summer classes.

North Carolina's budget crunch apparently wasn't bad enough to persuade lawmakers to work through the holiday weekend.

House and Senate negotiators said Thursday they will go home rather than iron out differences in taxes and spending, despite Gov. Beverly Perdue's stern advice to finish the budget.

Pennsylvania schools still don't know how much state money they'll receive and may have to reopen their budgets to add or subtract spending. The state's budget year began Wednesday with no sign of a deal between lawmakers and Gov. Ed Rendell.

Ohio Gov. Ted Strickland and lawmakers are stymied over a proposal to allow casino-style gambling to raise money. As a result, the state started its budget year with a one-week temporary budget.

That interim spending plan was already putting a strain on some social service groups.

The state food pantry agency has only $163,000 available to spend on produce this week, regardless of how much more they could purchase. The group spends $400,000 a week at the height of Ohio's harvest.

"This budget impasse is impacting real Ohioans," said Lisa Hamler-Fugitt, executive director of the Ohio Association of Second Harvest Food Banks. "People for the first time in their lives are now finding themselves standing in the food line because they've lost their jobs, their incomes aren't stretching."

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 05:19:35 AM

California, the land of IOU's, is finally facing the Day of Reckoning ...

IOUs spell uncertainty for Calif. small businesses
Small businesses brace for impact as broke California sends out IOUs instead of cash

By Michelle Locke, Associated Press Writer
On Friday July 3, 2009, 3:58 am EDT

BERKELEY, Calif. (AP) -- Business consultant Katrina Kennedy has taken her young son out of preschool and put a family vacation on hold. Dairyman Mike O'Kelly is wondering whether he is going to have to let employees go.

The problem? They rely on contracts with state agencies for much of their business and, cash-strapped California may start sending them IOUs instead of money until the state has enough cash to cover all payments.

"I've dealt with the state for many, many years, and the failure of the state to come up with a budget has always caused problems for July and August," said O'Kelly, owner of Morning Glory Inc. in Susanville, which supplies milk and eggs to prisons. "This particular economic crisis, however, has me more worried than all of the others combined."

The reason for the IOUs is California's $26.3 billion deficit. Lawmakers have not been able to agree on a balanced budget by cutting spending, raising taxes or both.

Without a balanced budget, the state controller's office says the treasury does not have enough cash to meet all its financial obligations. So IOUs were scheduled to go out beginning Thursday to private contractors, state vendors, people getting tax refunds and local governments for social services.

Assistance payments to elderly, blind and disabled people will be disbursed as usual, because the federal government is paying the state's share.

For California's small businesses and social agencies, which are accustomed to a Legislature that rarely meets the June 30 budget deadline, a lean summer is not new. Most say they expect to cope despite delays in getting paid.

Wells Fargo, Bank of America and Chase bank say they will accept IOUs from existing customers through July 10, while other banks haven't decided. Some credit unions also said they'll take IOUs, but it was unclear if payday lending businesses would cash them.

Most small businesses and social agencies are confident the state will come through eventually, and say it's a matter of when -- not if -- they'll get their money. Still, having the government of the world's eighth-largest economy resort to IOUs creates uncertainty.

"Getting an IOU through the summer months -- I'd rather have the money, but we're prepared for it," said Kennedy, who runs management training programs for a number of state agencies. "It's when it goes past September and into October, which I'm completely anticipating this year, that things begin to get really tight."

State Controller John Chiang, who plans to issue about $3.3 billion in IOUs this month along with nearly $11 billion in regular payments, was scheduled to start printing the IOUs on Thursday, marking the first time since 1992 the state has found itself in this position.

Last time around, the IOUs went to state workers in place of paychecks, and the workers filed suit. A federal judge ruled it was a violation of the Fair Labor Standards Act, and the issue eventually was settled with the workers getting extra vacation time or, if they no longer worked for the state, cash payments.

So far, no lawsuits have been threatened over the latest round of IOUs.

The latest IOUs, called individual registered warrants, will be redeemable with interest in October by banks, individuals or anyone who still has them. The interest rate was set at 3.75 percent.

Bank of America will stop accepting IOUs after July 10 but will try to assist those customers in other ways, perhaps by waiving fees or making other arrangements on payments, bank officials said. Wells Fargo and Chase didn't elaborate on their plans for IOUs after July 10.

The California crisis came as lawmakers in several other states wrestled with recession-wracked budgets.

In Illinois, the legislative session ended with no plan for paying state employees or delivering services. In Pennsylvania, the governor is proposing a 16 percent tax increase.

Though the crisis has been coming for a while, some cannot believe California has gotten itself to this point.

"Twenty-four billion dollars -- that's just a number I can't even wrap my mind around," said Lynn Merritt, whose small business provides office supplies to several state agencies.

Getting IOUs for payment "would be terrible as a business person, and it would put me in a really bad bind," she said, "but they can't just keep going like they are."

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 06:16:08 AM

DM, as you have pointed out, the Chinese commies are doing worldwide resource grabs ...

market pulse
Jul 3, 2009, 9:36 a.m. EST

China taking a $1.5 billion stake in Canada's Teck

By Steve Goldstein

LONDON (MarketWatch) -- The state-run China Investment Corp. is going to take a C$1.7 billion ($1.5 billion) stake in Teck Cominco, a deal that will give it a 17% equity stake with 6.7% voting interest in the Vancouver miner, according to a statement released Friday. The miner said the deal will have a "very positive effect" on its balance sheet and give it a deeper understanding of China, its top consumer. CIC plans to be a "long-term passive financial investor" and hold the stake for at least one year and then won't sell it to any other rival or material customer of Teck.

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 07:00:55 AM

More economic news on the UK and rogue oil trader ...

News on the UK (http://www.marketwatch.com/video/asset/europes-week-ahead-retailers-and-bank-of-england/A7C040C4-1768-4C2F-8904-EB70DAD288D0)

By MarketWatch
LONDON (MarketWatch) -- Unauthorized trading in oil futures by an employee resulted in a nearly $10 million loss for brokerage PVM Oil Futures and is being blamed for a dramatic spike in futures prices earlier this week, according to news reports.

"As a result of a series of unauthorized trades, substantial volumes of futures contracts were held by PVM. When this was discovered, the positions were closed in an orderly fashion," PVM Managing Director Robin Bieber told The Wall Street Journal. The company immediately notified its clearing broker, the Financial Services Authority and the IntercontinentalExchange, he said.

Bieber told the Journal that the company had met its margin call and was conducting business "as normal." The firm is a subsidiary of independent, privately-owned oil broker PVM Oil Associates.

A broker at PVM's London office was said to have purchased between 7 million to 10 million barrels of ICE Brent crude futures early Tuesday.

Brent crude futures on the ICE exchange, as well as crude futures at the New York Mercantile Exchange, jumped more than 2% within a minute early Tuesday. The spike drove ICE Brent to an eight-month high of $73.50.

Title: Re: Meltdown
Post by: Lethevich on July 03, 2009, 07:14:26 AM

Quote from: Coopmv on July 03, 2009, 05:08:22 AM
By Andrew Welsh-Huggins, Associated Press Writer

What a wonderful name :)

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 07:53:50 AM

(http://www.cartoonstock.com/newscartoons/cartoonists/rma/lowres/rman2868l.jpg)

MOUNTAIN OF DEBT: Rising debt may be next crisis
MOUNTAIN OF DEBT: Legacy of debt from Founding Fathers not celebrated on Independence Day

By Tom Raum, Associated Press Writer
On Friday July 3, 2009, 11:20 am EDT

WASHINGTON (AP) -- The Founding Fathers left one legacy not celebrated on Independence Day but which affects us all. It's the national debt.

The country first got into debt to help pay for the Revolutionary War. Growing ever since, the debt stands today at a staggering $11.5 trillion -- equivalent to over $37,000 for each and every American. And it's expanding by over $1 trillion a year.

The mountain of debt easily could become the next full-fledged economic crisis without firm action from Washington, economists of all stripes warn.

"Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth," Federal Reserve Chairman Ben Bernanke recently told Congress.

Higher taxes, or reduced federal benefits and services -- or a combination of both -- may be the inevitable consequences.

The debt is complicating efforts by President Barack Obama and Congress to cope with the worst recession in decades as stimulus and bailout spending combine with lower tax revenues to widen the gap.

Interest payments on the debt alone cost $452 billion last year -- the largest federal spending category after Medicare-Medicaid, Social Security and defense. It's quickly crowding out all other government spending. And the Treasury is finding it harder to find new lenders.

The United States went into the red the first time in 1790 when it assumed $75 million in the war debts of the Continental Congress.

Alexander Hamilton, the first treasury secretary, said, "A national debt, if not excessive, will be to us a national blessing."

Some blessing.

Since then, the nation has only been free of debt once, in 1834-1835.

The national debt has expanded during times of war and usually contracted in times of peace, while staying on a generally upward trajectory. Over the past several decades, it has climbed sharply -- except for a respite from 1998 to 2000, when there were annual budget surpluses, reflecting in large part what turned out to be an overheated economy.

The debt soared with the wars in Iraq and Afghanistan and economic stimulus spending under President George W. Bush and now Obama.

The odometer-style "debt clock" near Times Square -- put in place in 1989 when the debt was a mere $2.7 trillion -- ran out of numbers and had to be shut down when the debt surged past $10 trillion in 2008.

The clock has since been refurbished so higher numbers fit. There are several debt clocks on Web sites maintained by public interest groups that let you watch hundreds, thousands, millions zip by in a matter of seconds.

The debt gap is "something that keeps me awake at night," Obama says.

He pledged to cut the budget "deficit" roughly in half by the end of his first term. But "deficit" just means the difference between government receipts and spending in a single budget year.

This year's deficit is now estimated at about $1.85 trillion.

Deficits don't reflect holdover indebtedness from previous years. Some spending items -- such as emergency appropriations bills and receipts in the Social Security program -- aren't included, either, although they are part of the national debt.

The national debt is a broader, and more telling, way to look at the government's balance sheets than glancing at deficits.

According to the Treasury Department, which updates the number "to the penny" every few days, the national debt was $11,518,472,742,288 on Wednesday.

The overall debt is now slightly over 80 percent of the annual output of the entire U.S. economy, as measured by the gross domestic product.

By historical standards, it's not proportionately as high as during World War II, when it briefly rose to 120 percent of GDP. But it's still a huge liability.

Also, the United States is not the only nation struggling under a huge national debt. Among major countries, Japan, Italy, India, France, Germany and Canada have comparable debts as percentages of their GDPs.

Where does the government borrow all this money from?

The debt is largely financed by the sale of Treasury bonds and bills. Even today, amid global economic turmoil, those still are seen as one of the world's safest investments.

That's one of the rare upsides of U.S. government borrowing.

Treasury securities are suitable for individual investors and popular with other countries, especially China, Japan and the Persian Gulf oil exporters, the three top foreign holders of U.S. debt.

But as the U.S. spends trillions to stabilize the recession-wracked economy, helping to force down the value of the dollar, the securities become less attractive as investments. Some major foreign lenders are already paring back on their purchases of U.S. bonds and other securities.

And if major holders of U.S. debt were to flee, it would send shock waves through the global economy -- and sharply force up U.S. interest rates.

As time goes by, demographics suggest things will get worse before they get better, even after the recession ends, as more baby boomers retire and begin collecting Social Security and Medicare benefits.

While the president remains personally popular, polls show there is rising public concern over his handling of the economy and the government's mushrooming debt -- and what it might mean for future generations.

If things can't be turned around, including establishing a more efficient health care system, "We are on an utterly unsustainable fiscal course," said the White House budget director, Peter Orszag.

Some budget-restraint activists claim even the debt understates the nation's true liabilities.

The Peter G. Peterson Foundation, established by a former commerce secretary and investment banker, argues that the $11.4 trillion debt figures does not take into account roughly $45 trillion in unlisted liabilities and unfunded retirement and health care commitments.

That would put the nation's full obligations at $56 trillion, or roughly $184,000 per American, according to this calculation.

Treasury Department "to the penny" national debt breakdown: http://tinyurl.com/yrxrsh

Peter G. Peterson Foundation independent assessment of the national debt: http://www.pgpf.org/

"Deficits do Matter" debt clock: http://tinyurl.com/l6mvjb

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 08:22:18 AM

Check this out. The embedded link actually did not work for some reason but the unembedded one works ...

http://www.usdebtclock.org/

Title: Re: Meltdown
Post by: BachQ on July 03, 2009, 07:07:08 PM

Quote from: Coopmv on July 02, 2009, 07:26:37 PM
Crude at $70+/bbl cannot be justified in this lousy global economy, as EU and the US together probably consume some 50% of the global supply. I will not be surprised if the price drops back to the 50's ...

Oil falls below $67 a barrel as dollar gains on euro, US unemployment rate rises to 9.5 pct

By Chris Kahn, AP Energy Writer
On Thursday July 2, 2009, 3:20 pm EDT

NEW YORK (AP) -- Oil prices tumbled to their lowest level in a month Thursday following the release of woeful job numbers in Europe and the U.S.

Benchmark crude for August delivery fell $2.58, nearly 4 percent, to settle at $66.73 a barrel on the New York Mercantile Exchange.

Crude hit an eight-month high in midday trading Tuesday, but prices have fallen at the close for five straight days now.

Nymex is closed Friday for the July Fourth holiday.

On Thursday, a Labor Department report showed the economy lost a larger-than-expected 467,000 jobs in June. The unemployment rate climbed to 9.5 percent from 9.4 percent in May, underscoring concerns about the pace of economic recovery.

Since the recession began in December 2007, the economy has lost a net total of 6.5 million jobs.

That has destroyed demand for energy on numerous levels. Employees who have lost jobs or are in fear of losing jobs are driving less and buying fewer goods, many of them petroleum based. Factories also have curbed production and are using less natural gas and electricity.

U.S. stores of natural gas continue to grow as energy demand has weakened. The government reported that the nation's surplus grew more than expected last week, and it's now 21 percent above the five-year average.

The job numbers in the U.S. came on the heels of an awful employment picture in Europe.

Unemployment in the 16 countries that use the euro spiked to a ten-year high in May. The seasonally adjusted unemployment rate for the euro zone in May stood at 9.5 percent.

After rising 41 percent in the second quarter, which ended Tuesdsay, energy prices are now showing signs of a retreat.

Oil prices have doubled since March, when the Fed committed $1.2 trillion dollars to prop up the banking industry. Investors poured money into commodities like oil as a hedge against inflation, and foreign traders found they had more buying power as the dollar weakened.

How long the weak dollar can support energy prices, if demand is still weak, remains to be seen.

But energy prices are still a relative bargain and if there is any benefit from the awful economy, it can be found at the pump.

Retail gas prices have been slipping since Father's Day. They lost less than a penny overnight to a new national average of $2.629 a gallon, according to auto club AAA, Wright Express and Oil Price Information Service. Pump prices are 10.4 cents more per gallon than a month ago. At this time last year, gasoline cost $4.09 per gallon.

In other Nymex trading, gasoline for August delivery fell 6.82 cents to settle at $1.7908 a gallon and heating oil lost 6.41 cents to settle at $1.7016 a gallon. Natural gas for August delivery dropped 18 cents to settle at $3.615 per 1,000 cubic feet.

In London, Brent prices dropped $2.14 to settle at $66.66 a barrel on the ICE Futures exchange.

Coop, you are correct that the requisite demand for oil is absent as a justification for current high oil prices. Given how closely correlated oil and stock prices have been recently,*** (http://seekingalpha.com/article/146796-oil-remains-highly-correlated-to-the-s-p-500) it can be argued that surges in oil futures stems from speculation in FUTURE demand for oil rather than the fundamentals of current supply and demand.

***BTW, the price of Oil futures is now more closely correlated to the S&P 500 than at any other time in the past 20 years.
(http://seekingalpha.com/article/146796-oil-remains-highly-correlated-to-the-s-p-500)

BTW, because we've reached peak oil, we can expect the oil supply curve to be relatively inelastic in the medium term; thus, with the slightest sign of a recovery, we can expect oil prices to shoot upwards rapidly (see below).

(http://www.theoildrum.com/files/suppdem7.GIF)

Similarly, when investors realize that the recovery will be anemic (or non-existent), we can expect oil prices to fall. Once it becomes clear that oil supplies will be in long-term decline due to geological and production constraints (peak oil), oil prices will escalate even amid weak demand (stagflation).

(http://www.theoildrum.com/files/suppdem6.GIF)

When the supply curve becomes nearly vertical, we can expect extreme volatility in the price of oil:

(http://www.theoildrum.com/files/SupplyDemand2007_0.png)

This helps explain the volatility of the price of oil viz. the fundamentals of supply and demand from 2007-2008 (oil prices skyrocket), and 2008 to 2009 (oil prices plunge amid deflationary depression and deleveraging):

(http://www.theoildrum.com/files/SupplyDemand2009.png)

"Demand curve for 2009 moves sharply left as the global economy contracts. It takes a steep drop in price to force enough producers to cut supply to balance the market. ... [Because] demand has collapsed, the demand curve for 2009 has moved sharply left as economies unravel. So the oil price has to fall far enough to force some companies to cut production. If it weren't for OPEC cutting a few million barrels per day from their production, the price would fall even further until the market actually cut below the operating costs for a large enough fraction of the world's oil fields."
(http://anz.theoildrum.com/node/5110)

Title: Re: Meltdown
Post by: BachQ on July 03, 2009, 07:08:20 PM

US Home Prices Seen Falling 40% Overall: Analyst
By: Reuters | 02 Jul 2009 | 04:14 PM ET

U.S. housing prices will fall by a double-digit percentage from already beaten-down levels, resulting in an overall 40 percent plunge by the time foreclosures peak in the second half of 2010, Barclays Capital economist Michelle Meyer said. (http://www.cnbc.com/id/31713614)

Title: Re: Meltdown
Post by: BachQ on July 03, 2009, 07:09:48 PM

Quote from: Coopmv on July 03, 2009, 05:19:35 AM
California, the land of IOU's, is finally facing the Day of Reckoning ...

IOUs spell uncertainty for Calif. small businesses
Small businesses brace for impact as broke California sends out IOUs instead of cash

By Michelle Locke, Associated Press Writer
On Friday July 3, 2009, 3:58 am EDT

BERKELEY, Calif. (AP) -- Business consultant Katrina Kennedy has taken her young son out of preschool and put a family vacation on hold. Dairyman Mike O'Kelly is wondering whether he is going to have to let employees go.

The problem? They rely on contracts with state agencies for much of their business and, cash-strapped California may start sending them IOUs instead of money until the state has enough cash to cover all payments.

"I've dealt with the state for many, many years, and the failure of the state to come up with a budget has always caused problems for July and August," said O'Kelly, owner of Morning Glory Inc. in Susanville, which supplies milk and eggs to prisons. "This particular economic crisis, however, has me more worried than all of the others combined."

The reason for the IOUs is California's $26.3 billion deficit. Lawmakers have not been able to agree on a balanced budget by cutting spending, raising taxes or both.

Without a balanced budget, the state controller's office says the treasury does not have enough cash to meet all its financial obligations. So IOUs were scheduled to go out beginning Thursday to private contractors, state vendors, people getting tax refunds and local governments for social services.

Assistance payments to elderly, blind and disabled people will be disbursed as usual, because the federal government is paying the state's share.

For California's small businesses and social agencies, which are accustomed to a Legislature that rarely meets the June 30 budget deadline, a lean summer is not new. Most say they expect to cope despite delays in getting paid.

Wells Fargo, Bank of America and Chase bank say they will accept IOUs from existing customers through July 10, while other banks haven't decided. Some credit unions also said they'll take IOUs, but it was unclear if payday lending businesses would cash them.

Most small businesses and social agencies are confident the state will come through eventually, and say it's a matter of when -- not if -- they'll get their money. Still, having the government of the world's eighth-largest economy resort to IOUs creates uncertainty.

"Getting an IOU through the summer months -- I'd rather have the money, but we're prepared for it," said Kennedy, who runs management training programs for a number of state agencies. "It's when it goes past September and into October, which I'm completely anticipating this year, that things begin to get really tight."

State Controller John Chiang, who plans to issue about $3.3 billion in IOUs this month along with nearly $11 billion in regular payments, was scheduled to start printing the IOUs on Thursday, marking the first time since 1992 the state has found itself in this position.

Last time around, the IOUs went to state workers in place of paychecks, and the workers filed suit. A federal judge ruled it was a violation of the Fair Labor Standards Act, and the issue eventually was settled with the workers getting extra vacation time or, if they no longer worked for the state, cash payments.

So far, no lawsuits have been threatened over the latest round of IOUs.

The latest IOUs, called individual registered warrants, will be redeemable with interest in October by banks, individuals or anyone who still has them. The interest rate was set at 3.75 percent.

Bank of America will stop accepting IOUs after July 10 but will try to assist those customers in other ways, perhaps by waiving fees or making other arrangements on payments, bank officials said. Wells Fargo and Chase didn't elaborate on their plans for IOUs after July 10.

The California crisis came as lawmakers in several other states wrestled with recession-wracked budgets.

In Illinois, the legislative session ended with no plan for paying state employees or delivering services. In Pennsylvania, the governor is proposing a 16 percent tax increase.

Though the crisis has been coming for a while, some cannot believe California has gotten itself to this point.

"Twenty-four billion dollars -- that's just a number I can't even wrap my mind around," said Lynn Merritt, whose small business provides office supplies to several state agencies.

Getting IOUs for payment "would be terrible as a business person, and it would put me in a really bad bind," she said, "but they can't just keep going like they are."

Here's a good history lesson:

Ex-Gov. Gray Davis reflects on fiscal crisis
(http://imgs.sfgate.com/c/pictures/2009/07/02/mn-calbudget03_d_0500332704.jpg)

The last time California issued IOUs, Gray Davis was the state controller who made the controversial call. It was 1992 and such a drastic step hadn't been taken since the Great Depression. Two years later, Davis was elected lieutenant governor and in 1998, governor. In 2003, a year after winning re-election, he was ousted in a recall campaign by Arnold Schwarzenegger, who promised voters he would fix the state's broken finances. At the time, he criticized the budget Davis had signed as having "more special effects than 'Terminator III.' "

So, what does Davis, 66, have to say about the current state of affairs in Sacramento? The former governor told The Chronicle he is "thrilled" not to be in Sacramento as state leaders try to break a stalemate over California's finances. "I've seen this movie before," Davis said.

(continued -- click here --) (http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/03/MNT118I9A5.DTL&tsp=1)

Title: Re: Meltdown
Post by: BachQ on July 03, 2009, 07:12:31 PM

Moody's stripped Ireland of its last AAA credit rating on Thursday and warned Prime Minister Brian Cowen he needed to inflict more fiscal pain on his recession-wracked country or risk a further costly downgrade.
(http://www.guardian.co.uk/business/feedarticle/8588449)

Independent -- (http://www.independent.co.uk/news/business/news/britains-banks-are-on-life-support-says-miles-1729641.html)UK's banks are on life-support, says Bank of England member.

MarketWatch-- (http://www.marketwatch.com/story//euro-zone-unemployment-rate-hits-10-year-high)Eurozone jobless rate hits 10-year high of 9.5%. Spain's unemployment rocketed to 18.7% (compared to 18% in April and 10.5% in May 2008).

BRUSSELS, July 3 (Reuters) - (http://www.guardian.co.uk/business/feedarticle/8590198) Eurozone retail sales fell further than expected in May, data showed on Friday, dampening hopes that an improvement in consumer spending might ease the recession

Title: Re: Meltdown
Post by: BachQ on July 03, 2009, 07:13:53 PM

Why the Dow is headed to 6000. (http://seekingalpha.com/article/145928-why-the-dow-is-headed-to-6000?source=article_sb_popular)

Tim Knight: (http://slopeofhope.com/2009/07/june-11-was-the-top.html) June 11 was the top for the stock market.
(http://slopeofhope.typepad.com/.a/6a00e0098982228833011570b0937b970c-500wi)

Preparing for "The Big One"

(http://www.gold-eagle.com/gold_digest_08/images/taylor062509a.gif) (http://www.gold-eagle.com/gold_digest_08/taylor062509.html)

Title: Re: Meltdown
Post by: BachQ on July 03, 2009, 07:15:09 PM

Quote from: Coopmv on July 03, 2009, 07:53:50 AM
(http://www.cartoonstock.com/newscartoons/cartoonists/rma/lowres/rman2868l.jpg)

LOL

Perhaps it should read "tax, borrow and spend" ... :D

Title: Re: Meltdown
Post by: BachQ on July 03, 2009, 07:19:17 PM

This is fairly self-evident: when a homeowner does not have a substantial stake in his/her home, he/she will be much more likely to just walk away (i.e., be foreclosed upon).

New Evidence on the Foreclosure Crisis
Zero money down, not subprime loans, led to the mortgage meltdown.
By STAN LIEBOWITZ

What is really behind the mushrooming rate of mortgage foreclosures since 2007? The evidence from a huge national database containing millions of individual loans strongly suggests that the single most important factor is whether the homeowner has negative equity in a house -- that is, the balance of the mortgage is greater than the value of the house. This means that most government policies being discussed to remedy woes in the housing market are misdirected. .... the important factor is whether or not the homeowner currently has or ever had an important financial stake in the house. Yet merely because an individual has a home with negative equity does not imply that he or she cannot make mortgage payments so much as it implies that the borrower is more willing to walk away from the loan.

The difference in policy implications is enormous: A significant reduction in foreclosures will happen when and only when housing prices stop falling and unemployment stops rising. Although the government is throwing money -- almost $2 trillion and counting -- at the mortgage markets with the intent of stabilizing house prices, its methods are poorly targeted.

(continued) (http://online.wsj.com/article/SB124657539489189043.html)

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 07:20:09 PM

Quote from: Dm on July 03, 2009, 07:12:31 PM
Moody's stripped Ireland of its last AAA credit rating on Thursday and warned Prime Minister Brian Cowen he needed to inflict more fiscal pain on his recession-wracked country or risk a further costly downgrade.
(http://www.guardian.co.uk/business/feedarticle/8588449)

Independent -- (http://www.independent.co.uk/news/business/news/britains-banks-are-on-life-support-says-miles-1729641.html)UK's banks are on life-support, says Bank of England member.

MarketWatch-- (http://www.marketwatch.com/story//euro-zone-unemployment-rate-hits-10-year-high)Eurozone jobless rate hits 10-year high of 9.5%. Spain's unemployment rocketed to 18.7% (compared to 18% in April and 10.5% in May 2008).

BRUSSELS, July 3 (Reuters) - (http://www.guardian.co.uk/business/feedarticle/8590198) Eurozone retail sales fell further than expected in May, data showed on Friday, dampening hopes that an improvement in consumer spending might ease the recession

If unemployment in Spain hits almost 20%, we have to wonder what kind of unemployment the former eastern bloc countries such as Bulgaria and Romania are having ... ???

Title: Re: Meltdown
Post by: BachQ on July 03, 2009, 07:23:30 PM

U.S. loses equivalent of every job created in decade

Alia McMullen, Financial Post
Published: Thursday, July 02, 2009

The U.S. economy has lost the equivalent of every job created in the past nine years.

All job growth since the final year of the dot-com bubble, its recovery from the bust, and the ensuing six years of consumer -driven boom is now gone, leading some economists to fear an outright decline in wages will be next. Others believe the United States is on track for a painful "jobless recovery."

"This is the only recession since the Great Depression to wipe out all jobs growth from the previous business cycle, a testament both to the enormity of the current crisis and to the extreme weakness of jobs growth over the business cycle from 2000 to 2007," said Heidi Shierholz, an economist at Washington-based think tank The Economic Policy Institute. "It is apparent that, despite the substantial positive impact of the February recovery package, the economy's dramatic deterioration from November to March was even greater than anticipated."
(http://www.financialpost.com/story.html?id=1752178)

Quote from: Coopmv on July 03, 2009, 07:20:09 PM

If unemployment in Spain hits almost 20%, we have to wonder what kind of unemployment the former eastern bloc countries such as Bulgaria and Romania are having ... ???

Good question!

Title: Re: Meltdown
Post by: BachQ on July 03, 2009, 07:25:12 PM

Quote from: Coopmv on July 02, 2009, 07:26:37 PM
Crude at $70+/bbl cannot be justified in this lousy global economy, as EU and the US together probably consume some 50% of the global supply. I will not be surprised if the price drops back to the 50's ...

In London, Brent Crude prices dropped $2.14 to settle at $66.66 a barrel on the ICE Futures exchange.

Yikes, oil closed at $66.6 ... not a good omen! >:D >:D >:D

(http://yambra.bitacoras.com/imgpost/666.jpg)

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 07:26:24 PM

Quote from: Dm on July 03, 2009, 07:15:09 PM
LOL

Perhaps it should read "tax, borrow and spend" ... :D

The old joke was: Democrats were the tax and spend and the Republicans were thr borrow and spend. Both parties want to create the illusion of prosperity through reckless spending by both the federal government and individuals ...

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 07:33:17 PM

Quote from: Dm on July 03, 2009, 07:09:48 PM
Here's a good history lesson:

Ex-Gov. Gray Davis reflects on fiscal crisis
(http://imgs.sfgate.com/c/pictures/2009/07/02/mn-calbudget03_d_0500332704.jpg)

The last time California issued IOUs, Gray Davis was the state controller who made the controversial call. It was 1992 and such a drastic step hadn't been taken since the Great Depression. Two years later, Davis was elected lieutenant governor and in 1998, governor. In 2003, a year after winning re-election, he was ousted in a recall campaign by Arnold Schwarzenegger, who promised voters he would fix the state's broken finances. At the time, he criticized the budget Davis had signed as having "more special effects than 'Terminator III.' "

So, what does Davis, 66, have to say about the current state of affairs in Sacramento? The former governor told The Chronicle he is "thrilled" not to be in Sacramento as state leaders try to break a stalemate over California's finances. "I've seen this movie before," Davis said.

(continued -- click here --)
(http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/03/MNT118I9A5.DTL&tsp=1)

One has to wonder if major CA-based tech companies like Intel, HP and Oracle are starting to think about life after California. Intel has been building new plants all over the world except in CA during the past 20 years. Yahoo and Google have both recently started new offices in Michigan and upstate NY that will employ hundreds of people and one has to wonder why?

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 07:42:13 PM

Somehow commercial and military interests are inseparable for China

Ex-University of Tennessee professor sentenced to prison
Roth cites age, prior record, health issues in seeking leniency
By Jamie Satterfield (Contact)

Thursday, July 2, 2009

He asked for mercy Wednesday but not forgiveness.

University of Tennessee emeritus professor J. Reece Roth, 71, made an appeal before U.S. District Judge Tom Varlan for leniency as he faced sentencing for violating the Arms Export Control Act in his work on a U.S. Air Force research project.

"Your honor, I am nearly 72 years old, and this is the first time I have stood accused in a court of law," Roth said.

After summarizing what he said was a reputation for honesty and hard work, he noted his wife's health woes as well as his own heart-related medical problems.

"I would like to respectfully request the court to take these into account when passing sentence, and that's all I have to say," Roth said.

He did not, however, concede guilt or express remorse. He has steadfastly maintained his innocence since he was first confronted by federal authorities in May 2006 as he returned from China with reports that prosecutors contend contained military technological secrets that could have been used against the U.S.

Roth was convicted last year of more than a dozen crimes involving the arms control law. Among those were allegations he plotted with Knoxville technology firm Atmospheric Glow Technologies Inc. to use two foreign national graduate students - one Chinese, the other Iranian - to carry out research while hiding their involvement from the government.

Roth's attorney, Tom Dundon, has argued Roth was guilty, at most, of being ignorant of the law, believing it only applied to the finished product -a plasma actuator to be used on an unmanned Air Force drone - and not research.

However, Varlan rejected that argument Wednesday in ordering Roth to serve a four-year prison term.

"Even told by officials at UT of the export control nature of some of the information, (Roth) continued to (disregard the warning)," Varlan said.

Roth is being allowed to go free pending a U.S. Bureau of Prisons' decision on where he will serve his time. Varlan is mulling Roth's request to delay reporting to prison to allow him time for an appeal and should rule soon.

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 08:02:39 PM

Quote from: Dm on July 03, 2009, 07:13:53 PM
Why the Dow is headed to 6000. (http://seekingalpha.com/article/145928-why-the-dow-is-headed-to-6000?source=article_sb_popular)

Tim Knight: (http://slopeofhope.com/2009/07/june-11-was-the-top.html) June 11 was the top for the stock market.
(http://slopeofhope.typepad.com/.a/6a00e0098982228833011570b0937b970c-500wi)

Preparing for "The Big One"

(http://www.gold-eagle.com/gold_digest_08/images/taylor062509a.gif)
(http://www.gold-eagle.com/gold_digest_08/taylor062509.html)

I would not waste anytime with the stock market forecasters. No one is smart enough to forecast what the stock market will do. Only time will tell ...

Title: Re: Meltdown
Post by: Coopmv on July 03, 2009, 08:12:04 PM

DM: Does Switzerland import any chicken from China? I personally will never have any chicken that came from China to be on my dinner table.

China Ratchets up Pressure in US Trade Dispute

US - China is expected to ban imports of US chicken in coming days, a move likely to deliver a blow to the struggling American chicken industry and escalate trade tensions between the two nations.

James H. Sumner, president of the Georgia-based USA Poultry &Egg Export Council (USAPEEC), said he learned on 30 June from "several importers" in China that the US would not receive any import permits from the country's ministry of commerce starting 1 July.

Wall Street Journal reports Mr Sumner saying he has informed the US Embassy in Beijing and that it is looking into the matter. There has been no official confirmation from the Chinese government. Representatives for the US trade representative, the US Agriculture Department and the Chinese Embassy in Washington declined to comment.

Mr Sumner says the potential ban appears to be tied to a provision in the most recent US spending bill that prohibits the USDA from allowing Chinese chicken plants to send poultry products to the US lawmakers' question whether China's chicken processing plants meet US standards.

A ban on US chicken would be the latest example of food safety and trade colliding. In recent months, the US has been under pressure from lawmakers and trade groups to crack down on goods coming from China. China has responded with allegations of US protectionism.

The potential ban could be a big blow to the US chicken industry, which has been struggling with high grain prices and a price-depressing oversupply of chicken. Exports had been a bright spot for the industry, and last year China surpassed Russia as the largest destination for US chicken, according to USAPEEC.

"We have gone to great lengths over the past few years to explain to the Chinese that we are not behind this effort and that in fact we are opposed to any restrictive language," Mr Sumner told Wall Street Journal. "We think the decision should be based on sound science but apparently we have not convinced everyone because now we are falling victim to their actions."

US chicken exporters will lose about $370 million over the next six months if China doesn't resume imports, Mr. Sumner said.

A spokesman for Tyson Foods Inc., a big exporter to China, said the company has "heard rumours" of a Chinese ban, but "We have not received formal confirmation".

Food safety advocates are holding their ground. China's potential ban on US chicken is "unfortunate," says Tony Corbo, legislative representative at Food and Water Watch, a non-profit consumer group based in Washington. "This is really about public health," he added.

Chinese chicken has been a longstanding issue between the US and Beijing. In April 2006, the USDA issued a rule that allowed China to export cooked poultry products to the US as long as the raw poultry meat originated in the US or Canada.

The rule caused an uproar among US food safety advocates and in 2007, lawmakers inserted a provision in the 2008 fiscal year spending bill that prohibited the USDA from allowing chicken processed in China to be imported. The same prohibition was included in the spending bill in the next two fiscal years.

Trade tension between China and the US heightened earlier this week when the US International Trade Commission recommended imposing punitive duties of as much as 55 per cent on low-cost Chinese tyre imports because they are disrupting the US market, in a move that could sharply increase costs for consumers. GITI Tire, China's largest tyre manufacturer, has called the move "decidedly protectionist" and said it would take its case to President Barack Obama.

Last week, the House approved legislation to curb US greenhouse gas emissions that includes a provision to impose tariffs on goods from countries that do not match US efforts to combat climate change. The provision is widely seen as directed at China and other developing countries that have refused to commit to cutting their emissions. In an interview with The Wall Street Journal and other news organisations last weekend, Mr Obama expressed concern that such a provision would send "protectionist signals".

Title: Re: Meltdown
Post by: Coopmv on July 04, 2009, 07:13:53 AM

Quote from: Dm on July 03, 2009, 07:09:48 PM
Here's a good history lesson:

Ex-Gov. Gray Davis reflects on fiscal crisis
(http://imgs.sfgate.com/c/pictures/2009/07/02/mn-calbudget03_d_0500332704.jpg)

The last time California issued IOUs, Gray Davis was the state controller who made the controversial call. It was 1992 and such a drastic step hadn't been taken since the Great Depression. Two years later, Davis was elected lieutenant governor and in 1998, governor. In 2003, a year after winning re-election, he was ousted in a recall campaign by Arnold Schwarzenegger, who promised voters he would fix the state's broken finances. At the time, he criticized the budget Davis had signed as having "more special effects than 'Terminator III.' "

So, what does Davis, 66, have to say about the current state of affairs in Sacramento? The former governor told The Chronicle he is "thrilled" not to be in Sacramento as state leaders try to break a stalemate over California's finances. "I've seen this movie before," Davis said.

(continued -- click here --)
(http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/07/03/MNT118I9A5.DTL&tsp=1)

Longer term, I think CA needs a dranconian political solution. It should be carved up into two or more states to accommodate (i.e. to separate them) the conservative Republicans and liberal Democrats as the two factions hate each other so much that no compromise will ever be possible. Short of this solution, CA will just go from one fiscal train wreck to an even more serious train wreck. While things were bad in the early 90's when my parents had to send money to bail out my sister and her family in central CA on a regular basis, things are much worse today ... :o

Title: Re: Meltdown
Post by: BachQ on July 06, 2009, 03:18:53 AM

Quote from: Coopmv on June 29, 2009, 04:53:00 PM
QuoteTelegraph -- UK's debt will quadruple unless drastic steps are taken, says S&P
But the Pound has been very strong and has surged close to 20% against the Dollar from its March or April lows ... ???

UK's revised GDP figures show that UK's economy is shrinking at 1930's rates, on par with the depths of the Great Depression I. "Clearly this is now the worst peacetime recession since the 1930s," said Michael Saunders, chief UK economist at Citigroup. The 4.9pc annual fall was the biggest since Government records began. According to statistics compiled by economic historian Angus Maddison, the contraction was the worst since 1931 – worse than any year during the Second World War and the demobilisation that followed.

(continued)
(http://www.telegraph.co.uk/finance/economics/5700590/Economy-shrinks-at-1930s-rates.html)

Britain faces "riots on the streets" if Gordon Brown's "dishonesty" over public spending enables him to win the next election, David Cameron said. (http://www.telegraph.co.uk/news/newstopics/politics/5690836/Deceit-over-cuts-wil-lead-to-riots-says-David-Cameron.html)

Title: Re: Meltdown
Post by: Lethevich on July 06, 2009, 09:41:12 AM

David Cameron really is out of touch. The British are masters of putting up with sh*t with only complaints and no action.

Title: Re: Meltdown
Post by: Coopmv on July 06, 2009, 04:31:16 PM

Quote from: Lethe on July 06, 2009, 09:41:12 AM
David Cameron really is out of touch. The British are masters of putting up with sh*t with only complaints and no action.

But the scary thing was on a visit to the UK last year before the November US presidential election, Candidate Obama actually met with David Cameron to chit-chat, apparently thinking Cameron could be the next occupant of 10 Downing Street ...

Title: Re: Meltdown
Post by: Coopmv on July 06, 2009, 04:44:17 PM

Quote from: Dm on July 06, 2009, 03:18:53 AM
But the Pound has been very strong and has surged close to 20% against the Dollar from its March or April lows ... ???

UK's revised GDP figures show that UK's economy is shrinking at 1930's rates, on par with the depths of the Great Depression I. "Clearly this is now the worst peacetime recession since the 1930s," said Michael Saunders, chief UK economist at Citigroup. The 4.9pc annual fall was the biggest since Government records began. According to statistics compiled by economic historian Angus Maddison, the contraction was the worst since 1931 – worse than any year during the Second World War and the demobilisation that followed.

(continued)
(http://www.telegraph.co.uk/finance/economics/5700590/Economy-shrinks-at-1930s-rates.html)

Britain faces "riots on the streets" if Gordon Brown's "dishonesty" over public spending enables him to win the next election, David Cameron said. (http://www.telegraph.co.uk/news/newstopics/politics/5690836/Deceit-over-cuts-wil-lead-to-riots-says-David-Cameron.html)

I would have to say Gordon Brown is probably toast if the election is held today since voters always punish the incumbent party in a bad economy, even if the challenger party does not appear to be any more capable than the incumbent party. John McCain and the Republican Party went down last November for the same reason.

Title: Re: Meltdown
Post by: Coopmv on July 06, 2009, 04:53:01 PM

The big house in Austria where Sonja Kohn may be living probably plays Mozart Piano Concertos around the clock ... ;D

US, Britain join Austria in Madoff-related probes
Austria aiding US, British prosecutors checking possible Madoff ties to Vienna banker

By William J. Kole, Associated Press Writer
On Monday July 6, 2009, 5:08 pm EDT

VIENNA (AP) -- U.S. and British investigators have joined Austrian prosecutors in examining possible ties between a Vienna fund manager and disgraced financier Bernard Madoff, whose multibillion-dollar Ponzi scheme wiped out thousands of investors and charities worldwide, an official said Monday.

Gerhard Jarosch, spokesman for the Vienna public prosecutor's office, told The Associated Press his office is aiding the U.S. Justice Department and Britain's Serious Fraud Office in separate investigations of Bank Medici AG and its chairwoman, Sonja Kohn.

Both Kohn and Medici also have been the focus of a fraud investigation in Austria since February, Jarosch said, stressing that Kohn has not been charged with any criminal wrongdoing.

"I can confirm that we are assisting the U.S. and British authorities in their investigations of Mrs. Kohn in connection with the Madoff case," he told AP. Jarosch declined to elaborate or say whether Kohn has been questioned by investigators from either country.

Kohn, 60, has an unlisted phone number and could not be reached for comment Monday. Her attorney, Andreas Theiss, said she was not giving media interviews -- but he insisted she had no personal dealings with Madoff.

"It's just not true," Theiss told AP.

"There are some investors who lost money. Even the Kohn family lost a lot of money, full stop," he said. "That wasn't caused by Ms. Kohn. That was caused by Madoff."

"Ms. Kohn is saying she never, ever got money from Mr. Madoff ... and there's no evidence of any payments like that," Theiss added.

Prosecutors suspect that Madoff paid Kohn commissions in exchange for allegedly funneling billions of dollars in European investments to Madoff, according to a person with knowledge of U.S. involvement in the case. The person spoke on condition of anonymity because the investigation was ongoing.

Madoff was sentenced last week to 150 years in prison for swindling thousands of investors in a massive Ponzi scheme.

In London, the Serious Fraud Office would not comment, saying it does not identify suspects until they are formally charged. A spokeswoman for the U.S. Attorney's Office for the Southern District of New York also declined to comment.

Vienna-based Bank Medici disclosed in December that it had suffered huge losses it blamed on Madoff. It said nearly all of its Herald USA Fund and Herald Luxemburg Fund -- with a total volume of $2.1 billion -- were invested with Madoff.

In subsequent interviews with Austrian media, Kohn has characterized herself as one of Madoff's biggest victims and has described Medici's ordeal as a personal and professional tragedy.

In late May, the Financial Market Authority -- Austria's top financial supervisory authority -- revoked Bank Medici's banking license.

Kohn, a former adviser to Austria's economics and foreign affairs ministers and the Vienna Stock Exchange, owned 75 percent of Bank Medici, which recently changed its name to 20.20 Medici AG. Bank Austria, a unit of Italy's UniCredit SpA, held the remaining 25 percent.

The Journal said prosecutors suspect Kohn may have used the Medici funds as "feeders" that supplied Madoff with an estimated $3.5 billion from European investors. In return, it said, they believe she was paid more than $40 million.

But Theiss, her attorney, said Kohn headed Medici's supervisory board, not the bank itself.

"Her job was not to generate business," he said. "Her job was only to control and to check and to act as a supervisor -- not to work at the front."

Carolin Treichl, a Bank Medici spokeswoman, denied the bank was involved in any wrongdoing.

"The company itself has suffered terrible damage" because of Madoff, she told the AP.

Officials have refused to release affidavits or other records relating to the case, citing the ongoing investigations and Austria's strict privacy laws.

The Austrian newspaper Der Standard said the U.S. Justice Department was investigating roughly $32 million in payments that Bernard L. Madoff Investment Securities LLC allegedly made between 1998 and 2008 to Infovaleur, Inc., a New York company the paper said is owned by Kohn.

Prospectuses for the Medici funds now being examined by prosecutors made no mention of Madoff, Der Standard said.

That's because they were invested in S&P 500 stocks, Theiss said, contending that Medici and Kohn have simply been targeted by frustrated Austrian investors doing whatever they can to attempt to recover some of their losses.

"They want to put pressure on her," he said.

Also Monday, the French prosecutor's office said it has opened a preliminary inquiry into losses the Credit Industriel and Commercial bank says it suffered due to dealings with Madoff. CIC is believed to have lost about $150 million as a result of its participation in 2006 with the Bayern Landesbank and Ixis bank, now renamed Natixis, in a high-return financial operation. The investments by the banks made their way to an entity belonging the Madoff group.

A French judicial source, speaking on condition of anonymity because the investigation is underway, says the probe also looks into the role by Ixis and the Bayern Landesbank. Vincent Asselineau, a spokesperson for CIC, had no comment.

A federal judge in New York rejected Madoff's pleas for leniency and sentenced the 71-year-old on June 29 to spend the rest of his life in prison for an "extraordinarily evil" swindle that took a staggering toll on thousands of victims.

The massive Ponzi scheme run by Madoff since at least the early 1990s demolished the life savings of thousands of people, wrecked charities and shook confidence in the U.S. regulatory system.

Title: Re: Meltdown
Post by: snyprrr on July 06, 2009, 05:26:35 PM

The Last Summer

Title: Re: Meltdown
Post by: Coopmv on July 06, 2009, 07:39:30 PM

Quote from: Dm on July 03, 2009, 07:23:30 PM
U.S. loses equivalent of every job created in decade

Alia McMullen, Financial Post
Published: Thursday, July 02, 2009

The U.S. economy has lost the equivalent of every job created in the past nine years.

All job growth since the final year of the dot-com bubble, its recovery from the bust, and the ensuing six years of consumer -driven boom is now gone, leading some economists to fear an outright decline in wages will be next. Others believe the United States is on track for a painful "jobless recovery."

"This is the only recession since the Great Depression to wipe out all jobs growth from the previous business cycle, a testament both to the enormity of the current crisis and to the extreme weakness of jobs growth over the business cycle from 2000 to 2007," said Heidi Shierholz, an economist at Washington-based think tank The Economic Policy Institute. "It is apparent that, despite the substantial positive impact of the February recovery package, the economy's dramatic deterioration from November to March was even greater than anticipated."
Good question!
(http://www.financialpost.com/story.html?id=1752178)

DM, This is truly pathetic. I am eager to hear what those outsource gurus have to say about the benefits of global trade. It has been nothing but a massive transfer of wealth to China and India, period. Where did China get its $1.5T in foreign reserves and how did India now have the largest steel company in the world? It does not take a rocket scientist to answer these questions ...

Title: Re: Meltdown
Post by: BachQ on July 07, 2009, 03:52:01 AM

Quote from: Coopmv on July 03, 2009, 07:53:50 AM
(http://www.cartoonstock.com/newscartoons/cartoonists/rma/lowres/rman2868l.jpg)

MOUNTAIN OF DEBT: Rising debt may be next crisis
MOUNTAIN OF DEBT: Legacy of debt from Founding Fathers not celebrated on Independence Day

By Tom Raum, Associated Press Writer
On Friday July 3, 2009, 11:20 am EDT

WASHINGTON (AP) -- The Founding Fathers left one legacy not celebrated on Independence Day but which affects us all. It's the national debt.

The country first got into debt to help pay for the Revolutionary War. Growing ever since, the debt stands today at a staggering $11.5 trillion -- equivalent to over $37,000 for each and every American. And it's expanding by over $1 trillion a year.

The mountain of debt easily could become the next full-fledged economic crisis without firm action from Washington, economists of all stripes warn.

"Unless we demonstrate a strong commitment to fiscal sustainability in the longer term, we will have neither financial stability nor healthy economic growth," Federal Reserve Chairman Ben Bernanke recently told Congress.

Higher taxes, or reduced federal benefits and services -- or a combination of both -- may be the inevitable consequences.

The debt is complicating efforts by President Barack Obama and Congress to cope with the worst recession in decades as stimulus and bailout spending combine with lower tax revenues to widen the gap.

Interest payments on the debt alone cost $452 billion last year -- the largest federal spending category after Medicare-Medicaid, Social Security and defense. It's quickly crowding out all other government spending. And the Treasury is finding it harder to find new lenders.

The United States went into the red the first time in 1790 when it assumed $75 million in the war debts of the Continental Congress.

Alexander Hamilton, the first treasury secretary, said, "A national debt, if not excessive, will be to us a national blessing."

Some blessing.

Since then, the nation has only been free of debt once, in 1834-1835.

The national debt has expanded during times of war and usually contracted in times of peace, while staying on a generally upward trajectory. Over the past several decades, it has climbed sharply -- except for a respite from 1998 to 2000, when there were annual budget surpluses, reflecting in large part what turned out to be an overheated economy.

The debt soared with the wars in Iraq and Afghanistan and economic stimulus spending under President George W. Bush and now Obama.

The odometer-style "debt clock" near Times Square -- put in place in 1989 when the debt was a mere $2.7 trillion -- ran out of numbers and had to be shut down when the debt surged past $10 trillion in 2008.

The clock has since been refurbished so higher numbers fit. There are several debt clocks on Web sites maintained by public interest groups that let you watch hundreds, thousands, millions zip by in a matter of seconds.

The debt gap is "something that keeps me awake at night," Obama says.

He pledged to cut the budget "deficit" roughly in half by the end of his first term. But "deficit" just means the difference between government receipts and spending in a single budget year.

This year's deficit is now estimated at about $1.85 trillion.

Deficits don't reflect holdover indebtedness from previous years. Some spending items -- such as emergency appropriations bills and receipts in the Social Security program -- aren't included, either, although they are part of the national debt.

The national debt is a broader, and more telling, way to look at the government's balance sheets than glancing at deficits.

According to the Treasury Department, which updates the number "to the penny" every few days, the national debt was $11,518,472,742,288 on Wednesday.

The overall debt is now slightly over 80 percent of the annual output of the entire U.S. economy, as measured by the gross domestic product.

By historical standards, it's not proportionately as high as during World War II, when it briefly rose to 120 percent of GDP. But it's still a huge liability.

Also, the United States is not the only nation struggling under a huge national debt. Among major countries, Japan, Italy, India, France, Germany and Canada have comparable debts as percentages of their GDPs.

Where does the government borrow all this money from?

The debt is largely financed by the sale of Treasury bonds and bills. Even today, amid global economic turmoil, those still are seen as one of the world's safest investments.

That's one of the rare upsides of U.S. government borrowing.

Treasury securities are suitable for individual investors and popular with other countries, especially China, Japan and the Persian Gulf oil exporters, the three top foreign holders of U.S. debt.

But as the U.S. spends trillions to stabilize the recession-wracked economy, helping to force down the value of the dollar, the securities become less attractive as investments. Some major foreign lenders are already paring back on their purchases of U.S. bonds and other securities.

And if major holders of U.S. debt were to flee, it would send shock waves through the global economy -- and sharply force up U.S. interest rates.

As time goes by, demographics suggest things will get worse before they get better, even after the recession ends, as more baby boomers retire and begin collecting Social Security and Medicare benefits.

While the president remains personally popular, polls show there is rising public concern over his handling of the economy and the government's mushrooming debt -- and what it might mean for future generations.

If things can't be turned around, including establishing a more efficient health care system, "We are on an utterly unsustainable fiscal course," said the White House budget director, Peter Orszag.

Some budget-restraint activists claim even the debt understates the nation's true liabilities.

The Peter G. Peterson Foundation, established by a former commerce secretary and investment banker, argues that the $11.4 trillion debt figures does not take into account roughly $45 trillion in unlisted liabilities and unfunded retirement and health care commitments.

That would put the nation's full obligations at $56 trillion, or roughly $184,000 per American, according to this calculation.

Treasury Department "to the penny" national debt breakdown: http://tinyurl.com/yrxrsh

Peter G. Peterson Foundation independent assessment of the national debt: http://www.pgpf.org/

"Deficits do Matter" debt clock: http://tinyurl.com/l6mvjb

Debt Burden Quickens Power Shift as G-8 Loses Clout (Update2)

By James G. Neuger

July 7 (Bloomberg) -- The world's most affluent nations will take decades to work off the biggest buildup in debt since World War II. The political costs may be permanent, laid bare at this week's Group of Eight summit of leading industrial powers. Bank bailouts and recession-fighting measures will explode the debt of the advanced economies to at least 114 percent of gross domestic product in 2014, more than triple the 35 percent of the main emerging economies including China, the International Monetary Fund forecasts.

The run-up in debt has hastened a power shift that is sapping the industrial world's authority to impose its economic doctrine, currency arrangements or greenhouse-gas reduction strategies. Even some G-8 officials acknowledge that the group has lost its grip amid the global recession they spawned. ...

Led by China, the emerging economies don't share the "somber fiscal outlook" of the affluent world, the IMF says.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aEVdnjdCm1W0#)

Quote from: Coopmv on July 06, 2009, 07:39:30 PM

DM, This is truly pathetic. I am eager to hear what those outsource gurus have to say about the benefits of global trade. It has been nothing but a massive transfer of wealth to China and India, period. Where did China get its $1.5T in foreign reserves and how did India now have the largest steel company in the world? It does not take a rocket scientist to answer these questions ...

Yeah, Coop, Western powers are facing numerous threats: (1) Excessive debt (with increasing spending and decreasing tax revenues); (2) noncompetitive labor force; (3) eroding manufacturing base (and expanding service-oriented economies); (4) overly lax free-trade policies; and (5) growing systemic unemployment. Add to that dependence on fossil fuels ... and you've got the making of a unsolvable crisis.

The shift in power from Western countries to BRIC and other "emerging" countries is accelerating, and soon will become irreversible.

Title: Re: Meltdown
Post by: BachQ on July 07, 2009, 03:55:07 AM

High altitude wind power: an era of abundance?

(http://www.theoildrum.com/files/kitegenStemVolo550.jpg)

"With the kitegen concept, the kite reaches altitudes of the order of 1000 m; pulling on a power generator located on the ground. High altitude wind power promises to be a low cost and widely available technology able, in principle, to provide amounts of energy comparable, and even superior, to the present production based on fossil fuels. ... The basic idea of high altitude wind power is that wind is more intense as you move up in the atmosphere. ..." (http://europe.theoildrum.com/node/5538)

Title: Re: Meltdown
Post by: BachQ on July 07, 2009, 03:56:50 AM

Fitch downgrades California to 'BBB', 2 notches above JUNK status. (http://www.forbes.com/feeds/reuters/2009/07/06/2009-07-06T212752Z_01_N06145038_RTRIDST_0_ECONOMY-CALIFORNIA-UPDATE-2.html)

Title: Re: Meltdown
Post by: Coopmv on July 07, 2009, 04:33:52 PM

It will not be much longer before S&P and Moodys chop their ratings on CA to keep up with Fitch. The day of reckoning is here for CA and its people. The largest state, the junkiest credit rating ...

As California struggles, Fitch cuts debt rating
On Tuesday July 7, 2009, 1:14 am EDT

By Jim Christie

SAN FRANCISCO (Reuters) - California suffered a new setback in its financial crisis on Monday when Fitch Ratings cut its rating on the state's general obligation debt to just two notches above junk status.

Fitch cut its rating on California's long-term bonds to "BBB," two notches above speculative grade, citing the state's budget and revenue crisis.

The state last week started issuing "IOU" promissory notes for some bills to conserve cash for priority payments, including payments to investors holding the state's debt.

The rating agency also kept the debt of the most populous U.S. state on watch for additional downgrades. California ranks as the lowest-rated state general obligation credit by Fitch, followed by Louisiana, at "A+."

Tom Dresslar, a spokesman for State Treasurer Bill Lockyer, said the other two main credit rating agencies, Standard & Poor's and Moody's Investors Service, could soon follow Fitch's example. "I'm sure their patience is not deep," he said.

Lower ratings could raise California's borrowing costs during a severe cash crunch in Sacramento, the state capital, where talks between Governor Arnold Schwarzenegger and lawmakers to plug a $26.3 billion budget deficit for the fiscal year that began on July 1 are plodding along.

"If we're forced to pay tens of millions of dollars, if not hundreds of millions of dollars, in higher interest costs because we have a delayed budget, that's tantamount to lighting money on fire," said H.D. Palmer, a spokesman for the state's Department of Finance. "That's money that we could be spending on things like health care or education."

Standard & Poor's has California's general obligation bonds rated "A" with CreditWatch with negative implications. Moody's has warned of a possible "multi-notch" downgrade in its "A2," sixth-highest investment grade credit rating of California's general obligation debt.

In a statement, Fitch said it cut its "A-" rating due to the state's "inability to achieve timely agreement on budgetary and cash flow solutions to its severe fiscal crisis."

FITCH EYES CALIFORNIA'S CASH

Schwarzenegger seized on the Fitch downgrade to criticize state Assembly Speaker Karen Bass for not meeting for budget talks earlier in the day.

"This underscores the urgency to solve our entire deficit," he said in a statement. "This is not the time for boycotting budget meetings -- all sides must come to the table and balance the budget immediately."

Bass told reporters it was Schwarzenegger who was holding up budget talks by pushing to include overhauls of state government in negotiations: "The issue of reforms, I think are critical, but we can begin the reform process the day after the budget revision is signed."

Fitch said its "BBB" rating indicates "expectations of default risk remain low, although the rating is well below that of most other tax supported issuers."

The ratings agency said California needs a balanced budget agreement quickly because it will need to sell short-term debt for cash-flow purposes once it has a spending plan.

Fitch analyst Douglas Offerman said the rating agency is keeping a close eye on how California manages its cash, sharply reduced as revenues have plunged amid recession, rising unemployment and a prolonged housing slump.

California is experiencing the worst drop in revenues from personal income taxes since the Great Depression.

"The (state) controller having to issue IOUs is one thing, but the controller's own projection is that the state's projected cash position in the fall gets dramatically worse without a resolution to the budget," Offerman told Reuters.

"That raises the urgency to developing a budget solution that is going to address the cash-flow problem the state has in a responsible way," he said.

Questions have arisen whether California's tax-exempt IOUs can be bought, sold and traded.

The Securities and Exchange Commission must first determine if the IOUs are securities to regulate them, said Ernesto Lanza, general counsel to the Municipal Securities Rulemaking Board, adding that the board was not working directly with the commission on that decision.

"It looks like it has all the hallmarks of a security," Lanza said. "If they are securities, I think they're pretty clearly municipal securities."

Fitch's downgrade was seen having little effect Tuesday on the municipal debt market. "I don't see any huge negative reaction, it's priced in," said Parker Colvin, head of municipal securities trading at Stone & Youngberg in San Francisco.

Title: Re: Meltdown
Post by: Coopmv on July 07, 2009, 04:38:43 PM

Quote from: Dm on July 07, 2009, 03:52:01 AM
Debt Burden Quickens Power Shift as G-8 Loses Clout (Update2)

By James G. Neuger

July 7 (Bloomberg) -- The world's most affluent nations will take decades to work off the biggest buildup in debt since World War II. The political costs may be permanent, laid bare at this week's Group of Eight summit of leading industrial powers. Bank bailouts and recession-fighting measures will explode the debt of the advanced economies to at least 114 percent of gross domestic product in 2014, more than triple the 35 percent of the main emerging economies including China, the International Monetary Fund forecasts.

The run-up in debt has hastened a power shift that is sapping the industrial world's authority to impose its economic doctrine, currency arrangements or greenhouse-gas reduction strategies. Even some G-8 officials acknowledge that the group has lost its grip amid the global recession they spawned. ...

Led by China, the emerging economies don't share the "somber fiscal outlook" of the affluent world, the IMF says.

Yeah, Coop, Western powers are facing numerous threats: (1) Excessive debt (with increasing spending and decreasing tax revenues); (2) noncompetitive labor force; (3) eroding manufacturing base (and expanding service-oriented economies); (4) overly lax free-trade policies; and (5) growing systemic unemployment. Add to that dependence on fossil fuels ... and you've got the making of a unsolvable crisis.

The shift in power from Western countries to BRIC and other "emerging" countries is accelerating, and soon will become irreversible.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aEVdnjdCm1W0#)

Yes, the BRIC countries will play a larger role going forward. However, the BRIC countries are still building their middle class from scratch and their Per capita income remains very low. Whatever they produce will continue to need the G8 markets ...

Title: Re: Meltdown
Post by: BachQ on July 08, 2009, 09:44:41 AM

Repo business soars as Sacramento area home sales slump (http://www.sacbee.com/topstories/story/2002300.html)

Bloomberg -- (http://www.bloomberg.com/apps/news?pid=20601087&sid=axMDObJEk6eA) Delinquencies on U.S. Home-Equity Loans Reach Record

FORBES: Deluge Of Defaults
Matthew Craft, 07.06.09, 03:10 PM EDT
Another 18 companies defaulted on their debt in June, pushing the rate to an alarming 9.16%.

Corporate bond markets have climbed higher in recent months, but the rate at which companies miss bond payments has also surged. Another 18 companies defaulted on their debt in June, according to the rating agency Standard & Poor's, pushing the default rate to 9.16%, a new high for the year. The rate in June of last year was 2%. S&P expects another 84 low-rated companies to default before the end of the year, which translates to a 14% rate. The worst-case scenario has the rate hitting 18.5% if the economy sinks further.

(continued)
(http://www.forbes.com/2009/07/06/gm-lear-defaults-markets-bonds-income-economy.html)

Title: Re: Meltdown
Post by: BachQ on July 08, 2009, 09:45:50 AM

Quote from: Coopmv on July 07, 2009, 04:38:43 PM
Yes, the BRIC countries will play a larger role going forward. However, the BRIC countries are still building their middle class from scratch and their Per capita income remains very low. Whatever they produce will continue to need the G8 markets ...

Agreed. BTW, China is now in the midst of a major HOUSING BUBBLE (http://www.marketwatch.com/story/beijing-central-property-prices-up-65-in-a-week) where housing prices are increasing at the unsustainable rate of 6.5% / week in Beijing's city center. :o

Title: Re: Meltdown
Post by: Coopmv on July 08, 2009, 04:13:24 PM

Quote from: Dm on July 08, 2009, 09:45:50 AM
Agreed. BTW, China is now in the midst of a major HOUSING BUBBLE (http://www.marketwatch.com/story/beijing-central-property-prices-up-65-in-a-week) where housing prices are increasing at the unsustainable rate of 6.5% / week in Beijing's city center. :o

Easy-come-easy-go. Beijing will have to spend all of its $2T to bail out its eventual collapsing economy since I doubt its export will ever reach its old highs achieved at the height of its previous export drive ... ;D

Title: Re: Meltdown
Post by: Coopmv on July 08, 2009, 05:06:25 PM

As I have been stating this fact for a while now, there has been no economic basis for the crude to shoot up to over $70/bbl. Now it is a question of whether it will crash below $50/bbl. I told my wife we will lock in the price for our heating oil for the next year ...

Oil prices tumble near $60 as gas supplies surge
Oil prices near $60 with gas supplies surging and few signs recession has loosened grip

By Ernest Scheyder, AP Energy Writer
On Wednesday July 8, 2009, 3:22 pm EDT

NEW YORK (AP) -- Oil prices neared $60 per barrel Wednesday as the government reported that stockpiles of unused gasoline soared again.

Retail gas prices have fallen every day for more than two weeks, and gasoline futures fell more than 9 cents a gallon on Wednesday.

Energy markets are undergoing an extended sell-off, the longest in 10 months, with new economic reports dampening optimism about any economic recovery.

Benchmark crude for August delivery fell more than 4 percent, or $2.79, to settle at $60.14 a barrel on the New York Mercantile Exchange. Prices came within a penny of $60 at one point.

In just over one week, oil prices have fallen more than 18 percent.

"The recession is far from over," said analyst Stephen Schork. "Perhaps the run-up in prices was a bit overstated."

Crude prices by last week had more than doubled from lows reached January, when a barrel of crude cost slightly more than $30. That was just six months removed from record highs near $150 per barrel last summer.

Cheap oil sparked a new round of investment, as did the U.S. dollar which had been weakened by government efforts to bail out major banks and automakers.

Crude is priced in the dollar, so it effectively becomes cheaper internationally when the dollar falls.

Yet dismal economic data continues to emerge and the fundamentals of supply and demand appeared to take control of the market again, starting last week.

The International Monetary Fund on Wednesday lowered its global economic forecast, the latest suggestion that the global economy cannot support high energy prices. The Organization of Petroleum Exporting Countries predicted that demand for crude has fallen so sharply, it will take another four years to recover to 2008 levels.

Since peaking at $73.38 last Tuesday, crude futures have fallen by more than $13 per barrel. Gasoline, heating oil and natural gas futures are also tanking.

Americans are driving billions fewer miles than they had in recent years with millions losing their jobs.

Even though refiners have been slashing production, gasoline continues to pile up.

The Department of Energy reported Wednesday that gasoline in storage grew by another 1.9 million barrels last week, the fifth straight week that levels have grown.

The volatile energy markets may lead to increased scrutiny, both in the U.S. and overseas.

Federal regulators said Tuesday they would examine whether the government should impose limits on the number of futures contracts held by speculative traders.

Speculation in oil markets will be one of the topics discussed by world leaders meeting in Rome during the Group of Eight summit.

In an editorial published by The Wall Street Journal, British Prime Minister Gordon Brown and French President Nicolas Sarkozy also called for closer government oversight of the oil-trading markets.

Yet even before the big sell-off in oil markets began last week, retail gasoline had already begun to fall.

Retail gasoline prices dropped again overnight, the 16th straight day, to a new national average of $2.593 per gallon. Last year, prices were above $4 at this time, according to AAA and the Oil Price Information Service.

In other Nymex trading, gasoline for August delivery slid by 9.9 cents to settle at $1.6333 a gallon and heating oil lost about 6.3 cents to settle at $1.5379. Natural gas for August delivery fell 7.6 cents to settle at $3.353 per 1,000 cubic feet.

In London, Brent prices shed $2.80 to settle at $60.43 a barrel on the ICE Futures exchange.

Title: Re: Meltdown
Post by: Coopmv on July 08, 2009, 05:13:54 PM

I love seeing some lawyers doing time at the big house. I bet similar schemes were perpetuated in CA as well ... ;D

13 charged in $100 million mortgage fraud in NYC

13 charged in $100M mortgage fraud in New York City; 12 others waive indictment, plead guilty

By Samuel Maull, Associated Press Writer
On Wednesday July 8, 2009, 8:12 pm EDT

NEW YORK (AP) -- Twenty-five people, including lawyers, bankers, mortgage brokers and appraisers, and a mortgage company have been charged with committing mortgage frauds involving at least $102 million, New York City prosecutors said Wednesday.

AFG Financial Group Inc. ran the scheme, said Manhattan District Attorney Robert Morgenthau. He said AFG and its accomplices stole millions of dollars from banks that had loaned money to buy real estate.

The banks in some cases later sold the mortgage debts as investments, but because the investments were based on deals that never occurred, the banks, the property sellers, and the investors were left empty-handed.

Cheated banks and lenders included New Century Mortgage Corp., which lost $32.2 million; Countrywide Home Loans Inc., taken for $7.9 million; and Washington Mutual in Long Beach, New York, which lost $8.6 million.

"This is one of the reasons for the mortgage crisis," said Morgenthau. "This kind of activity is what led to the mortgage crisis."

He said the suspects used inflated property appraisals and phony loan packages, forged W-2 forms, pay statements and bank documents to perpetrate the largest mortgage fraud ever in the New York City area.

At a news conference, Morgenthau showed a color photograph of an overgrown vacant Bronx lot that defendants claimed was the site of a two-family house in order to get a $500,000 mortgage.

Asked whether AFG had legitimate activity, Morgenthau said, "If it did, it was by accident." He said the business, headquartered in Garden City, on Long Island, was established at its outset as a criminal enterprise.

Morgenthau said 12 of the 25 defendants, including two lawyers, have pleaded guilty to charges that include larceny and fraud. "Most of them are facing state prison time," he said. He added that the other 13 include three lawyers.

The district attorney said that between June 2004 and April 2009, the group would find "distressed" real estate and then get a "straw" buyer -- who had good credit but needed cash -- to front for the purchase of the property.

That buyer usually did not know the transaction was a sham. The buyers were told this was an investment opportunity that would help people save their homes, earn them and other investors a healthy return and cost them nothing but their signatures.

The AFG conspirators would strike a deal to buy, and then get a bank to finance the purchase, Morgenthau said. He said the lawyers said they put the mortgage money in escrow accounts but they and their accomplices actually took the money without paying the seller or anyone else.

"These attorneys often did not meet or communicate with their so-called clients until the day of the closings ... and were paid off by AFG for their efforts," Morgenthau said.

Meanwhile, the straw buyers were left with bad credit and no investment return, and the lender foreclosed on the seller's property and took ownership.

In some cases the banks had already sold worthless mortgage paper on the overvalued real estate on the secondary investment market.

The defendants were to be arraigned Wednesday in Manhattan's state Supreme Court. All are charged with enterprise corruption and face up to 25 years in prison if convicted.

Title: Re: Meltdown
Post by: Coopmv on July 08, 2009, 06:19:17 PM

DM, This article will make your hair stand up when it comes to food safety standard for food or food ingredients that originate from you know where. This article also was not written by a biased western journalist. (http://www2.chinadaily.com.cn/china/2009-03/27/content_7624158.htm)

Title: Re: Meltdown
Post by: snyprrr on July 08, 2009, 09:04:10 PM

I thought someone here mentioned the Goldman Sachs story recently? Someone stole?, or got out? that GS could manipulate the market? This happened within the last few days. I'm probably not describing it properly.

Title: Re: Meltdown
Post by: BachQ on July 09, 2009, 08:26:32 AM

Quote from: Coopmv on July 08, 2009, 05:13:54 PM
I love seeing some lawyers doing time at the big house. I bet similar schemes were perpetuated in CA as well ... ;D

Coop, speaking of lawyers, Lehman Brothers Holdings Inc., has paid its lawyers & advisers $262.6 million for nine months of work, (http://www.bloomberg.com/apps/news?pid=20601087&sid=apzbxu6eOxik)according to a filing with the U.S. Securities and Exchange Commission. :D

Quote from: Coopmv on July 08, 2009, 05:13:54 PM
I love seeing some lawyers doing time at the big house. I bet similar schemes were perpetuated in CA as well ... ;D

13 charged in $100 million mortgage fraud in NYC

13 charged in $100M mortgage fraud in New York City; 12 others waive indictment, plead guilty

By Samuel Maull, Associated Press Writer
On Wednesday July 8, 2009, 8:12 pm EDT

NEW YORK (AP) -- Twenty-five people, including lawyers, bankers, mortgage brokers and appraisers, and a mortgage company have been charged with committing mortgage frauds involving at least $102 million, New York City prosecutors said Wednesday.

AFG Financial Group Inc. ran the scheme, said Manhattan District Attorney Robert Morgenthau. He said AFG and its accomplices stole millions of dollars from banks that had loaned money to buy real estate.

The banks in some cases later sold the mortgage debts as investments, but because the investments were based on deals that never occurred, the banks, the property sellers, and the investors were left empty-handed.

Cheated banks and lenders included New Century Mortgage Corp., which lost $32.2 million; Countrywide Home Loans Inc., taken for $7.9 million; and Washington Mutual in Long Beach, New York, which lost $8.6 million.

"This is one of the reasons for the mortgage crisis," said Morgenthau. "This kind of activity is what led to the mortgage crisis."

He said the suspects used inflated property appraisals and phony loan packages, forged W-2 forms, pay statements and bank documents to perpetrate the largest mortgage fraud ever in the New York City area.

At a news conference, Morgenthau showed a color photograph of an overgrown vacant Bronx lot that defendants claimed was the site of a two-family house in order to get a $500,000 mortgage.

Asked whether AFG had legitimate activity, Morgenthau said, "If it did, it was by accident." He said the business, headquartered in Garden City, on Long Island, was established at its outset as a criminal enterprise.

Morgenthau said 12 of the 25 defendants, including two lawyers, have pleaded guilty to charges that include larceny and fraud. "Most of them are facing state prison time," he said. He added that the other 13 include three lawyers.

The district attorney said that between June 2004 and April 2009, the group would find "distressed" real estate and then get a "straw" buyer -- who had good credit but needed cash -- to front for the purchase of the property.

That buyer usually did not know the transaction was a sham. The buyers were told this was an investment opportunity that would help people save their homes, earn them and other investors a healthy return and cost them nothing but their signatures.

The AFG conspirators would strike a deal to buy, and then get a bank to finance the purchase, Morgenthau said. He said the lawyers said they put the mortgage money in escrow accounts but they and their accomplices actually took the money without paying the seller or anyone else.

"These attorneys often did not meet or communicate with their so-called clients until the day of the closings ... and were paid off by AFG for their efforts," Morgenthau said.

Meanwhile, the straw buyers were left with bad credit and no investment return, and the lender foreclosed on the seller's property and took ownership.

In some cases the banks had already sold worthless mortgage paper on the overvalued real estate on the secondary investment market.

The defendants were to be arraigned Wednesday in Manhattan's state Supreme Court. All are charged with enterprise corruption and face up to 25 years in prison if convicted.

FBI: U.S. Mortgage Fraud "Rampant" and "Escalating". Suspicious mortgage fraud filings from financial institutions increased 36 percent to 63,713 during FY 2008 compared to 46,717 filings in FY 2007. The total dollar loss attributed to mortgage fraud is unknown; however, at least 63 percent (1,035) of all pending FBI mortgage fraud investigations during FY 2008 involved dollar losses totaling more than $1 million. (http://www.fbi.gov/publications/fraud/mortgage_fraud08.htm)

Title: Re: Meltdown
Post by: BachQ on July 09, 2009, 08:29:10 AM

Strip Mall Vacancy Rate Hits 10%, Highest Since 1992

(http://3.bp.blogspot.com/_pMscxxELHEg/SlU8DhVBkfI/AAAAAAAAFxg/K_a6L_tFzW8/s320/StripMallVacancyRate.jpg)

(http://www.calculatedriskblog.com/2009/07/reis-strip-mall-vacancy-rate-hits-10.html)

Bloomberg -- (http://www.bloomberg.com/apps/news?pid=20601087&sid=afTeVIC9hmY0)Distressed Commercial Property in U.S. Doubles to $108 Billion

Title: Re: Meltdown
Post by: BachQ on July 09, 2009, 08:33:23 AM

Quote from: snyprrr on July 08, 2009, 09:04:10 PM
I thought someone here mentioned the Goldman Sachs story recently? Someone stole?, or got out? that GS could manipulate the market? This happened within the last few days. I'm probably not describing it properly.

Snyp, there have been 2 Goldman Sachs stories recently: (1) the theft of Goldman Sachs's trading platform (http://www.cnbc.com/id/31783285); and (2) Matt Taibbi's article in Rolling Stone Magazine, (http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine/print)where he describes Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

Title: Re: Meltdown
Post by: BachQ on July 09, 2009, 08:40:18 AM

Economist -- FDIC ramping up for wave of bank failures. According to Mark Dotzour, chief economist and director of research for the Real Estate Center at Texas A&M University, "The [FDIC folks] know they're going to take down a large number of banks and they can't do it until they're staffed up. Once they start to sell [foreclosed real estate], we'll find out what the market really is. Nobody knows what to do so they're doing nothing."

Government, in its quest to help the economy, is causing harm by propping up failing companies and regularly changing rules, he said. "No one can predict what the government will do," Dotzour said. "People are frozen. It's not that they don't want to invest in the future, the rules are unclear," he said. He jokingly called the Federal Reserve "inksters" for routinely printing money to bail out big business, including banks that are still not making many loans. (http://washington.bizjournals.com/washington/stories/2009/07/06/daily39.html)

Title: Re: Meltdown
Post by: BachQ on July 09, 2009, 08:44:09 AM

The Fed finally admits to peak oil. (--link--)
(http://scitizen.com/screens/blogPage/viewBlog/sw_viewBlog.php?idTheme=14&idContribution=2850)

"The new Malthusian nightmare is approaching" (--link--) (http://www.theglobeandmail.com/report-on-business/the-growing-cost-of-an-aging-world/article1211265/)

Title: Re: Meltdown
Post by: BachQ on July 09, 2009, 08:48:00 AM

Quote from: Coopmv on July 08, 2009, 05:06:25 PM
As I have been stating this fact for a while now, there has been no economic basis for the crude to shoot up to over $70/bbl. Now it is a question of whether it will crash below $50/bbl. I told my wife we will lock in the price for our heating oil for the next year ...

Oil prices tumble near $60 as gas supplies surge
Oil prices near $60 with gas supplies surging and few signs recession has loosened grip

By Ernest Scheyder, AP Energy Writer
On Wednesday July 8, 2009, 3:22 pm EDT

NEW YORK (AP) -- Oil prices neared $60 per barrel Wednesday as the government reported that stockpiles of unused gasoline soared again.

Retail gas prices have fallen every day for more than two weeks, and gasoline futures fell more than 9 cents a gallon on Wednesday.

Energy markets are undergoing an extended sell-off, the longest in 10 months, with new economic reports dampening optimism about any economic recovery.

Benchmark crude for August delivery fell more than 4 percent, or $2.79, to settle at $60.14 a barrel on the New York Mercantile Exchange. Prices came within a penny of $60 at one point.

In just over one week, oil prices have fallen more than 18 percent.

"The recession is far from over," said analyst Stephen Schork. "Perhaps the run-up in prices was a bit overstated."

Crude prices by last week had more than doubled from lows reached January, when a barrel of crude cost slightly more than $30. That was just six months removed from record highs near $150 per barrel last summer.

Cheap oil sparked a new round of investment, as did the U.S. dollar which had been weakened by government efforts to bail out major banks and automakers.

Crude is priced in the dollar, so it effectively becomes cheaper internationally when the dollar falls.

Yet dismal economic data continues to emerge and the fundamentals of supply and demand appeared to take control of the market again, starting last week.

The International Monetary Fund on Wednesday lowered its global economic forecast, the latest suggestion that the global economy cannot support high energy prices. The Organization of Petroleum Exporting Countries predicted that demand for crude has fallen so sharply, it will take another four years to recover to 2008 levels.

Since peaking at $73.38 last Tuesday, crude futures have fallen by more than $13 per barrel. Gasoline, heating oil and natural gas futures are also tanking.

Americans are driving billions fewer miles than they had in recent years with millions losing their jobs.

Even though refiners have been slashing production, gasoline continues to pile up.

The Department of Energy reported Wednesday that gasoline in storage grew by another 1.9 million barrels last week, the fifth straight week that levels have grown.

The volatile energy markets may lead to increased scrutiny, both in the U.S. and overseas.

Federal regulators said Tuesday they would examine whether the government should impose limits on the number of futures contracts held by speculative traders.

Speculation in oil markets will be one of the topics discussed by world leaders meeting in Rome during the Group of Eight summit.

In an editorial published by The Wall Street Journal, British Prime Minister Gordon Brown and French President Nicolas Sarkozy also called for closer government oversight of the oil-trading markets.

Yet even before the big sell-off in oil markets began last week, retail gasoline had already begun to fall.

Retail gasoline prices dropped again overnight, the 16th straight day, to a new national average of $2.593 per gallon. Last year, prices were above $4 at this time, according to AAA and the Oil Price Information Service.

In other Nymex trading, gasoline for August delivery slid by 9.9 cents to settle at $1.6333 a gallon and heating oil lost about 6.3 cents to settle at $1.5379. Natural gas for August delivery fell 7.6 cents to settle at $3.353 per 1,000 cubic feet.

In London, Brent prices shed $2.80 to settle at $60.43 a barrel on the ICE Futures exchange.

Yep, oil just dipped to around $59. If we enter a deflationary depression (as some economists have predicted as recently as 3 days ago), oil could drop back to around $35-$40/bbl.

Title: Re: Meltdown
Post by: Coopmv on July 09, 2009, 04:44:28 PM

Quote from: Dm on July 09, 2009, 08:33:23 AM
Snyp, there have been 2 Goldman Sachs stories recently: (1) the theft of Goldman Sachs's trading platform (http://www.cnbc.com/id/31783285); and (2) Matt Taibbi's article in Rolling Stone Magazine, (http://www.rollingstone.com/politics/story/28816321/the_great_american_bubble_machine/print)where he describes Goldman Sachs as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

At least $12B of the US taxpayer bailout money for AIG has gone to Goldman Sachs to settle the credit default swaps where GS was the counterparty. Guess who approved this, none other than Hank Paulson, the ex treasury secretary who was also the ex-CEO of GS ...

Title: Re: Meltdown
Post by: Coopmv on July 09, 2009, 04:46:57 PM

Quote from: Dm on July 09, 2009, 08:40:18 AM
Economist -- FDIC ramping up for wave of bank failures. According to Mark Dotzour, chief economist and director of research for the Real Estate Center at Texas A&M University, "The [FDIC folks] know they're going to take down a large number of banks and they can't do it until they're staffed up. Once they start to sell [foreclosed real estate], we'll find out what the market really is. Nobody knows what to do so they're doing nothing."

Government, in its quest to help the economy, is causing harm by propping up failing companies and regularly changing rules, he said. "No one can predict what the government will do," Dotzour said. "People are frozen. It's not that they don't want to invest in the future, the rules are unclear," he said. He jokingly called the Federal Reserve "inksters" for routinely printing money to bail out big business, including banks that are still not making many loans.
(http://washington.bizjournals.com/washington/stories/2009/07/06/daily39.html)

It is because the federal government does not want to see massive unemployment due to the outright failure of many banks and industrial companies such as GM and Chrysler ...

Title: Re: Meltdown
Post by: Coopmv on July 09, 2009, 06:33:39 PM

It looks like Japan is in a deflation spiral ...

Japan wholesale prices fall 6.6 percent in June

Japan wholesale prices fall 6.6 percent in June from year earlier, biggest fall on record

On Thursday July 9, 2009, 10:10 pm EDT

TOKYO (AP) -- Japan's central bank said Friday that wholesale prices fell 6.6 percent in June from a year earlier, the biggest fall on record and the latest sign that deflation is returning to the country.

The Bank of Japan's corporate good price index, which tracks the cost of a wide range of products sold domestically, declined for the sixth straight month. On a monthly basis, prices slipped 0.3 percent from May.

The yearly fall was the largest since the central bank began keeping comparable data in 1960.

Deflation can hurt economic growth because it cuts into company profits as prices fall. It can also lead consumers to put off purchases on the expectation that prices will fall further, and increase debt burdens.

Last month, another key indicator also showed prices were falling in Japan. The government said the country's key consumer price index fell at a record pace in May, the third straight month of decline.

Friday's data from the central bank showed that import prices fell 32.2 percent on a yen basis, while exports were down 12.8 percent.

Title: Re: Meltdown
Post by: BachQ on July 10, 2009, 03:27:23 AM

Quote from: Lethe on June 01, 2009, 06:48:07 AM
Quote from: LA Times on June 01, 2009, 05:55:36 AM
GM files for bankruptcy
(http://www.latimes.com/business/la-fi-gm-bankruptcy2-2009jun02,0,7013631.story)
Man, I read that as GMG for a second ::)

NY Times -- (http://www.nytimes.com/2009/07/11/business/11auto.html?_r=1)"General Motors completed a major step in its turnaround on Friday and closed the sale of its good assets to a new, government-backed carmaker, at a speed unimagined by auto and bankruptcy experts even six months ago. The government and G.M. signed the documents at 6:30 a.m. at the offices of Weil, Gotshal & Manges, the company's chief bankruptcy counsel, according to a person briefed on the matter, after a bankruptcy court order staying the sale for four days expired on Thursday."

July 10, 2009
A Muscle Car to the Rescue for General Motors
By BILL VLASIC and NICK BUNKLEY

(http://the-grayline.com/wp-content/uploads/2008/09/2010-camaro.jpg)

DETROIT — Believe it or not, General Motors has a hit car on its hands.

Amid the gloom of bankruptcy and a miserable market for new vehicles, G.M.'s new Chevrolet Camaro muscle car is winning over consumers looking for a little excitement in a bland landscape of look-alike sedans and watered-down sport utilities.

G.M. sold 9,300 Camaros during the month of June — more than either its entire Buick or Cadillac divisions could muster on their own.

And with G.M. expected to emerge Friday from bankruptcy as a newly constituted company, it is hardly surprising that the Camaro will play a starring role in the company's coming-out party and news conference at G.M.'s Detroit headquarters.

G.M.'s chief executive, Fritz Henderson, and new chairman, Edward Whitacre, plan to offer the Camaro as proof that a comeback is under way.

A product renaissance, of course, cannot be led solely by a retro-styled sports car that harks back to the horsepower hysteria of the 1960s. But in its short time on the market, the Camaro has brought some much-needed buzz to G.M. showrooms.

(click for continuation of article) (http://www.nytimes.com/2009/07/10/business/10auto.html?_r=1&ref=business)

Title: Re: Meltdown
Post by: BachQ on July 10, 2009, 03:33:59 AM

Quote from: Coopmv on July 09, 2009, 06:33:39 PM
It looks like Japan is in a deflation spiral ...

Japan wholesale prices fall 6.6 percent in June

Japan wholesale prices fall 6.6 percent in June from year earlier, biggest fall on record

On Thursday July 9, 2009, 10:10 pm EDT

TOKYO (AP) -- Japan's central bank said Friday that wholesale prices fell 6.6 percent in June from a year earlier, the biggest fall on record and the latest sign that deflation is returning to the country.

The Bank of Japan's corporate good price index, which tracks the cost of a wide range of products sold domestically, declined for the sixth straight month. On a monthly basis, prices slipped 0.3 percent from May.

The yearly fall was the largest since the central bank began keeping comparable data in 1960.

Deflation can hurt economic growth because it cuts into company profits as prices fall. It can also lead consumers to put off purchases on the expectation that prices will fall further, and increase debt burdens.

Last month, another key indicator also showed prices were falling in Japan. The government said the country's key consumer price index fell at a record pace in May, the third straight month of decline.

Friday's data from the central bank showed that import prices fell 32.2 percent on a yen basis, while exports were down 12.8 percent.

Coop, like many other high-cost, high-priced nations, Japanese companies are slashing wages, cutting bonuses, and reducing hours of their labor forces. This will invariably feed the deflationary vortex as consumers (employees) have less disposable income and therefore spend less; and when they do spend, they try to buy at the lowest prices possible. Those who lose their jobs will default and enter foreclosure. This decreased consumption will, in turn, cause companies to further downsize.

deflationary spiral (http://4.bp.blogspot.com/_FM71j6-VkNE/Ska7okN5jSI/AAAAAAAADtc/8R7Y9fqJoYQ/s320/DeflationarySpiral.png)

As credit contracts and investors deleverage, asset prices will fall and asset bubbles will pop, further feeding the asset deflationary cycle.

self-reinforcing deflationary spiral (http://3.bp.blogspot.com/_FM71j6-VkNE/Ska71XCNlgI/AAAAAAAADtk/y2c0fyMxfcY/s320/Spiral+2.gif)

Will a deflationary spiral happen to other countries? The US now has 14.7 million jobless, the most on record (dating back to 1948), and, for the first time since Great Depression I, (1) all jobs generated since the prior recession have been eliminated; (2) industrial production has been plunging at the same rate as it did in the early 1930s; (3) global trade has been tumbling at twice the rate of the early 1930s. (http://zerohedge.blogspot.com/2009/06/guest-post-just-stop-madness-already.html)

Title: Re: Meltdown
Post by: Coopmv on July 10, 2009, 04:08:22 PM

Quote from: Dm on July 10, 2009, 03:27:23 AM
Man, I read that as GMG for a second ::)

NY Times -- (http://www.nytimes.com/2009/07/11/business/11auto.html?_r=1)"General Motors completed a major step in its turnaround on Friday and closed the sale of its good assets to a new, government-backed carmaker, at a speed unimagined by auto and bankruptcy experts even six months ago. The government and G.M. signed the documents at 6:30 a.m. at the offices of Weil, Gotshal & Manges, the company's chief bankruptcy counsel, according to a person briefed on the matter, after a bankruptcy court order staying the sale for four days expired on Thursday."

July 10, 2009
A Muscle Car to the Rescue for General Motors
By BILL VLASIC and NICK BUNKLEY

(http://the-grayline.com/wp-content/uploads/2008/09/2010-camaro.jpg)

DETROIT — Believe it or not, General Motors has a hit car on its hands.

Amid the gloom of bankruptcy and a miserable market for new vehicles, G.M.'s new Chevrolet Camaro muscle car is winning over consumers looking for a little excitement in a bland landscape of look-alike sedans and watered-down sport utilities.

G.M. sold 9,300 Camaros during the month of June — more than either its entire Buick or Cadillac divisions could muster on their own.

And with G.M. expected to emerge Friday from bankruptcy as a newly constituted company, it is hardly surprising that the Camaro will play a starring role in the company's coming-out party and news conference at G.M.'s Detroit headquarters.

G.M.'s chief executive, Fritz Henderson, and new chairman, Edward Whitacre, plan to offer the Camaro as proof that a comeback is under way.

A product renaissance, of course, cannot be led solely by a retro-styled sports car that harks back to the horsepower hysteria of the 1960s. But in its short time on the market, the Camaro has brought some much-needed buzz to G.M. showrooms.

(click for continuation of article)
(http://www.nytimes.com/2009/07/10/business/10auto.html?_r=1&ref=business)

For those who know little about Edward Whitacre, he was at one point the CEO of the Southwestern Bell, the smallest of the 7 Bell Companies theat resulted from the breakup of AT&T back in 1984. He went on to gobble up 3 Bell companies that were much bigger than SBC and eventually took over its former parent AT&T. This guy is battle-tested and clearly much more competent than any CEO's GM has ever had in the last 30-40 years. I think GM will probably revive with this man being the chairman ...

Title: Re: Meltdown
Post by: Coopmv on July 10, 2009, 04:12:53 PM

Quote from: Dm on July 10, 2009, 03:33:59 AM
Coop, like many other high-cost, high-priced nations, Japanese companies are slashing wages, cutting bonuses, and reducing hours of their labor forces. This will invariably feed the deflationary vortex as consumers (employees) have less disposable income and therefore spend less; and when they do spend, they try to buy at the lowest prices possible. Those who lose their jobs will default and enter foreclosure. This decreased consumption will, in turn, cause companies to further downsize.

deflationary spiral (http://4.bp.blogspot.com/_FM71j6-VkNE/Ska7okN5jSI/AAAAAAAADtc/8R7Y9fqJoYQ/s320/DeflationarySpiral.png)

As credit contracts and investors deleverage, asset prices will fall and asset bubbles will pop, further feeding the asset deflationary cycle.

self-reinforcing deflationary spiral (http://3.bp.blogspot.com/_FM71j6-VkNE/Ska71XCNlgI/AAAAAAAADtk/y2c0fyMxfcY/s320/Spiral+2.gif)

Will a deflationary spiral happen to other countries? The US now has 14.7 million jobless, the most on record (dating back to 1948), and, for the first time since Great Depression I, (1) all jobs generated since the prior recession have been eliminated; (2) industrial production has been plunging at the same rate as it did in the early 1930s; (3) global trade has been tumbling at twice the rate of the early 1930s.
(http://zerohedge.blogspot.com/2009/06/guest-post-just-stop-madness-already.html)

The US is now paying the price for its relentless outsourcing of jobs which has led to a permanent decline in the standard of living of its middle class. Japan has no choice but to do the same in order to keep up with the US in terms of labor costs. It is a race to the bottom that only China and India come out on top. >:(

Title: Re: Meltdown
Post by: Coopmv on July 10, 2009, 04:38:57 PM

Rio Tinto is now paying the price for breaking its deal with the Chinese. Nothing is forgiven with these communists, they will get even ...

China accuses Rio workers of stealing price data
Reports: Rio employees accused of stealing information on China position in ore price talks
By Joe Mcdonald, Associated Press Writer
On Friday July 10, 2009, 9:42 am EDT

BEIJING (AP) -- Four detained Rio Tinto Ltd. employees are accused of paying bribes for secret information about China's stance in iron ore price talks, state media said Friday in a case that highlights the volatile Chinese mix of business and politics.

The four employees, including an Australian, were detained Sunday as Rio, the world's third-largest mining company, negotiated on behalf of global iron ore suppliers with Chinese steel mills. The government says it has proof they stole state secrets.

The Rio employees are accused of bribing Chinese steel company personnel to obtain summaries of meetings by Chinese negotiators and gain an edge in the price talks, newspapers said, citing the Ministry of State Security, China's domestic intelligence agency. They said that damaged China's "economic safety."

The accusations reflect the communist government's sensitivity about fields such as steel and energy that it deems strategic and its intense secrecy about a wide array of economic and industrial information.

"If you're foreign, information is power in China, and they tend to think most of their information is national security information," said Robert Broadfoot, managing director of Political and Economic Risk Consultancy in Hong Kong, who has advised companies on China since the 1970s.

The Australian, Stern Hu, is the Shanghai-based manager of Rio's Chinese iron ore business. Australian diplomats were allowed to meet with him Friday for the first time since he was detained but no details were immediately released.

China is the world's biggest steel producer and has criticized iron ore suppliers for sharply raising prices in recent years. Chinese mills are pressing for substantial reductions. The other major suppliers are Australia's BHP Billiton Ltd. and Brazil's Vale SA.

Information on Chinese steel company ore costs, profit margins and technology spending all are considered official secrets, according to news reports.

The maximum penalty for an espionage conviction is life in prison.

"China has its own laws about state secrets. They are clearly broader than the view that Australia might take," said Australian Foreign Minister Stephen Smith.

"Frankly it is difficult for a nation like Australia to see a relationship between espionage and national security and what appeared to be suggestions about commercial or economic negotiations," Smith said.

Rio responded to the accusation by saying Friday it is "committed to high standards and business integrity."

"The company is surprised and concerned about the allegations," said Rio spokesman Tony Shaffer in Melbourne. "We are not aware of any evidence that would support these allegations."

Chinese authorities have not given Rio any information about the case, Shaffer said.

"We remain ready to assist these authorities in their investigations," he said. "We will continue to support our employees and their families in China."

Employees of the China Iron & Steel Association, the iron ore price negotiator for Chinese steel mills, are also under investigation, the newspaper 21st Century Business Herald reported. An employee who answered the phone at CISA's Beijing headquarters and would give only his surname, Yang, said the association had no comment.

An executive who oversaw iron ore purchases for one of China's biggest steel producers, Shougang Group, was detained this week, according to the Herald. A foreign ministry spokesman declined Thursday to say whether that was linked to the Rio case.

Other Chinese steel companies also are being investigated, the newspaper Oriental Morning Post said.

Many of those caught up in criminal cases over economic and industrial information have been ethnic Chinese from abroad or Chinese-born foreign nationals.

Hu was born in 1963 in the eastern Chinese city of Tianjin and graduated from elite Peking University before emigrating to Australia, according to news reports.

In 2001, a Chinese-born American, Fong Fuming, was convicted of paying bribes to help investors obtain secret information to bid on power projects and sentenced to five years in prison. He was expelled from China in 2003 after three years in captivity.

China's foreign ministry denied speculation in Australia that the Rio case was linked to the company's decision last month to cancel a multibillion-dollar investment deal with state-owned Aluminum Corp. of China, or Chinalco.

In a possible attempt to avert a backlash in Australia, Chinalco issued a statement there Friday insisting it had nothing to do with the Rio case.

"Chinalco has been in contact with Rio Tinto expressing our mutual concern for the current situation with their staff," the statement said. "We have also reasserted that the situation is in no way related to any commercial dealings between Rio and Chinalco."

Despite such denials, the complex politics surrounding economic issues will make foreign companies wonder about Beijing's motives, Broadfoot said.

"They are going to be concerned that China's investments abroad did not go the way it wanted or that China is in the process of negotiating iron ore contracts and is using events like this either as revenge or to enhance its negotiating position," Broadfoot said. "That worries people."

Title: Re: Meltdown
Post by: BachQ on July 11, 2009, 04:31:48 AM

China's exports plunge 21.4% in June (http://business.smh.com.au/business/chinas-exports-sink-21-20090710-dfwr.html)

Title: Re: Meltdown
Post by: BachQ on July 11, 2009, 04:33:40 AM

Quote from: Coopmv on May 17, 2009, 05:06:30 AM
The price of crude is just about right, under $60 and perhaps should be a tad lower since the industrial demand is not there and people are driving a bit less. A country like Venezuela needs oil price to be around $80 to order to pay all the promised social programs or Hugo Chavez is toast. I do not know what that price point is for Russia, which is just another one-trick pony - almost 100% dependency on oil export. It appears oil price of under $60 is not good for it either.

Coop, here's more evidence of your "one trick pony" summation of Russia's economic dependence on oil:

Ruble Drops Most Since February as Oil Slumps, Deficit Widens

July 10 (Bloomberg) -- The ruble weakened the most since February as oil prices dropped, Russia cut interest rates and the budget deficit widened in the country's worst economic slump in a decade. The currency depreciated as much as 3.1 percent to 32.7649 per dollar, extending losses in the worst week since January. The 30-stock Micex Index sank to a three-month low.

Oil, Russia's main export, fell 1.5 percent to $59.48 a barrel, bringing this week's slump to 11 percent as concern deepened a prolonged global economic slowdown will damp demand for fuel. Bank Rossii cut its main rates for the fourth time in less than three months as the country slips into its first recession in 10 years. The budget gap widened as shrinking export revenue curb the state's income. (http://www.bloomberg.com/apps/news?pid=20601013&sid=albLxCjuyelY)

Title: Re: Meltdown
Post by: Coopmv on July 11, 2009, 06:13:50 AM

Quote from: Dm on July 11, 2009, 04:31:48 AM
China's exports plunge 21.4% in June
(http://business.smh.com.au/business/chinas-exports-sink-21-20090710-dfwr.html)

And it is manipulating the exchange rate and handing out tax rebates to exporters to prevent the plunge from going even deeper. It is also interesting to note is that Lenovo sales in the US have plunged. People or private companies have not stopped buying PC's, they are just not buying from Lenovo. As some have predicted, many customers who used to buy from the former IBM PC division have now switched over to HP or Dell ...

Title: Re: Meltdown
Post by: Coopmv on July 11, 2009, 09:47:26 AM

If the banks start to write off all the bad commercials loans - both corporate and real estate loans, their recapitalization effort would go down the drain since their capitals would get wiped out once again ... Bailout II?
???

ALL BUSINESS: More toxic loans could haunt banks
ALL BUSINESS: Toxic commercial real estate loans still on banks' books; could hurt economy
By Rachel Beck, AP Business Writer

On Saturday July 11, 2009, 5:44 am EDT

NEW YORK (AP) -- Japan's economy was paralyzed for a decade as banks failed to deal with their troubled loans. That's why it's nothing short of stunning to discover some U.S. banks are doing the same thing now.

Despite all the tough talk out of Washington and Wall Street about how the U.S. can't repeat what happened in Japan, the reality is that banks are granting extensions to borrowers in one key category, commercial real-estate loans, so they don't default. It's a bet that economic conditions will improve before the loans come due.

"They are kicking the can down the road, hoping things will be better soon," said Barry Ritholtz, head of the financial research firm FusionIQ and author of the new book "Bailout Nation."

This maneuvering is being called "extend and pretend" in financial circles, reflecting banks' willingness to extend loan maturities because they believe -- or hope-- rental rates and building values could come back to levels seen during the peak of the real-estate market in 2007.

Ritholtz and other financial experts worry that banks are just delaying the inevitable by not dealing with troubled loans now. And since commercial loans are such an important part of the portfolio of many small and midsized banks, it also could constrain their ability to make other new loans. An average of 20 percent of local and regional banks' loan exposure is in commercial real estate vs 4 percent for the nation's biggest banks, according to data from Deutsche Bank.

"This is a bad strategy," said Bryan Marsal, CEO of the corporate restructuring firm Alvarez & Marsal. "It is really about not facing up to where you are today."

Unlike fixed-rate home mortgages, most commercial property loans are structured as balloon notes. Borrowers pay only interest for the first five or 10 years until the loans mature, and then the entire amount must be paid back.

In the boom years, rising rents and property values made it easy for borrowers to find multiple lenders willing to roll over these loans into new and often larger principal amounts that allowed owners to take out millions of dollars in cash to buy other properties.

That game has come to a crashing halt. Cash flows are down on many properties as rental and occupancy rates have fallen, causing the value of many properties to drop significantly. That's made it tougher for owners to refinance their loans.

Delinquency rates on commercial loans have doubled in the past year to 7 percent as more companies downsize and retailers close their doors, according to the Federal Reserve.

In some cases, banks are offering a temporary fix by granting borrowers an extension on loan maturities. On paper, that looks like a plus for the bank because the borrower pays a fee or agrees to pay a higher interest rate, or both. This allows banks to avoid having to foreclose or write down these loans as impaired assets. They also can keep the loans on their books as if nothing were amiss.

"This lets the banks post results that are misleading because the loans have more risk to them than they are disclosing," said Len Blum, managing partner at the investment-bank Westwood Capital. "They can pretend things are better than they are."

That's just what banks in Japan did back in the 1990s. After its debt-fed real estate bubble burst, Japan slid into what has come to be known the "lost decade" because of its drawn out economic and financial malaise.

Even though the Japanese government injected trillions of yen into its banking system, new lending was constrained because troubled loans clogged banks' balance sheets. In some cases, banks refused to foreclose when owners couldn't even pay the interest. Instead, they added the unpaid interest to the loan's principal in the hope that borrowers' problems would be alleviated by an improving economic climate, which never materialized.

What's worrisome is the lack of transparency about how often this is happening now in the United States. Due to privacy issues, banks aren't required to disclose details of specific loan extensions, and most news that does trickle out comes from public companies announcing that they have reached accommodations with their lenders.

Just this week, Bluegreen Corp., a Boca Raton, Fla.-based timeshare resort developer, said it had gotten the maturity dates of a combined $130.1 million in liabilities extended. Others getting loan extensions in recent months were Toys R Us, Tanger Factory Outlets and Washington Real Estate Investment Trust.

The Federal Deposit Insurance Corp. believes that extending the maturity on commercial real-estate loans can be a "value-maximizing and prudent approach," said FDIC spokesman Andrew Gray.

Gray said that its examiners are trying to make sure the loan extensions are being done prudently, and that credit losses are being recognized appropriately. The FDIC directly examines and supervises about 5,160 banks and savings banks.

Bob Seiwert, who heads the Center for Commercial Lending and Business Banking at the American Bankers Association, said loan extensions should be done on a case-by-case basis and aren't necessarily a bad thing. Banks need to assess the chances of the principal amount being repaid and evaluate the viability on the loan on an ongoing basis, he said.

"It may still be a good project," Seiwert said. "It just may need more time."

There are already clear signs that worries about the commercial real estate market have constrained lending. The latest Federal Reserve Senior Loan Officer Opinion Survey, from April, showed almost two-thirds of domestic banks had reported tightening lending standards and terms on commercial real estate loans over the previous three months.

"When lenders do the 'extend and pretend' routine because they don't want to deal with the problem ... what that causes them to do is to restrict their future lending. They pull back into their shell," said Marsal, who is also leading the liquidation of Lehman Brothers. "When and if we do have an economic recovery, what it will do is slow the pace."

Now imagine if the loans that are being extended turn up rotten a year or two from now. That could further hamper lending at local banks -- the backbone of many small-town economies -- meaning companies wouldn't be able to get loans to build new facilities or do renovations or repairs. Hiring would be curbed or more jobs cut, slowing consumer spending.

"The banks seem to think it is OK to hide their head in the sand and keep these kinds of loans on their balance sheets," said Westwood Capital's Blum. "Until the banks really clean up their books, we risk repeating what happened in Japan."

Title: Re: Meltdown
Post by: Coopmv on July 11, 2009, 09:52:14 AM

These political idiots in CA are working on another band-aid solution instead of planning for a major surgery ...

Talks resume in addressing California's deficit
Schwarzenegger, lawmakers resume weekend talks over California's $26B deficit
By Judy Lin, Associated Press Writer

On Saturday July 11, 2009, 10:07 am EDT

SACRAMENTO, California (AP) -- Gov. Arnold Schwarzenegger and legislative leaders were scheduled to resume work Saturday on bridging California's $26 billion budget shortfall following an unexpected resumption of negotiations the day before.

Late Friday, lawmakers from both parties expressed optimism about the direction of the talks but cautioned that a lot of work remains. That is particularly true in meeting the demands for government reform by Schwarzenegger and Republican lawmakers.

"It was the most productive negotiation we have had in weeks," said Senate leader Darrell Steinberg, a Democrat. "We still have a ways to go."

California has been especially hard hit by the recession. Efforts to balance the budget have been hampered by rules that require a two-thirds vote in both houses of the state legislature to raise taxes or approve other budget measures.

The renewal of negotiations comes after a week of partisan infighting that temporarily stalled talks. Assembly Speaker Karen Bass, a Democrat, declined to participate in negotiations Monday because of disagreements with Schwarzenegger's demands for reforms to welfare, pension, health care and in-home supportive service programs.

"Things are moving forward. So I feel much more positive today than I did earlier this week," Bass said Friday.

The governor and lawmakers said they were prepared to work through the weekend.

At issue is their attempt to close a $26.3 billion shortfall for the fiscal year that began July 1. The Legislature passed a budget for the current fiscal year during an unusual midyear session in February, but quickly declining tax revenue threw the spending plan out of whack within weeks.

It's not clear how the two sides will bridge the gap, which represents roughly a quarter of the general fund, the state's main account for paying its daily operating expenses.

The governor initially proposed eliminating welfare and children's health care programs, while heavily reducing in-home care for the elderly and disabled. He backed off those plans but then angered Democrats and welfare advocates when he turned his attention to weeding out what he described as "waste, fraud and abuse" in California's social service programs.

Schwarzenegger continues to seek changes in eligibility and benefits within California's welfare-to-work program, while Democrats want to protect the state's poor and elderly from cuts they say would be crippling.

Revenue is running so far behind spending obligations that sometime in September the state will run short of cash to pay for most of its core functions, including contributions to state pension funds. It also could be forced to issue IOUs instead of paychecks to state workers, despite previous court rulings against the practice.

The national recession and a steep drop in tax collections has steered California way off course from the spending plan adopted in February. On Friday, the state controller confirmed that California was billions in the red at the end of the previous fiscal year on June 30.

Controller John Chiang said the state spent $10.4 billion more than it collected last year and is now without enough cash to cover all of its payment obligations.

"California continues to pay for its history of unbalanced budgets," he said in a statement.

To preserve cash, Schwarzenegger ordered public employees furloughed three days a month, shutting many state offices on those days. The controller has begun issuing IOUs to thousands of state vendors to save about $3 billion in July alone, but several major banks stopped honoring them on Friday.

That has left some contractors scrambling for a way to get paid.

At the urging of state Treasurer Bill Lockyer, Citigroup Inc. agreed to a one-week extension and Bank of the West reversed its decision and will continue to cash the IOUs, formally known as registered warrants.

Meanwhile, officials with the largest state employees union said they would ask their members to vote on whether they wanted to strike or take some other action in response to the governor's proposal for additional pay cuts.

The three-day-a-month furloughs translate into a roughly 14 percent pay cut for the state's 235,000 employees.

In response to the union's threat, Schwarzenegger acknowledged the cuts to state government were difficult on everyone, from general taxpayers to state workers.

"The key thing is to recognize that we have a shortfall of $26 billion," he said. "It's a huge drop in revenues. It's historic. We've never seen this before in California."

Title: Re: Meltdown
Post by: Coopmv on July 11, 2009, 08:01:47 PM

The Democrats are panicking now, many of them who vote for a tax increase on the middle class in order to fund healthcare reform can be goners after the mid-term election next November ...

Jul 11, 2009, 4:56 p.m. EST

Tax on wealthy mulled to fund heath care reform

By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) -- House Democrats intend to pay for their health-care reform plan with higher taxes on wealthy Americans.

A tax on the wealthy is the "best way" to raise money for the overhaul, Rep. Charles Rangel, the New York Democrat who is chairman of the House Ways and Means Committee, told reporters late Friday.

The House Democratic proposal, which includes a government-run insurance plan, is expected to be formally unveiled on Monday.

It faces an uphill battle, as even many Democrats are concerned about the political repercussion of higher taxes.

House Republican leader John Boehner, R-Ohio, said the tax plan would be a "job-killer."

"House Democrats have finally made clear that they will fund their government takeover of health care by raising taxes on hard-working American families and small businesses in the midst of one of the worst recessions in recent memory. With unemployment nearing double digits nationwide, the last thing we need is a massive tax hike that will punish small businesses and cost even more American jobs," Boehner said in a statement.

President Obama promised during the campaign not to raise taxes on Americans earning less than $250,000 per year.

Obama was heading back to Washington over the weekend from a foreign trip that included the Group of 8 summit in Italy. He is expected to wade into the health-care debate upon his return.

Progress on health-care legislation has stalled over the central issue of who will pay for the changes.

Rangel told reporters that the tax could start in 2011.

Married couples making $350,000 would have to pay a surtax of 1%. The surtax would increase for higher-income families.

The tax plan is expected to raise $500 billion, about half of the price tag of health care reform. The remainder of the costs would come from program savings, officials said.

The rates would be set to go higher in later years. But the increases might not go into effect if other ways to pay for the health plan are found.

Title: Re: Meltdown
Post by: BachQ on July 12, 2009, 05:45:20 AM

Quote from: Coopmv on June 06, 2009, 06:28:25 PM
I never realized there are this many mindless Americans until this housing meltdown hit . :o

Foreclosure: Now an Upscale Blight

Rising job losses and falling home prices are dragging down people who never dreamed they would get in trouble

With the U.S. economy and financial markets showing signs of life, optimistic analysts are looking for a recovery in the all-important housing sector. They got some ammunition on June 2 from the National Association of Realtors, which said that its Pending Home Sales Index jumped in April by the most in more than seven years.

But housing can't revive as long as the market is being flooded with homes that are falling into foreclosure. And far from going away, the problem is broadening. It's not just about subprime anymore. Now, people with excellent credit who never dreamed of getting in financial trouble are being dragged down by a dangerous cycle of rising unemployment and falling home prices. That is going to prolong the foreclosure crisis and, inevitably, inhibit the recovery of the rest of the economy.

Any illusion that prime loans would emerge unscathed was shattered by a May 28 report from the Mortgage Bankers Assn. "For the first time since the rapid growth of subprime lending, prime fixed-rate loans now represent the largest share of new foreclosures," the bankers said. The grime in prime was responsible for the worst performance on record for the U.S. mortgage sector in the first quarter: Nearly 13% of loans were delinquent or in foreclosure, the most since the bankers started keeping tabs in 1972. The problems were worst in the bubble states of California, Florida, Arizona, and Nevada.

The biggest factor in this second wave of foreclosures is the inability of distressed homeowners to sell in order to pay off their debts. Prices in bubble cities such as Los Angeles, Phoenix, and Miami are down less at the high end of the market than at the bottom, according to data from Standard & Poor's/Case-Shiller home price indexes. But that's cold comfort to people who haven't managed to sell at all. According to research by the National Association of Realtors, there are enough $750,000-plus homes on the market to cover more than 40 months' worth of demand at the current rate of sales. That's four times the rate of oversupply in the housing market as a whole.

Unemployment is exacerbating the problems at the top of the market. The jobless rate for adults with a bachelor's degree or more may not sound too high at 4.4% in April given the overall April jobless rate of 8.9%. But it's more than double the rate of 2% a year earlier. And many families in that segment of the population built their finances on the assumption of continuous full employment, so they can't cover the mortgage when even one spouse is out of work.

Consider the plight of Stephanie and Bob Walker, who bought a $799,000, three-bedroom home in Los Angeles with a view of the Hollywood sign in 2006 but are losing it because last year Bob stopped getting computer consulting work that used to pull in about $240,000 a year. Bob eventually landed a job paying $60,000, and Stephanie found work as a $13-an-hour temp, but it wasn't enough to cover their mortgage and credit-card debt, which was swelled by about $130,000 worth of home renovations. They listed the house last year for an "optimistic" $875,000 but didn't get any takers. After months of price cuts and threats of foreclosure from the bank, they're days from closing on a sale at $700,000 that will assuage their primary mortgage lender—but leave them under pressure from other creditors. "We had no expectation things would come crashing down as fast as they did," says Stephanie. "We had no one to blame but ourselves. We didn't have a backup plan if he lost his job."

The economics at the top of the market aren't as advantageous as they are at the bottom, where first-time home buyers are flocking to lower-priced homes, spurred by low interest rates, temporary tax credits, and a drop in prices that has made owning cheaper than renting in many cities. At the high end, homes are too expensive for most first-time buyers, and move-up buyers can't purchase a home without selling property they already own. What's more, financing is far costlier, if it's available at all, because private investors have lost their appetite for big mortgages. Rates on "jumbo" loans—that is, those too big to be purchased by Fannie Mae (FNM) or Freddie Mac (FRE)—are roughly a percentage point higher than those for loans that conform to Fannie and Freddie's purchase limits. (Those limits range from $417,000 to $730,000, depending on local housing costs.)

An inflation panic in the fixed-income market is the latest blow to homeowners who are trying to sell to avoid foreclosure, because it's pushing up mortgage rates and pushing potential buyers out of the market. Rates on 30-year fixed, conforming mortgage loans jumped nearly half a percentage point, to 5.25%, in the week ended May 29 from a week earlier, according to the Mortgage Bankers Assn. Meanwhile, the market is unlikely to get much help from the Obama Administration's foreclosure-prevention program. Although it's somewhat more ambitious than the Bush Administration's program, it is voluntary for lenders and is off to a slow start since its March inception.

When will this second wave of foreclosures crest? David Crowe, chief economist of the National Association of Home Builders, doesn't see the peak coming until 2011, later than most other experts predict. Foreclosures typically top out after unemployment does, and Crowe doesn't expect that to occur until late this year. After that, Crowe says, more people will lose their homes because of upward resets on adjustable-rate mortgages. Credit Suisse says mid-2010 is the peak for scheduled resets, and resets will stay high well into 2012. While most of the subprime loans issued during the boom years have been washed out by now, there are still about half a trillion dollars' worth of option ARMs, which allow borrowers to add unpaid interest to the principal they owe. There's an even more alarming $2.5 trillion in "alt-A" loans, which are between prime and subprime and include a big chunk of the mortgages that required little or no proof of income or assets. Most of these loans were issued to people with relatively good credit who were buying more expensive homes.

A key unknown is how many middle- and upper-income homeowners will simply walk away from homes that are worth less than the mortgages on them. So far few have. Whitney R. Tilson, managing partner of New York investment firm T2 Partners and co-author of the book More Mortgage Meltdown, expects the ranks of walk-aways to increase, exacerbating foreclosures. But Rick Sharga, senior vice-president of RealtyTrac, a foreclosure data specialist, disagrees. "To sign a contract for a house and then walk away from it runs counter to everything we were taught," says Sharga, who predicts foreclosures will dip slightly in 2010.

Even if foreclosures don't rise, the rate is already so high that it will put considerable pressure on the national housing market for at least two more years, says Mark Hanson, managing director of Field Check Group, a Menlo Park (Calif.) research firm.

While forecasts differ in detail, the clear message is that foreclosure is going upscale. And that means the housing bust won't end anytime soon.

Option-ARM Mortgages Turning Worse Than Subprime

Wall St. Journal
10 Jul 09
Marshall Eckblad, Dow Jones Newswires

NEW YORK (Dow Jones)--For the third straight month, option adjustable-rate mortgages are generating proportionally more delinquencies and foreclosures than subprime mortgages, the scourge of the housing crisis.

A further acceleration of troubles among the loans could mean higher-than-expected losses for Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM), as well as the Federal Deposit Insurance Corp.'s own insurance fund. "The realization of the issues related to option ARMs is just beginning," says Chris Marinac, director of research at Atlanta-based FIG Partners.

Known as Pick-A-Pays - a brand name popularized by Wachovia Corp. - the mostly adjustable-rate loans were typically issued to creditworthy homeowners, and allowed borrowers to make a range of monthly payments. The payment options include a partial-interest payment that adds the unpaid interest to the loan's balance. On many of the loans, balances have risen while values of the underlying properties have plummeted amid the nationwide housing crisis.

As of April, 36.9% of the loans were at least 60 days past due, while 19% were in foreclosure, according to data from First American CoreLogic, a unit of Santa Ana, Calif.-based First American Corp. (FAF). By contrast, 33.9% of subprime loans were delinquent as of April, while 14.5% were in foreclosure.

The loans are heavily concentrated in the worst-hit regions in the housing market, including California and Florida, making option-ARM borrowers inordinately vulnerable to declining property values. *** Troubles among option ARMs could well get worse, since the bulk are due to "recast" - industry lingo for reset - over the next three years or even earlier. ... " We're just beginning to enter the cycle of resets" on option-ARM loans, says Matt Stadler, chief risk officer of National Asset Direct Inc.

(continued)
(http://online.wsj.com/article/BT-CO-20090710-713165.html)

Title: Re: Meltdown
Post by: BachQ on July 12, 2009, 05:47:57 AM

Quote from: Coopmv on July 11, 2009, 08:01:47 PM
The Democrats are panicking now, many of them who vote for a tax increase on the middle class in order to fund healthcare reform can be goners after the mid-term election next November ...

Jul 11, 2009, 4:56 p.m. EST

Tax on wealthy mulled to fund heath care reform

By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) -- House Democrats intend to pay for their health-care reform plan with higher taxes on wealthy Americans.

A tax on the wealthy is the "best way" to raise money for the overhaul, Rep. Charles Rangel, the New York Democrat who is chairman of the House Ways and Means Committee, told reporters late Friday.

The House Democratic proposal, which includes a government-run insurance plan, is expected to be formally unveiled on Monday.

It faces an uphill battle, as even many Democrats are concerned about the political repercussion of higher taxes.

House Republican leader John Boehner, R-Ohio, said the tax plan would be a "job-killer."

"House Democrats have finally made clear that they will fund their government takeover of health care by raising taxes on hard-working American families and small businesses in the midst of one of the worst recessions in recent memory. With unemployment nearing double digits nationwide, the last thing we need is a massive tax hike that will punish small businesses and cost even more American jobs," Boehner said in a statement.

President Obama promised during the campaign not to raise taxes on Americans earning less than $250,000 per year.

Obama was heading back to Washington over the weekend from a foreign trip that included the Group of 8 summit in Italy. He is expected to wade into the health-care debate upon his return.

Progress on health-care legislation has stalled over the central issue of who will pay for the changes.

Rangel told reporters that the tax could start in 2011.

Married couples making $350,000 would have to pay a surtax of 1%. The surtax would increase for higher-income families.

The tax plan is expected to raise $500 billion, about half of the price tag of health care reform. The remainder of the costs would come from program savings, officials said.

The rates would be set to go higher in later years. But the increases might not go into effect if other ways to pay for the health plan are found.

Yep, democrats will never change. And of course they want to tax the rich (http://economix.blogs.nytimes.com/2009/07/11/taxing-the-very-rich/) to pay for their welfare state.

Title: Re: Meltdown
Post by: Coopmv on July 12, 2009, 05:55:51 AM

Quote from: Dm on July 12, 2009, 05:45:20 AM
Option-ARM Mortgages Turning Worse Than Subprime

Wall St. Journal
10 Jul 09
Marshall Eckblad, Dow Jones Newswires

NEW YORK (Dow Jones)--For the third straight month, option adjustable-rate mortgages are generating proportionally more delinquencies and foreclosures than subprime mortgages, the scourge of the housing crisis.

A further acceleration of troubles among the loans could mean higher-than-expected losses for Wells Fargo & Co. (WFC) and JPMorgan Chase & Co. (JPM), as well as the Federal Deposit Insurance Corp.'s own insurance fund. "The realization of the issues related to option ARMs is just beginning," says Chris Marinac, director of research at Atlanta-based FIG Partners.

Known as Pick-A-Pays - a brand name popularized by Wachovia Corp. - the mostly adjustable-rate loans were typically issued to creditworthy homeowners, and allowed borrowers to make a range of monthly payments. The payment options include a partial-interest payment that adds the unpaid interest to the loan's balance. On many of the loans, balances have risen while values of the underlying properties have plummeted amid the nationwide housing crisis.

As of April, 36.9% of the loans were at least 60 days past due, while 19% were in foreclosure, according to data from First American CoreLogic, a unit of Santa Ana, Calif.-based First American Corp. (FAF). By contrast, 33.9% of subprime loans were delinquent as of April, while 14.5% were in foreclosure.

The loans are heavily concentrated in the worst-hit regions in the housing market, including California and Florida, making option-ARM borrowers inordinately vulnerable to declining property values. *** Troubles among option ARMs could well get worse, since the bulk are due to "recast" - industry lingo for reset - over the next three years or even earlier. ... " We're just beginning to enter the cycle of resets" on option-ARM loans, says Matt Stadler, chief risk officer of National Asset Direct Inc.

(continued)

(http://online.wsj.com/article/BT-CO-20090710-713165.html)

Yeah, the folly of that California dream, not only for the illegals but for many people who should not have been there. Unfortunately, the Japanese-style 50-year mortgage loans will not work in this country since Americans are not like the dutiful Japanese sons and daughter who will continue to pay the mortgage after their parents have passed on. Instead, those schemes like pick-your-payments were selling like hotcakes when home prices had nowhere to go but up. Those mortgage holders figured they would flip the houses in 5 years and reap some handsome profits. Now they are left holding the bag ...

Title: Re: Meltdown
Post by: Coopmv on July 12, 2009, 07:07:59 AM

The once in 100 years major earthquake that last flattened SF is overdue. A natural disaster coupled with the current financial disaster will put CA in a mega-depression and will probably take 20 years for CA to dig itself out ...

1906 SF Quake (http://en.wikipedia.org/wiki/1906_San_Francisco_earthquake)

Tremors Detected on San Andreas Fault By ALICIA CHANG, AP
posted: 12 HOURS 13 MINUTES AGO

LOS ANGELES (July 9) - Scientists have detected a spike in underground rumblings on a section of California's San Andreas Fault that produced a magnitude-7.8 earthquake in 1857.

What these mysterious vibrations say about future earthquakes is far from certain. But some think the deep tremors suggest underground stress may be building up faster than expected and may indicate an increased risk of a major temblor.

Researchers at the University of California, Berkeley, monitored seismic activity on the fault's central section between July 2001 and February 2009 and recorded more than 2,000 tremors. The tremors lasted mere minutes to nearly half an hour.

Unlike earthquakes, tremors occur deeper below the surface and the shaking lasts longer.

During the study period, two strong earthquakes hit — a magnitude-6.5 in 2003 and a magnitude-6.0 a year later. Scientists noticed the frequency of the tremors doubled after the 2003 quake and jumped six-fold after 2004.

Tremor episodes persist today. Though the frequency of tremors have declined since 2004, scientists are still concerned because they are still at a level that is twice as high as before the 2003 quake.

Title: Re: Meltdown
Post by: BachQ on July 12, 2009, 09:37:17 AM

This is just San Jose ... but it's even worse in San Francisco, Oakland, etc.

Note to Californians: WAKE UP! YOUR STATE IS OUTTA CONTROL!

Six-figure pensions for hundreds of retired San Jose cops, firefighters
John Woolfolk

Posted: 07/11/2009 06:36:50 PM PDT
Updated: 07/11/2009 11:59:04 PM PDT

... All told, San Jose's $100,000-plus pension club includes 256 retired officers and firefighters and 34 other city workers. 18% of the city's retired officers and firefighters have six-figure pensions. (http://www.mercurynews.com/topstories/ci_12804646?nclick_check=1)

Title: Re: Meltdown
Post by: Coopmv on July 12, 2009, 09:51:46 AM

Quote from: Dm on July 12, 2009, 09:37:17 AM
This is just San Jose ... but it's even worse in San Francisco, Oakland, etc.

Note to Californians: WAKE UP! YOUR STATE IS OUTTA CONTROL!

Six-figure pensions for hundreds of retired San Jose cops, firefighters
John Woolfolk

Posted: 07/11/2009 06:36:50 PM PDT
Updated: 07/11/2009 11:59:04 PM PDT

... All told, San Jose's $100,000-plus pension club includes 256 retired officers and firefighters and 34 other city workers. 18% of the city's retired officers and firefighters have six-figure pensions.
(http://www.mercurynews.com/topstories/ci_12804646?nclick_check=1)

My next town Fairfield, which had part of its public employees pension invested with Bernie Madoff. So exclusive of the losses sustained from the market meltdown, a loss of $70MM was attributable to Madoff. Now the town residents are on the hook to make up that shortfall.

My sister has a neighbor whose son is a NYC cop. The son told my sister and her hubby that he makes $90K a year and does not do much. Over one week, the only significant thing he did was to deliver a car for his boss to some NJ location.

There is a need for a taxpayer revolt in the US. Why should taxpayers be paying these outrageous pensions and other benefits for the public employees? Are we getting our money worth?

Title: Re: Meltdown
Post by: Coopmv on July 12, 2009, 10:44:58 AM

Taxachusetts cannot even afford to keep a zoo open. Speaking of terrible fiscal mismanagement at the second highest tax state in the union after New York ...

Franklin Park Zoo may have to close
Patrick budget cuts also threaten Stone Zoo Some animals might have to be euthanized

(http://cache.boston.com/resize/bonzai-fba/Globe_Photo/2009/07/10/1247281422_7416/539w.jpg)

Franklin Park Zoo, a Boston institution that has drawn generations of city and suburban families, may be forced to close its doors and possibly euthanize some of its animals as a result of the deep budget cuts imposed by Governor Deval Patrick, zoo officials said yesterday.

Without more state funding, those zoo officials said, they will run out of money by October and have to close both the Franklin Park Zoo and its smaller counterpart, Stone Zoo in Stoneham. The zoo would lay off most of its 165 employees and attempt to find new homes for more than 1,000 animals, the officials said.

The zoo officials, in a written statement that echoed a letter sent earlier to legislative leaders, said they would be unlikely to find homes for at least 20 percent of the animals, "requiring either destroying them or the care of the animals in perpetuity.''

The zoos, which are both run by Zoo New England and attracted nearly 570,000 visitors over the past year, are operated through a public-private partnership funded by taxpayers and revenues from visitors. If the partnership dissolves, as it could in October if it runs out of money, the custody of the zoos is turned over to state officials, according to state law.

Zoo officials estimate that it would take three years and cost at least $9 million to completely shut down the zoos, and they said the state would be in charge of that process.

The Legislature had originally provided $6.5 million to the zoos - which accounts for more than half of its budget - but Patrick, using a line-item veto, cut the state funding to $2.5 million.

Zoo New England, headed by John Linehan, sent the letter to legislative leaders on Tuesday urging them to override Patrick's veto and effectively restore their funding. Linehan did not respond to requests for comment yesterday. Instead, a private public relations company hired by the zoos released a lengthy statement.

"The only areas left to cut are in nonanimal care, revenue-generating departments,'' the zoos statement reads. "This would result in a bare bones staff that would care for the animals and the facility, but would eliminate any that would service the public.''

Even the threat of closures illustrates the far-reaching consequences of state budget cuts and the fallout they can have on those who make the decisions. As word of the crisis broke, Patrick and his entire Cabinet, senior aides, and political advisers were gathered yesterday at the governor's estate in the Berkshires, plotting strategy for the months ahead.

"These are extremely difficult times across the state, and there have been tough cuts in every area,'' a Patrick spokeswoman, Cyndi Roy, said in a statement.

"This is an example of an unfortunate cut that had to be made in order to preserve core services for families struggling during the economic downturn.''

But for every cut, there is an affected constituency, and with a zoo, the users are far and wide and the targets - exotic animals - unusually sympathetic.

"This is just another bad decision on budget cuts, affecting working families,'' Mayor Thomas M. Menino of Boston said yesterday.

"It's a big deal,'' he said of the possible closure of Franklin Park Zoo in Dorchester. "It's a great resource for the community. The zoo is an inexpensive place to spend a day in tough economic times.''

Franklin Park Zoo, which was founded in 1913, has faced closure numerous times in the past because of a lack of funding, including recently in 2002 when State House lawmakers cut its funding from $6 million to $3.5 million.

Zoo officials have been lobbying House and Senate lawmakers, and are hoping they can persuade a two-thirds' majority to override Patrick's veto in each chamber. The Legislature is expected to begin addressing Patrick's line-item vetoes, which totaled nearly $150 million, on Tuesday.

"They just can't make the math work,'' said Representative Elizabeth A. Malia, a Democrat from Jamaica Plain, speaking of the finances of Zoo New England with the cut in state funding.

"It's very upsetting. It would be a horrible, horrible loss for the community.''

The Franklin Park Zoo, located in a section of the city where Dorchester, Roxbury, and Jamaica Plain come together, represents something of a touchstone for virtually anyone who grew up in Boston and walked through its gates.

The zoo was a featured site in the 1980 science fiction film "Altered States,'' where a Harvard professor devolves into a gorilla and goes on a rampage. It also achieved notoriety in 2003, when a gorilla named Little Joe escaped from his cage and attacked a 2-year-old girl and her baby sitter.

Franklin Park Zoo was operated by city and state agencies until 1991, when a nonprofit, private corporation was founded to oversee it. The same corporation operates the Stone Zoo, which is located on a 26-acre site near Spot Pond in Stoneham. The partnership has a clause that states that if the zoos shut down, the state would have to assume control of the property and the animals.

The total operations budget for the zoos last year was $11 million, about 60 percent of which came from state funding. The remainder came through admissions, food and gift shop sales, membership, and fund-raising.

The Globe reported yesterday that a film crew is laying the groundwork to begin filming a live-action comedy, "The Zookeeper'' starring Kevin James and Rosario Dawson, near an unused outdoor gorilla exhibit near the zoo's rear entrance. Filming is scheduled to run from July 20 through October, and the zoo was paid a "substantial'' location fee that zoo officials would not disclose.

"We all know it's a tough time economically, and cuts are going to have to be made,'' said Representative Linda Dorcena Forry, a Dorchester Democrat. "But with families losing their jobs and not able to go out of state, we have an amazing jewel here for people to visit.''

Senate President Therese Murray's spokesman did not return requests for comment, but a high-ranking Senate source said it was among the proposals that they plan to override.

House Speaker Robert A. DeLeo was less definitive.

"The House is still reviewing the governor's vetoes and deciding what action to take,'' he said through a spokesman, Seth Gitell.

Title: Re: Meltdown
Post by: Coopmv on July 12, 2009, 12:07:01 PM

DM: Here is an interesting read on China from the view of a real insider - the purged premier of that country ...

China: A Look Back at a Missed Opportunity

What if party boss Zhao Ziyang, purged after the Tiananmen crackdown in 1989, had been able to promote political reform?

By Pete Engardio

By the late 1980s, China's economic takeoff was well under way and the benefits of free-market reforms were abundantly evident. Yet as he traveled the booming coastal provinces, then-Premier and Communist Party chief Zhao Ziyang, an architect of several key reforms, was troubled by mounting evidence of rampant corruption, which he considered a symptom of a structural flaw in China's model. The Communist Party's monopoly on political power and heavy hand in business not only distorted competition, it also created enormous opportunities for officials at all levels of government to extract graft. "The only solution for resolving this issue is continued deepening of reform to separate government and enterprise," Zhao wrote in a diary. China also needed a system of political checks and balances and a rule of law. "To fight corruption, reform of the political system must be carried out." As Zhao saw it, without such reforms China would never become a modern market economy.

In 1989, when hundreds of thousands of people took to the streets of Beijing to demand a cleaner and more open government, Zhao's worries about corruption led him to express sympathy with the Tiananmen Square protesters. That prompted his purge by hard-liners, who placed Zhao under house arrest until his death, 16 years later. Today, two decades after Tiananmen, his observations are recorded in the book Prisoner of State: The Secret Journal of Zhao Ziyang, published last month by Simon & Schuster. The book, edited by Bao Pu, Renee Chiang, and Adi Ignatius, is based on translations of audiotapes that Zhao had recorded and kept hidden during his years under house arrest.

When Prisoner of State first appeared, most attention focused on Zhao's inside accounts of power battles within the Chinese leadership and his observations on Tiananmen. The book also triggered speculation about how China's political system would look today had Zhao remained in power: He endorsed Western parliamentary democracy as the best political system.

Zhao: Key Architect of Reforms
But Zhao's journal also raises the intriguing question of what the Chinese economy would look like today had he been able to usher in his agenda of political reform. While late paramount leader Deng Xiaoping garnered most of the credit, Zhao was a key architect of some of the most important reforms enabling China to achieve decades of rapid growth and emerge as a modern industrial power. He fought relentlessly behind the scenes to promote agricultural reform, foreign investment, and the economic opening of the coastal provinces.

Perhaps Zhao's biggest contribution to economic reform was to keep it on track and find a way to defuse ideological objections over capitalism, says editor Bao Pu, son of former top Zhao aide Bao Tong (who also was arrested after the June 4, 1989, crackdown) and editor and publisher of Hong Kong-based New Century Media. For instance, rather than use the term "market economy," Zhao used the term "merchandise economy." The nomenclature, Bao says in an interview, helped Beijing "bypass a costly debate among the leaders over whether they should go down the road of market reform or not."

Zhao's faith in democracy had nothing to do with ideology, Bao contends. "He was always a practical leader and tried to find real-world solutions," he says. "What he is saying [in his journal] is that since parliamentary democracy has proven to work in modern industrialized nations, there is no reason it would not work for China."

Prescient Concerns About Structural Flaws
By the time Zhao began dictating his journal, Bao says, "he knew China had way passed the turning point and had to be committed to a free-market economy." But he worried that without political reform, a market economy would lead to greater social injustice. "He thought it was time to address that."

Zhao's concerns about China's structural flaws, meanwhile, seem prescient today. Even though China's economy has enjoyed three decades of breathtaking growth—and is faring far better than the U.S., Europe, and Japan in the global recession—party officials from the central government down to the townships still have huge sway over most industries, while successful court challenges to abuse of power are rare. Corruption is a bigger problem than ever. And state-owned banks still funnel most of China's savings to big state corporations that crowd out more dynamic and innovative private entrepreneurs. Meanwhile, the growing gap between rich and poor has become a major concern for Beijing's leadership.

China's top leaders recognize the flaws in the current economic model and are pushing to address them. But as Zhao clearly realized decades ago, there's reason to doubt these flaws can be fixed without reforming the political system.

Title: Re: Meltdown
Post by: Sydney Grew on July 12, 2009, 05:52:36 PM

Quote from: Coopmv on July 12, 2009, 12:07:01 PM. . . He endorsed Western parliamentary democracy as the best political system. . . .

Democracy = government by the rabble (Kant)

Who would wish to be "governed" by low-class northern Americans? Only other low-class northern Americans and possibly not even they.

Title: Re: Meltdown
Post by: BachQ on July 13, 2009, 02:23:20 PM

Republicans unify against stimulus.

July 12 2009
WASHINGTON (AP) — Republicans lined up Sunday in opposition to a second economic stimulus package, a rare demonstration of unity from an out-of-power political party in search of a rallying cry against President Barack Obama. Republicans called Obama's $787 billion spending plan a "flop" and said it hasn't fulfilled its hype. They criticized the White House for increasing the federal deficit and doing little to combat an unemployment rate that hit 9.5 percent in June. "The reality is it hasn't helped yet," said Sen. Jon Kyl, R-Ariz. "Only about 6.8 percent of the money has actually been spent. What I proposed is, after you complete the contracts that are already committed, the things that are in the pipeline, stop it." (http://www.google.com/hostednews/ap/article/ALeqM5gWifx4pzOPIWhSx1Xff9H1vua02AD99D2G4G1)

Title: Re: Meltdown
Post by: BachQ on July 13, 2009, 02:25:01 PM

CNN: California vendors fight for their cash --
Small business owners plan layoffs and furloughs if they're saddled with hard-to-redeem IOUs. "This means that the state is casting off its cash-flow problems onto hundreds of families and small businesses in California," says Jacob Roper, a spokesman for the state controller's office. So far, California has mailed $354 million worth of IOUs and plans to issue a total of $3 billion by the end of July. Around $140 million of the warrants are expected go to small business owners.
(http://money.cnn.com/2009/07/12/smallbusiness/california_small_vendors_ious.smb/index.htm?postversion=2009071218)

Title: Re: Meltdown
Post by: MishaK on July 13, 2009, 02:26:14 PM

Quote from: Coopmv on July 10, 2009, 04:12:53 PM
The US is now paying the price for its relentless outsourcing of jobs which has led to a permanent decline in the standard of living of its middle class. Japan has no choice but to do the same in order to keep up with the US in terms of labor costs. It is a race to the bottom that only China and India come out on top. >:(

Not really. The Chinese labor market is dependent on there being a US middle class to buy its products. If you eliminate the US middle class, so goes the Chinese export market.

Title: Re: Meltdown
Post by: BachQ on July 13, 2009, 02:29:52 PM

One of the consequences of peak oil is escalating costs of oil exploration and extraction.

Study Shows Expense of Finding Oil, Nat. Gas Soared in 2008
by Kristen Hays|Houston Chronicle|Friday, June 19, 2009

The U.S. oil and gas industry's costs of finding resources rose 35% in 2008 amid the wild rise and fall in commodity prices, an Ernst & Young study released Thursday showed. The three-year average cost per barrel of oil equivalent, excluding acquisitions of proved reserves, was $27.22. But in 2008 that spiked to $51.96. (http://www.rigzone.com/news/article.asp?a_id=77447&hmpn=1)

Title: Re: Meltdown
Post by: Coopmv on July 13, 2009, 04:21:28 PM

Quote from: O Mensch on July 13, 2009, 02:26:14 PM
Not really. The Chinese labor market is dependent on there being a US middle class to buy its products. If you eliminate the US middle class, so goes the Chinese export market.

You are absolutely correct. No wonder the ascendency of WalMart from a virtual nobody in the retail world to the $300B revenue behemoth has coincided with the declining American middle class, which started in the mid 1970's. No other retailers have bought more from China on an annual basis ...

Title: Re: Meltdown
Post by: Coopmv on July 13, 2009, 04:30:05 PM

Quote from: Dm on July 13, 2009, 02:25:01 PM
CNN: California vendors fight for their cash --
Small business owners plan layoffs and furloughs if they're saddled with hard-to-redeem IOUs. "This means that the state is casting off its cash-flow problems onto hundreds of families and small businesses in California," says Jacob Roper, a spokesman for the state controller's office. So far, California has mailed $354 million worth of IOUs and plans to issue a total of $3 billion by the end of July. Around $140 million of the warrants are expected go to small business owners.

(http://money.cnn.com/2009/07/12/smallbusiness/california_small_vendors_ious.smb/index.htm?postversion=2009071218)

Looks like CA just started another vicious cycle. All those IOU's will cause many small businesses to shed workers, which will further expand the unemployment rolls. Higher unemployment will further reduce CA tax revenues. How are the IOU's supposed to help CA? ???

Title: Re: Meltdown
Post by: Coopmv on July 13, 2009, 04:47:03 PM

Quote from: Dm on July 13, 2009, 02:29:52 PM
One of the consequences of peak oil is escalating costs of oil exploration and extraction.

Study Shows Expense of Finding Oil, Nat. Gas Soared in 2008
by Kristen Hays|Houston Chronicle|Friday, June 19, 2009

The U.S. oil and gas industry's costs of finding resources rose 35% in 2008 amid the wild rise and fall in commodity prices, an Ernst & Young study released Thursday showed. The three-year average cost per barrel of oil equivalent, excluding acquisitions of proved reserves, was $27.22. But in 2008 that spiked to $51.96.
(http://www.rigzone.com/news/article.asp?a_id=77447&hmpn=1)

DM, Have you noticed the big earnings hits many of the major western integrated oils have been taking since the crude peaked at almost $150/bbl a year ago? They are supposed to mark their assets to market (MTM). Any companies that acquired oil assets at sky-high prices last year would need to take a massive write-offs to be in compliance with the GAAP accounting standards. At any rate, I have not noticed any Chinese oil companies writing down their impaired assets ...

Title: Re: Meltdown
Post by: MishaK on July 13, 2009, 05:10:18 PM

Quote from: Coopmv on July 13, 2009, 04:21:28 PM
You are absolutely correct. No wonder the ascendency of WalMart from a virtual nobody in the retail world to the $300B revenue behemoth has coincided with the declining American middle class, which started in the mid 1970's. No other retailers have bought more from China on an annual basis ...

Yes, but there is a limit to that. The Chinese can't lower theior labor costs further. On the contrary, it will increase as the value of the dollar declines. Look at the numbers. Chinese exports are way down this year.

Title: Re: Meltdown
Post by: Coopmv on July 13, 2009, 05:12:30 PM

Quote from: O Mensch on July 13, 2009, 05:10:18 PM
Yes, but there is a limit to that. The Chinese can't lower theior labor costs further. On the contrary, it will increase as the value of the dollar declines. Look at the numbers. Chinese exports are way down this year.

I think WalMart will have to buy more from the likes of Vietnam, Cambodia and Sri Lanka ... ;D

Title: Re: Meltdown
Post by: BachQ on July 14, 2009, 02:34:16 PM

Quote from: Coopmv on June 15, 2009, 05:29:04 PM
It will be very interesting to see how many years Madoff gets to spend at the big house ...

Madoff victims describe pain of fraud to judge

Sentencing letters to judge chronicle anguish of Bernard Madoff's investors

Larry Neumeister, Associated Press Writer
On Monday June 15, 2009, 8:05 pm EDT

NEW YORK (AP) -- More than 100 victims of failed financier Bernard Madoff's multibillion-dollar fraud urged a judge Monday to sentence him harshly, saying he ruined their lives, leaving many of them depressed, bitter and hopeless.

In 113 statements, the victims from across the country repeatedly referred to the 71-year-old Madoff as a "monster" who, as one victim put it, has "no soul, no remorse, no conscience."

Letter after letter urged U.S. District Judge Denny Chin to sentence Madoff to the maximum 150 years in prison after he pleaded guilty in March to securities fraud, perjury and other charges.

Madoff, who has been jailed since he entered his guilty plea, is scheduled to be sentenced on June 29.

Thousands of people lost billions of dollars investing with Madoff, who authorities say confessed to his sons in early December that he had been running a giant Ponzi scheme for decades in which early investors were paid with money collected from later investors.

In the letters, victims urged Chin to show no mercy for the man they described alternately as "wicked," "cruel," "amoral," "heartless, "ruthless," and "arrogant." One letter called Madoff one of the most hated men in the world.

Some of them criticized the government for not doing more to help them. And they reacted angrily at being portrayed in some published reports as greedy, saying they passed up riskier investments that promised higher returns for the steady profits reported by Madoff.

They also urged investigators to keep pursuing probes of Madoff's family members on the belief that some of them had to know about the fraud or had a role in it.

Ira Sorkin, Madoff's lawyer, said any comment he would make in response to the letters would be made in writing to the judge prior to the sentencing.

Dozens of retired investors said they were forced to look for work to survive after the loss of their investments had forced them to put their homes up for sale. Several said they had heard of suicides as a result of the extreme anguish caused by the loss of life savings.

"I can use every superlative in the dictionary, but none would suffice to tell you how damaging Madoff's scheme was," a letter from Ronnie Sue and Dominic Ambrosino said.

Ronnie Sue Ambrosino said the couple had so much faith in Madoff that they put their entire life savings in his hands and even took out a loan to buy a motor home rather than pay for it outright because they did not want to withdraw any of their money from Madoff.

She said when she learned of Madoff fraud she felt numb.

"The air in the room was thick and there was silence. The birds that had been chirping stopped singing. The squirrels stopped scurrying. The sun stopped shining. There was a void," she wrote. She said her decision to attend Madoff's plea brought her even more pain when she was hit by a van and was left in a cast for eight weeks.

Kathleen Bignell of Gunnison, Colorado, said she told her 89-year-old father he cannot die because she no longer has money to bury him. She said Madoff "ought to be able to look forward to just exactly what he has done to us. No hope, no future and no forgiveness."

Morton J. Chalek of Port Jefferson Station, New York, wrote: "I am 86 years old. I have a broken knee, I have lung cancer and thanks to Madoff, I am now bankrupt."

Jesse L. Cohen of Summit, New Jersey, told Chin to give him one year off his sentence "for every one billion dollars of hidden money that he reveals. In lieu of that, please make sure that the facility in which he rots is extremely uncomfortable."

"I am broke -- robbed by `The Madoff gang,'" wrote Emma De Vita of Chalfont, Pennsylvania.

Caren Low of Harrison, New York, wrote that her family's name is on buildings at the Albert Einstein College of Medicine, the Hebrew Home for the Aged in New Rochelle and the Hebrew University in Jerusalem. She said they are benefactors of Lincoln Center and founders of the Simon Wiesenthal Center in Los Angeles.

She said she went on anti-depressants after she learned what Madoff had done and that now she is looking for work.

"It's absolutely revolting," she wrote. "I guess one lesson learned is not to give away too much money before you die as you never know what can happen."

Madoff is locked-up in Charles Ponzi's former prison in Atlanta and is scheduled to be released on Nov. 14, 2139.

(http://1.bp.blogspot.com/_Nuta_CQvImI/ScRCEz6HP-I/AAAAAAAABEM/WCHN1baonNE/s400/madoff-ponzi.jpg)

Charles Ponzi / Bernard Madoff ... there is justice. >:D (http://www.bloomberg.com/apps/news?pid=20601087&sid=aJcrHC5gZxYM)

Title: Re: Meltdown
Post by: BachQ on July 14, 2009, 02:35:17 PM

WSJ: Average length of unemployment is higher than it's been since govt began tracking the data in 1948; the number of long-term unemployed has jumped to an all-time high of 4.4M.

LINK (http://online.wsj.com/article/SB124753066246235811.html)

Title: Re: Meltdown
Post by: BachQ on July 14, 2009, 02:44:09 PM

Quote from: Coopmv on July 13, 2009, 04:47:03 PM
DM, Have you noticed the big earnings hits many of the major western integrated oils have been taking since the crude peaked at almost $150/bbl a year ago? They are supposed to mark their assets to market (MTM). Any companies that acquired oil assets at sky-high prices last year would need to take a massive write-offs to be in compliance with the GAAP accounting standards. At any rate, I have not noticed any Chinese oil companies writing down their impaired assets ...

I find it fascinating that the three-year average cost/bbl barrel of oil equivalent, excluding acquisitions of proved reserves, spiked from $27.22 (2007) to $51.96 (2008), and yet oil companies were still able to extract record profits because of the disproportionately large increase in the price of oil during 2008. If the marginal costs of producing oil continue to increase by 35%/year, at some point that will erode oil companies' profits.

BTW, from The New Yorker

(http://www.newyorker.com/talk/financial/2009/06/22/090622ta_talk_surowiecki)

QuoteA study by James Hamilton, a macroeconomist at U.C.-San Diego, reached a startling conclusion: given the already weak state of the U.S. economy in 2007, the sharp increase in oil prices might have been enough, on its own, to tip the economy into recession, even without that year's blowup in the credit markets. It wasn't just that, as many people assume, higher gas prices functioned as a tax increase, taking money out of people's pockets. More important was the fact that four-dollar-a-gallon gasoline dramatically changed the way people spent their money. In particular, it killed demand for S.U.V.s and big cars; S.U.V. sales were down more than twenty-five per cent by the middle of last year. And, since these were the vehicles that American automakers relied on for most of their business, job cuts soon followed (a hundred and twenty-five thousand auto manufacturing jobs were lost between 2007 and 2008), with ripple effects for the entire economy. The price spike had other consequences, too; some have suggested that it magnified the housing bust by making long commutes to the overpriced exurbs less attractive. And this all created a classic "oil shock," like the one that hit the economy in the early nineteen-seventies.

Title: Re: Meltdown
Post by: BachQ on July 14, 2009, 02:45:36 PM

LA TIMES: Activists push ballot initiative to end state benefits for illegal immigrants and their U.S.-born children. The measure would end public benefits to illegal residents, challenge the citizenship of their U.S.-born children, cut welfare payments to those children and impose new birth certificate requirements. (http://www.latimes.com/news/local/la-me-illegal-immigration13-2009jul13,0,4982035.story)

Title: Re: Meltdown
Post by: BachQ on July 14, 2009, 02:46:34 PM

USA Today: Federal deficit tops record $1 trillion, intensifying fears about higher interest rates and inflation. (http://www.usatoday.com/news/washington/2009-07-13-deficit-record_N.htm)

Title: Re: Meltdown
Post by: Coopmv on July 14, 2009, 04:05:51 PM

Quote from: Dm on July 14, 2009, 02:45:36 PM
LA TIMES: Activists push ballot initiative to end state benefits for illegal immigrants and their U.S.-born children. The measure would end public benefits to illegal residents, challenge the citizenship of their U.S.-born children, cut welfare payments to those children and impose new birth certificate requirements.
(http://www.latimes.com/news/local/la-me-illegal-immigration13-2009jul13,0,4982035.story)

It is about time. The automatic qualification for welfare benefits for the illegals and automatic citizenship for children born of illegal immigrant parents have been the most powerful magnet that attracts more illegals into the US. This has to be stopped. No other countries in the world have such insane immigration policy.

Title: Re: Meltdown
Post by: BachQ on July 15, 2009, 02:41:56 PM

Business Week sale may fetch only $1

Business Week's advertising revenues fell by a third to $77.8m in the first half of 2009. The $1 for which OpenGate bought TV Guide "is probably the kind of deal that would be obtainable for Business Week", one banker said. Another banker said: "I think they'll end up giving it away." (http://www.ft.com/cms/s/0/bd68cdc6-6fdc-11de-b835-00144feabdc0.html?nclick_check=1)

Title: Re: Meltdown
Post by: Coopmv on July 15, 2009, 06:44:40 PM

Come this fall, we will know for sure if this latest move by the fed has turned out to be another disaster, though not on a scale of a Lehman bankruptcy, which reverberated around the world. Experts believe tens of thousands of retailers may go under because of the CIT bankruptcy, as few other credit sources are available in the current economic climate ... :(

Refusing bailout for CIT, gov't draws line in sand
Government draws line in sand on bailouts, refuses to rescue troubled lender CIT Group

By Daniel Wagner and Stevenson Jacobs, AP Business Writers
On Wednesday July 15, 2009, 9:30 pm EDT

WASHINGTON (AP) -- The Obama administration drew a line in the sand on financial bailouts Wednesday by denying emergency aid to CIT Group Inc., a struggling commercial lender on the brink of bankruptcy.

After days of round-the-clock talks with regulators about a possible government bailout, CIT said those negotiations had ceased. The company said its management and directors were "evaluating alternatives."

The decision not to save CIT is a defining moment for the Obama administration's financial rescue program, headed by Treasury Secretary Timothy Geithner. By withholding aid, the administration is betting that CIT's likely failure won't pose a critical risk to an economy weighed down by rising unemployment.

CIT, which had earlier received $2.3 billion of bailout money, is one of the nation's largest lenders to small and mid-size businesses. The company has warned that its failure could imperil about a million corporate borrowers -- from Dunkin' Donuts franchisees to retailer Dillards Inc.

The Bush administration paid a price for its decision not to save investment bank Lehman Brothers, which had eight times more assets than CIT. Lehman's collapse helped spark the financial crisis last fall.

Asked about CIT, a Treasury Department spokeswoman said in an e-mail that "even during periods of financial stress, we believe that there is a very high threshold for exceptional government assistance to individual companies."

With its assets deteriorating and dangerously little cash on hand, the news left CIT with few options outside of bankruptcy. A filing could come as early as Wednesday night, analysts said.

A bankruptcy filing would wipe out CIT's shareholders and the government's $2.3 billion stake. But CIT's clients would not automatically lose their lines of credit, longtime banking analyst Bert Ely said.

Still, with other lenders to retailers already under financial strain, many CIT clients may lose their financing options.

"The industry just won't be able to absorb the amount of volume," said Michael Cipriani, executive vice president of Rosenthal & Rosenthal Inc., a competitor of CIT that's considered healthy.

New York-based CIT was negotiating with officials from the Treasury, Federal Reserve and Federal Deposit Insurance Corp. for much of the week. FDIC Chairman Sheila Bair resisted lobbying by CIT and other regulators for her agency to come to the rescue.

An agreement on aid appeared close at midday, but trading of CIT's shares was halted Wednesday afternoon. CIT said late Wednesday that negotiations had stopped.

In the last 48 hours, creditors limited the company's access to cash, worried customers drew down their deposits at CIT's small retail bank and investors pushed its stock price to historic lows.

Officials became increasingly concerned about CIT's ability to right itself even with a short-term loan from Treasury or other federal aid, said two industry officials who spoke on condition of anonymity because they were not authorized to discuss the matter.

"I think it makes a bankruptcy filing a near certainty," Ely said. "It's quite possible they could file before trading on Thursday."

The company in April posted a larger first-quarter loss than expected and has seen funding options disappear as investors shy away from purchasing all but the safest forms of debt. The lender has $7.4 billion in debt coming due in the first quarter of 2010, plus other obligations.

A spokesman for the Fed declined to comment. A spokesman for the FDIC could not be reached for comment Wednesday evening.

Though a fraction of the size of big commercial banks, CIT's holdings are substantial. The company had $75.7 billion in assets as of March 31, according to a corporate filing.

Lehman Brothers, which collapsed after former Treasury Secretary Henry Paulson declined to save it, listed $639 billion in assets when it filed for bankruptcy Sept. 15.

The failure of Lehman helped spark the financial crisis. Paulson, serving under President George W. Bush, was lambasted for letting the company fold.

But nearly a year later, the government faces growing criticism over its policy of propping up companies -- including General Motors, Chrysler and large insurers -- that claimed to be systemically important.

"They must have realized if they were going to support CIT, there was no end, it was a bottomless pit and anyone could show up with any excuse" and demand a bailout, said Simon Johnson, a former chief economist with the International Monetary Fund, now a professor at the Massachusetts Institute of Technology's Sloan School of Management.

But the decision could come back to haunt the administration if CIT's failure proves devastating to the firm's many small business borrowers. Small businesses are considered crucial to economic recovery, employing about half of the private-sector work force.

"CIT may not be 'too big to fail,' but they are systemically important," said Scott Talbott, top lobbyist with the Financial Services Roundtable, which represents CIT and other big financial firms. "Many small businesses will be severely impacted by today's actions, and the effect could lengthen the economic crisis."

Investors reacted cautiously to the setback. U.S. stock futures on the Dow Jones industrial average and the Standard & Poor's 500 index dipped immediately after the news, though they quickly stabilized.

Shares of CIT added 26 cents, or more than 19 percent, to $1.61 Tuesday on hopes that the government would throw the company a financial lifeline. The price was $1.64 before trading was halted Wednesday.

President Barack Obama had been briefed on CIT's potential collapse, White House spokesman Robert Gibbs said earlier Wednesday. But Gibbs declined to discuss Obama's briefing and referred questions to the Treasury Department.

CIT said Saturday it retained the law firm Skadden Arps, a bankruptcy specialist, as an adviser.

Title: Re: Meltdown
Post by: Coopmv on July 15, 2009, 07:15:30 PM

DM, These idiots in CA are still refusing to face up to reality by drastically hacking away at all the wastes in the public sector - from overly generous welfare benefits to overpaid public employee pensions ...

Calif. tax officials: Legal pot would bring $1.4B

California tax officials estimate marijuana legalization would bring in nearly $1.4 billion
By Marcus Wohlsen, Associated Press Writer
On Wednesday July 15, 2009, 9:21 pm EDT

SAN FRANCISCO (AP) -- A bill to tax and regulate marijuana in California like alcohol would generate nearly $1.4 billion in revenue for the cash-strapped state, according to an official analysis released Wednesday by tax officials.

The State Board of Equalization report estimates marijuana retail sales would bring $990 million from a $50-per-ounce fee and $392 million in sales taxes.

The bill introduced by San Francisco Democratic Assemblyman Tom Ammiano in February would allow adults 21 and older to legally possess, grow and sell marijuana.

Ammiano has promoted the bill as a way to help bridge the state's $26.3 billion budget shortfall.

"It defies reason to propose closing parks and eliminating vital services for the poor while this potential revenue is available," Ammiano said in a statement.

The way the bill is written, the state could not begin collecting taxes until the federal government legalizes marijuana. A spokesman says Ammiano plans to amend the bill to remove that provision.

The legislation requires all revenue generated by the $50-per-ounce fee to be used for drug education and rehabilitation programs. The state's 9 percent sales tax would be applied to retail sales, while the fee would likely be charged at the wholesale level and built into the retail price.

The Equalization Board used law enforcement and academic studies to calculate that about 16 million ounces -- or 500 tons -- of marijuana are consumed in California each year.

Marijuana use would likely increase by about 30 percent once the law took effect because legalization would lead to falling prices, the board said.

Estimates of marijuana use, cultivation and sales are notoriously difficult to come by because of the drug's status as a black-market substance. Calculations by marijuana advocates and law enforcement officials often differ widely.

"That's one reason why we look at multiple reports from multiple sources -- so that no one agenda is considered to be the deciding or determining data," said board spokeswoman Anita Gore.

Advocates and opponents do agree that California is by far the country's top pot-producing state. Last year law enforcement agencies in California seized nearly 5.3 million plants.

If passed, Ammiano's bill could increase the tension between the state and the U.S. government over marijuana, which is banned outright under federal law. The two sides have clashed often since state voters passed a ballot measure in 1996 legalizing marijuana for medical use.

At the same time, some medical marijuana dispensary operators in the state have said they are less fearful of federal raids since U.S. Attorney General Eric Holder said the Justice Department would defer to state marijuana regulations.

Advocates pounced on the analysis as ammunition for their claim that the ban on marijuana is obsolete.

"We can't borrow or slash our way out of this deficit," said Stephen Gutwillig, California state director of the Drug Policy Alliance. "The legislature must consider innovative sources of new revenue, and marijuana should be at the top of that list."

Ammiano's bill is still in committee. Hearings on the legislation are expected this fall.

Also Wednesday, three Los Angeles City Council members proposed taxing medical marijuana to help close the city's budget gap.

Council members Janice Hahn, Dennis Zine and Bill Rosendahl backed a motion asking city finance officials to explore taxing the drug.

Hahn said that with more than 400 dispensaries operating in the city, the tax could generate significant revenue. The motion pointed out that a proposed tax increase on medical marijuana in Oakland, which has only four dispensaries, was projected to bring in more than $300,000 in 2010.

Meanwhile, marijuana supporters have taken the first official step toward putting the legalization question directly to California voters.

A trio of Northern California criminal defense attorneys on Wednesday submitted a pot legalization measure to the state attorney general's office, which must provide an official summary before supporters can begin gathering signatures.

About 443,000 signatures are necessary to place The Tax, Regulate and Control Cannabis Act on the November 2010 ballot. The measure would repeal all state and local laws that criminalize marijuana.

Title: Re: Meltdown
Post by: BachQ on July 16, 2009, 02:28:22 PM

Financial Times: Russian economy plummets 10.1%

link (http://www.ft.com/cms/s/0/6abb81a2-715f-11de-a821-00144feabdc0.html?nclick_check=1)

Title: Re: Meltdown
Post by: BachQ on July 16, 2009, 02:29:07 PM

July 16 (Bloomberg) -- US Commercial paper plunged 26% over the past 3 months, "its worst 3 months ever." (http://www.bloomberg.com/apps/news?pid=20601109&sid=ahK_pFZq4Wp4)

Title: Re: Meltdown
Post by: BachQ on July 16, 2009, 02:29:54 PM

SeekingAlpha: This isn't a recession. This is collapse.

link (http://seekingalpha.com/article/148526-washington-s-dilemma-this-isn-t-a-recession-it-s-a-collapse?source=email)

Title: Re: Meltdown
Post by: BachQ on July 16, 2009, 02:33:31 PM

U.S. foreclosures rise 15%, totaling a record 1.5M for 09, while house prices fall 18.1%.

"People are losing their jobs, seeing their income go down and are underwater on their mortgage," Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles, said in an interview. "It's a toxic combination." ... Clark County, Nevada, home to Las Vegas, had the highest rate in the nation with one in 13 households receiving a filing, according to RealtyTrac. "I don't see any turning of the tide," said Donald Haurin, an economics professor at Ohio State University in Columbus. "The effect of more foreclosures will be continued downward pressure on house prices, and lead to difficulty making mortgage payments that are continuing to reset."

link. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aHAbmgVoHjA4)

(http://www.foreclosurepulse.com/cfs-filesystemfile.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/mainblog/U.S.-Foreclosure-Heat-Map-_2D00_-June-%3Cbr%20/%3E2009.png)

link. (http://www.foreclosurepulse.com/blogs/mainblog/archive/2009/07/15/foreclosure-filings-in-the-millions-midway-through-2009.aspx)

Title: Re: Meltdown
Post by: Coopmv on July 16, 2009, 04:31:08 PM

Quote from: Dm on July 16, 2009, 02:29:07 PM
July 16 (Bloomberg) -- US Commercial paper plunged 26% over the past 3 months, "its worst 3 months ever."
(http://www.bloomberg.com/apps/news?pid=20601109&sid=ahK_pFZq4Wp4)

This is definitely another dose of bad news for the US economy ...

Title: Re: Meltdown
Post by: Coopmv on July 16, 2009, 04:38:29 PM

Quote from: Dm on July 16, 2009, 02:29:54 PM
SeekingAlpha: This isn't a recession. This is collapse.

link
(http://seekingalpha.com/article/148526-washington-s-dilemma-this-isn-t-a-recession-it-s-a-collapse?source=email)

Two well-known US economists, Gary Shilling and Robert Shiller have already been calling for a second stimulus. But the money can only come from printing more money, let the money printing press run 24/7. ???

Title: Re: Meltdown
Post by: Coopmv on July 16, 2009, 04:49:15 PM

So these are the steps China has been taking in order to achieve its objective of becoming the second nation in the world after the US to put men on the moon come 2017 ...

US gets conviction in 1st economic espionage trial
Man convicted in 1st US economic espionage trial; a key step to guarding secrets, experts say

By Amy Taxin, Associated Press Writer
On Thursday July 16, 2009, 8:14 pm EDT

SANTA ANA, Calif. (AP) -- A Chinese-born engineer's conviction in the United States' first economic espionage trial could be an important step to stop the flow of critical trade secrets to China, experts say.

A federal judge on Thursday found former Boeing Co. engineer Dongfan "Greg" Chung guilty of six counts of economic espionage and other charges for hoarding 300,000 pages of sensitive documents in his home, including information about the U.S. space shuttle and a booster rocket.

"The trust Boeing placed in Mr. Chung to safeguard its proprietary and trade secret information obviously meant very little to Mr. Chung," U.S. District Judge Cormac J. Carney wrote in his 31-page ruling. "He cast it aside to serve the PRC (People's Republic of China), which he proudly proclaimed as his `motherland.'"

Federal prosecutors accused the 73-year-old stress analyst of using his 30-year career at Boeing and Rockwell International to steal the documents. They said investigators found papers stacked throughout Chung's house that included sensitive information about a fueling system for a booster rocket -- documents that employees were ordered to lock away at the end of each day. They said Boeing invested $50 million in the technology over a five-year period.

Rick Fisher, a senior fellow with the International Assessment and Strategy Center, said the conviction -- and potentially lengthy prison sentence -- sends a message that U.S. officials won't let Beijing try to tap into the Chinese diaspora to procure military and security secrets.

"The Chinese communist government is seeking to divide the loyalties of Chinese-Americans," Fisher said. "By defending ourselves in this way, asserting our sovereignty, we are making clear to all those who would be turned by nationalist appeals from China's communist government that there is price to pay."

The judge convicted Chung of six counts of economic espionage, one count of acting as a foreign agent, one count of conspiracy and one count of lying to federal agents. He was acquitted of obstruction of justice.

Chung was taken into federal custody after the verdict. He could face more than 90 years in prison at his sentencing scheduled for Nov. 9, federal prosecutor Ivy Wang said.

"I hope that one of the messages that goes out is if someone is going to steal proprietary information and steal that information for the benefit of another country, they are going to be charged in this country and face very serious punishment for doing so," Wang said after the verdict.

Chung opted for a non-jury trial that ended June 24. During 10 days of proceedings, defense attorneys said Chung was a "pack rat" who hoarded documents at his house, but they insisted he was not a spy.

During the trial, Chung's lawyers argued that he may have violated Boeing policy by bringing the papers home, but he didn't break any laws by doing so, and the U.S. government couldn't prove he had given secret information to China.

In his ruling, the judge wrote that the notion that Chung was merely a pack rat was "ludicrous" and said the evidence showed that he had been passing information to Chinese officials as a spy.

Defense attorney Thomas Bienert said he planned to appeal.

"A big feature (of this case) is not about what China wanted Mr. Chung to do, but about what Mr. Chung was willing to do," Bienert said outside the courtroom. "There is no evidence that China used or benefited from anything in this case."

Chung had been free on $250,000 bail before the verdict. His attorneys asked the judge to let him remain with his family in Orange until sentencing, but the government said a man facing such a long sentence with close ties to China could easily flee.

The Economic Espionage Act was passed in 1996 to help the government crack down on the theft of information from private companies that contract with the government to develop U.S. space and military technologies. The legislation became a priority in the mid-1990s when the U.S. realized China and other countries were targeting private businesses as part of their spy strategy.

Since then, six economic espionage cases have settled before trial. In some of the cases, defendants were sentenced to just a year or two in prison. Another is set for trial in U.S. District Court in San Jose this year.

Steven Fink, president of Lexicon Communications Corp., a corporate crisis management firm, said prosecutors previously have tried cases under a different part of the 1996 act involving theft of trade secrets. He questioned why it took so long for the government to try someone on the economic espionage charges levied in the Chung case, saying he believes officials were too worried about ruffling diplomatic feathers.

"In the past there had been times when diplomacy has trumped national security," he said. "This (verdict) is a spit in the ocean unless it is a sign that the government is going to get aggressive in prosecuting these cases, because there are a lot of them out there."

A message seeking comment was left for officials at the Chinese consulate in Los Angeles.

The government believes Chung began spying for the Chinese in the late 1970s, a few years after he became a naturalized U.S. citizen and was hired by Rockwell International.

Chung worked for Rockwell until it was bought by Boeing in 1996. He stayed with the company until he was laid off in 2002 but brought back a year later as a consultant. He was fired when the FBI began its investigation in 2006.

Dan Beck, a spokesman for Chicago-based Boeing, welcomed the ruling and said the company was committed to working with the government to help prevent the theft and misuse of data.

Prosecutors said they discovered Chung's activities while investigating another suspected Chinese spy, Chi Mak. Mak was convicted in 2007 of conspiracy to export U.S. defense technology to China and sentenced to more than 24 years in prison.

Mak was not charged under the Economic Espionage Act.

Title: Re: Meltdown
Post by: Coopmv on July 16, 2009, 05:02:18 PM

Quote from: Dm on July 15, 2009, 02:41:56 PM
Business Week sale may fetch only $1

Business Week's advertising revenues fell by a third to $77.8m in the first half of 2009. The $1 for which OpenGate bought TV Guide "is probably the kind of deal that would be obtainable for Business Week", one banker said. Another banker said: "I think they'll end up giving it away."
(http://www.ft.com/cms/s/0/bd68cdc6-6fdc-11de-b835-00144feabdc0.html?nclick_check=1)

The hatchet man cometh. This surely is unwelcome news to New York City after all those job losses in the financial industry over the past 18 months ...

McGraw-Hill cuts 550 jobs, 2.5 pct of work force
McGraw-Hill cuts 550 jobs, or 2.5 pct of its work force, as downturn cuts into revenues

On Thursday July 16, 2009, 12:52 pm EDT

NEW YORK (AP) -- McGraw-Hill Cos., hit by declines in its education, financial services and media properties, said Thursday it has cut 550 jobs, or roughly 2.5 percent of its work force.

The New York company, which publishes textbooks and owns BusinessWeek magazine and the credit-ratings agency Standard & Poor's, said it will take a $24.3 million pretax charge for severance costs in the second quarter.

Accounting for taxes and lower-than-expected costs from previous cutbacks, the charge will amount to about 3 cents per share.

McGraw-Hill said the deepest cutbacks were in the education unit, which lost 340 positions, followed by information and media with 125 and financial services with 85.

The recession has cut across a broad swath of the company's businesses. McGraw-Hill reported a 22 percent drop in first quarter profit in April.

Revenue from the education and financial services units fell more than 5 percent year-over-year. Information and media, including BusinessWeek and J.D. Power and Associates, saw revenue slide 7.4 percent.

This week the company signaled that it may seek a buyer for BusinessWeek, which is facing an industrywide crises brought on by the shift of advertisers to the Internet on top of a severe recession.

McGraw-Hill reports earnings later this month.

Its shares fell 44 cents, or 1.4 percent, to $31.64 in midday trading Thursday.

Title: Re: Meltdown
Post by: karlhenning on July 17, 2009, 04:35:07 AM

QuoteBank of America and Citigroup this morning became the latest megabanks to report large profits in the second quarter, even as financial analysts cautioned that the results conceal the extent of ongoing problems in the financial industry [...]

Bank of America posted earnings of $3.22 billion for the second quarter, or 33 cents a share. That was down from $3.41 billion, or 72 cents a share, during the same period last year, but represented a large turnaround from the bank's autumn struggles.

[ complete article (http://www.washingtonpost.com/wp-dyn/content/article/2009/07/17/AR2009071700885.html) ]

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 05:10:15 AM

Quote from: k a rl h e nn i ng on July 17, 2009, 04:35:07 AM
[ complete article (http://www.washingtonpost.com/wp-dyn/content/article/2009/07/17/AR2009071700885.html) ]

Most of the profits made by BOA and Citi probably came from trading rather than from traditional banking, credit cards, commercial and residential mortgage lending, which have remained seriously troubled ...

Title: Re: Meltdown
Post by: karlhenning on July 17, 2009, 05:11:10 AM

Aye.

Title: Re: Meltdown
Post by: BachQ on July 17, 2009, 05:13:57 AM

What's wrong with this picture?

Henry Blodgett: Remind Us Again: Where Is The Money We're Borrowing Going To Come From?

(http://static.10gen.com/businessinsider.com/~~/f?id=4a5b314e4b543767002b5224)

"Bottom line? There is simply not enough available capital under current conditions to do it all. Something has to give. More household savings? More foreign investment (flight to safety, as the rest of the world looks even worse)? Reduced corporate borrowing and thus less GDP growth? Higher rates to attract more foreign and US investment?" (http://www.businessinsider.com/henry-blodget-remind-us-againwhere-is-the-money-were-borrowing-going-to-come-from-2009-7)

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 05:18:39 AM

Quote from: Dm on July 17, 2009, 05:13:57 AM
What's wrong with this picture?

Henry Blodgett: Remind Us Again: Where Is The Money We're Borrowing Going To Come From?

(http://static.10gen.com/businessinsider.com/~~/f?id=4a5b314e4b543767002b5224)

"Bottom line? There is simply not enough available capital under current conditions to do it all. Something has to give. More household savings? More foreign investment (flight to safety, as the rest of the world looks even worse)? Reduced corporate borrowing and thus less GDP growth? Higher rates to attract more foreign and US investment?"
(http://www.businessinsider.com/henry-blodget-remind-us-againwhere-is-the-money-were-borrowing-going-to-come-from-2009-7)

The only solution for the US is to keep more of the money at home, buy a lot less from the Chinese and the Arabs, though importing less oil is going to be difficult if and when the economy rebounds. The sad reality is there is no money for the second stimulus ...

Title: Re: Meltdown
Post by: BachQ on July 17, 2009, 07:55:36 AM

Quote from: Coopmv on July 17, 2009, 05:18:39 AM
The only solution for the US is to keep more of the money at home, buy a lot less from the Chinese and the Arabs, though importing less oil is going to be difficult if and when the economy rebounds. The sad reality is there is no money for the second stimulus ...

Yeah, Coop, there is no money for a second stimulus. Much more ominous: all of this debt will turn lethal once interest rates increase. Across the pond, Ireland is now paying 2% over what Germany pays ... that's gotta hurt when you're borrowing €400m a week to stay afloat. Ireland's Board chairman Colm McCarthy warned yesterday that "Even after [last year's corrective measures by the Irish Government], we're going to borrow through the balance of this year at the rate of €400m a week. That's what we've been borrowing in 2009 . . . and we've been borrowing it at a penalty interest. Ireland is now paying the highest margin over Germany of any Eurozone country, recently we've been paying 220 basis points, which is two and a bit percent more than Germany on 10-year bonds. A couple of years ago we were paying the same as Germany on 10-year bonds. The penalty interest rate that we're now paying is bigger than anybody else's." (http://www.independent.ie/national-news/were-now-borrowing-8364400m--a-week-something-has-to-give-1826445.html)

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 08:03:10 AM

Quote from: Dm on July 17, 2009, 07:55:36 AM

Yeah, Coop, there is no money for a second stimulus. Much more ominous: all of this debt will turn lethal once interest rates increase. Across the pond, Ireland is now paying 2% over what Germany pays ... that's gotta hurt when you're borrowing €400m a week to stay afloat. Ireland's Board chairman Colm McCarthy warned yesterday that "Even after [last year's corrective measures by the Irish Government], we're going to borrow through the balance of this year at the rate of €400m a week. That's what we've been borrowing in 2009 . . . and we've been borrowing it at a penalty interest. Ireland is now paying the highest margin over Germany of any Eurozone country, recently we've been paying 220 basis points, which is two and a bit percent more than Germany on 10-year bonds. A couple of years ago we were paying the same as Germany on 10-year bonds. The penalty interest rate that we're now paying is bigger than anybody else's." (http://www.independent.ie/national-news/were-now-borrowing-8364400m--a-week-something-has-to-give-1826445.html)

It was not even so long ago when Ireland was hailed as the miracle economy in western Europe as many big US companies such as INTEL, DELL and MetLife were either building factories or claims processing/call centers over there because of an educated and English-speaking workforce available at very reasonable labor costs. How has Ireland become an economic basket case in such a short time? ???

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 08:20:48 AM

It is a foregone conclusion that the US unemployment will top 10 pct. The question is really high much higher than 10 pct. Will it top 11 pct, 12 pct or even higher even as the REAL umemployment may be actually closer to 20%.

US: Unemployment tops 10 pct in 15 states in June

US: Unemployment tops 10 pct in 15 states in June; Michigan at 15.2 percent, highest since '84
By Jeannine Aversa, AP Economics Writer
On Friday July 17, 2009, 11:51 am EDT

WASHINGTON (AP) -- Unemployment topped 10 percent in 15 states and the District of Columbia last month, according to federal data released Friday. The rate in Michigan surpassed 15 percent, the first time any state hit that mark since 1984.

The Federal Reserve this week projected that the national unemployment rate, currently at a 26-year high of 9.5 percent, will pass 10 percent by the end of the year. Most Fed policymakers said it could take "five or six years" for the economy and the labor market to get back on a path of long-term health. To get there, consumers must return to a regular spending groove and housing prices need to start rising again.

Home to America's struggling auto makers, Michigan has been clobbered by lost factory jobs. Its jobless rate of 15.2 percent in June was the highest in the U.S.

Still, the Labor Department said it's the first time in 25 years that any state has suffered an unemployment rate of at least 15 percent. In 1984, it was West Virginia.

The state unemployment report underscores the damage that the longest recession since World War II has inflicted on companies, workers and communities.

The other 14 states where unemployment topped 10 percent last month were: Alabama, California, Florida, Georgia, Illinois, Indiana, Louisiana, Nevada, North Carolina, Ohio, Oregon, Rhode Island, South Carolina and Tennessee.

While Michigan's rate was the highest in the U.S. in June, the record-high for the state was 16.9 percent in November 1982.

Title: Re: Meltdown
Post by: BachQ on July 17, 2009, 09:45:26 AM

Good find, Coop.

Quote from: Coopmv on July 17, 2009, 08:20:48 AM
It is a foregone conclusion that the US unemployment will top 10 pct. The question is really high much higher than 10 pct. Will it top 11 pct, 12 pct or even higher even as the REAL umemployment may be actually closer to 20%.

US: Unemployment tops 10 pct in 15 states in June

US: Unemployment tops 10 pct in 15 states in June; Michigan at 15.2 percent, highest since '84
By Jeannine Aversa, AP Economics Writer
On Friday July 17, 2009, 11:51 am EDT

WASHINGTON (AP) -- Unemployment topped 10 percent in 15 states and the District of Columbia last month, according to federal data released Friday. The rate in Michigan surpassed 15 percent, the first time any state hit that mark since 1984.

The Federal Reserve this week projected that the national unemployment rate, currently at a 26-year high of 9.5 percent, will pass 10 percent by the end of the year. Most Fed policymakers said it could take "five or six years" for the economy and the labor market to get back on a path of long-term health. To get there, consumers must return to a regular spending groove and housing prices need to start rising again.

Home to America's struggling auto makers, Michigan has been clobbered by lost factory jobs. Its jobless rate of 15.2 percent in June was the highest in the U.S.

Still, the Labor Department said it's the first time in 25 years that any state has suffered an unemployment rate of at least 15 percent. In 1984, it was West Virginia.

The state unemployment report underscores the damage that the longest recession since World War II has inflicted on companies, workers and communities.

The other 14 states where unemployment topped 10 percent last month were: Alabama, California, Florida, Georgia, Illinois, Indiana, Louisiana, Nevada, North Carolina, Ohio, Oregon, Rhode Island, South Carolina and Tennessee.

While Michigan's rate was the highest in the U.S. in June, the record-high for the state was 16.9 percent in November 1982.

At 15.2%, Michigan's unemployment has almost doubled in one year (up from 8.1% one yr ago).

Coop, you mention the "real" unemployment numbers. The NYT has this interactive map (http://www.nytimes.com/interactive/2009/07/15/business/economy/20090715-leonhardt-graphic.html) that shows the "real" unemployment. "Under a broader definition of joblessness, some states have rates higher than 20 percent. This rate includes part-time workers who want to work full time, as well some people who want to work but have not looked for a job in the last four weeks."

link to interactive map (http://www.nytimes.com/interactive/2009/07/15/business/economy/20090715-leonhardt-graphic.html)

For example, Calif's actual unemployment rate is at least 20%. Ariz. is 19%, and NV is 18%. Oregon is 23%. It seems that in order to compare current unemployment rates with the Great Depression I, it's necessary to compare apples to apples, and use the broader unemployment definition (U6).

Title: Re: Meltdown
Post by: BachQ on July 17, 2009, 10:22:14 AM

Quote from: Coopmv on July 15, 2009, 07:15:30 PM
DM, These idiots in CA are still refusing to face up to reality by drastically hacking away at all the wastes in the public sector - from overly generous welfare benefits to overpaid public employee pensions ...

Calif. tax officials: Legal pot would bring $1.4B

2nd furlough begins as Calif. budget talks stall -- "Give Californians and the world a pleasant surprise for once: Balance the budget now, and get back to the work of getting our state back to work," Treasurer Bill Lockyer said in a statement.

link (http://news.yahoo.com/s/ap/20090717/ap_on_re_us/us_california_budget)

Budget mess makes California vulnerable to crippling credit downgrade, official warns -- "With every passing day, the state's credit rating moves closer and closer to the junk pile," Treasurer Bill Lockyer said in a prepared statement. "If our credit rating sinks to junk status, the state will find the door to the infrastructure bond market locked shut."

link (http://www.latimes.com/news/local/la-me-california-budget17-2009jul17,0,4871614.story)

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 12:40:13 PM

Quote from: Dm on July 17, 2009, 10:22:14 AM
2nd furlough begins as Calif. budget talks stall -- "Give Californians and the world a pleasant surprise for once: Balance the budget now, and get back to the work of getting our state back to work," Treasurer Bill Lockyer said in a statement.

link (http://news.yahoo.com/s/ap/20090717/ap_on_re_us/us_california_budget)

Budget mess makes California vulnerable to crippling credit downgrade, official warns -- "With every passing day, the state's credit rating moves closer and closer to the junk pile," Treasurer Bill Lockyer said in a prepared statement. "If our credit rating sinks to junk status, the state will find the door to the infrastructure bond market locked shut."

link
(http://www.latimes.com/news/local/la-me-california-budget17-2009jul17,0,4871614.story)

I think the Californian politicians have not quite reached the staring-into-the-abyss moments ... ::)

Title: Re: Meltdown
Post by: Lethevich on July 17, 2009, 12:46:44 PM

Quote from: Coopmv on July 17, 2009, 12:40:13 PM
I think the Californian politicians have not quite reached the staring-into-the-abyss moments ... ::)

How's this for an abyssal moment: if they don't agree on something next time, they're all fired 0:) Sucks that the president probably can't legally (metaphorically) bang their heads together, or change such an uneffective system.

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 12:55:46 PM

Quote from: Lethe on July 17, 2009, 12:46:44 PM
How's this for an abyssal moment: if they don't agree on something next time, they're all fired 0:) Sucks that the president probably can't legally (metaphorically) bang their heads together, or change such an uneffective system.

I am not sure if the president has the constitutional authority to forcibly remove some state politicians ...

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 01:50:13 PM

So some Californians still have not accepted the reality that the cutback for state funding for the UC (Univerrity of CA) system may be permanent. They want the school system to be repaid once the CA fiscal condition has gotten better. In short, back to business as usual. There is no hope for CA.

SACRAMENTO, Calif. (AP) -- Negotiations over closing California's $26.3 billion budget deficit appeared stuck Friday, as government offices closed for the second time this month and a health program for low-income children stopped accepting new applicants.

Gov. Arnold Schwarzenegger and the Legislature's four top lawmakers had no meetings scheduled after a disagreement over repaying billions of dollars to schools halted talks earlier in the week.

With little apparent action in the Capitol, the effects of California's fiscal crisis were being felt throughout the state.

Most state agencies, including the Department of Motor Vehicles, were closed Friday as part of the three-day-a-month furloughs ordered by Gov. Arnold Schwarzenegger. Prisons, state hospitals, highway patrol and firefighting agencies remained staffed.

Healthy Families, which offers reduced-cost medical coverage to low-income children, began putting new applicants on a waiting list because of a projected shortfall of at least $90 million. It was the first time the program had done so since it was started 12 years ago.

Advocates fear as many as 570,000 children would be denied access to health coverage, but program officials pegged the figure around 400,000 if the freeze were imposed for an entire year.

The freeze was imposed to prevent the state from having to remove children from coverage if lawmakers approve deep funding cuts, said Ginny Puddefoot, deputy director for health policy at the Managed Risk Medical Insurance Board, which oversees the Healthy Families program.

Even with the enrollment freeze, families continued applying.

"I understand there's no money, but the kids, they deserve to have some health insurance, some coverage. We don't have enough income to pay for their medical bills," 26-year-old Pa Lor said as she signed up for the waiting list at a Sacramento County Healthy Families contract provider.

Puddefoot said the recession was driving up need as parents lose jobs and struggle to find new ones, especially ones that provide health insurance.

The U.S. Department of Labor reported Friday that California's unemployment rate remained steady at 11.6 percent from May to June, the highest in modern record-keeping.

Not all developments Friday were grim. Citibank announced it was extending the period it will accept IOUs, which the state began issuing this month to preserve cash. That will provide temporary relief for vendors who have been issued IOUs instead of payments for providing staffing, cleaning office supplies and other services to the state.

Citibank said it would extend the deadline to July 24 after previously saying it planned to stop accepting the state's registered warrants.

"We are deeply disappointed that the California budget situation remains unresolved," Rebecca Macieira-Kaufmann, president of Citibank California, said in a statement.

Bank of the West and some credit unions have said they will continue to accept IOUs but JPMorgan Chase & Co., Bank of America Corp., Wells Fargo & Co. and several other major banks have already stopped honoring California's warrants.

Meanwhile, local government officials from around the state were meeting in Sacramento to discuss Schwarzenegger's proposals to take billions of dollars from local treasuries. They also were debating whether a constitutional convention is needed to change the state's governance structure.

As California's bond rating sinks, threatening the state's ability to fund infrastructure projects, budget negotiations hit a snag over education funding.

Schwarzenegger disagrees with the Legislature's two Democratic leaders over whether the state should guarantee that schools will always get back what is cut during lean budget years.

Both parties agree schools should be repaid about $11 billion from recent budget cuts, but Democrats want a written guarantee enshrined in the state's complex education funding formula that schools will always get such repayments.

The administration believes such a change would require voter approval.

Education advocates prefer to make repayment permanent because they feel the governor hasn't always made good on his past promises. In 2005, the administration agreed to repay $2.9 billion to public education after the state's largest teachers union accused Schwarzenegger in a lawsuit of taking school funding and refusing to pay it back.

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 02:42:24 PM

According to MINXIN PEI (http://www.carnegieendowment.org/experts/index.cfm?fa=expert_view&expert_id=27), who was originally from China ...

Think Again: Asia's Rise

Don't believe the hype about the decline of America and the dawn of a new Asian age. It will be many decades before China, India, and the rest of the region take over the world, if they ever do.

BY MINXIN PEI | JUNE 22, 2009

"Power Is Shifting from West to East."

Not really. Dine on a steady diet of books like The New Asian Hemisphere: The Irresistible Shift of Global Power to the East or When China Rules the World, and it's easy to think that the future belongs to Asia. As one prominent herald of the region's rise put it, "We are entering a new era of world history: the end of Western domination and the arrival of the Asian century."

Sustained, rapid economic growth since World War ii has undeniably boosted the region's economic output and military capabilities. But it's a gross exaggeration to say that Asia will emerge as the world's predominant power player. At most, Asia's rise will lead to the arrival of a multi-polar world, not another unipolar one.

Asia is nowhere near closing its economic and military gap with the West. The region produces roughly 30 percent of global economic output, but because of its huge population, its per capita gdp is only $5,800, compared with $48,000 in the United States. Asian countries are furiously upgrading their militaries, but their combined military spending in 2008 was still only a third that of the United States. Even at current torrid rates of growth, it will take the average Asian 77 years to reach the income of the average American. The Chinese need 47 years. For Indians, the figure is 123 years. And Asia's combined military budget won't equal that of the United States for 72 years.

Read the rest of this article here ... (http://bx.businessweek.com/china/view?url=http%3A%2F%2Fwww.foreignpolicy.com%2Farticles%2F2009%2F06%2F22%2Fthink_again_asias_rise%3Fprint%3Dyes%26hidecomments%3Dyes%26page%3Dfull)

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 03:06:56 PM

DM, Here is a good one ...

Title: Re: Meltdown
Post by: Coopmv on July 17, 2009, 09:23:13 PM

Quote from: Coopmv on July 17, 2009, 02:42:24 PM
According to MINXIN PEI (http://www.carnegieendowment.org/experts/index.cfm?fa=expert_view&expert_id=27), who was originally from China ...

Think Again: Asia's Rise

Don't believe the hype about the decline of America and the dawn of a new Asian age. It will be many decades before China, India, and the rest of the region take over the world, if they ever do.

BY MINXIN PEI | JUNE 22, 2009

"Power Is Shifting from West to East."

Not really. Dine on a steady diet of books like The New Asian Hemisphere: The Irresistible Shift of Global Power to the East or When China Rules the World, and it's easy to think that the future belongs to Asia. As one prominent herald of the region's rise put it, "We are entering a new era of world history: the end of Western domination and the arrival of the Asian century."

Sustained, rapid economic growth since World War ii has undeniably boosted the region's economic output and military capabilities. But it's a gross exaggeration to say that Asia will emerge as the world's predominant power player. At most, Asia's rise will lead to the arrival of a multi-polar world, not another unipolar one.

Asia is nowhere near closing its economic and military gap with the West. The region produces roughly 30 percent of global economic output, but because of its huge population, its per capita gdp is only $5,800, compared with $48,000 in the United States. Asian countries are furiously upgrading their militaries, but their combined military spending in 2008 was still only a third that of the United States. Even at current torrid rates of growth, it will take the average Asian 77 years to reach the income of the average American. The Chinese need 47 years. For Indians, the figure is 123 years. And Asia's combined military budget won't equal that of the United States for 72 years.

Read the rest of this article here ... (http://bx.businessweek.com/china/view?url=http%3A%2F%2Fwww.foreignpolicy.com%2Farticles%2F2009%2F06%2F22%2Fthink_again_asias_rise%3Fprint%3Dyes%26hidecomments%3Dyes%26page%3Dfull)

DM,

Here is a related article by the same author (http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=18110).

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on July 18, 2009, 03:13:31 AM

Quote from: Coopmv on July 17, 2009, 02:42:24 PM
According to MINXIN PEI (http://www.carnegieendowment.org/experts/index.cfm?fa=expert_view&expert_id=27), who was originally from China ...

Think Again: Asia's Rise

Don't believe the hype about the decline of America and the dawn of a new Asian age. It will be many decades before China, India, and the rest of the region take over the world, if they ever do. [yadda yadda yadda, etc.]

I've been hearing about the coming "Pacific Century" since the 1980s. It's still not here, although Asia has indeed gotten more important. But that's only natural, and the idea of Chinese or Indian "world takeover" has never made sense to me.

Remember the years around 1990? The conventional wisdom was that 1) Japan's economy would continue to expand until it bumped the US from 1st position, thereby facilitating a Japanese economic takeover of the world (or at least Asia); 2) the re-unified Germany would become a hegemonic force within Europe, able to push that continent around at will. Neither scenario happened.

Title: Re: Meltdown
Post by: Coopmv on July 18, 2009, 04:55:21 AM

Quote from: Spitvalve on July 18, 2009, 03:13:31 AM
I've been hearing about the coming "Pacific Century" since the 1980s. It's still not here, although Asia has indeed gotten more important. But that's only natural, and the idea of Chinese or Indian "world takeover" has never made sense to me.

Remember the years around 1990? The conventional wisdom was that 1) Japan's economy would continue to expand until it bumped the US from 1st position, thereby facilitating a Japanese economic takeover of the world (or at least Asia); 2) the re-unified Germany would become a hegemonic force within Europe, able to push that continent around at will. Neither scenario happened.

Spitvalve. I remember this all too well, being old enough to understand economic and geopolitical issues back in the 1980's where the Soviet Union was in Afghanistan and Japan was flying skyhigh economically. Then there was no end in sight to the Japanese trade surplus with the US and they bought Rockefeller Center and other prized US properties. Japan was supposed to be the dominant economic power in the 1990's and beyond and that did not happen. Now the same prognosticators are singing unwarranted praises on China. As these two articles rightly point out, the malaise the US finds itself in now is caused by having to fight two wars and to get itself out of the longest recession since the 1930, all simultaneously. These shallow articles never did any in-depth analyses on the systemic corruption and deep-seated problems China has, which that country has been papering over since that is easy for a dictatorial regime to do (remember how effective the Soviet Union was in this game). The deck of cards will come tumbling down at some point. It is just a matter of when and what event would trigger the collapse ...

Title: Re: Meltdown
Post by: BachQ on July 18, 2009, 05:35:27 AM

As to the ongoing debate of inflation vs. deflation as the destiny of the US and other Western economies, here's another economist to add to the "deflation" camp.

Mike Whitney: The Deflating Economy

... Regrettably, when the stimulus runs out, the economy will slide back into negative territory. That's because the US consumer has crossed an important threshold and no longer has the ability to drive the economy through debt-fueled consumption. The data indicates a critical change in consumer behavior which portends a shift away from the current model for economic growth. It's a whole new ballgame. From the mid-1980s to 2007, the ratio of debt-to-GDP rocketed from 165% to to over 350%; more than doubling in that same period.

[--snip--]

U.S. household leverage, as measured by the ratio of debt to personal disposable income, increased modestly from 55% in 1960 to 65% by the mid-1980s. Then, over the next two decades, leverage proceeded to more than double, reaching an all-time high of 133% in 2007.

[--snip--]

The US consumer, long considered an inexhaustible resource, is tapped out. Without job security and access to easy credit; consumer spending will slow, prices will fall, demand will flag and the economy will tank. There won't be a recovery, because pre-crisis levels of consumption will not return; that much is certain. Sustainable growth requires higher wages and longer working hours; neither of which are likely anytime soon. The economy is headed for a protracted slowdown with persistent high unemployment and growing social unrest. The future is deflation.

---LINK--- (http://www.counterpunch.org/whitney07132009.html)

Title: Re: Meltdown
Post by: BachQ on July 18, 2009, 06:14:41 AM

It doesn't take a rocket scientist to predict the inevitable plunge in tax revenues.

State Tax Revenues at Record Low, Rockefeller Institute Finds

The anemic economy decimated state tax collections during the first three months of the year, according to a report released Friday by the Rockefeller Institute of Government. The drop in revenues was the steepest in the 46 years that quarterly data has been available.

The blow to state coffers, which the report said appeared to worsen in the second quarter of the year, reflects the gravity of the recession and suggests the extent to which many states will probably have to resort to more spending cuts or tax increases to balance their budgets.

Over all, the report found that state tax collections dropped 11.7 percent in the first three months of 2009, compared with the same period last year. After adjusting for inflation, new changes in tax rates and other anomalies, the report found that tax revenues had declined in 47 of the 50 states in the quarter. All the major sources of state tax revenue — sales taxes, personal income taxes and corporate income taxes — took serious blows, the report found.

–continued– (link) – (http://www.nytimes.com/2009/07/18/us/18states.html)

Title: Re: Meltdown
Post by: Coopmv on July 18, 2009, 07:22:43 AM

Quote from: Dm on July 18, 2009, 05:35:27 AM
As to the ongoing debate of inflation vs. deflation as the destiny of the US and other Western economies, here's another economist to add to the "deflation" camp.

Mike Whitney: The Deflating Economy

... Regrettably, when the stimulus runs out, the economy will slide back into negative territory. That's because the US consumer has crossed an important threshold and no longer has the ability to drive the economy through debt-fueled consumption. The data indicates a critical change in consumer behavior which portends a shift away from the current model for economic growth. It's a whole new ballgame. From the mid-1980s to 2007, the ratio of debt-to-GDP rocketed from 165% to to over 350%; more than doubling in that same period.

[--snip--]

U.S. household leverage, as measured by the ratio of debt to personal disposable income, increased modestly from 55% in 1960 to 65% by the mid-1980s. Then, over the next two decades, leverage proceeded to more than double, reaching an all-time high of 133% in 2007.

[--snip--]

The US consumer, long considered an inexhaustible resource, is tapped out. Without job security and access to easy credit; consumer spending will slow, prices will fall, demand will flag and the economy will tank. There won't be a recovery, because pre-crisis levels of consumption will not return; that much is certain. Sustainable growth requires higher wages and longer working hours; neither of which are likely anytime soon. The economy is headed for a protracted slowdown with persistent high unemployment and growing social unrest. The future is deflation.

---LINK---
(http://www.counterpunch.org/whitney07132009.html)

The debt based economic model the US has been following for the past 25 years has been a disaster. This same bankrupt model was also responsible for the relentless outsourcing of jobs, with manufacturing taking most of the brunt. Right now, US consumers are all maxed out on their credit cards and the home equities have evaporated as well. Now with the total lack of job security, I just do not see how the consumption driven economy will come back to life anytime soon ...

Title: Re: Meltdown
Post by: BachQ on July 18, 2009, 09:57:47 AM

Quote from: Coopmv on July 18, 2009, 07:22:43 AM
The debt based economic model the US has been following for the past 25 years has been a disaster. This same bankrupt model was also responsible for the relentless outsourcing of jobs, with manufacturing taking most of the brunt. Right now, US consumers are all maxed out on their credit cards and the home equities have evaporated as well.

Coop, did you write this article (below)? He goes off onto an anti-GoldmanSachs tangent, but otherwise this was written by YOU! :D

Dr. Paul Craig Roberts -- What Economy? There's nothing left! (http://gata.org/node/7601)

The U.S. manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical "New Economy."

The "New Economy" was based on services. Its artificial life was fed by the Federal Reserve's artificially low interest rates, which produced a real estate bubble, and by "free market" financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products.

The real economy was traded away for a make-believe economy. When the make-believe economy collapsed, Americans' wealth in their real estate, pensions, and savings collapsed dramatically while their jobs disappeared.

The debt economy caused Americans to leverage their assets. They refinanced their homes and spent the equity. They maxed out numerous credit cards. They worked as many jobs as they could find. Debt expansion and multiple family incomes kept the economy going.

And now suddenly Americans can't borrow in order to spend. They are over their heads in debt. Jobs are disappearing. America's consumer economy, approximately 70 percent of GDP, is dead. Those Americans who still have jobs are saving against the prospect of job loss. Millions are homeless. Some have moved in with family and friends; others are living in tent cities.

Meanwhile the U.S. government's budget deficit has jumped from $455 billion in 2008 to $2,000 billion this year, with another $2,000 billion on the books for 2010. And President Obama has intensified America's expensive war of aggression in Afghanistan and initiated a new war in Pakistan.

There is no way for these deficits to be financed except by printing money or by further collapse in stock markets that would drive people out of equity into bonds.

The US government's budget is 50 percent in the red. That means half of every dollar the federal government spends must be borrowed or printed. Because of the worldwide debacle caused by Wall Street's financial gangsterism, the world needs its own money and hasn't $2 trillion annually to lend to Washington.

As dollars are printed, the growing supply adds to the pressure on the dollar's role as reserve currency. Already America's largest creditor, China, is admonishing Washington to protect China's investment in U.S. debt and lobbying for a new reserve currency to replace the dollar before it collapses. According to various reports, China is spending down its holdings of U.S. dollars by acquiring gold and stocks of raw materials and energy.

–snip–

The worst of the economic crisis has not yet hit. I don't mean the rest of the real estate crisis that is waiting in the wings. Home prices will fall further when the foreclosed properties currently held off the market are dumped. Store and office closings are diminishing the ability of owners of shopping malls and office buildings to make their mortgage payments. Commercial real estate loans were also securitized and turned into derivatives.

The real crisis awaits us. It is the crisis of high unemployment, of stagnant and declining real wages confronted with rising prices from the printing of money to pay the government's bills and from the dollar's loss of exchange value. Suddenly Wal-Mart prices will look like Nieman Marcus prices.

Retirees dependent on state pension systems, which cannot print money, might not be paid, or might be paid with IOUs. They will not even have depreciating money with which to try to pay their bills. Desperate tax authorities will squeeze the remaining life out of the middle class.

– continued: What Economy? There's nothing left! (http://gata.org/node/7601) —

Title: Re: Meltdown
Post by: BachQ on July 18, 2009, 10:02:13 AM

Telegraph: US lurching towards 'debt explosion' with long-term interest rates on course to double

The US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country's ability to pay its debts and potentially plunging it into another recession, according to a study by the US's own central bank

(http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5754447/US-lurching-towards-debt-explosion-with-long-term-interest-rates-on-course-to-double.html)

QuoteThe impact would be devastating by making it punitively expensive to finance national borrowings and leading to what Tim Congdon, founder of Lombard Street Research, called a "debt explosion". Mr Laubach's study has implications for the UK, too, as public debt is soaring. A US crisis would have implications for the rest of the world, in any case.

*** The study is damning because Mr Laubach was the Fed's economist at the time, going on to become its senior economist between 2005 and 2008, when he stepped down. As a result, the doubling in rates is the US central bank's own prediction. Mr Congdon said the study illustrated the "horrifying" consequences for leading western economies of bailing out their banks and attempting to stimulate markets by cutting taxes and boosting public spending. He said the markets had failed to digest fully the scale of fiscal largesse and said "current gilt yields [public debt] are extraordinary low given the size of deficits".

Should the cost of raising or refinancing public debt in the markets double, "the debt could just explode", he said, adding that it would come to a head in "five to 10 years".

Title: Re: Meltdown
Post by: BachQ on July 18, 2009, 10:03:32 AM

LONDON - Oil and gas drilling in British waters fell by more than half in the second quarter, business advisory group Deloitte said, arguing Britain must take urgent steps to avert a sharp decline in production. (http://www.calgaryherald.com/business/North+drilling+falls+half/1775508/story.html)

Title: Re: Meltdown
Post by: Coopmv on July 18, 2009, 10:10:20 AM

Quote from: Dm on July 18, 2009, 09:57:47 AM
Coop, did you write this article (below)? He goes off onto an anti-GoldmanSachs tangent, but otherwise this was written by YOU! :D

Dr. Paul Craig Roberts -- What Economy? There's nothing left! (http://gata.org/node/7601)

The U.S. manufacturing economy was lost to offshoring and free trade ideology. It was replaced by a mythical "New Economy."

The "New Economy" was based on services. Its artificial life was fed by the Federal Reserve's artificially low interest rates, which produced a real estate bubble, and by "free market" financial deregulation, which unleashed financial gangsters to new heights of debt leverage and fraudulent financial products.

The real economy was traded away for a make-believe economy. When the make-believe economy collapsed, Americans' wealth in their real estate, pensions, and savings collapsed dramatically while their jobs disappeared.

The debt economy caused Americans to leverage their assets. They refinanced their homes and spent the equity. They maxed out numerous credit cards. They worked as many jobs as they could find. Debt expansion and multiple family incomes kept the economy going.

And now suddenly Americans can't borrow in order to spend. They are over their heads in debt. Jobs are disappearing. America's consumer economy, approximately 70 percent of GDP, is dead. Those Americans who still have jobs are saving against the prospect of job loss. Millions are homeless. Some have moved in with family and friends; others are living in tent cities.

Meanwhile the U.S. government's budget deficit has jumped from $455 billion in 2008 to $2,000 billion this year, with another $2,000 billion on the books for 2010. And President Obama has intensified America's expensive war of aggression in Afghanistan and initiated a new war in Pakistan.

There is no way for these deficits to be financed except by printing money or by further collapse in stock markets that would drive people out of equity into bonds.

The US government's budget is 50 percent in the red. That means half of every dollar the federal government spends must be borrowed or printed. Because of the worldwide debacle caused by Wall Street's financial gangsterism, the world needs its own money and hasn't $2 trillion annually to lend to Washington.

As dollars are printed, the growing supply adds to the pressure on the dollar's role as reserve currency. Already America's largest creditor, China, is admonishing Washington to protect China's investment in U.S. debt and lobbying for a new reserve currency to replace the dollar before it collapses. According to various reports, China is spending down its holdings of U.S. dollars by acquiring gold and stocks of raw materials and energy.

–snip–

The worst of the economic crisis has not yet hit. I don't mean the rest of the real estate crisis that is waiting in the wings. Home prices will fall further when the foreclosed properties currently held off the market are dumped. Store and office closings are diminishing the ability of owners of shopping malls and office buildings to make their mortgage payments. Commercial real estate loans were also securitized and turned into derivatives.

The real crisis awaits us. It is the crisis of high unemployment, of stagnant and declining real wages confronted with rising prices from the printing of money to pay the government's bills and from the dollar's loss of exchange value. Suddenly Wal-Mart prices will look like Nieman Marcus prices.

Retirees dependent on state pension systems, which cannot print money, might not be paid, or might be paid with IOUs. They will not even have depreciating money with which to try to pay their bills. Desperate tax authorities will squeeze the remaining life out of the middle class.

– continued: What Economy? There's nothing left! (http://gata.org/node/7601) —

Paul Craig Roberts was a solid Reaganite, but Ronald Reagan was very different from any of his successors. Roberts is right, there has been a Goldman guy in every administration since Clinton. Goldman would probably have been a goner too had it not been Hank Paulson, its former CEO, who was at the helm at the US treasury. $12B of the AIG bailout fund was a transfer payment to Goldman. Go figure. Did Goldman have $12B of shareholder equity? >:(

Title: Re: Meltdown
Post by: Coopmv on July 18, 2009, 10:20:04 AM

Quote from: Dm on July 18, 2009, 10:02:13 AM
Telegraph: US lurching towards 'debt explosion' with long-term interest rates on course to double

The US economy is lurching towards crisis with long-term interest rates on course to double, crippling the country's ability to pay its debts and potentially plunging it into another recession, according to a study by the US's own central bank

(http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5754447/US-lurching-towards-debt-explosion-with-long-term-interest-rates-on-course-to-double.html)

Both the US and UK have been doing so-called the quantitative easing, i.e. to keep the long-term interest rates from rising too fast. Ordinarily, the Feds and the BOE can only control short-term interest rates. However, by doing QE, the central banks just buy a lot of long-term bonds to drive up their prices and therefore take down their yields and since long-term corporate bonds and mortgages are all indexed off these long-term treasury bonds, i.e. the 10 and 30 year bonds, they can artificially keep the long rates down. But this will require the central banks to keep printing money in order to purchase these long bonds in the open market. This is a sure path to financial Armageddon ...

Title: Re: Meltdown
Post by: Coopmv on July 18, 2009, 10:31:44 AM

Quote from: Dm on July 18, 2009, 10:03:32 AM
LONDON - Oil and gas drilling in British waters fell by more than half in the second quarter, business advisory group Deloitte said, arguing Britain must take urgent steps to avert a sharp decline in production.
(http://www.calgaryherald.com/business/North+drilling+falls+half/1775508/story.html)

Is there any area of North Sea in the British territorial water that has not already been explored? I think the North Sea Oil reserve is running out. The Norwegian side still has a number of years left. But the Norwegians are also a lot more fiscally conservative and they are well prepared for the inevitability ...

Title: Re: Meltdown
Post by: Coopmv on July 18, 2009, 02:51:36 PM

Quote from: Dm on July 18, 2009, 10:03:32 AM
LONDON - Oil and gas drilling in British waters fell by more than half in the second quarter, business advisory group Deloitte said, arguing Britain must take urgent steps to avert a sharp decline in production.
(http://www.calgaryherald.com/business/North+drilling+falls+half/1775508/story.html)

BTW, the Brits probably have not been net exporter of crude for sometimes already.

Title: Re: Meltdown
Post by: Coopmv on July 18, 2009, 06:29:29 PM

Jul 17, 2009, 4:27 p.m. EST
Mobius sees repeat crisis without derivative regulations

By Tom Bemis, MarketWatch

LONDON (MarketWatch) -- Mark Mobius, executive chairman of Franklin Templeton Investments, said Friday he fears the U.S. and other countries will fail to regulate derivatives properly, setting the stage for a repeat of current financial turmoil in a few years.

"I'm afraid that the political pressures on politicians in the U.S. and other countries will be so great that they will be unable to make the proper changes in regulations," Mobius said in an interview Friday at Franklin Templeton's London offices.

Derivatives, complicated financial agreements that derive their value from underlying commodity prices or interest rates, are at the heart of the current financial crisis, Mobius said.

"Derivatives can be a good thing, but if they're not properly regulated they can be very destructive," Mobius said. 'This will all come home to roost again,' he said.

Title: Re: Meltdown
Post by: BachQ on July 19, 2009, 05:21:48 AM

Quote from: Coopmv on July 18, 2009, 04:55:21 AM
Spitvalve. I remember this all too well, being old enough to understand economic and geopolitical issues back in the 1980's where the Soviet Union was in Afghanistan and Japan was flying skyhigh economically. Then there was no end in sight to the Japanese trade surplus with the US and they bought Rockefeller Center and other prized US properties. Japan was supposed to be the dominant economic power in the 1990's and beyond and that did not happen. Now the same prognosticators are singing unwarranted praises on China. As these two articles rightly point out, the malaise the US finds itself in now is caused by having to fight two wars and to get itself out of the longest recession since the 1930, all simultaneously. These shallow articles never did any in-depth analyses on the systemic corruption and deep-seated problems China has, which that country has been papering over since that is easy for a dictatorial regime to do (remember how effective the Soviet Union was in this game). The deck of cards will come tumbling down at some point. It is just a matter of when and what event would trigger the collapse ...

Excerpt:

Poorly Made in China: An Insider's Account of the Tactics Behind China's Production Game provides fascinating and disturbing answers. Chinese manufacturers cut corners wherever they can, from product quality to factory equipment and maintenance. They unilaterally change product and packaging specifications to trim costs. They raise prices after the deal is signed, leaving the importer to absorb the added cost. They reproduce their customers' products for sale at higher margins in other markets. With support from government, bankers, and networks of fellow manufacturers, they conduct manufacturing and customer relations as a game, treating the other party as a patsy not a partner, playing for the short term of making an extra penny at the risk of product quality but also taking a long-term, multidimensional outlook that outflanks the hapless customer. ... lead paint in toys and melamine in baby milk formula are not surprises but predictable outcomes from a manufacturing culture that takes customers for granted and assumes no responsibility for its outputs. (http://www.atimes.com/atimes/China/KG18Ad02.html)

Title: Re: Meltdown
Post by: BachQ on July 19, 2009, 05:38:32 AM

Quote from: Coopmv on July 18, 2009, 02:51:36 PM
BTW, the Brits probably have not been net exporter of crude for sometimes already.

Coop, UK reached peak oil production in 1999 (http://www.theoildrum.com/node/5576), and, according to the IEA, became a net importer of oil in 2006 (UK became a net importer of natural gas around 2004). Given the data above, it's highly unlikely that UK will ever be a net exporter of oil/gas again.

BTW, here's a freshly minted listing of countries that have reached peak oil. Notice that over 60% of all countries are now past peak. "Only 14 of the 54 oil producing nations in the world are still increasing their oil production. The era of cheap oil is definitively over, as shown below."

Country   Peak Prod.   2008 Prod.   % Off Peak   Peak Year
United States   11297   7337   -35%   1970
Venezuela   3754   2566   -32%   1970
Libya   3357   1846   -45%   1970
Other Middle East   79   33   -58%   1970
Kuwait   3339   2784   -17%   1972
Iran   6060   4325   -29%   1974
Indonesia   1685   1004   -41%   1977
Romania   313   99   -68%   1977
Trinidad & Tobago   230   149   -35%   1978
Iraq   3489   2423   -31%   1979
Brunei   261   175   -33%   1979
Tunisia   118   89   -25%   1980
Peru   196   120   -39%   1982
Cameroon   181   84   -54%   1985
Other Eur.ia   762   427   -44%   1986
Russian Federation   11484   9886   -14%   1987*
Egypt   941   722   -23%   1993
Other Asia Pacific   276   237   -14%   1993
India   774   766   -1%   1995*
Syria   596   398   -33%   1995
Gabon   365   235   -36%   1996
Argentina   890   682   -23%   1998
Colombia   838   618   -26%   1999
United Kingdom   2909   1544   -47%   1999
Rep. of Congo (Brazzaville)   266   249   -6%   1999*
Uzbekistan   191   111   -42%   1999
Australia   809   556   -31%   2000
Norway   3418   2455   -28%   2001
Oman   961   728   -24%   2001
Yemen   457   305   -33%   2002
Other S. & Cent. America   153   138   -10%   2003*
Mexico   3824   3157   -17%   2004
Malaysia   793   754   -5%   2004*
Vietnam   427   317   -26%   2004
Denmark   390   287   -26%   2004
Other Africa   75   54   -28%   2004*
Nigeria   2580   2170   -16%   2005*
Chad   173   127   -27%   2005*
Italy   127   108   -15%   2005*
Ecuador   545   514   -6%   2006*
Saudi Arabia   11114   10846   -2%   2005 / Growing
Canada   3320   3238   -2%   2007 / Growing
Algeria   2016   1993   -1%   2007 / Growing
Equatorial Guinea   368   361   -2%   2007 / Growing
China   3795   3795   -   Growing
United Arab Emirates   2980   2980   -   Growing
Brazil   1899   1899   -   Growing
Angola   1875   1875   -   Growing
Kazakhstan   1554   1554   -   Growing
Qatar   1378   1378   -   Growing
Azerbaijan   914   914   -   Growing
Sudan   480   480   -   Growing
Thailand   325   325   -   Growing
Turkmenistan   205   205   -   Growing
Peaked / Flat Countries Total   -   49597   -   60.6% of world oil production
Growing Countries Total   -   32223   -   39.4% of world oil production

"Only 14 out of 54 oil producing countries and regions in the world continue to increase production, while 30 are definitely past their production peak, and the remaining 10 appear to have flat or declining production. Put another way, peak oil is real in 61% of the oil producing world when weighted by production. Since 2008 capped a record run for oil prices, most countries and oil companies were trying all-out to increase production. While a handful of producers (think Iraq) might be limited by above-ground factors, the majority of producers simply couldn't do any better in 2008"

"The evidence of the demise of the cheap oil era has become insurmountable. In the face of the highest oil prices on record, the great majority of the world's oil producers were incapable of taking advantage and producing more oil. Many nations including the US saw their oil production peak decades ago - there simply is no turning the clock back. This list shows that we are relying on a small number of countries to keep providing cheap oil. We need to move faster to alternatives and greater energy efficiency, before the last fourteen peak as well."

Source: The Oil Drum (http://www.theoildrum.com/node/5576)

Title: Re: Meltdown
Post by: Coopmv on July 19, 2009, 08:39:18 AM

Quote from: Dm on July 19, 2009, 05:21:48 AM
Excerpt:

Poorly Made in China: An Insider's Account of the Tactics Behind China's Production Game provides fascinating and disturbing answers. Chinese manufacturers cut corners wherever they can, from product quality to factory equipment and maintenance. They unilaterally change product and packaging specifications to trim costs. They raise prices after the deal is signed, leaving the importer to absorb the added cost. They reproduce their customers' products for sale at higher margins in other markets. With support from government, bankers, and networks of fellow manufacturers, they conduct manufacturing and customer relations as a game, treating the other party as a patsy not a partner, playing for the short term of making an extra penny at the risk of product quality but also taking a long-term, multidimensional outlook that outflanks the hapless customer. ... lead paint in toys and melamine in baby milk formula are not surprises but predictable outcomes from a manufacturing culture that takes customers for granted and assumes no responsibility for its outputs.
(http://www.atimes.com/atimes/China/KG18Ad02.html)

DM, Thanks for the article ...

You are I are the few who have seen through the trickeries of these Chinese manufacturers. There are some idiots out there who will call us xenophobic and perhaps they would learn only after they have consumed or used some poisoned Chinese-made products. I shun all Chinese-made products whenever I can. Since I love classical music, I do have some pretty good audio equipments, which are all European, Japanese or North American made. I do not buy any Chinese-made audio gears, even if they are labeled as European or American designs. Brands like Creek, NAD, Rotel will not find any shelf space at my house. I continue to enjoy my Revox and Thorens, which were made in Switzerland almost 30 years ago ...

Title: Re: Meltdown
Post by: Coopmv on July 19, 2009, 10:43:28 AM

Quote from: Dm on July 19, 2009, 05:38:32 AM
Coop, UK reached peak oil production in 1999 (http://www.theoildrum.com/node/5576), and, according to the IEA, became a net importer of oil in 2006 (UK became a net importer of natural gas around 2004). Given the data above, it's highly unlikely that UK will ever be a net exporter of oil/gas again.

BTW, here's a freshly minted listing of countries that have reached peak oil. Notice that over 60% of all countries are now past peak. "Only 14 of the 54 oil producing nations in the world are still increasing their oil production. The era of cheap oil is definitively over, as shown below."

Country   Peak Prod.   2008 Prod.   % Off Peak   Peak Year
United States   11297   7337   -35%   1970
Venezuela   3754   2566   -32%   1970
Libya   3357   1846   -45%   1970
Other Middle East   79   33   -58%   1970
Kuwait   3339   2784   -17%   1972
Iran   6060   4325   -29%   1974
Indonesia   1685   1004   -41%   1977
Romania   313   99   -68%   1977
Trinidad & Tobago   230   149   -35%   1978
Iraq   3489   2423   -31%   1979
Brunei   261   175   -33%   1979
Tunisia   118   89   -25%   1980
Peru   196   120   -39%   1982
Cameroon   181   84   -54%   1985
Other Eur.ia   762   427   -44%   1986
Russian Federation   11484   9886   -14%   1987*
Egypt   941   722   -23%   1993
Other Asia Pacific   276   237   -14%   1993
India   774   766   -1%   1995*
Syria   596   398   -33%   1995
Gabon   365   235   -36%   1996
Argentina   890   682   -23%   1998
Colombia   838   618   -26%   1999
United Kingdom   2909   1544   -47%   1999
Rep. of Congo (Brazzaville)   266   249   -6%   1999*
Uzbekistan   191   111   -42%   1999
Australia   809   556   -31%   2000
Norway   3418   2455   -28%   2001
Oman   961   728   -24%   2001
Yemen   457   305   -33%   2002
Other S. & Cent. America   153   138   -10%   2003*
Mexico   3824   3157   -17%   2004
Malaysia   793   754   -5%   2004*
Vietnam   427   317   -26%   2004
Denmark   390   287   -26%   2004
Other Africa   75   54   -28%   2004*
Nigeria   2580   2170   -16%   2005*
Chad   173   127   -27%   2005*
Italy   127   108   -15%   2005*
Ecuador   545   514   -6%   2006*
Saudi Arabia   11114   10846   -2%   2005 / Growing
Canada   3320   3238   -2%   2007 / Growing
Algeria   2016   1993   -1%   2007 / Growing
Equatorial Guinea   368   361   -2%   2007 / Growing
China   3795   3795   -   Growing
United Arab Emirates   2980   2980   -   Growing
Brazil   1899   1899   -   Growing
Angola   1875   1875   -   Growing
Kazakhstan   1554   1554   -   Growing
Qatar   1378   1378   -   Growing
Azerbaijan   914   914   -   Growing
Sudan   480   480   -   Growing
Thailand   325   325   -   Growing
Turkmenistan   205   205   -   Growing
Peaked / Flat Countries Total   -   49597   -   60.6% of world oil production
Growing Countries Total   -   32223   -   39.4% of world oil production

"Only 14 out of 54 oil producing countries and regions in the world continue to increase production, while 30 are definitely past their production peak, and the remaining 10 appear to have flat or declining production. Put another way, peak oil is real in 61% of the oil producing world when weighted by production. Since 2008 capped a record run for oil prices, most countries and oil companies were trying all-out to increase production. While a handful of producers (think Iraq) might be limited by above-ground factors, the majority of producers simply couldn't do any better in 2008"

"The evidence of the demise of the cheap oil era has become insurmountable. In the face of the highest oil prices on record, the great majority of the world's oil producers were incapable of taking advantage and producing more oil. Many nations including the US saw their oil production peak decades ago - there simply is no turning the clock back. This list shows that we are relying on a small number of countries to keep providing cheap oil. We need to move faster to alternatives and greater energy efficiency, before the last fourteen peak as well."

Source: The Oil Drum
(http://www.theoildrum.com/node/5576)

I do wonder about the overall accuracy of this survey. First, how can any surveyor find precise data for the Chinese petro output, which is no doubt some highly guarded secret for the communist regime? Second, Iraqi petro output has been chronically below optimum since the late 70's when Saddam Hussein started the war with Iran. It may be a bit premature to put Iraq in the having reached peak oil category ...

Title: Re: Meltdown
Post by: Coopmv on July 19, 2009, 11:04:32 AM

I for one did not think much of those earnings announcements. The quality of those earnings was terrible - just more accounting gimmicks and onetime event such as the sale of 51% of SmithBarney by Citi to Morgan Stanley ...

Bank profits not as impressive as they seem
Banks turn in hefty profits, but industry still has big problems
By Stephen Bernard and Ieva M. Augstums, AP Business Writers
On Friday July 17, 2009, 11:15 pm EDT

NEW YORK (AP) -- The big banks are making big money again, but they won't be back to health as long as they have to deal with a recession and customers defaulting on mortgages and credit cards.

The impressive numbers included a $3 billion second-quarter profit announced Friday by Citigroup and $2.4 billion for Bank of America. They followed similarly robust earnings for Goldman Sachs and JPMorgan Chase.

That the banks managed to turn a profit at all is remarkable. Just 10 months ago, many of them looked to be on the verge of collapse. The stock market staged a huge rally this week, driven by the signs of health in banking.

But Bank of America CEO Ken Lewis had some sobering words during a conference call with Wall Street analysts after his company's results were released Friday: "Profitability in the second half of the year will be much tougher than the first half."

Bank of America Corp., JPMorgan Chase & Co. and Goldman Sachs Group Inc. earned profits this spring largely on investment banking and trading -- not traditional banking businesses, which still look shaky. Citi benefited from selling its majority stake in the Smith Barney brokerage.

Strip away those money-makers, and the banks have to rely on customers who are losing their jobs or earning less money. The banks will suffer as long as their customers do.

Bank of America, JPMorgan Chase and Citigroup Inc. all reported they lost more money on loans during the second quarter. Bank of America alone set aside $13.4 billion to cover loan losses. But the banks also saw signs that loan delinquencies were starting to stabilize.

Celent analyst Isabel Schauerte said Bank of America's earnings tell the story of the financial industry.

"B of A's results are the bellwether of where Main Street is headed. Measured by credit losses, a moderation of default rates is not in sight," Schauerte said. "For the investment banking business of B of A, in contrast, the worst days seem to have passed."

President Barack Obama's top economic adviser said the signs of improvement displayed by the banks would not have been possible without government infusions, guarantees and other programs provided by the government.

"There is no financial institution that would be reporting the kind of positive results that we have seen in the last quarter but for the extraordinary public support provided by the government," said Lawrence Summers, the director of the White House's National Economic Council.

The profits announced this week raise more questions about when banks will be able to repay their bailout money. Goldman Sachs and JPMorgan Chase have already repaid their loans. Others, like Bank of America and Citigroup, have not.

"Moving forward, companies that are solvent and performing should be held to the promise to repay the taxpayers with interest," said Rep. Darrell Issa of California, the top Republican on the House Oversight and Government Reform Committee, which is convening a hearing next week on bailout oversight.

The banks that reported earnings this week cited similar trends:

-- Mortgages: Bank of America's second-quarter revenue was bolstered by a spike in mortgage refinancings as interest rates tumbled early in the quarter. But rates have been climbing lately, and analysts expect that surge in refinancings to taper off. And more people are defaulting on mortgages.

-- Credit cards: Credit card losses tend to track the unemployment rate, and banks are expected to keep losing money on credit cards as more people lose their jobs. JPMorgan Chase, Citi and Bank of America all have huge credit card operations.

-- Investment banking: By far the quickest recovery in the banking business has come in the investment banking sector, helping Goldman Sachs earn $2.7 billion in the second quarter. Some of the rebound has come from the big stock market rally this spring. Companies also did well because there's less competition since Lehman Brothers and Bear Stearns went under.

Analysts say that besides the problems with loans, bank earnings may suffer because the country has less of an appetite for debt.

-- Commercial real estate: While home foreclosures are increasing, the commercial real estate market is expected to keep causing loan losses for banks. Rising store and office vacancies are cutting into landlords' and developers' cash flow, and leading them to default on their mortgages.

Title: Re: Meltdown
Post by: BachQ on July 20, 2009, 02:57:40 PM

UK economy set for biggest fall since 1945

By Margareta Pagano, Business Editor
Sunday, 19 July 2009

The UK economy is forecast to shrink by 4.5 per cent in 2009 – the biggest fall in a single year since 1945. This gloomy prognosis comes from leading forecaster the Ernst & Young Item Club, the only one to use the Treasury's own forecasting model, and paints a materially tougher outlook than the consensus.

Peter Spencer, chief economic adviser to Item, said yesterday: "The economic patient has been in trauma, but thanks to the paramedics at the Treasury and the Bank of England who pumped billions of pounds worth of medicine into the economy, the patient has been stabilised for now. But it remains unclear how quick and complete recovery will be, and there is still a serious chance of a relapse."

(continued) LINK (http://www.independent.co.uk/news/business/news/uk-economy-set-for-biggest-fall-since-1945-1752127.html)

Title: Re: Meltdown
Post by: BachQ on July 20, 2009, 03:04:36 PM

Quote from: Coopmv on July 19, 2009, 10:43:28 AM
I do wonder about the overall accuracy of this survey. First, how can any surveyor find precise data for the Chinese petro output, which is no doubt some highly guarded secret for the communist regime? Second, Iraqi petro output has been chronically below optimum since the late 70's when Saddam Hussein started the war with Iran. It may be a bit premature to put Iraq in the having reached peak oil category ...

Yeah, Coop, several of these countries have unreliable data, so there is a correspondingly large margin for error. But what's important is the big picture: an increasing number of countries have reached peak oil production (by any measure), and are heading for permanent, irreversible decline. Meanwhile, Asia is once again beginning to ramp up its demand for oil, which will be provided by fewer and fewer exporters. The main point of that data is to show that fewer and fewer countries are net exporters, and instead are becoming net importers of oil.

BTW, since it takes energy to extract oil, and since oil is becoming increasingly expensive to extract, what is ultimately important is the "net energy" extracted from the worlds' oil fields.

(http://www.theoildrum.com/files/Net%20Hubbert_6.png)

The net energy available from dwindling future oil reserves is about to dive off a cliff ... the economic effects of which are yet unknown.

Quote from: Coopmv on July 19, 2009, 10:43:28 AM
Second, Iraqi petro output has been chronically below optimum since the late 70's when Saddam Hussein started the war with Iran. It may be a bit premature to put Iraq in the having reached peak oil category ...

Agreed. No one can assert with confidence when Iraq will peak ... too many unknowns.

Title: Re: Meltdown
Post by: Coopmv on July 20, 2009, 04:16:59 PM

Quote from: Dm on July 20, 2009, 02:57:40 PM
UK economy set for biggest fall since 1945

By Margareta Pagano, Business Editor
Sunday, 19 July 2009

The UK economy is forecast to shrink by 4.5 per cent in 2009 – the biggest fall in a single year since 1945. This gloomy prognosis comes from leading forecaster the Ernst & Young Item Club, the only one to use the Treasury's own forecasting model, and paints a materially tougher outlook than the consensus.

Peter Spencer, chief economic adviser to Item, said yesterday: "The economic patient has been in trauma, but thanks to the paramedics at the Treasury and the Bank of England who pumped billions of pounds worth of medicine into the economy, the patient has been stabilised for now. But it remains unclear how quick and complete recovery will be, and there is still a serious chance of a relapse."

(continued) LINK
(http://www.independent.co.uk/news/business/news/uk-economy-set-for-biggest-fall-since-1945-1752127.html)

Yet the Pound rose against the Dollar today ... ???

Title: Re: Meltdown
Post by: Coopmv on July 20, 2009, 04:20:50 PM

Quote from: Dm on July 20, 2009, 03:04:36 PM

Yeah, Coop, several of these countries have unreliable data, so there is a correspondingly large margin for error. But what's important is the big picture: an increasing number of countries have reached peak oil production (by any measure), and are heading for permanent, irreversible decline. Meanwhile, Asia is once again beginning to ramp up its demand for oil, which will be provided by fewer and fewer exporters. The main point of that data is to show that fewer and fewer countries are net exporters, and instead are becoming net importers of oil.

BTW, since it takes energy to extract oil, and since oil is becoming increasingly expensive to extract, what is ultimately important is the "net energy" extracted from the worlds' oil fields.

(http://www.theoildrum.com/files/Net%20Hubbert_6.png)

The net energy available from dwindling future oil reserves is about to dive off a cliff ... the economic effects of which are yet unknown.

Agreed. No one can assert with confidence when Iraq will peak ... too many unknowns.

Oil companies can go nuclear (http://www.freepatentsonline.com/3593788.html)

Title: Re: Meltdown
Post by: Coopmv on July 20, 2009, 05:48:02 PM

DM: For Mark Mobius' prediction to come to pass, the US equity market must experience an unrecoverable crash within the next three years and the Chinese market must continue to rocket skyward. Even someone I work with who was born in China and knows China intimately well does not believe there is any possibility for this to happen. At least I do not invest with the Templeton Funds ... ???

China could overtake US market in 3 years: Mobius
Bloomberg
Published: July 18, 2009, 23:19

London: China's stock market may surpass the US as the world's largest by value in three years as state-owned companies sell new shares and the nation's 1.4 billion people put more of their money into equities, Mark Mobius said.

"The Chinese population is just dipping its toe into equities and they've got a long way to go," Mobius, who oversees about $25 billion (Dh92 billion) of emerging-market assets as executive chairman of Templeton Asset Management Ltd, said in an interview in London. State-owned companies are "coming up with more huge" initial public offerings, he said on Friday.

China's market is valued at $3.2 trillion, compared with $11.2 trillion in the US, according to data compiled by Bloomberg. The Standard & Poor's 500 Index, a benchmark for US equities, has gained 4.1 per cent in 2009, while China's 4 trillion-yuan (Dh2.2 trillion) stimulus package lifted the Shanghai Composite Index 75 per cent this year.

China last month approved its first IPO since September, ending a nine-month ban by regulators. Guilin Sanjin Pharmaceutical Co and Zhejiang Wanma Cable Co, the first two Chinese companies to go public this year, surged 64 per cent and 139 per cent, respectively, since they began trading this month.

Sanjin, China's largest maker of herbal lozenges, raised 910.8 million yuan in a sale that was 500 times oversubscribed. Wanma, which supplies cable to the nation's top electricity distributor, raised 575 million yuan after investors applied for 638-times the stock available.

While China's mainland-traded stocks, known as A shares, are "somewhat overvalued," the market will move higher as earnings climb, he said. China's gross domestic product will expand eight per cent this year as the stimulus package boosts consumer spending, Mobius said.

"We can expect corrections along the way" for emerging markets, Mobius said. "I would expect a more steady, jagged movement upwards."

China's stock market overtaking the US "is possible, but I think people need to understand the difference between the Chinese equity markets and the US equity markets," said Donald Straszheim, a former Merrill Lynch & Co chief economist who runs Los Angeles-based Straszheim Global Advisors. State-owned companies "dominate" the Shanghai stock exchange while the US stock market consists of private companies, he said.

Title: Re: Meltdown
Post by: Lethevich on July 21, 2009, 03:37:19 AM

Quote from: Coopmv on July 20, 2009, 04:16:59 PM
Yet the Pound rose against the Dollar today ... ???

It's just leveling out I think. Historically the pound has always been a fair bit higher per unit than the dollar, and as the US and UK are both doing roughly equally badly, there's no real reason for their to be parity when there wasn't when they both were doing well. I may be misunderstanding the process, though.

Title: Re: Meltdown
Post by: Coopmv on July 21, 2009, 04:17:41 PM

DM: Check this out. There is ample truth that Wall Street indeed owns the US government ...

John Crudele
Last updated: 11:43 am
July 21, 2009
Posted: 3:22 am
July 21, 2009

PAULSON'S '07 TRUE CONFESSIONS NEED CLOSER LOOK

HANK Paulson must have been feeling a little guilty on Aug. 21, 2007, when he made a startling and unprompted confession on live television.

Speaking with Larry Kudlow, CNBC's clueless anchor, then-Treasury Secretary Paulson blurted out: "I think it's my job to talk regularly to market participants, but also talk regularly to key regulators and make sure that we are seeing the same issues, the same problems and working toward the same solutions."

On the surface Paulson was simply defending the way he was doing his job. The financial markets were just starting to unravel and the former chairman of Goldman Sachs, at that time leading President Bush's economic team, wanted to assure us that he had things under control.

OK on that level.

But Paulson's statement was a legal humdinger that should have caused investors to go nuts, Congress to rise up and demand answers and journalists to, at the very least, do their jobs.

I've brought all of this up in the past.

But since the House Committee on Oversight and Government Reform was on a fishing expedition last week with regard to Paulson's behavior during the Bank of America acquisition of Merrill Lynch, I figure it's appropriate to rehash this story. The next time Congress goes fishing for Paulson, the least it can do is put its hooks in the right pond.

By the way, I sent a copy of this material to the committee yesterday in case it really wants to understand what Paulson was up to and not just showcase its own ability to ask nasty questions that go nowhere.

Here is the rest of the article (http://www.nypost.com/seven/07212009/business/paulsons_07_true_confessions_need_closer_180515.htm?page=0)

Title: Re: Meltdown
Post by: BachQ on July 22, 2009, 06:03:16 AM

California: A Budget Agreement That Breaks The State

The politicians who run California have come to a budget agreement that may take care of most of the state budget deficit, but it will drive California much deeper into recession.

To close a $26 billion gap, the state will, among other things, cut spending $15.6 billion. The damage that the plan will do to local economies and job creation is hard to imagine because it is so significant. Funds for public schools will be slashed. The state will borrow money from municipalities which will cut into their ability to provide new infrastructure and basic services.

The reduction in expenditures by the state was absolutely necessary to keep California's bonds from being cut to junk status, making it nearly impossible to raise money, and to keep the state from becoming insolvent. It had already begun to issue IOUs for some obligations and this paper was not of much value to vendors who had to make payrolls.

State unemployment in California is well above 10%, one of the highest levels in the country. The state's economic production makes up an outsized portion of America's GDP and the total value of the real estate in California affects the national inventory of office space and homes for sale. The budget cuts will put more Californians out of work, which will almost certainly further erode state employment and, by extension, national jobless numbers.

The battle over the California deficit has been brutal and that part of the saga may be coming to an end. The pain that the settlement will cause the state's citizens and the national economy is just beginning.
(http://247wallst.com/2009/07/21/california-a-budget-agreement-that-breaks-the-state/)

Title: Re: Meltdown
Post by: BachQ on July 22, 2009, 06:05:59 AM

UK's National debt now worst since Second World War
Britain's total borrowing increases to £799bn; Economists warn that austerity budget is inevitable

By James Moore, Deputy Business Editor
Wednesday, 22 July 2009

Britain's borrowing surged to a record £13.3bn in June, official figures showed yesterday as economists used phrases such as "dire", "alarming" and "parlous" to describe the state of the nation's public finances. The figure is nearly double that for the same month last year while the actual cash shortfall also stood at a record of £19bn, £7.6 billion higher than last year. Total borrowing now stands at a colossal £799bn – 56.6 per cent of GDP.

... continued ...

link (http://www.independent.co.uk/news/business/news/national-debt-now-worst-since-second-world-war-1755879.html)

Title: Re: Meltdown
Post by: BachQ on July 22, 2009, 06:06:55 AM

Bloomberg: U.K. House-Price Slump Will Persist Until 2012, Niesr Says

link (http://www.bloomberg.com/apps/news?pid=20601102&sid=a4RsB_MDg7OY)

Title: Re: Meltdown
Post by: BachQ on July 22, 2009, 06:08:10 AM

UK Pubs closing at rate of 52 a week as hard-up drinkers shun their local taverns

The rate of pub closures is accelerating, with 52 going out of business every week at a cost of 24,000 jobs over the past year, figures show. Almost 2,400 pubs and bars have vanished from villages and towns in the past 12 months, according to research for the British Beer & Pub Association (BBPA). Local pubs serving small communities have been the worst hit, the association said.

The number of closures represents the steepest rate of decline since records began in 1990 and has risen by a third compared with the same period last year, when 36 pubs were closing every week.

A preference for drinking more cheaply at home, rather than going out, is thought to have contributed to closures.

... continued ...

link (http://business.timesonline.co.uk/tol/business/industry_sectors/leisure/article6722488.ece)

Title: Re: Meltdown
Post by: BachQ on July 22, 2009, 06:09:01 AM

Bloomberg: Calpers Lost 23.4% in 2008, Posts Worst Single-Year Drop Ever

link (http://www.bloomberg.com/apps/news?pid=20601103&sid=aplFNaHGoiIQ)

Title: Re: Meltdown
Post by: BachQ on July 22, 2009, 06:10:23 AM

MassLive:Massachusetts Ch. 7 bankruptcy filings soar 58.12% in 2Q

link (http://www.masslive.com/metrowest/republican/index.ssf?/base/news-21/1248165950173870.xml&coll=1)

Title: Re: Meltdown
Post by: BachQ on July 22, 2009, 06:12:26 AM

CNN: By August, 65% of all filers for unemployment insurance will have run out of their standard 26 weeks. And that's just the beginning.

link (http://money.cnn.com/2009/07/17/news/economy/unemployment_benefits/index.htm)

Title: Re: Meltdown
Post by: BachQ on July 22, 2009, 06:14:25 AM

Almost one-fifth of US household incomes now comes from the Govt.
(http://www.businessinsider.com/~~/f?id=4a49296c796c7a23006fd3a6)

Chart-of-the-day shows "a staggering proportion of American personal income now comes straight from government transfer payments -- welfare, unemployment, etc. And thus the process of household debt becoming government debt takes place."

link (http://www.businessinsider.com/chart-of-the-day-govt-transfers-as-a-percent-of-personal-income-2009-6)

Title: Re: Meltdown
Post by: Coopmv on July 22, 2009, 04:40:31 PM

Quote from: Dm on July 22, 2009, 06:08:10 AM
UK Pubs closing at rate of 52 a week as hard-up drinkers shun their local taverns

The rate of pub closures is accelerating, with 52 going out of business every week at a cost of 24,000 jobs over the past year, figures show. Almost 2,400 pubs and bars have vanished from villages and towns in the past 12 months, according to research for the British Beer & Pub Association (BBPA). Local pubs serving small communities have been the worst hit, the association said.

The number of closures represents the steepest rate of decline since records began in 1990 and has risen by a third compared with the same period last year, when 36 pubs were closing every week.

A preference for drinking more cheaply at home, rather than going out, is thought to have contributed to closures.

... continued ...

link
(http://business.timesonline.co.uk/tol/business/industry_sectors/leisure/article6722488.ece)

400 restaurants have closed in New York City over the past 3 months ...

Title: Re: Meltdown
Post by: Coopmv on July 22, 2009, 04:42:46 PM

Quote from: Dm on July 22, 2009, 06:12:26 AM
CNN: By August, 65% of all filers for unemployment insurance will have run out of their standard 26 weeks. And that's just the beginning.

link
(http://money.cnn.com/2009/07/17/news/economy/unemployment_benefits/index.htm)

Look for an extension of unemployment benefits here in the US. The unemployment rate is sure to go over 10% and to possibly as high as 12% ....

Title: Re: Meltdown
Post by: Coopmv on July 22, 2009, 04:54:43 PM

Quote from: Dm on July 22, 2009, 06:03:16 AM
California: A Budget Agreement That Breaks The State

The politicians who run California have come to a budget agreement that may take care of most of the state budget deficit, but it will drive California much deeper into recession.

To close a $26 billion gap, the state will, among other things, cut spending $15.6 billion. The damage that the plan will do to local economies and job creation is hard to imagine because it is so significant. Funds for public schools will be slashed. The state will borrow money from municipalities which will cut into their ability to provide new infrastructure and basic services.

The reduction in expenditures by the state was absolutely necessary to keep California's bonds from being cut to junk status, making it nearly impossible to raise money, and to keep the state from becoming insolvent. It had already begun to issue IOUs for some obligations and this paper was not of much value to vendors who had to make payrolls.

State unemployment in California is well above 10%, one of the highest levels in the country. The state's economic production makes up an outsized portion of America's GDP and the total value of the real estate in California affects the national inventory of office space and homes for sale. The budget cuts will put more Californians out of work, which will almost certainly further erode state employment and, by extension, national jobless numbers.

The battle over the California deficit has been brutal and that part of the saga may be coming to an end. The pain that the settlement will cause the state's citizens and the national economy is just beginning.

(http://247wallst.com/2009/07/21/california-a-budget-agreement-that-breaks-the-state/)

The financial market will instill discipline in these turkeys (politicians), they have been spending money they do not have for the past 30 years. If the CA credit rating ever hits junk, they can kiss that muni bond market good-bye. It is hard to believe that even Arkansas and Mississippi now have higher credit rating than CA ...

Title: Re: Meltdown
Post by: Coopmv on July 22, 2009, 05:59:55 PM

It will be interesting to see how many Democrats will do down in their re-election bids next year if they pass this bill. The non-partisan CBO has issued its study, which concludes this program will bust the federal budget big-time ...

Pelosi: House Dems have the votes on health care
Despite problems, Speaker says Democrats can pass health care in the House

By David Espo, AP Special Correspondent
On Wednesday July 22, 2009, 7:49 pm EDT

WASHINGTON (AP) -- Democrats command the votes needed to pass a sweeping health care bill through the House, Speaker Nancy Pelosi said Wednesday, an unexpected statement that quickly drew a biting response from conservative members of the party's rank-and-file demanding changes in President Barack Obama's trademark legislation.

The House's top Democrat also signaled strongly that lawmakers will soon incorporate a provision to curtail growth in Medicare costs into the legislation, although she said it would be done in a way that "respects the prerogatives" of Congress.

The White House and conservative lawmakers want to empower an independent commission to order changes in spending within the giant government health care program for seniors, subject to veto by the House and Senate.

While Pelosi said she has "no question" that Democrats have the votes they need, she stopped short of promising the full House would act on the legislation before beginning a monthlong vacation at the end of July.

"We are waiting to see what the president says, and what the Senate will do," she said.

Pelosi spoke as White House officials and Rep. Henry Waxman, D-Calif., chairman of the House Energy and Commerce Committee, met with moderate and conservative Democrats who have stalled progress on the bill, demanding numerous changes as the price of their support.

Rep. Charlie Melancon, D-La., expressed unhappiness at the Speaker's words. "I've been meeting to death, so if that has been for naught until they counted votes, and just to occupy our time, I'm sorry," he said.

"I thought we were legitimately having conversations about writing a good health care bill for America."

Rep. Mike Ross, D-Ark., who also has been involved in days of private negotiations, said he believed the Speaker was mistaken when she said Democrats have the votes to prevail.

Separately, Democrats on the House Ways and Means Committee met privately to consider changes in the legislation they pushed through last week.

Across the Capitol, a small group of senators of both parties continued a daily series of meetings aimed at producing a bipartisan agreement. There was no visible sign they were close to an accord, and officials said it appeared that hopes of holding a vote in the Senate before the congressional vacation were gone.

Pelosi's statement was her most optimistic to date on the prospects for health care legislation, and came a few hours before a prime-time presidential news conference where the president once again urged Congress to act.

"We will pass reform that lowers cost, promotes choice and provides coverage that every American can count on. And we will do it this year," Obama said in excerpts of an opening statement that the White House distributed in advance.

Since returning from an overseas trip more than a week ago, Obama has spoken in public on a near daily basis about his desire for legislation to expand health coverage while reducing the skyrocketing growth in costs.

In recent days, though, public opinion polls have shown a leveling off in support for his proposals, and emboldened Republicans have stepped up their criticism. One, Sen. Jim DeMint, R-S.C. has predicted that health care could turn into Obama's "Waterloo" if the legislation is blocked.

The president referred to the political struggle, as well. "This isn't about me," he said in the excerpts. "I have great health insurance and so does every member of Congress."

In an interview with The Washington Post, Obama expressed confidence that both the House and Senate versions of health care legislation would include some provision along the lines he proposed to curtail the growth of Medicare far into the future. He also spoke favorably of a tax on health care benefits if their cost goes up too fast each year. He said the Senate Finance Committee was discussing a variation that "goes after the insurance company, as opposed to directly taxing the benefits."

Pelosi's remarks were uttered at a news conference designed to showcase the difficulties that can result from a lack of insurance or insufficient coverage, and appeared aimed in part at recovering some of the political momentum.

"You are a part of history and you are watching the legislative process at work, and it will take some time," she said. "But we are going to do it right and it will lower cost, improve quality, expand choices, be fully paid for and make America healthier ..." she said.

Democratic leaders have said any legislation would bar insurance companies from denying coverage or charging higher premiums on the basis of pre-existing medical conditions.

In general, the bills would provide federal subsidies for lower income families unable to afford coverage, part of an effort to dramatically reduce the ranks of the uninsured.

The House bill includes a provision for the government to sell insurance in competition with private companies, a provision strenuously opposed by industry.

The legislation appeared on course last week, until Douglas Elmendorf, the director of the Congressional Budget Office, said it lacked steps to control the costs of health care in the future.

On Friday, Obama called for lawmakers to include a provision to change that, specifically requesting creation of an independent board that would have the power to set payment rates for doctors, hospitals and other providers under Medicare.

But in a fresh sign of the challenges, the American Hospital Association urged its members to oppose the provision, saying it could "hit future hospital reimbursements hard." The AHA joined other hospital organizations recently in agreeing to cut more than $150 billion over the next decade from projected Medicare payments. Officials could not be reached to say whether that deal might be reconsidered in view of the proposed change to the legislation.

The administration's legislation, as well as a competing bill backed by Sen. Jay Rockefeller, D-W.Va., would both dramatically reduce the clout that Congress has in setting payment rates, a change that has drawn opposition from numerous lawmakers. At the same time, they are designed to clamp down significantly on future costs.

Rockefeller's bill, for example, limits Medicare's growth to 1.5 percent a year, until the program is financially solvent, regardless of the rate of inflation.

Title: Re: Meltdown
Post by: Coopmv on July 22, 2009, 07:21:21 PM

Quote from: Lethe on July 21, 2009, 03:37:19 AM
It's just leveling out I think. Historically the pound has always been a fair bit higher per unit than the dollar, and as the US and UK are both doing roughly equally badly, there's no real reason for their to be parity when there wasn't when they both were doing well. I may be misunderstanding the process, though.

I was loading up CD's from MDT when the exchange rate was at 1.55 and lower and that has turned out to be an excellent move ... ;D

Title: Re: Meltdown
Post by: karlhenning on July 23, 2009, 10:31:32 AM

QuoteThe stock market soared to its highest level since November today, as several major companies reported strong financial results and new data suggested the housing market is stabilizing.

[ complete article (http://www.washingtonpost.com/wp-dyn/content/article/2009/07/23/AR2009072301609.html) ]

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:37:24 PM

Moody's report: US commercial real estate fallout accelerates as prices plunge 35%

23 July 09

Commercial real estate values around the country have dropped 35 percent from their peak in October 2007, according to Moody's REAL Commercial Property Price Indices. The decline appears to be accelerating as the index dropped more than 15 percent during April and May. Transactional volume also fell along with value, which is showing signs of effects from distressed sales. "May marked a new low for both counts," the report said.

--snip--

David Geltner, who led the team that developed Moody's indices, said May's figures have dropped 22 percent from the same month a year ago. "This makes the second month in a row of near-record losses in the same-property transaction prices of U.S. commercial real estate tracked by Real Capital Analytics," he said.

link (continued)
(http://www.bizjournals.com/sacramento/stories/2009/07/20/daily54.html)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:38:12 PM

Irish Times: Ireland's debt payments expected to soar to 18.7% of tax revenues

DAVID LABANYI

The cost of repaying interest on Irish national debt will rise from 3.8 per cent of tax revenues in 2008 to 18.7 per cent in 2013, according to the State's debt manager, the National Treasury Management Agency (NTMA). In its annual report for 2008, the NTMA said the sharp increase in borrowing requirements is due to the deficit in the Government finance. It says while the burden of interest repayments will increase "it will be no greater than the levels experienced in the mid-1990s".

link (continued)
(http://www.irishtimes.com/newspaper/breaking/2009/0723/breaking36.htm)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:40:06 PM

U.S. 10-Year Note Falls Most in 7 Weeks as Record Supply Looms

By Cordell Eddings and Susanne Walker

July 23 (Bloomberg) -- Treasuries declined, with 10-year notes falling the most in almost seven weeks, as stocks rose and the U.S. announced plans to sell a record $115 billion in notes in four auctions next week. ... The government more than doubled note and bond offerings to $963 billion in the first half of 2009 as it tries to end the U.S. economic recession. It may sell another $1.1 trillion by year-end, according to primary dealer Barclays Plc.

link (continued)
(http://www.bloomberg.com/apps/news?pid=20601087&sid=afHIHrJ96iFw)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:41:26 PM

Spain Housing Collapse Cuts Rents in Worst Glut Since 1950s

By Sharon Smyth
July 22 (Bloomberg) --

... The number of properties for rent in Spain climbed 55 percent in the past two years to 3.3 million, the highest since the Ministry of Housing started collecting the data in 2004. Rents in cities, including Madrid and Barcelona, are falling for the first time in seven years with declines of as much as 8 percent, according to Madrid-based property research firm Idealista.com. "Those who need to sell but can't are being forced to lease," said Fernando Encinar, co-founder and head of research at Idealista.com, Spain's largest real estate Web site with 308,000 listings for rent and purchase. "We haven't seen this number of properties for rent since the 1950s."

... continued ...

link
(http://www.bloomberg.com/apps/news?pid=20601087&sid=a2CB8KFfL3tw)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:42:13 PM

Independent: UK fears lost generation as 1-in-5 workers under age 24 looking for employment (http://www.independent.co.uk/news/business/news/young-hit-by-soaring-jobless-toll-soars-to-record-levels-1748280.html)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:43:08 PM

Bloomberg (22 Jul): Moody's Says Credit-Card Defaults Rose to Record in June

link
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aeRIY7KhrEpk)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:45:12 PM

Nanotechnology could be key to Solar Cell development
A new nanotechnology approach could mean cheaper solar cells than current silicon-based approaches...

From MIT Tech Review:

Researchers at the University of California, Berkeley, have made a new kind of solar cell by growing an array of upright nanoscale pillars on aluminum foil. They make bendable solar cells by encapsulating the entire cell inside a transparent, rubbery polymer. The design, the researchers suggest, could lead to solar cells that cost less than conventional silicon photovoltaics.

(continued) (http://www.thecherrycreeknews.com/content/view/4819/2/)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:46:10 PM

Richard Heinberg: "We Have Reached The Global Limits To Growth"

At the deepest level, our societal expectation of perpetual economic growth is based on the assumption that we will always have increasing amounts of cheap energy with which to power the engines of production and distribution. This expectation of growth became institutionalized in ever-increasing levels of debt and in increased financial leveraging. Thus when the amount of energy available started to level off or decline, the entire financial house of cards came tumbling down. ... Our current financial system cannot be made to function in an era of declining energy supplies. ... Development based on consumption of fossil fuels is no longer a path to wealth and security, as it was in the early 20th century. Today it is a trap. It merely creates dependence upon energy sources that are becoming more scarce and expensive.

(http://www.voltairenet.org/IMG/jpg/heinberg_400.jpg)
(http://www.voltairenet.org/article160984.html)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:46:45 PM

Independent: The planet's future: Climate change 'will cause civilisation to collapse' (http://www.independent.co.uk/environment/climate-change/the-planets-future-climate-change-will-cause-civilisation-to-collapse-1742759.html)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:48:33 PM

Quote The sinking Titanic:

"Peak Oil is potentially the end of the human race and that outcome is perhaps just a few years away unless the human race essentially throws every ideological sacred cow out the window and starts with a fresh piece of paper. There are around five billion people alive today that were not sustainable before oil came along. There is no combination of alternative energies (nor will there ever be) that can possibly sustain the edifice built by oil."[/i]

--- Michael C. Ruppert (http://www.energybulletin.net/node/48990)

Title: Re: Meltdown
Post by: BachQ on July 23, 2009, 03:56:58 PM

Quote from: Coopmv on July 22, 2009, 05:59:55 PM
It will be interesting to see how many Democrats will do down in their re-election bids next year if they pass this bill. The non-partisan CBO has issued its study, which concludes this program will bust the federal budget big-time ...

Pelosi: House Dems have the votes on health care
Despite problems, Speaker says Democrats can pass health care in the House

Coop, Democrats are on a spending spree ... it will be very interesting to see how this all plays out. The budget is already busted ... it's now a question of when the repercussions of this become apparent to the average citizen.

Meanwhile, Pelosi just loves spending taxpayer money ...

Title: Re: Meltdown
Post by: MishaK on July 23, 2009, 03:59:55 PM

Quote from: Dm on July 23, 2009, 03:56:58 PM
Coop, Democrats are on a spending spree ... it will be very interesting to see how this all plays out. The budget is already busted ... it's now a question of when the repercussions of this become apparent to the average citizen.

Meanwhile, Pelosi just loves spending taxpayer money ...

So, you'd prefer to see government cutting spending, thereby reducing demand even further and adding several thousand former government employees to the numbers of unemployed?

Title: Re: Meltdown
Post by: Coopmv on July 23, 2009, 05:00:00 PM

Quote from: k a rl h e nn i ng on July 23, 2009, 10:31:32 AM
[ complete article (http://www.washingtonpost.com/wp-dyn/content/article/2009/07/23/AR2009072301609.html) ]

But this is no new bull market. The total stock market return from 2000 through the beginnning of this year was actually lower than that of money market fund and I believe it might be slightly negative. It has been a lost decade.

Title: Re: Meltdown
Post by: Coopmv on July 23, 2009, 05:01:17 PM

Quote from: Dm on July 23, 2009, 03:37:24 PM
Moody's report: US commercial real estate fallout accelerates as prices plunge 35%

23 July 09

Commercial real estate values around the country have dropped 35 percent from their peak in October 2007, according to Moody's REAL Commercial Property Price Indices. The decline appears to be accelerating as the index dropped more than 15 percent during April and May. Transactional volume also fell along with value, which is showing signs of effects from distressed sales. "May marked a new low for both counts," the report said.

--snip--

David Geltner, who led the team that developed Moody's indices, said May's figures have dropped 22 percent from the same month a year ago. "This makes the second month in a row of near-record losses in the same-property transaction prices of U.S. commercial real estate tracked by Real Capital Analytics," he said.

link (continued)

(http://www.bizjournals.com/sacramento/stories/2009/07/20/daily54.html)

This is the other shoe that is going to drop ...

Title: Re: Meltdown
Post by: Coopmv on July 23, 2009, 05:04:15 PM

Quote from: Dm on July 23, 2009, 03:45:12 PM
Nanotechnology could be key to Solar Cell development
A new nanotechnology approach could mean cheaper solar cells than current silicon-based approaches...

From MIT Tech Review:

Researchers at the University of California, Berkeley, have made a new kind of solar cell by growing an array of upright nanoscale pillars on aluminum foil. They make bendable solar cells by encapsulating the entire cell inside a transparent, rubbery polymer. The design, the researchers suggest, could lead to solar cells that cost less than conventional silicon photovoltaics.

(continued)
(http://www.thecherrycreeknews.com/content/view/4819/2/)

The spies from China are ready to steal this technology. The FBI and these labs will need to be on the lookout ...

Title: Re: Meltdown
Post by: Coopmv on July 23, 2009, 05:07:25 PM

Quote from: Dm on July 23, 2009, 03:56:58 PM
Coop, Democrats are on a spending spree ... it will be very interesting to see how this all plays out. The budget is already busted ... it's now a question of when the repercussions of this become apparent to the average citizen.

Meanwhile, Pelosi just loves spending taxpayer money ...

Pelosi represents the most liberal district in the US - a district in SF and she will NEVER lose her re-election, though her position as speaker will hold as long as the Democrats maintain their majority in the House ...

Title: Re: Meltdown
Post by: Coopmv on July 23, 2009, 05:54:58 PM

DM: This will be a very interesting case to watch ...

STUART, Fla. (July 23) - All sides agree on one thing in the case of a South Florida hospital that secretly repatriated a seriously brain injured patient back to Guatemala.

During the early hours of a steamy July 2003 morning, Martin Memorial Medical Center chartered a private plane and sent Luis Jimenez back to the Central American country without telling his relatives in the U.S. or Guatemala — even as his cousin and legal guardian, Montejo Gaspar, frantically sought to stop the move.

There, things get murky. Gaspar is suing the hospital for essentially deporting Jimenez, who was an illegal immigrant. The hospital, which spent more than $1.5 million on his care over three years, says Jimenez wanted to go home.

Underlying the dispute is the broader question of what Americans expect a hospital to do with a patient who requires long-term care, is unable to pay and doesn't qualify for federal or state aid because of his immigration status. Health care and immigration experts across the country are watching the case, which could set precedent in Florida and possibly beyond. Lawyers for Jimenez said this appears to be the first time a lawsuit has been filed in such a case.

The case went to the jury for deliberations Thursday afternoon.
Before sending them to the jury room, Senior Judge James Midelis told jurors that an appeals court ruling has already established that Jimenez was "unlawfully detained and deprived of liberty" by the hospital and that the hospital had acted against the will of his legal guardian. Midelis told jurors their task would be to decide if the hospital's actions were "unreasonable and unwarranted" under the circumstances.

In closing arguments earlier Thursday, a lawyer for Gaspar and Jimenez said the hospital wanted to send Jimenez back to Guatemala to halt what would have been a long and expensive appeals process.

"The plan was designed once and for all to stop the meter from running, to stop the expenses ... to stop the case from going all the way up to the Supreme Court — because Luis Jimenez was gone," attorney Jack Hill told a packed courtroom in the sleepy South Florida town of Stuart, just north of the exclusive community of Palm Beach.

Scott Michaud, the lawyer for the hospital, countered that Martin Memorial was in an impossible situation, but ultimately a judge — not the hospital — decided that it was acceptable to send Jimenez back to Guatemala. Michaud said the hospital saved Jimenez's life and provided free care for him for three years, only to be unfairly hit with a lawsuit.
"Paging Alice in Wonderland where up is down and down is up and no good deed goes unpunished," he exclaimed Thursday.

The case also raises the question of whether a hospital and a state court should be deciding whether to deport someone — a power long held by the federal government.

"Regardless of the decision, it will heighten the awareness of hospitals nationwide. The next time they debate shipping a patient overseas, they're going to have to do their homework because it's going to leave them open to a lot of legal challenges and questions," said Steve Larson, an assistant dean at the University of Pennsylvania's School of Medicine and medical director of a nonprofit clinic for Latino immigrants.

But Linda Quick, president of the South Florida Hospital & Healthcare Association, says hospitals may become even more wary about providing extended care to uninsured immigrants.

Hospitals are already struggling under the staggering costs of treating the nation's roughly 47 million uninsured. Illegal immigrants make up an estimated 15 percent of this group, according to the Pew Hispanic Center.
"I think they'll do what's required according to physician orders," she said, "but I think they will be more pro-active and aggressive in finding a discharge plan."

Like millions of others, Jimenez, now 37, came the U.S to work as a day laborer, sending money home to his wife and small children. In 2000, a drunk driver crashed into a van he was riding in, leaving the robust soccer player a paraplegic. For more than a year he lingered in a vegetative state before he began to recuperate, eventually reaching a fourth grade level in cognitive ability. The hospital sent him to a long-term care facility for a brief stint, but eventually he was returned to the hospital for care.
Because Jimenez has diminished capacity to make decisions, Gaspar was named as his legal guardian. Initially he supported Jimenez's return to Guatemala, but after a court-appointed attorney for Jimenez questioned whether any hospital there could take him, Gaspar grew concerned.
Then, armed with a vague letter from the Guatemalan minister of health stating the poverty-ridden country could care for Jimenez, the hospital got a county judge to OK the move.

While Gaspar sought an emergency order to stop the move so he could appeal the decision, the hospital put Jimenez on a $30,000 charter flight home.

Gaspar eventually won his appeal, with the court ruling a state judge doesn't have the power to decide immigration cases. By then, it was too late. Jimenez had been released from the Guatemalan hospital and was living with his 73-year-old mother in a one-room home in the mountainous state of Huehuetenango — a steep hike from the village center and 12 hours from the Guatemalan capital.

Jimenez's lawsuit seeks nearly $1 million to cover the estimated lifetime costs of his care in Guatemala, as well as damages for the hospital's alleged "false imprisonment" of his cousin.

A South Florida Roman Catholic priest described a visit to Jimenez in an e-mail to The Associated Press: "He was clean, glad of the visit and occasionally made apparently good sense comments," wrote the Rev. Frank O'Laughlin. "It seemed that he was cooperating with his caregiver and would survive, I guessed, until his first pneumonia."

O'Laughlin said he wasn't sure that Jimenez should be returned to "medical care in an alien Florida institution."

But he said the lawsuit is important because hospitals should not be allowed to deport people.

He and Larson also say a country that relies on cheap immigrant labor for everything from agriculture, to clothing to construction, should factor in the cost of catastrophic injuries to those providing these essential services — whether it means requiring employers to offer coverage for day laborers or ensuring public and nonprofit hospitals can care for them.
Carla Luggiero, a senior associate director for American Hospital Association, said that cases such as Jimenez's are rare. Most of the time, hospitals are able to work with the families to find acceptable care.
And most of the time families don't have pro bono lawyers working for them as Jimenez does.

But she also warned the issue is serious, and it is one Congress has yet to address in its health care reform proposals.

"There is absolutely no discussion about it," Luggiero said. And yet, hospitals that receive Medicare reimbursements are required to provide emergency care to all patients and must provide an acceptable discharge plan once the patient is stabilized.

"It's a complicated, huge issue. Without repatriation, the issue of undocumented immigrants is already a hand grenade and so is health care," Larson said. "So together, you're really walking a tightrope."

Title: Re: Meltdown
Post by: Coopmv on July 25, 2009, 04:28:07 AM

DM: HuaWei, the Chinese telecom equipements company did not bid, wonder why? Perhaps since it sells mostly on price to underbid everyone else and most of its technologies were pilfered from Cisco, it just does not have the real know-how to handle the newest LTE technology. I have owned a bit of Ericsson stocks for years ...

Ericsson buys Nortel wireless units for $1 billion
Swedish telecom giant Ericsson to buy parts of Nortel wireless business for $1.13 billion
By Louise Nordstrom, Associated Press Writer
On Saturday July 25, 2009, 7:57 am EDT

STOCKHOLM (AP) -- Swedish wireless equipment maker LM Ericsson on Saturday said it had penned a deal to buy a majority of Nortel Networks' North American wireless business for $1.13 billion.

The Stockholm-based group said the purchase is on a cash and debt-free basis and covers the older CDMA and newer LTE wireless businesses of Nortel's Carrier Networks unit.

Nortel on Friday placed its wireless business up for auction behind closed doors in New York City, and international tech industry titans submitted their best offers for the prized division.

The deal is subject to approval by relevant authorities.

Ericsson CEO Carl-Henric Svanberg said in a statement that the acquisition would add 2,500 employees to his company, of which about 400 are focused on LTE research and development.

"Acquiring Nortel's North American CDMA business allows us to serve this important region better as we build relationships for the future migration to LTE," he said.

Under the deal, Ericsson will get CDMA contracts with North American operators such as Verizon, Sprint, U.S. Cellular, Bell Canada and Leap, as well as LTE assets, and certain patents and patent licenses relating to CDMA and LTE.

According to Ericsson, Nortel's North American CDMA operations generated $2 billion last year.

"Going forward, research and development costs are expected to be relatively low in CDMA compared with other technologies," Ericsson said.

CDMA, or code division multiple access, is a rival standard to the dominant cellular standard GSM, or global system for mobile, while LTE, or long-term evolution, is a next-generation wireless network technology that promises to be much faster.

In 2008, Ericsson's North American business generated around $2.7 billion of sales.

The group said that including its recent services agreement with Sprint, Saturday's deal will make North America its largest region, with around 14,000 staff.

Ericsson expects the acquisition to have a positive effect on its earnings within a year after closing, it said.

Magnus Mandersson, currently head of Ericsson Northern Europe, has been named President of Ericsson CDMA operations, and Richard Lowe of Nortel the chief operating officer.

Title: Re: Meltdown
Post by: BachQ on July 25, 2009, 09:18:56 AM

Quote from: Coopmv on July 23, 2009, 05:54:58 PM
DM: This will be a very interesting case to watch ...

STUART, Fla. (July 23) - All sides agree on one thing in the case of a South Florida hospital that secretly repatriated a seriously brain injured patient back to Guatemala.

During the early hours of a steamy July 2003 morning, Martin Memorial Medical Center chartered a private plane and sent Luis Jimenez back to the Central American country without telling his relatives in the U.S. or Guatemala — even as his cousin and legal guardian, Montejo Gaspar, frantically sought to stop the move.

There, things get murky. Gaspar is suing the hospital for essentially deporting Jimenez, who was an illegal immigrant. The hospital, which spent more than $1.5 million on his care over three years, says Jimenez wanted to go home.

Underlying the dispute is the broader question of what Americans expect a hospital to do with a patient who requires long-term care, is unable to pay and doesn't qualify for federal or state aid because of his immigration status. Health care and immigration experts across the country are watching the case, which could set precedent in Florida and possibly beyond. Lawyers for Jimenez said this appears to be the first time a lawsuit has been filed in such a case.

The case went to the jury for deliberations Thursday afternoon.
Before sending them to the jury room, Senior Judge James Midelis told jurors that an appeals court ruling has already established that Jimenez was "unlawfully detained and deprived of liberty" by the hospital and that the hospital had acted against the will of his legal guardian. Midelis told jurors their task would be to decide if the hospital's actions were "unreasonable and unwarranted" under the circumstances.

In closing arguments earlier Thursday, a lawyer for Gaspar and Jimenez said the hospital wanted to send Jimenez back to Guatemala to halt what would have been a long and expensive appeals process.

"The plan was designed once and for all to stop the meter from running, to stop the expenses ... to stop the case from going all the way up to the Supreme Court — because Luis Jimenez was gone," attorney Jack Hill told a packed courtroom in the sleepy South Florida town of Stuart, just north of the exclusive community of Palm Beach.

Scott Michaud, the lawyer for the hospital, countered that Martin Memorial was in an impossible situation, but ultimately a judge — not the hospital — decided that it was acceptable to send Jimenez back to Guatemala. Michaud said the hospital saved Jimenez's life and provided free care for him for three years, only to be unfairly hit with a lawsuit.
"Paging Alice in Wonderland where up is down and down is up and no good deed goes unpunished," he exclaimed Thursday.

The case also raises the question of whether a hospital and a state court should be deciding whether to deport someone — a power long held by the federal government.

"Regardless of the decision, it will heighten the awareness of hospitals nationwide. The next time they debate shipping a patient overseas, they're going to have to do their homework because it's going to leave them open to a lot of legal challenges and questions," said Steve Larson, an assistant dean at the University of Pennsylvania's School of Medicine and medical director of a nonprofit clinic for Latino immigrants.

But Linda Quick, president of the South Florida Hospital & Healthcare Association, says hospitals may become even more wary about providing extended care to uninsured immigrants.

Hospitals are already struggling under the staggering costs of treating the nation's roughly 47 million uninsured. Illegal immigrants make up an estimated 15 percent of this group, according to the Pew Hispanic Center.
"I think they'll do what's required according to physician orders," she said, "but I think they will be more pro-active and aggressive in finding a discharge plan."

Like millions of others, Jimenez, now 37, came the U.S to work as a day laborer, sending money home to his wife and small children. In 2000, a drunk driver crashed into a van he was riding in, leaving the robust soccer player a paraplegic. For more than a year he lingered in a vegetative state before he began to recuperate, eventually reaching a fourth grade level in cognitive ability. The hospital sent him to a long-term care facility for a brief stint, but eventually he was returned to the hospital for care.
Because Jimenez has diminished capacity to make decisions, Gaspar was named as his legal guardian. Initially he supported Jimenez's return to Guatemala, but after a court-appointed attorney for Jimenez questioned whether any hospital there could take him, Gaspar grew concerned.
Then, armed with a vague letter from the Guatemalan minister of health stating the poverty-ridden country could care for Jimenez, the hospital got a county judge to OK the move.

While Gaspar sought an emergency order to stop the move so he could appeal the decision, the hospital put Jimenez on a $30,000 charter flight home.

Gaspar eventually won his appeal, with the court ruling a state judge doesn't have the power to decide immigration cases. By then, it was too late. Jimenez had been released from the Guatemalan hospital and was living with his 73-year-old mother in a one-room home in the mountainous state of Huehuetenango — a steep hike from the village center and 12 hours from the Guatemalan capital.

Jimenez's lawsuit seeks nearly $1 million to cover the estimated lifetime costs of his care in Guatemala, as well as damages for the hospital's alleged "false imprisonment" of his cousin.

A South Florida Roman Catholic priest described a visit to Jimenez in an e-mail to The Associated Press: "He was clean, glad of the visit and occasionally made apparently good sense comments," wrote the Rev. Frank O'Laughlin. "It seemed that he was cooperating with his caregiver and would survive, I guessed, until his first pneumonia."

O'Laughlin said he wasn't sure that Jimenez should be returned to "medical care in an alien Florida institution."

But he said the lawsuit is important because hospitals should not be allowed to deport people.

He and Larson also say a country that relies on cheap immigrant labor for everything from agriculture, to clothing to construction, should factor in the cost of catastrophic injuries to those providing these essential services — whether it means requiring employers to offer coverage for day laborers or ensuring public and nonprofit hospitals can care for them.
Carla Luggiero, a senior associate director for American Hospital Association, said that cases such as Jimenez's are rare. Most of the time, hospitals are able to work with the families to find acceptable care.
And most of the time families don't have pro bono lawyers working for them as Jimenez does.

But she also warned the issue is serious, and it is one Congress has yet to address in its health care reform proposals.

"There is absolutely no discussion about it," Luggiero said. And yet, hospitals that receive Medicare reimbursements are required to provide emergency care to all patients and must provide an acceptable discharge plan once the patient is stabilized.

"It's a complicated, huge issue. Without repatriation, the issue of undocumented immigrants is already a hand grenade and so is health care," Larson said. "So together, you're really walking a tightrope."

How about a new federal law that simply states: "Illegal immigrants SHALL HAVE NO RIGHTS. NONE. ZERO."

Title: Re: Meltdown
Post by: BachQ on July 25, 2009, 09:22:21 AM

Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601087&sid=ajlP7ROLo39w)Even as home prices have fallen 33%, U.S. home vacancies now exceed 18.7 Million on bank seizures, with more than 14% of homes vacant during 2Q.

Title: Re: Meltdown
Post by: BachQ on July 25, 2009, 09:23:35 AM

Quote from: O Mensch on July 23, 2009, 03:59:55 PM
So, you'd prefer to see government cutting spending, thereby reducing demand even further and adding several thousand former government employees to the numbers of unemployed?

I'd prefer legislation carefully tailored to address a country's core economic and energy concerns rather than sprawling shotgun legislation filled with unnecessary pork.

Title: Re: Meltdown
Post by: Coopmv on July 25, 2009, 09:25:20 AM

Quote from: Dm on July 25, 2009, 09:18:56 AM
How about a new federal law that simply states: "Illegal immigrants SHALL HAVE NO RIGHTS. NONE. ZERO."

The ACLU has been pushing civil rights and all kinds of other rights for the illegals. IMO, the only kind of rights that should be accorded the illegals in the US are the basic human rights, which should be respected anywhere. The illegals should NEVER have any rights-parity with the US citizens or those who are legally here in the US ...

Title: Re: Meltdown
Post by: BachQ on July 25, 2009, 09:28:07 AM

State budgets walloped again
Revenue shortfalls lead to new budget gaps only three weeks into the new fiscal year. States are forced to make more painful budget cuts.

By Tami Luhby, CNNMoney.com senior writer
Last Updated: July 24, 2009: 10:03 PM ET

NEW YORK (CNNMoney.com) -- The bad news about state budgets just keeps getting worse. Only three weeks into the new fiscal year, gaps are already opening up. And the shortfalls are only expected to grow.

"If you think legislators are breathing a sigh of relief because their budgets are passed, think again," said William Pound, executive director of the National Conference of State Legislatures. State legislators and governors had to contend with deficits totaling $142.6 billion as they closed out fiscal 2009, which ended on June 30 for 46 states, according to the conference. Three states have yet to pass balanced budgets for fiscal 2010, as officials tussle over painful budget cuts and tax increases.

But even some states that approved budgets are going back to the drawing board as revenues drop faster and more sharply than they had estimated. Legislators from around the country, who are meeting in Philadelphia, gathered Tuesday to discuss their common plight. Gallows humor was abundant, according to Corina Eckl, director of the conference's fiscal program.

An Arizona official joked that the state's financial plight is comparable to the Grand Canyon, while an Illinois legislator said his state's budget situation is so scary, it's best told around a campfire at night.
"The revenue forecasts are continuing to underperform even the most pessimistic of projections," Eckl said. "There's still a lot of this ahead of us."

At least 12 states and the District of Columbia are confronting gaps totaling $24 billion in budgets already adopted, according the Center for Budget Policy and Priorities, which focuses on policies affecting low- and moderate-income families and tracks state budgets.

In a sign of what other states may have to contend with, California Gov. Arnold Schwarzenegger and lawmakers have reached a compromise to close a $26 billion budget gap. The spending plan, however, is anything but pretty and has raised the ire of many groups within the state. The agreement, which was approved Friday by the state legislature, calls for slashing $15.5 billion in spending, including some massive cuts to education, social services and corrections, as well as borrowing $2 billion from local government, shifting money from other funds and other accounting gimmicks.

(click for continuation)
(http://money.cnn.com/2009/07/23/news/economy/state_budget_gaps/index.htm)

Title: Re: Meltdown
Post by: BachQ on July 25, 2009, 09:30:36 AM

Quote from: Coopmv on July 23, 2009, 05:01:17 PM
This is the other shoe that is going to drop ...

Coop, it seems you have company with your prediction: Commercial real estate is the next shoe to drop. (http://economictimes.indiatimes.com/articleshow/4816425.cms?flstry=1)

Title: Re: Meltdown
Post by: BachQ on July 25, 2009, 09:32:44 AM

Fannie & Freddie: The most expensive bailout
Efforts to use the troubled mortgage finance firms to fix housing market problems are likely to push the taxpayer bill for Fannie & Freddie above $100 billion.

By Chris Isidore, CNNMoney.com senior writer
Last Updated: July 22, 2009: 8:50 PM ET

NEW YORK (CNNMoney.com) -- The first big government bailout of the financial crisis -- the takeover of mortgage finance giants Fannie Mae and Freddie Mac -- is poised to be the most expensive and complicated to complete.

Since Congress essentially wrote a blank check to the Treasury Department in July 2008 to do what needed to be done to inject capital into the two firms, Fannie (FNM, Fortune 500) has received $34.2 billion of direct government support while Freddie (FRE, Fortune 500) has received $51.7 billion. While that's lower than the $117.5 billion poured into insurer AIG (AIG, Fortune 500) by the Federal Reserve and the $200 billion given to the nation's largest banks through the Troubled Asset Relief Program, or TARP, the current cost of the Fannie and Freddie bailouts dwarfs original estimates from a year ago.

When Congress was debating the bailout of Fannie and Freddie last July, the official estimate from the Congressional Budget Office was that a bailout would most likely cost taxpayers $25 billion, with only a 5% chance of the price tag reaching $100 billion between them.

In addition, both Fannie and Freddie are likely to need billions of dollars more after they report second quarter results in the coming weeks. Experts believe the cost will only continue to rise in the next year.
"We're assuming they each will cross the $100 billion mark fairly soon. They could be hitting the $200 billion barrier by the end of next year," said Bose George, mortgage analyst at Keefe, Bruyette & Woods, an investment bank specializing in financial services firms.

(click for continuation)
(http://money.cnn.com/2009/07/22/news/companies/fannie_freddie_bailout/)

Title: Re: Meltdown
Post by: BachQ on July 25, 2009, 09:39:01 AM

UK Guardian: (http://www.guardian.co.uk/business/2009/jul/24/uk-gdp-record-fall) UK GDP falls faster than expected, contracting by a record 5.6% over the past year as output fell for a fifth straight quarter, dashing hopes that the steepest decline in growth since the 1930s might be nearing an end, the Office for National Statistics said.

Comments by economists:

Colin Ellis, European economist at Daiwa Securities SMBC: "The GDP number was much worse than had been expected ... The bottom line was that today's number is pretty dire, and a sharp wake-up call for anyone who had already been dreaming of recovery."

Vicky Redwood, UK economist at Capital Economics: "The provisional UK GDP figures for Q2 are shockingly bad and firmly dash any hopes that the UK had already pulled out of recession."

Rob Carnell, ING Markets: "UK 2Q09 GDP came in worse than many had been expecting [and] at -0.8%, the outcome was almost twice as bad as the consensus expectation, and drags the year on year rate of growth to a sorry -5.6%."

Alan Clarke, UK economist at BNP Paribas: "UK Q2 GDP was much weaker than expected at -0.8% quarter-on-quarter against expectations for -0.3% quarter-on-quarter. That was much worse than indicated by the usually reliable surveys. ... One interpretation is that the green shoots indicated by survey releases were a flash in the pan and are not feeding into the hard economic data, though it is still early days. Worryingly, the upward thrust in the leading indicators that sparked green shoots fever is losing momentum."

David Kern, chief economist at the British Chambers of Commerce: "On the basis of these figures, the UK recession is almost as bad as that of the early 1980s. June's positive retail sales were more than offset by declines in other areas of the economy. There is no room for complacency and suggestions of suspending quantitative easing are misguided. It is important to persevere with an aggressive policy stimulus to ensure that the economic downturn does not worsen."

KPMG chief economist Andrew Smith: "The worse-than-expected outcome is confirmation that the recession is deeper and even more serious than previously thought – and that the road back to sustained growth will be a long haul. ... Hopes of a V-shaped recovery have all but evaporated. On the demand-side, ... Overall, today's figures indicate that any recovery in the next year is likely to be weak at best - and starting from a lower base."

(http://www.guardian.co.uk/business/2009/jul/24/uk-gdp-what-economists-say)

UK Telegraph: (http://www.telegraph.co.uk/finance/financetopics/recession/5901961/British-economic-collapse-rivals-Great-Depression.html) British economic collapse now rivals the worst days of the Great Depression

(http://www.telegraph.co.uk/telegraph/multimedia/archive/01449/uk_unemployment_ra_1449200c.jpg) (http://www.telegraph.co.uk/telegraph/multimedia/archive/01449/nationwide_house_p_1449221c.jpg) (http://www.telegraph.co.uk/telegraph/multimedia/archive/01449/uk_index_of_produc_1449215c.jpg) (http://www.telegraph.co.uk/telegraph/multimedia/archive/01449/UK-quarterly-gdp-g_1449405c.jpg)

Title: Re: Meltdown
Post by: Coopmv on July 25, 2009, 09:43:50 AM

Quote from: Dm on July 25, 2009, 09:28:07 AM
State budgets walloped again
Revenue shortfalls lead to new budget gaps only three weeks into the new fiscal year. States are forced to make more painful budget cuts.

By Tami Luhby, CNNMoney.com senior writer
Last Updated: July 24, 2009: 10:03 PM ET

NEW YORK (CNNMoney.com) -- The bad news about state budgets just keeps getting worse. Only three weeks into the new fiscal year, gaps are already opening up. And the shortfalls are only expected to grow.

"If you think legislators are breathing a sigh of relief because their budgets are passed, think again," said William Pound, executive director of the National Conference of State Legislatures. State legislators and governors had to contend with deficits totaling $142.6 billion as they closed out fiscal 2009, which ended on June 30 for 46 states, according to the conference. Three states have yet to pass balanced budgets for fiscal 2010, as officials tussle over painful budget cuts and tax increases.

But even some states that approved budgets are going back to the drawing board as revenues drop faster and more sharply than they had estimated. Legislators from around the country, who are meeting in Philadelphia, gathered Tuesday to discuss their common plight. Gallows humor was abundant, according to Corina Eckl, director of the conference's fiscal program.

An Arizona official joked that the state's financial plight is comparable to the Grand Canyon, while an Illinois legislator said his state's budget situation is so scary, it's best told around a campfire at night.
"The revenue forecasts are continuing to underperform even the most pessimistic of projections," Eckl said. "There's still a lot of this ahead of us."

At least 12 states and the District of Columbia are confronting gaps totaling $24 billion in budgets already adopted, according the Center for Budget Policy and Priorities, which focuses on policies affecting low- and moderate-income families and tracks state budgets.

In a sign of what other states may have to contend with, California Gov. Arnold Schwarzenegger and lawmakers have reached a compromise to close a $26 billion budget gap. The spending plan, however, is anything but pretty and has raised the ire of many groups within the state. The agreement, which was approved Friday by the state legislature, calls for slashing $15.5 billion in spending, including some massive cuts to education, social services and corrections, as well as borrowing $2 billion from local government, shifting money from other funds and other accounting gimmicks.

(click for continuation)

(http://money.cnn.com/2009/07/23/news/economy/state_budget_gaps/index.htm)

But has CA done away with those $100K+ annual pensions for its firemen, cops and correction officers? Many of the municipalities must face up to this reality as these liabilities are like cancer in uncontrolled growth ...

::)

Title: Re: Meltdown
Post by: Coopmv on July 25, 2009, 10:00:35 AM

Quote from: Dm on July 25, 2009, 09:30:36 AM
Coop, it seems you have company with your prediction: Commercial real estate is the next shoe to drop.
(http://economictimes.indiatimes.com/articleshow/4816425.cms?flstry=1)

Blamed this debacle on all these city mayors and city councils across the US. There were no development projects they did not like a few years ago when there was a building boom in commercial real estate. Now all these unfinished projects or empty buildings are destroying the market values for existing buildings in much the same way the excess or foreclosed homes are destroying values of the occupied homes ...

Title: Re: Meltdown
Post by: BachQ on July 25, 2009, 10:02:33 AM

Quote from: Coopmv on June 17, 2009, 04:43:03 PM
Another big reason the US MUST beef up border controls, as a wave of illegals will stream across the border when the Mexican national oil revenues dry up and the government can no longer afford the social programs ...

Manhunt launched amid murder of US border patrol agent who was responding to an incursion alert. (http://www.allheadlinenews.com/articles/7015899187?Officials%20From%20U.S.-Mexico%20Launch%20Manhunt%20Over%20Killing%20Of%20Border%20Patrol%20Agent)

Title: Re: Meltdown
Post by: Coopmv on July 25, 2009, 10:06:50 AM

Quote from: Dm on July 25, 2009, 10:02:33 AM
Manhunt launched amid murder of US border patrol agent who was responding to an incursion alert.
(http://www.allheadlinenews.com/articles/7015899187?Officials%20From%20U.S.-Mexico%20Launch%20Manhunt%20Over%20Killing%20Of%20Border%20Patrol%20Agent)

Line that US - Mexican borders with robots which will automatically shoot at anyone who try to illegally cross the border. Robots work 24/7 and take no lunch/coffee break, are forever alert and devoid of any human emotion ...

Title: Re: Meltdown
Post by: MishaK on July 25, 2009, 11:14:24 AM

Quote from: Coopmv on July 25, 2009, 10:06:50 AM
Line that US - Mexican borders with robots which will automatically shoot at anyone who try to illegally cross the border. Robots work 24/7 and take no lunch/coffee break, are forever alert and devoid of any human emotion ...

Brilliant! And how do you prevent it from accidentally wasting its ammo on coyotes, migrating birds, errant hikers? BTW, it might be news to you, but, with some local exceptions, generally under US law lethal force is not permissible merely to protect property/real estate. Property owners who plant booby traps that shoot trespassers are liable for the deaths and injuries that ensue.

Title: Re: Meltdown
Post by: Coopmv on July 25, 2009, 12:54:23 PM

Quote from: Dm on July 25, 2009, 09:32:44 AM
Fannie & Freddie: The most expensive bailout
Efforts to use the troubled mortgage finance firms to fix housing market problems are likely to push the taxpayer bill for Fannie & Freddie above $100 billion.

By Chris Isidore, CNNMoney.com senior writer
Last Updated: July 22, 2009: 8:50 PM ET

NEW YORK (CNNMoney.com) -- The first big government bailout of the financial crisis -- the takeover of mortgage finance giants Fannie Mae and Freddie Mac -- is poised to be the most expensive and complicated to complete.

Since Congress essentially wrote a blank check to the Treasury Department in July 2008 to do what needed to be done to inject capital into the two firms, Fannie (FNM, Fortune 500) has received $34.2 billion of direct government support while Freddie (FRE, Fortune 500) has received $51.7 billion. While that's lower than the $117.5 billion poured into insurer AIG (AIG, Fortune 500) by the Federal Reserve and the $200 billion given to the nation's largest banks through the Troubled Asset Relief Program, or TARP, the current cost of the Fannie and Freddie bailouts dwarfs original estimates from a year ago.

When Congress was debating the bailout of Fannie and Freddie last July, the official estimate from the Congressional Budget Office was that a bailout would most likely cost taxpayers $25 billion, with only a 5% chance of the price tag reaching $100 billion between them.

In addition, both Fannie and Freddie are likely to need billions of dollars more after they report second quarter results in the coming weeks. Experts believe the cost will only continue to rise in the next year.
"We're assuming they each will cross the $100 billion mark fairly soon. They could be hitting the $200 billion barrier by the end of next year," said Bose George, mortgage analyst at Keefe, Bruyette & Woods, an investment bank specializing in financial services firms.

(click for continuation)

(http://money.cnn.com/2009/07/22/news/companies/fannie_freddie_bailout/)

And the two Democrats Chris Dodd of the US Senate and Barney Frank of the US House both had a big hand in blocking any meaningful regulatory oversight to be imposed on Fannie and Freddie back in 2006. They are both running for re-election next year ...

Title: Re: Meltdown
Post by: Coopmv on July 25, 2009, 12:59:55 PM

Quote from: O Mensch on July 25, 2009, 11:14:24 AM
Brilliant! And how do you prevent it from accidentally wasting its ammo on coyotes, migrating birds, errant hikers? BTW, it might be news to you, but, with some local exceptions, generally under US law lethal force is not permissible merely to protect property/real estate. Property owners who plant booby traps that shoot trespassers are liable for the deaths and injuries that ensue.

Do you know that the army cannot be sued for wrongful deaths by the soldiers' families? Exceptions can always be made. With the brilliant legal minds in Washington, they will find a way if they have the will ...

Title: Re: Meltdown
Post by: Coopmv on July 25, 2009, 01:10:43 PM

DM: This is an outrage when a property owner cannot protect his own property ...

16 illegals sue Arizona rancher
Claim violation of rights as they crossed his land
By Jerry Seper (Contact) | Monday, February 9, 2009

An Arizona man who has waged a 10-year campaign to stop a flood of illegal immigrants from crossing his property is being sued by 16 Mexican nationals who accuse him of conspiring to violate their civil rights when he stopped them at gunpoint on his ranch on the U.S.-Mexico border.

Roger Barnett, 64, began rounding up illegal immigrants in 1998 and turning them over to the U.S. Border Patrol, he said, after they destroyed his property, killed his calves and broke into his home.

His Cross Rail Ranch near Douglas, Ariz., is known by federal and county law enforcement authorities as "the avenue of choice" for immigrants seeking to enter the United States illegally.

Trial continues Monday in the federal lawsuit, which seeks $32 million in actual and punitive damages for civil rights violations, the infliction of emotional distress and other crimes. Also named are Mr. Barnett's wife, Barbara, his brother, Donald, and Larry Dever, sheriff in Cochise County, Ariz., where the Barnetts live. The civil trial is expected to continue until Friday.

The lawsuit is based on a March 7, 2004, incident in a dry wash on the 22,000-acre ranch, when he approached a group of illegal immigrants while carrying a gun and accompanied by a large dog.

Attorneys for the immigrants - five women and 11 men who were trying to cross illegally into the United States - have accused Mr. Barnett of holding the group captive at gunpoint, threatening to turn his dog loose on them and saying he would shoot anyone who tried to escape.

The immigrants are represented at trial by the Mexican American Legal Defense and Educational Fund (MALDEF), which also charged that Sheriff Dever did nothing to prevent Mr. Barnett from holding their clients at "gunpoint, yelling obscenities at them and kicking one of the women."

In the lawsuit, MALDEF said Mr. Barnett approached the group as the immigrants moved through his property, and that he was carrying a pistol and threatening them in English and Spanish. At one point, it said, Mr. Barnett's dog barked at several of the women and he yelled at them in Spanish, "My dog is hungry and he's hungry for buttocks."

The lawsuit said he then called his wife and two Border Patrol agents arrived at the site. It also said Mr. Barnett acknowledged that he had turned over 12,000 illegal immigrants to the Border Patrol since 1998.

In March, U.S. District Judge John Roll rejected a motion by Mr. Barnett to have the charges dropped, ruling there was sufficient evidence to allow the matter to be presented to a jury. Mr. Barnett's attorney, David Hardy, had argued that illegal immigrants did not have the same rights as U.S. citizens.

Mr. Barnett told The Washington Times in a 2002 interview that he began rounding up illegal immigrants after they started to vandalize his property, northeast of Douglas along Arizona Highway 80. He said the immigrants tore up water pumps, killed calves, destroyed fences and gates, stole trucks and broke into his home.

Some of his cattle died from ingesting the plastic bottles left behind by the immigrants, he said, adding that he installed a faucet on an 8,000-gallon water tank so the immigrants would stop damaging the tank to get water.

Mr. Barnett said some of the ranch´s established immigrant trails were littered with trash 10 inches deep, including human waste, used toilet paper, soiled diapers, cigarette packs, clothes, backpacks, empty 1-gallon water bottles, chewing-gum wrappers and aluminum foil - which supposedly is used to pack the drugs the immigrant smugglers give their "clients" to keep them running.

He said he carried a pistol during his searches for the immigrants and had a rifle in his truck "for protection" against immigrant and drug smugglers, who often are armed.

A former Cochise County sheriff´s deputy who later was successful in the towing and propane business, Mr. Barnett spent $30,000 on electronic sensors, which he has hidden along established trails on his ranch. He searches the ranch for illegal immigrants in a pickup truck, dressed in a green shirt and camouflage hat, with his handgun and rifle, high-powered binoculars and a walkie-talkie.

His sprawling ranch became an illegal-immigration highway when the Border Patrol diverted its attention to several border towns in an effort to take control of the established ports of entry. That effort moved the illegal immigrants to the remote areas of the border, including the Cross Rail Ranch.

"This is my land. I´m the victim here," Mr. Barnett said. "When someone´s home and loved ones are in jeopardy and the government seemingly can´t do anything about it, I feel justified in taking matters into my own hands. And I always watch my back."

Title: Re: Meltdown
Post by: Coopmv on July 25, 2009, 02:40:12 PM

Quote from: Dm on July 25, 2009, 09:39:01 AM
UK Guardian: (http://www.guardian.co.uk/business/2009/jul/24/uk-gdp-record-fall) UK GDP falls faster than expected, contracting by a record 5.6% over the past year as output fell for a fifth straight quarter, dashing hopes that the steepest decline in growth since the 1930s might be nearing an end, the Office for National Statistics said.

Comments by economists:

Colin Ellis, European economist at Daiwa Securities SMBC: "The GDP number was much worse than had been expected ... The bottom line was that today's number is pretty dire, and a sharp wake-up call for anyone who had already been dreaming of recovery."

Vicky Redwood, UK economist at Capital Economics: "The provisional UK GDP figures for Q2 are shockingly bad and firmly dash any hopes that the UK had already pulled out of recession."

Rob Carnell, ING Markets: "UK 2Q09 GDP came in worse than many had been expecting [and] at -0.8%, the outcome was almost twice as bad as the consensus expectation, and drags the year on year rate of growth to a sorry -5.6%."

Alan Clarke, UK economist at BNP Paribas: "UK Q2 GDP was much weaker than expected at -0.8% quarter-on-quarter against expectations for -0.3% quarter-on-quarter. That was much worse than indicated by the usually reliable surveys. ... One interpretation is that the green shoots indicated by survey releases were a flash in the pan and are not feeding into the hard economic data, though it is still early days. Worryingly, the upward thrust in the leading indicators that sparked green shoots fever is losing momentum."

David Kern, chief economist at the British Chambers of Commerce: "On the basis of these figures, the UK recession is almost as bad as that of the early 1980s. June's positive retail sales were more than offset by declines in other areas of the economy. There is no room for complacency and suggestions of suspending quantitative easing are misguided. It is important to persevere with an aggressive policy stimulus to ensure that the economic downturn does not worsen."

KPMG chief economist Andrew Smith: "The worse-than-expected outcome is confirmation that the recession is deeper and even more serious than previously thought – and that the road back to sustained growth will be a long haul. ... Hopes of a V-shaped recovery have all but evaporated. On the demand-side, ... Overall, today's figures indicate that any recovery in the next year is likely to be weak at best - and starting from a lower base."

(http://www.guardian.co.uk/business/2009/jul/24/uk-gdp-what-economists-say)

UK Telegraph: (http://www.telegraph.co.uk/finance/financetopics/recession/5901961/British-economic-collapse-rivals-Great-Depression.html) British economic collapse now rivals the worst days of the Great Depression

(http://www.telegraph.co.uk/telegraph/multimedia/archive/01449/uk_unemployment_ra_1449200c.jpg) (http://www.telegraph.co.uk/telegraph/multimedia/archive/01449/nationwide_house_p_1449221c.jpg) (http://www.telegraph.co.uk/telegraph/multimedia/archive/01449/uk_index_of_produc_1449215c.jpg) (http://www.telegraph.co.uk/telegraph/multimedia/archive/01449/UK-quarterly-gdp-g_1449405c.jpg)

It will be an L-shaped economic recovery for the UK and perhaps for the US as well. For the US, I think the determining factor may well hinge on how bad the commercial real estate market gets. The banks may need another round of bailouts and for the developers, there should be no bailouts. Let them go under since they have been way too greedy ...

Title: Re: Meltdown
Post by: MishaK on July 25, 2009, 05:48:27 PM

Quote from: Coopmv on July 25, 2009, 12:59:55 PM
Do you know that the army cannot be sued for wrongful deaths by the soldiers' families? Exceptions can always be made. With the brilliant legal minds in Washington, they will find a way if they have the will ...

That is a total non sequitur. It's not the soldiers that are being shot by the Army. You don't have the right to shoot citizens of another country that aren't soldiers and that you're not at war with.

But this is clearly the Coopmv & Dm kooky theory den, so I'll leave you to your games.

Title: Re: Meltdown
Post by: Coopmv on July 26, 2009, 09:20:41 AM

DM, Here is another exercise of futility. Remember GATT from 20 years ago - the general agreement to talk and talk (more) ... ;D

US hopes China talks spur economy, job creation
Despite diplomatic tensions, US hopes China talks help spur economic recovery, job creation
By Martin Crutsinger, AP Economics Writer
On Sunday July 26, 2009, 12:04 pm EDT

WASHINGTON (AP) -- With the global economy mired in recession, the United States and China begin talks Monday to seek a solution together despite tensions over currencies, the U.S. budget deficit and the huge U.S. trade gap with China.

Ultimately, how well the U.S. efforts succeed could help determine how fast the economy recovers and how many U.S. jobs might be created once it does.

Other issues, such as climate control and North Korean nuclear ambitions, also will command attention. Few expect the talks to bridge the sharp differences between Beijing and Washington. But both governments want to use the occasion to help build a less confrontational relationship.

Three years ago, Henry Paulson, then Treasury secretary, used the talks to press Beijing to let its currency, the yuan, rise in value against the dollar, to make it cheaper for Chinese to buy U.S. goods. U.S. manufacturers blame an undervalued yuan for record U.S. trade deficits with China -- and, in part, for a decline in U.S. jobs.

The U.S. efforts have yielded only mixed results. The yuan, after rising in value about 22 percent since 2005, has scarcely budged in the past year. Beijing had begun to fear that a stronger yuan could threaten its exports. Chinese exports already were under pressure from the global recession.

But the Obama administration intends to remain focused on the trade gap. It plans to stress at the talks Monday and Tuesday that China can't rely on U.S. consumers to pull the global economy out of recession this time. In part, that's because U.S. household savings rates are rising, shrinking consumer spending in this country.

"Perhaps the most important message we are going to have for the Chinese is that there has been a fundamental change in the U.S. economy," said a senior administration official, who briefed reporters on the meetings under rules that did not permit use of his name. "The U.S. economy is going to recover, but it is going to be a different type of recovery than what the Chinese have seen in the past."

That change will mean that the Chinese won't be able to rely on booming U.S. demand for Chinese goods to lift their economy. Instead, they will have to shift from an export-led economy to growth that's fueled in large part by rising Chinese spending.

For the United States, suffering from a 9.5 percent unemployment rate, the ultimate goal is to help put more Americans to work.

"All of this ultimately gets back to jobs in the United States," the U.S. official said. "If the Chinese can increase their domestic consumption and reduce their trade surplus, that will mean more U.S. jobs."

The official said the United States also will seek assurances that Beijing won't resort to what Washington considers protectionist trade steps. Some in Congress want to punish China for what they see as unfair trade practices that have cost Americans manufacturing jobs.

The Obama administration has filed its first unfair-trade case against China over its restrictions on exports that U.S. manufacturers need to produce steel and other products. U.S. officials said they also will raise complaints about how China handles its government contracts, a process that U.S. manufacturers say discriminates against them.

The U.S. trade deficit with China has narrowed slightly this year. The main reason is thought to be the weak U.S. economy, which has cut consumers' demand for Chinese goods.

The United States wants to reduce the gap further, with fewer Chinese trade restrictions on U.S.-made imports. Some lawmakers are pressing for a law to impose sanctions on China unless it does more to let its currency rise.

The latest round of talks will have a different look. The Obama administration has decided to expand the focus this time beyond economics. It will include foreign policy issues, including the need for China's cooperation in imposing sanctions on North Korea over its nuclear program.

Treasury Secretary Timothy Geithner and Secretary of State Hillary Rodham Clinton will be co-leaders of the U.S. delegation, joined by their Chinese counterparts, Vice Premier Wang Qishan and State Councilor Dai Bingguo.

The meeting will include officials from various departments. On the U.S. side, Energy Secretary Steven Chu will be part of a team of officials from the Environmental Protection Agency, the White House and the State Department involved in the global climate discussions.

The Chinese are bringing a delegation of 150 officials, one of the largest ever to visit the United States. Highlighting the importance of the meetings, President Barack Obama will address the opening session.

Chinese officials are making clear they want further explanations of what the administration plans to do about the soaring U.S. budget deficits. China, the largest foreign holder of U.S. Treasury debt -- $801.5 billion -- wants to know that those holdings are safe and won't be jeopardized in case of future inflation.

"The Chinese delegation, especially Vice Premier Wang, will make the request that the U.S. side should adopt responsible policies to ensure the basic stability of the exchange rate of the U.S. dollar and protect the safety of Chinese assets in the United States," Zhu Guangyao, an assistant Chinese finance minister, told reporters in Beijing.

The Chinese are likely to hear a repeat of the assurances Geithner gave them when he visited China last month. He said then that the administration is committed to cutting the U.S. budget deficit -- expected to hit $1.84 trillion this year -- in half once the emergency spending to ease the recession and the financial crisis are no longer needed.

So what's likely to emerge from two days of talks?

Both the U.S. and Chinese sides are playing down expectations for any major breakthroughs. But outside observers say that doesn't mean the meetings won't serve a useful purpose.

"Our economies are very intertwined, and we both have a huge impact on the global economy," said Frank Vargo, vice president for international affairs at the National Association of Manufacturers.

Title: Re: Meltdown
Post by: Coopmv on July 26, 2009, 10:30:54 AM

DM, It was all BS from Pelosi. It turned out the Democrats do not have the votes to pass the healthcare reform bill in the US Senate anyway. The Democrats in the House are between a rock and a hard place since they have to face voters next year while many of the Senate Democrats do not ...

Democrat says health overhaul needs GOP to pass
Democratic senator says GOP needed for health care overhaul many Republicans oppose
On Sunday July 26, 2009, 1:32 pm EDT

WASHINGTON (AP) -- Senate Democrats alone cannot pass President Barack Obama's ambitious overhaul of how Americans receive health care, a top lawmaker acknowledged on Sunday. Republicans said they will continue their opposition to a plan they say is simply a government takeover of private decisions.

Both sides said they want to improve the system and provide care for almost 50 million Americans who lack health insurance coverage, but they remain deeply divided over how to reach that goal. Republicans said the longer the delay, the more the public understands the stakes of a policy that has vexed lawmakers for decades.

"Republicans want to protect the right of Americans to make their own health care decisions, to pick their own doctors and their own plans," said Sen. Jim DeMint, R-S.C. "We could have a plan in a few weeks if the goal is not a government takeover. We've never seen the government operate a plan of any kind effectively and at the budgets we talked about."

Democrats countered that their plans -- and there are many iterations on Capitol Hill, as committees in both the House and Senate work on versions -- would expand coverage without adding to the deficit. Even so, they are likely to leave for an August recess without a vote.

White House spokesman Robert Gibbs said they are "80 percent" in agreement on what a final version will include and are making progress.

In separate interviews, Obama adviser David Axelrod used the same line, underscoring the White House's desire to paint the missed deadline as a hiccup rather than a hurdle.

"Now, we're at the final 20 percent and we're trying to work through those details," Axelrod said during one appearance.

During another, he added: "We're less interested in hard deadlines than in moving the process forward. The deadlines have had a disciplining effect. ... What we don't want is for the process to bog down here. We want to keep moving forward, and I believe we will.

That final piece, however, will require GOP backing -- something Sen. Mitch McConnell said was unlikely. The Senate minority leader said congressional Democrats are having difficulty selling a health care bill to their own members.

"The only thing bipartisan about the measure so far is the opposition to it," said McConnell, R-Ky.

It's a reality a key Democratic senator acknowledged. Even though the Democrats enjoy a majority in the Senate, some are skittish about the financial or political costs of the proposals.

"Look, there are not the votes for Democrats to do this just on our side of the aisle," said Sen. Kent Conrad, D-N.D., the chairman of the powerful budget committee.

House Speaker Nancy Pelosi, meanwhile, said she has the votes in her chamber to move forward with the plan despite the same concerns among fiscally conservative fellow Democrats.

"When I take this bill to the floor, it will win. We will move forward, it will happen," Pelosi said.

Secretary of State Hillary Rodham Clinton, who led her husband's failed health care push in 1993, said Obama has made a convincing case for an overhaul.

"He's waded right into it. And I am somewhat encouraged by what I see happening in the Congress. You know, I've been there. I know how hard this is," said Clinton, a one-time Obama rival.

"I think that the time has come. I think this president is committed to it. I think the leadership in Congress understands we have to do something. And I, I think we'll get it done."

DeMint and Conrad spoke with ABC's "This Week." Gibbs appeared on "Fox News Sunday." Axelrod appeared on CBS' "Face the Nation" and CNN's "State of the Union. McConnell and Pelosi also were interviewed for CNN's "State of the Union." Clinton appeared on NBC's "Meet the Press."

Title: Re: Meltdown
Post by: BachQ on July 26, 2009, 11:39:17 AM

Quote from: Coopmv on July 26, 2009, 10:30:54 AM
DM, It was all BS from Pelosi. It turned out the Democrats do not have the votes to pass the healthcare reform bill in the US Senate anyway. The Democrats in the House are between a rock and a hard place since they have to face voters next year while many of the Senate Democrats do not ...

House Speaker Nancy Pelosi, meanwhile, said she has the votes in her chamber to move forward with the plan despite the same concerns among fiscally conservative fellow Democrats.

"When I take this bill to the floor, it will win. We will move forward, it will happen," Pelosi said.

But Pelosi thinks she has the votes, so she may move forward anyway. Meanwhile, the Congressional Budget Office (http://www.politico.com/news/stories/0709/25415.html#ixzz0MIjmgvSd) said the Medicare proposal would cost $1 Trillion but save only $2 Billion over 10 years.

Texas Gov. Perry raises possibility of states' rights showdown with White House over healthcare

BY DAVE MONTGOMERY
AUSTIN — Gov. Rick Perry, raising the specter of a showdown with the Obama administration, suggested Thursday that he would consider invoking states' rights protections under the 10th Amendment to resist the president's healthcare plan, which he said would be "disastrous" for Texas.

Interviewed by conservative talk show host Mark Davis of Dallas' WBAP/820 AM, Perry said his first hope is that Congress will defeat the plan, which both Perry and Davis described as "Obama Care." But should it pass, Perry predicted that Texas and a "number" of states might resist the federal health mandate.

"I think you'll hear states and governors standing up and saying 'no' to this type of encroachment on the states with their healthcare," Perry said. "So my hope is that we never have to have that stand-up. But I'm certainly willing and ready for the fight if this administration continues to try to force their very expansive government philosophy down our collective throats."

(con't)
(http://www.star-telegram.com/804/story/1504240.html)

Title: Re: Meltdown
Post by: BachQ on July 26, 2009, 11:42:48 AM

Speaking of the Congressional Budget Office:

ECONOMIST: -- (http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13832411) The CBO reckons the deficit will still be running at more than $1 trillion a year in 2019. It estimates that the accumulated debt will have hit almost $19 trillion by then. Yet it was only last October that it breached $10 trillion, requiring an extra digit to be added to the famous debt clock off Times Square. *** "There's going to come a point where it's going to be impossible to get people to buy our bonds at affordable prices," says Paul Ryan, the leading Republican on the House budget committee. He fears that the Democrats will create a huge new spending programme—a nationa l health-care plan—while making little effort to curb spending in other areas. That, he predicts, will lead to crushing taxes on middle-class Americans, a lower standard of living and higher unemployment.

Title: Re: Meltdown
Post by: Coopmv on July 26, 2009, 11:54:23 AM

Quote from: Dm on July 26, 2009, 11:39:17 AM
But Pelosi thinks she has the votes, so she may move forward anyway. Meanwhile, the Congressional Budget Office (http://www.politico.com/news/stories/0709/25415.html#ixzz0MIjmgvSd) said the Medicare proposal would cost $1 Trillion but save only $2 Billion over 10 years.

Texas Gov. Perry raises possibility of states' rights showdown with White House over healthcare

BY DAVE MONTGOMERY
AUSTIN — Gov. Rick Perry, raising the specter of a showdown with the Obama administration, suggested Thursday that he would consider invoking states' rights protections under the 10th Amendment to resist the president's healthcare plan, which he said would be "disastrous" for Texas.

Interviewed by conservative talk show host Mark Davis of Dallas' WBAP/820 AM, Perry said his first hope is that Congress will defeat the plan, which both Perry and Davis described as "Obama Care." But should it pass, Perry predicted that Texas and a "number" of states might resist the federal health mandate.

"I think you'll hear states and governors standing up and saying 'no' to this type of encroachment on the states with their healthcare," Perry said. "So my hope is that we never have to have that stand-up. But I'm certainly willing and ready for the fight if this administration continues to try to force their very expansive government philosophy down our collective throats."

(con't)

(http://www.star-telegram.com/804/story/1504240.html)

Pelosi may have the votes in the House where she is the Speaker. But the Democrats do not have the votes in the Senate. Until a bill is ratified in both the House and Senate, it does not become the law, period.

Title: Re: Meltdown
Post by: Coopmv on July 26, 2009, 11:59:05 AM

Quote from: Dm on July 26, 2009, 11:42:48 AM
Speaking of the Congressional Budget Office:

ECONOMIST: -- (http://www.economist.com/world/unitedstates/displaystory.cfm?story_id=13832411) The CBO reckons the deficit will still be running at more than $1 trillion a year in 2019. It estimates that the accumulated debt will have hit almost $19 trillion by then. Yet it was only last October that it breached $10 trillion, requiring an extra digit to be added to the famous debt clock off Times Square. *** "There's going to come a point where it's going to be impossible to get people to buy our bonds at affordable prices," says Paul Ryan, the leading Republican on the House budget committee. He fears that the Democrats will create a huge new spending programme—a nationa l health-care plan—while making little effort to curb spending in other areas. That, he predicts, will lead to crushing taxes on middle-class Americans, a lower standard of living and higher unemployment.

Pelosi may have a revolt by Democratic House members on her hand ...

Title: Re: Meltdown
Post by: BachQ on July 27, 2009, 03:02:08 PM

Arizona's notorious house-flippers will pay the price if this law takes effect:

New law in AZ triggers fear for housing
It holds some owners liable for debt, even in foreclosure
The Arizona Republic

A new law passed by the Arizona Legislature that makes homeowners liable for tens of thousands of dollars on homes lost to foreclosure is now the focus of an intense repeal battle.

An amendment to the state's foreclosure laws, passed in the recent legislative session, was designed to protect small community banks from people buying speculative new homes they can't sell for a profit.

But the impact of the change is much larger. The law makes some homeowners in foreclosure liable for the difference between their mortgage and what their lender can recoup from reselling the house. In the current housing market, the difference is generally more than $100,000 on the typical Valley foreclosure.

Real-estate lobbyists and attorneys for homeowners are working to have the law repealed before the Legislature adjourns after completing its work on the budget. Banks are pushing hard to keep the amendment in place. If the new rules stand, they go into effect Sept. 30.

The new law would affect any Arizona homeowner in foreclosure who has not lived in the home for six straight months. This might include landlords, second-home owners and investors who bought homes hoping for quick resales and big profits. Once the home is sold in foreclosure, the homeowner would have to pay back the remaining value of the loan, minus the proceeds from the foreclosure sale. Currently, Arizona homeowners, including investors, who lose a house to foreclosure take a big hit on their credit scores but aren't usually required to pay back lenders.

[con't] (http://www.azcentral.com/arizonarepublic/news/articles/2009/07/26/20090726foreclosurelaw0726.html)

Title: Re: Meltdown
Post by: BachQ on July 27, 2009, 03:04:10 PM

UK Telegraph:Wave of suicide sweeps China's graduate class (Millions of students will graduate in China this year, but with up to a third unable to get a job the number of suicides is soaring).

link (http://www.telegraph.co.uk/news/worldnews/asia/china/5907368/Wave-of-suicide-sweeps-Chinas-graduate-class.html)

Title: Re: Meltdown
Post by: Coopmv on July 27, 2009, 04:48:03 PM

Quote from: Dm on July 27, 2009, 03:04:10 PM
UK Telegraph:Wave of suicide sweeps China's graduate class (Millions of students will graduate in China this year, but with up to a third unable to get a job the number of suicides is soaring).

link
(http://www.telegraph.co.uk/news/worldnews/asia/china/5907368/Wave-of-suicide-sweeps-Chinas-graduate-class.html)

Very sad story. The Chinese communists are clueless as to how to create jobs for the college educated. Just stashing away the billions of dollars in foreign reserves and relentlessly exporting goods to the rest of the world cannot solve such problem since the college-educated will not work at a factory that produces iPods or cheap junks sold at WalMart ...

Title: Re: Meltdown
Post by: Coopmv on July 27, 2009, 05:01:44 PM

These were friends of Angelo

AP IMPACT: Dodd, Conrad told deals were sweetened
AP IMPACT: Loan official says Dodd, Conrad were told they were getting VIP home loan deals
By Larry Margasak, Associated Press Writer
On Monday July 27, 2009, 8:24 pm EDT

WASHINGTON (AP) -- Despite their denials, influential Democratic Sens. Kent Conrad and Chris Dodd were told from the start they were getting VIP mortgage discounts from one of the nation's largest lenders, the official who handled their loans has told Congress in secret testimony.

Both senators have said that at the time the mortgages were being written they didn't know they were getting unique deals from Countrywide Financial Corp., the company that went on to lose billions of dollars on home loans to credit-strapped borrowers. Dodd still maintains he got no preferential treatment.

Continue (http://finance.yahoo.com/news/AP-IMPACT-Dodd-Conrad-told-apf-3529550125.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on July 27, 2009, 05:13:17 PM

No surprise here

Democrats in the US Senate are not giving Obama what he wants ... (http://finance.yahoo.com/news/AP-sources-Senate-group-omits-apf-2891928753.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on July 28, 2009, 03:49:20 PM

Quote from: Coopmv on July 27, 2009, 05:13:17 PM
No surprise here

Democrats in the US Senate are not giving Obama what he wants ... (http://finance.yahoo.com/news/AP-sources-Senate-group-omits-apf-2891928753.html?x=0&sec=topStories&pos=2&asset=&ccode=)

In contrast, a panel of the House of Rep. gave Obama a big win by approving of this legislation:

House Panel Approves Bill Allowing Regulators To Ban Incentive Pay

By Jesse Westbrook

July 28 (Bloomberg) -- The U.S. House Financial Services Committee approved legislation that would let regulators ban incentive pay at banks and give shareholders a vote on bonuses in response to public outrage over Wall Street pay.

The bill, adopted 40-28 today, would allow agencies such as the Securities and Exchange Commission to prohibit compensation that encourages financial companies to take "inappropriate risks." The House and Senate must pass the bill before the president signs it into law. The House may vote by July 31.

"There is a risk to the system when the incentive structure is huge," Committee Chairman Barney Frank, a Massachusetts Democrat, said as the committee debated the legislation during a meeting in Washington.

Members of Congress have faulted Wall Street banks for basing employee compensation on revenue generated in a given year without adequate regard to whether those transactions succeed over time. The legislation, which goes further than the Obama administration's proposals to regulate compensation, also is aimed at quelling a political uproar over bonuses paid to executives whose companies took aid from U.S. rescue programs.

Republicans opposed the measure, arguing that giving regulators power to ban compensation practices would be tantamount to the government determining pay.

"The government should not be in a position of setting executive compensation," said U.S. Representative Spencer Bachus, an Alabama Republican.

[--continued--] (http://www.bloomberg.com/apps/news?pid=20601087&sid=aYhdmIaV0uQo)

Title: Re: Meltdown
Post by: BachQ on July 28, 2009, 03:51:45 PM

From The Times July 27, 2009

Dubai boom ends as one cheque in four bounces

David Robertson

Up to one quarter of all the cheques written in Dubai may be bouncing as expatriate residents in the Gulf state struggle as the economy slows.

Blank cheques are used to underwrite financial arrangements, such as credit cards, in Dubai, guaranteeing future payments such as a rental agreement or bank loan.

This system arose in the United Arab Emirates (UAE), which includes Dubai, because of the difficulty of doing credit checks on foreign workers. As many of these workers have now lost their jobs in the recession, the number of bounced cheques has risen.

The penalty for failing to honour a cheque is severe and some people have ended up in jail. Dubai's police chief said this year that about one fifth of all prisoners in the emirate were there because of bounced cheques. Most of these are likely to be foreign workers.

... During Dubai's boom years, expatriates from around the world took advantage of cheap credit and a booming economy to live a luxury lifestyle. Easy credit arrangements meant that they could buy penthouses, motorboats and expensive cars with little or no scrutiny from lenders. When the economy slowed, many foreign workers lost their jobs or had their salaries cut and became unable to keep up with their payments.

Some abandoned their luxury cars at Dubai airport as they fled their debts and possible imprisonment. Some have been jailed while others have struggled to stay in Dubai. ... About 10 per cent of expatriates in the UAE have lost their jobs ...

[--- continued ---] (http://business.timesonline.co.uk/tol/business/economics/article6728160.ece)

Title: Re: Meltdown
Post by: BachQ on July 28, 2009, 03:53:51 PM

LA Times: Calif's huge backlog of unemployment appeals is out of control ... and will worsen amid budget cuts

link (http://www.latimes.com/business/la-fi-unemployment28-2009jul28,0,6635379.story)

Title: Re: Meltdown
Post by: Coopmv on July 28, 2009, 04:31:03 PM

Quote from: Dm on July 28, 2009, 03:49:20 PM
In contrast, a panel of the House of Rep. gave Obama a big win by approving of this legislation:

House Panel Approves Bill Allowing Regulators To Ban Incentive Pay

By Jesse Westbrook

July 28 (Bloomberg) -- The U.S. House Financial Services Committee approved legislation that would let regulators ban incentive pay at banks and give shareholders a vote on bonuses in response to public outrage over Wall Street pay.

The bill, adopted 40-28 today, would allow agencies such as the Securities and Exchange Commission to prohibit compensation that encourages financial companies to take "inappropriate risks." The House and Senate must pass the bill before the president signs it into law. The House may vote by July 31.

"There is a risk to the system when the incentive structure is huge," Committee Chairman Barney Frank, a Massachusetts Democrat, said as the committee debated the legislation during a meeting in Washington.

Members of Congress have faulted Wall Street banks for basing employee compensation on revenue generated in a given year without adequate regard to whether those transactions succeed over time. The legislation, which goes further than the Obama administration's proposals to regulate compensation, also is aimed at quelling a political uproar over bonuses paid to executives whose companies took aid from U.S. rescue programs.

Republicans opposed the measure, arguing that giving regulators power to ban compensation practices would be tantamount to the government determining pay.

"The government should not be in a position of setting executive compensation," said U.S. Representative Spencer Bachus, an Alabama Republican.

[--continued--]
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aYhdmIaV0uQo)

This bill is heavy in symbolism and light in substance since the shareholder votes are non-binding. As such, companies may choose to ignore them. Moreover, these days individual shareholders are often outnumbered by institutional investors, i.e. pensions, 401K, insurance funds, etc, which generally vote with managements ...

Title: Re: Meltdown
Post by: Coopmv on July 28, 2009, 04:40:45 PM

China's New 'Great Wall' Built on Easy Money, Speculation and Toxic Debt

Wonder who will bail them out if they suffer from a complete meltdown?

DM, Check this out ... (http://finance.yahoo.com/tech-ticker/article/291000/China's-New-'Great-Wall'-Built-on-Easy-Money-Speculation-and-Toxic-Debt?tickers=FXI,FXP,RTP,PGJ,XPP,TAO,EEM)

Title: Re: Meltdown
Post by: BachQ on July 29, 2009, 03:31:19 PM

Quote from: Coopmv on July 28, 2009, 04:40:45 PM
China's New 'Great Wall' Built on Easy Money, Speculation and Toxic Debt

Wonder who will bail them out if they suffer from a complete meltdown?

DM, Check this out ... (http://finance.yahoo.com/tech-ticker/article/291000/China's-New-'Great-Wall'-Built-on-Easy-Money-Speculation-and-Toxic-Debt?tickers=FXI,FXP,RTP,PGJ,XPP,TAO,EEM)

QuoteBecause policymakers are pumping money like mad to prevent unemployment and social unrest, Gamble believes China's economy may very well be a bubble set to burst. With $1.2 trillion of new loans made since November there's "basically a wall of money that's not going anywhere," Gamble says, suggesting real estate speculation and bad lending are rampant.

Thanks, Coop. There is no doubt that at least two huge bubbles (real estate bubble & stock market bubble, both of which have nearly doubled in 2009) are waiting to pop in China. It will be quite a spectacle when that happens.

Title: Re: Meltdown
Post by: BachQ on July 29, 2009, 03:32:05 PM

Mish: Arizona May Sell State Capitol Building To Balance Budget

link (http://www.howestreet.com/articles/index.php?article_id=10291)

Title: Re: Meltdown
Post by: BachQ on July 29, 2009, 03:33:10 PM

Forbes: Mexico's GDP to contract by 7.5%

link (http://www.google.com/hostednews/canadianpress/article/ALeqM5i-d3ARjUYLH1VfAdk-2YD9DWNn5Q)

Title: Re: Meltdown
Post by: BachQ on July 29, 2009, 03:34:24 PM

Ambac Ratings Cut Deep Into 'Junk'

By LAVONNE KUYKENDALL and JAY MILLER

The outlook for Ambac Financial Group Inc. turned bleaker, as Standard & Poor's Ratings Services pushed the bond insurer's ratings deep into junk territory due to its worsening financial condition.

S&P cut its rating on Ambac's bond insurance unit to CC from BBB, saying the move reflected "significant deterioration" in the company's insured portfolio of subprime residential mortgage-backed and related securities.

On Monday, Ambac said it expected to post a second-quarter loss of $1.3 billion because of higher write-downs on derivatives contracts backing losses on the securities.

Bond insurers have taken it on the chin as the weak housing market leads to rising defaults and delinquencies on home loans.

Ambac will report its second-quarter results on Aug. 5 before the market opens. (http://online.wsj.com/article/SB124882926457688767.html)

Title: Re: Meltdown
Post by: Coopmv on July 29, 2009, 03:53:15 PM

Quote from: Dm on July 29, 2009, 03:33:10 PM
Forbes: Mexico's GDP to contract by 7.5%

link
(http://www.google.com/hostednews/canadianpress/article/ALeqM5i-d3ARjUYLH1VfAdk-2YD9DWNn5Q)

The US would be wise to significantly beef up that border patrol ...

Title: Re: Meltdown
Post by: Coopmv on July 29, 2009, 04:49:41 PM

Green shoots are almost impossible to find. Where are they? ???

May-June joblessness up in 90 pct of metro areas
Jobless rates rise in 90 pct of metro areas from May to June; college towns feel a big hit
By Jeannine Aversa, AP Economics Writer
On Wednesday July 29, 2009, 8:31 pm EDT

WASHINGTON (AP) -- More than 90 percent of the nation's largest metropolitan areas saw their unemployment rates climb in June from the previous month.

Some of the biggest increases hit college towns, where the annual summertime exodus of students causes bars, restaurants and other businesses to cut staff. The Detroit area, hit hard by manufacturing layoffs tied to the beleaguered auto industry, also got stung in June.

Unemployment rates rose from May to June in 348 of more than 370 metro areas, according to an Associated Press analysis of Labor Department data released Wednesday.

The figures aren't adjusted to account for seasonal trends, such as lifeguards hired during summer or retail clerks let go after the holiday shopping season. So they tend to be volatile from month to month.

The Labor Department does not provide seasonally adjusted metro area unemployment data. It does adjust the national unemployment rate for seasonal factors. The U.S. jobless rate, which hit 9.5 percent in June, is expected to rise to 9.7 percent when the department reports the July rate next week.

Tuscaloosa, Ala., home to the University of Alabama, suffered the biggest monthly increase in unemployment from May to June. Its jobless rate jumped to 12.5 percent in June, up 3.8 percentage points.

Michigan's metro area of Detroit-Warren-Livonia posted the second-biggest monthly gain. The unemployment rate there climbed to 17.1 percent, a gain of 2.2 percentage points.

Pocatello, site of Idaho State University, saw the third-biggest monthly rise. The metro area's unemployment rate rose to 7.8 percent in June, up 2 percentage points from May.

Next were Laredo, Texas, home of Laredo Community College, with a June jobless rate of 9.4 percent; Lafayette, Ind., which includes Purdue University, with a rate of 10.5 percent; and McAllen-Edinburg-Mission, Texas, at 11.1 percent. Each saw its unemployment rate rise 1.7 percentage points from May.

When the unemployment data is seasonally adjusted and viewed over the past year, all 372 of the largest metro areas saw their unemployment rates move higher in June for the sixth month in a row, the Labor Department said.

Kokomo, Ind., suffered the biggest over-the-year gain in unemployment. Its rate rose to 19.2 percent in June, an increase of 11.8 percentage points from June 2008. Elkhart-Goshen had the second-largest gain. Its jobless rate of 16.8 percent was up 10 percentage points from last year. Monroe, Mich., the third-biggest gainer, registered an unemployment rate of 17.1 percent in June, up 8.6 percentage points from a year ago.

Other big over-the-month gainers were: Gadsden, Ala., which includes Gadsden State Community College among other schools. The unemployment rate there rose to 11.1 percent in June.

Alexandria, La., saw its unemployment rate rise 7.5 percent. And the jobless rate in College Station-Bryan, Texas, home to Texas A&M, rose to 6.5 percent. All three areas suffered month-to-month increases of 1.6 percentage points.

Seven metro areas saw their jobless rates hold steady from May to June. One of them was Yuma, Ariz., whose steady unemployment rate was probably cold comfort: It remained at 23.1 percent, second-highest in the country.

Other metro areas whose unemployment rates didn't budge last month: Portsmouth, N.H., at 5.7 percent; Asheville, N.C., at 9.2; Cleveland-Elyria-Mentor in Ohio, at 10.1 percent; Sioux Fall, S.D., at 4.7 percent (tied for the fourth-lowest in the nation); Danville, Va., at 12.8 percent; and Spokane, Wash., at 8.9 percent.

And 18 metro areas saw their unemployment rates drop from May. One was El Centro, Calif., which still laid claim to the highest unemployment rate in the country in June: 27.5 percent. That was down from 28.7 percent in May. (Unemployment there is notoriously high because of many seasonal farm workers without jobs.)

Another: Indiana's Elkhart-Goshen, which has been pounded by layoffs in the RV industry. Its jobless rate dropped to 16.8 percent in June, from 17.5 percent in May. The unemployment rate in Wenatchee-East Wenatchee, Wash., fell to 7.7 percent, and in Yakima, it dropped to 8.2 percent.

Title: Re: Meltdown
Post by: Coopmv on July 29, 2009, 04:51:38 PM

Quote from: Dm on July 29, 2009, 03:34:24 PM
Ambac Ratings Cut Deep Into 'Junk'

By LAVONNE KUYKENDALL and JAY MILLER

The outlook for Ambac Financial Group Inc. turned bleaker, as Standard & Poor's Ratings Services pushed the bond insurer's ratings deep into junk territory due to its worsening financial condition.

S&P cut its rating on Ambac's bond insurance unit to CC from BBB, saying the move reflected "significant deterioration" in the company's insured portfolio of subprime residential mortgage-backed and related securities.

On Monday, Ambac said it expected to post a second-quarter loss of $1.3 billion because of higher write-downs on derivatives contracts backing losses on the securities.

Bond insurers have taken it on the chin as the weak housing market leads to rising defaults and delinquencies on home loans.

Ambac will report its second-quarter results on Aug. 5 before the market opens.
(http://online.wsj.com/article/SB124882926457688767.html)

Indeed, Ambac's claims-paying ability is highly questionable ...

Title: Re: Meltdown
Post by: Coopmv on July 29, 2009, 04:55:09 PM

Quote from: Dm on July 29, 2009, 03:31:19 PM

Thanks, Coop. There is no doubt that at least two huge bubbles (real estate bubble & stock market bubble, both of which have nearly doubled in 2009) are waiting to pop in China. It will be quite a spectacle when that happens.

DM, I cannot wait to see if a totalitarian regime can put a wall around a huge credit meltdown to keep it from spreading ...

Title: Re: Meltdown
Post by: Coopmv on July 29, 2009, 07:31:49 PM

Great, this will put a kibosh on Goldman, which routinely makes 10% of its revenue from commodities trading. Why should this have been a mystery to the regulators that speculators were manipulating the crude market?

Tuesday, July 28, 2009
Regulator Report Blames Speculators for Oil Price Swings

Joanna Ossinger
FOXBusiness

The Commodity Futures Trading Commission plans to issue a report next month indicating that speculators may have played a significant role in creating big swings in oil prices, The Wall Street Journal reported Tuesday.

The report could reignite a debate about what role speculators such as investment banks play in the pricing of a commodity that can have a significant effect not only on global consumers, but on companies and even country economies.

Eric Bolling, a FOX Business anchor who has more than 25 years of experience as a commodities trader, said, "My feeling is that the investment banks have too much influence in oil prices."

That new report would reverse an earlier position by the CFTC, and could indicate that investors will receive more scrutiny from the agency, the Journal said.

In an interview with the paper on Monday, Bart Chilton, one of four CFTC commissioners, said a report last year pinning oil-price swings primarily on supply and demand was based on "deeply flawed data."

Chilton had objected to that previous report at the time. It had been conducted under the auspices of Bush-appointed acting CFTC Chairman Walter Lukken, and Chilton claimed the report didn't go far enough, telling the Journal, "We didn't have all the information we should have." The CFTC declined to make preliminary figures from the new report available to the Journal, and declined to discuss the previous data with the paper.

Now that the CFTC is headed by Obama appointee Gary Gensler, who may take a more hands-on approach with the markets than Lukken did.

CME Group (CME: 269.24, 2.68, 1.01%), the world's largest commodities exchange, told the Journal in a statement that it hasn't seen "any empirical evidence that index funds and speculators distort prices." And the Journal reported that CME's CEO, Craig Donohue, said "we are deeply concerned that inappropriate regulation of these markets will cause market participants to move to dark pools and other unregulated markets, causing irrevocable harm to the U.S. economy." The paper noted that "dark pools" are private markets where large orders are transacted.

Bolling noted that Goldman Sachs (GS: 158.4, -2.27, -1.41%) and Morgan Stanley (MS: 27.17, -0.26, -0.95%) are some of the biggest oil traders in the world -- and noted that the tumble in oil prices last fall correlated with the point when the investment banks were under scrutiny about their capital positions.

Bolling said his suggestion regarding oil-market regulation would be not to limit positions, but to raise the margin requirements, which would require oil investors to put up more money up front to make purchases.

Title: Re: Meltdown
Post by: Coopmv on July 30, 2009, 04:21:20 PM

The stupidity of the American politicians is beyond belief. Under this program, someone who jettisons an SUV that gets 12 mpg and buys a new SUV that gets 15 mpg will be qualified to receive up to $4,500 in cash. How does this program encourage meaningful fuel economy improvement? ???

AP sources: Govt to suspend 'cash for clunkers'
AP sources: Government to suspend 'cash for clunkers' program out of funding concerns
By Ken Thomas, Associated Press Writer
On Thursday July 30, 2009, 7:59 pm EDT

WASHINGTON (AP) -- The government plans to suspend its popular "cash for clunkers" program amid concerns it could quickly use up the $1 billion in rebates for new car purchases, congressional officials said Thursday.

The Transportation Department called lawmakers' offices to alert them to the decision to suspend the program at midnight Friday. The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle.

The congressional officials spoke on condition of anonymity because they were not authorized to speak publicly. Rae Tyson, a spokesman for the National Highway Traffic Safety Administration, which administers the program, declined comment.

Congress last month approved the Car Allowance Rebate System program, known as CARS, to boost auto sales and remove some inefficient cars and trucks from the roads. The program kicked off last Friday and was heavily publicized by car companies and auto dealers.

Through late Wednesday, 22,782 vehicles had been purchased through the program and nearly $96 million had been spent. But dealers raised concerns about large backlogs in the processing of the deals in the government system, prompting the suspension.

A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.

"There's a significant backlog of 'cash for clunkers' deals that make us question how much funding is still available in the program," said Bailey Wood, a spokesman for the dealers association.

Title: Re: Meltdown
Post by: MishaK on July 30, 2009, 05:38:14 PM

Quote from: Coopmv on July 30, 2009, 04:21:20 PM
The stupidity of the American politicians is beyond belief. Under this program, someone who jettisons an SUV that gets 12 mpg and buys a new SUV that gets 15 mpg will be qualified to receive up to $4,500 in cash. How does this program encourage meaningful fuel economy improvement? ???

coopmv, To qualify under the CARS program the new SUV must get at least combined 18 MPG, so the 15 MPG SUV in your example would not qualify. Besides, the new vehicle may not have an MSRP before taxes and extras of more than $45K. You'd be hard pressed to find a current model year SUV (non-hybrid) that has a combined MPG of more than the minimum 18 needed to qualify under the program.(e.g. a 2009 Explorer 4WD gets only 16.) Also note that NHTSA has a new methodology for rating MPG which is stricter and makes the gas mileage look smaller. This was done to make the ratings more 'realistic' for the average aggressive driver. ::) E.g. my car was officially rated 23/32 city/hwy as of a few years ago. Now the new combined mileage rating is 23 (which is actually much lower than what I get in average daily driving). Even so, your hypothetical trade in of a 12 MPG vehicle for a 15 MPG vehicle is a 20% savings in fuel consumption and greenhouse gases, which is nothing to scoff at. More info:

http://www.cars.gov/

Title: Re: Meltdown
Post by: Coopmv on July 30, 2009, 05:49:07 PM

Quote from: O Mensch on July 30, 2009, 05:38:14 PM
coopmv, To qualify under the CARS program the new SUV must get at least combined 18 MPG, so the 15 MPG SUV in your example would not qualify. Besides, there the new vehicle may not have an MSRP before taxes and extras of more than $45K. You'd be hard pressed to find a current model year SUV (non-hybrid) that has a combined MPG of more than the minimum 18 needed to qualify under the program.(e.g. a 2009 Explorer 4WD gets only 16.) Even so, your hypothetical trade in of a 12 MPG vehicle for a 15 MPG vehicle is a 20% savings in fuel consumption and greenhouse gases, which is nothing to scoff at. More info:

http://www.cars.gov/

I hear your reasoning and I may have picked a bad number. But is 18-20 mpg such great fuel economy when Honda already has a model that can get 50 mpg. If you google a little, you will find that this program is not getting many praises from many quarters. Heck, if someone ditches his 10 mpg clunker and gets a new car that gets 15 mpg, that is a 50% improvement. But is that 50% improvement really that impressive? You judge for yourself.

Title: Re: Meltdown
Post by: BachQ on July 30, 2009, 07:57:58 PM

RTE.ie -- Ireland's Central Bank revised the magnitude of Ireland's 2009 GDP contraction from -7% to -8.3%, while its 2010 unemployment forecast has been revised upwards to 15%. :o

link (http://www.rte.ie/news/2009/0730/economy.html)

Title: Re: Meltdown
Post by: BachQ on July 30, 2009, 07:59:07 PM

BBC.UK -- UK's retail vacancy rate tripled from 4% to 12% from 1 yr ago. :o

link (http://news.bbc.co.uk/2/hi/business/8177502.stm)

Title: Re: Meltdown
Post by: BachQ on July 30, 2009, 08:02:26 PM

Fortune-- The next great bailout: Social Security

By Allan Sloan, senior editor at large
Last Updated: July 30, 2009: 4:13 PM ET

(Fortune Magazine) -- In Washington these days, the only topics of discussion seem to be how many trillions to throw at health care and the recession, and whom on Wall Street to pillory next. But watch out. Lurking just below the surface is a bailout candidate that may soon emerge like the great white shark in Jaws: Social Security.

Perhaps as early as this year, Social Security, at $680 billion the nation's biggest social program, will be transformed from an operation that's helped finance the rest of the government for 25 years into a cash drain that will need money from the Treasury. In other words, a bailout.

(http://i2.cdn.turner.com/money/2009/07/29/news/economy/fixing_social_security.fortune/chart_soc_security_bars2.gif)

Just last year Social Security was projecting a cash surplus of $87 billion this year and $88 billion next year. These were to be the peak cash-generating years, followed by a cash-flow decline, followed by cash outlays exceeding inflows starting in 2017.

But in this year's Social Security trustees report, the cash flow projections for 2009 and 2010 have shrunk by almost 80%, to $19 billion and $18 billion, respectively. How did $138 billion of projected cash go missing in just one year? Stephen Goss, Social Security's chief actuary, says the major reason is that the recession has cost millions of jobs, reducing Social Security's tax income below projections.

But $18 billion is still a surplus. Why do I say Social Security could go cash-negative this year? Because unemployment is far worse than Social Security projected. It assumed that unemployment would rise gradually this year and peak at 9% in 2010.

Now, of course, the rate is 9.5% and rising -- and we're still in 2009.

[continued] (http://money.cnn.com/2009/07/29/news/economy/fixing_social_security.fortune/index.htm?postversion=2009073009)

Title: Re: Meltdown
Post by: BachQ on July 30, 2009, 08:06:19 PM

Quote from: Coopmv on July 29, 2009, 04:49:41 PM
Green shoots are almost impossible to find. Where are they? ???

May-June joblessness up in 90 pct of metro areas
Jobless rates rise in 90 pct of metro areas from May to June; college towns feel a big hit
By Jeannine Aversa, AP Economics Writer
On Wednesday July 29, 2009, 8:31 pm EDT

WASHINGTON (AP) -- More than 90 percent of the nation's largest metropolitan areas saw their unemployment rates climb in June from the previous month.

Some of the biggest increases hit college towns, where the annual summertime exodus of students causes bars, restaurants and other businesses to cut staff. The Detroit area, hit hard by manufacturing layoffs tied to the beleaguered auto industry, also got stung in June.

Unemployment rates rose from May to June in 348 of more than 370 metro areas, according to an Associated Press analysis of Labor Department data released Wednesday.

The figures aren't adjusted to account for seasonal trends, such as lifeguards hired during summer or retail clerks let go after the holiday shopping season. So they tend to be volatile from month to month.

The Labor Department does not provide seasonally adjusted metro area unemployment data. It does adjust the national unemployment rate for seasonal factors. The U.S. jobless rate, which hit 9.5 percent in June, is expected to rise to 9.7 percent when the department reports the July rate next week.

Tuscaloosa, Ala., home to the University of Alabama, suffered the biggest monthly increase in unemployment from May to June. Its jobless rate jumped to 12.5 percent in June, up 3.8 percentage points.

Michigan's metro area of Detroit-Warren-Livonia posted the second-biggest monthly gain. The unemployment rate there climbed to 17.1 percent, a gain of 2.2 percentage points.

Pocatello, site of Idaho State University, saw the third-biggest monthly rise. The metro area's unemployment rate rose to 7.8 percent in June, up 2 percentage points from May.

Next were Laredo, Texas, home of Laredo Community College, with a June jobless rate of 9.4 percent; Lafayette, Ind., which includes Purdue University, with a rate of 10.5 percent; and McAllen-Edinburg-Mission, Texas, at 11.1 percent. Each saw its unemployment rate rise 1.7 percentage points from May.

When the unemployment data is seasonally adjusted and viewed over the past year, all 372 of the largest metro areas saw their unemployment rates move higher in June for the sixth month in a row, the Labor Department said.

Kokomo, Ind., suffered the biggest over-the-year gain in unemployment. Its rate rose to 19.2 percent in June, an increase of 11.8 percentage points from June 2008. Elkhart-Goshen had the second-largest gain. Its jobless rate of 16.8 percent was up 10 percentage points from last year. Monroe, Mich., the third-biggest gainer, registered an unemployment rate of 17.1 percent in June, up 8.6 percentage points from a year ago.

Other big over-the-month gainers were: Gadsden, Ala., which includes Gadsden State Community College among other schools. The unemployment rate there rose to 11.1 percent in June.

Alexandria, La., saw its unemployment rate rise 7.5 percent. And the jobless rate in College Station-Bryan, Texas, home to Texas A&M, rose to 6.5 percent. All three areas suffered month-to-month increases of 1.6 percentage points.

Seven metro areas saw their jobless rates hold steady from May to June. One of them was Yuma, Ariz., whose steady unemployment rate was probably cold comfort: It remained at 23.1 percent, second-highest in the country.

Other metro areas whose unemployment rates didn't budge last month: Portsmouth, N.H., at 5.7 percent; Asheville, N.C., at 9.2; Cleveland-Elyria-Mentor in Ohio, at 10.1 percent; Sioux Fall, S.D., at 4.7 percent (tied for the fourth-lowest in the nation); Danville, Va., at 12.8 percent; and Spokane, Wash., at 8.9 percent.

And 18 metro areas saw their unemployment rates drop from May. One was El Centro, Calif., which still laid claim to the highest unemployment rate in the country in June: 27.5 percent. That was down from 28.7 percent in May. (Unemployment there is notoriously high because of many seasonal farm workers without jobs.)

Another: Indiana's Elkhart-Goshen, which has been pounded by layoffs in the RV industry. Its jobless rate dropped to 16.8 percent in June, from 17.5 percent in May. The unemployment rate in Wenatchee-East Wenatchee, Wash., fell to 7.7 percent, and in Yakima, it dropped to 8.2 percent.

Coop, more on the effect of unemployment on distressed home loans (below).

Reuters: Unemployment spreads distress in U.S. home loans

By Lynn Adler

NEW YORK (Reuters) - Cities in the U.S. Sun Belt states of California, Florida, Nevada and Arizona dominated the record foreclosure spree in the first half of the year, but distress in other regions emerged as joblessness spread, RealtyTrac said on Thursday. Metro areas with populations of at least 200,000 in those four states accounted for 35 of the 50 highest foreclosure rates. Mortgages have failed the fastest in the areas with the greatest overbuilding, purchases by speculators and reliance on riskier loan products to improve affordability. But the source of the mortgage trouble has swung from lax lending standards to unemployment.

continued (http://www.reuters.com/article/businessNews/idUSTRE56T0P020090730?feedType=RSS&feedName=businessNews)

Title: Re: Meltdown
Post by: MishaK on July 31, 2009, 05:17:11 AM

Quote from: Coopmv on July 30, 2009, 05:49:07 PM
I hear your reasoning and I may have picked a bad number. But is 18-20 mpg such great fuel economy when Honda already has a model that can get 50 mpg.

No, but the only way to do it properly is to do what they do in most parts of Europe: impose a tax on fuel. But since the US has a strange congenital allergy to Pigovian taxation and passing a tax increase in a recession is next to impossible, this is not so bad a deal. I'm not going to let the perfect be the enemy of the good. BTW, a new regular passenger car (non-truck or SUV) has to have an MPG of at least 22 to qualify, so your example is again not a good one. Plus, they obviously wouldn't have passed a law that permitted you only to buy non-American cars, and since no US manufacturer (apart from Tesla) currently offers a model that gets 50 MPG that would have been a politically impossible threshold to put in the law.

Quote from: Coopmv on July 30, 2009, 05:49:07 PM
If you google a little, you will find that this program is not getting many praises from many quarters. Heck, if someone ditches his 10 mpg clunker and gets a new car that gets 15 mpg, that is a 50% improvement. But is that 50% improvement really that impressive? You judge for yourself.

Again, you need at least 18 MPG for a new SUV/truck and 22 MP for the new passenger car, so your example once again is no good. But you have to take a macro perspective: If a decent number of people take advantage of this program and reduce their fuel consumption by 20-50%, even if the new car they drive is still not particularly efficient, that is still a substantial reduction in fuel use and greenhouse gas emissions. It's not as much as would be possible. Sooner or later, upward market pressures on gas prices will do the rest anyway.

Title: Re: Meltdown
Post by: Coopmv on July 31, 2009, 05:37:11 PM

Quote from: Dm on July 30, 2009, 08:02:26 PM
Fortune-- The next great bailout: Social Security

By Allan Sloan, senior editor at large
Last Updated: July 30, 2009: 4:13 PM ET

(Fortune Magazine) -- In Washington these days, the only topics of discussion seem to be how many trillions to throw at health care and the recession, and whom on Wall Street to pillory next. But watch out. Lurking just below the surface is a bailout candidate that may soon emerge like the great white shark in Jaws: Social Security.

Perhaps as early as this year, Social Security, at $680 billion the nation's biggest social program, will be transformed from an operation that's helped finance the rest of the government for 25 years into a cash drain that will need money from the Treasury. In other words, a bailout.

(http://i2.cdn.turner.com/money/2009/07/29/news/economy/fixing_social_security.fortune/chart_soc_security_bars2.gif)

Just last year Social Security was projecting a cash surplus of $87 billion this year and $88 billion next year. These were to be the peak cash-generating years, followed by a cash-flow decline, followed by cash outlays exceeding inflows starting in 2017.

But in this year's Social Security trustees report, the cash flow projections for 2009 and 2010 have shrunk by almost 80%, to $19 billion and $18 billion, respectively. How did $138 billion of projected cash go missing in just one year? Stephen Goss, Social Security's chief actuary, says the major reason is that the recession has cost millions of jobs, reducing Social Security's tax income below projections.

But $18 billion is still a surplus. Why do I say Social Security could go cash-negative this year? Because unemployment is far worse than Social Security projected. It assumed that unemployment would rise gradually this year and peak at 9% in 2010.

Now, of course, the rate is 9.5% and rising -- and we're still in 2009.

[continued]
(http://money.cnn.com/2009/07/29/news/economy/fixing_social_security.fortune/index.htm?postversion=2009073009)

The economic projection for the Social Security System is a joke, as many retirees have been getting a lot more out of the system than what they actually paid in. It also invests only in very low yielding treasury bonds. This is just not sustainable. It is also not clear if the SS Administration has realistically updated its mortality rate calculations for future retirees.

Title: Re: Meltdown
Post by: Coopmv on July 31, 2009, 05:45:18 PM

Quote from: O Mensch on July 31, 2009, 05:17:11 AM
No, but the only way to do it properly is to do what they do in most parts of Europe: impose a tax on fuel. But since the US has a strange congenital allergy to Pigovian taxation and passing a tax increase in a recession is next to impossible, this is not so bad a deal. I'm not going to let the perfect be the enemy of the good. BTW, a new regular passenger car (non-truck or SUV) has to have an MPG of at least 22 to qualify, so your example is again not a good one. Plus, they obviously wouldn't have passed a law that permitted you only to buy non-American cars, and since no US manufacturer (apart from Tesla) currently offers a model that gets 50 MPG that would have been a politically impossible threshold to put in the law.

Again, you need at least 18 MPG for a new SUV/truck and 22 MP for the new passenger car, so your example once again is no good. But you have to take a macro perspective: If a decent number of people take advantage of this program and reduce their fuel consumption by 20-50%, even if the new car they drive is still not particularly efficient, that is still a substantial reduction in fuel use and greenhouse gas emissions. It's not as much as would be possible. Sooner or later, upward market pressures on gas prices will do the rest anyway.

What can I say, we are our own worst enemies when it comes to our economic policies. Adding a surtax to gasoline when the price is low is the best way to bring about a behavioral change to the American drivers since cheap gas encourages consumption. But I doubt our politicians will ever go for this.

Title: Re: Meltdown
Post by: BachQ on July 31, 2009, 06:06:41 PM

Business Week: Are We Headed for Another Oil Shock?
Global economic recovery and increased demand for oil—coupled with tighter supply—could provoke a 1970s-type oil shock

As the global economy recovers from the current downturn, there is a significant risk that resurgent energy demand will coincide with tight supply, vaulting oil prices higher again. Indeed, prices are already on the rise. Research by the McKinsey Global Institute (MGI), combining macroeconomic modeling with an understanding of industry dynamics, finds that unless business leaders and policymakers act decisively on both oil supply and demand, there is a risk that a second oil shock could follow economic recovery—indeed, one that could be lengthier than the second price spike that hit the world economy in the 1970s. *** producers will find adding supply capacity more difficult than they did in the 1970s because of the challenge of producing oil from rapidly maturing oil fields and the difficulty of finding new low-cost oil fields.

[continued] (http://www.businessweek.com/globalbiz/content/jul2009/gb20090729_550682.htm)

Title: Re: Meltdown
Post by: BachQ on July 31, 2009, 06:08:17 PM

Forbes: The End Of Fossil Fuel
Chris Nelder, 07.24.09, 03:00 PM EDT
Prepare for a radically different lifestyle as global crude oil production peaks and begins to decline.

... According to the best available data, we are now at the peak rate of oil production. After over a century of continual growth, global conventional crude oil production topped out in 2005 at just over 74 million barrels per day (mbpd) and has remained at that level ever since.

The additional "oil" that brings the oft-cited world total to 84 mbpd today (down from 87 mbpd last year; according to U.S. government data) isn't conventional crude, but, rather, unconventional hydrocarbons, including natural gas liquids, "extra heavy" oil, synthetic oil made from Canadian tar sands, refinery gains, liquids produced from the conversion of coal and natural gas, and biofuels.

Oil production is expected to go into terminal decline around 2012. The principal reason is that the largest and most productive fields are becoming depleted while new discoveries have been progressively smaller and of lesser quality. Discovery of new oil peaked over 40 years ago and has been declining ever since despite furious drilling and unprecedentedly high prices.

When it begins to decline, rate of crude production is projected to fall at 5%, or over four mbpd, per year--roughly equivalent to losing the entire production of Latin America or Europe every year. The decline rate will likely accelerate to over 10% per year by 2030.

The Paris-based International Energy Agency estimates that the world would need to add the equivalent of six new Saudi Arabias by 2030 in order to meet declining production and growing demand.

[continued] (http://www.forbes.com/2009/07/24/peak-oil-production-business-energy-nelder.html)

Title: Re: Meltdown
Post by: BachQ on July 31, 2009, 06:11:33 PM

Quote from: Coopmv on July 31, 2009, 05:37:11 PM
The economic projection for the Social Security System is a joke, as many retirees have been getting a lot more out of the system than what they actually paid in. It also invests only in very low yielding treasury bonds. This is just not sustainable. It is also not clear if the SS Administration has realistically updated its mortality rate calculations for future retirees.

Coop, "joke" is perhaps the best word to describe social security ... it's a problem that politicians love to pass on to their successors as they keep kicking the can further and further down the road. As they do so, the problem becomes increasingly entrenched and, thus, more difficult to solve.

Title: Re: Meltdown
Post by: Coopmv on July 31, 2009, 06:14:12 PM

Quote from: Dm on July 31, 2009, 06:06:41 PM
Business Week: Are We Headed for Another Oil Shock?
Global economic recovery and increased demand for oil—coupled with tighter supply—could provoke a 1970s-type oil shock

As the global economy recovers from the current downturn, there is a significant risk that resurgent energy demand will coincide with tight supply, vaulting oil prices higher again. Indeed, prices are already on the rise. Research by the McKinsey Global Institute (MGI), combining macroeconomic modeling with an understanding of industry dynamics, finds that unless business leaders and policymakers act decisively on both oil supply and demand, there is a risk that a second oil shock could follow economic recovery—indeed, one that could be lengthier than the second price spike that hit the world economy in the 1970s. *** producers will find adding supply capacity more difficult than they did in the 1970s because of the challenge of producing oil from rapidly maturing oil fields and the difficulty of finding new low-cost oil fields.

[continued]
(http://www.businessweek.com/globalbiz/content/jul2009/gb20090729_550682.htm)

There is little chance politicians in the US will do the right thing. They are all too beholden to the lobbyists.

Title: Re: Meltdown
Post by: BachQ on July 31, 2009, 06:14:59 PM

San Francisco Chron. -- "California won't be returning to pre-Great Recession job levels until 2013. And it will have lost more jobs - over 1 million - than any other state in the union. Almost twice as many as the next-hardest hit, Michigan."
(http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2009/07/30/BUHC190EQK.DTL&ref=patrick.net)

Title: Re: Meltdown
Post by: BachQ on July 31, 2009, 06:24:22 PM

OCEAN TURBINES: Is the ocean Florida's untapped energy source?

(http://i2.cdn.turner.com/cnn/2009/TECH/07/27/ocean.turbines/art.turbine.overview.jpg)

(CNN) -- The answer to easing the energy crunch in one of the nation's most populous states could lie underwater. Researchers at Florida Atlantic University are in the early stages of turning that idea into reality in the powerful Gulf Stream off the state's eastern shore. "The Gulf Stream is the strongest current in the world, so we want to harness our greatest resource.

It's renewable, emission free and reliable," said Jeremy Susac, executive director of the Florida Energy and Climate Commission. Scientists say the energy within its currents could propel Florida out of its potential energy crisis, powering 3 million to 7 million Florida homes -- or supplying the state with one-third of its electricity. "The predictions at this point estimate that the strength of the Gulf Stream could generate anywhere between four to 10 gigawatts of power, the equivalent of four to 10 nuclear power plants," said Skemp.

(http://www.cnn.com/2009/TECH/07/27/ocean.turbines/)

Quote from: Coopmv on July 31, 2009, 06:14:12 PM
There is little chance politicians in the US will do the right thing. They are all too beholden to the lobbyists.

Coop, lately, it seems that politicians only make things WORSE ... while the special interests tend to be unduly rewarded. As you've mentioned before, as currently constituted, the system is hopelessly flawed and unable to address the root issues facing the planet. We need an extreme makeover.

Title: Re: Meltdown
Post by: BachQ on July 31, 2009, 06:26:14 PM

NJ to more than double solar power generation

By VICTOR EPSTEIN, Associated Press Writer Victor Epstein, Associated Press Writer Wed Jul 29, 6:19 pm ET

NEWARK, N.J. – Regulators approved more than $515 million in projects Wednesday that will more than double the amount of solar power generated in New Jersey and will solidify the state's No. 2 spot behind California in power produced from the sun. The state Board of Public Utilities gave the green light to proposals from four utilities that together will yield 145 megawatts of solar energy, enough to power about 130,000 homes, and will boost the state total to 232 megawatts. "We're all in this climate change boat together, and we're all going to sink or swim together," board president Jeanne Fox said. With global warming, many nations have been working to reduce the use of fossil fuels that release greenhouse gases, a major contributor to pollution and climate change. The United States had 791 megawatts of solar capacity at the end of last year, with California accounting for 530 megawatts, according to the Solar Energy Industries Association.

New Jersey Gov. Jon Corzine has said he wants 30 percent of the energy consumed in the state to come from renewable sources by 2020.

[continued] (http://news.yahoo.com/s/ap/20090729/ap_on_re_us/us_new_jersey_solar/print)

Title: Re: Meltdown
Post by: Coopmv on July 31, 2009, 06:26:21 PM

Quote from: Dm on July 31, 2009, 06:11:33 PM
Coop, "joke" is perhaps the best word to describe social security ... it's a problem that politicians love to pass on to their successors as they keep kicking the can further and further down the road. As they do so, the problem becomes increasingly entrenched and, thus, more difficult to solve.

Unfortunately, our politicians are a lot more stupid than the Norwegian politicians who have been investing their oil revenues in rainy-day funds and pensions for their citizens, recognizing that their North Sea Oil will run dry one day ...

Title: Re: Meltdown
Post by: BachQ on July 31, 2009, 06:31:02 PM

LA TIMES: California's default rate soars to 9.5%
Delinquencies in June are up sharply from a year ago, when 6% of borrowers were behind on their loans.

By Peter Y. Hong
July 31, 2009
About 1 in 10 Californians with a home loan is now in default, and there's growing evidence that the mortgage meltdown is spreading to commercial real estate.

The home mortgage delinquency rate -- the percentage of borrowers who have missed several payments and are in the first stage of foreclosure -- climbed in June to 9.5% in California and 9.9% in Los Angeles County, according to First American CoreLogic. The staggering number of home mortgage defaults probably will lead to large numbers of foreclosures through at least this year, housing experts say. "It's probably a given we'll see a high number of foreclosures in the next couple of quarters due to the level of defaults plus the recession and jobs lost. There's plenty more pain to come," said Andrew LePage, an analyst for real estate research firm MDA DataQuick of San Diego.

In recent months, about 60% of California mortgages in default ended up foreclosed, LePage said. Foreclosures should pick up even more now that various government moratoriums and voluntary foreclosure freezes by lenders have expired. But LePage said the rate of foreclosures may not reach the record level set last year if lenders increase loan modifications or approve more "short sales," in which homes are sold for less than their mortgage amounts. The mortgage delinquency rate in June was up sharply from a year ago, when 6% of California mortgages were delinquent and 5.2% in Los Angeles County were in default.

In May 2009, the state default rate was 9.2% and the Los Angeles County rate was 9.5%, according to First American CoreLogic. At the same time, the California Mortgage Bankers Assn. reported a surge in the number of commercial real estate loans in default. The total number of delinquent commercial loans remains small -- only 14 of 6,497 loans in the statewide survey -- but industry analysts say more defaults are on the way.

Low interest rates are enabling many commercial borrowers to stay current on loans, but that's certain to change if rates rise, and a high percentage of office, retail and apartment buildings are already underwater. "There's no question we're going to see more commercial properties end up in restructuring; the question is how much," said Dan Fasulo, managing director of Real Capital Analytics, a New York research firm. Fasulo said lenders are trying to avoid foreclosures on commercial properties partly because they don't want to take on properties they would have trouble selling. "They're saying, 'If we foreclose now, what are we going to do with it?' This is the worst market to sell property in modern times." Lenders have been making allowances to upside-down borrowers, hoping to keep from foreclosing long enough for commercial real estate values to recover, Fasulo said. There's now a popular street term for the practice, he said: "extend and pretend."

(http://www.latimes.com/business/la-fi-default31-2009jul31,0,173542.story)

Title: Re: Meltdown
Post by: Coopmv on July 31, 2009, 06:33:04 PM

Quote from: Dm on July 31, 2009, 06:24:22 PM
OCEAN TURBINES: Is the ocean Florida's untapped energy source?

(http://i2.cdn.turner.com/cnn/2009/TECH/07/27/ocean.turbines/art.turbine.overview.jpg)

(CNN) -- The answer to easing the energy crunch in one of the nation's most populous states could lie underwater. Researchers at Florida Atlantic University are in the early stages of turning that idea into reality in the powerful Gulf Stream off the state's eastern shore. "The Gulf Stream is the strongest current in the world, so we want to harness our greatest resource.

It's renewable, emission free and reliable," said Jeremy Susac, executive director of the Florida Energy and Climate Commission. Scientists say the energy within its currents could propel Florida out of its potential energy crisis, powering 3 million to 7 million Florida homes -- or supplying the state with one-third of its electricity. "The predictions at this point estimate that the strength of the Gulf Stream could generate anywhere between four to 10 gigawatts of power, the equivalent of four to 10 nuclear power plants," said Skemp.

Coop, lately, it seems that politicians only make things WORSE ... while the special interests tend to be unduly rewarded. As you've mentioned before, as currently constituted, the system is hopelessly flawed and unable to address the root issues facing the planet. We need an extreme makeover.
(http://www.cnn.com/2009/TECH/07/27/ocean.turbines/)

This American political system is hopeless. When these politicians retire or lose their re-elections, most of them become high-pay lobbyists. Some of them are in fact on the Chinese payrolls. Never mind the red state vs. blue state, green is the color they all love ...

Title: Re: Meltdown
Post by: Coopmv on August 01, 2009, 05:59:01 AM

DM, Those who continue to argue FOR this failed policy should pay extra taxes to fund the welfare and services these illegals and their archor babies will use. End of debate.

'Anchor' Babies: No More U.S. Citizenship
The U.S. should pass H.R. 1868—the Birthright Citizenship Act of 2009—so all babies born on U.S. soil are no longer automatically made citizens. Pro or con? (http://www.businessweek.com/debateroom/archives/2009/07/anchor_babies_n.html)

Title: Re: Meltdown
Post by: Coopmv on August 01, 2009, 07:43:27 AM

DM, The pains have only just begun for these companies that sell luxury goods ...

The Leaner Baby Boomer Economy
The downturn is putting a crimp on baby boomers' free-spending ways, and the likes of Mercedes and Starwood Hotels are scrambling to keep up
(http://www.businessweek.com/magazine/content/09_31/b4141026524433.htm?chan=magazine+channel_top+stories)

Title: Re: Meltdown
Post by: Coopmv on August 01, 2009, 08:13:35 AM

DM, It is bad news city all over. Things don't look so pretty on your side of the pond either ...

Europe's Jobless Youth
With one in five Gen Yers unable to find work, a new "Lost Generation" may be in the making
(http://www.businessweek.com/magazine/content/09_31/b4141021419387.htm?chan=magazine+channel_new+business)

Title: Re: Meltdown
Post by: Coopmv on August 01, 2009, 08:39:05 AM

DM, Wouldn't it be fun to watch the currency traders push the Yuan up 50% against the Dollar and 30% against Euro? This will easily address all the trade deficits problems both US and EU have been confronting ...

China's Yuan: The Next Reserve Currency?
Skeptics have dismissed Beijing's talk of de-emphasizing the U.S. dollar, but China is making moves that could soon lead to a convertible yuan (http://www.businessweek.com/globalbiz/content/may2009/gb20090522_665312.htm)

Title: Re: Meltdown
Post by: Coopmv on August 01, 2009, 09:08:20 AM

DM, Here is comeback story for 2030 ... ;D

A superstar real estate agent plots his comeback How a superstar Miami real estate agent went from boom to bust, and seeks a new boom (http://finance.yahoo.com/news/A-superstar-real-estate-agent-apf-2181263375.html?x=0)

Title: Re: Meltdown
Post by: snyprrr on August 01, 2009, 02:40:02 PM

Practically every new day brings another jaw-dropper from our new lord and master.

What was this thing in the CashForClunkers, that when you "applied" on line, there was a "read-this-and-click-before-you-enter", and what it said was that IF you clicked to continue, your computer was now the property of the gov.??? Can anyone verify?

And the "beer summit." Ooooo... that's rich. Isn't that the third time I've heard Obama bring up... nevermind.

And I'm reallly enjoying the "settlements/settlers" controversy. Could anything be a bigger smokescreen? Obama's starting to look like a chump. God forbid he withhold a few dollars from the apartheid regime. Who's zoomin who? Obama as Rahm's lapdog?

Title: Re: Meltdown
Post by: Coopmv on August 01, 2009, 02:49:55 PM

Quote from: snyprrr on August 01, 2009, 02:40:02 PM
Practically every new day brings another jaw-dropper from our new lord and master.

What was this thing in the CashForClunkers, that when you "applied" on line, there was a "read-this-and-click-before-you-enter", and what it said was that IF you clicked to continue, your computer was now the property of the gov.??? Can anyone verify?

And the "beer summit." Ooooo... that's rich. Isn't that the third time I've heard Obama bring up... nevermind.

And I'm reallly enjoying the "settlements/settlers" controversy. Could anything be a bigger smokescreen? Obama's starting to look like a chump. God forbid he withhold a few dollars from the apartheid regime. Who's zoomin who? Obama as Rahm's lapdog?

Right on. We do not need to visit the UK to see the House of Lords in action. We have one right here in Washington at the US Senate where some members are many times wealthier than their British counterparts.

I remember many years ago when I was taking history classes in middle school, the teacher explained the major difference between a monarchy and a democracy. It went like this: A monarchy is where the power flows from the ruler, i.e. the absolute monarch, to his subjects. A democracy is where the power flows from the people to the elected. The elected are supposed to be the servants of the people who elected them. It certainly sound like we are dealing with a bunch of absolute monarchs in Washington ... >:(

Title: Re: Meltdown
Post by: BachQ on August 01, 2009, 07:59:05 PM

Quote from: Coopmv on August 01, 2009, 08:13:35 AM
DM, It is bad news city all over. Things don't look so pretty on your side of the pond either ...

Europe's Jobless Youth
With one in five Gen Yers unable to find work, a new "Lost Generation" may be in the making
(http://www.businessweek.com/magazine/content/09_31/b4141021419387.htm?chan=magazine+channel_new+business)

Good catch, Coop ... Unbelivably, 37% of Spain's youth under 25 remain jobless. :o

Der Spiegel: Recession Robs Spain's Youth of Jobs and Hope

By Helene Zuber in Madrid
The ongoing economic crisis has pummelled Spain. Small businesses feel abandoned by the government, layoffs are swelling the ranks of the desperate, and a whole generation of recent college graduates is facing a future without prospects.

... As [Spain] faces the worst recession since the Spanish Civil War ended 70 years ago, first-time jobseekers are being hit especially hard. No other country in Europe has as many young people out of work: almost 37 percent of people under 25 and a quarter of those under 30. Sociologists have already created a name for this group -- "generación ni-ni," the neither-nor generation. The term meant to describe young people who are neither studying nor working and don't have something in their lives that they can get excited about. It's a true zero generation -- zero jobs, zero prospects. A recent survey of Spaniards between the ages of 18 and 34 showed that 54 percent of those polled view themselves as neither-nors. ... "We've hardly even started our careers, and we're already disillusioned," says Noa Beade, 24.

link (http://www.spiegel.de/international/europe/0,0518,638981,00.html)

Title: Re: Meltdown
Post by: BachQ on August 01, 2009, 08:12:51 PM

U.S. Recession Worst Since Great Depression, Revised Data Show
By Bob Willis

Aug. 1 (Bloomberg) -- The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world's largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said yesterday in Washington. Gross domestic product has shrunk 3.9 percent in the past year, the report said, indicating the worst slump since the Great Depression.

[continued] (http://www.bloomberg.com/apps/news?pid=20601087&sid=aNivTjr852TI)

Title: Re: Meltdown
Post by: Coopmv on August 01, 2009, 08:18:20 PM

Quote from: Dm on August 01, 2009, 07:59:05 PM
Good catch, Coop ... Unbelivably, 37% of Spain's youth under 25 remain jobless. :o

Der Spiegel: Recession Robs Spain's Youth of Jobs and Hope

By Helene Zuber in Madrid
The ongoing economic crisis has pummelled Spain. Small businesses feel abandoned by the government, layoffs are swelling the ranks of the desperate, and a whole generation of recent college graduates is facing a future without prospects.

... As [Spain] faces the worst recession since the Spanish Civil War ended 70 years ago, first-time jobseekers are being hit especially hard. No other country in Europe has as many young people out of work: almost 37 percent of people under 25 and a quarter of those under 30. Sociologists have already created a name for this group -- "generación ni-ni," the neither-nor generation. The term meant to describe young people who are neither studying nor working and don't have something in their lives that they can get excited about. It's a true zero generation -- zero jobs, zero prospects. A recent survey of Spaniards between the ages of 18 and 34 showed that 54 percent of those polled view themselves as neither-nors. ... "We've hardly even started our careers, and we're already disillusioned," says Noa Beade, 24.

link
(http://www.spiegel.de/international/europe/0,0518,638981,00.html)

Spain is in terrible shape and will probably require a bailout from EU. Ireland may be in the same boat. These two formerly supercharged economies were apparently all built on mountains of debt. With the global credit crunch, these two economies just collapsed. The American style capitalism of relentless borrowing is a bankrupt idea ...

Title: Re: Meltdown
Post by: Coopmv on August 01, 2009, 08:41:10 PM

Quote from: Dm on August 01, 2009, 08:12:51 PM
U.S. Recession Worst Since Great Depression, Revised Data Show
By Bob Willis

Aug. 1 (Bloomberg) -- The first 12 months of the U.S. recession saw the economy shrink more than twice as much as previously estimated, reflecting even bigger declines in consumer spending and housing, revised figures showed.

The world's largest economy contracted 1.9 percent from the fourth quarter of 2007 to the last three months of 2008, compared with the 0.8 percent drop previously on the books, the Commerce Department said yesterday in Washington. Gross domestic product has shrunk 3.9 percent in the past year, the report said, indicating the worst slump since the Great Depression.

[continued]
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aNivTjr852TI)

The so called Chinese economic growth may be just phony baloney. Its companies may be just cranking out products that are heading for local warehouses instead of to the ports for export. The Chinese expectation is when the foreign demands start to skyrocket, its production will be ready and able to accelerate and the stockpiled products at the warehouses will take no time to be drawn down. Unfortunately, the hoped-for export rebounds may not happen for another year or longer. How much more stockpiling can these companies afford to do?

Title: Re: Meltdown
Post by: BachQ on August 02, 2009, 05:28:19 PM

Quote from: Coopmv on August 01, 2009, 08:41:10 PM
The so called Chinese economic growth may be just phony baloney. Its companies may be just cranking out products that are heading for local warehouses instead of to the ports for export. The Chinese expectation is when the foreign demands start to skyrocket, its production will be ready and able to accelerate and the stockpiled products at the warehouses will take no time to be drawn down. Unfortunately, the hoped-for export rebounds may not happen for another year or longer. How much more stockpiling can these companies afford to do?

Coop, China's red-hot manufacturing economy will run into a brick wall once oil becomes expensive again (e.g., $80+/bbl). Earlier in 2009, China for the first time surpassed the US in consumption of automobiles (the US had been #1 for eons), so China is on track to become the world's biggest consumer of oil. I honestly believe that is China's biggest problem. (see article below)

Warning: Oil supplies are running out fast

Catastrophic shortfalls threaten economic recovery, says world's top energy economist

By Steve Connor, Science Editor

Monday, 3 August 2009

UK Independent --

The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.

Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.
Related articles

In an interview with The Independent, Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.

But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said.

In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010.

"One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

"The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future," he said.

There is now a real risk of a crunch in the oil supply after next year when demand picks up because not enough is being done to build up new supplies of oil to compensate for the rapid decline in existing fields.

The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.

"If we see a tightness of the markets, people in the street will see it in terms of higher prices, much higher than we see now. It will have an impact on the economy, definitely, especially if we see this tightness in the markets in the next few years," Dr Birol said.

"It will be especially important because the global economy will still be very fragile, very vulnerable. Many people think there will be a recovery in a few years' time but it will be a slow recovery and a fragile recovery and we will have the risk that the recovery will be strangled with higher oil prices," he told The Independent.

In its first-ever assessment of the world's major oil fields, the IEA concluded that the global energy system was at a crossroads and that consumption of oil was "patently unsustainable", with expected demand far outstripping supply.

Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned.

[continued] (http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html)

Title: Re: Meltdown
Post by: BachQ on August 02, 2009, 05:30:45 PM

UK Independent -- "As [Ireland's] economy continues to plummet, Irish firms are in increasing trouble with ever-growing numbers going to the wall or having to apply to the courts for protection. The number of voluntary and High Court liquidations, receiverships and examinerships increased a staggering 135 per cent in the first six months of 2009, and there are no signs that it is evening out, according to figures from accountants Farrell Grant Sparks (FGS). Indeed, the only booming business in town is insolvency." (http://www.independent.ie/business/irish/firms-are-running-out-of-options-as-creditors-come-calling-1849289.html)

Title: Re: Meltdown
Post by: Coopmv on August 02, 2009, 06:08:18 PM

Quote from: Dm on August 02, 2009, 05:28:19 PM
Coop, China's red-hot manufacturing economy will run into a brick wall once oil becomes expensive again (e.g., $80+/bbl). Earlier in 2009, China for the first time surpassed the US in consumption of automobiles (the US had been #1 for eons), so China is on track to become the world's biggest consumer of oil. I honestly believe that is China's biggest problem. (see article below)

Warning: Oil supplies are running out fast

Catastrophic shortfalls threaten economic recovery, says world's top energy economist

By Steve Connor, Science Editor

Monday, 3 August 2009

UK Independent --

The world is heading for a catastrophic energy crunch that could cripple a global economic recovery because most of the major oil fields in the world have passed their peak production, a leading energy economist has warned.

Higher oil prices brought on by a rapid increase in demand and a stagnation, or even decline, in supply could blow any recovery off course, said Dr Fatih Birol, the chief economist at the respected International Energy Agency (IEA) in Paris, which is charged with the task of assessing future energy supplies by OECD countries.
Related articles

In an interview with The Independent, Dr Birol said that the public and many governments appeared to be oblivious to the fact that the oil on which modern civilisation depends is running out far faster than previously predicted and that global production is likely to peak in about 10 years – at least a decade earlier than most governments had estimated.

But the first detailed assessment of more than 800 oil fields in the world, covering three quarters of global reserves, has found that most of the biggest fields have already peaked and that the rate of decline in oil production is now running at nearly twice the pace as calculated just two years ago. On top of this, there is a problem of chronic under-investment by oil-producing countries, a feature that is set to result in an "oil crunch" within the next five years which will jeopardise any hope of a recovery from the present global economic recession, he said.

In a stark warning to Britain and the other Western powers, Dr Birol said that the market power of the very few oil-producing countries that hold substantial reserves of oil – mostly in the Middle East – would increase rapidly as the oil crisis begins to grip after 2010.

"One day we will run out of oil, it is not today or tomorrow, but one day we will run out of oil and we have to leave oil before oil leaves us, and we have to prepare ourselves for that day," Dr Birol said. "The earlier we start, the better, because all of our economic and social system is based on oil, so to change from that will take a lot of time and a lot of money and we should take this issue very seriously," he said.

"The market power of the very few oil-producing countries, mainly in the Middle East, will increase very quickly. They already have about 40 per cent share of the oil market and this will increase much more strongly in the future," he said.

There is now a real risk of a crunch in the oil supply after next year when demand picks up because not enough is being done to build up new supplies of oil to compensate for the rapid decline in existing fields.

The IEA estimates that the decline in oil production in existing fields is now running at 6.7 per cent a year compared to the 3.7 per cent decline it had estimated in 2007, which it now acknowledges to be wrong.

"If we see a tightness of the markets, people in the street will see it in terms of higher prices, much higher than we see now. It will have an impact on the economy, definitely, especially if we see this tightness in the markets in the next few years," Dr Birol said.

"It will be especially important because the global economy will still be very fragile, very vulnerable. Many people think there will be a recovery in a few years' time but it will be a slow recovery and a fragile recovery and we will have the risk that the recovery will be strangled with higher oil prices," he told The Independent.

In its first-ever assessment of the world's major oil fields, the IEA concluded that the global energy system was at a crossroads and that consumption of oil was "patently unsustainable", with expected demand far outstripping supply.

Oil production has already peaked in non-Opec countries and the era of cheap oil has come to an end, it warned.

[continued]
(http://www.independent.co.uk/news/science/warning-oil-supplies-are-running-out-fast-1766585.html)

It is not a pretty picture any which way you slice it. But the Arabs cannot be too conceited about being the kingpin of the world oil supply since their military power is limited. When push comes to shove, the west will resort to military force and the western powers are much more experienced in that arena than the Chinese who only have the numeric superiority but do not have a navy to project any military power to faraway places anytime soon. This is very scary thought but it could happen ...

Title: Re: Meltdown
Post by: BachQ on August 02, 2009, 06:18:23 PM

Fla. highrise has 32 stories, but just 1 tenant

(http://d.yimg.com/a/p/ap/20090802/capt.de782f1559ca46b68a48483b83d93355.lonely_highrise_flwl101.jpg?x=258&y=345&q=85&sig=k.90PDLiNzNDW428zOPOew--)
FORT MYERS, Fla. – The Vangelakos' southwest Florida condominium has marble floors, a large pool overlooking a river and modern furnishings that speak of affluence and luxury. What they don't have in the 32-story building is a single neighbor. The New Jersey family of five purchased their unit four years ago, when Fort Myers was in the midst of a housing boom and any hints of an impending financial crisis were buried in lofty dreams of expansion and development. They made a $10,000 down payment and eagerly watched as builders transformed an empty lot into an opulent high rise, one that now symbolizes the foreclosure crisis.

"The future was going to be southwest Florida," said Victor Vangelakos, 45, a fire captain who planned to eventually retire and live permanently in the condo. Most of the other tenants in the 200-unit condo didn't close on their contracts, and the few that did have transferred to an adjacent building owned by the same company because more people live there.

The Vangelakos' mortgage lender will not allow them to do the same. That leaves them as the sole residents of the Oasis Tower One. "It's a beautiful building," said their attorney, John Ewing, who is representing 27 others who made deposits on units. "The problem is, it's a very lonely building." :D

continued

(http://news.yahoo.com/s/ap/20090801/ap_on_re_us/us_lonely_highrise)

Quote from: Coopmv on August 02, 2009, 06:08:18 PM

It is not a pretty picture any which way you slice it. But the Arabs cannot be too conceited about being the kingpin of the world oil supply since their military power is limited. When push comes to shove, the west will resort to military force and the western powers are much more experienced in that arena than the Chinese who only have the numeric superiority but do not have a navy to project any military power to faraway places anytime soon. This is very scary thought but it could happen ...

Yeah, Coop, that's a huge unknown: at what point will oil become so scarce that countries will not only fight over it (Iraq), but invade other countries for the express purpose of acquiring oil.

Title: Re: Meltdown
Post by: Coopmv on August 02, 2009, 06:51:01 PM

Quote from: Dm on August 02, 2009, 05:30:45 PM
UK Independent -- "As [Ireland's] economy continues to plummet, Irish firms are in increasing trouble with ever-growing numbers going to the wall or having to apply to the courts for protection. The number of voluntary and High Court liquidations, receiverships and examinerships increased a staggering 135 per cent in the first six months of 2009, and there are no signs that it is evening out, according to figures from accountants Farrell Grant Sparks (FGS). Indeed, the only booming business in town is insolvency."
(http://www.independent.ie/business/irish/firms-are-running-out-of-options-as-creditors-come-calling-1849289.html)

Ireland and Spain were the stars of the EU with their respective economic miracles just a short few years ago. Now the two countries really represent the ultimate debacle. At the depth of the Depression in the 1930's, the US unemployment rate was 25%. Ireland and Spain may be approaching the same number soon. As for the US, who knows what the real unemployment rate is since the data is being manipulated before it is published. Whatever the real unemployment rate is, it is probably a bit higher than the published ones. The US has had many self-employed people such as consultants and small business owners over the past two decades. When these people are out of a job, they are not counted since they do not qualify for unemployment benefits. ???

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on August 02, 2009, 11:32:40 PM

Quote from: Dm on August 02, 2009, 06:18:23 PM
"The future was going to be southwest Florida," said Victor Vangelakos, 45, a fire captain who planned to eventually retire and live permanently in the condo.

One of the themes of the peak oil observers, like JH Kunstler, is that the Sunbelt is doomed. A whole region of bloated cities and exurbs, all utterly dependent on automobile transport and the cheap oil that makes it possible. I shudder to think what places like Phoenix and Las Vegas will look like as the oil peak kicks in >:D

Sorry Victor, but the future isn't going to be southwest Florida anymore.

Title: Re: Meltdown
Post by: Coopmv on August 03, 2009, 03:58:37 PM

Quote from: Spitvalve on August 02, 2009, 11:32:40 PM
One of the themes of the peak oil observers, like JH Kunstler, is that the Sunbelt is doomed. A whole region of bloated cities and exurbs, all utterly dependent on automobile transport and the cheap oil that makes it possible. I shudder to think what places like Phoenix and Las Vegas will look like as the oil peak kicks in >:D

Sorry Victor, but the future isn't going to be southwest Florida anymore.

I read some very cogent analysis a few months ago that the Sunbelt as we know it - endless prosperity, plenty of jobs and huge influx of immigrants, etc will never be the same after this epic housing bust in Arizona and Florida. This author may well be right.

Title: Re: Meltdown
Post by: Coopmv on August 03, 2009, 05:14:26 PM

Oh Bummer

AP ENTERPRISE: Federal tax revenues plummeting
AP ENTERPRISE: Plummeting tax revenues starve government just as Obama embarks on big plans
By Stephen Ohlemacher, Associated Press Writer
On Monday August 3, 2009, 8:51 pm EDT

WASHINGTON (AP) -- The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation's plate and struggling to find money to pay the tab.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession's impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government's revenues were this bleak, the year was 1932 in the midst of the Depression.

"Our tax system is already inadequate to support the promises our government has made," said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.

"This just adds to the problem."

While much of Washington is focused on how to pay for new programs such as overhauling health care -- at a cost of $1 trillion over the next decade -- existing programs are feeling the pinch, too.

Social Security is in danger of running out of money earlier than the government projected just a few month ago. Highway, mass transit and airport projects are at risk because fuel and industry taxes are declining.

The national debt already exceeds $11 trillion. And bills just completed by the House would boost domestic agencies' spending by 11 percent in 2010 and military spending by 4 percent.

For this report, the AP analyzed annual tax receipts dating back to the inception of the federal income tax in 1913. Tax receipts for the 2009 budget year were available through June. They were compared to the same period last year. The budget year runs from October to September, meaning there will be three more months of receipts this year.

Is there a way out of the financial mess?

A key factor is the economy's health. The future of current programs -- not to mention the new ones Obama is proposing -- will depend largely on how fast the economy recovers from the recession, said William Gale, co-director of the Tax Policy Center.

"The numbers for 2009 are striking, head-snapping. But what really matters is what happens next," said Gale, who previously taught economics at UCLA and was an adviser to President George H. W. Bush's Council of Economic Advisers.

"If it's just one year, then it's a remarkable thing, but it's totally manageable. If the economy doesn't recover soon, it doesn't matter what your social, economic and political agenda is. There's not going to be any revenue to pay for it."

A small part of the drop in tax receipts can be attributed to new tax credits for individuals and corporations enacted in February as part of the $787 billion economic stimulus package. The sheer magnitude of the tax decline, however, points to the deep recession that is reducing incomes, wiping out corporate profits and straining government programs.

Social Security tax receipts are down less than a percentage point from last year, but in May the government had been projecting a slight increase. At the time, the government's best estimate was that Social Security would start to pay out more money than it receives in taxes in 2016, and that the fund would be depleted in 2037 unless changes are enacted.

Some experts think the sour economy has made those numbers outdated.

"You could easily move that number up three or four years, then you're talking about 2013, and that's not very far off," said Kent Smetters, associate professor of insurance and risk management at the University of Pennsylvania.

The government's projections included best- and worst-case scenarios. Under the worst, Social Security would start to pay out more money than it received in taxes in 2013, and the fund would be depleted in 2029.

The fund's trustees are still confident the solvency dates are within the range of the worst-case scenario, said Jason Fichtner, the Social Security Administration's acting deputy commissioner.

"We're not outside our boundaries yet," Fichtner said. "As the recovery comes, we'll see how that plays out."

The recession's toll on Social Security makes it even more urgent for Congress to address the fund's long-term solvency, said Sen. Herb Kohl, D-Wis., chairman of the Senate Aging Committee.

"Over the past year, millions of older Americans have watched their retirement savings crumble, making the guaranteed income of Social Security more important than ever," Kohl said.

President Barack Obama has said he wants to tackle Social Security next year, after he clears an already crowded agenda that includes overhauling health care, addressing climate change and imposing new regulations on financial companies.

Medicare tax receipts are also down less than a percentage point for the year, pretty close to government projections. Medicare started paying out more money than it received last year.

Meanwhile, the recession is taking a toll on fuel and industry excise taxes that pay for highway, mass transit and airport projects. Fuel taxes that support road construction and mass transit projects are on pace to fall for the second straight year. Receipts from taxes on jet fuel and airline tickets are also dropping, meaning Congress will have to borrow more money to fund airport projects and the Federal Aviation Administration.

Last week, Congress voted to spend $7 billion to replenish the highway fund, which would otherwise run out of money in August. Congress spent $8 billion to replenish the fund last year.

Rep. Richard Neal, D-Mass., chairman of the House subcommittee that oversees fuel taxes, is working on a package to make the fund more self-sufficient. The U.S. Chamber of Commerce, which doesn't back many tax increases, supports increasing the federal gasoline tax, currently 18.4 cents per gallon.

Neal said he hasn't endorsed a specific plan. But, he added, "You can't keep going back to the general fund."

Title: Re: Meltdown
Post by: Coopmv on August 03, 2009, 06:01:32 PM

There is no doubt Ruth Madoff has not come clean and disclosed what she has stashed away

Trustee to keep tabs on Ruth Madoff's spending
NY judge signs order making Mrs. Madoff give trustee monthly spending reports
By Tom Hays
On Monday August 3, 2009, 7:06 pm EDT

NEW YORK (AP) -- Bernard Madoff's once free-spending wife has suffered another financial indignity: She now must report any purchases over $100 to a trustee.

U.S. Bankruptcy Court Judge Burton Lifland signed off on an agreement last week that imposed the monthly reports while freezing Ruth Madoff's assets in response to the court-appointed trustee's $45 million claim against her.

The order in the Manhattan court allows Ruth Madoff only to pay "reasonable" legal and living expenses and up to $589,000 in back taxes until the matter is resolved.

Mrs. Madoff's lawyer, Peter Chavkin, declined comment on Monday. Last week, he called the claim by Trustee Irving Picard "wrong as a matter of law and fairness" because his client already has forfeited nearly all her wealth to federal prosecutors.

Picard -- appointed to locate and liquidate Madoff's assets to pay back thousands of burned customers -- sued the disgraced financier's wife last week, claiming she used investor money to finance "a life of splendor."

The suit alleges Mrs. Madoff pocketed $23.7 million from the business in the last two years, including $1.1 million to pay personal expenses charged to her American Express card and $2.7 million in 2007 to pay for her yacht. It seeks the return of at least $44.8 million that it says she knew or should have known belonged to the business and its clients, along with unspecified compensatory and punitive damages.

The 71-year-old Madoff is serving a 150-year sentence after admitting he squandered tens of billions of dollars in investors' money with a massive pyramid scheme.

His wife has not been charged with any crime. But she agreed to give up all of her possessions in return for a promise that federal prosecutors wouldn't pursue $2.5 million not tied to the fraud. The money, though, is not protected from civil legal actions that might be pursued by the trustee or by separate investor lawsuits.

The scandal forced Mrs. Madoff to move out of a $7 million Manhattan penthouse where she and her husband had lived during their 49-year marriage.

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on August 03, 2009, 10:50:53 PM

Quote from: Coopmv on August 03, 2009, 03:58:37 PM
I read some very cogent analysis a few months ago that the Sunbelt as we know it - endless prosperity, plenty of jobs and huge influx of immigrants, etc will never be the same after this epic housing bust in Arizona and Florida. This author may well be right.

Being a person with New Urbanist sympathies, I think that in the long run the collapse of the Sunbelt (and the whole grotesque world of auto-dependent suburban sprawl that sprang up after WW2) will be a good thing. However, the immediate results of such collapse are likely to be dire and socially disruptive.

Title: Re: Meltdown
Post by: BachQ on August 04, 2009, 04:02:51 PM

Four of Top 'Clunkers' Model Purchases Are Foreign (Update3)

By Angela Greiling Keane and Holly Rosenkrantz

Aug. 4 (Bloomberg) -- Four of the top five models sold so far under the U.S. "cash for clunkers" program, aimed at boosting the auto industry, are made by foreign automakers, according to Transportation Department data.

Ford Motor Co.'s Focus was the top seller, followed by Toyota Motor Corp.'s Corolla, Honda Motor Co.'s Civic and Toyota's Prius and Camry, data from the department showed today.

Initial clunkers legislation sponsored by Representative Betty Sutton, an Ohio Democrat, would have barred discounts for new vehicles manufactured overseas and offered higher payments for cars and trucks produced in the U.S. than for those made in Canada and Mexico. The "Buy American" provision was dropped from the final legislation because of opposition from foreign automakers and free-trade advocates who said it would conflict with U.S. obligations to the World Trade Organization.

continued (http://www.bloomberg.com/apps/news?pid=20601087&sid=am1mj6R6tAcg)

Title: Re: Meltdown
Post by: BachQ on August 04, 2009, 04:05:34 PM

Mike Whitney: This depression is just beginning.

link (http://informationclearinghouse.info/article23182.htm)

Title: Re: Meltdown
Post by: BachQ on August 04, 2009, 04:08:07 PM

Offshoring by US companies surges from 22% (in 2005) to 53%

Aug 3 05:14 PM US/Eastern

US companies are increasingly turning to offshoring their functions to achieve cost savings, and few plan to bring those jobs back to the United States, the Conference Board said Monday. The number of US companies with a corporate offshoring strategy in place more than doubled in the past three years, according to the fifth annual report on offshoring trends, published by Duke University in collaboration with the Conference Board.

Of the companies surveyed, 53 percent had a corporate offshoring strategy in place, up from 22 percent in 2005, said the Conference Board, a nonprofit business research organization. "Sixty percent of companies that had already offshored say they have aggressive plans to expand existing activities, and very few plan to relocate activities back to the United States," it said. The report also said the globalization of innovation -- defined as engineering, research and development (R&D), R&D support functions, product design, and software development, is accelerating. "Speed to market and the domestic shortage of science and engineering talent are two key drivers for offshoring projects," the board said. (http://www.breitbart.com/article.php?id=CNG.c1b0c9606e32be85cd66a2835fc895e2.9a1&show_article=1)

Title: Re: Meltdown
Post by: BachQ on August 04, 2009, 04:10:22 PM

Quote from: Coopmv on August 03, 2009, 05:14:26 PM
Oh Bummer

AP ENTERPRISE: Federal tax revenues plummeting
AP ENTERPRISE: Plummeting tax revenues starve government just as Obama embarks on big plans
By Stephen Ohlemacher, Associated Press Writer
On Monday August 3, 2009, 8:51 pm EDT

WASHINGTON (AP) -- The recession is starving the government of tax revenue, just as the president and Congress are piling a major expansion of health care and other programs on the nation's plate and struggling to find money to pay the tab.

The numbers could hardly be more stark: Tax receipts are on pace to drop 18 percent this year, the biggest single-year decline since the Great Depression, while the federal deficit balloons to a record $1.8 trillion.

Other figures in an Associated Press analysis underscore the recession's impact: Individual income tax receipts are down 22 percent from a year ago. Corporate income taxes are down 57 percent. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever.

The last time the government's revenues were this bleak, the year was 1932 in the midst of the Depression.

"Our tax system is already inadequate to support the promises our government has made," said Eugene Steuerle, a former Treasury Department official in the Reagan administration who is now vice president of the Peter G. Peterson Foundation.

"This just adds to the problem."

While much of Washington is focused on how to pay for new programs such as overhauling health care -- at a cost of $1 trillion over the next decade -- existing programs are feeling the pinch, too.

Social Security is in danger of running out of money earlier than the government projected just a few month ago. Highway, mass transit and airport projects are at risk because fuel and industry taxes are declining.

The national debt already exceeds $11 trillion. And bills just completed by the House would boost domestic agencies' spending by 11 percent in 2010 and military spending by 4 percent.

For this report, the AP analyzed annual tax receipts dating back to the inception of the federal income tax in 1913. Tax receipts for the 2009 budget year were available through June. They were compared to the same period last year. The budget year runs from October to September, meaning there will be three more months of receipts this year.

Is there a way out of the financial mess?

A key factor is the economy's health. The future of current programs -- not to mention the new ones Obama is proposing -- will depend largely on how fast the economy recovers from the recession, said William Gale, co-director of the Tax Policy Center.

"The numbers for 2009 are striking, head-snapping. But what really matters is what happens next," said Gale, who previously taught economics at UCLA and was an adviser to President George H. W. Bush's Council of Economic Advisers.

"If it's just one year, then it's a remarkable thing, but it's totally manageable. If the economy doesn't recover soon, it doesn't matter what your social, economic and political agenda is. There's not going to be any revenue to pay for it."

A small part of the drop in tax receipts can be attributed to new tax credits for individuals and corporations enacted in February as part of the $787 billion economic stimulus package. The sheer magnitude of the tax decline, however, points to the deep recession that is reducing incomes, wiping out corporate profits and straining government programs.

Social Security tax receipts are down less than a percentage point from last year, but in May the government had been projecting a slight increase. At the time, the government's best estimate was that Social Security would start to pay out more money than it receives in taxes in 2016, and that the fund would be depleted in 2037 unless changes are enacted.

Some experts think the sour economy has made those numbers outdated.

"You could easily move that number up three or four years, then you're talking about 2013, and that's not very far off," said Kent Smetters, associate professor of insurance and risk management at the University of Pennsylvania.

The government's projections included best- and worst-case scenarios. Under the worst, Social Security would start to pay out more money than it received in taxes in 2013, and the fund would be depleted in 2029.

The fund's trustees are still confident the solvency dates are within the range of the worst-case scenario, said Jason Fichtner, the Social Security Administration's acting deputy commissioner.

"We're not outside our boundaries yet," Fichtner said. "As the recovery comes, we'll see how that plays out."

The recession's toll on Social Security makes it even more urgent for Congress to address the fund's long-term solvency, said Sen. Herb Kohl, D-Wis., chairman of the Senate Aging Committee.

"Over the past year, millions of older Americans have watched their retirement savings crumble, making the guaranteed income of Social Security more important than ever," Kohl said.

President Barack Obama has said he wants to tackle Social Security next year, after he clears an already crowded agenda that includes overhauling health care, addressing climate change and imposing new regulations on financial companies.

Medicare tax receipts are also down less than a percentage point for the year, pretty close to government projections. Medicare started paying out more money than it received last year.

Meanwhile, the recession is taking a toll on fuel and industry excise taxes that pay for highway, mass transit and airport projects. Fuel taxes that support road construction and mass transit projects are on pace to fall for the second straight year. Receipts from taxes on jet fuel and airline tickets are also dropping, meaning Congress will have to borrow more money to fund airport projects and the Federal Aviation Administration.

Last week, Congress voted to spend $7 billion to replenish the highway fund, which would otherwise run out of money in August. Congress spent $8 billion to replenish the fund last year.

Rep. Richard Neal, D-Mass., chairman of the House subcommittee that oversees fuel taxes, is working on a package to make the fund more self-sufficient. The U.S. Chamber of Commerce, which doesn't back many tax increases, supports increasing the federal gasoline tax, currently 18.4 cents per gallon.

Neal said he hasn't endorsed a specific plan. But, he added, "You can't keep going back to the general fund."

Well, look at the bright side: at least it's better than 1932! :D

Title: Re: Meltdown
Post by: BachQ on August 04, 2009, 04:17:15 PM

Quote from: Spitvalve on August 02, 2009, 11:32:40 PM
One of the themes of the peak oil observers, like JH Kunstler, is that the Sunbelt is doomed. A whole region of bloated cities and exurbs, all utterly dependent on automobile transport and the cheap oil that makes it possible. I shudder to think what places like Phoenix and Las Vegas will look like as the oil peak kicks in >:D

Sorry Victor, but the future isn't going to be southwest Florida anymore.

Yeah, as you mention, any infrastructure that is dependent on "cheap oil" is doomed. This includes most suburbs, McMansions, sprawling retail shopping malls, etc. Las Vegas and Phoenix are at the top of the list of dinosaurs. Kunstler's The End of Suburbia provides a documentary of this phenomenon.

Title: Re: Meltdown
Post by: Coopmv on August 04, 2009, 04:42:40 PM

Quote from: Dm on August 04, 2009, 04:02:51 PM
Four of Top 'Clunkers' Model Purchases Are Foreign (Update3)

By Angela Greiling Keane and Holly Rosenkrantz

Aug. 4 (Bloomberg) -- Four of the top five models sold so far under the U.S. "cash for clunkers" program, aimed at boosting the auto industry, are made by foreign automakers, according to Transportation Department data.

Ford Motor Co.'s Focus was the top seller, followed by Toyota Motor Corp.'s Corolla, Honda Motor Co.'s Civic and Toyota's Prius and Camry, data from the department showed today.

Initial clunkers legislation sponsored by Representative Betty Sutton, an Ohio Democrat, would have barred discounts for new vehicles manufactured overseas and offered higher payments for cars and trucks produced in the U.S. than for those made in Canada and Mexico. The "Buy American" provision was dropped from the final legislation because of opposition from foreign automakers and free-trade advocates who said it would conflict with U.S. obligations to the World Trade Organization.

continued
(http://www.bloomberg.com/apps/news?pid=20601087&sid=am1mj6R6tAcg)

Ohio is really Honda country anyway. I do not think there are still any Japanese cars sold in the US that are not made in North America - US and Canada. The Japanese automakers do not make cars in Mexico to the best of my knowledge.

Title: Re: Meltdown
Post by: Coopmv on August 04, 2009, 07:33:24 PM

Quote from: Dm on August 04, 2009, 04:08:07 PM
Offshoring by US companies surges from 22% (in 2005) to 53%

Aug 3 05:14 PM US/Eastern

US companies are increasingly turning to offshoring their functions to achieve cost savings, and few plan to bring those jobs back to the United States, the Conference Board said Monday. The number of US companies with a corporate offshoring strategy in place more than doubled in the past three years, according to the fifth annual report on offshoring trends, published by Duke University in collaboration with the Conference Board.

Of the companies surveyed, 53 percent had a corporate offshoring strategy in place, up from 22 percent in 2005, said the Conference Board, a nonprofit business research organization. "Sixty percent of companies that had already offshored say they have aggressive plans to expand existing activities, and very few plan to relocate activities back to the United States," it said. The report also said the globalization of innovation -- defined as engineering, research and development (R&D), R&D support functions, product design, and software development, is accelerating. "Speed to market and the domestic shortage of science and engineering talent are two key drivers for offshoring projects," the board said.
(http://www.breitbart.com/article.php?id=CNG.c1b0c9606e32be85cd66a2835fc895e2.9a1&show_article=1)

Not sure how representative this article is. It turned out that DELL insourced a call center back to the US about a year or 2 years ago after rampant complaints from US customers about poor service provided by its call center in India.

Title: Re: Meltdown
Post by: BachQ on August 05, 2009, 04:21:02 PM

Quote from: Coopmv on July 23, 2009, 05:01:17 PM
This is the other shoe that is going to drop ...

US commercial real estate (CRE) prices nosedived by a record 18.1% in Q2 09, eclipsing the previous record of 10.6% as CRE woes accelerated their downward spiral.

(http://web.mit.edu/newsoffice/2009/july-sm-enlarged.jpg)

The 39% drop since its mid-2007 peak dwarfs the 27% decline of the 1980s and early 1990s, and also dwarfs the 30% drop in residential housing prices.
(http://web.mit.edu/newsoffice/2009/tbi-0803.html)

Meanwhile, 82% of executives polled (http://www.reuters.com/article/bondsNews/idUSN0526358420090805) think CRE values will continue to deteriorate.

Title: Re: Meltdown
Post by: BachQ on August 05, 2009, 04:22:26 PM

And it's even worse in the UK.

Lloyds, RBS May Write Down Extra $30 Billion on Property Loans
By Jon Menon

Aug. 4 (Bloomberg) -- Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, the U.K.'s biggest taxpayer-funded banks, may post a combined 17.7 billion pounds ($30 billion) of writedowns after the U.K.'s property slump worsened. ... British property values have dropped since the start of the credit freeze, with commercial real estate declining 44 percent from its mid-2007 peak, according to London-based Investment Property Databank Ltd. Residential prices fell 21 percent in the same period, according to the Halifax housing index.

Banks have "too much commercial property debt and have to get it down," RBS Chief Executive Officer Stephen Hester said last month. The debt reductions would take three-to-five years, he said. Together, RBS and Lloyds have 97 billion pounds of commercial real estate loans, according to a June 26 report from Paris-based BNP Paribas SA.

'Next Wave'

Mortgage, credit card and personal loan impairments will "rise significantly" this year, while "continuing declines in commercial property prices and reducing levels of corporate cash flows" will darken the economic outlook, Lloyds Finance Director Tim Tookey told analysts in May. U.K. and Irish commercial real estate defaults probably will result in a 50 percent increase in corporate bad loans this year, he said.

"This crisis has consisted of a series of earthquakes, with changing epicenters," Deutsche Bank AG Chief Executive Officer Josef Ackermann said July 30 in Zurich. "Bad loans are the next wave."

The U.K. government owns 43 percent of Lloyds and 70 percent of RBS. The two banks are seeking insurance for 585 billion pounds of toxic assets. The European Union has warned it may force the banks, which received a combined 60 billion pounds from the government, to sell assets and branches in return for approval of their restructuring plans. (http://www.bloomberg.com/apps/news?pid=20601102&sid=akq8yT.Gp7RQ)

Title: Re: Meltdown
Post by: Coopmv on August 05, 2009, 04:41:14 PM

Quote from: Dm on August 05, 2009, 04:22:26 PM
And it's even worse in the UK.

Lloyds, RBS May Write Down Extra $30 Billion on Property Loans
By Jon Menon

Aug. 4 (Bloomberg) -- Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, the U.K.'s biggest taxpayer-funded banks, may post a combined 17.7 billion pounds ($30 billion) of writedowns after the U.K.'s property slump worsened. ... British property values have dropped since the start of the credit freeze, with commercial real estate declining 44 percent from its mid-2007 peak, according to London-based Investment Property Databank Ltd. Residential prices fell 21 percent in the same period, according to the Halifax housing index.

Banks have "too much commercial property debt and have to get it down," RBS Chief Executive Officer Stephen Hester said last month. The debt reductions would take three-to-five years, he said. Together, RBS and Lloyds have 97 billion pounds of commercial real estate loans, according to a June 26 report from Paris-based BNP Paribas SA.

'Next Wave'

Mortgage, credit card and personal loan impairments will "rise significantly" this year, while "continuing declines in commercial property prices and reducing levels of corporate cash flows" will darken the economic outlook, Lloyds Finance Director Tim Tookey told analysts in May. U.K. and Irish commercial real estate defaults probably will result in a 50 percent increase in corporate bad loans this year, he said.

"This crisis has consisted of a series of earthquakes, with changing epicenters," Deutsche Bank AG Chief Executive Officer Josef Ackermann said July 30 in Zurich. "Bad loans are the next wave."

The U.K. government owns 43 percent of Lloyds and 70 percent of RBS. The two banks are seeking insurance for 585 billion pounds of toxic assets. The European Union has warned it may force the banks, which received a combined 60 billion pounds from the government, to sell assets and branches in return for approval of their restructuring plans.
(http://www.bloomberg.com/apps/news?pid=20601102&sid=akq8yT.Gp7RQ)

DM, we cannot wait to see the meltdown of the Chinese commercial real estate market soon enough ... ;D

Title: Re: Meltdown
Post by: Coopmv on August 05, 2009, 05:31:41 PM

What the politicians have trumpeted as the American Dream for decades has now become the American Nightmare ...

About half of U.S. mortgages seen underwater by 2011

By Al Yoon – Wed Aug 5, 5:12 pm ET
NEW YORK (Reuters) – The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.

Home price declines will have their biggest impact on prime "conforming" loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less risky because of stringent requirements.

"We project the next phase of the housing decline will have a far greater impact on prime borrowers," Deutsche analysts Karen Weaver and Ying Shen said in the report.

Of prime conforming loans, 41 percent will be "underwater" by the first quarter of 2011, up from 16 percent at the end of the first quarter 2009, it said. Forty-six percent of prime jumbo loans will be larger than their properties' value, up from 29 percent, it said.

"The impact of this is significant given that these markets have the largest share of the total mortgage market outstanding," the analysts said. Prime jumbo loans make up 13 percent of the total market.

Deutsche's dire assessment comes amid a bolt of evidence in recent months that point to stabilization in the U.S. housing market after three years of price drops. This week, the National Association of Realtors said pending home sales rose for a fifth straight month in June. A widely watched index released in July showed home prices in May rose for the first time since 2006.

Covering 100 U.S. metropolitan areas, Deutsche Bank in June forecast home prices would fall 14 percent through the first quarter of 2011, for a total drop of 41.7 percent.

The drop in home prices is fueling a vicious cycle of foreclosures as it eliminates homeowner equity and gives borrowers an incentive to walk away from their mortgages. The more severe the negative equity, the more likely are defaults, since many borrowers believe prices will not recover enough.

Homeowners with the riskiest mortgages taken out during the housing boom have seen the greatest erosion in equity, in part because they were "affordability products" originated at the housing peak, Deutsche said. They include subprime loans, of which 69 percent will be underwater in 2011, up from 50 percent in March, Deutsche said,

Of option adjustable-rate mortgages -- which cut payments by allowing principal balances to rise -- 89 percent will be underwater in 2011, up from 77 percent, the report said.

Regions suffering the worst negative equity are areas in California, Florida, Arizona, Nevada, Ohio, Michigan, Illinois, Wisconsin, Massachusetts and West Virginia. Las Vegas and parts of Florida and California will see 90 percent or more of their loans underwater by 2011, it added.

"For many, the home has morphed from piggy bank to albatross," the analysts said.

Title: Re: Meltdown
Post by: Jay F on August 06, 2009, 01:58:46 PM

Quote from: Spitvalve on August 03, 2009, 10:50:53 PM
Being a person with New Urbanist sympathies, I think that in the long run the collapse of the Sunbelt (and the whole grotesque world of auto-dependent suburban sprawl that sprang up after WW2) will be a good thing.

But where are all those people going to go, 72nd and Riverside?

Title: Re: Meltdown
Post by: MishaK on August 06, 2009, 02:27:36 PM

Quote from: nicht schleppend on August 06, 2009, 01:58:46 PM
But where are all those people going to go, 72nd and Riverside?

They will repopulate Detroit, Cleveland, Buffalo, and all the other dying cities of the Rust Belt. ;)

Title: Re: Meltdown
Post by: BachQ on August 06, 2009, 05:17:44 PM

Quote from: Coopmv on July 25, 2009, 09:25:20 AM
The ACLU has been pushing civil rights and all kinds of other rights for the illegals. IMO, the only kind of rights that should be accorded the illegals in the US are the basic human rights, which should be respected anywhere. The illegals should NEVER have any rights-parity with the US citizens or those who are legally here in the US ...

Can illegal aliens enrol in the foodstamp program? Notice that sunbelt-state Florida tops the foodstamp list.

Forbes: US food stamp list tops 34 million for first time

WASHINGTON (Reuters) - For the first time, more than 34 million Americans received food stamps, which help poor people buy groceries, government figures said on Thursday, a sign of the longest and one of the deepest recessions since the Great Depression

Enrollment surged by 2 percent to reach a record 34.4 million people, or one in nine Americans, in May, the latest month for which figures are available.

It was the sixth month in a row that enrollment set a record. Every state recorded a gain in participation from April. Florida had the largest increase at 4.2 percent.

[continued) (http://www.forbes.com/feeds/reuters/2009/08/06/2009-08-06T152646Z_01_N06328040_RTRIDST_0_FOODSTAMPS-USA.html)

Title: Re: Meltdown
Post by: BachQ on August 06, 2009, 05:22:51 PM

What will be the final result of soaring costs associated with Medicare, Social Security, etc.? Higher taxes? Default? Inflation?

"Almost everyone is aware that federal government spending in the United States is scheduled to skyrocket, primarily because of Social Security, Medicare, and Medicaid. Recent "stimulus" packages have accelerated the process. Only the naively optimistic actually believe that politicians will fully resolve this looming fiscal crisis with some judicious combination of tax hikes and program cuts. Many predict that, instead, the government will inflate its way out of this future bind, using Federal Reserve monetary expansion to fill the shortfall between outlays and receipts. But I believe, in contrast, that it is far more likely that the United States will be driven to an outright default on Treasury securities, openly reneging on the interest due on its formal debt and probably repudiating part of the principal."

continued (http://www.econlib.org/library/Columns/y2009/Hummeltbills.html)

Title: Re: Meltdown
Post by: BachQ on August 06, 2009, 05:25:59 PM

Quote from: Coopmv on August 01, 2009, 08:13:35 AM
Europe's Jobless Youth
With one in five Gen Yers unable to find work, a new "Lost Generation" may be in the making
(http://www.businessweek.com/magazine/content/09_31/b4141021419387.htm?chan=magazine+channel_new+business)

Reuters: Lost generation? U.S. grads work for free, look abroad

link (http://www.reuters.com/article/ousiv/idUSTRE57359120090804)

Title: Re: Meltdown
Post by: Coopmv on August 06, 2009, 05:26:14 PM

Quote from: Dm on August 06, 2009, 05:17:44 PM
Can illegal aliens enrol in the foodstamp program? Notice that sunbelt-state Florida tops the foodstamp list.

Forbes: US food stamp list tops 34 million for first time

WASHINGTON (Reuters) - For the first time, more than 34 million Americans received food stamps, which help poor people buy groceries, government figures said on Thursday, a sign of the longest and one of the deepest recessions since the Great Depression

Enrollment surged by 2 percent to reach a record 34.4 million people, or one in nine Americans, in May, the latest month for which figures are available.

It was the sixth month in a row that enrollment set a record. Every state recorded a gain in participation from April. Florida had the largest increase at 4.2 percent.

[continued)
(http://www.forbes.com/feeds/reuters/2009/08/06/2009-08-06T152646Z_01_N06328040_RTRIDST_0_FOODSTAMPS-USA.html)

It is of course an outrage that illegals are given foodstamps, which are obviously paid by the taxpayers of the US.

Title: Re: Meltdown
Post by: BachQ on August 06, 2009, 05:29:08 PM

Five Reasons the Market Could Crash This Fall (http://seekingalpha.com/article/153555-five-reasons-the-market-could-crash-this-fall?source=article_sb_popular)

Title: Re: Meltdown
Post by: Coopmv on August 06, 2009, 05:30:28 PM

Quote from: Dm on August 06, 2009, 05:25:59 PM
Reuters: Lost generation? U.S. grads work for free, look abroad

link
(http://www.reuters.com/article/ousiv/idUSTRE57359120090804)

IMO, the US economy needs to be fundamentally restructured. There should be more manufacturing jobs and the financial industry needs to be downsized.

Title: Re: Meltdown
Post by: BachQ on August 06, 2009, 05:32:59 PM

Quote from: Coopmv on August 06, 2009, 05:30:28 PM
IMO, the US economy needs to be fundamentally restructured. There should be more manufacturing jobs and the financial industry needs to be downsized.

Yes!

Title: Re: Meltdown
Post by: BachQ on August 06, 2009, 05:34:23 PM

Is Britain bust?
For 300 years our best minds have fretted over the threat of national bankruptcy. As government debt surges upwards, they are doing so again. How worried should we be?

link
(http://www.prospectmagazine.co.uk/2009/07/isbritainbust/)

Title: Re: Meltdown
Post by: Coopmv on August 06, 2009, 05:34:30 PM

Quote from: Dm on August 06, 2009, 05:29:08 PM
Five Reasons the Market Could Crash This Fall
(http://seekingalpha.com/article/153555-five-reasons-the-market-could-crash-this-fall?source=article_sb_popular)

This guy is late to the crash party.

Title: Re: Meltdown
Post by: BachQ on August 06, 2009, 05:36:16 PM

Quote from: Coopmv on August 06, 2009, 05:34:30 PM

This guy is late to the crash party.

I know, it's already August ... he's really slow! :D

Title: Re: Meltdown
Post by: Coopmv on August 06, 2009, 06:35:37 PM

The banks are at it again. ???

Old Banks, New Lending Tricks
Lenders haven't sworn off risky financial products. They've come up with a slew of new ones

That didn't take long. The economy hasn't yet recovered from the implosion of risky investments that led to the worst recession in decades—and already some of the world's biggest banks are peddling a new generation of dicey products to corporations, consumers, and investors.

Read on (http://www.businessweek.com/magazine/content/09_33/b4143020536818.htm?campaign_id=yhoo)

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on August 06, 2009, 11:25:39 PM

Quote from: nicht schleppend on August 06, 2009, 01:58:46 PM
But where are all those people going to go, 72nd and Riverside?

Mensch gave the short answer. We have to repopulate and revitalize our dying cities and traditionally-built towns. Having been built before the tyranny of the automobile spread over the whole country, they are the natural habitat for a population that will need to rediscover the joys of walking, biking and taking public transport.

Will anyone really miss the wasteful, sprawling exurbs with their identikit housing developments, interchangeable shopping malls, lack of sidewalks, and absence of traditional downtowns? Somehow I doubt it.

Title: Re: Meltdown
Post by: BachQ on August 08, 2009, 07:24:57 AM

Are we about to hit Peak Oil?

...The recession may have bought us some time as global growth slows. However, says Jeremy Grantham of US fund manager GMO, beyond our debt problems "lurks another longer-term and more important factor affecting future growth – the increasing limitations on resources. We're simply running out of everything at a dangerous rate".

The planet's metal supply is fast depleting, and the quality of what's left is lower: "where 30 tons of copper ore once produced a ton of copper, it now takes 500 tons". Even water's running out.

As the planet's population soars, says Grantham, "we must prepare ourselves for waves of higher resource prices and shortages unlike anything we've faced outside wartime".

(Click for more) (http://www.moneyweek.com/investments/commodities/investing-in-oil-are-we-about-to-hit-peak-oil-44709.aspx)

Title: Re: Meltdown
Post by: BachQ on August 08, 2009, 07:32:18 AM

Goldman Sachs: Oil to reach $147/bbl

LONDON, Aug 6 (Reuters) - Goldman Sachs said it expects commodity prices to spike sharply higher next year, mimicking the moves in 2008 when oil almost hit $150 a barrel and other commodities touched a series of all-time highs. "As the commodity markets rebound with the broader global economy we expect a redux of 2008 when severe supply constraints forced the rationing of demand through sharply higher prices to keep the market balanced," Goldman Sachs analysts said in a research note dated Aug 5. "As the developed world increasingly begins to consume like Westerners the demands placed on the finite resources of the planet increases. This trend of human populations growing faster than the earth's ability to produce not only impacts food production but that of commodity usage."

Goldman Sachs made headlines in early 2008 after analyst Arjun Murti predicted oil prices could spike as high as $200 a barrel. Oil prices had never before traded above $100 a barrel until January 2008.

link

(http://michelle2005.files.wordpress.com/2008/10/oil-derrick.jpg) (http://www.forbes.com/feeds/reuters/2009/08/06/2009-08-%3Cbr%20/%3E06T153446Z_01_L6414942_RTRIDST_0_GOLDMAN-COMMODITIES.html)

Title: Re: Meltdown
Post by: Coopmv on August 08, 2009, 07:32:33 AM

Quote from: Johannes Brahms D Minor Piano Concerto Opus 15 on August 08, 2009, 07:24:57 AM
Are we about to hit Peak Oil?

...The recession may have bought us some time as global growth slows. However, says Jeremy Grantham of US fund manager GMO, beyond our debt problems "lurks another longer-term and more important factor affecting future growth – the increasing limitations on resources. We're simply running out of everything at a dangerous rate".

The planet's metal supply is fast depleting, and the quality of what's left is lower: "where 30 tons of copper ore once produced a ton of copper, it now takes 500 tons". Even water's running out.

As the planet's population soars, says Grantham, "we must prepare ourselves for waves of higher resource prices and shortages unlike anything we've faced outside wartime".

(Click for more)
(http://www.moneyweek.com/investments/commodities/investing-in-oil-are-we-about-to-hit-peak-oil-44709.aspx)

DM, Almost did not recognize you. I just spent a few thousands of the worthless greenbacks to buy shares in Marathon Oil and Williams & Co, the largest natural gas provider/transporter in the US in preparation for this. These new investments are on top of the pretty good-sized investments my wife and I made on ExxonMobil and ConocoPhillips from years ago. These are long-term investments ...

Title: Re: Meltdown
Post by: Brian on August 08, 2009, 07:39:17 AM

Dude, D minor, your username is totally ruining the Diner's decor.

Title: Re: Meltdown
Post by: Coopmv on August 08, 2009, 07:46:14 AM

Quote from: Brian on August 08, 2009, 07:39:17 AM
Dude, D minor, your username is totally ruining the Diner's decor.

Brian, Looks like you prefer some 2-letter username better. ;D

Title: Re: Meltdown
Post by: Coopmv on August 08, 2009, 10:58:33 AM

This is pretty good news. If this consumer debt reduction continues for a few more years and the federal government can trim its deficits, the US should be much less dependent on foreign countries buying its debt, particularly the Chinese ...

Consumers cut debt for 5th straight month

WASHINGTON (AP) -- Consumers paid down their credit cards and cut other debt in June for the fifth straight month as they rebuild savings battered by the recession.

Outstanding U.S. consumer debt fell by $10.3 billion, or 4.9 percent at an annual rate, to $2.5 trillion, the Federal Reserve said. That's a much steeper cut than the $4.7 billion analysts expected, according to Thomson Reuters.

June's reduction follows a 2.6 percent cut in May and a steep 8.2 percent drop in April, when consumers reduced their borrowing by $17.4 billion. That was the most in dollar terms on records dating back to 1943.

Title: Re: Meltdown
Post by: snyprrr on August 09, 2009, 11:49:16 AM

So, when is the next "September '08" going to happen? This year, or next?

Title: Re: Meltdown
Post by: Coopmv on August 09, 2009, 08:06:26 PM

DM: A bubble is not a bubble until it has burst. The Chinese are inflating their bubble once again. ;D

Wen: No plan to halt China's easy credit policy
Premier Wen says China still faces economic problems, easy credit policies will continue
On Sunday August 9, 2009, 7:06 am EDT

BEIJING (AP) -- China's top economic official cautioned Sunday that the country still faced economic problems and assured jittery investors that easy credit policies aimed at kick-starting a recovery would continue.

"We still face many difficulties and challenges and there is uncertainty over the prospect of the international economy," Wen Jiabao said during a recent visit to eastern Jiangsu province, according to remarks posted Sunday on the central government's Web site.

He said the economy continues to be challenged by plunging demand for Chinese exports and challenges in boosting domestic demand.

Wen said Beijing will stick to its "relatively relaxed monetary policy" and a "proactive fiscal policy" -- a reference to the 4 trillion yuan ($586 billion) stimulus for the world's third-largest economy.

Chinese leaders say the country's recovery is not firmly established even though economic growth accelerated to 7.9 percent in the latest quarter, up from 6.1 percent in the previous quarter. They say the rebound is still dependent on government spending and a full-fledged private sector recovery has yet to take hold.

Wen's pledge of continued easy credit added to a string of government assurances to nervous investors that the flood of bank lending that fueled China's nascent economic rebound would continue despite concerns that it might be adding to dangerous speculation in stock and real estate.

Analysts are concerned that stimulus-fueled speculation in stocks and real estate could cause a boom and bust in those markets. They say reckless lending could add to pressure for prices to rise and leave banks burdened with bad debt.

Total lending by Chinese banks soared to 7.1 trillion yuan ($1 trillion) in the first half of the year. Economists say an estimated 15 percent of that has flowed into stocks and real estate in violation of government lending rules.

Banks have been told to curtail credit for the second half of the year and make sure borrowers put money into productive investments, according to Chinese news reports. They say 10 lenders, including Bank of China Ltd., the country's No. 2 commercial lender, were ordered to buy 100 billion yuan ($14 billion) in government bonds to curb their credit growth.

Title: Re: Meltdown
Post by: Coopmv on August 09, 2009, 08:26:31 PM

DM: Meltdown II will start in Hong Kong or Shanghai, name your pick and it could be a fun sequel to Meltdown I to watch. Will the communists trounce the capitalists in their ability to handle a systemic meltdown?

Blazing Days at the Shanghai Exchange
Can China's high-flying stock market continue its rapid ascent without a serious correction?
By Frederik Balfour

Hong Kong - Shanghai's stock exchange has long been a roller-coaster ride, so after watching the benchmark index rise 90% this year, Wang Yaodong decided it was time to pull the emergency brake. "I'm really afraid the whole market will go down," says the property salesman, who sold all his stocks on Aug. 3.

He's right to worry. Stock prices are being fueled by easy money in China, and many experts say that has to end soon. As part of Beijing's effort to goose the economy, banks made $1.08 trillion in loans in the first half, triple the year-earlier level. While most of that was intended for new roads, bridges, and factories, some was put into stocks by managers seeking quick profits. Problem is, when credit tightens again—as it inevitably will—shares may crash. "Chinese asset markets have become a giant Ponzi scheme," says independent economist Andy Xie. "This sort of bubble ends when there isn't enough liquidity to feed the beast."

China bulls counter that the beast can continue to feast for some time. Shanghai shares are just half their October 2007 high, and with the economy recovering, corporate profits will start to grow. The average price-earnings ratio is 26, still well below the average of 60 at the market's peak. "This rally is leading the recovery, so it's fine," says Frank Gong, chief economist for China at JPMorgan Chase (JPM). "Equity markets are supposed to do that."

Gong and others say it's unlikely the government will choke off credit. For starters, no one wants to be blamed for slowing China's recovery. And officials across the mainland have ample incentive to keep the loans flowing. The money helps companies hire and economies grow—key metrics in assessing the job performance of municipal and provincial bigwigs. Local governments also benefit when state-owned enterprises on their turf list on the exchange, which is much easier when prices are rising. On July 27, the government of Sichuan Province benefited mightily when highway operator Sichuan Expressway saw its shares triple on its first day of trading.

Nonetheless, many investors are keeping their fingers close to the sell button. On July 29, Shanghai shares plunged by 5% as rumors spread that Beijing was clamping down on lending. But prices quickly resumed their climb, worrying economists. "The way asset prices are moving in China is not healthy," says David Cui, Shanghai-based equity strategist for Bank of America Merrill Lynch. "The government has to balance its desire for growth with the integrity of the financial system."

Title: Re: Meltdown
Post by: Coopmv on August 09, 2009, 08:48:38 PM

DM, This is pretty much the expected outcome of the Senate investigation. In 14-months, Dodd's career could end and many voters in CT like myself want him out ...

Ethics Panel Clears Dodd in Countrywide Refinancing (Update2)

By Jonathan D. Salant

Aug. 7 (Bloomberg) -- The Senate Ethics Committee said Senate Banking Committee Chairman Chris Dodd of Connecticut and fellow Democrat Kent Conrad of North Dakota didn't violate ethics rules in refinancing their home mortgages with Countrywide Financial Corp.

The panel said today it found "no substantial credible evidence" that the mortgages violated Senate ethics rules.

Even so, the committee, which includes equal numbers of Democrats and Republicans, said both senators should have "exercised more vigilance" to "avoid the appearance" of preferential treatment.

Dodd, who faces re-election next year and whose committee oversees the mortgage industry, claimed vindication.

"There was no 'sweetheart' or special deal; the allegations are and have always been false," Dodd said in a statement. "I hope that today's dismissal will go a long way towards restoring the bond of trust and confidence that I've worked long and hard to build with the people of our state."

Conrad called findings "welcome news" in a statement. "While I should have shown more vigilance in the appearance of these transactions, the committee has concluded I did nothing unethical, and that is the truth," he said.

The complaint against the senators was brought by Citizens for Responsibility and Ethics in Washington, a watchdog group. CREW executive director Melanie Sloan said Dodd and Conrad were cleared of wrongdoing "despite the fact that the senators participated in a program the committee found 'offered quicker, more efficient loan processing and some discounts.'"

'Friends' of Mozilo

Both senators were put into Countrywide's VIP program and were designated by the company as "friends" of former chief executive officer Angelo Mozilo, who founded the company and served as its head until last year. The committee found that neither Dodd nor Conrad received special treatment, that their mortgages were in line with offers from competing companies, and that they didn't obtain any benefits by virtue of their elected offices.

Dodd, 65, said he assumed the VIP program was simply a courtesy for customers. Conrad, the Senate Budget Committee chairman, also denied receiving favorable treatment.

Dodd, first elected to his seat in 1980, is the only Democratic senator currently in danger of losing re-election next year, political analysts say. Three Washington-based organizations that rate congressional races -- Congressional Quarterly, the Rothenberg Political Report and the Cook Political Report -- say the race is a tossup.

Through June 30, Dodd had $1.8 million in his campaign bank account, more than double that reported by his leading Republican challenger, former Representative Rob Simmons.

Conrad, 61, faces re-election in 2012. He first won his Senate seat in 1986.

Title: Re: Meltdown
Post by: Coopmv on August 10, 2009, 06:02:16 AM

DM, Fed is waiting for the other shoe to drop ...

Fed Focusing on Real-Estate Recession as Bernanke Convenes FOMC

By Scott Lanman

Aug. 10 (Bloomberg) -- The collapse in commercial real estate is preventing Federal Reserve Chairman Ben S. Bernanke from declaring the economy and financial markets are healed.

Property values have fallen 35 percent since October 2007, according to Moody's Investors Service. That's making it tough for owners to refinance almost $165 billion of mortgages for skyscrapers, shopping malls and hotels this year, pressuring companies such as Maguire Properties Inc., the largest office landlord in downtown Los Angeles, to put buildings up for sale.

The industry is likely to be high on the agenda when Bernanke and his colleagues sit down in Washington tomorrow for the Federal Open Market Committee meeting on monetary policy. Lawmakers including Barney Frank and Carolyn Maloney are pushing the central bank to extend an aid program designed to restore the flow of credit.

If nonresidential real estate remains in the doldrums, the Fed may be forced to leave emergency-lending programs in place and keep its benchmark interest rate close to zero for longer than some investors expect, given positive signs elsewhere in the economy.

Commercial property is "certainly going to be a significant drag" on growth, said Dean Maki, a former Fed researcher who is now chief U.S. economist in New York at Barclays Capital Inc., the investment-banking division of London-based Barclays Plc. "The bigger risk from it would be if it causes unexpected losses to financial firms that lead to another financial crisis."

'Close Attention'

The Fed is "paying very close attention," Bernanke, 55, told the Senate Banking Committee on July 22, the second of two days of semiannual monetary-policy testimony before the House and Senate. "As the recession's gotten worse in the last six months or so, we're seeing increased vacancy, declining rents, falling prices, and so, more pressure on commercial real estate."

The pressure may be easing in other areas of the economy. Gross domestic product shrank at a better-than-forecast 1 percent annual pace in the second quarter after a 6.4 percent drop the prior three months, and residential housing starts rose unexpectedly by 3.6 percent in June as construction of single- family dwellings jumped by the most since 2004, according to data from the Commerce Department.

Employers cut fewer workers than anticipated last month as the jobless rate fell to 9.4 percent from 9.5 percent in June -- the first decline since April 2008, based on Labor Department figures.

'Danger Zone'

Amid such glimmers of improvement, commercial real estate is a "particular danger zone," said Janet Yellen, president of the Federal Reserve Bank of San Francisco, in a July 28 speech in Coeur d'Alene, Idaho. The market may be "under stress for some considerable period of time," William Dudley, chief of the New York Fed bank, said the following day in New York.

Nonresidential construction may decline as much as 9 percent this year and another 5 percent in 2010, predicts Kenneth Simonson, chief economist at Associated General Contractors of America, an Arlington, Virginia, trade group whose members include Essen, Germany-based Hochtief AG's Turner Construction Co. in New York, one of the largest U.S. builders. In the second quarter, it accounted for 3.6 percent, or $509 billion, of U.S. gross domestic product on an annual basis, down from 4.3 percent in the final three months of 2008.

A dozen lawmakers questioned Bernanke on the topic during his July testimony. Some asked about extending the Term Asset- Backed Securities Loan Facility, the emergency program the Fed began in March to restart the market for securities backed by auto, credit-card and education loans. The central bank expanded the facility in June to cover as much as $100 billion in loans to support commercial mortgage-backed securities.

One-Year Extension

Forty-one House members -- including Frank, 69, a Massachusetts Democrat who chairs the Financial Services Committee, and Maloney, 61, a New York Democrat who heads the Joint Economic Committee -- signed a July 31 letter seeking a one-year extension through December 2010 and asking for a decision by mid-August.

Fed policy makers will prolong the program if they judge financial markets are still "some distance from normal operation," Bernanke said during his July 22 testimony. "We will certainly be monitoring the situation."

The Fed likely will change the end date -- just not right away, said former central-bank Governor Lyle Gramley.

Market Developments

"They're probably going to want to wait a while to see how markets develop," said Gramley, 82, now senior economic adviser with Soleil Securities Corp., a New York-based investment- research firm.

A six-month continuance is more likely than the one year industry officials want, said former Fed Governor Laurence Meyer, Washington-based vice chairman with consultant Macroeconomic Advisers LLC of St. Louis.

That would still be useful and "provide more of a runway" for the TALF to be effective, said Jeffrey DeBoer, president of the Real Estate Roundtable, a Washington group representing 16 trade associations and property owners including New York-based Vornado Realty Trust, the third-largest U.S. real-estate- investment trust by market value.

Any sales of mortgage-backed bonds would be the first new issues in the $700 billion U.S. market for commercial-mortgage- backed securities since it was shut down by the credit freeze in 2008.

About $3 billion are in the pipeline, and the success of these sales may foster as much as $25 billion in total deals in the next six months, said Kenneth Rosen, who runs a $310 million hedge fund in real-estate securities and heads the University of California's Fisher Center for Real Estate and Urban Economics in Berkeley.

Signs of Improvement

The market is showing some signs of life: The Bloomberg REIT Office Property Index of 14 companies, while down 56 percent from its February 2007 peak, has gained 41 percent in the past six months. Also, the yield gap, or spread, on top- ranked commercial mortgage-backed bonds relative to U.S. Treasuries is about 4.49 percentage points compared with 8 percentage points at the start of May, according to Barclays data.

The Fed's efforts to revive credit may be overpowered by continuing job losses, even as the pace of those losses slows. U.S. employers eliminated 247,000 workers from payrolls last month, according to an Aug. 7 Labor Department report, bringing the cumulative reduction to about 6.7 million since the start in December 2007 of the worst contraction since the Great Depression.

'Negative Fundamental'

"Demand for commercial space comes from employment and the income generated by that employment," said University of Pennsylvania Professor Joseph Gyourko, director of the Wharton School's Samuel Zell and Robert Lurie Real Estate Center in Philadelphia. Mounting job losses are a "really significant negative fundamental," signaling that "conditions are going to be tough for the industry for a while," he said.

That may spill over into mounting losses at some banks. Forty-seven percent of loans at the 7,000-plus smaller U.S. lenders are in commercial real estate, compared with 17 percent for the biggest banks, according to New York-based Goldman Sachs Group Inc.

Regions Financial Corp., the Birmingham, Alabama, lender that accepted $3.5 billion in U.S. rescue funds, had $36.9 billion in nonresidential real-estate and construction loans at the end of the second quarter, 38 percent of its overall total. Regions posted a net loss for the period of $188 million compared with a profit of $206.3 million a year earlier as more developers and home builders fell behind on payments.

Third Straight Loss

Salt Lake City-based Zions Bancorporation, which operates in 10 Western states, reported its third straight quarterly loss July 20 on a surge in commercial-property defaults. Thirty-five percent of its loans for the period were in nonresidential real estate and construction, and its provision for loan losses rose to $762.7 million from $297.6 million in the first quarter.

One developer based in U.S. Representative Walt Minnick's district is in a bind because a lower appraisal means he can't renew the full amount of a $10 million, three-year loan he took out for a recent project, the first-term Democrat from Idaho said in an interview last week. The person may be forced into bankruptcy, said Minnick, 66, without identifying the developer.

"That is a microcosm of what is happening to commercial property" everywhere, he said. "It's the next shoe to drop."

Maguire bought 24 properties and 11 development sites for $2.88 billion in 2007 from New York-based Blackstone Group LP, the world's largest private-equity company. Later that year, credit markets froze, blocking the Los Angeles-based company's efforts to refinance its mortgages. As a result, Maguire said in April it would accelerate its property sales to raise cash and pay down debt from the purchases.

Refinancing Debt

New York-based Brookfield Properties Corp. faces a $1.8 billion debt maturity in October 2011 arising from the 2006 purchase of Trizec Properties Inc., which made it the second- biggest owner of U.S. office buildings by square footage. Brookfield has said it expects to refinance some of its obligations and sell buildings to cover the rest.

Commercial real estate remains "an important downside risk," said Gramley, a Fed governor from 1980 to 1985. "I don't think it's going to be a blockbuster negative, but it's one additional reason why this recovery is going to be of modest dimensions."

Title: Re: Meltdown
Post by: BachQ on August 10, 2009, 06:14:12 AM

Quote from: Coopmv on August 09, 2009, 08:06:26 PM
DM: A bubble is not a bubble until it has burst. The Chinese are inflating their bubble once again. ;D

Wen: No plan to halt China's easy credit policy
Premier Wen says China still faces economic problems, easy credit policies will continue
On Sunday August 9, 2009, 7:06 am EDT

BEIJING (AP) -- China's top economic official cautioned Sunday that the country still faced economic problems and assured jittery investors that easy credit policies aimed at kick-starting a recovery would continue.

"We still face many difficulties and challenges and there is uncertainty over the prospect of the international economy," Wen Jiabao said during a recent visit to eastern Jiangsu province, according to remarks posted Sunday on the central government's Web site.

He said the economy continues to be challenged by plunging demand for Chinese exports and challenges in boosting domestic demand.

Wen said Beijing will stick to its "relatively relaxed monetary policy" and a "proactive fiscal policy" -- a reference to the 4 trillion yuan ($586 billion) stimulus for the world's third-largest economy.

Chinese leaders say the country's recovery is not firmly established even though economic growth accelerated to 7.9 percent in the latest quarter, up from 6.1 percent in the previous quarter. They say the rebound is still dependent on government spending and a full-fledged private sector recovery has yet to take hold.

Wen's pledge of continued easy credit added to a string of government assurances to nervous investors that the flood of bank lending that fueled China's nascent economic rebound would continue despite concerns that it might be adding to dangerous speculation in stock and real estate.

Analysts are concerned that stimulus-fueled speculation in stocks and real estate could cause a boom and bust in those markets. They say reckless lending could add to pressure for prices to rise and leave banks burdened with bad debt.

Total lending by Chinese banks soared to 7.1 trillion yuan ($1 trillion) in the first half of the year. Economists say an estimated 15 percent of that has flowed into stocks and real estate in violation of government lending rules.

Banks have been told to curtail credit for the second half of the year and make sure borrowers put money into productive investments, according to Chinese news reports. They say 10 lenders, including Bank of China Ltd., the country's No. 2 commercial lender, were ordered to buy 100 billion yuan ($14 billion) in government bonds to curb their credit growth.

Coop, did you see this?

The Coming China Meltdown
by Martin Hutchinson August 04, 2009

Shares are trading at 35 times earnings. Banks in the last six months have lent more than the entire Gross Domestic Product for the period. Interest rates are below the inflation rate, while monetary growth is far above it. The seven largest bond transactions in the world in 2009 were domestic deals in this country.

Looks like a bubble to me, and bound to end in tears. In a Western economy, one would be sure of it. So why should we think China's different, and what would be the effects of a Chinese economic meltdown?

Various very intelligent people have seen their hair turn grey waiting for a Chinese bubble to burst. ... The most likely form of meltdown to occur is that of a banking system collapse, as the gigantic volume of recent loans goes bad and liquidity in the economy finally dries up. That would drain the huge Chinese savings pool and cause steep output contraction, particularly in the overleveraged and inefficient state-owned sector.

... A Chinese economic collapse, which might well be accompanied by an Indian balance of payments crisis due to that country's perpetual government overspending, would cause a sharp "second dip" in the global economy. The amount of foreign capital tied up one way or another in the Chinese economy is now so great that a Chinese market collapse would have global repercussions in an already weakened financial system. ... (http://www.prudentbear.com/index.php/thebearslairview?art_id=10256)

Title: Re: Meltdown
Post by: BachQ on August 10, 2009, 06:21:05 AM

Quote from: Coopmv on August 10, 2009, 06:02:16 AM
The Fed is "paying very close attention," Bernanke, 55, told the Senate Banking Committee on July 22, the second of two days of semiannual monetary-policy testimony before the House and Senate. "As the recession's gotten worse in the last six months or so, we're seeing increased vacancy, declining rents, falling prices, and so, more pressure on commercial real estate."

If the properties are overpriced and need to reach market equilibrium, what exactly can the Fed do? Another bailout?

QuoteMaguire bought 24 properties and 11 development sites for $2.88 billion in 2007 from New York-based Blackstone Group LP, the world's largest private-equity company. Later that year, credit markets froze, blocking the Los Angeles-based company's efforts to refinance its mortgages. As a result, Maguire said in April it would accelerate its property sales to raise cash and pay down debt from the purchases.

Yep, Mcguire Prop. is a typical example.

Maguire Properties Inc., one of the largest office-building owners in Southern California, is planning to hand over control of seven buildings with some $1.06 billion in debt to creditors, the latest sign that rising vacancies and falling rents are causing stress in the commercial real-estate sector. Maguire, which borrowed heavily during the go-go years to make disastrous top-of-the-market investments, mostly in Orange County, notified the buildings' mortgage holders Friday that it expected "imminent default" on the loans. The buildings are all worth less then their mortgages and aren't generating enough cash to pay debt service and finance leasing expenses. Maguire's problems are an example of the mounting pain among owners and lenders to office buildings, stores, hotels and other commercial real estate that is causing concern among banks and regulators that the sector may drag down a hoped-for economic recovery just as it is getting started. Initially, a dearth of financing caused the distress. But Maguire's problems show that falling rents and rising vacancies are causing landlords to run out of cash.

(http://online.wsj.com/article/SB124986079948018087.html#printMode)

Title: Re: Meltdown
Post by: BachQ on August 10, 2009, 06:24:42 AM

US Deficit grew by $181 billion in July

By Walter Alarkon
Posted: 08/09/09 06:06 PM [ET]
Bailouts for financial firms and billions in tax revenue lost because of the recession drove the deficit to a record $1.3 trillion in July, according to the independent Congressional Budget Office (CBO).

Tax receipts that have fallen due to the poor economy and increased spending to save car companies, banks and mortgage firms were major contributors to the federal deficit, according to CBO, which provides official budget numbers for Congress. The federal deficit grew by another $181 billion in July.

Falling tax receipts and increased spending on bailouts for auto companies and the financial sector and for the economic stimulus package added to the deficit, according to CBO.

Spending through July of 2009 has increased by $530 billion, which is 21 percent over the same period in 2008. The bailout money for Freddie Mac and Fannie Mae accounted for almost half of the spending increase. Unemployment benefits have more than doubled, Medicaid spending has grown by a quarter and Medicare spending has increased by 11 percent.

Tax revenue for the first three quarters of 2009 has fallen by approximately $350 billion, or 17 percent compared to the same period last year, due mostly to the effects of the recession on payroll, income and corporate taxes. A third of the decline is due to tax breaks in the stimulus, including the middle-class tax cut that President Obama campaigned on during last year's election.

The independent budget scorekeeper has projected the deficit to reach $1.8 trillion by the end of the fiscal year, Sept. 30. The deficit in 2008 reached $455 billion, which was a record at the time.

The latest deficit projections come as Democrats in Congress and the White House are pushing for healthcare reform criticized by Republicans as too costly.

House Speaker Nancy Pelosi (D-Calif.) stressed during a town-hall meeting in Colorado this week that the healthcare bill won't add to the deficit or restrict benefits and instead will increase access to care. But lawmakers have yet to settle on a way to pay for the bill, expected to cost roughly $1 trillion over the next decade. Pelosi has supported an income surtax on the highest earners, those making more than $280,000, while senators are considering a tax on insurance companies that offer expensive health plans.

Sen. Judd Gregg (N.H.), the top Republican on the Budget Committee, said that Democrats in Congress aren't doing anything to address the record deficit and are instead pushing ahead with "wildly expensive" healthcare legislation.

"To allow the deficit to hit these previously unthinkable levels – while still planning to implement massive new spending programs – shows an incredible lack of fiscal responsibility, especially toward the future generations who will be saddled with the consequences of today's actions," Gregg said. (http://thehill.com/leading-the-news/deficit-grew-by-181-billion-in-july-2009-08-09.html)

Title: Re: Meltdown
Post by: Coopmv on August 10, 2009, 06:36:20 AM

Quote from: Johannes Brahms Piano Concerto No. 1 in D Minor Opus 15 on August 10, 2009, 06:14:12 AM
Coop, did you see this?

The Coming China Meltdown
by Martin Hutchinson August 04, 2009

Shares are trading at 35 times earnings. Banks in the last six months have lent more than the entire Gross Domestic Product for the period. Interest rates are below the inflation rate, while monetary growth is far above it. The seven largest bond transactions in the world in 2009 were domestic deals in this country.

Looks like a bubble to me, and bound to end in tears. In a Western economy, one would be sure of it. So why should we think China's different, and what would be the effects of a Chinese economic meltdown?

Various very intelligent people have seen their hair turn grey waiting for a Chinese bubble to burst. ... The most likely form of meltdown to occur is that of a banking system collapse, as the gigantic volume of recent loans goes bad and liquidity in the economy finally dries up. That would drain the huge Chinese savings pool and cause steep output contraction, particularly in the overleveraged and inefficient state-owned sector.

... A Chinese economic collapse, which might well be accompanied by an Indian balance of payments crisis due to that country's perpetual government overspending, would cause a sharp "second dip" in the global economy. The amount of foreign capital tied up one way or another in the Chinese economy is now so great that a Chinese market collapse would have global repercussions in an already weakened financial system. ...
(http://www.prudentbear.com/index.php/thebearslairview?art_id=10256)

Thanks DM. It was a great and objective article. That bubble will burst in China and many western companies may be forced to write off all their investments made over the past 20 years to the tune of hundreds of billions dollars ...

Title: Re: Meltdown
Post by: Coopmv on August 10, 2009, 07:06:08 AM

DM, Can you imagine someone who overdraft by $1 and end up having to pay a $25 overdraft fee ... ???

U.S. banks to make $38 billion from overdraft fees: report
On Monday August 10, 2009, 3:43 am EDT

(Reuters) - Banks in the United States are poised to make $38.5 billion in customer overdraft fees this year, the Financial Times said, citing research by Moebs Services.

A large portion of the revenue is likely to come from the most financially stretched consumers, according to the paper.

It said the research showed that many banks have increased charges on overdrafts and credit cards in order to boost profits.

The median bank overdraft fee rose this year by one dollar to $26, the paper said, citing the Moebs data.

"Banks are returning to a fee-driven model and overdraft fees are the mother lode," Mike Moebs, the company's founder was quoted by the paper as saying.

Overdraft fees accounted for more than 75 percent of service fees charged on customer deposits, the paper cited Moebs as saying.

Last year the U.S. Federal Reserve approved credit card rules to curb "unfair" practices such as surprise fees and interest rate hikes, and new mortgage lending rules are expected this summer. It is also mulling rules to give bank customers the chance to opt out of overdraft schemes that can involve fees.

Title: Re: Meltdown
Post by: Coopmv on August 10, 2009, 07:32:38 AM

DM, It is just preposterous for the Chinese to accuse other countries for spying when there are some 3000+ spies roaming the US alone and additional ones in many western European countries, willing and ready to pilfer any technologies from both government labs and private companies in order to bolster its own modernization drive and military capabilities. They have no moral high ground to accuse other people... >:(

CANBERRA (Reuters) - Shares in global miner Rio Tinto Ltd (ASX:RIO.AX - News; LSE:RIO.L - News) fell more than 3 percent on Monday after a Chinese magazine published additional spying allegations against the company.

Dual-listed Rio Tinto's were down 3 percent at 2,347 pence in London at 1258 GMT (8:58 a.m. EDT), slightly underperforming a generally weaker mining sector (^SXPP - News), having closed 3.3 percent lower at A$58.55 in Sydney.

Rio Tinto had spied on Chinese steel mills for six years, resulting in the mills overpaying $102 billion for iron ore, Rio Tinto's biggest earner, according to an article in the online edition of a magazine published by China's state secrets agency.

That overpayment allegation echoed the findings of an earlier study conducted by a Chinese university professor, but it was not clear if the article had any other basis for its argument.

The magazine's website (www.baomi.org) was inaccessible for most of the day on Monday.

When it reopened late on Monday, the article with details of the allegations was no longer accessible. A second article that referred to the Rio case in calling for greater protection of commercial information was still available on the website.

Rio Tinto declined to comment on the accusations, which followed China's detention of four Rio employees -- including Australian citizen Stern Hu -- a month ago in Shanghai on suspicion of stealing state secrets.

The company said last month its employees had done nothing wrong. The men remain in detention and have yet to be charged.

"The allegations referred to on the National Secrets Protection Bureau website are not new," a spokeswoman for Australian Foreign Minister Stephen Smith said in a statement.

"The (Australian) government has always said the Stern Hu case was complex and involved serious allegations. The government has urged the Chinese authorities to deal with his case expeditiously," the spokeswoman said, adding Australia would continue to make representations to Beijing over Hu's case.

The article said Rio Tinto's commercial spying involved "winning over and buying off, prying out intelligence ... and gaining things by deceit" over six years.

The detentions have raised concerns about doing business in China, strained ties with Australia and overshadowed 2009 price talks on iron ore, which is used to make steel.

"It sets a negative precedent for the whole industry," said Nick Hatch, analyst at ING. "It raises questions for the whole mining industry in terms of supplying China."

Australia exported A$18 billion ($15 billion) worth of iron ore and concentrates to China in 2008, accounting for 41 percent of China's iron ore imports last year. The ore came mainly from Rio and BHP Billiton (ASX:BHP.AX - News; LSE:BLT.L - News), although other Australian companies shipped the mineral as well.

CONCERN FOR INVESTORS IN CHINA

Investors said it was hard to assess what the latest comments might mean for Rio Tinto and other iron ore exporters such as Vale (Sao Paolo:VALE5.SA - News) of Brazil and BHP. The article said some of the information had come from computers seized from Rio.

China surpassed Europe and Japan as the biggest iron ore importer roughly six years ago, setting off an unprecedented rise in spot iron ore prices.

Term prices also climbed, but for most of that period remained lower than the spot market, thus benefitting the large Chinese mills that were able to access cheaper, good quality iron ore through term contracts with Rio, BHP, and Vale (Sao Paolo:VALE5.SA - News).

"It has to be a concern for anybody marketing anything into China," said Tim Barker, an analyst at BT Investment Management.

Barker said China appeared to be using the spying issue to reassert control over iron ore price talks at a time when some Chinese mills have independently signed new contracts while the China Iron and Steel Association is pressing for bigger cuts than agreed by other Asian mills.

Analysts pointed out that the $102 billion that Chinese steel mills overpaid, according to the article, was more than double Rio Tinto's total iron ore sales revenue of $42.6 billion over the past six years.

The figures appear to derive from a calculation by a Chinese professor that were quoted by the Southern Metropolis Daily in mid-July, although there was no indication of what figures the professor had used to come up with his overpayment estimate.

"It's very difficult to find any reasonableness surrounding the latest claims, given the orders of magnitude and lack of detail," said Tim Schroeders, portfolio manager of Pengana Capital's global resources fund.

"There's a little bit of nervousness about the allegations."

BHP Billiton, which is working with Rio Tinto to combine their iron ore mining operations, declined to comment on the tension between China and Rio. Spokeswoman Samantha Evans said work on the production joint venture was going ahead.

Title: Re: Meltdown
Post by: Coopmv on August 10, 2009, 08:39:51 AM

It was a lost decade, the US stock market returns since 2000 through end of 2008 were essentially zero ...

BOSTON (TheStreet) -- Three years of steady gains were wiped out in retirement plans because of the stock-market crash, according to a report by the nonprofit Employee Benefit Research Institute.

Median asset levels in defined-contribution plans dropped at least 15% from the end of 2007 to mid-2009, according to the review, one of the first that quantified just how bad retirement plans were hurt.

Crash Erases Three Years of Retirement Gains (http://www.thestreet.com/_yahoo/story/10569104/1/crash-erases-three-years-of-retirement-gains.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA)

Title: Re: Meltdown
Post by: Coopmv on August 10, 2009, 08:45:19 AM

DM, Have you read about this?

Chinese steel executive threatens mass layoffs, is beaten to death as 30K workers riot
(http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6159120)

Title: Re: Meltdown
Post by: BachQ on August 11, 2009, 05:01:33 AM

NYT: New Graduates Finding Jobs in China (Mandarin Optional)
By HANNAH SELIGSON

Shanghai and Beijing are becoming lands of opportunity for recent American college graduates who face unemployment nearing double digits at home. Even those with limited or no knowledge of Chinese are heeding the call. They are lured by China's surging economy, the lower cost of living and a chance to bypass some of the dues-paying that is common to first jobs in the United States.

[continued]

(http://www.nytimes.com/2009/08/11/business/economy/11expats.html?ref=business)

Bloomberg: China's Exports Decline for Ninth Month on Weak Global Demand

Aug. 11 (Bloomberg) -- China's exports fell for a ninth month on weak global demand, reinforcing the government's case for sticking with a "moderately loose" monetary policy to fuel domestic growth. Overseas sales dropped 23 percent in July from a year earlier, the customs bureau said today.

[continued] (http://www.bloomberg.com/apps/news?pid=20601087&sid=aAyWg0P3ISXg)

Title: Re: Meltdown
Post by: BachQ on August 11, 2009, 05:03:35 AM

UK Telegraph: S&P downgrades Baltic states' debt ratings The sovereign debt of Latvia and Estonia have been downgraded as the brutal slump plays havoc with public finances and tests commitment to euro currency pegs across the Baltic states.
By Ambrose Evans-Pritchard
Published: 8:09PM BST 10 Aug 2009

Standard & Poor's, the credit-rating agency, cut Latvia's rating to "BB" and warned that its economy will contract by a further 16pc this year. The public debt will vault from 19pc of GDP last year to 80pc by 2011. "This very fast increase in debt is unprecedented," said Moritz Kraemer, S&P's head of sovereign ratings. ...GDP has fallen 20pc in Latvia and 22pc in Lithuania over the past year – more concentrated falls than anything seen in the Great Depression. Both countries expect unemployment to peak at almost a quarter of the workforce.

[continued] (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/6006322/SandP-downgrades-Baltic-states-debt-ratings.html)

Title: Re: Meltdown
Post by: BachQ on August 11, 2009, 05:05:41 AM

Russia's Output Shrank by a Record 10.9% Last Quarter as Meltdown Deepened

By Paul Abelsky

Aug. 11 (Bloomberg) -- Russia's economy contracted the most on record last quarter as rising unemployment sapped consumer demand, bank lending stalled and the government was slow to respond with support measures. GDP contracted an annual 10.9% in the second quarter, the Federal Statistics Service said ... Russia's economic decline is worsening after output contracted 9.8 percent in the first quarter, ending 10 years of expansion that averaged close to 7 percent. President Dmitry Medvedev said: "We can't develop like this any longer. It's a dead end. And the crisis has placed us in a situation where we will have to make decisions on changing the structure of the economy." ... By the end of 2009, 17.4 percent of the population, or 24.6 million people, will be living beneath the subsistence level of $185 per month, almost 5 percent more than before the crisis, the World Bank said in a report released in June. Unemployment may exceed 13 percent by the end of the year, compared with 8.3 percent in June, according to the World Bank. ...

[continued]
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aYImZJKQlUnk)

Ruble Falls in Longest Slump Since February on Record GDP Drop

Aug. 11 (Bloomberg) -- The ruble weakened for a fifth day versus dollar, its longest losing streak since February, after a report showed Russia's economy contracted by the most on record in the second quarter.

[continued] (http://www.bloomberg.com/apps/news?pid=20601087&sid=a4ShtGSqy32U)

Title: Re: Meltdown
Post by: Coopmv on August 11, 2009, 03:38:44 PM

Quote from: dm on August 11, 2009, 05:05:41 AM
Russia's Output Shrank by a Record 10.9% Last Quarter as Meltdown Deepened

By Paul Abelsky

Aug. 11 (Bloomberg) -- Russia's economy contracted the most on record last quarter as rising unemployment sapped consumer demand, bank lending stalled and the government was slow to respond with support measures. GDP contracted an annual 10.9% in the second quarter, the Federal Statistics Service said ... Russia's economic decline is worsening after output contracted 9.8 percent in the first quarter, ending 10 years of expansion that averaged close to 7 percent. President Dmitry Medvedev said: "We can't develop like this any longer. It's a dead end. And the crisis has placed us in a situation where we will have to make decisions on changing the structure of the economy." ... By the end of 2009, 17.4 percent of the population, or 24.6 million people, will be living beneath the subsistence level of $185 per month, almost 5 percent more than before the crisis, the World Bank said in a report released in June. Unemployment may exceed 13 percent by the end of the year, compared with 8.3 percent in June, according to the World Bank. ...

[continued]
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aYImZJKQlUnk)

Ruble Falls in Longest Slump Since February on Record GDP Drop

Aug. 11 (Bloomberg) -- The ruble weakened for a fifth day versus dollar, its longest losing streak since February, after a report showed Russia's economy contracted by the most on record in the second quarter.

[continued]
(http://www.bloomberg.com/apps/news?pid=20601087&sid=a4ShtGSqy32U)

Russia has serious economic problems. It and Venezuela both require crude at $80 to fund their social programs and keep the country running. $80 oil may be a pipedream for a while if there is another leg down in the ongoing worldwide financial crisis.

Title: Re: Meltdown
Post by: Coopmv on August 11, 2009, 03:49:19 PM

Quote from: dm on August 11, 2009, 05:01:33 AM

Bloomberg: China's Exports Decline for Ninth Month on Weak Global Demand

Aug. 11 (Bloomberg) -- China's exports fell for a ninth month on weak global demand, reinforcing the government's case for sticking with a "moderately loose" monetary policy to fuel domestic growth. Overseas sales dropped 23 percent in July from a year earlier, the customs bureau said today.

[continued]

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aAyWg0P3ISXg)

No surprise there. The $64MM question is how much longer this decline will persist. The era when Chinese companies of all stripes can dump their products in the US market is OVER ...

Title: Re: Meltdown
Post by: Coopmv on August 11, 2009, 03:50:40 PM

Here is another scary forecast by the famous Elliott Wave Guru ...

Bob Prechter "Quite Sure" Next Wave Down Will Be Bigger and March Lows Will Break (http://finance.yahoo.com/tech-ticker/article/299205/Bob-Prechter-%22Quite-Sure%22-Next-Wave-Down-Will-Be-Bigger-and-March-Lows-Will-Break?tickers=%5EDJI,%5EGSPC,SPY,DIA,QQQQ,%5ERUT,BGZ&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on August 11, 2009, 06:31:55 PM

DM, This healthcare reform bill may sink like a lead balloon ...

Lawmakers face angry crowds on health care
Angry crowds greet members at health care events; congressman says swastika painted at office (http://finance.yahoo.com/news/Lawmakers-face-angry-crowds-apf-2271825547.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on August 11, 2009, 06:40:08 PM

DM, Any healthcare reform where the health insurers turn out to be big winners must be all smoke and mirrors. The reform can only be genuine when it inflicts serious financial pains on the insurers. But it looks like the insurers will be writing the reform bill ... ???

The Health Insurers Have Already Won
How UnitedHealth and rival carriers, maneuvering behind the scenes in Washington, shaped health-care reform for their own benefit
(http://www.businessweek.com/magazine/content/09_33/b4143034820260.htm?chan=magazine+channel_top+stories)

Title: Re: Meltdown
Post by: Coopmv on August 11, 2009, 07:26:45 PM

DM, Against such backdrop, any meaningful increase in exports from China into the US over the near term is looking more and more like a pipe dream ...

Consumer, Celebrity Bankruptcies May Hit 1.4 Million (http://www.bloomberg.com/apps/news?pid=20603037&sid=au04p.PrHKhA)

Title: Re: Meltdown
Post by: Coopmv on August 12, 2009, 05:43:41 AM

DM, I wonder if these are mostly repossessed commercial buildings from foreclosures. Is this a sign of things to come? The Fed is now very concerned about the state of the commercial real estate market ...

JPMorgan looking to sell 23 office properties: report
(http://finance.yahoo.com/news/JPMorgan-looking-to-sell-23-rb-2758330446.html?x=0&sec=topStories&pos=8&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on August 12, 2009, 05:51:41 AM

DM, Here is a relatively short but interesting article you should read ...

The Simple Math of Chinese Staggering growth (http://www.ritholtz.com/blog/2009/07/the-simple-math-of-chinese-staggering-growth/)

Title: Re: Meltdown
Post by: Coopmv on August 12, 2009, 07:16:54 AM

DM, The fun has just begun ...

China accuses US of protectionism in tire case (http://finance.yahoo.com/news/China-accuses-US-of-apf-3174225794.html?x=0&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on August 12, 2009, 08:44:44 AM

Quote from: Coopmv on August 11, 2009, 03:50:40 PM
Here is another scary forecast by the famous Elliott Wave Guru ...

Bob Prechter "Quite Sure" Next Wave Down Will Be Bigger and March Lows Will Break (http://finance.yahoo.com/tech-ticker/article/299205/Bob-Prechter-%22Quite-Sure%22-Next-Wave-Down-Will-Be-Bigger-and-March-Lows-Will-Break?tickers=%5EDJI,%5EGSPC,SPY,DIA,QQQQ,%5ERUT,BGZ&sec=topStories&pos=9&asset=&ccode=)

Coop, that is a very interesting interview/presentation. Thanks for that.

Based on P/E ratios (now averaging around 140 while the historical average has been 12 :o :o :o), the S&P index has has never been this overvalued throughout history (and is exceeded only by the huge NASDAQ bubble at the peak of the Internet bubble).

We're looking at a bubble the size of the South Sea Bubble (1720's England) and exceeding the 1929 Stock Mkt bubble.

As you know, all bubbles burst. And this bear-mkt-rally bubble is about to burst. With corporate earnings in an unprecedented cliffdive, when the current bubble bursts, there won't be much of a floor to stop the downward cascade.

(http://www.marketoracle.co.uk/images/2009/Aug/stocks-crash-5-2.gif)

S&P stocks have never been this overvalued.

(http://www.dgcmagazine.com/blog/wp-content/uploads/2009/05/20090522.gif)

Title: Re: Meltdown
Post by: BachQ on August 12, 2009, 08:47:42 AM

Quote from: Coopmv on August 11, 2009, 07:26:45 PM
DM, Against such backdrop, any meaningful increase in exports from China into the US over the near term is looking more and more like a pipe dream ...

Consumer, Celebrity Bankruptcies May Hit 1.4 Million (http://www.bloomberg.com/apps/news?pid=20603037&sid=au04p.PrHKhA)

Canadian bankruptcies rose by 51.6% in June

link (http://www.thestar.com/business/article/679449)

Title: Re: Meltdown
Post by: Coopmv on August 12, 2009, 09:45:27 AM

Quote from: dm on August 12, 2009, 08:44:44 AM
Coop, that is a very interesting interview/presentation. Thanks for that.

Based on P/E ratios (now averaging around 140 while the historical average has been 12 :o :o :o), the S&P index has has never been this overvalued throughout history (and is exceeded only by the huge NASDAQ bubble at the peak of the Internet bubble).

We're looking at a bubble the size of the South Sea Bubble (1720's England) and exceeding the 1929 Stock Mkt bubble.

As you know, all bubbles burst. And this bear-mkt-rally bubble is about to burst. With corporate earnings in an unprecedented cliffdive, when the current bubble bursts, there won't be much of a floor to stop the downward cascade.

(http://www.marketoracle.co.uk/images/2009/Aug/stocks-crash-5-2.gif)

S&P stocks have never been this overvalued.

(http://www.dgcmagazine.com/blog/wp-content/uploads/2009/05/20090522.gif)

I wonder which bubble will burst first, the Chinese bubble or the American bubble?

Title: Re: Meltdown
Post by: Coopmv on August 12, 2009, 11:40:26 AM

DM, Rio employees will be facing the Kangaroo court, no pun intended ...

;D

Rio employees face trade secrets, bribery charges (http://finance.yahoo.com/news/Rio-employees-face-trade-apf-930740829.html?x=0&sec=topStories&pos=7&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on August 12, 2009, 02:07:26 PM

Hedge funds are dropping like flies (http://finance.yahoo.com/news/SEC-to-bring-action-against-rb-340045862.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: bwv 1080 on August 12, 2009, 10:28:13 PM

Quote from: dm on August 12, 2009, 08:44:44 AM
Coop, that is a very interesting interview/presentation. Thanks for that.

Based on P/E ratios (now averaging around 140 while the historical average has been 12 :o :o :o), the S&P index has has never been this overvalued throughout history (and is exceeded only by the huge NASDAQ bubble at the peak of the Internet bubble).

We're looking at a bubble the size of the South Sea Bubble (1720's England) and exceeding the 1929 Stock Mkt bubble.

As you know, all bubbles burst. And this bear-mkt-rally bubble is about to burst. With corporate earnings in an unprecedented cliffdive, when the current bubble bursts, there won't be much of a floor to stop the downward cascade.

(http://www.marketoracle.co.uk/images/2009/Aug/stocks-crash-5-2.gif)

S&P stocks have never been this overvalued.

(http://www.dgcmagazine.com/blog/wp-content/uploads/2009/05/20090522.gif)

God this is so full of shit

The S&P PE ratio is 66x 2008 fully diluted earnings (which includes all the writedowns of the financials, several of which were a multiple of the stock's market cap) and 18.4x consensus 2009 operating earnings (i.e. two quarters of real earnings + two of consensus estimates, both excluding non-recurring items like writedowns)

http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_500/2,3,2,2,0,0,0,0,0,0,6,0,0,0,0,0.html (http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_500/2,3,2,2,0,0,0,0,0,0,6,0,0,0,0,0.html)

if you read the damned chart you would see that the author is predicting a drop in earnings to something like $2, not reporting actual real numbers. Even if his prediction turns out to be right, you think people might be smart enough to figure that earnings would recover at some point and not discount single digit earnings forever into the future?

go buy Burton Malkiel's book for chrissake and stop wasting your time playing market guru

however the best equity market valuation data is here:

http://www.econ.yale.edu/~shiller/data.htm (http://www.econ.yale.edu/~shiller/data.htm)

Elliot Wave theory has every bit as much validity as phrenology or reading chicken guts

Title: Re: Meltdown
Post by: BachQ on August 13, 2009, 03:31:29 AM

Quote from: Coopmv on August 10, 2009, 06:02:16 AM
DM, Fed is waiting for the other shoe to drop ...

Fed Focusing on Real-Estate Recession as Bernanke Convenes FOMC

By Scott Lanman

Aug. 10 (Bloomberg) -- The collapse in commercial real estate is preventing Federal Reserve Chairman Ben S. Bernanke from declaring the economy and financial markets are healed.

Property values have fallen 35 percent since October 2007, according to Moody's Investors Service. That's making it tough for owners to refinance almost $165 billion of mortgages for skyscrapers, shopping malls and hotels this year, pressuring companies such as Maguire Properties Inc., the largest office landlord in downtown Los Angeles, to put buildings up for sale.

The industry is likely to be high on the agenda when Bernanke and his colleagues sit down in Washington tomorrow for the Federal Open Market Committee meeting on monetary policy. Lawmakers including Barney Frank and Carolyn Maloney are pushing the central bank to extend an aid program designed to restore the flow of credit.

If nonresidential real estate remains in the doldrums, the Fed may be forced to leave emergency-lending programs in place and keep its benchmark interest rate close to zero for longer than some investors expect, given positive signs elsewhere in the economy.

Commercial property is "certainly going to be a significant drag" on growth, said Dean Maki, a former Fed researcher who is now chief U.S. economist in New York at Barclays Capital Inc., the investment-banking division of London-based Barclays Plc. "The bigger risk from it would be if it causes unexpected losses to financial firms that lead to another financial crisis."

'Close Attention'

The Fed is "paying very close attention," Bernanke, 55, told the Senate Banking Committee on July 22, the second of two days of semiannual monetary-policy testimony before the House and Senate. "As the recession's gotten worse in the last six months or so, we're seeing increased vacancy, declining rents, falling prices, and so, more pressure on commercial real estate."

The pressure may be easing in other areas of the economy. Gross domestic product shrank at a better-than-forecast 1 percent annual pace in the second quarter after a 6.4 percent drop the prior three months, and residential housing starts rose unexpectedly by 3.6 percent in June as construction of single- family dwellings jumped by the most since 2004, according to data from the Commerce Department.

Employers cut fewer workers than anticipated last month as the jobless rate fell to 9.4 percent from 9.5 percent in June -- the first decline since April 2008, based on Labor Department figures.

'Danger Zone'

Amid such glimmers of improvement, commercial real estate is a "particular danger zone," said Janet Yellen, president of the Federal Reserve Bank of San Francisco, in a July 28 speech in Coeur d'Alene, Idaho. The market may be "under stress for some considerable period of time," William Dudley, chief of the New York Fed bank, said the following day in New York.

Nonresidential construction may decline as much as 9 percent this year and another 5 percent in 2010, predicts Kenneth Simonson, chief economist at Associated General Contractors of America, an Arlington, Virginia, trade group whose members include Essen, Germany-based Hochtief AG's Turner Construction Co. in New York, one of the largest U.S. builders. In the second quarter, it accounted for 3.6 percent, or $509 billion, of U.S. gross domestic product on an annual basis, down from 4.3 percent in the final three months of 2008.

A dozen lawmakers questioned Bernanke on the topic during his July testimony. Some asked about extending the Term Asset- Backed Securities Loan Facility, the emergency program the Fed began in March to restart the market for securities backed by auto, credit-card and education loans. The central bank expanded the facility in June to cover as much as $100 billion in loans to support commercial mortgage-backed securities.

One-Year Extension

Forty-one House members -- including Frank, 69, a Massachusetts Democrat who chairs the Financial Services Committee, and Maloney, 61, a New York Democrat who heads the Joint Economic Committee -- signed a July 31 letter seeking a one-year extension through December 2010 and asking for a decision by mid-August.

Fed policy makers will prolong the program if they judge financial markets are still "some distance from normal operation," Bernanke said during his July 22 testimony. "We will certainly be monitoring the situation."

The Fed likely will change the end date -- just not right away, said former central-bank Governor Lyle Gramley.

Market Developments

"They're probably going to want to wait a while to see how markets develop," said Gramley, 82, now senior economic adviser with Soleil Securities Corp., a New York-based investment- research firm.

A six-month continuance is more likely than the one year industry officials want, said former Fed Governor Laurence Meyer, Washington-based vice chairman with consultant Macroeconomic Advisers LLC of St. Louis.

That would still be useful and "provide more of a runway" for the TALF to be effective, said Jeffrey DeBoer, president of the Real Estate Roundtable, a Washington group representing 16 trade associations and property owners including New York-based Vornado Realty Trust, the third-largest U.S. real-estate- investment trust by market value.

Any sales of mortgage-backed bonds would be the first new issues in the $700 billion U.S. market for commercial-mortgage- backed securities since it was shut down by the credit freeze in 2008.

About $3 billion are in the pipeline, and the success of these sales may foster as much as $25 billion in total deals in the next six months, said Kenneth Rosen, who runs a $310 million hedge fund in real-estate securities and heads the University of California's Fisher Center for Real Estate and Urban Economics in Berkeley.

Signs of Improvement

The market is showing some signs of life: The Bloomberg REIT Office Property Index of 14 companies, while down 56 percent from its February 2007 peak, has gained 41 percent in the past six months. Also, the yield gap, or spread, on top- ranked commercial mortgage-backed bonds relative to U.S. Treasuries is about 4.49 percentage points compared with 8 percentage points at the start of May, according to Barclays data.

The Fed's efforts to revive credit may be overpowered by continuing job losses, even as the pace of those losses slows. U.S. employers eliminated 247,000 workers from payrolls last month, according to an Aug. 7 Labor Department report, bringing the cumulative reduction to about 6.7 million since the start in December 2007 of the worst contraction since the Great Depression.

'Negative Fundamental'

"Demand for commercial space comes from employment and the income generated by that employment," said University of Pennsylvania Professor Joseph Gyourko, director of the Wharton School's Samuel Zell and Robert Lurie Real Estate Center in Philadelphia. Mounting job losses are a "really significant negative fundamental," signaling that "conditions are going to be tough for the industry for a while," he said.

That may spill over into mounting losses at some banks. Forty-seven percent of loans at the 7,000-plus smaller U.S. lenders are in commercial real estate, compared with 17 percent for the biggest banks, according to New York-based Goldman Sachs Group Inc.

Regions Financial Corp., the Birmingham, Alabama, lender that accepted $3.5 billion in U.S. rescue funds, had $36.9 billion in nonresidential real-estate and construction loans at the end of the second quarter, 38 percent of its overall total. Regions posted a net loss for the period of $188 million compared with a profit of $206.3 million a year earlier as more developers and home builders fell behind on payments.

Third Straight Loss

Salt Lake City-based Zions Bancorporation, which operates in 10 Western states, reported its third straight quarterly loss July 20 on a surge in commercial-property defaults. Thirty-five percent of its loans for the period were in nonresidential real estate and construction, and its provision for loan losses rose to $762.7 million from $297.6 million in the first quarter.

One developer based in U.S. Representative Walt Minnick's district is in a bind because a lower appraisal means he can't renew the full amount of a $10 million, three-year loan he took out for a recent project, the first-term Democrat from Idaho said in an interview last week. The person may be forced into bankruptcy, said Minnick, 66, without identifying the developer.

"That is a microcosm of what is happening to commercial property" everywhere, he said. "It's the next shoe to drop."

Maguire bought 24 properties and 11 development sites for $2.88 billion in 2007 from New York-based Blackstone Group LP, the world's largest private-equity company. Later that year, credit markets froze, blocking the Los Angeles-based company's efforts to refinance its mortgages. As a result, Maguire said in April it would accelerate its property sales to raise cash and pay down debt from the purchases.

Refinancing Debt

New York-based Brookfield Properties Corp. faces a $1.8 billion debt maturity in October 2011 arising from the 2006 purchase of Trizec Properties Inc., which made it the second- biggest owner of U.S. office buildings by square footage. Brookfield has said it expects to refinance some of its obligations and sell buildings to cover the rest.

Commercial real estate remains "an important downside risk," said Gramley, a Fed governor from 1980 to 1985. "I don't think it's going to be a blockbuster negative, but it's one additional reason why this recovery is going to be of modest dimensions."

Coop, more on Maguire Prop.

Massive Maguire Properties Mortgage Default Underscores CRE Debt Maturity Challenges
REIT's Intent to Walk Away From 7 Properties Rekindles Anxiety About Wave of Commercial Mortgage Delinquencies, Foreclosures

By Randyl Drummer
August 12, 2009
Over-leveraged Southern California office landlord Maguire Properties Corp. (NYSE: MPG), may have opted against bankruptcy by defaulting on more than $1 billion in loans and surrendering seven buildings to its lenders in an attempt to restore liquidity. However, the huge default illustrates the debt problems that commercial real estate companies face, with between $1.4 trillion and $2 trillion in mortgage loans maturing over the next 3 ½ years and foreclosures beginning to mount at an alarming clip.

con't
(http://www.costar.com/News/Article.aspx?id=50AF5DABDC82FE3C69A1015361AC1A0A)

Title: Re: Meltdown
Post by: BachQ on August 13, 2009, 03:35:43 AM

California exports sharply down again in June

By Mark Glover
mglover@sacbee.com
Published: Wednesday, Aug. 12, 2009 - 9:46 am
Last Modified: Wednesday, Aug. 12, 2009 - 1:27 pm

California exports were sharply down for the eighth straight month in June as the state's struggling economy and fiscal problems among trading partners continued to put the brakes on trade. ... The UC center said California's year-to-date exports are down 23 percent from the 2008 January-to-June period. In comparison to June 2008, manufactured exports fell 28.8%. ... The Commerce Department said U.S. exports were off by 24.7 percent in the first half of this year. California import figures likewise were dismal. The UC center said the value of foreign goods entering the United States through California dropped by 33.4 percent in June compared with 2008.

continued (http://www.sacbee.com/ourregion/story/2103519.html?mi_rss=Our%2520Region)

Title: Re: Meltdown
Post by: BachQ on August 13, 2009, 03:38:43 AM

China will very quickly find itself up against the energy wall of peak oil.

China's July 09 crude oil imports surged by 42% (from July 08) as China overtakes Japan to become the world's No. 2 crude oil consumer.

link (http://www.nationalpost.com/todays-paper/story.html?id=1883106)

Title: Re: Meltdown
Post by: BachQ on August 13, 2009, 03:43:57 AM

Quote from: bwv 1080 on August 12, 2009, 10:28:13 PM
however the best equity market valuation data is here:

http://www.econ.yale.edu/~shiller/data.htm (http://www.econ.yale.edu/~shiller/data.htm)

thanks

Title: Re: Meltdown
Post by: Coopmv on August 13, 2009, 03:59:56 AM

Quote from: bwv 1080 on August 12, 2009, 10:28:13 PM
God this is so full of shit

The S&P PE ratio is 66x 2008 fully diluted earnings (which includes all the writedowns of the financials, several of which were a multiple of the stock's market cap) and 18.4x consensus 2009 operating earnings (i.e. two quarters of real earnings + two of consensus estimates, both excluding non-recurring items like writedowns)

http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_500/2,3,2,2,0,0,0,0,0,0,6,0,0,0,0,0.html (http://www2.standardandpoors.com/portal/site/sp/en/us/page.topic/indices_500/2,3,2,2,0,0,0,0,0,0,6,0,0,0,0,0.html)

if you read the damned chart you would see that the author is predicting a drop in earnings to something like $2, not reporting actual real numbers. Even if his prediction turns out to be right, you think people might be smart enough to figure that earnings would recover at some point and not discount single digit earnings forever into the future?

go buy Burton Malkiel's book for chrissake and stop wasting your time playing market guru

however the best equity market valuation data is here:

http://www.econ.yale.edu/~shiller/data.htm (http://www.econ.yale.edu/~shiller/data.htm)

Elliot Wave theory has every bit as much validity as phrenology or reading chicken guts

bwv 1080, Welcome to the blogging age when anyone can post misinformation and half-truth as a self-style expert. Some of these alarmists are just outright amusing and provide good entertainment values. DM is not playing market guru, he is just combing the web and post some interesting finds. I just scoff at the market technicians and the Elliott Wave Theorists, as they always find a reason to explain how their latest readings have failed.

I am fully invested but very diversified and have weathered the meltdown quite well.

Title: Re: Meltdown
Post by: Coopmv on August 13, 2009, 04:08:50 AM

Quote from: dm on August 13, 2009, 03:38:43 AM
China will very quickly find itself up against the energy wall of peak oil.

China's July 09 crude oil imports surged by 42% (from July 08) as China overtakes Japan to become the world's No. 2 crude oil consumer.

link
(http://www.nationalpost.com/todays-paper/story.html?id=1883106)

I forgot where I read the article which said the Chinese Government was pressuring all citizens to buy large electric appliances like frigs, washers and dryers through government subsidies, even if they have no electric power. The motive is clear, the government wants to produce the semi-bogus demand data to show that its industrial goods are moving in the domestic market. What idiosy? It will take a fool to believe the numbers the Chinese Government publishes, yet the Goldman folks are eating those numbers up and actually use them as the basis for their forecasts of the Chinese economy in 2010. I cannot wait to see another stock market crash and a systemic meltdown over there ... ;D

Title: Re: Meltdown
Post by: Coopmv on August 13, 2009, 11:55:05 AM

Quote from: dm on August 13, 2009, 03:31:29 AM
Coop, more on Maguire Prop.

Massive Maguire Properties Mortgage Default Underscores CRE Debt Maturity Challenges
REIT's Intent to Walk Away From 7 Properties Rekindles Anxiety About Wave of Commercial Mortgage Delinquencies, Foreclosures

By Randyl Drummer
August 12, 2009
Over-leveraged Southern California office landlord Maguire Properties Corp. (NYSE: MPG), may have opted against bankruptcy by defaulting on more than $1 billion in loans and surrendering seven buildings to its lenders in an attempt to restore liquidity. However, the huge default illustrates the debt problems that commercial real estate companies face, with between $1.4 trillion and $2 trillion in mortgage loans maturing over the next 3 ½ years and foreclosures beginning to mount at an alarming clip.

con't

(http://www.costar.com/News/Article.aspx?id=50AF5DABDC82FE3C69A1015361AC1A0A)

I bet the CA lawmakers may have to go back to the drawing board to raise more revenues since this commercial real estate meltdown was not factored into the rescue package, i.e. its tax revenues from commercial property companies will fall way short ... :D

Title: Re: Meltdown
Post by: Coopmv on August 13, 2009, 01:12:04 PM

DM, Here is a nice analysis ...

Three Ways to Predict the End of the Housing Bounce
(http://finance.yahoo.com/news/Three-Ways-to-Predict-the-End-minyanville-1909575148.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on August 13, 2009, 01:14:32 PM

Consumers are not bailing out the US economy
(http://finance.yahoo.com/news/Retail-sales-unexpectedly-dip-apf-2840598402.html?x=0)

Title: Re: Meltdown
Post by: Sarastro on August 13, 2009, 03:33:01 PM

Quote from: Coopmv on August 13, 2009, 01:14:32 PM
Consumers are not bailing out the US economy
(http://finance.yahoo.com/news/Retail-sales-unexpectedly-dip-apf-2840598402.html?x=0)

They have nothing to bail it out with. I understand that there are hard times now, but the governor's education policy will hurt the economy in the future even more. He has recently passed the increase in tuition fees and cuts in financial assistance for the students in need. With classes being cut and fees raised, one can imagine that many people have to drop out of school and seek a job. Furthermore, in such bad economy and competing with illegals, they can not really find a job and stay unemployed. :o So, we get more uneducated and unemployed young adults. What will be the consequences?

Title: Re: Meltdown
Post by: Coopmv on August 13, 2009, 05:31:54 PM

Quote from: Sarastro on August 13, 2009, 03:33:01 PM
They have nothing to bail it out with. I understand that there are hard times now, but the governor's education policy will hurt the economy in the future even more. He has recently passed the increase in tuition fees and cuts in financial assistance for the students in need. With classes being cut and fees raised, one can imagine that many people have to drop out of school and seek a job. Furthermore, in such bad economy and competing with illegals, they can not really find a job and stay unemployed. :o So, we get more uneducated and unemployed young adults. What will be the consequences?

I feel for you. You really need to look at the total costs of education on a comparative basis. That is, how much does it cost to attend a state college of comparable quality in other states? My brother-in-law attended Ohio State and my understanding is it has cost over $20K a year for some times now. Years ago, it was practically free. The average annual cost of attending a private college is now over $40K a year.

You missed some excellent posts made by DM a while back that could make your blood boil. San Diego has over 100 retired cops, firemen and other city employees who are each collecting over $100K a year in pensions. Now, most retirees in the private sectors never receive this kind of pensions unless they are corporate officers or someone high up. Guess who are paying for those pensions? Primarily people who live in SD. I am sure such legalized rackets exist in other CA cities as well. Well, state and cities have revenues sharing and this implies just about every CA taxpayer ends up paying directly or indirectly for these overly generous pensions. My two sisters may be regretting having moved out there.

The costs of doing business in CA are very high, perhaps even higher than NYS. AMD opened up a chip plant in Albany NY, not long ago. INTEL has not built a plant in CA in decades. Yahoo is now staffing up in Buffalo, NY and Google in Michigan somewhere (could be Ann Arbor, the college town). None of these developments bode well for CA. I wish you the best of luck as you research your options. You may even want to consider colleges in other states if you can get good financial aids. It does not hurt to try.

Title: Re: Meltdown
Post by: Sarastro on August 13, 2009, 05:48:04 PM

Thanks, I am good in CA, since I established residency here. Moving to other states will cost more, and some colleges do not award out-of-state students. Hope I get through this crisis. :)

Title: Re: Meltdown
Post by: BachQ on August 14, 2009, 03:56:24 AM

Quote from: Coopmv on August 13, 2009, 01:14:32 PM
Consumers are not bailing out the US economy
(http://finance.yahoo.com/news/Retail-sales-unexpectedly-dip-apf-2840598402.html?x=0)

Coop, how can Americans increase their retail consumption when they're unemployed? How can a country have a "jobless recovery"? How can the US have more private sector jobs when it's perpetually shifting jobs overseas, or liquidating manufacturing jobs in favor of service jobs? The US economy is fundamentally unsound, and increasing public sector jobs will solve nothing. Things will only deteriorate further unless the root problems are addressed. Meanwhile, it's just a matter of months until China overtakes the US as the world's leading economic power ... during which time the US will be paying increasingly larger interest payments to China as Obama and Pelosi break more deficit records by spending more public funds. I'm sure Obama and Pelosi are praying for another huge bubble to form, so that once again the US can give the appearance of prosperity. Too bad the Fed can't lower interest rates further to facilitate their bubblemania ...

Meanwhile, U.K. unemployment (http://www.bloomberg.com/apps/news?pid=20601085&sid=aUmho54tTmag) has climbed to the highest level in 14 years.

Title: Re: Meltdown
Post by: BachQ on August 14, 2009, 03:59:44 AM

Toxic Loans Topping 5% May Push 150 Banks to Point of No Return

By Ari Levy

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank's equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

continued (http://www.bloomberg.com/apps/news?pid=20601087&sid=aTTT9jivRIWE)

Title: Re: Meltdown
Post by: BachQ on August 14, 2009, 04:00:54 AM

US Home prices fall a record 15.6%

link (http://money.cnn.com/2009/08/12/real_estate/record_home_price_fall/?postversion=2009081211)

Title: Re: Meltdown
Post by: BachQ on August 14, 2009, 04:04:23 AM

US private sector sees zero job growth during past decade -- "FOR the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period." (http://www.nytimes.com/2009/08/08/business/economy/08charts.html?_r=1&ref=patrick.net)

'Lost Couple of Decades' Looming for U.S. Economy: Chart of Day
By David Wilson

Aug. 7 (Bloomberg) -- The U.S. economy may be just as sluggish during the next 20 years as Japan's economy was in the last 20, according to Comstock Partners, a money manager founded and run by Charles Minter. Stimulus programs and a surging money supply aren't likely to "solve a problem of excess debt generation that resulted from greed and living way beyond our means," the firm wrote yesterday in an unsigned report on its Web site. "We could wind up with a lost couple of decades."

continued (http://www.bloomberg.com/apps/news?pid=20601109&sid=aX39_VW6pf3U&ref=patrick.net)

Title: Re: Meltdown
Post by: Coopmv on August 14, 2009, 04:31:09 AM

Quote from: dm on August 14, 2009, 03:56:24 AM
Coop, how can Americans increase their retail consumption when they're unemployed? How can a country have a "jobless recovery"? How can the US have more private sector jobs when it's perpetually shifting jobs overseas, or liquidating manufacturing jobs in favor of service jobs? The US economy is fundamentally unsound, and increasing public sector jobs will solve nothing. Things will only deteriorate further unless the root problems are addressed. Meanwhile, it's just a matter of months until China overtakes the US as the world's leading economic power ... during which time the US will be paying increasingly larger interest payments to China as Obama and Pelosi break more deficit records by spending more public funds. I'm sure Obama and Pelosi are praying for another huge bubble to form, so that once again the US can give the appearance of prosperity. Too bad the Fed can't lower interest rates further to facilitate their bubblemania ...

Meanwhile, U.K. unemployment (http://www.bloomberg.com/apps/news?pid=20601085&sid=aUmho54tTmag) has climbed to the highest level in 14 years.

Indeed, while healthcare reform is needed, addressing these structural problems in the US economy caused by the ever declining quality private sector jobs should have the highest priority but have gotten the short shrift. Even the non-partisan CBO latest analysis concludes that the expected savings from this healthcare reform may not materialize. The Democrats can blame Bush for the lousy economy for only so long and they themselves had a hand in it.

Title: Re: Meltdown
Post by: Coopmv on August 14, 2009, 04:07:05 PM

Quote from: dm on August 14, 2009, 03:59:44 AM
Toxic Loans Topping 5% May Push 150 Banks to Point of No Return

By Ari Levy

Aug. 14 (Bloomberg) -- More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank's equity and threaten its survival.

The number of banks exceeding the threshold more than doubled in the year through June, according to data compiled by Bloomberg, as real estate and credit-card defaults surged. Almost 300 reported 3 percent or more of their loans were nonperforming, a term for commercial and consumer debt that has stopped collecting interest or will no longer be paid in full.

continued
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aTTT9jivRIWE)

Many of the banks on this BB list are banks that are not located near major population centers. These banks tend to have their loan portfolios overconcentrated in commercial properties and small business loans. This lack of diversification will certainly kill them in this economy ... ::)

Title: Re: Meltdown
Post by: Coopmv on August 14, 2009, 04:12:27 PM

Quote from: dm on August 14, 2009, 04:04:23 AM
US private sector sees zero job growth during past decade -- "FOR the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period." (http://www.nytimes.com/2009/08/08/business/economy/08charts.html?_r=1&ref=patrick.net)

'Lost Couple of Decades' Looming for U.S. Economy: Chart of Day
By David Wilson

Aug. 7 (Bloomberg) -- The U.S. economy may be just as sluggish during the next 20 years as Japan's economy was in the last 20, according to Comstock Partners, a money manager founded and run by Charles Minter. Stimulus programs and a surging money supply aren't likely to "solve a problem of excess debt generation that resulted from greed and living way beyond our means," the firm wrote yesterday in an unsigned report on its Web site. "We could wind up with a lost couple of decades."

continued
(http://www.bloomberg.com/apps/news?pid=20601109&sid=aX39_VW6pf3U&ref=patrick.net)

Indeed, since 89, Nikkei has never traded close to 40,000. I don't think the S&P will trade anywhere near 1500 and Dow near 14,000 for some times. In spite of what the Fed has done, it may be very difficult for the US to avoid that same fate that has befallen Japan ...

Title: Re: Meltdown
Post by: Sarastro on August 14, 2009, 05:10:17 PM

Quote from: Coopmv on August 06, 2009, 05:30:28 PM
There should be more manufacturing jobs and the financial industry needs to be downsized.

Well, and how is it possible to execute?

Title: Re: Meltdown
Post by: Coopmv on August 14, 2009, 05:30:03 PM

Quote from: Sarastro on August 14, 2009, 05:10:17 PM
Well, and how is it possible to execute?

I will PM you about this ...

Title: Re: Meltdown
Post by: Coopmv on August 15, 2009, 05:33:20 AM

DM,

Here is the price China has to pay to join the WTO and you ain't seen nothing yet. (http://finance.yahoo.com/news/China-steel-workers-trap-apf-62826315.html?x=0&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on August 15, 2009, 06:37:28 AM

DM, Looks like the US Senate has finally learned something from the meltdown ... ;D

Goldman Faces Carbon Market Curbs in Senate Proposals (http://www.bloomberg.com/apps/news?pid=20601109&sid=a9qWGysLQ.Cg)

Title: Re: Meltdown
Post by: Coopmv on August 15, 2009, 06:39:52 AM

Title: Re: Meltdown
Post by: Coopmv on August 15, 2009, 11:32:54 AM

DM, These wild-eyed government bureaucrats really believe consumer spending will come roaring back this fast ... :D

Commerce Department reported an unexpected decline in retail sales (http://finance.yahoo.com/news/Stocks-drop-as-investors-apf-1129554766.html?x=0)

Title: Re: Meltdown
Post by: BachQ on August 15, 2009, 03:25:18 PM

Quote from: Coopmv on August 14, 2009, 04:07:05 PM

Many of the banks on this BB list are banks that are not located near major population centers. These banks tend to have their loan portfolios overconcentrated in commercial properties and small business loans. This lack of diversification will certainly kill them in this economy ... ::)

Mish: As of Friday August 14, 2009, the FDIC is Bankrupt

link (http://globaleconomicanalysis.blogspot.com/2009/08/as-of-friday-august-14-2009-fdic-is.html)

Title: Re: Meltdown
Post by: BachQ on August 15, 2009, 03:27:13 PM

Quote from: Coopmv on August 05, 2009, 05:31:41 PM
What the politicians have trumpeted as the American Dream for decades has now become the American Nightmare ...

About half of U.S. mortgages seen underwater by 2011

By Al Yoon – Wed Aug 5, 5:12 pm ET
NEW YORK (Reuters) – The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.

Home price declines will have their biggest impact on prime "conforming" loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less risky because of stringent requirements.

"We project the next phase of the housing decline will have a far greater impact on prime borrowers," Deutsche analysts Karen Weaver and Ying Shen said in the report.

Of prime conforming loans, 41 percent will be "underwater" by the first quarter of 2011, up from 16 percent at the end of the first quarter 2009, it said. Forty-six percent of prime jumbo loans will be larger than their properties' value, up from 29 percent, it said.

"The impact of this is significant given that these markets have the largest share of the total mortgage market outstanding," the analysts said. Prime jumbo loans make up 13 percent of the total market.

Deutsche's dire assessment comes amid a bolt of evidence in recent months that point to stabilization in the U.S. housing market after three years of price drops. This week, the National Association of Realtors said pending home sales rose for a fifth straight month in June. A widely watched index released in July showed home prices in May rose for the first time since 2006.

Covering 100 U.S. metropolitan areas, Deutsche Bank in June forecast home prices would fall 14 percent through the first quarter of 2011, for a total drop of 41.7 percent.

The drop in home prices is fueling a vicious cycle of foreclosures as it eliminates homeowner equity and gives borrowers an incentive to walk away from their mortgages. The more severe the negative equity, the more likely are defaults, since many borrowers believe prices will not recover enough.

Homeowners with the riskiest mortgages taken out during the housing boom have seen the greatest erosion in equity, in part because they were "affordability products" originated at the housing peak, Deutsche said. They include subprime loans, of which 69 percent will be underwater in 2011, up from 50 percent in March, Deutsche said,

Of option adjustable-rate mortgages -- which cut payments by allowing principal balances to rise -- 89 percent will be underwater in 2011, up from 77 percent, the report said.

Regions suffering the worst negative equity are areas in California, Florida, Arizona, Nevada, Ohio, Michigan, Illinois, Wisconsin, Massachusetts and West Virginia. Las Vegas and parts of Florida and California will see 90 percent or more of their loans underwater by 2011, it added.

"For many, the home has morphed from piggy bank to albatross," the analysts said.

Miami Herald: 47% of South Florida homeowners are now underwater on their mortgages.

link (http://www.miamiherald.com/news/breaking-news/story/1182855.html)

Title: Re: Meltdown
Post by: Coopmv on August 15, 2009, 03:35:46 PM

Quote from: dm on August 15, 2009, 03:25:18 PM
Mish: As of Friday August 14, 2009, the FDIC is Bankrupt

link
(http://globaleconomicanalysis.blogspot.com/2009/08/as-of-friday-august-14-2009-fdic-is.html)

Yeah, FDIC will have to be recapitalized ... ;D

Title: Re: Meltdown
Post by: Coopmv on August 15, 2009, 03:39:06 PM

Quote from: dm on August 15, 2009, 03:27:13 PM
Miami Herald: 47% of South Florida homeowners are now underwater on their mortgages.

link
(http://www.miamiherald.com/news/breaking-news/story/1182855.html)

If fully 48% of all the homes across the US will be underwater by 2011, I will not be surprised if 70% of all homes in Florida to be underwater by then. CA, NV and AZ will all pass that 50% mark as well.

Title: Re: Meltdown
Post by: Coopmv on August 15, 2009, 08:14:58 PM

DM, Here is a nice story I missed ...

Chinese high-tech spy case inches closer to trial
(http://www.networkworld.com/news/2009/031909-high-tech-spy-case-trial.html)

Title: Re: Meltdown
Post by: Coopmv on August 18, 2009, 06:03:25 PM

Dollar sinks on better European news, weak U.S. data (http://www.marketwatch.com/story/us-dollar-yen-reverse-gains-in-asia-2009-08-18)

Title: Re: Meltdown
Post by: Coopmv on August 18, 2009, 06:07:42 PM

On August 11, the Treasury Department delivered to Congress the final piece of a more-than 600-page bank regulatory reform proposal (http://www.marketwatch.com/story/bank-reform-architect-defends-600-pages-of-changes-2009-08-18?link=kiosk)

Title: Re: Meltdown
Post by: Coopmv on August 19, 2009, 05:19:51 PM

Double-dip recession fears are growing (http://finance.yahoo.com/news/Doubledip-recession-fears-are-cnnm-2487366613.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on August 19, 2009, 05:48:04 PM

US banks deepen credit lines cuts. They should have done this long time ago... (http://www.ft.com/cms/s/0/1d4581ce-8d1c-11de-a540-00144feabdc0.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058)

Title: Re: Meltdown
Post by: Coopmv on August 19, 2009, 06:38:52 PM

$3,000 gift card could have put the economy back on track. A crummy idea since most of that money will be used to stimulate the Chinese exporters ... (http://www.dailyfinance.com/2009/08/18/3-000-gift-card-could-have-put-the-economy-back-on-track/)

Title: Re: Meltdown
Post by: BachQ on August 20, 2009, 01:51:00 PM

Quote from: Coopmv on August 15, 2009, 03:39:06 PM
If fully 48% of all the homes across the US will be underwater by 2011, I will not be surprised if 70% of all homes in Florida to be underwater by then. CA, NV and AZ will all pass that 50% mark as well.

Coop, US real estate is looking rather dire. Haven't found many green shoots yet.

Mortgage deliquencies soar to record 13.2% (http://www.housingwire.com/2009/08/20/1316-of-mortgages-delinquent-mba/)

MISH: Brace for a Wave of Foreclosures, the Dam is About to Break

A summary of Second Quarter 2009 Negative Equity Data from First American CoreLogic shows that Nearly One-Third Of All Mortgages Are Underwater.

• More than 32.2 percent of all mortgaged properties, were in negative equity position as of June 30, 2009
• The aggregate property value for loans in a negative equity position was $3.4 trillion, which represents the total property value at risk of default. In California, the aggregate value of homes that are in negative equity was $969 billion, followed by Florida ($432 billion), New Jersey ($146 billion), Illinois ($146 billion) and Arizona ($140 billion).
• Nevada (66 percent) had the highest percentage with nearly two‐thirds of mortgage borrowers in a negative equity position. In Arizona (51 percent) and Florida (49 percent), half of all mortgage borrowers were in a negative equity position. Michigan (48 percent) and California (42 percent) round out the top five states.

link (http://globaleconomicanalysis.blogspot.com/2009/08/brace-for-wave-of-foreclosures-dam-is.html)

Title: Re: Meltdown
Post by: BachQ on August 20, 2009, 01:52:55 PM

'Chimerica' is Headed for Divorce

By Niall Ferguson | NEWSWEEK

Published Aug 15, 2009

From the magazine issue dated Aug 31, 2009

When does a rising power become a threat? There is seldom a single moment. A century ago, AngloGerman antagonism was still a relatively new phenomenon; an alliance between the two empires seemed plausible as late as 1899. Likewise, the United States took time to identify Japan as a serious rival in the Pacific region; it was not until the 1930s that relations really soured. In both cases, the perception of a strategic threat was slow to grow. But grow it did—and ultimately it led to war.

Could the same be happening to the United States and China today? Are we imperceptibly but inexorably slipping from cooperation to competition? Back in early 2007, it seemed as if China and America were so intertwined they'd become one economy: I called it "Chimerica." The Chinese did the saving, the Americans the spending. The Chinese did the exporting, the Americans the importing. The Chinese did the lending, the Americans the borrowing.

(long article continued) (http://www.newsweek.com/id/212143/)

Title: Re: Meltdown
Post by: BachQ on August 20, 2009, 01:54:05 PM

Peter Schiff on FOX

http://www.youtube.com/v/0IQRh99bpQo

http://www.youtube.com/watch?v=0IQRh99bpQo

Title: Re: Meltdown
Post by: Coopmv on August 20, 2009, 05:16:18 PM

Quote from: dm on August 20, 2009, 01:51:00 PM
Coop, US real estate is looking rather dire. Haven't found many green shoots yet.

Mortgage deliquencies soar to record 13.2% (http://www.housingwire.com/2009/08/20/1316-of-mortgages-delinquent-mba/)

MISH: Brace for a Wave of Foreclosures, the Dam is About to Break

A summary of Second Quarter 2009 Negative Equity Data from First American CoreLogic shows that Nearly One-Third Of All Mortgages Are Underwater.

• More than 32.2 percent of all mortgaged properties, were in negative equity position as of June 30, 2009
• The aggregate property value for loans in a negative equity position was $3.4 trillion, which represents the total property value at risk of default. In California, the aggregate value of homes that are in negative equity was $969 billion, followed by Florida ($432 billion), New Jersey ($146 billion), Illinois ($146 billion) and Arizona ($140 billion).
• Nevada (66 percent) had the highest percentage with nearly two‐thirds of mortgage borrowers in a negative equity position. In Arizona (51 percent) and Florida (49 percent), half of all mortgage borrowers were in a negative equity position. Michigan (48 percent) and California (42 percent) round out the top five states.

link
(http://globaleconomicanalysis.blogspot.com/2009/08/brace-for-wave-of-foreclosures-dam-is.html)

The $64B question is, has foreclosure already reached the peak? If unemployment does not get worse from here, most under-the-water homeowners will just tough it out.

Title: Re: Meltdown
Post by: Coopmv on August 20, 2009, 05:29:04 PM

Quote from: dm on August 20, 2009, 01:52:55 PM
'Chimerica' is Headed for Divorce

By Niall Ferguson | NEWSWEEK

Published Aug 15, 2009

From the magazine issue dated Aug 31, 2009

When does a rising power become a threat? There is seldom a single moment. A century ago, AngloGerman antagonism was still a relatively new phenomenon; an alliance between the two empires seemed plausible as late as 1899. Likewise, the United States took time to identify Japan as a serious rival in the Pacific region; it was not until the 1930s that relations really soured. In both cases, the perception of a strategic threat was slow to grow. But grow it did—and ultimately it led to war.

Could the same be happening to the United States and China today? Are we imperceptibly but inexorably slipping from cooperation to competition? Back in early 2007, it seemed as if China and America were so intertwined they'd become one economy: I called it "Chimerica." The Chinese did the saving, the Americans the spending. The Chinese did the exporting, the Americans the importing. The Chinese did the lending, the Americans the borrowing.

(long article continued)
(http://www.newsweek.com/id/212143/)

The Chinese communist leaders clearly have their hands full. If they allow the Chinese currency to be freely convertible, the currency traders will drive its value skyhigh and kill its exports big-time. In the meantime, the country is still a number of years from a real consumption-driven economy. Just how can a country where the income per capita is significantly below $10,000 become a real consumption economy is beyond me ...

Title: Re: Meltdown
Post by: Coopmv on August 21, 2009, 08:03:02 AM

More shoppers thinking twice in the checkout line. This does not seem to suggest many green shoots to me ... (http://news.yahoo.com/s/ap/20090821/ap_on_re_us/us_shopping_cart_abandonment)

Title: Re: Meltdown
Post by: BachQ on August 21, 2009, 08:09:43 AM

MarketWatch: Delinquency rate on bank loans up to record 6.49%

WASHINGTON (MarketWatch) -- Delinquency rates for loans and leases at U.S. banks increased to a record 6.49% in the second quarter from 5.58% in the first quarter, the Federal Reserve announced Monday. The Fed began collecting the data in 1985. The charge-off rate rose from a record 2.03% to a record 2.65%. Before this recession, the highest charge-off rate had been 1.70%. Delinquency rates for real estate loans rose from 7.10% to 8.27%, the highest since the data began in 1987. Delinquency rates for commercial and industrial loans rose from 3.12% to 3.73%, while delinquencies for consumer loans rose to from 4.69% to 4.92%, also a 22-year high.

link (http://www.marketwatch.com/story/delinquency-rate-on-bank-loans-up-to-record-649-2009-08-17)

Title: Re: Meltdown
Post by: BachQ on August 21, 2009, 08:13:07 AM

Quote from: Coopmv on August 20, 2009, 05:29:04 PM
The Chinese communist leaders clearly have their hands full. If they allow the Chinese currency to be freely convertible, the currency traders will drive its value skyhigh and kill its exports big-time. In the meantime, the country is still a number of years from a real consumption-driven economy. Just how can a country where the income per capita is significantly below $10,000 become a real consumption economy is beyond me ...

http://www.indiandefencereview.com/2009/08/unmasking-china.html

Unmasking China
China will launch an attack on India before 2012.

There are multiple reasons for a desperate Beijing to teach India the final lesson, thereby ensuring Chinese supremacy in Asia in this century. The recession that shut the Chinese exports shop is creating an unprecedented internal social unrest. In turn, the vice-like grip of the communists over the society stands severely threatened.

Unemployment is on the rise. The unofficial estimate stands at a whopping fourteen percent. Worldwide recession has put thirty million people out of jobs. Economic slowdown is depleting the foreign exchange reserves. Foreign investors are slowly shifting out. To create a domestic market, the massive dole of loans to individuals is turning out to be a nightmare. There appears to be a flight of capital in billions of dollars in the shape of diamond and gold bought in Hong Kong and shipped out towards end 2008.

(http://wondersofpakistan.files.wordpress.com/2009/07/060724_borders_china_india.jpg)

The fear of losing control over the Chinese masses is forcing the communists to compulsorily install filtering software on new computers on sale to crush dissent on the Internet, even though it is impossible to censor in entirety the flow of information as witnessed recently in Tibet, Xinjiang and Iran.

The growing internal unrest is making Beijing jittery.

The external picture appears to be equally dismal. The unfolding Obama strategy seems to be scoring goals for democracy and freedom without firing a single shot. While Bush unwittingly united and arrayed against himself Islamic countries and radical Islam worldwide, Obama has put radical Islam in disarray by lowering the intra-societal temperature vis-à-vis America and the Muslim world. He deftly hints at democracy in his talk without directly threatening any group or country and the youth picks it up from there - as in Iran. With more and more Chinese citizens beginning to demand political freedom, the future of the communists is also becoming uncertain. The technological means available in the 21st century to spread democracy is definitely not conducive for the totalitarian regime in Beijing.

(continued) (http://www.indiandefencereview.com/2009/08/unmasking-china.html)

Title: Re: Meltdown
Post by: BachQ on August 21, 2009, 08:36:15 AM

Der Spiegel: Shipping industry drowning in financial woes (http://presseurop.eu/content/article/76921-shipping-industry-drowning-financial-woes)

Title: Re: Meltdown
Post by: BachQ on August 21, 2009, 08:38:02 AM

Times stay tough for Canadian commercial property
Mon Aug 17, 2009 4:54pm EDT

* First half 2009 deals down 38% from yr earlier
* The value of the transactions shrank by 51%

link (http://www.reuters.com/article/marketsNews/idUSN1733389320090817?sp=true)

Title: Re: Meltdown
Post by: Coopmv on August 21, 2009, 08:42:19 AM

Quote from: dm on August 21, 2009, 08:13:07 AM
http://www.indiandefencereview.com/2009/08/unmasking-china.html

Unmasking China
China will launch an attack on India before 2012.

There are multiple reasons for a desperate Beijing to teach India the final lesson, thereby ensuring Chinese supremacy in Asia in this century. The recession that shut the Chinese exports shop is creating an unprecedented internal social unrest. In turn, the vice-like grip of the communists over the society stands severely threatened.

Unemployment is on the rise. The unofficial estimate stands at a whopping fourteen percent. Worldwide recession has put thirty million people out of jobs. Economic slowdown is depleting the foreign exchange reserves. Foreign investors are slowly shifting out. To create a domestic market, the massive dole of loans to individuals is turning out to be a nightmare. There appears to be a flight of capital in billions of dollars in the shape of diamond and gold bought in Hong Kong and shipped out towards end 2008.

(http://wondersofpakistan.files.wordpress.com/2009/07/060724_borders_china_india.jpg)

The fear of losing control over the Chinese masses is forcing the communists to compulsorily install filtering software on new computers on sale to crush dissent on the Internet, even though it is impossible to censor in entirety the flow of information as witnessed recently in Tibet, Xinjiang and Iran.

The growing internal unrest is making Beijing jittery.

The external picture appears to be equally dismal. The unfolding Obama strategy seems to be scoring goals for democracy and freedom without firing a single shot. While Bush unwittingly united and arrayed against himself Islamic countries and radical Islam worldwide, Obama has put radical Islam in disarray by lowering the intra-societal temperature vis-à-vis America and the Muslim world. He deftly hints at democracy in his talk without directly threatening any group or country and the youth picks it up from there - as in Iran. With more and more Chinese citizens beginning to demand political freedom, the future of the communists is also becoming uncertain. The technological means available in the 21st century to spread democracy is definitely not conducive for the totalitarian regime in Beijing.

(continued)
(http://www.indiandefencereview.com/2009/08/unmasking-china.html)

DM, Excellent post that shows two opposite views. War between India and China is not as unthinkable as the Chinese writer wants us to believe. The rivalry between China and India has run deep, though perhaps not as deep as the enmity between China and Japan. Pakistan became a nuclear power with help from the Chinese. Since India ran its first atomic test in 73 or 74, its archrival Pakistan as well as China felt threatened, and the enemy of my enemy is my friend has been practiced to the nth degree ever since. China has a big hand in helping Pakistan join the nuclear club for sure. Pakistan in turn has helped North Korea to become nuclear so the Chinese can have a client state to check on South Korea and Japan, two rivals to China. This has become a major geopolitical game. The current US administration certainly appears to be a whole lot smarter than the previous one in playing this geopolitical game. In the end, I will not be surprised if most companies in the west have to write off all their investments in China if things go major-sour between China and the west.

Title: Re: Meltdown
Post by: Coopmv on August 21, 2009, 08:45:28 AM

Quote from: dm on August 21, 2009, 08:38:02 AM
Times stay tough for Canadian commercial property
Mon Aug 17, 2009 4:54pm EDT

* First half 2009 deals down 38% from yr earlier
* The value of the transactions shrank by 51%

link
(http://www.reuters.com/article/marketsNews/idUSN1733389320090817?sp=true)

DM, You should see how many former office buildings in Manhattan were converted into luxury condos selling for millions. Now these super-greedy developers are holding the bags. The banks that loaned them money are moving in to foreclose. ;D

Title: Re: Meltdown
Post by: Coopmv on August 21, 2009, 10:02:19 AM

DM, Here is an interesting read ...

The volume of world trade is drying up at a faster pace than the Great Depression and government surpluses are the lowest in 100+ years (http://finance.yahoo.com/news/Is-This-Rally-The-Final-Kiss-etfguide-3572165417.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on August 21, 2009, 10:10:59 AM

DM, How can such stupidity be allowed is beyond me? These developers deserve to be totally wiped out ...

Fla. highrise has 32 stories, but just 1 tenant (http://news.yahoo.com/s/ap/20090801/ap_on_re_us/us_lonely_highrise)

Title: Re: Meltdown
Post by: snyprrr on August 21, 2009, 11:05:06 AM

People think I'm just a looney.

"It's a cycle," they say, "and of course it's going to correct itself and things will get back on track."

I'm waiting for another false flag... oh, I just don't think if I continued that sentence on this forum that things would still be kosher (hint hint).

I fear that the "talking" (dialogue???....haha) will soon be over (Sept?...Oct?...this year, next year???)

Go ahead people, think of me what you will.

It makes a sane man mad.

Title: Re: Meltdown
Post by: Coopmv on August 21, 2009, 11:14:29 AM

Quote from: snyprrr on August 21, 2009, 11:05:06 AM
People think I'm just a looney.

"It's a cycle," they say, "and of course it's going to correct itself and things will get back on track."

I'm waiting for another false flag... oh, I just don't think if I continued that sentence on this forum that things would still be kosher (hint hint).

I fear that the "talking" (dialogue???....haha) will soon be over (Sept?...Oct?...this year, next year???)

Go ahead people, think of me what you will.

It makes a sane man mad.

The sad truth is, most of these prognosticators were not even born yet when the US and the world experienced the same financial turmoil back in the late 20's and 30's. Even if they were, they were just toddlers then. This downturn is different than anything most of us have ever experienced but some people are still in denial that they cannot bring themselves to admit they don't know ...

Title: Re: Meltdown
Post by: Coopmv on August 21, 2009, 11:25:17 AM

DM, Looks like more credit downgrades for the banks are on their way ...

Fitch: Banks face more difficult credit trends amid exposure to commercial real estate losses
(http://finance.yahoo.com/news/Fitch-Banks-face-more-apf-843959656.html?x=0&.v=2)

Title: Re: Meltdown
Post by: Coopmv on August 22, 2009, 07:56:32 AM

DM, The party is over here in the US. Is a new party starting in China? ;D

The End of a 30-Year Wealth Bubble (http://finance.yahoo.com/banking-budgeting/article/107575/rise-of-the-super-rich-hits-a-sobering-wall.html)

Title: Re: Meltdown
Post by: Coopmv on August 22, 2009, 09:53:58 AM

American shoppers are on strike ... ;D

12 million jobseekers in China won't find work this year even if country hits growth target (http://finance.yahoo.com/news/12-million-jobseekers-in-apf-1730661174.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on August 22, 2009, 10:50:09 AM

World Bank Snookered by Phony Chinese Economic Statistics (http://seekingalpha.com/article/155382-world-bank-snookered-by-phony-chinese-economic-statistics)

Title: Re: Meltdown
Post by: BachQ on August 22, 2009, 10:50:54 AM

Quote from: Coopmv on August 21, 2009, 10:02:19 AM
DM, Here is an interesting read ...

The volume of world trade is drying up at a faster pace than the Great Depression and government surpluses are the lowest in 100+ years (http://finance.yahoo.com/news/Is-This-Rally-The-Final-Kiss-etfguide-3572165417.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Coop, the disparity between the "fundamentals" (see below) and the "perception" (green shoots & recovery) is astonishing ... and it's made possible by unprecedented amounts of "easy money" ($13 trillion in the US over the past year, by some estimates). So what happens when this "easy money" faucet is turned off?

QuoteEvery single sector of the real economy is deteriorating, whether it is unemployment, production, corporate profits, real estate, credit defaults, federal deficits, or construction. ... Unemployment rates - calculated the way the government used to do it before it was changed in the 1990s - pegs the real unemployment rate around 20%, or 30 million people. During the Great Depression, unemployment reached 25%, the non-farm peak figure of the 1930s clocked in at 35%. ... Research shows that the decline in industrial production over the last nine months has been as bad, if not worse than the nine month following the 1929 peak. The world stock markets have fallen even faster this time around, compared to 70 years ago. The volume of world trade is drying up at a faster pace than the Great Depression and government surpluses are the lowest in 100+ years.

Quote from: snyprrr on August 21, 2009, 11:05:06 AM
"It's a cycle," they say, "and of course it's going to correct itself and things will get back on track."

The cycles that we're accustomed to have depended upon the availability of "cheap energy" (growth requires cheap energy). However, "cheap energy" is becoming increasingly scarce; to that extent, we should not expect to see any return of the typical recoveries that have historically followed recessions -- at least not until new forms of energy are discovered. So you're not loony ... you are, in fact, quite correct. 8)

Title: Re: Meltdown
Post by: snyprrr on August 22, 2009, 10:52:59 AM

Yea, I guess we don't really think about how China must "react" to the global downturn. They have so many more people that can be unemployed than anyone else. I wonder what's really happening behind the curtain? How many Chinese men have no chance of finding a mate, and just join the army instead?

Honestly, is this thread just coopmv and Dm? That is so cool that you get no static from the peanut gallery... makes me want to mention Israel, haha. ::)

Debbie Downer...or Reality Rachel????...we retort, you deny!!

Title: Re: Meltdown
Post by: BachQ on August 22, 2009, 10:53:43 AM

US manufacturing has not had this few jobs since 1941:
(http://research.stlouisfed.org/fred2/data/MANEMP_Max_630_378.png)
Manufacturing employment in the U.S. peaked in June 1979 with 19,553,000 jobs, and by July 2009, manufacturing employment had fallen to 11,817,000, the lowest level of manufacturing jobs since April 1941 (see chart above).
(http://4.bp.blogspot.com/_otfwl2zc6Qc/So3S7XtDAII/AAAAAAAALCA/ndwHHvtfGQQ/s1600-h/mfg.jpg)
As a percent of the total labor force, in July 09 US manufacturing employment fell below 9% -- the lowest level in BLS history dating back to 1939 (see chart above).
(http://mjperry.blogspot.com/2009/08/manufacturing-employment-drops-to.html)

Factors to consider:

-- Global competitive forces and US offshoring
-- Labor costs, unions, payroll taxes etc.
-- Increases in labor productivity
-- Federal and state regulation (environmental laws; OSHA; etc.)
-- Other

Title: Re: Meltdown
Post by: Coopmv on August 22, 2009, 11:00:24 AM

Quote from: snyprrr on August 22, 2009, 10:52:59 AM
Yea, I guess we don't really think about how China must "react" to the global downturn. They have so many more people that can be unemployed than anyone else. I wonder what's really happening behind the curtain? How many Chinese men have no chance of finding a mate, and just join the army instead?

They already have the largest peacetime standing army. A 10% unemployment there translates into 130MM people, which is 40% of the US population.

Title: Re: Meltdown
Post by: Coopmv on August 22, 2009, 11:31:34 AM

Quote from: dm on August 22, 2009, 10:53:43 AM
US manufacturing has not had this few jobs since 1941:
(http://research.stlouisfed.org/fred2/data/MANEMP_Max_630_378.png)
Manufacturing employment in the U.S. peaked in June 1979 with 19,553,000 jobs, and by July 2009, manufacturing employment had fallen to 11,817,000, the lowest level of manufacturing jobs since April 1941 (see chart above).
(http://4.bp.blogspot.com/_otfwl2zc6Qc/So3S7XtDAII/AAAAAAAALCA/ndwHHvtfGQQ/s1600-h/mfg.jpg)
As a percent of the total labor force, in July 09 US manufacturing employment fell below 9% -- the lowest level in BLS history dating back to 1939 (see chart above).
(http://mjperry.blogspot.com/2009/08/manufacturing-employment-drops-to.html)

Factors to consider:

-- Global competitive forces and US offshoring
-- Labor costs, unions, payroll taxes etc.
-- Increases in labor productivity
-- Federal and state regulation (environmental laws; OSHA; etc.)
-- Other

Lets see how BAM can right this ship and crack that whip on you-know-who ... ;D

Title: Re: Meltdown
Post by: Coopmv on August 22, 2009, 12:05:24 PM

DM, Here is a good one ...

Much has been said about China saving the world from economic armageddon. Well I have news for the China bulls, the macro-economic data that you are pinning your investment hopes on are no where near as good as you think. In fact they are probably quite far off the mark.

(http://hedged.biz/index.php?option=com_content&view=article&id=171:dont-believe-the-china-lies&catid=1:latest-news&Itemid=63)

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on August 22, 2009, 11:53:57 PM

Quote from: snyprrr on August 22, 2009, 10:52:59 AM
Yea, I guess we don't really think about how China must "react" to the global downturn. They have so many more people that can be unemployed than anyone else. I wonder what's really happening behind the curtain?

This doesn't prove anything, but there are many thousands of Chinese traders and menial laborers here in Moscow. If their own economy is so booming, why do they feel a need to get on a bus and make a trek to a foreign city several thousand miles away, just to eke out a marginal and precarious living?

Just a drop in the Chinese ocean...but I wonder if it points to something deeper ???

Title: Re: Meltdown
Post by: Coopmv on August 23, 2009, 03:34:11 AM

Quote from: Spitvalve on August 22, 2009, 11:53:57 PM
This doesn't prove anything, but there are many thousands of Chinese traders and menial laborers here in Moscow. If their own economy is so booming, why do they feel a need to get on a bus and make a trek to a foreign city several thousand miles away, just to eke out a marginal and precarious living?

Just a drop in the Chinese ocean...but I wonder if it points to something deeper ???

Spitvalve, I have read this story you mentioned had happened across many of the former eastern bloc capitals such as Budapest, Sofia, etc. There is actually a good-sized mall in Budapest owned and operated by Chinese who bailed out of China after the Tiananmen Square crackdown. While Russia may have its problems, the problems the Chinese communist ruling class faces is much deeper. Its pile of foreign reserves may look impressive at $2T but that is about $2000 per person given its 1.3B population and the country is still relatively poor. Countless have lost their manufacturing jobs due to the global recession and the majority of these jobs were geared toward supporting the US relentless (and totally mindless) consumption, which I think is history. If China cannot take care of its employment problem, the party may not survive.

Title: Re: Meltdown
Post by: Coopmv on August 23, 2009, 04:23:35 AM

Spitvalve, Here are a few links I found ...

Four Tigers Chinese Market, Budapest (http://horinca.blogspot.com/2008/01/four-tigers-chinese-market-budapest.html)

Chinese workers stranded in Bucharest (http://www.euronews.net/2009/02/17/chinese-workers-stranded-in-bucharest/)

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on August 23, 2009, 04:30:48 AM

Yes, the Four Tigers Market looks familiar, it's the same kind of setup we've got here.

Title: Re: Meltdown
Post by: Coopmv on August 23, 2009, 04:35:45 AM

DM, I bet you will find this link entertaining - it is almost like a time capsule.

Foreign News: The Chinese in Moscow (http://www.time.com/time/magazine/article/0,9171,816865,00.html)

Title: Re: Meltdown
Post by: Coopmv on August 23, 2009, 04:41:22 AM

This is just a replay of what is happening in NYC anywhere - countless counterfeited products on sale with complete disregard for trademarks and patents ...

China protests Russia's shutdown of huge Moscow market
(http://www.dw-world.de/dw/article/0,,4517247,00.html)

Title: Re: Meltdown
Post by: BachQ on August 24, 2009, 03:43:27 PM

Quote from: Coopmv on August 23, 2009, 04:41:22 AM
This is just a replay of what is happening in NYC anywhere - countless counterfeited products on sale with complete disregard for trademarks and patents ...

China protests Russia's shutdown of huge Moscow market
(http://www.dw-world.de/dw/article/0,,4517247,00.html)

Good grief ... 80,000 Chinese selling counterfeit crap at just one bazaar ... Makes you wonder how many multimillion's of Chinese do this on a daily basis ...

Henry Blodget -- Uh Oh: China Doesn't Want To Lend Us Money Anymore

link (http://www.businessinsider.com/henry-blodget-uh-oh-china-doesnt-want-to-lend-us-money-anymore-2009-8)

Title: Re: Meltdown
Post by: Coopmv on August 24, 2009, 03:59:58 PM

I am afraid that stress test was all smoke and mirrors ...

What the Stress Tests Didn't Predict (http://finance.yahoo.com/banking-budgeting/article/107585/what-the-stress-tests-did-not-predict.html?sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on August 25, 2009, 05:24:26 PM

Most red ink ever: $9 trillion over next decade
Citing worse than expected economy, White House and Congress offer bleak budget outlooks
(http://finance.yahoo.com/news/Most-red-ink-ever-9-trillion-apf-2714959279.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on August 25, 2009, 05:28:42 PM

Japan's export decline worsens in July, points to fragile economic recovery
(http://finance.yahoo.com/news/Japans-export-decline-worsens-apf-3081391277.html?x=0&.v=1)

Title: Re: Meltdown
Post by: BachQ on August 26, 2009, 03:02:34 PM

Quote from: Coopmv on August 25, 2009, 05:24:26 PM
Most red ink ever: $9 trillion over next decade
Citing worse than expected economy, White House and Congress offer bleak budget outlooks
(http://finance.yahoo.com/news/Most-red-ink-ever-9-trillion-apf-2714959279.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Coop, it took the US 233 years to accumulate a $9.5T national debt; it will take only 10 years to double that to $19T.

The growth is almost exponential!

(http://daveeriqat.files.wordpress.com/2008/12/exponential_function.png)

Here is a graph of the US national debt (nominal)

(http://4.bp.blogspot.com/_3lnHyxdeYU4/SatO6kZ8eII/AAAAAAAAAbM/_jfX5XxJDQE/s400/NationalDebtChart+Feb+09.png) (http://www.moneyaswealth.blogspot.com/)

Obama & Pelosi will increase spending 22% in 2009 to a peacetime-record 26% of US GDP. By 2019, the mammoth debt will require that the US spend roughly $775 billion/yr on net interest (net interest costs will consume 84% of the 2019 budget deficit). link (http://www.heritage.org/research/budget/wm2595.cfm) "Racking up massive deficits is troublesome enough. Doing it without creating jobs and strengthening the economy is a national disgrace. The mushrooming federal debt poses a grave danger to America's prosperity, threatening to plunge our economy and future generations into the abyss of stagnant growth and national decline," said Republican Whip Eric Cantor.

Title: Re: Meltdown
Post by: BachQ on August 26, 2009, 03:09:12 PM

Quote from: GlobalResearch on June 25, 2009, 04:09:04 PM
Earlier this month, China bought companies to enable it to control of 95% of the market for rare-earth metals. (http://www.globalresearch.ca/index.php?context=va&aid=13853) This is highly significant since rare-earth metals are essential for solar panels, wind turbines, and other green technologies. As the Times Online notes: "The weight and magnetic properties of rare-earth metals have made them important for wind turbines, essential to hybrid cars, and indispensable if the world ever hopes to covert to fully electric vehicles..." ("Rare earth oxides go into these super magnets that are a key part of these hybrid and electric cars," notes metals analyst John Kaiser.)

World faces hi-tech crunch as China eyes ban on rare metal exports
Beijing is drawing up plans to prohibit or restrict exports of rare earth metals that are produced only in China and play a vital role in cutting edge technology, from hybrid cars and catalytic converters, to superconductors, and precision-guided weapons.

By Ambrose Evans-Pritchard
Published: 5:58PM BST 24 Aug 2009

A draft report by China's Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.

China mines over 95pc of the world's rare earth minerals, mostly in Inner Mongolia. The move to hoard reserves is the clearest sign to date that the global struggle for diminishing resources is shifting into a new phase. Countries may find it hard to obtain key materials at any price.

continued (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6082464/World-faces-hi-tech-crunch-as-China-eyes-ban-on-rare-metal-exports.html)

Title: Re: Meltdown
Post by: Coopmv on August 26, 2009, 04:32:27 PM

Quote from: dm on August 26, 2009, 03:09:12 PM

World faces hi-tech crunch as China eyes ban on rare metal exports
Beijing is drawing up plans to prohibit or restrict exports of rare earth metals that are produced only in China and play a vital role in cutting edge technology, from hybrid cars and catalytic converters, to superconductors, and precision-guided weapons.

By Ambrose Evans-Pritchard
Published: 5:58PM BST 24 Aug 2009

A draft report by China's Ministry of Industry and Information Technology has called for a total ban on foreign shipments of terbium, dysprosium, yttrium, thulium, and lutetium. Other metals such as neodymium, europium, cerium, and lanthanum will be restricted to a combined export quota of 35,000 tonnes a year, far below global needs.

China mines over 95pc of the world's rare earth minerals, mostly in Inner Mongolia. The move to hoard reserves is the clearest sign to date that the global struggle for diminishing resources is shifting into a new phase. Countries may find it hard to obtain key materials at any price.

continued
(http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6082464/World-faces-hi-tech-crunch-as-China-eyes-ban-on-rare-metal-exports.html)

Outer Mongolia (or just Mongolia) is an independent country that is also pro-western. Perhaps it can provide some of these rare earth minerals. I also wonder how China can effectively protect its minerals rights in Africa and oil in Angola. Where is its navy? China cannot project its military power more than a few hundred miles from mainland China, period. ;D

Title: Re: Meltdown
Post by: drogulus on August 26, 2009, 04:48:12 PM

Quote from: Coopmv on August 26, 2009, 04:32:27 PM

Outer Mongolia (or just Mongolia) is an independent country that is also pro-western. Perhaps it can provide some of these rare earth minerals. I also wonder how China can effectively protect its minerals rights in Africa and oil in Angola. Where is its navy? China cannot project its military power more than a few hundred miles from mainland China, period. ;D

It occurs to me that if there is something that's good to have the maritime power will end up with it. Do you have something? Can you keep it? China might be well advised to bet on the system and become a member of it rather than nipping around the edges in Africa and building pariah coalitions. Yes, it's the obvious strategy...you go low road when the high road isn't there for you. But it loses every time.

Oh , I forgot....is history still over?

Title: Re: Meltdown
Post by: Coopmv on August 26, 2009, 05:10:23 PM

Quote from: drogulus on August 26, 2009, 04:48:12 PM
It occurs to me that if there is something that's good to have the maritime power will end up with it. Do you have something? Can you keep it? China might be well advised to bet on the system and become a member of it rather than nipping around the edges in Africa and building pariah coalitions. Yes, it's the obvious strategy...you go low road when the high road isn't there for you. But it loses every time.

Oh , I forgot....is history still over?

Before the Dutch and Portuguese were sailing the Atlantic and Indian Oceans, the Chinese did have a navy that was probably the largest in the world at the time and had in fact reached east Africa. Then Imperial China looked inward and became isolationist. It took decades to become a naval power. I read an article that the US 6th fleet can effectively sink the entire Chinese navy in a week if there should be a large scale naval war in the Pacific, presumably a conflict that would be triggered by the communist invasion of Taiwan.

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on August 26, 2009, 10:40:54 PM

Quote from: dm on August 26, 2009, 03:09:12 PM
Beijing is drawing up plans to prohibit or restrict exports of rare earth metals that are produced only in China and play a vital role in cutting edge technology, from hybrid cars and catalytic converters, to superconductors, and precision-guided weapons.

Well then there is only one thing to do. We must invade China and convert it to Western-style democracy ;)

Title: Re: Meltdown
Post by: BachQ on August 27, 2009, 03:25:29 PM

Mish:Huge Plunge In Mortgage Cure Rates Portends Foreclosure Disaster

Mortgage cure rates have fallen off a cliff. For those unfamiliar with the term, a "cure rate" pertains to those who go delinquent on loans then catch up and become current. Late payments that don't "cure" have a tendency to get later and later over time, before they eventually default.

Fitch ratings notes Cure Rates Plunge Among Prime RMBS.

According to Fitch, cure rate on prime mortgages plunged to 6.6% from an average 45% during 2000-2006. Alt-A cure rates plunged to 4.3% from an average 30.2% and subprime cure rates fell to 5.% from an average 19.4%.

(http://4.bp.blogspot.com/_nSTO-vZpSgc/SpNVtZvhaSI/AAAAAAAAGtg/-Rg4ABMh0Ns/s400/pent+up+prime+foreclosures.png)

[continued -- click] (http://globaleconomicanalysis.blogspot.com/2009/08/huge-plunge-in-mortgage-cure-rates.html)

CNBC Economist: Tsunami of Home Foreclosures to Hit US (http://www.cnbc.com/id/32549123)

Title: Re: Meltdown
Post by: BachQ on August 27, 2009, 03:28:20 PM

The world's 8th largest oilfield, and the lifeblood of Mexico's economy, will be dead by the end of next year.
(http://static.seekingalpha.com/uploads/2009/8/23/saupload_reuters_cantarell_through_june_20093.jpg)
(http://seekingalpha.com/article/157824-mexico-s-declining-oil-production-clarion-call-for-cantarell)

Mexico legalizes drug possession -- In enacting a controversial law on Thursday decriminalizing possession of small amounts of marijuana, cocaine, heroin, LSD and methamphetamine, Mexico now has one of the world's most liberal laws for drug users. The Mexican law is part of a growing trend across Latin America to treat drug use as a public health problem and make room in overcrowded prisons for violent traffickers rather than small-time users.

link (http://www.google.com/hostednews/ap/article/ALeqM5gtME6rwpVYyyaIuEi2CtxhMj9B7wD9AAOMA80)

Title: Re: Meltdown
Post by: BachQ on August 27, 2009, 03:31:38 PM

Quote from: Coopmv on August 25, 2009, 05:28:42 PM
Japan's export decline worsens in July, points to fragile economic recovery
(http://finance.yahoo.com/news/Japans-export-decline-worsens-apf-3081391277.html?x=0&.v=1)

Coop, that's pretty dismal. And now for the UK:

UK Telegraph: Britain is sleepwalking towards a decade of economic misery
(http://www.telegraph.co.uk/finance/comment/liamhalligan/6089679/Britain-is-sleepwalking-towards-a-decade-of-economic-misery.html)

UK Telegraph: UK business investment shrank by a record 18.4% in Q2, the steepest slump in 44 yrs. (http://www.telegraph.co.uk/finance/financetopics/recession/6101356/Fears-for-economy-mount-as-business-investment-falls.html)

Title: Re: Meltdown
Post by: Coopmv on August 27, 2009, 07:08:58 PM

Quote from: dm on August 27, 2009, 03:25:29 PM
Mish:Huge Plunge In Mortgage Cure Rates Portends Foreclosure Disaster

Mortgage cure rates have fallen off a cliff. For those unfamiliar with the term, a "cure rate" pertains to those who go delinquent on loans then catch up and become current. Late payments that don't "cure" have a tendency to get later and later over time, before they eventually default.

Fitch ratings notes Cure Rates Plunge Among Prime RMBS.

According to Fitch, cure rate on prime mortgages plunged to 6.6% from an average 45% during 2000-2006. Alt-A cure rates plunged to 4.3% from an average 30.2% and subprime cure rates fell to 5.% from an average 19.4%.

(http://4.bp.blogspot.com/_nSTO-vZpSgc/SpNVtZvhaSI/AAAAAAAAGtg/-Rg4ABMh0Ns/s400/pent+up+prime+foreclosures.png)

[continued -- click] (http://globaleconomicanalysis.blogspot.com/2009/08/huge-plunge-in-mortgage-cure-rates.html)

CNBC Economist: Tsunami of Home Foreclosures to Hit US
(http://www.cnbc.com/id/32549123)

This may lead to a double-dip in the US economy ...

Title: Re: Meltdown
Post by: Coopmv on August 27, 2009, 07:10:39 PM

Quote from: dm on August 27, 2009, 03:28:20 PM
The world's 8th largest oilfield, and the lifeblood of Mexico's economy, will be dead by the end of next year.
(http://static.seekingalpha.com/uploads/2009/8/23/saupload_reuters_cantarell_through_june_20093.jpg)
(http://seekingalpha.com/article/157824-mexico-s-declining-oil-production-clarion-call-for-cantarell)

Mexico legalizes drug possession -- In enacting a controversial law on Thursday decriminalizing possession of small amounts of marijuana, cocaine, heroin, LSD and methamphetamine, Mexico now has one of the world's most liberal laws for drug users. The Mexican law is part of a growing trend across Latin America to treat drug use as a public health problem and make room in overcrowded prisons for violent traffickers rather than small-time users.

link
(http://www.google.com/hostednews/ap/article/ALeqM5gtME6rwpVYyyaIuEi2CtxhMj9B7wD9AAOMA80)

Illegal immigration to the US will be out of control ... >:(

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on August 27, 2009, 10:19:48 PM

Quote from: Coopmv on August 27, 2009, 07:10:39 PM
Illegal immigration to the US will be out of control ... >:(

It won't be if we have no jobs for them

Title: Re: Meltdown
Post by: BachQ on August 28, 2009, 02:51:46 PM

Quote from: Coopmv on June 12, 2009, 06:36:45 PM
Unfortunately, it was the Bubble Man Alan Greenspan who politicized his job and thereby makes things difficult for his successor. The best fed chief of the past 50 years has to be Paul Volcker, who raised fed funds rate to 15+% that subequently broke the back of double digit inflation and sent his boss Jimmy Carter packing as well. Reagan made the mistake of appointing Greenspan for sure.

August 26, 2009

History Will See Bernanke As Worst Fed Chairman

"... Nobody has the foresight to see the disaster that lies ahead because of Bernanke. Facing a recession in 2001, Greenspan lowered interest rates down to 1% and created the Real Estate bubble, which led to the economic crisis we have today. Bernanke, by lowering interest rates down to 0% and taking worthless mortgage-backed securities, auto loans and student loans onto the Federal Reserve's balance sheet, has temporarily given our economy a short-term artificial high that will soon wear off and cause our financial markets to crash again even harder. While Greenspan's destructive actions gave our economy a high that lasted for a good five years, today there are no more asset bubbles in the U.S. left to inflate. ... This out-of-control deficit spending will only be possible if Bernanke monetizes it and creates massive inflation, and it's obvious to us that he is committed to doing so. ... We will never again have a prosperous economy until we have a severe recession and rebuild a sound viable economy from the ground-floor. It is better to have our much needed recession now, than a Great Depression coupled with hyperinflation a few years down the road. ..." (http://inflation.us/bernankeworstfedchairman.html)

Title: Re: Meltdown
Post by: BachQ on August 28, 2009, 02:54:46 PM

Ben Bernanke "World's Most Dangerous Man"

(http://4.bp.blogspot.com/_nSTO-vZpSgc/SpTIaiEb-2I/AAAAAAAAGt4/TitNKpcVVNM/s400/ben+the+wizard-2.png) (http://globaleconomicanalysis.blogspot.com/2009/08/ben-bernanke-worlds-most-dangerous-man.html)

Title: Re: Meltdown
Post by: BachQ on August 28, 2009, 03:29:29 PM

Financial Times: Bankers watch as Sweden goes negative

By Andrew Ward in Stockholm and David Oakley in London
Published: August 27 2009 19:48 | Last updated: August 27 2009 22:41

For a world first, the announcement came with remarkably little fanfare. But last month, the Swedish Riksbank entered uncharted territory when it became the world's first central bank to introduce negative interest rates on bank deposits.

Even at the deepest point of Japan's financial crisis, the country's central bank shied away from such a measure, which is designed to encourage commercial banks to boost lending. But, as they contemplate their exit strategies after the extraordinary measures of the past two years, central bankers will be monitoring the Swedish experiment closely. Mervyn King, the Bank of England governor, has hinted he may follow the Swedish example as the danger of a so-called liquidity trap, where cash remains stuck in the banking system and does not filter out to the wider economy, is an increasing concern for the UK.

continued (http://www.ft.com/cms/s/0/5d3f0692-9334-11de-b146-00144feabdc0.html?&nclick_check=1)

Title: Re: Meltdown
Post by: Coopmv on August 28, 2009, 04:35:07 PM

Quote from: dm on August 28, 2009, 02:51:46 PM
August 26, 2009

History Will See Bernanke As Worst Fed Chairman

"... Nobody has the foresight to see the disaster that lies ahead because of Bernanke. Facing a recession in 2001, Greenspan lowered interest rates down to 1% and created the Real Estate bubble, which led to the economic crisis we have today. Bernanke, by lowering interest rates down to 0% and taking worthless mortgage-backed securities, auto loans and student loans onto the Federal Reserve's balance sheet, has temporarily given our economy a short-term artificial high that will soon wear off and cause our financial markets to crash again even harder. While Greenspan's destructive actions gave our economy a high that lasted for a good five years, today there are no more asset bubbles in the U.S. left to inflate. ... This out-of-control deficit spending will only be possible if Bernanke monetizes it and creates massive inflation, and it's obvious to us that he is committed to doing so. ... We will never again have a prosperous economy until we have a severe recession and rebuild a sound viable economy from the ground-floor. It is better to have our much needed recession now, than a Great Depression coupled with hyperinflation a few years down the road. ..."
(http://inflation.us/bernankeworstfedchairman.html)

Only time will tell if Bernanke did the right thing. Had he not flooded the US financial system with massive liquidity, we could have been in the Great Depression II. The combination of extreme pessimism and herd mentality played a big part to push the US into the Great Depression back in the 1930's. I thought we were going down that path last fall.

Title: Re: Meltdown
Post by: Coopmv on August 28, 2009, 05:20:14 PM

There are still some out there who believe the US consumers will resume spending money like the good old days very soon. Here is a dose of reality ...

"In the Tank Forever": U.S. Consumers, Retailers in a "Death Spiral," Davidowitz Says
(http://finance.yahoo.com/tech-ticker/article/312114/%E2%80%9CIn-the-Tank-Forever%E2%80%9D-U.S.-Consumers-Retailers-in-a-%22Death-Spiral%22-Davidowitz-Says?tickers=dltr,fdo,ndn,kss,xrt,WMT,CVS&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on August 28, 2009, 05:23:12 PM

Real US unemployment rate at 16 pct: Fed official
(http://www.breitbart.com/article.php?id=CNG.4452bed82adf3124e5884678e236d7fb.361&show_article=1)

Title: Re: Meltdown
Post by: Coopmv on August 28, 2009, 05:25:59 PM

Lou Dobbs Questions: Where Are the Jobs? (http://www.breitbart.tv/dobbs-questions-where-are-the-jobs/)

Title: Re: Meltdown
Post by: Coopmv on August 29, 2009, 05:57:50 AM

Quote from: Contents Under Pressure on August 27, 2009, 10:19:48 PM
It won't be if we have no jobs for them

Yeah, but the federal government has been MIA for so long. States have no say on immigration issues.

Title: Re: Meltdown
Post by: Coopmv on August 29, 2009, 06:41:19 AM

How can the Meltdown thread not offer a short course on Meltdown 101? ;D

Meltdown 101: Why banks' struggles have worsened? (http://finance.yahoo.com/news/Meltdown-101-Why-banks-apf-78787609.html?x=0)

Title: Re: Meltdown
Post by: BachQ on August 29, 2009, 02:20:05 PM

Quote from: Coopmv on August 28, 2009, 05:20:14 PM
There are still some out there who believe the US consumers will resume spending money like the good old days very soon. Here is a dose of reality ...

"In the Tank Forever": U.S. Consumers, Retailers in a "Death Spiral," Davidowitz Says
(http://finance.yahoo.com/tech-ticker/article/312114/%E2%80%9CIn-the-Tank-Forever%E2%80%9D-U.S.-Consumers-Retailers-in-a-%22Death-Spiral%22-Davidowitz-Says?tickers=dltr,fdo,ndn,kss,xrt,WMT,CVS&sec=topStories&pos=9&asset=&ccode=)

Coop ... excellent find. Davidowitz NAILS it. The green shoots can be found at Dollar Tree and the Dollar Store ... :D :D

Title: Re: Meltdown
Post by: BachQ on August 29, 2009, 02:22:02 PM

S&P: Corporate defaults on pace to quadruple in 2009 compared with '08

link (http://finance.yahoo.com/news/SP-Corporate-defaults-surging-apf-1497193292.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on August 29, 2009, 02:23:05 PM

Quote from: dm on August 29, 2009, 02:20:05 PM
Coop ... excellent find. Davidowitz NAILS it. The green shoots can be found at Dollar Tree and the Dollar Store ... :D :D

The massive export drive to the US China has been waiting for would have to wait a whole lot longer ... :D

Title: Re: Meltdown
Post by: BachQ on August 29, 2009, 02:23:38 PM

CNN: Why the deficit will raise taxes

(http://i2.cdn.turner.com/money/2009/08/27/news/economy/deficit_taxes/chart_deficit_gdp2.03.gif) (http://money.cnn.com/2009/08/27/news/economy/deficit_taxes/index.htm)

Title: Re: Meltdown
Post by: Coopmv on August 30, 2009, 05:43:25 AM

Where are the green shoots? ???

NH opens 5 unemployment offices on weekend (http://finance.yahoo.com/news/NH-opens-5-unemployment-apf-3367696583.html?x=0&.v=2)

Title: Re: Meltdown
Post by: BachQ on August 31, 2009, 04:57:13 PM

BBC: The impending "perfect storm" of resource shortages

By Stephen Mulvey
BBC News

(http://newsimg.bbc.co.uk/media/images/46241000/gif/_46241253_population_region_466.gif)

As the world's population grows, competition for food, water and energy will increase. Food prices will rise, more people will go hungry, and migrants will flee the worst-affected regions. By 2030 "a whole series of events come together":

* The world's population will rise from 6bn to 8bn (33%)
* Demand for food will increase by 50%
* Demand for water will increase by 30%
* Demand for energy will increase by 50%

link (http://news.bbc.co.uk/2/hi/science/nature/8213884.stm)

Title: Re: Meltdown
Post by: BachQ on August 31, 2009, 04:59:36 PM

Commercial Mortgage Defaults More than Double for U.S. Banks (Update2)

By Hui-yong Yu

Aug. 31 (Bloomberg) -- The default rate on commercial mortgages held by U.S. banks more than doubled in the second quarter from a year earlier amid falling rents and occupancies for malls, office buildings and warehouses. Loans that were 90 days or more past due climbed to 2.88 percent of outstanding balances in the second quarter, from 1.18 percent a year earlier, according to New York-based property research firm Real Estate Econometrics LLC. Defaults increased from 2.25 percent in the first quarter.

link (http://www.bloomberg.com/apps/news?pid=20601087&sid=a9FRZ6ipJB8Y)

Title: Re: Meltdown
Post by: BachQ on August 31, 2009, 05:01:30 PM

American bankers quit high-tax Britain

Barry Wigmore, Daily Mail
28 August 2009, 8:40am

The high cost of living and rising taxes are forcing many top Americans working in the City to go home, it was revealed yesterday. The new 50% tax on those earning more than £150,000 a year takes effect next April. ... US studies have shown the number of Americans transferring to the UK has dropped by 25% in the past year. ...

link (http://www.thisismoney.co.uk/news/article.html?in_article_id=490128)

Title: Re: Meltdown
Post by: BachQ on August 31, 2009, 05:03:12 PM

Las Vegas' July 09 jobless rate jumped 92.7% (from July 08)

By Nicole Lucht (contact), In Business reporter
Fri, Aug 28, 2009 (3 a.m.)

... Las Vegas' jobless rate jumped 92.7% since July 2008, the state's Employment, Training and Rehabilitation Department reported Aug. 21. July's jobless rate was 13.1 percent, up from 12.3 percent in June and 6.9 percent in July 2008. For the employment rate to return to pre-recession levels, an additional 60,000 jobs are needed, said Brian Gordon, principal of Applied Analysis, an economic consulting firm. In July 2006, as the economy boomed, Las Vegas' jobless rate was 4.6 percent and the economy had a year-over-year increase of 48,900 jobs. ...

link (http://www.lasvegassun.com/news/2009/aug/28/prospects-are-grim-job-growth-las-vegas/)

Title: Re: Meltdown
Post by: BachQ on August 31, 2009, 05:06:34 PM

57% Would Like to Replace Entire Congress
Sunday, August 30, 2009

If they could vote to keep or replace the entire Congress, just 25% of voters nationwide would keep the current batch of legislators. A new Rasmussen Reports national telephone survey finds that 57% would vote to replace the entire Congress and start all over again. (http://www.rasmussenreports.com/public_content/politics/general_politics/august_2009/57_would_like_to_replace_entire_congress)

Title: Re: Meltdown
Post by: Coopmv on August 31, 2009, 05:07:12 PM

Quote from: dm on August 31, 2009, 05:01:30 PM
American bankers quit high-tax Britain

Barry Wigmore, Daily Mail
28 August 2009, 8:40am

The high cost of living and rising taxes are forcing many top Americans working in the City to go home, it was revealed yesterday. The new 50% tax on those earning more than £150,000 a year takes effect next April. ... US studies have shown the number of Americans transferring to the UK has dropped by 25% in the past year. ...

link
(http://www.thisismoney.co.uk/news/article.html?in_article_id=490128)

But higher taxes are waiting for them at home as well, as Obama Administration will make sure they pay through their nose. How about moving to the Beijing and Shanghai offices? Perhaps the commies will give them some major breaks ...
:D

Title: Re: Meltdown
Post by: Coopmv on September 01, 2009, 04:51:21 PM

Much of those investments in South Florida real estate market that came from Latin America are now dead in the water ...

Mexican Family Faces Problems in U.S. A Mexican real-estate family's move into the U.S. has led to problems that could ripple throughout their empire.

(http://online.wsj.com/article/SB125184968158577851.html)

Title: Re: Meltdown
Post by: Coopmv on September 01, 2009, 04:59:16 PM

DM, This sounds like a nice deal, you honor the derivatives contract ONLY when you make money ... :D

China regulator said to clear defaults on some derivatives
Market observers debate whether state-owned firms can in fact walk away (http://www.marketwatch.com/story/scrutiny-for-reported-china-change-on-derivatives-2009-09-01)

Title: Re: Meltdown
Post by: Coopmv on September 01, 2009, 05:01:28 PM

Democracy is dead ... lobbyists rule America. (http://www.marketwatch.com/story/16-credos-for-our-new-lobbyist-nation-2009-09-01)

Title: Re: Meltdown
Post by: Coopmv on September 01, 2009, 05:15:30 PM

Philadelphia is taking out a short-term loan to help with cash flow as Pennsylvania's budget crisis continues.
(http://cbs3.com/topstories/Philadelphia.Budget.mayor.2.1157773.html)

Title: Re: Meltdown
Post by: Scarpia on September 02, 2009, 11:38:49 AM

BP Discovers 'Giant' Oil Field in Gulf of Mexico
By CLIFFORD KRAUSS

HOUSTON — The British oil giant, BP, announced on Wednesday the discovery of what it characterized as a "giant" oil field more than six miles under the Gulf of Mexico, but it may take years to assess how much crude can actually be recovered.

The discovery should have no immediate impact on world oil or gasoline prices since it could take three years or more to begin extracting the resource. Because the oil is so deep underwater and difficult to extract, the price of oil will need to be above $70 a barrel to make drilling profitable, according to energy analysts.

Nevertheless, the discovery was another indication that the deep waters of the Gulf of Mexico are probably the most promising area in the country to bolster domestic oil production. The rise in Gulf production in recent years, in large part because of BP's deep-water giant Thunder Horse field, has stabilized domestic production after almost two decades of yearly declines.

"This is big," said Chris Ruppel, a senior energy analyst at Execution, a London-based investment bank. "It says we're seeing that improved technology is unlocking resources that were before either undiscovered or too costly to exploit because of economics."

The "Tiber" well discovery is about 250 miles southeast of Houston at more than 35,000 feet — greater than the height of Mount Everest. It is part of a new frontier of exploration where oil companies are spending billions of dollars to find oil off the shores of Brazil and West Africa and boring through miles of rock, salt and packed sands.

The discoveries have been made possible by leaps in development of offshore drilling technology, computers and three-dimensional imaging that can pinpoint where the best reserves lie, and advanced mooring equipment to stabilize platforms in deep waters. BP executives say the oil and gas in the field is extremely hot and under intense pressure, requiring advanced well heads with thick steel and exceptional insulation.

In its announcement of the discovery, BP would not estimate the size of the new reserve. It said the well would be one of the deepest ever drilled by an oil company. BP, which is the largest producer of oil and gas in the Gulf, will operate the well with a 62 percent interest. Petrobras and ConocoPhillips also own shares.

"The information we have gathered thus far is encouraging," said Daren Beaudo, a BP spokesman, who said one well has already been drilled in the area. "But appraisal work will be required before we know the field's size and determine how it should be developed. It's the next wave of development of the ultra deep water Gulf of Mexico."

The Tiber well along with the Kaskida discovery in 2006, according to a statement by Andy Inglis, BP's chief executive for exploration and production, "support the continuing growth of our deepwater Gulf of Mexico business into the second half of the next decade."

The Gulf of Mexico accounts for about a quarter of the nation's oil production, and that percentage could rise even though many shallow water wells are tapping out.

But the Gulf is also a treacherous place to rely on oil because of hurricanes, which have been particularly fierce in recent years. Last year, hurricanes Gustav and Ike shut down wells, damaged pipelines and forced companies to evacuate workers from production platforms for weeks, resulting in an estimated loss of 63 million barrels of production.

Deep-water drilling in the Gulf has produced some major challenges and delays. BP's Thunder Horse platform, the biggest in the Gulf and producing 300,000 barrels a day, was first drilled in 1999 but did not begin to produce for a decade due to a string of engineering problems.

Title: Re: Meltdown
Post by: BachQ on September 02, 2009, 04:39:37 PM

Quote from: Scarpia on September 02, 2009, 11:38:49 AM
BP Discovers 'Giant' Oil Field in Gulf of Mexico
By CLIFFORD KRAUSS

HOUSTON — The British oil giant, BP, announced on Wednesday the discovery of what it characterized as a "giant" oil field more than six miles under the Gulf of Mexico, but it may take years to assess how much crude can actually be recovered.

The discovery should have no immediate impact on world oil or gasoline prices since it could take three years or more to begin extracting the resource. Because the oil is so deep underwater and difficult to extract, the price of oil will need to be above $70 a barrel to make drilling profitable, according to energy analysts.

Nevertheless, the discovery was another indication that the deep waters of the Gulf of Mexico are probably the most promising area in the country to bolster domestic oil production. The rise in Gulf production in recent years, in large part because of BP's deep-water giant Thunder Horse field, has stabilized domestic production after almost two decades of yearly declines.

"This is big," said Chris Ruppel, a senior energy analyst at Execution, a London-based investment bank. "It says we're seeing that improved technology is unlocking resources that were before either undiscovered or too costly to exploit because of economics."

The "Tiber" well discovery is about 250 miles southeast of Houston at more than 35,000 feet — greater than the height of Mount Everest. It is part of a new frontier of exploration where oil companies are spending billions of dollars to find oil off the shores of Brazil and West Africa and boring through miles of rock, salt and packed sands.

The discoveries have been made possible by leaps in development of offshore drilling technology, computers and three-dimensional imaging that can pinpoint where the best reserves lie, and advanced mooring equipment to stabilize platforms in deep waters. BP executives say the oil and gas in the field is extremely hot and under intense pressure, requiring advanced well heads with thick steel and exceptional insulation.

In its announcement of the discovery, BP would not estimate the size of the new reserve. It said the well would be one of the deepest ever drilled by an oil company. BP, which is the largest producer of oil and gas in the Gulf, will operate the well with a 62 percent interest. Petrobras and ConocoPhillips also own shares.

"The information we have gathered thus far is encouraging," said Daren Beaudo, a BP spokesman, who said one well has already been drilled in the area. "But appraisal work will be required before we know the field's size and determine how it should be developed. It's the next wave of development of the ultra deep water Gulf of Mexico."

The Tiber well along with the Kaskida discovery in 2006, according to a statement by Andy Inglis, BP's chief executive for exploration and production, "support the continuing growth of our deepwater Gulf of Mexico business into the second half of the next decade."

The Gulf of Mexico accounts for about a quarter of the nation's oil production, and that percentage could rise even though many shallow water wells are tapping out.

But the Gulf is also a treacherous place to rely on oil because of hurricanes, which have been particularly fierce in recent years. Last year, hurricanes Gustav and Ike shut down wells, damaged pipelines and forced companies to evacuate workers from production platforms for weeks, resulting in an estimated loss of 63 million barrels of production.

Deep-water drilling in the Gulf has produced some major challenges and delays. BP's Thunder Horse platform, the biggest in the Gulf and producing 300,000 barrels a day, was first drilled in 1999 but did not begin to produce for a decade due to a string of engineering problems.

Thank you for that article. Some observations:

1. Let's assume that 6 billion barrels will be ultimately recoverable; at current global consumption (85M bpd), that will last approximately 2.5 months (70 days).

2. The oil is located 6.6 miles under the ocean (greater than the height of Mount Everest), so who knows how much oil will be ultimately recoverable, and at what cost. Ultra-deep drilling in the Gulf is highly challenging, and the difficulties include hurricanes, special drilling methods, extremely high pressure, extremely high temperatures, etc.

3. It will be 10 years before we see a drop of oil from the field.

4. This highlights a much more fundamental issue: discoveries of giant oil fields have declined to such an extent that a find like this is considered "big news."

(http://www.theoildrum.com/files/May09Fig.png)

The reality is that fewer and fewer giant oil fields are being discovered, rendering the devastating consequences of peak oil all the more stark and inevitable. All of the low-hanging fruit has already been extracted ... so we're left with increasingly expensive high-hanging fruit.

Title: Re: Meltdown
Post by: Coopmv on September 02, 2009, 04:42:47 PM

Quote from: Scarpia on September 02, 2009, 11:38:49 AM
BP Discovers 'Giant' Oil Field in Gulf of Mexico
By CLIFFORD KRAUSS

HOUSTON — The British oil giant, BP, announced on Wednesday the discovery of what it characterized as a "giant" oil field more than six miles under the Gulf of Mexico, but it may take years to assess how much crude can actually be recovered.

The discovery should have no immediate impact on world oil or gasoline prices since it could take three years or more to begin extracting the resource. Because the oil is so deep underwater and difficult to extract, the price of oil will need to be above $70 a barrel to make drilling profitable, according to energy analysts.

Nevertheless, the discovery was another indication that the deep waters of the Gulf of Mexico are probably the most promising area in the country to bolster domestic oil production. The rise in Gulf production in recent years, in large part because of BP's deep-water giant Thunder Horse field, has stabilized domestic production after almost two decades of yearly declines.

"This is big," said Chris Ruppel, a senior energy analyst at Execution, a London-based investment bank. "It says we're seeing that improved technology is unlocking resources that were before either undiscovered or too costly to exploit because of economics."

The "Tiber" well discovery is about 250 miles southeast of Houston at more than 35,000 feet — greater than the height of Mount Everest. It is part of a new frontier of exploration where oil companies are spending billions of dollars to find oil off the shores of Brazil and West Africa and boring through miles of rock, salt and packed sands.

The discoveries have been made possible by leaps in development of offshore drilling technology, computers and three-dimensional imaging that can pinpoint where the best reserves lie, and advanced mooring equipment to stabilize platforms in deep waters. BP executives say the oil and gas in the field is extremely hot and under intense pressure, requiring advanced well heads with thick steel and exceptional insulation.

In its announcement of the discovery, BP would not estimate the size of the new reserve. It said the well would be one of the deepest ever drilled by an oil company. BP, which is the largest producer of oil and gas in the Gulf, will operate the well with a 62 percent interest. Petrobras and ConocoPhillips also own shares.

"The information we have gathered thus far is encouraging," said Daren Beaudo, a BP spokesman, who said one well has already been drilled in the area. "But appraisal work will be required before we know the field's size and determine how it should be developed. It's the next wave of development of the ultra deep water Gulf of Mexico."

The Tiber well along with the Kaskida discovery in 2006, according to a statement by Andy Inglis, BP's chief executive for exploration and production, "support the continuing growth of our deepwater Gulf of Mexico business into the second half of the next decade."

The Gulf of Mexico accounts for about a quarter of the nation's oil production, and that percentage could rise even though many shallow water wells are tapping out.

But the Gulf is also a treacherous place to rely on oil because of hurricanes, which have been particularly fierce in recent years. Last year, hurricanes Gustav and Ike shut down wells, damaged pipelines and forced companies to evacuate workers from production platforms for weeks, resulting in an estimated loss of 63 million barrels of production.

Deep-water drilling in the Gulf has produced some major challenges and delays. BP's Thunder Horse platform, the biggest in the Gulf and producing 300,000 barrels a day, was first drilled in 1999 but did not begin to produce for a decade due to a string of engineering problems.

Drilling for oil at a depth of 6 miles under the water will be something else ... :o

Title: Re: Meltdown
Post by: BachQ on September 02, 2009, 06:24:35 PM

Irish unemployment hits 14-year high of 12.4 pct
(http://news.yahoo.com/s/ap/20090902/ap_on_re_eu/eu_ireland_economy)

Quote from: Coopmv on September 01, 2009, 05:15:30 PM
Philadelphia is taking out a short-term loan to help with cash flow as Pennsylvania's budget crisis continues.
(http://cbs3.com/topstories/Philadelphia.Budget.mayor.2.1157773.html)

Missouri projected to borrow $2.7B for jobless benefits

link (http://www.statesman.com/business/content/shared-gen/ap/Finance_General/MO_Unemployment_Benefits.html)

Title: Re: Meltdown
Post by: Coopmv on September 02, 2009, 06:57:17 PM

Quote from: dm on September 02, 2009, 06:24:35 PM
Irish unemployment hits 14-year high of 12.4 pct
(http://news.yahoo.com/s/ap/20090902/ap_on_re_eu/eu_ireland_economy)

Missouri projected to borrow $2.7B for jobless benefits

link
(http://www.statesman.com/business/content/shared-gen/ap/Finance_General/MO_Unemployment_Benefits.html)

Where are the green shoots? ???

Title: Re: Meltdown
Post by: Coopmv on September 03, 2009, 05:49:37 PM

DM, This ruling has serious implications for all the banks - Wall Street firms included, as they can be sued for billions of dollars in damage by various investment funds that were duped into buying all those bogus AAA rated securities that ultimately became worthless ...

UPDATE 1-Moody's, McGraw-Hill hit by free speech loss
(http://www.reuters.com/article/marketsNews/idINN0313041120090903?rpc=44)

Title: Re: Meltdown
Post by: BachQ on September 04, 2009, 03:29:02 AM

Quote from: Coopmv on September 03, 2009, 05:49:37 PM
DM, This ruling has serious implications for all the banks - Wall Street firms included, as they can be sued for billions of dollars in damage by various investment funds that were duped into buying all those bogus AAA rated securities that ultimately became worthless ...

UPDATE 1-Moody's, McGraw-Hill hit by free speech loss
(http://www.reuters.com/article/marketsNews/idINN0313041120090903?rpc=44)

Coop, that's an excellent, excellent find! 8)

QuoteIn a 68-page ruling, [the judge] said credit ratings could be subject to challenge "if the speaker does not genuinely and reasonably believe it or if it is without basis in fact."

Title: Re: Meltdown
Post by: BachQ on September 04, 2009, 03:32:28 AM

Airline losses 'hit $1bn a month'

Airlines are likely to have lost more than $6bn (£3.7bn) in the first half of 2009, according to the International Air Transport Association (Iata). This figure - an average of $1bn a month - is double the amount Iata said in December that airlines would lose during the whole of 2009. Airlines made losses between April and June, when they would usually make 50% of their annual profits, Iata said. Meanwhile, budget airline SkyEurope has filed for bankruptcy. The loss-making Slovakian airline, which was set up in 2001, has suspended all flights with immediate effect. And American Airlines has said it is cutting 921 flight attendant jobs as it deals with a downturn in passengers, and lower revenue.

link -- continued (http://news.bbc.co.uk/2/hi/business/8231714.stm)

Title: Re: Meltdown
Post by: Coopmv on September 04, 2009, 04:52:59 PM

It was Treasury bureaucrats running amok: Banks Were Pressured to Take TARP Funds: CEO (http://finance.yahoo.com/news/Banks-Were-Pressured-to-Take-cnbc-670419300.html?x=0&sec=topStories&pos=8&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 04, 2009, 04:55:33 PM

Roubini: "U-shaped" recovery is possible. Only a bunch of crack cocaine sniffing economists can be forecasting a V-shaped recovery ... (http://finance.yahoo.com/news/Roubini-Ushaped-recovery-is-rb-3221405059.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on September 05, 2009, 12:33:30 PM

CNN: Cut my pay ... please! As the number of layoffs mount, more workers are ready and willing to take significant pay cuts to find employment ... In a recent survey, 65% of out-of-work respondents reported willingness to accept wages up to 30% lower than their previous compensation.

link (http://money.cnn.com/2009/08/28/news/economy/paycuts/index.htm?postversion=2009090210)

US unemployment rate rises to 26-year high
Fri Sep 4, 2009 8:51am

WASHINGTON (Reuters) - U.S. employers cut a fewer-than-expected 216,000 jobs in August, while the unemployment rate rose to a 26-year high, the government said on Friday in a report showing a still fragile labor market.

The Labor Department said the unemployment rate rose to 9.7 percent after dipping to 9.4 percent in July and the decline in payrolls was the smallest in a year. The department revised job losses for June and July to show 49,000 more jobs lost than previously reported.
link (http://www.reuters.com/article/ousiv/idUSTRE58331220090904)

Here's ShadowStat's take:

(http://www.shadowstats.com/imgs/sgs-emp.gif)
(http://www.shadowstats.com/alternate_data)

Title: Re: Meltdown
Post by: BachQ on September 05, 2009, 12:35:03 PM

The Coming Reset in State Government
My fellow governors and I are likely facing a permanent reduction in tax revenues.

By Gov. MITCH DANIELS (Gov. Indiana)

State government finances are a wreck. The drop in tax receipts is the worst in a half century. Fewer than 10 states ended the last fiscal year with significant reserves, and three-fourths have deficits exceeding 10% of their budgets. Only an emergency infusion of printed federal funny money is keeping most state boats afloat right now.

Most governors I've talked to are so busy bailing that they haven't checked the long-range forecast. What the radar tells me is that we ain't seen nothin' yet. What we are being hit by isn't a tropical storm that will come and go, with sunshine soon to follow. It's much more likely that we're facing a near permanent reduction in state tax revenues that will require us to reduce the size and scope of our state governments. And the time to prepare for this new reality is already at hand.

The coming state government reset will be particularly wrenching after the happy binge that preceded this recession. During the last decade, states increased their spending by an average of 6% per year, gusting to 8% during 2007-08. Much of the government institutions built up in those years will now have to be dismantled.

... The Obama administration's "stimulus" package in effect shared the use of Uncle Sam's printing press for two years. But after that money runs out, the states will be back where they were. Even if Congress goes for a second round of stimulus funding, driven by the political panic of bankrupt Democratic governors, it would only postpone the reckoning.

The time to plan and debate is now. This is a test of our adulthood as a democracy. Washington, as long as our Chinese lenders enable it, can practice denial for a while longer. But for states the real world is about to arrive.

link (http://online.wsj.com/article/SB10001424052970204731804574390603114939642.html)

Title: Re: Meltdown
Post by: BachQ on September 05, 2009, 12:43:29 PM

Quote from: Coopmv on September 04, 2009, 04:55:33 PM
Roubini: "U-shaped" recovery is possible. Only a bunch of crack cocaine sniffing economists can be forecasting a V-shaped recovery ... (http://finance.yahoo.com/news/Roubini-Ushaped-recovery-is-rb-3221405059.html?x=0&sec=topStories&pos=2&asset=&ccode=)

It will be either a double-dip recession, or an L-shaped recession. Whatever "recovery" is currently underway seems to be little more than a bubble caused by extremely easy fed money.

U.S. Dollar Will Weaken, Currency Crash Possible, Roubini Says
Sept. 4 (Bloomberg) -- The dollar will weaken and the U.S. risks seeing a crash of the currency unless it does more to control the deficit and reduce debt, said New York University Professor Nouriel Roubini, who predicted the financial crisis. "If markets were to believe, and I'm not saying it's likely, that inflation is going to be the route that the U.S. is going to take to resolve this problem, then you could have a crash of the value of the dollar," Roubini said in an interview today in Cernobbio, Italy. "The value of the dollar over time has to fall on a trade-weighted basis, but not necessarily relative to euro and yen."
(http://www.bloomberg.com/apps/news?pid=20601087&sid=a.SW_71xPhjA)

Title: Re: Meltdown
Post by: Coopmv on September 05, 2009, 01:07:32 PM

Quote from: dm on September 05, 2009, 12:35:03 PM
The Coming Reset in State Government
My fellow governors and I are likely facing a permanent reduction in tax revenues.

By Gov. MITCH DANIELS (Gov. Indiana)

State government finances are a wreck. The drop in tax receipts is the worst in a half century. Fewer than 10 states ended the last fiscal year with significant reserves, and three-fourths have deficits exceeding 10% of their budgets. Only an emergency infusion of printed federal funny money is keeping most state boats afloat right now.

Most governors I've talked to are so busy bailing that they haven't checked the long-range forecast. What the radar tells me is that we ain't seen nothin' yet. What we are being hit by isn't a tropical storm that will come and go, with sunshine soon to follow. It's much more likely that we're facing a near permanent reduction in state tax revenues that will require us to reduce the size and scope of our state governments. And the time to prepare for this new reality is already at hand.

The coming state government reset will be particularly wrenching after the happy binge that preceded this recession. During the last decade, states increased their spending by an average of 6% per year, gusting to 8% during 2007-08. Much of the government institutions built up in those years will now have to be dismantled.

... The Obama administration's "stimulus" package in effect shared the use of Uncle Sam's printing press for two years. But after that money runs out, the states will be back where they were. Even if Congress goes for a second round of stimulus funding, driven by the political panic of bankrupt Democratic governors, it would only postpone the reckoning.

The time to plan and debate is now. This is a test of our adulthood as a democracy. Washington, as long as our Chinese lenders enable it, can practice denial for a while longer. But for states the real world is about to arrive.

link
(http://online.wsj.com/article/SB10001424052970204731804574390603114939642.html)

DM, I believe Indiana has one of the highest credit ratings among the states. Utah is another of these rare states. On the other hand, CA and NY are among the worst and they still are in denial ...

Title: Re: Meltdown
Post by: Coopmv on September 06, 2009, 04:00:06 AM

DM, These big US banks have already started hawking risky instruments to new customers according to a recent article. Where are the regulators?

Lehman investors in Hong Kong protest central bank
Hong Kong investors left out of Lehman settlement hold protest outside central bank (http://finance.yahoo.com/news/Lehman-investors-in-Hong-Kong-apf-1882644772.html?x=0&.v=1)

Check this out (http://www.pressdemocrat.com/article/20090825/BUSINESS/908251051?Title=Deja-vu-all-over-again-Wall-Street-repackages-toxic-debt)

Title: Re: Meltdown
Post by: Coopmv on September 07, 2009, 11:53:39 AM

New frugality is the new normal, by necessity
Even if shoppers' willingness to spend returns, ability likely to be constrained for years (http://finance.yahoo.com/news/New-frugality-is-the-new-apf-1960140123.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 07, 2009, 04:22:27 PM

The next big-time toxic instrument is ready (http://www.dailyfinance.com/2009/09/06/wall-streets-500-billion-plot-to-profit-from-your-death/)

Title: Re: Meltdown
Post by: BachQ on September 08, 2009, 03:43:20 PM

Quote from: Coopmv on September 07, 2009, 11:53:39 AM
New frugality is the new normal, by necessity
Even if shoppers' willingness to spend returns, ability likely to be constrained for years (http://finance.yahoo.com/news/New-frugality-is-the-new-apf-1960140123.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Coop, a large part of this "frugality" is forced on consumers by banks slashing credit, and by rising unemployment. In any case, this is strong evidence that consumers WILL NOT be leading the way out of this recession.

U.S. Consumer Credit Falls by a Record $21.6 Billion

Sept. 8 (Bloomberg) -- U.S. consumer credit plunged more than five times as much as forecast in July as banks restricted lending terms and job losses made Americans reluctant to borrow. Consumer credit fell by a record $21.6 billion, or 10 percent at an annual rate, to $2.5 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $15.5 billion in June, more than previously estimated. Credit fell for a sixth month, the longest series of declines since 1991.

The credit crunch, stagnant incomes and declines in household wealth are casting doubt on the strength of the economic recovery. The arrival of the government's "cash for clunkers" program in late July wasn't enough to keep credit that covers car loans from plummeting by a record amount, as consumers delayed other purchases.

"Lenders are restricting access to credit because risk has increased and that is intersecting with households reducing their leverage," said Richard DeKaser, chief economist at Woodley Park Research in Washington, whose forecast of a decline of $12 billion was the most pessimistic among economists surveyed. "Cash-for-clunkers is to some extent shifting demand from one place to another, not creating it."

link (continued) (http://www.bloomberg.com/apps/news?pid=20601087&sid=aAYZpSNGocVM)

Title: Re: Meltdown
Post by: BachQ on September 08, 2009, 03:44:01 PM

Forbes: Oil climbs past $71/bbl; gold rises past $1005; dollar falls (http://www.forbes.com/2009/09/08/kraft-cadbury-exxon-markets-transcript-chevron.html)

Title: Re: Meltdown
Post by: BachQ on September 08, 2009, 03:46:15 PM

Senate must raise debt ceiling above $12T

By Walter Alarkon - 09/07/09 12:11 PM ET
The Senate must move legislation to raise the federal debt limit beyond $12.1 trillion by mid-October, a move viewed as necessary despite protests about the record levels of red ink.

The move will highlight the nation's record debt, which has been central to Republican attacks against Democratic congressional leaders and President Barack Obama. The year's deficit is expected to hit a record $1.6 trillion. Democrats in control of Congress, including then-Sen. Obama (Ill.), blasted President George W. Bush for failing to contain spending when he oversaw increased deficits and raised the debt ceiling.

"Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren," Obama said in a 2006 floor speech that preceded a Senate vote to extend the debt limit. "America has a debt problem and a failure of leadership." Obama later joined his Democratic colleagues in voting en bloc against raising the debt increase.

Now Obama is asking Congress to raise the debt ceiling, something lawmakers are almost certain to do despite misgivings about the federal debt. The ceiling already has been hiked three times in the past two years, and the House took action earlier this year to raise the ceiling to $13 trillion.

Congress has little choice. Failing to raise the cap could lead the nation to default in mid-October, when the debt is expected to exceed its limit, Treasury Secretary Timothy Geithner has said. In August, Geithner asked Senate Majority Leader Harry Reid (D-Nev.) to increase the debt limit as soon as possible.

link
(http://thehill.com/homenews/senate/57493-senate-must-raise-debt-ceiling-above-12t)

WSJ: Warning: The Deficits Are Coming! "Our off balance sheet obligations associated with Social Security and Medicare put us in a $56 trillion financial hole—and that's before the recession was officially declared last year. America now owes more than Americans are worth—and the gap is growing!" (http://online.wsj.com/article/SB10001424052970203585004574392620693542630.html)

Title: Re: Meltdown
Post by: Coopmv on September 08, 2009, 04:23:04 PM

Quote from: dm on September 08, 2009, 03:43:20 PM
Coop, a large part of this "frugality" is forced on consumers by banks slashing credit, and by rising unemployment. In any case, this is strong evidence that consumers WILL NOT be leading the way out of this recession.

U.S. Consumer Credit Falls by a Record $21.6 Billion

Sept. 8 (Bloomberg) -- U.S. consumer credit plunged more than five times as much as forecast in July as banks restricted lending terms and job losses made Americans reluctant to borrow. Consumer credit fell by a record $21.6 billion, or 10 percent at an annual rate, to $2.5 trillion, according to a Federal Reserve report released today in Washington. Credit dropped by $15.5 billion in June, more than previously estimated. Credit fell for a sixth month, the longest series of declines since 1991.

The credit crunch, stagnant incomes and declines in household wealth are casting doubt on the strength of the economic recovery. The arrival of the government's "cash for clunkers" program in late July wasn't enough to keep credit that covers car loans from plummeting by a record amount, as consumers delayed other purchases.

"Lenders are restricting access to credit because risk has increased and that is intersecting with households reducing their leverage," said Richard DeKaser, chief economist at Woodley Park Research in Washington, whose forecast of a decline of $12 billion was the most pessimistic among economists surveyed. "Cash-for-clunkers is to some extent shifting demand from one place to another, not creating it."

link (continued)
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aAYZpSNGocVM)

May it stay this way for a few years. The US needs more retailers to disappear in order to cut down on its trade deficits with China.

Title: Re: Meltdown
Post by: Coopmv on September 08, 2009, 05:38:26 PM

DM, This move is like re-arranging the chairs on the deck of the Titanic. Foreign oil companies have the know-how and I doubt Mexico can go it alone ...

Mexico names new oil chief, starts Gulf mapping
Mexico changes leadership at state oil firm, starts Gulf mapping to reverse production decline (//http:///%3EMexico%20changes%20leadership%20at%20state%20oil%20firm,%20starts%20Gulf%20mapping%20to%20reverse%20production%20decline)

Title: Re: Meltdown
Post by: Coopmv on September 08, 2009, 05:45:18 PM

Quote from: dm on September 05, 2009, 12:33:30 PM
CNN: Cut my pay ... please! As the number of layoffs mount, more workers are ready and willing to take significant pay cuts to find employment ... In a recent survey, 65% of out-of-work respondents reported willingness to accept wages up to 30% lower than their previous compensation.

link (http://money.cnn.com/2009/08/28/news/economy/paycuts/index.htm?postversion=2009090210)

US unemployment rate rises to 26-year high
Fri Sep 4, 2009 8:51am

WASHINGTON (Reuters) - U.S. employers cut a fewer-than-expected 216,000 jobs in August, while the unemployment rate rose to a 26-year high, the government said on Friday in a report showing a still fragile labor market.

The Labor Department said the unemployment rate rose to 9.7 percent after dipping to 9.4 percent in July and the decline in payrolls was the smallest in a year. The department revised job losses for June and July to show 49,000 more jobs lost than previously reported.
link (http://www.reuters.com/article/ousiv/idUSTRE58331220090904)

Here's ShadowStat's take:

(http://www.shadowstats.com/imgs/sgs-emp.gif)

(http://www.shadowstats.com/alternate_data)

And the SGS' curve is the most believable. The US Labor Dept just fudged the numbers ...

Title: Re: Meltdown
Post by: Coopmv on September 09, 2009, 04:47:50 PM

DM, There may be a new wave of insourcing ...

Remanufacturing America's Factory Sector
Conventional wisdom says American manufacturing jobs are gone forever, outsourced to low-wage, low-regulation nations. Thomas D. Kuczmarski disagrees (http://www.businessweek.com/innovate/content/sep2009/id2009099_517814.htm?campaign_id=yhoo)

Title: Re: Meltdown
Post by: Coopmv on September 09, 2009, 06:25:44 PM

DM, I would love to see much tougher capital rules to be imposed on these Wall Street firms. They have to be reined in ...

Wall Street Profits at Risk (http://www.thestreet.com/_yahoo/story/10596058/1/wall-street-profits-at-risk.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA)

Title: Re: Meltdown
Post by: Coopmv on September 09, 2009, 06:41:10 PM

DM, Here is an excellent article ...

Credit Debt Has Dug a Two-Decade Hole (http://www.minyanville.com/articles/credit-card-debt-+minyanville-/index/a/24419/from/yahoo)

Title: Re: Meltdown
Post by: BachQ on September 10, 2009, 02:22:55 PM

Quote from: Coopmv on September 09, 2009, 06:41:10 PM
DM, Here is an excellent article ...

Credit Debt Has Dug a Two-Decade Hole (http://www.minyanville.com/articles/credit-card-debt-+minyanville-/index/a/24419/from/yahoo)

Good article, Coop. It took the US over two decades to get into this mess, and it won't resolve itself in just two years ... it will take many years.

(http://image.minyanville.com/assets/FCK_May2009/File/mcarl/qchart1.jpg)

Consumer debt kept exploding until it hit a wall.

Title: Re: Meltdown
Post by: BachQ on September 10, 2009, 02:24:12 PM

Bank of China's Zhu Sees 'Bubbles' in Asset Markets

Sept. 10 (Bloomberg) -- Bank of China Ltd., which led the nation's $1.1 trillion lending spree in the first half, said ample liquidity has caused "bubbles" in stocks, commodities and real estate.

"The potential risk is that a lot of liquidity goes to the asset market," Vice President Zhu Min said in an interview in Dalian today. "So you see asset bubbles in commodities, stocks and real estate, not only in China, but everywhere."

China's record credit expansion, which helped the country's economy expand 7.9 percent in the second quarter, has raised concerns that bank loans have been diverted and used to buy stocks and real estate, fueling unsustainable gains in equity and property markets.

continued
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aPOHjduHTfFg#)

Title: Re: Meltdown
Post by: BachQ on September 10, 2009, 02:25:48 PM

In US, six unemployed people compete for every available position
(http://s.wsj.net/public/resources/MWimages/MW-AB742_job_op_MD_20090909113339.jpg)
(http://www.marketwatch.com/story//job-openings-down-50-from-the-peak-in-2007-2009-09-09)

Title: Re: Meltdown
Post by: Coopmv on September 10, 2009, 05:20:13 PM

Quote from: dm on September 10, 2009, 02:24:12 PM
Bank of China's Zhu Sees 'Bubbles' in Asset Markets

Sept. 10 (Bloomberg) -- Bank of China Ltd., which led the nation's $1.1 trillion lending spree in the first half, said ample liquidity has caused "bubbles" in stocks, commodities and real estate.

"The potential risk is that a lot of liquidity goes to the asset market," Vice President Zhu Min said in an interview in Dalian today. "So you see asset bubbles in commodities, stocks and real estate, not only in China, but everywhere."

China's record credit expansion, which helped the country's economy expand 7.9 percent in the second quarter, has raised concerns that bank loans have been diverted and used to buy stocks and real estate, fueling unsustainable gains in equity and property markets.

continued

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aPOHjduHTfFg#)

But does the Chinese Communist government have any choice? 30MM jobs have already been lost due to the free fall in exports ...

Title: Re: Meltdown
Post by: Coopmv on September 11, 2009, 04:30:03 PM

DM, The US deficit is out of control ... :o

Federal deficit hits $1.38 trillion through August (http://finance.yahoo.com/news/Federal-deficit-hits-138-apf-3369591513.html?x=0&sec=topStories&pos=4&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 11, 2009, 06:01:03 PM

DM, The other shoe is definitely dropping, the meltdown in the commercial real estate market is happening. Wonder how bad it can get?

Regulators seize construction lender Corus Bank
Regulators close major Chicago-based commercial real estate lender; 91 bank failures this year (http://finance.yahoo.com/news/Regulators-seize-construction-apf-218858753.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 11, 2009, 06:13:54 PM

This move is long overdue ...

Obama to impose tariffs on Chinese tires (http://finance.yahoo.com/news/Obama-to-impose-tariffs-on-apf-2199438691.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on September 12, 2009, 07:44:24 AM

DM, Check this out ...

Ten Bubbles in the Making (http://finance.yahoo.com/tech-ticker/article/325783/Ten-Bubbles-in-the-Making?tickers=%5Egspc,%5Edji,xlf)

Title: Re: Meltdown
Post by: BachQ on September 12, 2009, 06:55:09 PM

Quote from: Coopmv on September 11, 2009, 06:13:54 PM
This move is long overdue ...

Obama to impose tariffs on Chinese tires (http://finance.yahoo.com/news/Obama-to-impose-tariffs-on-apf-2199438691.html?x=0)

Obama actually had the courage to do this. Amazing. Now let's see how China responds!

Title: Re: Meltdown
Post by: BachQ on September 12, 2009, 06:58:34 PM

Growing Asian middle class to propel oil use: study

Fri Sep 11, 2009 12:26am IS

NEW YORK (Reuters) - A rapidly expanding middle class in China and India will provide the main engine for world oil demand growth in the coming years as families in developing nations buy more cars and appliances to go with their thicker wallets, according to a study released on Thursday.

The outlook could place a firm floor under global oil prices into the next decade after the first decline in world energy demand in a quarter century pulled them to lows near $30 a barrel this winter. "The dramatic growth in the middle class, concentrated in China and India, provides a significant upside to the outlook for global oil demand growth in the next several years," according to PIRA, a New York-based oil consultancy. "New entrants to the middle class are just the group most likely to produce rapid increases in oil and other energy demand," PIRA said in the study obtained by Reuters.

Since 2000, China and India combined have added more than 59 million people per year to the global middle class -- defined as people with an annual income of $6,000 or more -- representing over 75 percent of the world's increase in this group, PIRA estimated in its study. Energy demand growth in China and India were major drivers behind oil's dramatic multi-year spike to near $150 a barrel in July 2008, though prices have since fallen back under the weight of the recession.

cont'd (http://in.reuters.com/article/businessNews/idINIndia-42375320090910?rpc=401&=undefined&sp=true)

Title: Re: Meltdown
Post by: BachQ on September 12, 2009, 06:59:55 PM

Prosecutors Are Poised to Impanel AIG Grand Jury
Ex-Executive Cassano Is Focus of Probe as Authorities Weigh Criminality vs. Poor Decisions

By AMIR EFRATI and SUSAN PULLIAM

Federal prosecutors, capping an 18-month investigation, are preparing to impanel a grand jury in Brooklyn, N.Y., to consider an indictment of a former senior American International Group Inc. executive, according to people familiar with the matter.

The Justice Department and the Securities and Exchange Commission have been investigating whether Joseph Cassano, whose AIG Financial Products unit nearly brought down the insurer a year ago, committed securities fraud in allegedly misleading investors by overstating the value of mortgage-related contracts and failing to disclose material facts about them to AIG's outside auditor, the people said.

(http://riverdaughter.files.wordpress.com/2009/03/joseph_j_cassano.jpg)

The planned grand jury in the AIG case also could weigh charges against other employees. The possible case against Mr. Cassano and others could rely partly on tape recordings of 2007 phone calls involving AIG Financial Products employees who discussed the value of derivatives trades known as credit-default swaps, these people said.

Spokesmen for the Justice Department's fraud section in Washington, the SEC and the U.S. attorney's office in Brooklyn, which are handling the case, declined to comment.
(http://online.wsj.com/article/SB125262174627001209.html)

Title: Re: Meltdown
Post by: Coopmv on September 12, 2009, 07:01:01 PM

Quote from: dm on September 12, 2009, 06:55:09 PM
Obama actually had the courage to do this. Amazing. Now let's see how China responds!

How are Continental and Michelin doing in the continental Europe?

Title: Re: Meltdown
Post by: BachQ on September 12, 2009, 07:04:17 PM

Unemployment Rate for College Graduates Highest on Record
(http://www.mybudget360.com/does-a-college-degree-protect-your-career-unemployment-rate-for-college-graduates-highest-on-record/)

U.S. Foreclosure Filings Top 300,000 for Sixth Straight Month

Sept. 10 (Bloomberg) -- Foreclosure filings in the U.S. exceeded 300,000 for the sixth straight month as job losses that boosted the unemployment rate to a 26-year high left many homeowners unable to keep up with their mortgage payments. A total of 358,471 properties received a default or auction notice or were seized last month, according to data provider RealtyTrac Inc. That's up 18 percent from a year earlier, and down 0.5 percent from July, the Irvine, California-based company said in a statement. One in 357 households received a filing.
(http://www.bloomberg.com/apps/news?pid=20602007&sid=a3dnPxhcGAxs)

Texas Gov. Perry deploys 'Ranger Recon' to the border
By JAMES PINKERTON
HOUSTON CHRONICLE
Sept. 10, 2009, 8:33PM
Gov. Rick Perry announced Thursday he's sent a special contingent of Texas Rangers called "Ranger Recon" to hot spots along the Texas-Mexico border to engage drug and human smugglers. Perry said the special teams — drawn from the state's elite 144-officer Texas Ranger division — began operating in early August in remote areas on the Texas border where cartels and human smugglers have "overrun" private farms and ranches. The division is supported by 200 Texas National Guard members, part of what the governor described as a continuation of $110 million in state-funded operations to contend with the fallout from Mexico's increasingly violent drug war.

"We have taken a more aggressive approach to policing the border, but the bad guys are very flexible; they react to our changing tactics as well," said Perry, during a news conference at Texas Department of Public Safety offices in north Houston. "... As a result, we have landowners all along the border who are finding their farms and ranches overrun by smuggling operations, often armed individuals are on their property."

(http://www.chron.com/disp/story.mpl/metropolitan/6612379.html)

Title: Re: Meltdown
Post by: Coopmv on September 12, 2009, 07:05:40 PM

Quote from: dm on September 12, 2009, 06:59:55 PM
Prosecutors Are Poised to Impanel AIG Grand Jury
Ex-Executive Cassano Is Focus of Probe as Authorities Weigh Criminality vs. Poor Decisions

By AMIR EFRATI and SUSAN PULLIAM

Federal prosecutors, capping an 18-month investigation, are preparing to impanel a grand jury in Brooklyn, N.Y., to consider an indictment of a former senior American International Group Inc. executive, according to people familiar with the matter.

The Justice Department and the Securities and Exchange Commission have been investigating whether Joseph Cassano, whose AIG Financial Products unit nearly brought down the insurer a year ago, committed securities fraud in allegedly misleading investors by overstating the value of mortgage-related contracts and failing to disclose material facts about them to AIG's outside auditor, the people said.

(http://riverdaughter.files.wordpress.com/2009/03/joseph_j_cassano.jpg)

The planned grand jury in the AIG case also could weigh charges against other employees. The possible case against Mr. Cassano and others could rely partly on tape recordings of 2007 phone calls involving AIG Financial Products employees who discussed the value of derivatives trades known as credit-default swaps, these people said.

Spokesmen for the Justice Department's fraud section in Washington, the SEC and the U.S. attorney's office in Brooklyn, which are handling the case, declined to comment.

(http://online.wsj.com/article/SB125262174627001209.html)

I have yet to see anyone who has been convicted for having played a role in this meltdown. A number of people should be living at the big house for sure ...

Title: Re: Meltdown
Post by: BachQ on September 12, 2009, 07:07:54 PM

European Commission sees galloping UK debt crisis @ 180% of GDP ---

Britain's public debt will explode to 180pc of GDP within a decade unless future governments take drastic measures to restore fiscal probity, according to a confidential study by the European Commission. ... What is shocking is that UK risks decoupling from the other major economies in Europe, vaulting past Germany, France and even Italy into a wholly different league. Ireland is in the worst shape, with debt projected to reach 200pc of GDP. ... "The debt snowballs because interest costs alone push up the deficit, so you can race up to 180pc very fast." Attempts to bring the debt down by a spending squeeze can prove counter-productive because lack of growth itself drives the deficit higher. "Once you get there your trapped," Stephen Lewis said. ...

cont'd
(http://www.telegraph.co.uk/finance/financetopics/recession/6169544/European-Commission-sees-galloping-UK-debt-crisis.html)

Quote from: Coopmv on September 12, 2009, 07:05:40 PM
I have yet to see anyone who has been convicted for having played a role in this meltdown. A number of people should be living at the big house for sure ...

I'd also like to see Countrywide's CEO (Mozilo) go to the Pokey.

Title: Re: Meltdown
Post by: BachQ on September 12, 2009, 07:09:00 PM

U.S. junk bond default rate rises to 10.2 pct -- worst since the Great Depression --

The default rate is expected to rise to 13.9 percent by July 2010 and could reach as high as 18 percent if economic conditions are worse than expected, S&P said in a statement. (http://www.reuters.com/article/marketsNews/idUSN039597920090903)

Title: Re: Meltdown
Post by: Coopmv on September 12, 2009, 07:09:34 PM

Quote from: dm on September 12, 2009, 06:55:09 PM
Obama actually had the courage to do this. Amazing. Now let's see how China responds!

Don't you think it is about time the US and EU play some hardball with China? Free trade is good only if it is fair trade ...

Title: Re: Meltdown
Post by: Coopmv on September 12, 2009, 07:18:01 PM

Quote from: dm on September 12, 2009, 07:04:17 PM
Unemployment Rate for College Graduates Highest on Record
(http://www.mybudget360.com/does-a-college-degree-protect-your-career-unemployment-rate-for-college-graduates-highest-on-record/)

U.S. Foreclosure Filings Top 300,000 for Sixth Straight Month

Sept. 10 (Bloomberg) -- Foreclosure filings in the U.S. exceeded 300,000 for the sixth straight month as job losses that boosted the unemployment rate to a 26-year high left many homeowners unable to keep up with their mortgage payments. A total of 358,471 properties received a default or auction notice or were seized last month, according to data provider RealtyTrac Inc. That's up 18 percent from a year earlier, and down 0.5 percent from July, the Irvine, California-based company said in a statement. One in 357 households received a filing.
(http://www.bloomberg.com/apps/news?pid=20602007&sid=a3dnPxhcGAxs)

Texas Gov. Perry deploys 'Ranger Recon' to the border
By JAMES PINKERTON
HOUSTON CHRONICLE
Sept. 10, 2009, 8:33PM
Gov. Rick Perry announced Thursday he's sent a special contingent of Texas Rangers called "Ranger Recon" to hot spots along the Texas-Mexico border to engage drug and human smugglers. Perry said the special teams — drawn from the state's elite 144-officer Texas Ranger division — began operating in early August in remote areas on the Texas border where cartels and human smugglers have "overrun" private farms and ranches. The division is supported by 200 Texas National Guard members, part of what the governor described as a continuation of $110 million in state-funded operations to contend with the fallout from Mexico's increasingly violent drug war.

"We have taken a more aggressive approach to policing the border, but the bad guys are very flexible; they react to our changing tactics as well," said Perry, during a news conference at Texas Department of Public Safety offices in north Houston. "... As a result, we have landowners all along the border who are finding their farms and ranches overrun by smuggling operations, often armed individuals are on their property."

(http://www.chron.com/disp/story.mpl/metropolitan/6612379.html)

The Mexican oil industry is in terrible shape and if the Mexican government continues to keep foreign oil companies out, that industry will collapse. Since 40% of the Mexican social programs are funded by oil revenues, a collapse of its oil industry may usher in a human wave of illegals crossing into the US ... ::)

Title: Re: Meltdown
Post by: Coopmv on September 12, 2009, 07:19:52 PM

Quote from: dm on September 12, 2009, 07:07:54 PM
European Commission sees galloping UK debt crisis @ 180% of GDP ---

Britain's public debt will explode to 180pc of GDP within a decade unless future governments take drastic measures to restore fiscal probity, according to a confidential study by the European Commission. ... What is shocking is that UK risks decoupling from the other major economies in Europe, vaulting past Germany, France and even Italy into a wholly different league. Ireland is in the worst shape, with debt projected to reach 200pc of GDP. ... "The debt snowballs because interest costs alone push up the deficit, so you can race up to 180pc very fast." Attempts to bring the debt down by a spending squeeze can prove counter-productive because lack of growth itself drives the deficit higher. "Once you get there your trapped," Stephen Lewis said. ...

cont'd
(http://www.telegraph.co.uk/finance/financetopics/recession/6169544/European-Commission-sees-galloping-UK-debt-crisis.html)

I'd also like to see Countrywide's CEO (Mozilo) go to the Pokey.

Mozilo should share the cell with Madoff ... ;D

Title: Re: Meltdown
Post by: Coopmv on September 13, 2009, 03:50:23 AM

DM, There is no doubt some Democratic fat cat politicians have been paid off by the financial industry. This US political system is hopeless since it no longer knows how to do the right thing ...

Avoiding the abyss: Success without glory ... Obama has recommended a series of regulatory changes, including new oversight powers for the Fed, increased capital requirements for institutions and other conditions designed to discourage companies from getting too big. But Congress has yet to act and some of Obama's proposals are meeting resistance within his own party.
(http://finance.yahoo.com/news/Avoiding-the-abyss-Success-apf-2331922711.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 13, 2009, 06:25:37 AM

Quote from: dm on September 12, 2009, 07:07:54 PM
European Commission sees galloping UK debt crisis @ 180% of GDP ---

Britain's public debt will explode to 180pc of GDP within a decade unless future governments take drastic measures to restore fiscal probity, according to a confidential study by the European Commission. ... What is shocking is that UK risks decoupling from the other major economies in Europe, vaulting past Germany, France and even Italy into a wholly different league. Ireland is in the worst shape, with debt projected to reach 200pc of GDP. ... "The debt snowballs because interest costs alone push up the deficit, so you can race up to 180pc very fast." Attempts to bring the debt down by a spending squeeze can prove counter-productive because lack of growth itself drives the deficit higher. "Once you get there your trapped," Stephen Lewis said. ...

cont'd
(http://www.telegraph.co.uk/finance/financetopics/recession/6169544/European-Commission-sees-galloping-UK-debt-crisis.html)

Unless Americans and the Brits start saving like the Japanese, the total government deficits of 100+ % of GDP can only be financed by foreigners. Due to the prodigious saving rate of its citizens, Japan barely needs any foreigners to help finance its deficits that top 170% of its GDP ...

Title: Re: Meltdown
Post by: Coopmv on September 13, 2009, 11:27:03 AM

DM. As expected, it looks like it will be business as usual. The lobbyists have won again ...

Risk-taking is back for banks 1 year after crisis
Banks' appetite for risk is rebounding 1 year after crisis; Is the financial system any safer?

The Obama administration has proposed measures to diminish the risk posed by large banks. They include forcing banks to hold more capital to cover losses and trying to increase the transparency of markets in which banks trade the most complex -- and potentially risky -- financial products.

One major component of the Obama plan -- creating an agency to oversee the marketing of financial products to consumers -- will be difficult to pass in Congress. Industry lobbying against it and other proposed financial rules has been fierce.

Lobbyists for hedge funds, the large investment pools that cater to the rich, have been able to fend off proposals that would require them to register with the SEC and regularly disclose their holdings.

And they, too, are profitable again after a dismal 2008. The 1,000 largest hedge funds in Morningstar's database posted average returns of 11.9 percent through July. In 2008, those same funds lost 22 percent on average.

"Have there been changes around the edges?" says Timothy Brog, portfolio manager of New York-based hedge fund Locksmith Capital. "Absolutely. Have their been systematic changes? Absolutely not."

(http://finance.yahoo.com/news/Risktaking-is-back-for-banks-apf-3400806176.html?x=0&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 14, 2009, 06:07:19 PM

DM, As Mark Haines of CNBC called things made in China craps, China really cannot afford to start a trade war with the US. Otherwise, who will be buying the craps China makes ... ;D

US-China tire spat unlikely to trigger trade war
China balks at US tire pressure, but 2 economies need each other; wider trade war unlikely
(http://finance.yahoo.com/news/USChina-tire-spat-unlikely-to-apf-1507633751.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 18, 2009, 06:29:33 PM

DM, If similar story like this continues into next year, the mid-term election year, the Dems will get massacred at the polls come next November ...

42 states lose jobs in August, up from 29 in July; biggest cuts in Texas, Mich., Ga., Ohio
(http://finance.yahoo.com/news/42-states-lose-jobs-in-August-apf-1171568305.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 18, 2009, 06:33:27 PM

DM, The world needs to go back to the gold standard. :o

FDIC chief considers tapping Treasury for funds
FDIC chief Bair may ask Treasury for money to replenish dwindling deposit insurance fund (http://finance.yahoo.com/news/FDIC-chief-considers-tapping-apf-2307518415.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on September 18, 2009, 06:35:25 PM

DM, Looks like the FHA will need a bailout just like Fannie and Freddie ... :o

The Federal Housing Administration is tightening rules for lenders after reporting that its financial cushion will sink below mandatory levels for the first time in its 75-year history.

(http://finance.yahoo.com/news/Govt-home-loan-agency-faces-apf-2908284556.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on September 18, 2009, 06:39:54 PM

The FBI and Department of Justice are conducting a criminal probe into Bank of America Corp.'s purchase of Merrill Lynch last year, the Charlotte Observer reported Friday.

(http://finance.yahoo.com/news/Report-US-investigating-BofAs-apf-1415797737.html?x=0&.v=3)

Title: Re: Meltdown
Post by: Coopmv on September 18, 2009, 06:54:17 PM

There will be no Brady bonds to bail out the Mexican papers like in the early 90's since Uncle Sam itself needs the bailout this time around ...

The Oil Crisis Slamming Mexico (http://www.businessweek.com/magazine/content/09_39/b4148036488158.htm?chan=magazine+channel_new+business)

Title: Re: Meltdown
Post by: BachQ on September 19, 2009, 04:26:30 AM

Quote from: Coopmv on September 18, 2009, 06:35:25 PM
DM, Looks like the FHA will need a bailout just like Fannie and Freddie ... :o

The Federal Housing Administration is tightening rules for lenders after reporting that its financial cushion will sink below mandatory levels for the first time in its 75-year history.

(http://finance.yahoo.com/news/Govt-home-loan-agency-faces-apf-2908284556.html?x=0)

Coop ... yep, over 7.8% of FHA loans at the end of the 2d quarter were 90+ days delinquent or in foreclosure (up from 5.4% a year ago :o). Meanwhile, Reuters (http://www.reuters.com/article/ousivMolt/idUSTRE58G5U320090917) explains that "option" mortgages are poised to explode to a degree worse than the subprime crisis. Nevada is perhaps worst hit by this, and NV's unemployment just jumped to 13.2% ... fueling the downward spiral.

October could be an interesting month ... >:D

Title: Re: Meltdown
Post by: BachQ on September 19, 2009, 04:31:32 AM

Quote from: Telegraph.co.uk on September 12, 2009, 07:07:54 PM
European Commission sees galloping UK debt crisis @ 180% of GDP ---

Britain's public debt will explode to 180pc of GDP within a decade unless future governments take drastic measures to restore fiscal probity, according to a confidential study by the European Commission. ... What is shocking is that UK risks decoupling from the other major economies in Europe, vaulting past Germany, France and even Italy into a wholly different league. Ireland is in the worst shape, with debt projected to reach 200pc of GDP. ... "The debt snowballs because interest costs alone push up the deficit, so you can race up to 180pc very fast." Attempts to bring the debt down by a spending squeeze can prove counter-productive because lack of growth itself drives the deficit higher. "Once you get there your trapped," Stephen Lewis said. ...
(http://www.telegraph.co.uk/finance/financetopics/recession/6169544/European-Commission-sees-galloping-UK-debt-crisis.html)

Bloomberg -- (http://www.bloomberg.com/apps/news?pid=20601068&sid=acd0Qn63RZDY) U.K. Had Record Deficit in August as Tax Revenue Fell

link

Title: Re: Meltdown
Post by: Coopmv on September 19, 2009, 07:16:07 AM

DM, It will be nice to see a financial meltdown in China to see how the communists in the Forbidden City will respond ... ;D

China calls on banks to reduce loan risk (http://finance.yahoo.com/news/China-calls-on-banks-to-apf-3155686816.html?x=0&.v=1)

Title: Re: Meltdown
Post by: Coopmv on September 19, 2009, 07:25:58 AM

Quote from: dm on September 19, 2009, 04:31:32 AM
Bloomberg -- (http://www.bloomberg.com/apps/news?pid=20601068&sid=acd0Qn63RZDY) U.K. Had Record Deficit in August as Tax Revenue Fell

link

In hindsight, the UK made the economic policy mistake of the 20th century to follow the lead of the US - to hollow out the manufacturing sectors (the Brits are probably right behind the Americans in terms of outsourcing of manufacturing) and to overly emphasize finance. Yet its economy is much less diverse than the US and thereby cannot withstand as much shock. This is bad news. Is the Pound gonna to crash from here? ::)

Title: Re: Meltdown
Post by: Coopmv on September 20, 2009, 06:52:17 PM

DM, This movie will be fun to watch ...

Hong Kong goes into speculative overdrive
Commentary: Despite all the warnings, some are betting their savings on IPOs

By Craig Stephen
HONG KONG (MarketWatch) -- Forget somber reflection on the one-year anniversary of the Lehman crash, memories are short in Hong Kong and bear markets shorter still, as the city dives headlong into another speculative frenzy. Initial public offerings are receiving record subscriptions, luxury property prices are in the stratosphere, and the equity market is at a 2009 high.

(http://www.marketwatch.com/story/hong-kong-goes-into-speculative-overdrive-2009-09-20)

Title: Re: Meltdown
Post by: Coopmv on September 22, 2009, 05:10:09 PM

Government: Half of Madoff accounts show no loss
Government says in new filing that half of Madoff's active customers did not lose money (http://finance.yahoo.com/news/Government-Half-of-Madoff-apf-3723971474.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 22, 2009, 05:16:56 PM

Ohio now ranks 7th on the foreclosure list ...

Hard times bring rising foreclosures to rural Ohio (http://www.reuters.com/article/marketsNews/idCNN2127368820090922?rpc=44)

Title: Re: Meltdown
Post by: Coopmv on September 22, 2009, 06:29:44 PM

DM, John Crudele definitely smelled a rat ... ;D

What did Hank know and when did he know it? (http://www.nypost.com/p/news/business/what_did_hank_know_and_when_did_TC8X8ACA151jmmZTjhQmaJ)

Title: Re: Meltdown
Post by: Coopmv on September 23, 2009, 04:55:02 PM

Hugo Chavez is such an idiot ... (http://finance.yahoo.com/news/Venezuela-Well-pay-40-pct-for-apf-2528321804.html?x=0&.v=1)

Title: Re: Meltdown
Post by: Coopmv on September 24, 2009, 06:34:57 PM

The Angolans said NO to the Chinese oil companies (http://www.reuters.com/article/marketsNews/idAFLO7785120090924?rpc=44)

Title: Re: Meltdown
Post by: Coopmv on September 25, 2009, 05:34:35 PM

But what else were they supposed to say. Where are the green shoots?

G-20 leaders declare major progress on economy (http://finance.yahoo.com/news/G20-leaders-declare-major-apf-1092246276.html?x=0&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 25, 2009, 06:00:48 PM

DM, Check this out. Politicians can be bought too easily in the US.

Device approval exposes political pressure on FDA ...
FDA finds bungled approval of knee repair device followed 'extreme' political pressure
(http://finance.yahoo.com/news/Device-approval-exposes-apf-2348043415.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on September 25, 2009, 06:02:00 PM

Disappointing economic reports signal bumpy recovery as government supports winds down
(http://finance.yahoo.com/news/Disappointing-economic-data-apf-1892931756.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on September 25, 2009, 06:17:14 PM

Just when we think there will be no more bank bailouts in the US ... :o

Fresh bailouts for smaller banks being weighed (http://finance.yahoo.com/news/Fresh-bailouts-for-smaller-apf-3635481836.html?x=0)

Title: Re: Meltdown
Post by: BachQ on September 26, 2009, 04:57:26 AM

Coop, relax, the green shoots are just around the corner. :D

Quote from: Coopmv on September 25, 2009, 06:02:00 PM
Disappointing economic reports signal bumpy recovery as government supports winds down
(http://finance.yahoo.com/news/Disappointing-economic-data-apf-1892931756.html?x=0)

Housing Crash to Resume on 7 Million Foreclosures, Up from 1.3M in '05 :o

Sept. 23 (Bloomberg) -- The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said. The "huge shadow inventory," reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said.

(cont'd) (http://www.bloomberg.com/apps/news?pid=20601087&sid=aw6_gqc0EKKg&ref=patrick.net)

Title: Re: Meltdown
Post by: BachQ on September 26, 2009, 05:04:59 AM

Coop, everything will be just fine. :D

Quote from: Coopmv on September 25, 2009, 06:02:00 PM
Disappointing economic reports signal bumpy recovery as government supports winds down
(http://finance.yahoo.com/news/Disappointing-economic-data-apf-1892931756.html?x=0)

U.S. large-loan bank losses triple to $53 billion
Reuters
Fri Sep 25, 2009 6:05am EDT

Classified assets rated 'substandard', 'doubtful', and 'loss,' rose to $447 billion from $163 billion in 2008. The volume of SNCs rated 'doubtful' and 'loss' in 2009 rose almost 14-fold to $110 billion, while non-accrual loans touched $172 billion, up from $22 billion in 2008.

(cont'd)
(http://www.reuters.com/article/newsOne/idUSTRE58O1HR20090925)

US Credit Card Defaults Surge to Record 11.49% in August, Moody's Says

By Peter Eichenbaum

Sept. 23 (Bloomberg) -- U.S. credit-card defaults rose to a record in August and more losses may lie ahead as delinquencies climbed for the first time since March, according to Moody's Investors Service. Write-offs rose to 11.49 percent from 10.52 percent in July, Moody's said today in a report. Loans at least 30 days delinquent rose to 5.8 percent from 5.73 percent. "Early- stage" delinquencies, or loans overdue 30 to 59 days, surged to 1.65 percent, from 1.41 percent, signaling higher losses in coming months. Banks typically write off loans after 180 days.
(cont'd)
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aOUFvgV93LaI)

Canada's (http://ca.news.finance.yahoo.com/s/24092009/3/finance-business-canadians-credit-card-debt-mounts.html) credit card charge-off rate soared 60% to 4.8% in the second quarter of 2009, according to Moody's Canadian Credit Card Index.

Title: Re: Meltdown
Post by: BachQ on September 26, 2009, 05:34:54 AM

Everything You Ever Wanted To Know About The Coming China Collapse...

* There's more debt in China than common figures suggest.
* Capital-expenditure driven growth is likely to collapse soon.
* The China urbanization driver is far weaker than proclaimed.
* GDP is full of wasteful spending.

link (http://www.businessinsider.com/the-full-story-on-why-china-is-a-bubble-2009-9)

Title: Re: Meltdown
Post by: Coopmv on September 26, 2009, 03:42:18 PM

Quote from: dm on September 26, 2009, 04:57:26 AM
Coop, relax, the green shoots are just around the corner. :D

Housing Crash to Resume on 7 Million Foreclosures, Up from 1.3M in '05 :o

Sept. 23 (Bloomberg) -- The crash in U.S. home prices will probably resume because about 7 million properties that are likely to be seized by lenders have yet to hit the market, Amherst Securities Group LP analysts said. The "huge shadow inventory," reflecting mortgages already being foreclosed upon or now delinquent and likely to be, compares with 1.27 million in 2005, the analysts led by Laurie Goodman wrote today in a report. Assuming no other homes are on the market, it would take 1.35 years to sell the properties based on the current pace of existing-home sales, they said.

(cont'd)
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aw6_gqc0EKKg&ref=patrick.net)

DM, But those idiot home builders want to get more permits to build more homes. What is the point of filling the bucket when the bucket is leaking badly. It makes no freaking sense. The stupidity in the US is astounding ...

Title: Re: Meltdown
Post by: Coopmv on September 26, 2009, 03:44:40 PM

Quote from: dm on September 26, 2009, 05:04:59 AM
Coop, everything will be just fine. :D

U.S. large-loan bank losses triple to $53 billion
Reuters
Fri Sep 25, 2009 6:05am EDT

Classified assets rated 'substandard', 'doubtful', and 'loss,' rose to $447 billion from $163 billion in 2008. The volume of SNCs rated 'doubtful' and 'loss' in 2009 rose almost 14-fold to $110 billion, while non-accrual loans touched $172 billion, up from $22 billion in 2008.

(cont'd)
(http://www.reuters.com/article/newsOne/idUSTRE58O1HR20090925)

US Credit Card Defaults Surge to Record 11.49% in August, Moody's Says

By Peter Eichenbaum

Sept. 23 (Bloomberg) -- U.S. credit-card defaults rose to a record in August and more losses may lie ahead as delinquencies climbed for the first time since March, according to Moody's Investors Service. Write-offs rose to 11.49 percent from 10.52 percent in July, Moody's said today in a report. Loans at least 30 days delinquent rose to 5.8 percent from 5.73 percent. "Early- stage" delinquencies, or loans overdue 30 to 59 days, surged to 1.65 percent, from 1.41 percent, signaling higher losses in coming months. Banks typically write off loans after 180 days.
(cont'd)
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aOUFvgV93LaI)

Canada's (http://ca.news.finance.yahoo.com/s/24092009/3/finance-business-canadians-credit-card-debt-mounts.html) credit card charge-off rate soared 60% to 4.8% in the second quarter of 2009, according to Moody's Canadian Credit Card Index.

BTW, those ABS (assets-backed securities) based on credit card receivables were probably all rated AAA. More toxic papers ... :D

Title: Re: Meltdown
Post by: Coopmv on September 26, 2009, 04:21:07 PM

Quote from: dm on September 26, 2009, 05:34:54 AM
Everything You Ever Wanted To Know About The Coming China Collapse...

* There's more debt in China than common figures suggest.
* Capital-expenditure driven growth is likely to collapse soon.
* The China urbanization driver is far weaker than proclaimed.
* GDP is full of wasteful spending.

link
(http://www.businessinsider.com/the-full-story-on-why-china-is-a-bubble-2009-9)

DM, Thanks for the link. That was an excellent analysis. I have always been skeptical about this China miracle. My sense is, this worldwide meltdown may not be over yet. Should there be a meltdown in China and the communists need cash fast and they unload the US treasury bonds left and right, financial markets worldwide will fall into an abyss.

Title: Re: Meltdown
Post by: Coopmv on September 26, 2009, 04:57:10 PM

It is drilling and more drilling. Now that peak oil was reached a few years ago ...

Arctic Oil Tempts Norway to Seek Drilling at 'Gates of Hell'
(http://www.bloomberg.com/apps/news?pid=20601109&sid=ajnhJCcmv8pU)

Title: Re: Meltdown
Post by: Coopmv on September 27, 2009, 06:18:21 AM

Dm, I like chicken but will never consume any chicken from China. People have to be desperate to consume the chicken from China. Do you still remember thousands of pets in the US died two years ago due to the melamine laden wheat gluten, which Chinese companies used to make the gluten to appear to contain more protein than it actually did. This tiff started because of the tire tariff and the US refused to allow Chinese chicken to be imported.

China launches probe into imports of US chicken
China launches investigation into imports of US chicken on dumping, subsidy complaints (http://finance.yahoo.com/news/China-launches-probe-into-apf-2844241415.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on September 29, 2009, 04:33:48 PM

DM, A good friend of mine sent me this Bloomberg article. It cannot describe the middle-class experience in the US over the past twenty years any better. With the relentless outsourcing of jobs from the US - first the manufacturing, then the computer and other R&D jobs, the rapid decline in the living standard for the middle-class is all but guaranteed. I think the US is unique in this experience among the western industrialized nation.

Credit 'Neverland' Vanishes as U.S. Dreams of Real Jobs: Books
2009-09-28 23:01:00.2 GMT

Review by James Pressley
Sept. 29 (Bloomberg) -- Peter S. Goodman is a reporter with
a valuable thesis, reams of anecdotes and a habit of being in
the right place at the right time.
He puts these assets to work in a persuasive book on an
all-too-familiar topic, "Past Due: The End of Easy Money and
the Renewal of the American Economy." His argument: Americans
became profligate borrowers in recent years partly because the
economy hasn't created enough jobs capable of financing a
middle-class lifestyle.
The book opens on Dorothy Thomas, a single mother in
northern California who "lived strategically beyond her means"
for two decades, mostly to get her daughters decent educations.
The bill finally came due in early 2008, Goodman writes.
Thomas lost her car, so she couldn't get to work. She lost
her job, so she couldn't pay her rent. By year end, she was
bunking down in a homeless shelter. Her descent into disaster
was repeated across the land, as Goodman shows by profiling
Americans from Boston to Portland, Oregon.
"Millions of people have been living beyond their incomes
for the simple reason that those incomes have been outstripped
by the cost of middle-class American life," he writes.
Extravagance certainly helped stoke the crisis, Goodman
says. Americans didn't really need that special trip to Belize
or those extra flat-screen TVs in their bedrooms.

Pernicious Confluence

Yet Goodman makes the case that many Americans dug
themselves into a hole through a pernicious confluence of other
factors -- notably the failure of real compensation for the rank
and file to keep pace with productivity gains. Easy credit
plugged the gap, he says.
"For many years, the economy has existed in a state of
Neverland akin to that depicted in J.M. Barrie's classic tale
'Peter Pan'; Americans have operated as if we can fly, borrowing
increasingly enormous sums of money while making believe it need
never be paid back," he writes.
It didn't help that Federal Reserve Chairman Alan Greenspan
kept sprinkling the economy with the equivalent of fairy dust --
low interest rates and assurances that "the magic of market
forces obviated the need for government regulation," Goodman
says. When the magic wore off, Americans were buried in consumer
credit -- more than $2.6 trillion of it by 2008, he says.
Goodman is well equipped to explain how we reached this
juncture, having covered three of the biggest financial stories
of the past decade, first for the Washington Post and then for
the New York Times.

'Limitless Future'

In 1999, he began reporting on the snap, crackle and pop of
the telecommunications and dot-com craze, which mortgaged the
future to build "an abundant present," he writes. "It wasn't
supposed to be a problem because the future was inestimably
enormous."
Moving to Shanghai in 2002, he got the uncomfortable
feeling that "the New Economy hadn't really died, but merely
shifted venues across the Pacific, gaining new props with which
to spin tales of another limitless future."
Returning to the U.S., he watched the housing bubble swell
as Americans turned their homes into cash machines, allowing
them to buy ever more Chinese goods.
Goodman is particularly good at explaining why China has
acquired so much U.S. debt. Yes, the purchases have allowed
American consumers to keep buying Chinese goods.
Yet they also have kept some Chinese savings away from
corrupt real-estate deals that have sparked violent protests,
Goodman says. Working together, developers and local officials
have seized rice paddies and wheat fields and turned them into
fairways, factories and office parks with loans from state
banks, he explains.
So Chinese authorities have found a way to keep some of the
money collected from exports beyond the reach of crooked
operators -- by investing it abroad, he says.
"In essence, the party delivered China's savings to the
United States to keep it free of the depredations of China
itself, using the U.S. Treasury as a safe deposit box," Goodman
says.

Building Windmills

How can Americans renew the economy? Goodman says we need
to get back to honest work and invest in productive enterprises,
such as biotechnology and renewable energy. To show what can be
done, he takes us to Newton, Iowa, which was hammered by the
loss of its main employer, Maytag Corp. The town has since
gained back jobs by making windmill components.
Though it's unclear how many jobs can be created this way,
it's hard to argue with Goodman's conclusion: "Rather than
bingeing on finance borrowed against a supposedly fantastic
future, we must figure out how to generate enough income to live
on -- as individual households and as a society."

"Past Due" is published by Times Books in the U.S. (336
pages, $25). To buy this book in North America, click here.

(James Pressley writes for Bloomberg News. The opinions
expressed are his own.)

Title: Re: Meltdown
Post by: BachQ on October 01, 2009, 03:19:53 PM

Coop, any doubts about whether "Cash for Clunkers" was a TOTAL, ABSOLUTE FAILURE have now been laid to rest!

Quote from: Coopmv on July 30, 2009, 04:21:20 PM
The stupidity of the American politicians is beyond belief. Under this program, someone who jettisons an SUV that gets 12 mpg and buys a new SUV that gets 15 mpg will be qualified to receive up to $4,500 in cash. How does this program encourage meaningful fuel economy improvement? ???

AP sources: Govt to suspend 'cash for clunkers'

New York Times: Auto sales plunge with expiration of Clunkers program -- Chrysler down 42.1% & GM down 45%

By NICK BUNKLEY
Published: October 1, 2009

DETROIT — After two frenzied months during the government's cash-for-clunkers program, new-vehicle sales fell in September back to the dismal levels seen earlier this year, automakers said Thursday.

(http://www.cnycentral.com/uploadedImages/wstm/News/Stories/CashForClunkers.jpg)

link
(http://www.nytimes.com/2009/10/02/business/02auto.html?_r=1&ref=business)

Title: Re: Meltdown
Post by: BachQ on October 01, 2009, 03:21:25 PM

Euro zone jobless rate at new 10-year high of 9.6%

link (http://finance.yahoo.com/news/Euro-zone-jobless-rate-at-new-apf-4173185686.html?x=0&.v=4)

Title: Re: Meltdown
Post by: BachQ on October 01, 2009, 03:22:32 PM

Bloomberg: Recession Rising Like Phoenix With Area Delinquencies Surging

Delinquencies in the Phoenix area on loans backed by office, industrial, retail and apartment properties have risen more than five-fold since March, according to data compiled by Bloomberg. ... Worse, more real estate is at risk of defaulting throughout the U.S. Investors in commercial mortgage-backed securities are holding assets with a delinquent unpaid balance of $28.9 billion, up more than five fold since June 2008, according to a report issued by the Congressional Oversight Panel.

(cont'd) --- LINK ---
(http://www.bloomberg.com/apps/news?pid=20601109&sid=ak__6D.HTBQM)

Title: Re: Meltdown
Post by: Coopmv on October 01, 2009, 06:23:00 PM

Quote from: dm on October 01, 2009, 03:22:32 PM
Bloomberg: Recession Rising Like Phoenix With Area Delinquencies Surging

Delinquencies in the Phoenix area on loans backed by office, industrial, retail and apartment properties have risen more than five-fold since March, according to data compiled by Bloomberg. ... Worse, more real estate is at risk of defaulting throughout the U.S. Investors in commercial mortgage-backed securities are holding assets with a delinquent unpaid balance of $28.9 billion, up more than five fold since June 2008, according to a report issued by the Congressional Oversight Panel.

(cont'd) --- LINK ---

(http://www.bloomberg.com/apps/news?pid=20601109&sid=ak__6D.HTBQM)

DM, The US sunbelt is toast ...

Title: Re: Meltdown
Post by: Coopmv on October 01, 2009, 06:27:00 PM

Yeah, show me the green shoots and the V-shaped recovery! It looks more like an L-shaped recovery, which may lead to a double dip ...

Stocks tumble on disappointing reports on manufacturing, unemployment; Dow slides 203 points (http://finance.yahoo.com/news/Manufacturing-employment-apf-2632850236.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 01, 2009, 06:28:34 PM

Quote from: dm on October 01, 2009, 03:21:25 PM
Euro zone jobless rate at new 10-year high of 9.6%

link
(http://finance.yahoo.com/news/Euro-zone-jobless-rate-at-new-apf-4173185686.html?x=0&.v=4)

Most of the former eastern bloc countries must be having 20+% unemployment ... ???

Title: Re: Meltdown
Post by: BachQ on October 02, 2009, 02:27:01 PM

Quote from: Coopmv on October 01, 2009, 06:27:00 PM
Yeah, show me the green shoots and the V-shaped recovery! It looks more like an L-shaped recovery, which may lead to a double dip ...

Stocks tumble on disappointing reports on manufacturing, unemployment; Dow slides 203 points (http://finance.yahoo.com/news/Manufacturing-employment-apf-2632850236.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Coop, perhaps it's time for Obama & Pelosi to unveil their 2d stimulus package! :D :D :D

Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601087&sid=a9pGHoU62vaU) "U.S. job losses accelerated last month and the unemployment rate climbed to the highest level since 1983"

(http://4.bp.blogspot.com/_pMscxxELHEg/SsXzzDSUSqI/AAAAAAAAGfM/PWX-2daRZ0w/s1600/EmploymentJobLossesRecessions.jpg)
"The current recession is now the worst recession since WWII in percentage terms"
(http://www.calculatedriskblog.com/2009/10/employment-report-263k-jobs-lost-98.html)

US Jobless Rate Rises to 9.8%

By JACK HEALY
Published: October 2, 2009

The American economy lost 263,000 jobs in September — far more than expected — and the unemployment rate rose to 9.8 percent, the government reported on Friday, dimming prospects of any meaningful job growth by the end of the year. ... Overall, the report offered little good news for the 15.1 million unemployed people in the United States. The number of hours worked stagnated. Overtime hours slipped in many industries. And temporary help companies — typically, among the first to rebound after a recession — shed 1,700 jobs.

Indeed, while many businesses are making money again and seeing new orders trickle in, most are not ready to hire back the workers they laid off, even part-time.To economists, that suggests that unemployment could remain at historically high levels through next year, if not longer. "It's a little bleak," said Marissa Di Natale, senior economist at Moody's Economy.com. "We're not going to see job growth until the second half of next year. And even when it does start to grow, it's going to be slow."The economy has been bleeding jobs every month, without interruption, for nearly two years. More than 15 million people in the United States are now unemployed, and more are working part-time jobs for less pay, or have given up looking for work altogether.

link
(http://www.nytimes.com/2009/10/03/business/economy/03jobs.html)

Title: Re: Meltdown
Post by: Coopmv on October 02, 2009, 06:08:46 PM

DM, Check out this article. It is a very interesting read ...

NJ, Va. could kill ObamaCare (http://www.nypost.com/p/news/opinion/opedcolumnists/corzine_the_canary_cU9GlOj1KuhPCOqygtvmTM)

Title: Re: Meltdown
Post by: BachQ on October 03, 2009, 05:59:05 AM

Quote from: Coopmv on October 02, 2009, 06:08:46 PM
DM, Check out this article. It is a very interesting read ...

NJ, Va. could kill ObamaCare (http://www.nypost.com/p/news/opinion/opedcolumnists/corzine_the_canary_cU9GlOj1KuhPCOqygtvmTM)

Democrats are going _DOWN ... :D

Title: Re: Meltdown
Post by: BachQ on October 03, 2009, 06:03:31 AM

Quote from: Coopmv on July 16, 2009, 04:49:15 PM
So these are the steps China has been taking in order to achieve its objective of becoming the second nation in the world after the US to put men on the moon come 2017 ...

US gets conviction in 1st economic espionage trial
Man convicted in 1st US economic espionage trial; a key step to guarding secrets, experts say

By Amy Taxin, Associated Press Writer
On Thursday July 16, 2009, 8:14 pm EDT

SANTA ANA, Calif. (AP) -- A Chinese-born engineer's conviction in the United States' first economic espionage trial could be an important step to stop the flow of critical trade secrets to China, experts say.

A federal judge on Thursday found former Boeing Co. engineer Dongfan "Greg" Chung guilty of six counts of economic espionage and other charges for hoarding 300,000 pages of sensitive documents in his home, including information about the U.S. space shuttle and a booster rocket.

"The trust Boeing placed in Mr. Chung to safeguard its proprietary and trade secret information obviously meant very little to Mr. Chung," U.S. District Judge Cormac J. Carney wrote in his 31-page ruling. "He cast it aside to serve the PRC (People's Republic of China), which he proudly proclaimed as his `motherland.'"

Federal prosecutors accused the 73-year-old stress analyst of using his 30-year career at Boeing and Rockwell International to steal the documents. They said investigators found papers stacked throughout Chung's house that included sensitive information about a fueling system for a booster rocket -- documents that employees were ordered to lock away at the end of each day. They said Boeing invested $50 million in the technology over a five-year period.

Rick Fisher, a senior fellow with the International Assessment and Strategy Center, said the conviction -- and potentially lengthy prison sentence -- sends a message that U.S. officials won't let Beijing try to tap into the Chinese diaspora to procure military and security secrets.

"The Chinese communist government is seeking to divide the loyalties of Chinese-Americans," Fisher said. "By defending ourselves in this way, asserting our sovereignty, we are making clear to all those who would be turned by nationalist appeals from China's communist government that there is price to pay."

The judge convicted Chung of six counts of economic espionage, one count of acting as a foreign agent, one count of conspiracy and one count of lying to federal agents. He was acquitted of obstruction of justice.

Chung was taken into federal custody after the verdict. He could face more than 90 years in prison at his sentencing scheduled for Nov. 9, federal prosecutor Ivy Wang said.

"I hope that one of the messages that goes out is if someone is going to steal proprietary information and steal that information for the benefit of another country, they are going to be charged in this country and face very serious punishment for doing so," Wang said after the verdict.

Chung opted for a non-jury trial that ended June 24. During 10 days of proceedings, defense attorneys said Chung was a "pack rat" who hoarded documents at his house, but they insisted he was not a spy.

During the trial, Chung's lawyers argued that he may have violated Boeing policy by bringing the papers home, but he didn't break any laws by doing so, and the U.S. government couldn't prove he had given secret information to China.

In his ruling, the judge wrote that the notion that Chung was merely a pack rat was "ludicrous" and said the evidence showed that he had been passing information to Chinese officials as a spy.

Defense attorney Thomas Bienert said he planned to appeal.

"A big feature (of this case) is not about what China wanted Mr. Chung to do, but about what Mr. Chung was willing to do," Bienert said outside the courtroom. "There is no evidence that China used or benefited from anything in this case."

Chung had been free on $250,000 bail before the verdict. His attorneys asked the judge to let him remain with his family in Orange until sentencing, but the government said a man facing such a long sentence with close ties to China could easily flee.

The Economic Espionage Act was passed in 1996 to help the government crack down on the theft of information from private companies that contract with the government to develop U.S. space and military technologies. The legislation became a priority in the mid-1990s when the U.S. realized China and other countries were targeting private businesses as part of their spy strategy.

Since then, six economic espionage cases have settled before trial. In some of the cases, defendants were sentenced to just a year or two in prison. Another is set for trial in U.S. District Court in San Jose this year.

Steven Fink, president of Lexicon Communications Corp., a corporate crisis management firm, said prosecutors previously have tried cases under a different part of the 1996 act involving theft of trade secrets. He questioned why it took so long for the government to try someone on the economic espionage charges levied in the Chung case, saying he believes officials were too worried about ruffling diplomatic feathers.

"In the past there had been times when diplomacy has trumped national security," he said. "This (verdict) is a spit in the ocean unless it is a sign that the government is going to get aggressive in prosecuting these cases, because there are a lot of them out there."

A message seeking comment was left for officials at the Chinese consulate in Los Angeles.

The government believes Chung began spying for the Chinese in the late 1970s, a few years after he became a naturalized U.S. citizen and was hired by Rockwell International.

Chung worked for Rockwell until it was bought by Boeing in 1996. He stayed with the company until he was laid off in 2002 but brought back a year later as a consultant. He was fired when the FBI began its investigation in 2006.

Dan Beck, a spokesman for Chicago-based Boeing, welcomed the ruling and said the company was committed to working with the government to help prevent the theft and misuse of data.

Prosecutors said they discovered Chung's activities while investigating another suspected Chinese spy, Chi Mak. Mak was convicted in 2007 of conspiracy to export U.S. defense technology to China and sentenced to more than 24 years in prison.

Mak was not charged under the Economic Espionage Act.

Coop, let this serve as a wakeup call to all companies with highly sensitive trade secrets that, during this era of "economic warfare," a person's loyalties to his home country will often trump his loyalties to his company (and to his country of current citizenship). As such, defense contractors and other high-tech companies must take elaborate and overly-cautious steps to guard trade secrets ... and in this case, Dongfan Chung was allowed to accumulate thousands of sensitive documents in his library -- clearly a sign that Boeing was far too lax with its protocols.

Title: Re: Meltdown
Post by: Coopmv on October 03, 2009, 07:05:09 AM

Quote from: dm on October 03, 2009, 06:03:31 AM
Coop, let this serve as a wakeup call to all companies with highly sensitive trade secrets that, during this era of "economic warfare," a person's loyalties to his home country will often trump his loyalties to his company (and to his country of current citizenship). As such, defense contractors and other high-tech companies must take elaborate and overly-cautious steps to guard trade secrets ... and in this case, Dongfan Chung was allowed to accumulate thousands of sensitive documents in his library -- clearly a sign that Boeing was far too lax with its protocols.

DM, The Chinese communists are pulling out all the stops to pilfer technologies that can bring advantages to them. It matters little where those technologies come from. Their spy network has members in the EU countries and possibly in Switzerland in addition to having as many as 3000 of them in the US alone. It is terrible to see the fruits of years of research and tens and often hundreds of millions of research dollars get stolen ...

Title: Re: Meltdown
Post by: BachQ on October 03, 2009, 07:20:43 AM

Coop, one must wonder how much longer this "War on Terror" will continue, and at what cost? Some commentators estimate a price tag exceeding $3 Trillion (or $5T including "social costs") ... and several hundred thousand (500,000?) US troops ... I wonder if this is a bottomless pit, or if "victory" is possible at some distant point in the future.

U.S. commander warns of "failure" in Afghanistan

WASHINGTON/KABUL (Reuters) - The top U.S. and NATO commander in Afghanistan says in a confidential assessment of the war that without additional forces the mission "will likely result in failure." A request for more troops faces resistance from within U.S. President Barack Obama's Democratic Party, which controls Congress, and opinion polls show Americans are turning against the nearly eight-year-old war.

Army General Stanley McChrystal wrote: "Failure to gain the initiative and reverse insurgent momentum in the near-term (next 12 months) -- while Afghan security capacity matures -- risks an outcome where defeating the insurgency is no longer possible." ... McChrystal's request [may] include roughly 30,000 new combat troops and trainers ... [and he] paints a grim picture of how the war is progressing and writes "the overall situation is deteriorating." He calls for a "dramatically" and even "uncomfortably" different approach to fighting a war which requires a cultural change in the way the military fights. "The objective is the will of the people, our conventional warfare culture is part of the problem, the Afghans must ultimately defeat the insurgency." The war in Afghanistan is now at its deadliest in eight years. ... The number of U.S. troops in Afghanistan has almost doubled this year from 32,000 to 62,000 and is expected to grow by another 6,000 by the year's end. ...

link

(http://newsimg.bbc.co.uk/media/images/46413000/gif/_46413801_afghan_poll_226_1.gif)

(http://www.reuters.com/article/newsOne/idUSTRE58K0GI20090921?pageNumber=2&virtualBrandChannel=0&sp=true)

Christian Science Monitor: Afghanistan will cost US more than Iraq
Funding for war in Afghanistan will eclipse Iraq for the first time in next year's budget.

By David R. Francis | Staff Writer/ September 15, 2009 edition

For the first time, the war in Afghanistan in the next budget year will cost Americans more than the war in Iraq. By the end of the next fiscal year, which starts Oct. 1, the total military budget costs for both wars will have exceeded $1 trillion. That's more than the cost of the Vietnam War, adjusting for inflation, or any other US war except World War II ($3.2 trillion in 2007 dollars).

(http://features.csmonitor.com/economyrebuild/2009/09/15/economic-scene-afghanistan-will-cost-us-more-than-iraq/)

QuoteIf one looks beyond immediate war costs, the price tag escalates dramatically. Factoring in outlays for such things as veterans' health and other benefits, the replenishment of military hardware worn out or destroyed by war, a higher price for oil, and the interest on debt incurred by the war, the total cost of the two wars will be "significantly more" than $3 trillion, says Professor Bilmes. Costs and utilization of healthcare and other veterans' benefits are running about 30 percent higher than she and coauthor Joseph Stiglitz, a Columbia University Nobel Prize economist, estimated in their 2008 New York Times bestseller, "The Three Trillion Dollar War." Adding in some social costs (such as families caring for the disabled and a diminished labor force), the two economists put a "moderate-realistic" price tag on the two wars of $5 trillion.

link

(http://features.csmonitor.com/economyrebuild/2009/09/15/economic-scene-afghanistan-will-cost-us-more-than-iraq/)

Classified McChrystal Report: 500,000 Troops Will Be Required Over Five Years in Afghanistan

Read more here
(http://www.huffingtonpost.com/tom-andrews/classified-mcchrystal-rep_b_298528.html)

Title: Re: Meltdown
Post by: Coopmv on October 03, 2009, 07:31:58 AM

The Chinese will be owning a large chunk of Austria ... ???

China's XAC is majority owner of Austria's FACC (http://finance.yahoo.com/news/Chinas-XAC-is-majority-owner-apf-606057616.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on October 03, 2009, 07:37:05 AM

Quote from: dm on October 03, 2009, 07:20:43 AM
Coop, one must wonder how much longer this "War on Terror" will continue, and at what cost? Some commentators estimate a price tag exceeding $3 Trillion (or $5T including "social costs") ... and several hundred thousand (500,000?) US troops ... I wonder if this is a bottomless pit, or if "victory" is possible at some distant point in the future.

U.S. commander warns of "failure" in Afghanistan

WASHINGTON/KABUL (Reuters) - The top U.S. and NATO commander in Afghanistan says in a confidential assessment of the war that without additional forces the mission "will likely result in failure." A request for more troops faces resistance from within U.S. President Barack Obama's Democratic Party, which controls Congress, and opinion polls show Americans are turning against the nearly eight-year-old war.

Army General Stanley McChrystal wrote: "Failure to gain the initiative and reverse insurgent momentum in the near-term (next 12 months) -- while Afghan security capacity matures -- risks an outcome where defeating the insurgency is no longer possible." ... McChrystal's request [may] include roughly 30,000 new combat troops and trainers ... [and he] paints a grim picture of how the war is progressing and writes "the overall situation is deteriorating." He calls for a "dramatically" and even "uncomfortably" different approach to fighting a war which requires a cultural change in the way the military fights. "The objective is the will of the people, our conventional warfare culture is part of the problem, the Afghans must ultimately defeat the insurgency." The war in Afghanistan is now at its deadliest in eight years. ... The number of U.S. troops in Afghanistan has almost doubled this year from 32,000 to 62,000 and is expected to grow by another 6,000 by the year's end. ...

link

(http://newsimg.bbc.co.uk/media/images/46413000/gif/_46413801_afghan_poll_226_1.gif)

(http://www.reuters.com/article/newsOne/idUSTRE58K0GI20090921?pageNumber=2&virtualBrandChannel=0&sp=true)

Christian Science Monitor: Afghanistan will cost US more than Iraq
Funding for war in Afghanistan will eclipse Iraq for the first time in next year's budget.

By David R. Francis | Staff Writer/ September 15, 2009 edition

For the first time, the war in Afghanistan in the next budget year will cost Americans more than the war in Iraq. By the end of the next fiscal year, which starts Oct. 1, the total military budget costs for both wars will have exceeded $1 trillion. That's more than the cost of the Vietnam War, adjusting for inflation, or any other US war except World War II ($3.2 trillion in 2007 dollars).

[url=http://features.csmonitor.com/economyrebuild/2009/09/15/economic-scene-afghanistan-will-cost-us-more-than-iraq/]link

(http://features.csmonitor.com/economyrebuild/2009/09/15/economic-scene-afghanistan-will-cost-us-more-than-iraq/)

Classified McChrystal Report: 500,000 Troops Will Be Required Over Five Years in Afghanistan

Read more here

(http://www.huffingtonpost.com/tom-andrews/classified-mcchrystal-rep_b_298528.html)

This nation-building crap in Afghanistan has got to stop - the US is acting more and more like the Roman Empire before its epic decline. The Soviet Unions had their pants beaten off in Afghanistan, why is the US so stupid as to think we can win over there? $3T price tag is too much to pay when the US gets almost nothing in return. It is not as if people are paying under $1 for a gallon of gas now ...

Title: Re: Meltdown
Post by: BachQ on October 03, 2009, 07:39:25 AM

Coop, the FDIC is utterly helpless and asleep at the wheel.

Banks With 20% Unpaid Loans at 18-Year High Amid Recovery Doubt
For banks with 20 percent of loans overdue, "either they've got a massive amount of capital, or the FDIC just hasn't gotten around to them," said Jeff Davis, an analyst with FTN Equity Capital Markets in Nashville. Lack of staff and money are slowing FDIC's shutdowns, he said. At least 17 of the 26 banks have been hit with civil penalties or enforcement orders that demand improved management and more capital, according to data compiled by Bloomberg. Failure to comply can lead to seizure. The number of distressed banks is larger, with the FDIC counting 416 companies on its confidential list of "problem" lenders at mid-year.

link
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aXZinRhF5tlA)

FDIC Insuring 8,200 Banks with $9 Trillion in Deposits and Zero in the Deposit Insurance Fund. Calling Banks to Prepay Assessment of $45 Billion. --- MyBudget360 --- (http://www.mybudget360.com/fdic-insuring-8200-banks-with-9-trillion-in-deposits-and-zero-in-the-deposit-insurance-fund-calling-banks-to-prepay-assessment-of-45-billion/)

Title: Re: Meltdown
Post by: BachQ on October 03, 2009, 07:43:10 AM

Wash. Post -- US foreclosure rate rises 17%
(http://www.washingtonpost.com/wpdyn/content/article/2009/09/30/AR2009093001696.html?hpid=topnews)

Bloomberg: -- U.S. consumer bankruptcies rose past 1 million through the first nine months of the year, the highest since 2005 changes to bankruptcy laws. (http://www.bloomberg.com/apps/news?pid=20601103&sid=aCE00r4wATqU)

Reuters -- (http://www.reuters.com/article/Restructuring09/idUSTRE5905ZO20091001) According to Rob McMahon, head of General Electric Corp's Restructuring Finance Group, an "avalanche" of large U.S. businesses will need to be restructured over the next 12 to18 months ... "The only thing keeping more companies from filing right now is all the convenant-lite deals," said McMahon, whose unit is one of the leading providers of debtor-in-possession or DIP loans to bankrupt companies, "We're still heading for an avalanche of deals over the next 12 to 18 months that will keep the restructuring world quite busy. ... There is not a scarcity of money available for DIP lending. There is a scarcity of companies with adequate collateral."

Title: Re: Meltdown
Post by: Coopmv on October 03, 2009, 07:49:56 AM

Quote from: dm on October 03, 2009, 07:39:25 AM
Coop, the FDIC is utterly helpless and asleep at the wheel.

Banks With 20% Unpaid Loans at 18-Year High Amid Recovery Doubt
For banks with 20 percent of loans overdue, "either they've got a massive amount of capital, or the FDIC just hasn't gotten around to them," said Jeff Davis, an analyst with FTN Equity Capital Markets in Nashville. Lack of staff and money are slowing FDIC's shutdowns, he said. At least 17 of the 26 banks have been hit with civil penalties or enforcement orders that demand improved management and more capital, according to data compiled by Bloomberg. Failure to comply can lead to seizure. The number of distressed banks is larger, with the FDIC counting 416 companies on its confidential list of "problem" lenders at mid-year.

link
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aXZinRhF5tlA)

FDIC Insuring 8,200 Banks with $9 Trillion in Deposits and Zero in the Deposit Insurance Fund. Calling Banks to Prepay Assessment of $45 Billion. --- MyBudget360 --- (http://www.mybudget360.com/fdic-insuring-8200-banks-with-9-trillion-in-deposits-and-zero-in-the-deposit-insurance-fund-calling-banks-to-prepay-assessment-of-45-billion/)

Unfortunately, the man who played no small role in creating this mess, the creator of two bubbles are now collecting his pension, traveling the world and giving speeches for big bucks ... >:(

Title: Re: Meltdown
Post by: snyprrr on October 03, 2009, 11:34:26 AM

And Israel is frothing at the mouth to jump start the "will it ever come?" War With Iran. Israel seems to looove to use goy soldiers to do their dirty work. Hmmm, troops in Iraq...troops in Afghanistan... hmmm, what's in the middle? even MORE OIL!!! Yeehaw!!!

Look for a (another) false flag terror op to go down. If nukes go off in the US, they will blame the muslims/Iran, but look for the mossad agents fleeing the scene.

And I was wondering about all those poppies. Is it really herion addicts who are consuming all the poppies, or is it BigPharma who need them for all their painkillers that the whole world seems hooked on these days? BigPharma seems to make more sense than herion addicts, the point being that SOMEONE wants YOU doped up so,...mmm maybe you won't bother with all that wool they've been trying to pull over your eyes lately.

Title: Re: Meltdown
Post by: Lethevich on October 03, 2009, 12:15:49 PM

Oh man, I lol'd.

Title: Re: Meltdown
Post by: Coopmv on October 03, 2009, 12:21:13 PM

Quote from: dm on October 03, 2009, 07:39:25 AM
Coop, the FDIC is utterly helpless and asleep at the wheel.

Banks With 20% Unpaid Loans at 18-Year High Amid Recovery Doubt
For banks with 20 percent of loans overdue, "either they've got a massive amount of capital, or the FDIC just hasn't gotten around to them," said Jeff Davis, an analyst with FTN Equity Capital Markets in Nashville. Lack of staff and money are slowing FDIC's shutdowns, he said. At least 17 of the 26 banks have been hit with civil penalties or enforcement orders that demand improved management and more capital, according to data compiled by Bloomberg. Failure to comply can lead to seizure. The number of distressed banks is larger, with the FDIC counting 416 companies on its confidential list of "problem" lenders at mid-year.

link
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aXZinRhF5tlA)

FDIC Insuring 8,200 Banks with $9 Trillion in Deposits and Zero in the Deposit Insurance Fund. Calling Banks to Prepay Assessment of $45 Billion. --- MyBudget360 --- (http://www.mybudget360.com/fdic-insuring-8200-banks-with-9-trillion-in-deposits-and-zero-in-the-deposit-insurance-fund-calling-banks-to-prepay-assessment-of-45-billion/)

I had hope earlier this year that the politicians would bring back the Glass-Steagall Acts. The abolition of that law in the name of deregulation was what got the US into such mess. But it looks like the lobbyists of the big banks have won again. The Obama Administration has been all thunder and no rain ... >:(

Title: Re: Meltdown
Post by: BachQ on October 03, 2009, 12:29:28 PM

Quote from: snyprrr on October 03, 2009, 11:34:26 AM
And I was wondering about all those poppies. Is it really herion addicts who are consuming all the poppies, or is it BigPharma who need them for all their painkillers that the whole world seems hooked on these days? BigPharma seems to make more sense than herion addicts, the point being that SOMEONE wants YOU doped up so,...mmm maybe you won't bother with all that wool they've been trying to pull over your eyes lately.

Afghanistan's opium poppy accounts for 90% (http://www.state.gov/p/inl/rls/nrcrpt/2006/vol1/html/62105.htm) of the world's supply, and over 60% of Afghanistan's GDP.

So, for whatever reason, the US is determined to control the world's opium output ... even at a cost GREATER THAN the Iraq War. AMAZING.

It seems that opium is even more valuable than oil.

Title: Re: Meltdown
Post by: Coopmv on October 03, 2009, 02:51:04 PM

Quote from: dm on October 03, 2009, 12:29:28 PM
Afghanistan's opium poppy accounts for 90% (http://www.state.gov/p/inl/rls/nrcrpt/2006/vol1/html/62105.htm) of the world's supply, and over 60% of Afghanistan's GDP.

So, for whatever reason, the US is determined to control the world's opium output ... even at a cost GREATER THAN the Iraq War. AMAZING.

It seems that opium is even more valuable than oil.

Considering the problems Iran has been causing, the most brilliant policy was to have kept Saddam around and have him go after Iran. But GWB blew it.

Title: Re: Meltdown
Post by: Coopmv on October 07, 2009, 07:02:00 PM

DM, Wonder how the Chinese export to the US did in August?

Americans reduce their outstanding debt by $12 billion in August, 7th straight drop
(http://finance.yahoo.com/news/US-consumers-cut-borrowing-by-apf-3466825138.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on October 08, 2009, 05:26:55 PM

DM, These big banks are just so disgusting. Obama is just all thunder and no rain. These banks must be put on a short leash, as they are a menace to mankind ...

Last year Wall Street banks were virtually insolvent. Taxpayers stimulated them back from the dead. Now, thanks to the proliferation of HFT-Quants, Wall Street's again racing at hyperspeed, gambling with the money it conned from taxpayers, using it to skim more from clueless investors. First the Fed and Treasury, now Wall Street's "Too-Stupid-To-Fail" banks are stealing from Main Street's "Too-Dumb-To-Stop-Trading" investors.

(http://www.marketwatch.com/story/hft-quants-crush-main-street-investors-2009-10-06?link=kiosk)

Title: Re: Meltdown
Post by: Coopmv on October 08, 2009, 05:29:08 PM

Absolutely, the commercial real estate meltdown is just around the corner ...

Roubini says housing market hasn't bottomed (http://finance.yahoo.com/news/Roubini-says-housing-market-rb-3184996166.html?x=0&.v=2&sec=topStories&pos=4&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 08, 2009, 05:32:05 PM

DM, Will this be called the Long March Hummer or the Great Wall Hummer going forward? ;D

General Motors Co. is poised to sign a deal to sell its Hummer brand to a Chinese heavy equipment manufacturer as early as Thursday afternoon, a person briefed on the deal said.

(http://finance.yahoo.com/news/AP-Source-GM-nearing-apf-2382971456.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 08, 2009, 05:35:25 PM

DM, Gold will hit $5000/oz and gas at $20/gal in the US ... ;D

Next asset bubble could come sooner than you think
Amid the wreckage of the financial crisis, building blocks for the next bubble are with us

(http://finance.yahoo.com/news/Next-asset-bubble-could-come-apf-3960488317.html?x=0&sec=topStories&pos=7&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 08, 2009, 05:39:39 PM

DM, Here comes the second stimulus .. Confronted with big job losses and no sign the U.S. economy is ready to stand on its own, Democrats are working on a growing list of relief efforts, leaving for later how to pay for them, or whether even to bother.

(http://finance.yahoo.com/news/Proposals-to-create-jobs-add-apf-1179550443.html?x=0&.v=5)

Title: Re: Meltdown
Post by: Coopmv on October 09, 2009, 09:28:27 PM

DM, We Americans should be ashamed of how stupid our bankers and politicians have been to let this housing debacle happen. Denmark has a total population less than that of NYC ... >:(

The Mortgage Crisis: The U.S. vs. Denmark (http://finance.yahoo.com/expert/article/mortgage/195143)

Title: Re: Meltdown
Post by: Coopmv on October 10, 2009, 05:20:55 AM

DM, It will be interesting to watch how long the Chinese will keep the Hummer manufacturing plants in the US.

Iconic Hummer brand sold to Chinese manufacturer
Hummer, symbol of America's love of big, is now in hands of Chinese heavy equipment maker

(http://finance.yahoo.com/news/Iconic-Hummer-brand-sold-to-apf-2907039406.html?x=0)

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 10:27:46 AM

Coop, I think 7 consecutive drops in outstanding debt is a record ... and it's not over yet.

Quote from: Coopmv on October 07, 2009, 07:02:00 PM
DM, Wonder how the Chinese export to the US did in August?

Americans reduce their outstanding debt by $12 billion in August, 7th straight drop
(http://finance.yahoo.com/news/US-consumers-cut-borrowing-by-apf-3466825138.html?x=0)

WASHINGTON (MarketWatch) -- U.S. banks are reducing their lending at the fastest rate on record, tightening the credit squeeze and threatening to leave many otherwise viable businesses unable to borrow money to expand their businesses, meet their payroll or refinance their maturing debts. According to weekly figures provided by the Federal Reserve, total loans at commercial banks have fallen at a 19% annual rate over the past three months, while loans to businesses have dropped at a 28% annualized pace. ... In the first and second quarters, the U.S. private sector consumed more capital than it raised for the first time in more than 60 years. Negative net investment is "the hallmark of depression and difficult to reverse," said economist Leigh Skene of Lombard Street Research.

(http://s.wsj.net/public/resources/MWimages/MW-AC114_capito_MD_20091008132538.jpg)
(http://www.marketwatch.com/story/banks-cutting-back-on-loans-to-businesses-2009-10-09)

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 10:29:19 AM

NYT: Financial Crisis Puts Europe Back in the Slow Lane

By NELSON D. SCHWARTZ and MATTHEW SALTMARSH
Published: October 9, 2009

PARIS — Two years ago, Europe was growing more rapidly than the United States, and the Old Continent finally seemed prepared to tackle longstanding economic challenges like rigid labor markets, runaway government spending and a rapidly aging population.

But as Asia and the United States emerge from the global economic crisis, Europe appears likely to be the world's laggard, threatening a return to the dark days of "Eurosclerosis." Leaders who once spoke optimistically of fundamental changes aimed at enhancing productivity have turned to the more prosaic tasks of protecting jobs and avoiding painful political choices.

"It's worse than being back to Square 1," said Gilles Moëc, a senior economist in London for Deutsche Bank.

And just when it is needed most, the political will to address Europe's bigger economic problems seems absent, according to many experts across the region and around the world.

... Underscoring the new pessimism, new statistics released Wednesday showed a 0.2 percent contraction in the euro zone in the second quarter, worse than forecast. ... "The Europeans are losing out," said Simon Johnson, a professor at the Sloan School of Management at the Massachusetts Institute of Technology. "The Europeans are the biggest losers of the economic crisis, even though the home of subprime madness was the U.S." ... Already, the euro zone's share of world trade has slipped to 28 percent in 2008 from 31 percent in 2004, according to the World Trade Organization.

Economies in Spain, Ireland, and Greece are all expected to keep shrinking in 2010, while the region's economic powerhouse, Germany, ekes out a 0.3 percent gain, according to a bleak new outlook from the IMF.

link (http://www.nytimes.com/2009/10/10/business/economy/10euro.html?_r=1&ref=business)

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 10:40:35 AM

Ten Thousand Apply For Ninety Job Openings In Louisville

Read more at: http://www.huffingtonpost.com/2009/10/09/ten-thousand-apply-for-ni_n_315778.html

Title: Re: Meltdown
Post by: Coopmv on October 10, 2009, 11:05:09 AM

Quote from: dm on October 10, 2009, 10:27:46 AM
Coop, I think 7 consecutive drops in outstanding debt is a record ... and it's not over yet.

WASHINGTON (MarketWatch) -- U.S. banks are reducing their lending at the fastest rate on record, tightening the credit squeeze and threatening to leave many otherwise viable businesses unable to borrow money to expand their businesses, meet their payroll or refinance their maturing debts. According to weekly figures provided by the Federal Reserve, total loans at commercial banks have fallen at a 19% annual rate over the past three months, while loans to businesses have dropped at a 28% annualized pace. ... In the first and second quarters, the U.S. private sector consumed more capital than it raised for the first time in more than 60 years. Negative net investment is "the hallmark of depression and difficult to reverse," said economist Leigh Skene of Lombard Street Research.

(http://s.wsj.net/public/resources/MWimages/MW-AC114_capito_MD_20091008132538.jpg)

(http://www.marketwatch.com/story/banks-cutting-back-on-loans-to-businesses-2009-10-09)

If many of the about-to-fail businesses are actually retailers that sell Chinese goods, it probably is a good thing. With Americans saving a bit more and the import of Chinese-goods never return to the level before the meltdown, do you see anything wrong with that?

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 11:11:00 AM

California's Budget Suffers 'Major Blow' as Debt Sales Loom
By William Selway and Michael B. Marois

Oct. 9 (Bloomberg) -- California's revenue collections trailed its forecasts by $1.1 billion during the first three months of the fiscal year, showing new deficits are emerging in the budget Governor Arnold Schwarzenegger signed July 28.

Revenue was 5.3 percent less than was assumed in the $85 billion annual budget during the three months ended Sept. 30. Income tax receipts led the shortfall, as unemploymentreached as high as 12.2 percent in August.

"Revenues more than $1 billion under estimates and recent adverse court rulings are dealing a major blow to a budget that is barely 10-weeks old," Controller John Chiang said in a statement. "While there are encouraging signs that California's economy is preparing for a comeback, the recession continues to drag state revenues down."

The latest figures show that California is facing resurgent fiscal strains brought on by the U.S. recession. Since February, Schwarzenegger and lawmakers have cut $32 billion from spending, raised taxes by $12.5 billion and covered $6 billion more with accounting gimmicks and borrowing.

The budget news comes as the most populous U.S. state prepares to sell as much as $15 billion of bonds in the next nine months to refinance debt and fund public-works projects.

continued

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aCqnfmqrY9d8)

Quote from: Coopmv on October 10, 2009, 11:05:09 AM
If many of the about-to-fail businesses are actually retailers that sell Chinese goods, it probably is a good thing. With Americans saving a bit more and the import of Chinese-goods never return to the level before the meltdown, do you see anything wrong with that?

The problem, of course, is that small and medium-sized businesses need credit to grow and hire employees; and, with 70% of the US economy running on consumption, huge decreases in consumer credit will kill consumption (which is a good outcome in that US consumers were over-consuming prior to the meltdown).

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 11:13:03 AM

Coop, the housing market has another 10%-30% drop to go ...

Quote from: Coopmv on October 08, 2009, 05:29:08 PM
Absolutely, the commercial real estate meltdown is just around the corner ...

Roubini says housing market hasn't bottomed (http://finance.yahoo.com/news/Roubini-says-housing-market-rb-3184996166.html?x=0&.v=2&sec=topStories&pos=4&asset=&ccode=)

Rising U.S. vacancies mean ALL real estate going DOWN
Two pieces of data on U.S. vacancy rates (one commercial, one residential) show in unequivocal terms that house prices are going to continue lower, while the more-recent collapse in commercial real estate will continue to accelerate. The U.S. vacancy rates for rental apartments has just hit its highest rate in 23 years – and is set to continue moving higher with new construction vastly outpacing sales. ... Meanwhile, in the commercial sector, the vacancy rate just hit its highest level in 5 years (reflecting the fact that this market hasn't been collapsing for as long as the housing market). It is a certainty that this rate will continue soaring higher – given that both corporate revenues and corporate earnings are still plunging downward at double-digit rates. This means that U.S. banks can expect sky-rocketing losses on their commercial mortgage portfolio (in this $6 trillion market). ...

(http://seekingalpha.com/instablog/407380-jeff-nielson/31060-rising-u-s-vacancies-mean-all-real-estate-going-down?source=feed)

QuoteThe main difference between this new source of mounting losses on this category of bank loans is that unlike with the crash in residential real estate, this crash comes at the same time that all other categories of U.S. debt are already at or near record-levels of delinquencies (i.e. loans where the banks are not getting paid). The combination of huge losses these banks must absorb on commercial defaults while they are not receiving payments from record numbers of borrowers in all other categories of debt, and having virtually no reserves to cover these losses creates a very painful dilemma for the banksters.

Title: Re: Meltdown
Post by: Coopmv on October 10, 2009, 11:13:39 AM

Quote from: dm on October 10, 2009, 10:29:19 AM
NYT: Financial Crisis Puts Europe Back in the Slow Lane

By NELSON D. SCHWARTZ and MATTHEW SALTMARSH
Published: October 9, 2009

PARIS — Two years ago, Europe was growing more rapidly than the United States, and the Old Continent finally seemed prepared to tackle longstanding economic challenges like rigid labor markets, runaway government spending and a rapidly aging population.

But as Asia and the United States emerge from the global economic crisis, Europe appears likely to be the world's laggard, threatening a return to the dark days of "Eurosclerosis." Leaders who once spoke optimistically of fundamental changes aimed at enhancing productivity have turned to the more prosaic tasks of protecting jobs and avoiding painful political choices.

"It's worse than being back to Square 1," said Gilles Moëc, a senior economist in London for Deutsche Bank.

And just when it is needed most, the political will to address Europe's bigger economic problems seems absent, according to many experts across the region and around the world.

... Underscoring the new pessimism, new statistics released Wednesday showed a 0.2 percent contraction in the euro zone in the second quarter, worse than forecast. ... "The Europeans are losing out," said Simon Johnson, a professor at the Sloan School of Management at the Massachusetts Institute of Technology. "The Europeans are the biggest losers of the economic crisis, even though the home of subprime madness was the U.S." ... Already, the euro zone's share of world trade has slipped to 28 percent in 2008 from 31 percent in 2004, according to the World Trade Organization.

Economies in Spain, Ireland, and Greece are all expected to keep shrinking in 2010, while the region's economic powerhouse, Germany, ekes out a 0.3 percent gain, according to a bleak new outlook from the IMF.

link
(http://www.nytimes.com/2009/10/10/business/economy/10euro.html?_r=1&ref=business)

DM, Thanks for the excellent article ... It is all relative, isn't it? EU is in bad shape but the hoped-for US rebound may not be anything to write home about. In the meantime, we can sit back to watch the meltdown in China, which may not be too far down the road ...

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 11:14:05 AM

34 Banks Fail to Make TARP Payments, Up from 19 In a sign that more banks are under great pressure from the recession, 34 financial institutions did not pay their quarterly dividends in August to the Treasury on funds obtained under the Troubled Asset Relief Fund (TARP). The number almost doubled from 19 in May when payments were last made, and also raised questions about Treasury's judgment in approving these banks as "healthy," a necessary step for them to get TARP funding.

continued (http://www.usatoday.com/money/industries/banking/2009-10-07-banks-tarp-dividends_N.htm)

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 11:18:07 AM

Finland was especially hard hit.

Quote from: Coopmv on October 10, 2009, 11:13:39 AM
DM, Thanks for the excellent article ... It is all relative, isn't it? EU is in bad shape but the hoped-for US rebound may not be anything to write home about.

Business Week: The Finnish economy shrank at 11.6 pct annually in July, the sharpest rate registered so far during the current recession, the government statistics agency said Wednesday.

(http://www.businessweek.com/ap/financialnews/D9B64KC80.htm)

Quote from: Coopmv on October 10, 2009, 11:13:39 AM
In the meantime, we can sit back to watch the meltdown in China, which may not be too far down the road ...

Yeah, perhaps the China bubble has several more months of steam building up before it blows.

Title: Re: Meltdown
Post by: Coopmv on October 10, 2009, 11:33:45 AM

Quote from: dm on October 10, 2009, 11:13:03 AM
Coop, the housing market has another 10%-30% drop to go ...

Rising U.S. vacancies mean ALL real estate going DOWN
Two pieces of data on U.S. vacancy rates (one commercial, one residential) show in unequivocal terms that house prices are going to continue lower, while the more-recent collapse in commercial real estate will continue to accelerate. The U.S. vacancy rates for rental apartments has just hit its highest rate in 23 years – and is set to continue moving higher with new construction vastly outpacing sales. ... Meanwhile, in the commercial sector, the vacancy rate just hit its highest level in 5 years (reflecting the fact that this market hasn't been collapsing for as long as the housing market). It is a certainty that this rate will continue soaring higher – given that both corporate revenues and corporate earnings are still plunging downward at double-digit rates. This means that U.S. banks can expect sky-rocketing losses on their commercial mortgage portfolio (in this $6 trillion market). ...

(http://seekingalpha.com/instablog/407380-jeff-nielson/31060-rising-u-s-vacancies-mean-all-real-estate-going-down?source=feed)

I heard on the news that some developers have plans to build other high-rise apartment buildings in the Miami area. What happens to all those vacant condos number in the 50,000-60,000 units in that city? Which banks loan them the money to start the project and why are they allowed to create more glut in the market? ???

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 11:38:14 AM

Quote from: Coopmv on October 08, 2009, 05:29:08 PM
Absolutely, the commercial real estate meltdown is just around the corner ...

Roubini says housing market hasn't bottomed (http://finance.yahoo.com/news/Roubini-says-housing-market-rb-3184996166.html?x=0&.v=2&sec=topStories&pos=4&asset=&ccode=)

Bloomberg: FHA "appears destined for a taxpayer bailout"
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aOmu318hOZr4)

FHA may be setting up repeat of housing bubble, lawmakers worry
The percentage of loans backed by the agency that are delinquent or in foreclosure hit nearly 8% at the end of June. Critics say borrowers don't have enough of a stake in keeping up with payments.

The FHA insured 21.5% of all new mortgages last year, up from fewer than 6% in 2007. ... The percentage of FHA loans that are delinquent or in foreclosure climbed to nearly 8% at the end of June, from about 5.5% in early 2006, according to the Mortgage Bankers Assn. And in the weeks ahead, its reserves for loan losses are projected to slip below federally mandated limits."It's not the least bit implausible to be concerned about the ever-deteriorating performance of the FHA portfolio," said UCLA finance professor Stuart Gabriel, director of the university's Ziman Center for Real Estate. "The jury is out as to whether the FHA is going to need a government infusion." ... Alarm bells went off last month when the FHA projected that its secondary reserve fund would fall below the congressionally mandated level of 2% of all mortgages on its books. The fund was at 6.4% at the end of September 2007.

(http://www.latimes.com/business/la-fi-fha8-2009oct08,0,5815426,full.story)

Quote from: Coopmv on October 10, 2009, 11:33:45 AM
I heard on the news that some developers have plans to build other high-rise apartment buildings in the Miami area. What happens to all those vacant condos number in the 50,000-60,000 units in that city? Which banks loan them the money to start the project and why are they allowed to create more glut in the market? ???

Pure insanity. >:D

Title: Re: Meltdown
Post by: Coopmv on October 10, 2009, 12:22:31 PM

Quote from: dm on October 10, 2009, 11:38:14 AM
Bloomberg: FHA "appears destined for a taxpayer bailout"
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aOmu318hOZr4)

FHA may be setting up repeat of housing bubble, lawmakers worry
The percentage of loans backed by the agency that are delinquent or in foreclosure hit nearly 8% at the end of June. Critics say borrowers don't have enough of a stake in keeping up with payments.

The FHA insured 21.5% of all new mortgages last year, up from fewer than 6% in 2007. ... The percentage of FHA loans that are delinquent or in foreclosure climbed to nearly 8% at the end of June, from about 5.5% in early 2006, according to the Mortgage Bankers Assn. And in the weeks ahead, its reserves for loan losses are projected to slip below federally mandated limits."It's not the least bit implausible to be concerned about the ever-deteriorating performance of the FHA portfolio," said UCLA finance professor Stuart Gabriel, director of the university's Ziman Center for Real Estate. "The jury is out as to whether the FHA is going to need a government infusion." ... Alarm bells went off last month when the FHA projected that its secondary reserve fund would fall below the congressionally mandated level of 2% of all mortgages on its books. The fund was at 6.4% at the end of September 2007.

Pure insanity. >:D

(http://www.latimes.com/business/la-fi-fha8-2009oct08,0,5815426,full.story)

Unlike Fannie and Freddie, FHA has no shareholders to wipe out. It just wipes out the taxpayer dollars. Where were all those financial sharpshooters of the Obama Administration? They should have seen this coming ...

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 02:15:23 PM

Structural unemployment crisis stalking U.S. economy
Tue Oct 6, 2009 3:07pm EDT
By Lucia Mutikani - Analysis
WASHINGTON (Reuters) - Millions of American job-hunters risk permanent unemployment as industries undergo radical change and some skills become irrelevant in the wake of the worst U.S. economic recession in 70 years.

There are troubling signs that unemployment in the United States is taking on a structural dimension, though the extent of it may not become clear until the severe downturn that started in December 2007 finally ends, analysts said.

Government data last Friday showed that in September, 5.4 million people had been out of work for over 27 weeks. That was up from 5 million in August and represented a startlingly large 35.6 percent of the total of unemployed Americans.

In addition, the number of those who believed they had permanently lost their jobs soared to 8.5 million from 8.1 million in August, about 54.3 percent of the jobless total. "The figures reflect the fact that some of the jobs lost are probably lost for good and highlight that unemployment is rising more because of structural changes in the economy than in past recessions," said Tony Crescenzi, strategist and portfolio manager at Pimco in Newport Beach, California.

People staying out of work for a long time tend to lose their skills and become less attractive as workers compared to people who have been unemployed for a shorter period of time. According to Charles Kramer, the International Monetary Fund's mission chief to the United States, such people are more likely to grow discouraged and leave the labor force entirely. That hurts not only them, but also the broader economy. ...

continued (http://www.reuters.com/article/ousiv/idUSTRE5955NE20091006?sp=true)

Title: Re: Meltdown
Post by: BachQ on October 10, 2009, 02:17:32 PM

BRING BACK VOLCKER!!!

WSJ: "The Weak-Dollar Threat to Prosperity"

... ...Measured in euros (a more stable ruler than the ever-weakening dollar), U.S. real per capita GDP is down 25% since 2000, while Germany's is up 4% and tops ours. ... Washington's current economic program pushes capital away by weakening the dollar, threatening higher tax rates, borrowing short (the Fed's near trillion-dollar overnight debt, Treasury's mounds of bill and note issuance) to lend long (mortgages, student loans, entitlements), doubling down on government subsidies, and rechanneling bank loans to governments and big businesses instead of the small business job-growth engine.It's possible global bond vigilantes will call Washington's bluff, reducing their bond purchases until we stop devaluing and restart job growth, which is the ultimate source of tax revenues to repay our bond debt. This would create a Volcker moment when the U.S. might tighten even as the economy slowed (as then Fed Chairman Paul Volcker did back in 1979). ... A better approach would start with President Barack Obama rejecting the Bush administration's weak-dollar policy. This would invite capital and jobs to come back before interest rates have to rise.

continued (http://online.wsj.com/article/SB20001424052748703298004574458923186941870.html)

Title: Re: Meltdown
Post by: Coopmv on October 10, 2009, 03:20:14 PM

Quote from: dm on October 10, 2009, 02:15:23 PM
Structural unemployment crisis stalking U.S. economy
Tue Oct 6, 2009 3:07pm EDT
By Lucia Mutikani - Analysis
WASHINGTON (Reuters) - Millions of American job-hunters risk permanent unemployment as industries undergo radical change and some skills become irrelevant in the wake of the worst U.S. economic recession in 70 years.

There are troubling signs that unemployment in the United States is taking on a structural dimension, though the extent of it may not become clear until the severe downturn that started in December 2007 finally ends, analysts said.

Government data last Friday showed that in September, 5.4 million people had been out of work for over 27 weeks. That was up from 5 million in August and represented a startlingly large 35.6 percent of the total of unemployed Americans.

In addition, the number of those who believed they had permanently lost their jobs soared to 8.5 million from 8.1 million in August, about 54.3 percent of the jobless total. "The figures reflect the fact that some of the jobs lost are probably lost for good and highlight that unemployment is rising more because of structural changes in the economy than in past recessions," said Tony Crescenzi, strategist and portfolio manager at Pimco in Newport Beach, California.

People staying out of work for a long time tend to lose their skills and become less attractive as workers compared to people who have been unemployed for a shorter period of time. According to Charles Kramer, the International Monetary Fund's mission chief to the United States, such people are more likely to grow discouraged and leave the labor force entirely. That hurts not only them, but also the broader economy. ...

continued
(http://www.reuters.com/article/ousiv/idUSTRE5955NE20091006?sp=true)

The relentless outsourcing of American jobs was the main cause for this structural change in the economy. It is a joke that Eastman Kodak invented OLED, the latest display technology, yet the US cannot manufacture products based on this technology in this country since there is no meaningful capacity left in this manufacturing sector ... >:(

Title: Re: Meltdown
Post by: Coopmv on October 10, 2009, 03:32:16 PM

Quote from: dm on October 10, 2009, 02:17:32 PM
BRING BACK VOLCKER!!!

WSJ: "The Weak-Dollar Threat to Prosperity"

... ...Measured in euros (a more stable ruler than the ever-weakening dollar), U.S. real per capita GDP is down 25% since 2000, while Germany's is up 4% and tops ours. ... Washington's current economic program pushes capital away by weakening the dollar, threatening higher tax rates, borrowing short (the Fed's near trillion-dollar overnight debt, Treasury's mounds of bill and note issuance) to lend long (mortgages, student loans, entitlements), doubling down on government subsidies, and rechanneling bank loans to governments and big businesses instead of the small business job-growth engine.It's possible global bond vigilantes will call Washington's bluff, reducing their bond purchases until we stop devaluing and restart job growth, which is the ultimate source of tax revenues to repay our bond debt. This would create a Volcker moment when the U.S. might tighten even as the economy slowed (as then Fed Chairman Paul Volcker did back in 1979). ... A better approach would start with President Barack Obama rejecting the Bush administration's weak-dollar policy. This would invite capital and jobs to come back before interest rates have to rise.

continued
(http://online.wsj.com/article/SB20001424052748703298004574458923186941870.html)

The last time there was a super-strong dollar was more than 20 years ago. It is absolutely stupid to think a weak dollar is good for the US.

Title: Re: Meltdown
Post by: Lethevich on October 11, 2009, 12:03:33 AM

Quote from: dm on October 10, 2009, 02:15:23 PM
Millions of American job-hunters risk permanent unemployment as industries undergo radical change and some skills become irrelevant in the wake of the worst U.S. economic recession in 70 years.

I don't understood this. "I am no longer able to find jobs building cars, but I certainly can't go and work in a shop or something else."

A friend who works at a job centre in Scotland recounted a fun story of a person who would only accept jobs involving manufacturing stained glass within a 3 mile radius of his house ::)

Title: Re: Meltdown
Post by: Coopmv on October 11, 2009, 05:39:45 PM

Quote from: Lethe on October 11, 2009, 12:03:33 AM
I don't understood this. "I am no longer able to find jobs building cars, but I certainly can't go and work in a shop or something else."

A friend who works at a job centre in Scotland recounted a fun story of a person who would only accept jobs involving manufacturing stained glass within a 3 mile radius of his house ::)

He probably only works for pleasure and not out of necessity ... ???

Title: Re: Meltdown
Post by: Coopmv on October 11, 2009, 06:24:29 PM

DM, A big part of the financial regulatory reforms has to do with the regulations of derivatives. Looks like Obama's worst enemies are not the Republicans. With Democrats like these, Obama does not need the Republicans ...

Derivatives Lobby Links With New Democrats to Blunt Obama Plan
(http://www.bloomberg.com/apps/news?pid=20601109&sid=a3CxbMYYXpt8)

Title: Re: Meltdown
Post by: Coopmv on October 11, 2009, 06:35:54 PM

Quote from: Coopmv on October 11, 2009, 06:24:29 PM
DM, A big part of the financial regulatory reforms has to do with the regulations of derivatives. Looks like Obama's worst enemies are not the Republicans. With Democrats like these, Obama does not need the Republicans ...

BTW, one of these New Democrats represents my district and he defeated the last Republican Congressman in all of New England (6 states) last November.

Derivatives Lobby Links With New Democrats to Blunt Obama Plan
(http://www.bloomberg.com/apps/news?pid=20601109&sid=a3CxbMYYXpt8)

Title: Re: Meltdown
Post by: Coopmv on October 12, 2009, 06:57:15 AM

DM, It is desperate time that requires desperate response. This is the price the Brits are paying for following the American folly to massively de-industrialize and to outsource its jobs with an abandonment to focus primarily on finance ...

Britain sells off public assets to boost finances
Britain holds public asset fire sale as PM Brown warns that recession not yet over ...
(http://finance.yahoo.com/news/Britain-sells-off-public-apf-749679576.html?x=0&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 12, 2009, 07:50:36 AM

DM, Here is the man who constantly claims that China could do no wrong in its economic management. Hear him out ... ;D

Jim Rogers "Quite Sure" Gold Will Hit $2000, Dollar Will Lose Reserve Status (http://finance.yahoo.com/tech-ticker/article/352044/Jim-Rogers-%22Quite-Sure%22-Gold-Will-Hit-2000-Dollar-Will-Lose-Reserve-Status?tickers=GLD,GDX,TIP,TBT,SLV,%5EDJI,%5EGSPC&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 12, 2009, 07:57:20 AM

DM, Not a pretty picture as far as your eyes can see. Where are the green shoots - a jobless recovery?

Scant Earnings Relief as Banks Build Reserves
Costs to cover sour loans could double, helping to cut earnings by 28% for the third quarter when banks report results this week. When will loan losses bottom out?
(http://www.businessweek.com/investor/content/oct2009/pi20091011_403951.htm?campaign_id=yhoo)

Title: Re: Meltdown
Post by: Coopmv on October 12, 2009, 01:48:11 PM

DM, I certainly hope there will be more bankruptcy filings among the MLB teams. It is just absurd that MLB players make an average of $1MM a year and there are many mediocre players out there. Pay-for-performance not only does not exist in corporate America, it has not existed in MLB for a very long time ...

Chicago Cubs file for Ch. 11 to speed team's sale (http://finance.yahoo.com/news/Chicago-Cubs-file-for-Ch-11-apf-1079567049.html?x=0&sec=topStories&pos=4&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 12, 2009, 02:00:00 PM

So what is so big deal about two consecutive quarters with 0.1% GDP growth each. This will be considered economic expansion according to the textbook definition of recession. The Democrats could be toast IMO come next November.

Survey: Most economists see recovery beginning
Survey: US economists say recession is over, predict moderate, slow-paced recovery (http://finance.yahoo.com/news/Survey-Most-economists-see-apf-2667612647.html?x=0&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Mozart on October 15, 2009, 07:50:45 AM

http://www.youtube.com/watch/v/IwkUJZjpwOY

Title: Re: Meltdown
Post by: Coopmv on October 15, 2009, 04:24:21 PM

Quote from: Mozart on October 15, 2009, 07:50:45 AM
http://www.youtube.com/watch/v/IwkUJZjpwOY

Indeed, so what? How well you do really depends on what you actually own and don't forget your investments (401K or otherwise) probably lost anywhere from 30-50% since 2007 until this past March to begin with. It will be a while before people can even break even ...

Title: Re: Meltdown
Post by: Coopmv on October 16, 2009, 06:10:52 PM

DM, These greedy bastards on Wall Street need to be reined in big-time. Obama has been a major disappointment, lots of thunder but no rain. Unfortunately, the financial industry has paid off his party big-time ...

Billionaire among 6 nabbed in inside trading case
Wall Street wake-up call: Hedge fund boss, 5 others charged in $25M-plus insider trading case

(http://finance.yahoo.com/news/Billionaire-among-6-nabbed-in-apf-2808194948.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 16, 2009, 06:18:32 PM

Bring back the Glass-Steagall Act and break up these banks ...

Bailout Helps Revive Banks, and Bonuses (http://www.nytimes.com/2009/10/17/business/economy/17wall.html?partner=yahoofinance)

Title: Re: Meltdown
Post by: Coopmv on October 17, 2009, 02:13:56 PM

Give him a shovel and have him do some serious hard labor without pay for the next 24 years ...

Florida man sentenced to 24 years in prison for defrauding investors of $44M in Ponzi scheme

(http://finance.yahoo.com/news/US-man-sentenced-to-prison-apf-34321272.html?x=0&sec=topStories&pos=4&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 17, 2009, 05:09:57 PM

DM, Will that number hit 100 before the end of October?

Calif. bank becomes 99th in US to be shut in 2009 (http://finance.yahoo.com/news/Calif-bank-becomes-99th-in-US-apf-2368207611.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on October 17, 2009, 07:26:18 PM

DM, An excellent analysis can be found in this article. Fannie Mae and Freddie Mac are the biggest bunch of BS's. A government sponsored entity that is also a stock company should NEVER have existed in the US, which considers itself as the ultimate of capitalism. Such animal should only exist in China, which can then sucker in the equity investors. Unfortunately, I doubt there is any will in this administration to completely privatize these two agencies and cut off the government sponsorships ...

The Mortgage Crisis: U.S. vs. Denmark, Part II
(http://finance.yahoo.com/expert/article/mortgage/196510)

Title: Re: Meltdown
Post by: Coopmv on October 18, 2009, 05:54:17 AM

DM, Forget the red states vs the blue states. Green is the color all corrupt politicians like and there are too many of them in Obama's own party ...

ALL BUSINESS: Banks' lobbying blitz threatens overhaul of financial regulations (http://finance.yahoo.com/news/ALL-BUSINESS-Lobbyists-apf-1664699835.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on October 19, 2009, 06:51:29 PM

British economy between a rig and a hard place (http://www.reuters.com/article/marketsNews/idAFL212491020091020?rpc=44&pageNumber=1&virtualBrandChannel=0)

Title: Re: Meltdown
Post by: BachQ on October 20, 2009, 04:48:03 PM

Quote from: Coopmv on October 19, 2009, 06:51:29 PM
British economy between a rig and a hard place (http://www.reuters.com/article/marketsNews/idAFL212491020091020?rpc=44&pageNumber=1&virtualBrandChannel=0)

London Times: -- UK's national debt is 3-times the official number @ £85,610 per household, & 157% of GDP

link (http://business.timesonline.co.uk/tol/business/economics/article6880228.ece)

Title: Re: Meltdown
Post by: BachQ on October 20, 2009, 04:49:14 PM

OIL=$80

link (http://www.marketwatch.com/story/oil-futures-tops-80-as-stock-markets-rally-2009-10-20)

Title: Re: Meltdown
Post by: BachQ on October 20, 2009, 04:52:00 PM

U.S. Foreclosure Filings Jump 23% to Record in Third Quarter ... "The problem is prime loans going into foreclosure and people being underwater and losing their jobs," Richard Green, director of the Lusk Center for Real Estate at the University of Southern California in Los Angeles, said in an interview. "It's a really bad number."

Mounting foreclosures mean U.S. home prices probably will resume falling, analysts from Amherst Securities Group LP in New York said Sept. 23. A "shadow inventory" of 7 million properties are in the foreclosure process or likely to be seized, up from 1.27 million in 2005, they said

link (http://www.bloomberg.com/apps/news?pid=20601208&sid=aFofq9_za8Is)

Title: Re: Meltdown
Post by: karlhenning on October 20, 2009, 04:53:22 PM

Yo, dm! How are you doing?!

Title: Re: Meltdown
Post by: Coopmv on October 20, 2009, 04:54:45 PM

The lobbyists are the cancer of the American society ...

Some bailed-out firms spent less on lobbying federal government in 3rd quarter

(http://finance.yahoo.com/news/Some-bailedout-firms-spent-apf-4174926979.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on October 20, 2009, 04:55:21 PM

Greetings, Karl.

UK Telegraph: Russia's bad loans predicted to reach at least 25%, and possibly 40%. (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/5713031/Fitchs-warning-over-Russian-bank-loans.html)

Title: Re: Meltdown
Post by: BachQ on October 20, 2009, 04:56:27 PM

Gloomy times ahead for China -- China faces a major slowdown in the growth of its economy as investment spending loses its momentum and consumer spending fails to offset that, according to a new report from the Monaco-based investment gurus Pivot Capital Management. (http://www.moneyweek.com/news-and-charts/economics/gloomy-times-ahead-for-china-94206.aspx?utm_source=newsletter&utm_medium=email&utm_campaign=Money%2BMorning)

Title: Re: Meltdown
Post by: Coopmv on October 20, 2009, 05:01:59 PM

Quote from: dm on October 20, 2009, 04:56:27 PM
Gloomy times ahead for China -- China faces a major slowdown in the growth of its economy as investment spending loses its momentum and consumer spending fails to offset that, according to a new report from the Monaco-based investment gurus Pivot Capital Management.
(http://www.moneyweek.com/news-and-charts/economics/gloomy-times-ahead-for-china-94206.aspx?utm_source=newsletter&utm_medium=email&utm_campaign=Money%2BMorning)

Folks at Pivot Capital Management should have a debate with Jim Rogers, the ultimate China bull who believes nothing can go wrong with the central kingdom ...

Title: Re: Meltdown
Post by: BachQ on October 20, 2009, 05:03:55 PM

Quote from: Coopmv on October 16, 2009, 06:10:52 PM
DM, These greedy bastards on Wall Street need to be reined in big-time. Obama has been a major disappointment, lots of thunder but no rain. Unfortunately, the financial industry has paid off his party big-time ...

Billionaire among 6 nabbed in inside trading case
Wall Street wake-up call: Hedge fund boss, 5 others charged in $25M-plus insider trading case

(http://finance.yahoo.com/news/Billionaire-among-6-nabbed-in-apf-2808194948.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Coop, the justice department used wiretaps for the first time in an insider trading case, but nevertheless, the billionaire is claiming innocence. Most of the investors in his hedge fund want to exit, and are demanding redemptions.

Quote from: Coopmv on October 16, 2009, 06:18:32 PM
Bring back the Glass-Steagall Act and break up these banks ...

Bailout Helps Revive Banks, and Bonuses (http://www.nytimes.com/2009/10/17/business/economy/17wall.html?partner=yahoofinance)

This is sickening ... yet, the Americans allow for this to continue without protest. Wall Street owns Washington, and capitalism has lost its soul. (http://www.marketwatch.com/story/americas-soul-is-lost-and-collapse-is-inevitable-2009-10-20?%3Cbr%20/%3Esiteid=yahoomy)

Title: Re: Meltdown
Post by: BachQ on October 20, 2009, 05:08:19 PM

China car sales surge 78% in Sept., widening its lead over the US (9.6 mil. vs. 7.8 mil.) (http://www.google.com/hostednews/ap/article/ALeqM5hG-udu2YB9s5alt-DBa3JgkuvJiAD9BAF6DG0)

Title: Re: Meltdown
Post by: BachQ on October 20, 2009, 05:10:28 PM

Bankruptcy filings in Nevada soared 64% in the first nine months of 09; the national average increased 35.5% through September. (http://www.lvrj.com/news/breaking_news/Bankruptcy-filings-in-Nevada-jump-64-percent-64646117.html)

Title: Re: Meltdown
Post by: Coopmv on October 20, 2009, 05:10:48 PM

Quote from: dm on October 20, 2009, 05:08:19 PM
China car sales surge 78% in Sept., widening its lead over the US (9.6 mil. vs. 7.8 mil.)
(http://www.google.com/hostednews/ap/article/ALeqM5hG-udu2YB9s5alt-DBa3JgkuvJiAD9BAF6DG0)

The old adage will prove to be true once again - the higher it flies, the deepest it will plunge ...

Title: Re: Meltdown
Post by: BachQ on October 20, 2009, 05:12:33 PM

Quote from: Coopmv on October 20, 2009, 05:10:48 PM
The old adage will prove to be true once again - the higher it flies, the deepest it will plunge ...

Yes!

The 10 Countries Most At Risk Of A Meltdown

Spain
Dubai
Iran
Latvia
Ireland
China
Venezuela
Lithuania
Korea
USA (http://www.businessinsider.com/20-countries-at-risk-of-a-meltdown-2009-10)

Title: Re: Meltdown
Post by: Coopmv on October 20, 2009, 05:32:15 PM

According to the most recent Census Bureau statistics, nearly 36 million Americans lived in poverty in 2003, an increase of 1.3 million from 2002. And since 2000, 4.4 million more people in this country are living in poverty. (http://money.cnn.com/2004/12/22/news/economy/poverty_overview/index.htm)

Title: Re: Meltdown
Post by: Coopmv on October 20, 2009, 05:35:31 PM

Sun blames Brussels as 3,000 jobs are axed
(http://www.ft.com/cms/s/0/8b2cacbe-bdcb-11de-9f6a-00144feab49a.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058)

Title: Re: Meltdown
Post by: Coopmv on October 21, 2009, 07:04:43 PM

The US and UK should both break up their large banks. Goldman should not be allowed to borrow from the Fed discount window. That was not an option before the meltdown ...

King Suggests Splitting Up Largest Banks to Stem Risk (http://www.bloomberg.com/apps/news?pid=20601068&sid=aAdP3tUMTdVE)

Title: Re: Meltdown
Post by: Coopmv on October 23, 2009, 07:51:17 PM

DM, The other shoe has dropped big-time ... ;D

Manhattan office properties have lost almost 47 percent of their value since 2007, more than any other major U.S. city, according to the Concord Group, a consulting firm in Newport Beach, California.
(http://www.bloomberg.com/apps/news?pid=20601109&sid=aEF99Lms9has)

Title: Re: Meltdown
Post by: Coopmv on October 24, 2009, 04:05:02 AM

The UK economy unexpectedly contracted by 0.4% between July and September, according to official figures, meaning the country is still in recession.

(http://news.bbc.co.uk/2/hi/business/8321970.stm)

Title: Re: Meltdown
Post by: Coopmv on October 24, 2009, 06:29:11 AM

Nouriel Roubini: Big Crash Coming for oil and commodities (http://finance.yahoo.com/news/Nouriel-Roubini-Big-Crash-indexuniverse-1323647540.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on October 24, 2009, 06:37:46 AM

DM, You will like this article, check it out ...

China's Economy: Behind All the Hype

"China wants to be self-sufficient, producing everything itself," says Nathan K. Smith, aerospace analyst at market research firm Frost & Sullivan. "But it simply doesn't have the capabilities to develop these aircraft without Western technology." The prospect of Comac competing with Boeing and Airbus outside China even two decades from now, says Smith, "is a long shot." (http://finance.yahoo.com/news/Chinas-Economy-Behind-All-the-bizwk-3372035503.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on October 24, 2009, 09:55:28 AM

DM, No wonder GS is making out like bandit and many states, NJ included, are in such serious financial trouble ...

New Jersey Pays Goldman Sachs for Interest-Rate Swaps on Nonexistent Bonds (http://www.bloomberg.com/?b=0&Intro=intro3)

Title: Re: Meltdown
Post by: BachQ on October 24, 2009, 10:12:45 AM

Quote from: Coopmv on October 20, 2009, 05:32:15 PM
According to the most recent Census Bureau statistics, nearly 36 million Americans lived in poverty in 2003, an increase of 1.3 million from 2002. And since 2000, 4.4 million more people in this country are living in poverty. (http://money.cnn.com/2004/12/22/news/economy/poverty_overview/index.htm)

Officially, 36 million Americans lived in poverty; Unofficially, 47.4 Million (1 in 6) (http://abcnews.go.com/Business/wireStory?id=8869779) live in poverty.

Title: Re: Meltdown
Post by: BachQ on October 24, 2009, 10:16:55 AM

Quote from: Coopmv on October 24, 2009, 04:05:02 AM
The UK economy unexpectedly contracted by 0.4% between July and September, according to official figures, meaning the country is still in recession.

(http://news.bbc.co.uk/2/hi/business/8321970.stm)

Good catch. The UK has become mired in its longest recession on record.

Japan's exports fell 30.7% in September, compared with a year ago, as shipments to the U.S. fell by 34.1%, data from the Ministry of Finance showed Thursday. (http://www.marketwatch.com/story/japanese-exports-fall-307-on-year-in-september-2009-10-21)

Title: Re: Meltdown
Post by: BachQ on October 24, 2009, 10:19:27 AM

"Citigroup is in serious trouble." "Perhaps what we're really seeing is a business reacting to hidden deterioration of asset bases that are not known by investors and the public due to the legitimation of bogus accounting that happened this last March, but which is known by company executives!" (http://globaleconomicanalysis.blogspot.com/2009/10/citigroups-hail-mary-pass-how-to-know.html)

Title: Re: Meltdown
Post by: BachQ on October 24, 2009, 10:21:34 AM

20 Year Old Buys Home With $183,000 FHA Loan And Just 3.5% Down

(http://static.businessinsider.com/~~/f?id=4adb3fe80000000000003e70&maxX=412&maxY=285) (http://www.businessinsider.com/20-year-old-buys-home-with-183000-fha-loan-and-just-35-down-2009-10)Guess What: The Next Housing Bubble Is Already Underway (http://www.businessinsider.com/the-next-housing-bubble-is-here-2009-10#it-starts-with-cheap-money-1)

Title: Re: Meltdown
Post by: Coopmv on October 24, 2009, 10:26:17 AM

Quote from: dm on October 24, 2009, 10:12:45 AM
Officially, 36 million Americans lived in poverty; Unofficially, 47.4 Million (1 in 6) (http://abcnews.go.com/Business/wireStory?id=8869779) live in poverty.

With millions of illegals, nobody knows what the real numbers are anymore.

Title: Re: Meltdown
Post by: BachQ on October 24, 2009, 10:28:53 AM

Quote from: Coopmv on October 24, 2009, 04:05:02 AM
The UK economy unexpectedly contracted by 0.4% between July and September, according to official figures, meaning the country is still in recession.

(http://news.bbc.co.uk/2/hi/business/8321970.stm)

Telegraph -- (http://www.telegraph.co.uk/finance/economics/6389094/Experts-warn-of-deluge-of-insolvencies-to-come-in-the-UK.html)Experts warn of 'deluge' of insolvencies to come in the UK

Telegraph -- (http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/6378602/Irish-house-prices-to-fall-45pc-as-debt-spiral-looms.html)Irish house prices to fall 45pc as debt spiral looms

Title: Re: Meltdown
Post by: Coopmv on October 24, 2009, 10:30:24 AM

Quote from: dm on October 24, 2009, 10:21:34 AM
20 Year Old Buys Home With $183,000 FHA Loan And Just 3.5% Down

(http://static.businessinsider.com/~~/f?id=4adb3fe80000000000003e70&maxX=412&maxY=285) (http://www.businessinsider.com/20-year-old-buys-home-with-183000-fha-loan-and-just-35-down-2009-10)Guess What: The Next Housing Bubble Is Already Underway
(http://www.businessinsider.com/the-next-housing-bubble-is-here-2009-10#it-starts-with-cheap-money-1)

It is unbelievable Washington can let the Fannie Mae and Freddie Mac's fiascos repeat with the FHA ... >:(

Title: Re: Meltdown
Post by: BachQ on October 24, 2009, 10:32:21 AM

Quote from: Coopmv on October 24, 2009, 10:30:24 AM
It is unbelievable Washington can let the Fannie Mae and Freddie Mac's fiascos repeat with the FHA ... >:(

Yes indeed.

7 reasons housing is doomed:

Reason #1 - Low Housing Starts
Reason #2 - Foreclosures Hit Record Numbers
Reason #3 - Housing Has No Relief at the Top
Reason #4 - Banks Are Reeling From Mortgage Losses
Reason #5 - Property Prices Still Falling
Reason #6 - Housing Permits Drop
Reason #7 - New Homebuyer Tax Credit Expiring

link (http://blogs.moneycentral.msn.com/topstocks/archive/2009/10/22/7-reasons-housing-is-doomed.aspx?PageIndex=16)

Title: Re: Meltdown
Post by: Coopmv on October 24, 2009, 10:32:52 AM

Quote from: dm on October 24, 2009, 10:28:53 AM
Telegraph -- (http://www.telegraph.co.uk/finance/economics/6389094/Experts-warn-of-deluge-of-insolvencies-to-come-in-the-UK.html)Experts warn of 'deluge' of insolvencies to come in the UK

Telegraph -- (http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/6378602/Irish-house-prices-to-fall-45pc-as-debt-spiral-looms.html)Irish house prices to fall 45pc as debt spiral looms

The BOE is printing money the same way like the US Fed and flood the UK economy with cash ... :o

Title: Re: Meltdown
Post by: Coopmv on October 24, 2009, 03:37:44 PM

$6B is really small potato in the scheme of overall US healthcare spending. It is nonetheless a tax increase here and no doubt there will be many a few billions here and a few billions there of effective tax increases in order to pay for this healthcare reform. The US is broke after all ... >:(

A $6 Billion Employee Benefit May Dry Up (http://finance.yahoo.com/news/A-6-Billion-Employee-Benefit-tsmf-1928138095.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on October 24, 2009, 04:44:44 PM

DM, The sky is the limit when it comes to bank failures in the US ... :o

Bank failures hit 106 for the year; many more are weak and could be shuttered (http://finance.yahoo.com/news/Bank-failures-hit-106-for-apf-2725707666.html?x=0&sec=topStories&pos=4&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 25, 2009, 12:44:25 PM

Record NYC real estate deal now on the rocks (http://finance.yahoo.com/news/Record-NYC-real-estate-deal-apf-1729920781.html?x=0&.v=2)

Title: Re: Meltdown
Post by: Coopmv on October 25, 2009, 01:25:40 PM

The other shoe of the US real estate markets has definitely dropped ...

Capmark Financial Group Inc., the lender owned by firms including Goldman Sachs Group Inc. and KKR & Co., filed for bankruptcy protection after posting a second- quarter loss of about $1.6 billion.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=abkxwVZ_eXi0)

Title: Re: Meltdown
Post by: Coopmv on October 28, 2009, 05:37:13 PM

DM, Where are the green shoots? :D

Metro jobless rates fall in September, but mostly reflects discouraged workers dropping out

(http://finance.yahoo.com/news/Metro-jobless-rates-fall-as-apf-3729239255.html?x=0&.v=4)

Title: Re: Meltdown
Post by: Coopmv on October 28, 2009, 05:43:05 PM

Economic growth expected, but can it be sustained?
(http://finance.yahoo.com/news/Economic-growth-expected-but-apf-2278642134.html?x=0&.v=13)

Title: Re: Meltdown
Post by: Coopmv on October 29, 2009, 05:15:27 PM

DM, What is all the fuss about? Just reinstitute the Glass-Steagall Act. Separate investment banking from commercial banking and shut down the Fed discount window to the likes of Goldman Sachs and Morgan Stanley ...

Obama administration's financial oversight proposal gets wary reception from Congress
(http://finance.yahoo.com/news/Financial-overhaul-bill-gets-apf-3530908886.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 29, 2009, 05:33:04 PM

Calif. AG seeks bank info on mortgage "time bombs"
(http://www.reuters.com/article/marketsNews/idCNN2934815220091029?rpc=44)

Title: Re: Meltdown
Post by: Coopmv on October 30, 2009, 05:01:46 PM

DM, Here is an excellent article ...

To Rein In Pay, Rein In Wall St.
(http://finance.yahoo.com/career-work/article/108053/to-rein-in-pay-rein-in-wall-st?mod=career-salary_negotiation&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on October 30, 2009, 05:28:43 PM

Obama Bridge to Lasting Expansion Risks Going Nowhere as Feldstein Warns of `Double Dip' (http://www.bloomberg.com/apps/news?pid=20601068&sid=atRvES59nzWI)

Title: Re: Meltdown
Post by: Coopmv on October 30, 2009, 05:57:54 PM

It is all phony baloney ... :D

Economic upturn not based in reality: experts. (http://www.nypost.com/p/news/business/economic_upturn_not_based_in_reality_7k4OFKABlgbcnkVjts47UO)

Title: Re: Meltdown
Post by: BachQ on October 31, 2009, 08:06:58 AM

Record 9 Bank Failures on Friday --- "U.S. authorities seized nine failed banks on Friday, the most in a single day since the financial crisis began and the latest stark sign that substantial parts of the nation's banking industry are being crippled by bad loans. The move brought the total number of failed banks in 2009 to 115 -- their highest annual level since 1992 -- with analysts expecting more to come." (http://www.reuters.com/article/newsOne/idUSTRE59U05420091031)

Title: Re: Meltdown
Post by: BachQ on October 31, 2009, 08:08:22 AM

Quote from: Coopmv on October 30, 2009, 05:57:54 PM
It is all phony baloney ... :D

Economic upturn not based in reality: experts. (http://www.nypost.com/p/news/business/economic_upturn_not_based_in_reality_7k4OFKABlgbcnkVjts47UO)

Mish: Obama creates 640,329 jobs at a cost of $323,739.83 per job (http://globaleconomicanalysis.blogspot.com/2009/10/obama-creates-640329-jobs-at-cost-of.html)

Title: Re: Meltdown
Post by: BachQ on October 31, 2009, 08:10:00 AM

Zero Hedge: Fannie Mae Seriously Delinquent Rate Hockeysticks by 300% to 4.45% From 1.57% In Prior Year

(http://www.zerohedge.com/sites/default/files/images/FNM%20SD%2010.30_0.jpg)

"The delinquent inventory is feeding on itself: high delinquency rates are begetting even higher delinquencies, as borrowers who are current hear about their neighbors who are equally underwater but have stopped paying their mortgage and are living rent-free, going on vacation, buying toys, etc." (http://www.zerohedge.com/article/fannie-maie-seriously-delinquent-rate-hockeysticks-445-417-august-157-august-2008)

Title: Re: Meltdown
Post by: Coopmv on October 31, 2009, 08:11:06 AM

DM, The US is in serious trouble. Obama has been a major disappointment as you have said. One economist recently gave an interview to BusinessWeek at which he said the US is in serious trouble when it has 2 bad presidents in a row. I could not have agreed more. >:(

Chinese technology to power U.S. wind farm (http://www.dailyfinance.com/2009/10/30/china-technology-to-power-us-wind-farm/)

Title: Re: Meltdown
Post by: BachQ on October 31, 2009, 08:12:45 AM

U.S. Home Vacancies at 18.8 Million as Lenders Seize Properties
(http://www.bloomberg.com/apps/news?pid=20601087&sid=ayjET7O1JS38)

Adjustable Rate Mtg (ARM) delinquencies reach 50%

(http://av.r.ftdata.co.uk/lib/inc/getfile/19716.jpg)
"[Option ARM Mtg] delinquencies have moved steadily higher with the 30 day + delinquency now reaching close to 50% of all outstanding Option Arms."
(http://ftalphaville.ft.com/blog/2009/10/29/80306/option-armageddon-rears-its-ugly-head/)

Karl Denninger: (http://seekingalpha.com/article/170171-option-arms-still-a-gaping-hole)Option ARMs still a gaping hole.

Title: Re: Meltdown
Post by: BachQ on October 31, 2009, 08:22:00 AM

Quote from: Coopmv on October 30, 2009, 05:57:54 PM
It is all phony baloney ... :D

Economic upturn not based in reality: experts. (http://www.nypost.com/p/news/business/economic_upturn_not_based_in_reality_7k4OFKABlgbcnkVjts47UO)

Coop, the actual GDP figure is roughly -1.47%. (http://seekingalpha.com/article/169828-gdp-is-better) Mike Shedlock (Mish) concedes that these GDP and income figures are "horrible numbers." (http://globaleconomicanalysis.blogspot.com/2009/10/market-cheers-over-ugly-gdp-report.html) ... and that doesn't take into account the ZIRP (zero interest rates) and the multi-trillions of ultra-easy money the Fed has pumped into the economy's emergency lifesupport system.

But, hey, Obama and Pelosi want to show Joe 6-Pack that the trillions spent on stimulus and bailouts has yielded a "growing" economy. Thanks for all of the pablum, Obama & Pelosi. We can hardly wait for the 2d stimulus. :D

(http://i578.photobucket.com/albums/ss221/shadyobama/nancy_pelosi.jpg)

Cash for Clunkers: Taxpayers paid $24,000 per car
(http://money.cnn.com/2009/10/28/autos/clunkers_analysis/index.htm)

CHART OF THE DAY: Cash-For-Clunkers MASSIVELY Distorted GDP
(http://static.businessinsider.com/~~/f?id=4ae9cdc60000000000590b60)
According to the Bureau of Economic Analysis (BEA), motor vehicle output spiked a seasonally-adjusted 157.6% quarter on quarter. ... To put this into GDP terms, according to the BEA the spike you see below added 1.66% to the U.S. GDP growth figure reported. Thus without it, GDP growth would have been only 1.89% (3.5% - 1.66%) in Q3. (http://www.businessinsider.com/chart-of-the-day-motor-vehicle-output-2009-10)

Title: Re: Meltdown
Post by: Coopmv on October 31, 2009, 08:24:02 AM

Quote from: dm on October 31, 2009, 08:12:45 AM

U.S. Home Vacancies at 18.8 Million as Lenders Seize Properties
(http://www.bloomberg.com/apps/news?pid=20601087&sid=ayjET7O1JS38)

Adjustable Rate Mtg (ARM) delinquencies reach 50%

(http://av.r.ftdata.co.uk/lib/inc/getfile/19716.jpg)
"[Option ARM Mtg] delinquencies have moved steadily higher with the 30 day + delinquency now reaching close to 50% of all outstanding Option Arms."
(http://ftalphaville.ft.com/blog/2009/10/29/80306/option-armageddon-rears-its-ugly-head/)

Karl Denninger: (http://seekingalpha.com/article/170171-option-arms-still-a-gaping-hole)Option ARMs still a gaping hole.

Unfortunately, once these ARM's reset, there will be another wave of foreclosures. The Fed has to raise interest rate at some point and hopefully sooner rather than later since rate cannot remain at close to 0% indefinitely. The Democrats are totally oblivious to the spiraling-out-of-control federal deficits. The voters just have to toss them out and hopefully there will be a lot more independent candidates who will run next year, as the Republicans are nearly as bad since they did nothing of values from 01-06.

Title: Re: Meltdown
Post by: BachQ on October 31, 2009, 08:27:24 AM

Quote from: Coopmv on October 31, 2009, 08:11:06 AM
DM, The US is in serious trouble. Obama has been a major disappointment as you have said. One economist recently gave an interview to BusinessWeek at which he said the US is in serious trouble when it has 2 bad presidents in a row. I could not have agreed more. >:(

But Obama is our savior! ... :D Let's bring back Bush! :D

US Consumer Spending Plunges; US Consumer Confidence Tanks to 26-yr Low

By Timothy R. Homan and Courtney Schlisserman

Oct. 30 (Bloomberg) -- Americans cut spending for the first time in five months and a gauge of confidence weakened, signaling consumers will make a limited contribution to the recovery without government incentives.
Consumer spending fell 0.5 percent in September after a 1.4 percent jump in August, Commerce Department figures showed today in Washington. The Reuters/University of Michigan final index of consumer sentiment decreased to 70.6 in October from 73.5 the month before.

Mounting jobs losses, stagnant incomes and the expiration of programs such as the cash-for-clunkers auto rebates threaten to hold back household spending as the nation emerges from a recession. An unexpected improvement in an index of business activity reported separately today supports forecasts that manufacturing may help fill the void and propel the expansion that started last quarter.

"Manufacturing growth is going to be robust and broad- based," said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York. "Consumers are waiting to see whether the job market will improve before confidence takes another big leg up. That's coming, but it'll be a gradual process."

Stocks fell after the consumer spending report, with the Standard & Poor's 500 Index down 1 percent to 1,055.77 at 11:23 a.m. in New York. Treasury securities rose, pushing the yield on the 10-year note down to 3.44 percent from 3.50 percent late yesterday.

... The unemployment rate reached a 26-year high of 9.8 percent in September, up from 7.6 percent from when President Barack Obama took office in January. Economists project the jobless rate will exceed 10 percent by early 2010. (http://www.bloomberg.com/apps/news?pid=20601087&sid=a2g02NI0x4wA)

Title: Re: Meltdown
Post by: Coopmv on October 31, 2009, 08:30:37 AM

Quote from: dm on October 31, 2009, 08:08:22 AM
Mish: Obama creates 640,329 jobs at a cost of $323,739.83 per job
(http://globaleconomicanalysis.blogspot.com/2009/10/obama-creates-640329-jobs-at-cost-of.html)

This is money flushed down the toilet.

Title: Re: Meltdown
Post by: BachQ on October 31, 2009, 08:33:44 AM

Bank chargeoffs now @ 3.4%, equalling the chargeoff rate at the peak of the Great Depression.
(http://www.cnbc.com/id/33481862)

Business loans in record FREEFALL

The chart below shows the year over year change in business loans as a percent of GDP going back 6o years. A record drop and this one doesn't yet appear to be slowing down.

(http://1.bp.blogspot.com/_8rpY5fQK-UQ/SuTmunD42lI/AAAAAAAAIPg/Boy1vYLAraw/s400/loanperdp.png) (http://econompicdata.blogspot.com/2009/10/business-loans-record-freefall.html)

Title: Re: Meltdown
Post by: Coopmv on October 31, 2009, 08:38:11 AM

Quote from: dm on October 31, 2009, 08:33:44 AM
Bank chargeoffs now @ 3.4%, equalling the chargeoff rate at the peak of the Great Depression.
(http://www.cnbc.com/id/33481862)

Business loans in record FREEFALL

The chart below shows the year over year change in business loans as a percent of GDP going back 6o years. A record drop and this one doesn't yet appear to be slowing down.

(http://1.bp.blogspot.com/_8rpY5fQK-UQ/SuTmunD42lI/AAAAAAAAIPg/Boy1vYLAraw/s400/loanperdp.png)
(http://econompicdata.blogspot.com/2009/10/business-loans-record-freefall.html)

The US Small Business Administration will have to step in to provide funding to more small businesses as these banks just will not lend ...

Title: Re: Meltdown
Post by: BachQ on October 31, 2009, 08:43:29 AM

Quote from: Coopmv on October 31, 2009, 08:11:06 AM
DM, The US is in serious trouble. Obama has been a major disappointment as you have said. One economist recently gave an interview to BusinessWeek at which he said the US is in serious trouble when it has 2 bad presidents in a row. I could not have agreed more. >:(

Eric Sprott: "We believe the US government's current trajectory presents one of the greatest macro-economic risks at play today. The Federal Reserve and the US government have assumed the toxic financial trash that brought the banking system to its knees a year ago. By monetizing debt to support their budget deficit and 'save the system', both entities have chosen to walk a well worn path traveled by so many governments before them. Like dead men walking, the US government is merely biding its time until the moment of truth. Unlike Fannie Mae, General Motors or Citigroup, however, there is no one left to grant a reprieve."
(http://www.zerohedge.com/article/sprott-surreality-check-part-two-dead-government-walking)

Marc Faber: "The fiscal position of the US is a complete disaster. Eventually in ten years time about 50% of tax revenues will be used to just cover the interest payments on the government debt and that is unsustainable. Then you are forced to print money... As soon as the S&P drops towards 900 or 800 Bernanke will print money again, he is a money printer, he is nothing else. But he does that well - he prints well; you have to give him a medal for that" -
(http://www.zerohedge.com/article/marc-faber-death-fiat-money-dollar-will-go-value-exactly-zero)

U.S. Empire in Decline, on Collision Course with China --
Posted Oct 20, 2009 07:30am EDT by Aaron Task in Newsmakers

The U.S. is an empire in decline, according to Niall Ferguson, Harvard professor and author of The Ascent of Money. "People have predicted the end of America in the past and been wrong," Ferguson concedes. "But let's face it: If you're trying to borrow $9 trillion to save your financial system...and already half your public debt held by foreigners, it's not really the conduct of rising empires, is it?" (http://finance.yahoo.com/tech-ticker/article/357319/Niall-Ferguson-U.S.-Empire-in-Decline-on-Collision-Course-with-China?tickers=FXI,PGJ,%5EGSPC,%5Edji,SPY,LMT,RTN)

Title: Re: Meltdown
Post by: BachQ on October 31, 2009, 08:52:48 AM

Telegraph -- Return of high oil prices threatens real damage ... "prices have nearly doubled so far this year and at more than $80 a barrel, they are again high enough to cause real economic damage."
(http://blogs.telegraph.co.uk/finance/jeremywarner/100001422/return-of-high-oil-prices-threatens-real-damage/)

Peak oil before 2020 a 'significant risk', say experts
David Strahan

8th October, 2009 A new report highlights how woefully unprepared the Government is for a looming peak in oil production There is a 'significant risk' that conventional oil production will peak before 2020, and forecasts that delay the event beyond 2030 are based on assumptions that are 'at best optimistic and at worst implausible'. So says a major new report that puts the excitement over recent 'giant' oil discoveries into perspective and directly contradicts the British government's position. It also warns that failure to recognise the threat of peak oil could undermine efforts to combat climate change. The report, entitled 'Global Oil Depletion: An assessment of the evidence for a near-term peak in global oil production', comes from the UK Energy Research Centre, an independent group funded by the Research Councils, whose mission is to resolve contentious technical issues and deliver clear guidance for policymakers. This report is significant because it is the first dispassionate academic attempt to reconcile the highly polarised debate over whether and when oil supplies will start to decline, yet its conclusions chime with a growing number of recent forecasts that warn of an early peak in production.

... The UKERC found that total production from existing fields is declining at 4 per cent or more each year, meaning the world has to add 3 million barrels of daily production capacity annually just to stand still, equivalent to developing a new Saudi Arabia every three years. This will present 'a major challenge, even if 'above-ground' conditions are favourable', says the report.

... The UKERC argues that each additional 1 billion barrels delays peak oil by less than a week. To postpone the peak by a year would take 7 times what was discovered in 2007. 'We're unlikely to explore our way out of this,' says Sorrel

... "If you don't even recognize the problem you will inevitably be unprepared. The Government needs to wake up to oil depletion and start planning, because it's going to mean major changes infrastructure, investment and lifestyles." (http://www.theecologist.org/News/news_analysis/333587/peak_oil_before_2020_a_significant_risk_say_experts.html)

Title: Re: Meltdown
Post by: Coopmv on October 31, 2009, 12:39:23 PM

China will encounter peak water by 2030 and this warning was issued a few years ago. How will drinking water be provided to the expected population of 1.6B people given 60% of its lakes and rivers are heavily polluted due to its manufacturing activities? :o

China Warned of Water Crisis by 2030 (http://english.people.com.cn/200206/06/eng20020606_97285.shtml)

Title: Re: Meltdown
Post by: Coopmv on November 01, 2009, 05:46:03 AM

Stiglitz may have a point there, though I have extremely low confidence in the US government ever being able to do the right thing. :(

Stiglitz Says U.S. Is Paying for Failure to Nationalize Banks (http://www.bloomberg.com/apps/news?pid=20601087&sid=a1GMxUFBOhrY&pos=5)

Title: Re: Meltdown
Post by: Coopmv on November 01, 2009, 05:50:30 AM

Wilbur Ross is one of the most astute investors around and he is not a bag of hot air and exaggerations like Jimmy Rogers ...

Wilbur Ross Sees 'Huge' Commercial Real Estate Crash (Update3) (http://www.bloomberg.com/apps/news?pid=20601109&sid=aoRYl03Rw1_g&pos=10)

Title: Re: Meltdown
Post by: Coopmv on November 01, 2009, 09:12:32 AM

Quote from: dm on October 31, 2009, 08:08:22 AM
Mish: Obama creates 640,329 jobs at a cost of $323,739.83 per job
(http://globaleconomicanalysis.blogspot.com/2009/10/obama-creates-640329-jobs-at-cost-of.html)

DM, I cannot help but add this: $323,739.83 was probably used to create some $50,000 a year job. Go figure, by any economic analysis, this kind of performance is abysmal ... >:(

Title: Re: Meltdown
Post by: snyprrr on November 01, 2009, 10:43:11 AM

I'm buying as many cds as I can right now, to save all my money for the rest of my life for electricity! Oh, that's right, it may be going out for a while at some point.

How is this not all by design?

I'm just waiting for the next false flag event.

Title: Re: Meltdown
Post by: Coopmv on November 01, 2009, 10:46:41 AM

Quote from: snyprrr on November 01, 2009, 10:43:11 AM
I'm buying as many cds as I can right now, to save all my money for the rest of my life for electricity! Oh, that's right, it may be going out for a while at some point.

How is this not all by design?

I'm just waiting for the next false flag event.

You could be right. Life may become immeasurably bad going forward ...

Title: Re: Meltdown
Post by: Coopmv on November 01, 2009, 12:27:33 PM

DM, How do you spell double-dip?

Nobel Prize-winning economist Joseph E. Stiglitz said the U.S. recession is "nowhere near" an end and the economy's third-quarter growth rate of 3.5 percent, the first expansion in more than a year, won't carry into 2010.
(http://www.bloomberg.com/apps/news?pid=20601068&sid=aNiwcXqjCcY4)

Title: Re: Meltdown
Post by: Coopmv on November 01, 2009, 12:38:39 PM

Geithner Urges Banks to Resume Lending, Help Recovery, But how when their commercial real estate portfolios are imploding? (http://www.bloomberg.com/apps/news?pid=20601087&sid=aBG6IqPjtD1k&pos=5)

Title: Re: Meltdown
Post by: Coopmv on November 01, 2009, 04:12:48 PM

DM, So much for that stimulus. The US and perhaps the global economy could be heading for a double-dip ...

Even Mayor Keith Divine filed for unemployment when his furniture store went out of business. He now sells carpet and mattresses and says he hasn't seen evidence of the 640,000 jobs saved or created nationwide thanks to the $787 billion stimulus.

(http://finance.yahoo.com/news/As-jobs-vanish-factory-towns-apf-2768687577.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: snyprrr on November 02, 2009, 12:01:51 PM

I know that I know that I know that...

somewhere in the world there is a table with thirteen chairs, and the twelve members of the twelve families that "run the world" sit in twelve of the seats, and in the thirteenth seat sits a glowing set of red eyes, a la Sauron.

Who are the banking families that are doing this "to" us? Who else can it be but those which HAVE the money? Don't the Chinese get their money from the same place everyone else does?

Maybe I'm sounding cheeky here, but don't we know the actual names of the people that need to be exposed? And, I mean, beyond Bush and Obama...the puppets. Who is Bernanke's sponsor, and who is his sponsor's sponsor, and so on (how many Israeli dual-citizens in the Bush and Obama admins.?, etc...)? Why does it seem to be such a thing to get to the actual names of the heads? Oh, that's right, they own the media, so even if you uncover them, no one will know about it, or, you will be labeled a kook.

The more inconvenient questions people ask, the more the need for another false flag terror event to level out the playing field again. You can't worry about who's stealing your money if there's martial law. ASK MORE INCONVENIENT QUESTIONS!!!

I remember when I first learned about the fractionalized reserve system. Yes, Virginia, the system is against you on purpose!

and... "nothing in politics happens by accident."

Ain't life grand? ::)

Title: Re: Meltdown
Post by: Coopmv on November 03, 2009, 06:41:57 PM

DM, It was classic tossing out the bums. What happened to the Republicans in 06 and 08 just happened to the Democrats this evening, who were under the illusion they had some serious mandate after last November when they did not ...

GOP sweep: Big governor victories in Virginia, NJ ... (http://news.yahoo.com/s/ap/us_election_rdp)

Title: Re: Meltdown
Post by: Coopmv on November 03, 2009, 06:58:34 PM

DM, Take a look at all those wastes. So much for the stimulus of almost $800B ...

After a flurry of stimulus spending, questionable projects pile up
(http://www.washingtonexaminer.com/politics/After-a-flurry-of-stimulus-spending_-questionable-projects-pile-up-8474249-68709732.html)

Title: Re: Meltdown
Post by: Coopmv on November 05, 2009, 05:38:22 PM

DM, There is no end to this bailout for Fannie and Freddie ... >:(

Fannie Mae asks for $15 billion in US aid after posting $19.8 billion third-quarter loss
(http://finance.yahoo.com/news/Fannie-Mae-seeks-15-bln-in-US-apf-328804811.html?x=0&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 06, 2009, 05:22:02 PM

Show me the green shoots ... ???

What recovery? Unemployment shoots past 10 percent (http://finance.yahoo.com/news/What-recovery-Unemployment-apf-563122944.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 06, 2009, 05:32:23 PM

DM, You've got to read this article. Great article and it exposes the idiosy of the US ...

Three Decades of Subsidized Risk by Charles Gasparino
Friday, November 6, 2009 (http://finance.yahoo.com/loans/article/108104/three-decades-of-subsidized-risk?sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 06, 2009, 06:08:47 PM

DM, Things are getting interesting and I would love to see the mother of all breakups among these banks ...

Radical fixes for 'too big to fail' gain support
Bank of America, J.P. Morgan, Wells, Goldman among break-up candidates (http://www.marketwatch.com/story/radical-fixes-for-too-big-to-fail-gain-support-2009-11-06?pagenumber=1)

Title: Re: Meltdown
Post by: Coopmv on November 07, 2009, 08:10:36 AM

DM, It is just a matter of time before Freddie comes hat in hand begging for additional bailout money. The Feds will have to print a few billions more of the increasingly worthless dollar ... :o

Freddie Mac loses $6.3 billion, avoids request for federal aid for 2nd-straight quarter
(http://finance.yahoo.com/news/Freddie-Mac-loses-63B-in-apf-2893396059.html?x=0&sec=topStories&pos=7&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 07, 2009, 09:57:10 AM

DM, With John Reed, Alan Greenspan and Paul Volcker all preaching break-up, the push for busting up the banks is gaining momentum. Perhaps for once, the lobbyists will lose ...

Reed Says 'I'm Sorry' for Role in Creating Citigroup (http://www.bloomberg.com/apps/news?pid=20601109&sid=albMYVE7D578&pos=10)

Title: Re: Meltdown
Post by: Coopmv on November 07, 2009, 10:13:57 AM

DM, It is Financial Armageddon in Latvia ...

Latvia Spares Currency, Devalues Economy to Save Path to Euro (http://www.bloomberg.com/apps/news?pid=20601109&sid=auRvTno15W7k)

Title: Re: Meltdown
Post by: Coopmv on November 09, 2009, 08:21:55 AM

DM, You have not been putting in your 2 cents ... ;)

Flaw in US Data Overstates Growth, Productivity (http://finance.yahoo.com/banking-budgeting/article/108116/economists-seek-to-fix-a-defect-in-data-that-overstates-the-nations-vigor?sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 10, 2009, 05:42:30 AM

DM, Check this out, 72 million credit card account closings over 12 months. This clearly shows the US has been in an illusion of prosperity ...
:D

In the 12 months that ended in September, the number of Visa, MasterCard, American Express and Discover card accounts in the United States fell by 72 million (http://www.nytimes.com/2009/11/10/your-money/credit-and-debit-cards/10rates.html?partner=yahoofinance)

Title: Re: Meltdown
Post by: Coopmv on November 10, 2009, 08:37:56 PM

DM, American politicians are finally wisening up. Why should US stimulus money be used to create jobs in China?

Last week, Sen. Charles Schumer, D-N.Y., urged that $450 million in stimulus money be blocked from aiding a proposed Texas wind farm that relies on many turbines made in China, saying it would create jobs in China, not in the U.S.
(http://finance.yahoo.com/news/Government-Stimulus-Fanning-ibd-1319154649.html?x=0&.v=1)

Title: Re: Meltdown
Post by: Coopmv on November 11, 2009, 07:45:50 AM

Not looking good here. For a while the community banks mentioned in this article were touted as a bastion of strength during the meltdown, now they are melting down as well ...

:(

Banks Across America Bleed More Capital (http://www.thestreet.com/_yahoo/story/10625139/1/banks-across-america-bleed-more-capital.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA)

Title: Re: Meltdown
Post by: Coopmv on November 11, 2009, 09:22:35 AM

10 states face looming budget disasters
Pew report says 9 states face budget deficits, economic challenges similar to California's (http://finance.yahoo.com/news/Report-10-states-face-looming-apf-1219382684.html?x=0&sec=topStories&pos=1&asset=&ccode=)

No surprise that every state where there was a complete real estate market meltdown is on this list. Michigan and two states where a governor who recently lost his re-election and one whose ex-governor is awaiting a federal trial are also on this list ...

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on November 11, 2009, 09:49:51 AM

Quote from: Coopmv on November 09, 2009, 08:21:55 AM
DM, You have not been putting in your 2 cents ... ;)

He has probably fled to his cave by now, after stocking up on canned goods ;D

Title: Re: Meltdown
Post by: Coopmv on November 11, 2009, 01:31:22 PM

Quote from: Contents Under Pressure on November 11, 2009, 09:49:51 AM
He has probably fled to his cave by now, after stocking up on canned goods ;D

I am sure there are lots of tunnels and caves in the Alps where he can hide. This is the beauty of being a Swiss ... 8)

Title: Re: Meltdown
Post by: Coopmv on November 11, 2009, 04:12:46 PM

federal judge in LA: Countrywide ex-CEO Mozilo must face SEC fraud case
(http://www.reuters.com/article/BROKER/idUSN046815820091105)

Judgment Day cometh for Mozilo ...

(http://blog.rebeltraders.net/wp-content/uploads/2009/05/angelo-mozilo.jpg)

Title: Re: Meltdown
Post by: Coopmv on November 11, 2009, 07:49:17 PM

DM, $2000 an oz for gold?

Barrick shuts hedge book as world gold supply runs out
(http://www.telegraph.co.uk/finance/newsbysector/industry/mining/6546579/Barrick-shuts-hedge-book-as-world-gold-supply-runs-out.html)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 11:38:22 AM

Quote from: Coopmv on November 03, 2009, 06:41:57 PM
DM, It was classic tossing out the bums. What happened to the Republicans in 06 and 08 just happened to the Democrats this evening, who were under the illusion they had some serious mandate after last November when they did not ...

GOP sweep: Big governor victories in Virginia, NJ ... (http://news.yahoo.com/s/ap/us_election_rdp)

Coop, you correctly predicted this 2 months ago ... The Democrat's are going DOWN!

2010 will be UGLY for the Obamites.

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 11:42:01 AM

Bad news in Florida: 22% of Florida mortgages are non-current (http://www.thetruthaboutmortgage.com/22-percent-of-florida-mortgages-non-current/)

Bad news in CA:Orange County Foreclosure notices hit record 8,800 (ForeclosureRadar.com reports that outstanding foreclosure auction notices in Orange County rose to 8,895 at the end of September, the highest in this housing downturn and probably the highest ever).
(http://mortgage.freedomblogging.com/files/2009/11/outstandingforeclosureswebg1111-300x228.jpg) (http://mortgage.freedomblogging.com/2009/11/11/foreclosure-notices-hit-record-8800/21021/)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 11:45:19 AM

Junkbond Default Rate Is Highest Since Great Depression (Update2) Nov. 5 (Bloomberg) -- The global speculative-grade default rate rose to 12.4 percent in October, the highest proportion of defaults since the Great Depression, according to Moody's Investors Service.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=agMuCQkztqh4&pos=7)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 11:48:36 AM

Pension Funds, Facing $1 Trillion Gap, Next In Line For Government Pittance It was just a matter of time: with the government set to take over every aspect of the economy, its next holding will be the perpetually underfunded and soon to be bankrupt State and local pension system. Bloomberg notes that state and local government pensions are underfunded by $1 trillion and may need to seek federal guarantees for their debt. Another insolvent institution, the FDIC, will undoubtedly be happy to guarantee one broke entity's obligations with another broke entity's worthless guarantee.

continued (http://www.zerohedge.com/article/pension-funds-facing-1-trillion-gap-next-line-government-pittance)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 11:51:26 AM

October Personal Bankruptcies Highest Since 2005 Law Changes

By Bill Rochelle and Michael Bathon

Nov. 3 (Bloomberg) -- More Americans filed bankruptcy in October than in any month since changes to U.S. bankruptcy laws in 2005 as unemployment and falling home prices prevented consumers from paying their debts. The number of individuals filing bankruptcy rose 25 percent to about 131,200 from a year earlier, according to data compiled from court records by Oklahoma City-based Jupiter ESources LLC. The 1.2 million bankruptcies filed through October have already surpassed last year's total of 1.1 million.Businesses also continued to struggle to pay creditors; corporate bankruptcies climbed about 30 percent from October 2008, according to Jupiter. Chapter 11 bankruptcies, where a company attempts to reorganize rather than liquidate, rose the most in four months to 1,327 in October, according to Jupiter. (http://www.bloomberg.com/apps/news?pid=20601087&sid=a9eOFk1X3uoQ&pos=7)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 11:56:54 AM

Japan's debt-laden economy is imploding. (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6480289/It-is-Japan-we-should-be-worrying-about-not-America.html)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:02:36 PM

The American Economy in One Chart:
(http://www.safehaven.com/images/shepherd/14999.png)
This chart shows that interest rates have been decreasing by approximately 0.5% every 2 years. Put simply, As the price of debt becomes cheaper more is created and then spent, and that effectively is the economy. ... By constantly dropping interest rates, in line with the trendline above or 0.5% every 2 years, you will GUARANTEE A CONTINUOUS HOUSING BOOM. Which is exactly what we have had for the last 30 years. That is until the market runs ahead of itself and then crashes WHICH HAS NOW HAPPENED, or until you reach the ZERO BOUND position of 0% interest rates WHICH HAS NOW ALSO HAPPENED

continued (http://www.safehaven.com/article-14999.htm)

Title: Re: Meltdown
Post by: Valentino on November 13, 2009, 12:05:49 PM

Still melting over there? 0:)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:06:59 PM

US's October deficit = $178 billion (Receipts were $135 billion whilst outlays were $311 billion). (http://www.marketwatch.com/story/us-ran-deficit-of-176-billion-in-october-2009-11-12-140160)

Title: Re: Meltdown
Post by: MN Dave on November 13, 2009, 12:08:29 PM

(http://foodbeast.com/content/wp-content/uploads/2009/02/double_bacon_hamburger_cheese_melt.jpg)

Hi dm. :)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:08:46 PM

3 Arguments for China's Looming Economic Crash (http://dailyreckoning.com/3-arguments-for-chinas-looming-economic-crash/)

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 12:13:08 PM

Quote from: dm on November 13, 2009, 11:56:54 AM
Japan's debt-laden economy is imploding.
(http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6480289/It-is-Japan-we-should-be-worrying-about-not-America.html)

DM, I have more confidence in Japan to pull through this debt crisis since its people are more disciplined and with a 30% savings rate compared to 0% for the US until a few months ago, Japan is no doubt in far better shape.

BTW, what are the requirements for foreign nationals who want to retire to Swtizerland - arrive with a few millions dollars. Just checking ... ;D

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:13:41 PM

Quote from: Coopmv on November 01, 2009, 04:12:48 PM
DM, So much for that stimulus. The US and perhaps the global economy could be heading for a double-dip ...

Even Mayor Keith Divine filed for unemployment when his furniture store went out of business. He now sells carpet and mattresses and says he hasn't seen evidence of the 640,000 jobs saved or created nationwide thanks to the $787 billion stimulus.

(http://finance.yahoo.com/news/As-jobs-vanish-factory-towns-apf-2768687577.html?x=0&sec=topStories&pos=2&asset=&ccode=)

US Real unemployment (U6) soars to 17.5%

(http://www.zerohedge.com/sites/default/files/images/U-6%20October.jpg)

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 12:15:03 PM

Quote from: MN Dave on November 13, 2009, 12:08:29 PM
(http://foodbeast.com/content/wp-content/uploads/2009/02/double_bacon_hamburger_cheese_melt.jpg)

Hi dm. :)

The way things have been going for the American middle class, most of us will be having bacon and cheese sandwich for dinner for the foreseeable future ... >:(

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:15:49 PM

US Slaps Duties on Chinese Pipes in Biggest Trade Action
Published: Thursday, 5 Nov 2009 | 11:08 PM ET
The United States on Thursday slapped preliminary anti-dumping duties ranging up to 99 percent on Chinese-made oil well pipe in the biggest U.S. trade action against China. (http://www.cnbc.com/id/33704692)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:17:52 PM

Henry Blodget: -- Commercial Real-Estate Crash Is Coming And It's Going To Be Terrific ... "The commercial real-estate crash is the worst-kept secret in the economy, but it's happening. It's just taking a long time to play out." ... "All of the components of real estate value are going in the wrong direction simultaneously," said Wilbur Ross, one of nine money managers participating in a government program to remove toxic assets from bank balance sheets. "Occupancy rates are going down. Rent rates are going down and the capitalization rate -- the return that investors are demanding to buy a property -- are going up." (http://www.businessinsider.com/henry-blodget-soros-ross-commercial-real-estate-crash-is-coming-and-its-going-to-be-terrific-2009-11)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:19:26 PM

States Are Pondering Fraud Suits Against Banks -- "While statutes vary, those of every state prohibit fraud in consumer lending. The attorneys general are considering the theory that the banks essentially perpetrated a vast fraud on consumers by marketing exotic loans that would prove impossible to pay back." (http://www.nytimes.com/2009/11/03/business/03suits.html)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:22:47 PM

11% of US population on food stamps.

(http://www.mybudget360.com/wp-content/uploads/2009/11/food-stamps.png)
(http://www.mybudget360.com/bankruptcy-filings-to-match-divorce-filings-in-2009-15-million-358-million-americans-on-food-stamps-11-percent-of-the-population-the-5-indicators-of-the-misery-index/)

Half of US kids will get food stamps (90% of African American kids) (http://news.yahoo.com/s/ap/20091103/ap_on_he_me/us_med_children_food_stamps)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:24:46 PM

Property Values Set to Fall 43% from Current Depressed Levels

(http://static.seekingalpha.com/uploads/2009/11/2/saupload_clip_image002_thumb2_thumb1.jpg) (http://seekingalpha.com/article/170526-property-values-set-to-fall-43-from-current-depressed-levels?source=hp_mostpopular)

Title: Re: Meltdown
Post by: BachQ on November 13, 2009, 12:28:23 PM

In the US, "one out of every five dollars in personal income now comes from the Federal government"

(http://farm4.static.flickr.com/3014/3353079569_aeac6d42ca.jpg) (http://www.oftwominds.com/blogoct09/great-implosion10-09.html)

Title: Re: Meltdown
Post by: MN Dave on November 13, 2009, 12:30:40 PM

So? Fix it!!!

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 12:32:00 PM

Quote from: dm on November 13, 2009, 12:28:23 PM
In the US, "one out of every five dollars in personal income now comes from the Federal government"

(http://farm4.static.flickr.com/3014/3353079569_aeac6d42ca.jpg)
(http://www.oftwominds.com/blogoct09/great-implosion10-09.html)

And the Obama Administration has yet to figure out how to stimulate the private sectors to create jobs. Maybe it never will before it is voted out of power in 2012 ...

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 12:35:26 PM

Quote from: dm on November 13, 2009, 12:28:23 PM
In the US, "one out of every five dollars in personal income now comes from the Federal government"

(http://farm4.static.flickr.com/3014/3353079569_aeac6d42ca.jpg)
(http://www.oftwominds.com/blogoct09/great-implosion10-09.html)

Nancy Pelosi has company with Emperor Nero ... :D

(http://scrapetv.com/News/News%20Pages/Everyone%20Else/images/nero-fiddling-as-rome-burns.JPG)

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 12:39:23 PM

Quote from: dm on November 13, 2009, 12:15:49 PM
US Slaps Duties on Chinese Pipes in Biggest Trade Action
Published: Thursday, 5 Nov 2009 | 11:08 PM ET
The United States on Thursday slapped preliminary anti-dumping duties ranging up to 99 percent on Chinese-made oil well pipe in the biggest U.S. trade action against China.
(http://www.cnbc.com/id/33704692)

The Chinese had zero presence in this industry a few years ago. They are trying to do the same to this new target industry like what they did a few years ago to the American furniture industry, whose destruction the previous administration turned a blind eye to ...

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 01:16:28 PM

Bad news for the central kingdom ...

Four Reasons Mexico Is the New China (http://www.minyanville.com/articles/mexico-china-currency-low-cost-maquiladora-us-connection-nafta-trade-minyanville/index/a/25444)

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 07:28:46 PM

DM. Even celebrities are getting foreclosed on ... :o

Nicolas Cage loses 2 homes in foreclosure auction
(http://finance.yahoo.com/news/Nicolas-Cage-loses-2-homes-in-cnnm-1304107173.html?x=0&.v=2)

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 07:33:57 PM

The threat of a major debacle at the ballot box is scaring the crap out of the Democrats. It may already be too little too late. In 2012, they will likely lose their majority in Congress and Pelosi will lose her speakership ...

Obama Eyes Domestic Spending Freeze (http://news.aol.com/article/obama-eyes-domestic-spending-freeze/766309)

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 08:01:20 PM

DM, What have these guys been smoking? ;D

Realtors: home prices to rise 4 percent in 2010 (http://finance.yahoo.com/news/Realtors-home-prices-to-rise-apf-935437126.html?x=0&sec=topStories&pos=4&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 13, 2009, 08:08:05 PM

The folly of the Obama Administration, which shows that these folks are as idiotic as those in the Bush Administration. The root cause of the massive trade deficits have more to do with the Dollar overvalued relative to the YUAN because the Chinese have been manipulating the exchange rate. There are massive structural problems and tax system problems that have to be addressed. The current tax code encourages US companies to outsource jobs. Close those loopholes and this deficits problem will be partially addressed ...

Weak dollar no quick fix for narrowing trade gap (http://finance.yahoo.com/news/Weak-dollar-no-quick-fix-for-apf-2683498712.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 14, 2009, 05:20:43 AM

DM, I cannot wait for the day when YUAN starts to trade in the forex market and traders start a speculative attack to drive it sky high ... ;D

China is "stealing" jobs from developing countries and hindering a global recovery by keeping the yuan low, Nobel laureate Paul Krugman says. "China's bad behavior is posing a growing threat to the rest of the world economy," Krugman, the Princeton University professor who won the Nobel prize for economics last year, wrote in an Oct. 22 New York Times article.

(http://www.bloomberg.com/apps/news?pid=20601109&sid=awHX2QPENKgQ&pos=10)

Title: Re: Meltdown
Post by: Coopmv on November 15, 2009, 04:33:46 AM

DM, The US has become a third-world country run by some dictator where there is no accountability for large sum of money spent ...

The government paid more than $47 billion in questionable Medicare claims including medical treatment showing little relation to a patient's condition, wasting taxpayer dollars at a rate nearly three times the previous year.

(http://finance.yahoo.com/news/Govt-Medicare-paid-47-billion-apf-2922922408.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on November 15, 2009, 05:27:53 PM

DM, It will be a pipe dream if the Chinese want to sell their planes to SwissAir. ;)

GE forms China JV to make airplane electronics (http://finance.yahoo.com/news/GE-forms-China-JV-to-make-apf-323306390.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: snyprrr on November 15, 2009, 08:14:07 PM

Do the Chinese get their money the same place that everyone else does (which is... where?), or do they have their own money, or, what's the deal with them? Are they really as mysterious as they seem, or, do they just play the "game" very well, as pokerplayers?

Title: Re: Meltdown
Post by: Coopmv on November 15, 2009, 08:20:23 PM

Quote from: snyprrr on November 15, 2009, 08:14:07 PM
Do the Chinese get their money the same place that everyone else does (which is... where?), or do they have their own money, or, what's the deal with them? Are they really as mysterious as they seem, or, do they just play the "game" very well, as pokerplayers?

Just look at the American middle class and realize how much the living standard has fallen off the cliff over the past 25 years. It has been a massive transfer of wealth from the US to China. That is why the Chinese have amassed the $2T foreign reserves. This is no mystery, though some of these shameless free-traders will call me xenophobic, but I am telling the truth. This whole free trade deal is essentially a zero-sum game ...

Title: Re: Meltdown
Post by: Coopmv on November 15, 2009, 10:02:37 PM

DM, This should not have come as a surprise. What was your previous calculation? It took over $300,000 of federal money to create a single job ... :o

The federal stimulus funding that has reached Michigan so far has created few private-sector jobs and some recipients of the cash have overstated the number of jobs created or protected, an analysis by the Detroit Free Press shows.

(http://finance.yahoo.com/news/Newspaper-Stimulus-brings-few-apf-2153549130.html?x=0&.v=2)

Title: Re: Meltdown
Post by: Coopmv on November 16, 2009, 09:53:47 AM

DM, It ain't over till it is over ... >:(

House Prices Still Have A Ways To Fall (http://finance.yahoo.com/tech-ticker/article/372877/House-Prices-Still-Have-A-Ways-To-Fall?tickers=xhb,tol,kbh,len,spy,dia&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 17, 2009, 07:18:18 PM

DM, The Dems are clueless ... ;)

Democrats promise jobs bill (http://finance.yahoo.com/news/Democrats-promise-jobs-apf-1436663205.html?x=0&.v=2)

Title: Re: Meltdown
Post by: Coopmv on November 18, 2009, 06:52:27 PM

DM, They should have done this 20 years ago ... :o

Ariz. prosecutor files 1st case under law that prohibits knowingly hiring illegal immigrants (http://finance.yahoo.com/news/Ariz-prosecutor-files-1st-apf-3649147786.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 18, 2009, 06:56:05 PM

DM, Health insurer is taking preemptive action ...

Health insurer Aetna said Wednesday it will cut 625 jobs immediately, or nearly 2 percent of its staff, and will make a similar number of cuts by the end of the 2010 first quarter due to the lagging economy and the potential impact of health care reform.

(http://finance.yahoo.com/news/Aetna-cutting-more-than-1000-apf-2683371876.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 18, 2009, 07:01:34 PM

DM, Pelosi might be a one-shot wonder as I doubt the Dems have the votes to pass the bill in its current form in the US Senate. Joe Lieberman of CT (my state), a former Dems turned Independent has already said he will not vote for the bill ...

Reid unveils $849 billion health care bill, setting up historic debate over national overhaul (http://finance.yahoo.com/news/Reid-sets-markers-for-apf-1544984161.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on November 20, 2009, 05:14:58 PM

Speaking of unrealistic expectation. CA residents should get used to higher taxes and fees to help bring down the massive state budget deficits ...

UC students occupy buildings to protest fee hike (http://news.yahoo.com/s/ap/us_california_university_fees)

Title: Re: Meltdown
Post by: Coopmv on November 20, 2009, 05:22:31 PM

DM, This cannot be good for Chinese imports into the US ...

Americans save more but earn less as rates fall ... (http://finance.yahoo.com/news/Americans-save-more-but-earn-apf-3318981277.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 20, 2009, 07:27:29 PM

DM, You can go blind by staring at these numbers ... :o

Figures on government spending and debt (http://finance.yahoo.com/news/Figures-on-government-apf-1649533470.html?x=0&.v=2)

Title: Re: Meltdown
Post by: Coopmv on November 21, 2009, 06:24:41 AM

DM, Just give it 2-3 years, the Chinese will have their own mega financial meltdown. They are doing a copycat on Alan Greenspan ...

China Banks Fill Syndicated Loan Void as RBS Retreats (http://www.bloomberg.com/apps/news?pid=20601109&sid=a4iYO7Ud35LA&pos=14)

Title: Re: Meltdown
Post by: Coopmv on November 21, 2009, 07:19:29 AM

DM, 55% top rate on $1M estate. $1M is not a lot of money when it is denominated in the worthless dollar ...

Rangel Says House Democrats Will Renew Tax Breaks (http://www.bloomberg.com/apps/news?pid=20603037&sid=aibLRu6QCZlA)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 03:50:17 PM

Coop, the US Nat'l debt now exceeds $12 TRILLION! :o

Quote from: Coopmv on November 20, 2009, 07:27:29 PM
DM, You can go blind by staring at these numbers ... :o

Figures on government spending and debt (http://finance.yahoo.com/news/Figures-on-government-apf-1649533470.html?x=0&.v=2)

Remember 10 months ago when Obama and Pelosi couldn't wait to spend $800 billion to stimulate the economy. Well, now that the debt exceeds $12 trillion, Obama is backpedalling, claiming that too much debt could fuel a double-dip recession. (http://www.reuters.com/article/businessNews/idUSTRE5AH1RY20091118)

Examiner.com -- Obama's one way ticket to a "double-dip" recession

(http://img513.imageshack.us/img513/8734/1225853127171mg1.gif)

(http://farm4.static.flickr.com/3014/3353079569_aeac6d42ca.jpg) (http://www.examiner.com/x-26173-Dauphin-County-Republican-Examiner~y2009m11d18-Obamas-one-way-ticket-to-a-doubledip-recession)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 03:54:04 PM

Fears of 'Lost Decade' Grow for British Economy

By LANDON THOMAS Jr.
Published: November 20, 2009

Britain may finally be emerging from recession, but many analysts warn that it is a false dawn. In fact, they argue, the economy here is so ravaged by growing debts and ruined banks that it could well be following in the steps of Japan's lost decade of the 1990s. On top of rising debt, the tax base is collapsing and the crippled banking sector has yet to show it can generate profits by lending to companies. According to Adam S. Posen of the Bank of England, "the United Kingdom has an uncomfortable parallel with the Japanese financial system when the Japanese economy began to recover in the mid-1990s and was unable to sustain it. The closer one looks, the more worrisome this specific parallel becomes, given the concentration of the U.K. banking system in few major, mostly still troubled banks, and the relative underdevelopment of alternative nonbank channels for getting capital to nonfinancial businesses in the U.K." (http://www.nytimes.com/2009/11/21/business/global/21pound.html?ref=business)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 03:55:16 PM

Zero Hedge -- State Unemployment Ticks Up In 29 States, Mass Layoff Events Pick Up Once Again (http://www.zerohedge.com/article/state-unemployment-ticks-29-states-mass-layoff-events-pick-once-again)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 03:56:43 PM

NYT: Ohio Sues Credit Rating Agencies

By DAVID SEGAL
Published: November 20, 2009

The attorney general of Ohio sued the country's largest credit rating agencies on Friday, alleging that they had cost state retirement and funds some $457 million by approving high-risk Wall Street securities that went bust in the financial collapse. The case could test whether the agencies' ratings are constitutionally protected as a form of free speech.

The lawsuit claims that Moody's, Standard & Poor's and Fitch were in league with the banks and other issuers, helping to design an assortment of exotic financial instruments that led to a disastrous bubble in the housing market.

"We believe that the credit rating agencies, in exchange for fees, departed from their objective, neutral role as arbiters," the attorney general, Richard Cordray, said at a news conference. "At minimum, they were aiding and abetting misconduct by issuers."

He accused the companies of selling their integrity to the highest bidder.

continued (http://www.nytimes.com/2009/11/21/business/21ratings.html?_r=1&ref=business)

Title: Re: Meltdown
Post by: Coopmv on November 21, 2009, 03:57:17 PM

Quote from: dm on November 21, 2009, 03:50:17 PM
Coop, the US Nat'l debt now exceeds $12 TRILLION! :o

Remember 10 months ago when Obama and Pelosi couldn't wait to spend $800 billion to stimulate the economy. Well, now that the debt exceeds $12 trillion, Obama is backpedalling, claiming that too much debt could fuel a double-dip recession. (http://www.reuters.com/article/businessNews/idUSTRE5AH1RY20091118)

Examiner.com -- Obama's one way ticket to a "double-dip" recession

(http://img513.imageshack.us/img513/8734/1225853127171mg1.gif)

(http://farm4.static.flickr.com/3014/3353079569_aeac6d42ca.jpg)
(http://www.examiner.com/x-26173-Dauphin-County-Republican-Examiner~y2009m11d18-Obamas-one-way-ticket-to-a-doubledip-recession)

As one economist recently wrote, the US has historically been able to right itself economically. But when we have two bad presidents in a row, all bets are off. We are looking into the economic abyss right now ...

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 03:58:25 PM

House panel approves Ron Paul's proposal to audit the Federal Reserve

The House Financial Services Committee has approved Rep. Ron Paul's measure to drastically expand the government's power to audit the Federal Reserve.

The measure, based on a Paul proposal that has attracted more than 300 co-sponsors, passed, 43-26, as an amendment to a financial reform bill. Florida Democrat and fellow Fed critic Alan Grayson co-sponsored the amendment with Paul and played a leading role drumming up support for it among committee members. The adoption of this amendment is an extraordinary victory for Paul, whose libertarian, anti-Fed leanings have often been dismissed by the political establishment.

The amendment would give the Government Accountability Office much greater to audit the Federal Reserve, which has a long history of independence from congressional audits. Paul and Grayson beat out a competing measure offered by Rep. Mel Watt (D-N.C.), who after weeks of negotiations with the pair felt their measure would threaten the Fed's monetary policy.

continued (http://www.politico.com/news/stories/1109/29734.html)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 04:01:40 PM

Wall Street Journal -- (http://online.wsj.com/article/SB125854971533953543.html?mod=rss_US_News)Fear of Double Dip in Housing -- Home Starts Tumble and Mortgage Delinquencies Rise, Casting Cloud Over Recovery

NYT: US Mortgage delinquencies & foreclosures reach all-time high of 14.1% -- The overall third-quarter delinquency rate is the highest since the association began keeping records in 1972. It is up from about one in 14 mortgage holders in the third quarter of 2008.

The combined percentage of those in foreclosure as well as delinquent homeowners is 14.41 percent, or about one in seven mortgage holders. One in four people with mortgages in Florida is behind in payments. The percentage of loans in foreclosure on Sept. 30 was 4.47 percent, up from 2.97 percent last year.

(http://www.nytimes.com/2009/11/20/business/20mortgage.html?_r=1&ref=business)

Quote from: Coopmv on November 21, 2009, 03:57:17 PM
As one economist recently wrote, the US has historically been able to right itself economically. But when we have two bad presidents in a row, all bets are off. We are looking into the economic abyss right now ...

Yep, 12 consecutive years of horsesh!t leadership will doom even the greatest of countries.

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 04:06:25 PM

Pollution in China is OUT OF CONTROL:

(http://www.chinahush.com/wp-content/uploads/2009/10/20091020luguang01.jpg)

(http://www.chinahush.com/wp-content/uploads/2009/10/20091020luguang06.jpg)

(http://www.chinahush.com/wp-content/uploads/2009/10/20091020luguang10.jpg) (http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/)

Karl Denninger: "America used to mistreat her land and water like this. This sort of thing, by the way, is how you manage to produce things with a wage of $1 or $2/day and undercut first-world producers. When we have "free trade" with China, this is what we are supporting. This is what we're serving up on their people. This is what our government and corporations all say is ok - so long as it is hidden from us, and happens "over there." ... Those "great earnings" [in the US] the last two quarters were in fact generated by firing Americans and shifting yet more production over to China, where they poison their air, water and ground with wild abandon, all so we can have a "strong" stock market and our banksters can loot us some more. (http://seekingalpha.com/article/174149-are-we-exacerbating-china-s-pollution)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 04:07:33 PM

(http://www.oftwominds.com/photos09/job-losses8-09.jpg) (http://www.oftwominds.com/blognov09/market-should-crash11-09.html)

(http://www.businessweek.com/the_thread/economicsunbound/archives/longjobs1.gif)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 04:08:31 PM

NYT: The proportion long-term unemployed workers "is higher now than it has ever been since the Great Depression"

(http://graphics8.nytimes.com/images/2009/11/13/business/1114-biz-webCHARTS.gif) (http://www.nytimes.com/2009/11/14/business/economy/14charts.html?_r=1&ref=business)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 04:10:23 PM

Calif's deficit could reach $25 billion
(http://www.mercurynews.com/top-stories/ci_13784035)

Nine states suffer Californian fiscal disease
(http://www.ft.com/cms/s/0/39101034-ceeb-11de-8a4b-00144feabdc0.html)

Strapped for cash, states are releasing prisoners in record numbers (http://www.ft.com/cms/s/0/a077b512-d074-11de-af9c-00144feabdc0.html)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 04:14:28 PM

Quote from: Coopmv on November 18, 2009, 06:52:27 PM
DM, They should have done this 20 years ago ... :o

Ariz. prosecutor files 1st case under law that prohibits knowingly hiring illegal immigrants (http://finance.yahoo.com/news/Ariz-prosecutor-files-1st-apf-3649147786.html?x=0&sec=topStories&pos=2&asset=&ccode=)

I agree ... what took so long?

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 04:17:40 PM

Forbes: Commercial Real Estate Will Collapse --

Stuart Saft, 11.19.09, 04:00 PM EST
The long-feared financial disaster is still looming. Bad court decisions could set it off.

The commercial real estate market is on its last legs and unless drastic actions are taken, the effects on the broader economy will be catastrophic. The obvious problem is the excessive amount of debt placed on the properties and the amount of debt that has to be refinanced during a relatively short period of time.

Between now and 2013, at least $1.3 trillion of financing comes due, of which $160 billion was the result of securitizations. Unfortunately, as a result of the virtual disappearance of the secondary market, the weakened condition of the banks, and the amount of debt already held by insurance companies and pension funds, even under the best of circumstances, less than half of the outstanding debt can be refinanced.

... So far, the courts seem to believe that they are playing the role of Robin Hood and ignoring creditors' rights. This behavior is also causing lenders to think twice before making loans.

continued

(http://www.forbes.com/2009/11/19/saft-commercial-real-estate-intelligent-investing-collapse.html)

U.S. Foreclosure Filings Surpass 300,000 for 8th Straight Month ("A total of 332,292 properties received a default or auction notice or were seized by banks in October, up 19 percent from a year earlier")
(http://www.bloomberg.com/apps/news?pid=20601103&sid=aaXO2EVjAjb4&ref=patrick.net)

Vacant rental housing is increasingly subject to vandalism. (http://www.azcentral.com/business/realestate/articles/2009/11/09/20091109rentalrisks.html#comments)

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 04:20:09 PM

UK Telegraph: China has now become the biggest risk to the world economy

Far from taking over as the engine of growth from an exhausted West, China is making matters worse. Its "beggar-thy-neighbour" policies continue to play havoc with global trade and risk tipping the world into a second leg of the Great Recession.

...By holding the yuan to 6.83 to the dollar to boost exports, Beijing is dumping its unemployment abroad – "stealing American jobs", says Nobel laureate Paul Krugman. As long as China does it, other tigers must do it too. ...

At some point, American workers will rebel. US unemployment is already 17.5pc under the broad "U6" gauge followed by Barack Obama. Realty Track said that 332,000 properties were foreclosed in October alone. More Americans have lost their homes this year than during the entire decade of the Great Depression. A backlog of 7m homes is awaiting likely seizure by lenders. If you are not paying attention to this political time-bomb, perhaps you should.

continued (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6575883/China-has-now-become-the-biggest-risk-to-the-world-economy.html)

Title: Re: Meltdown
Post by: Coopmv on November 21, 2009, 04:24:17 PM

Quote from: dm on November 21, 2009, 03:58:25 PM
House panel approves Ron Paul's proposal to audit the Federal Reserve

The House Financial Services Committee has approved Rep. Ron Paul's measure to drastically expand the government's power to audit the Federal Reserve.

The measure, based on a Paul proposal that has attracted more than 300 co-sponsors, passed, 43-26, as an amendment to a financial reform bill. Florida Democrat and fellow Fed critic Alan Grayson co-sponsored the amendment with Paul and played a leading role drumming up support for it among committee members. The adoption of this amendment is an extraordinary victory for Paul, whose libertarian, anti-Fed leanings have often been dismissed by the political establishment.

The amendment would give the Government Accountability Office much greater to audit the Federal Reserve, which has a long history of independence from congressional audits. Paul and Grayson beat out a competing measure offered by Rep. Mel Watt (D-N.C.), who after weeks of negotiations with the pair felt their measure would threaten the Fed's monetary policy.

continued
(http://www.politico.com/news/stories/1109/29734.html)

Once the Fed is no longer politically independent, the US of A will become another Argentina - with annualized inflation of 300% since Congress would insist the Fed to keep interest rates low ... :o

Title: Re: Meltdown
Post by: BachQ on November 21, 2009, 04:25:20 PM

Reuters -- 12 reasons unemployment is going to (at least) 12 percent
(http://blogs.reuters.com/james-pethokoukis/2009/11/11/12-reasons-unemployment-is-going-to-at-least-12-percent/)

Roubini: The worst is yet to come: Unemployed Americans should hunker down for more job losses

BY NOURIEL ROUBINI

Sunday, November 15th 2009, 4:00 AM

Think the worst is over? Wrong. Conditions in the U.S. labor markets are awful and worsening. While the official unemployment rate is already 10.2% and another 200,000 jobs were lost in October, when you include discouraged workers and partially employed workers the figure is a whopping 17.5%.

Read more: (http://www.nydailynews.com/opinions/2009/11/15/2009-11-15_the_worst_is_yet_to_come_unemployed_americans_should_hunker_down_for_more_job_lo.html#ixzz0WzpPxNO3)

Title: Re: Meltdown
Post by: Coopmv on November 21, 2009, 04:28:26 PM

Quote from: dm on November 21, 2009, 04:06:25 PM
Pollution in China is OUT OF CONTROL:

(http://www.chinahush.com/wp-content/uploads/2009/10/20091020luguang01.jpg)

(http://www.chinahush.com/wp-content/uploads/2009/10/20091020luguang06.jpg)

(http://www.chinahush.com/wp-content/uploads/2009/10/20091020luguang10.jpg) (http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/)

Karl Denninger: "America used to mistreat her land and water like this. This sort of thing, by the way, is how you manage to produce things with a wage of $1 or $2/day and undercut first-world producers. When we have "free trade" with China, this is what we are supporting. This is what we're serving up on their people. This is what our government and corporations all say is ok - so long as it is hidden from us, and happens "over there." ... Those "great earnings" [in the US] the last two quarters were in fact generated by firing Americans and shifting yet more production over to China, where they poison their air, water and ground with wild abandon, all so we can have a "strong" stock market and our banksters can loot us some more.
(http://seekingalpha.com/article/174149-are-we-exacerbating-china-s-pollution)

But the commies in Beijing have to continue this pollution policy because their regime will collapse if it does not generate a lot of jobs.

Title: Re: Meltdown
Post by: Coopmv on November 21, 2009, 04:37:30 PM

Quote from: dm on November 21, 2009, 04:20:09 PM
UK Telegraph: China has now become the biggest risk to the world economy

Far from taking over as the engine of growth from an exhausted West, China is making matters worse. Its "beggar-thy-neighbour" policies continue to play havoc with global trade and risk tipping the world into a second leg of the Great Recession.

...By holding the yuan to 6.83 to the dollar to boost exports, Beijing is dumping its unemployment abroad – "stealing American jobs", says Nobel laureate Paul Krugman. As long as China does it, other tigers must do it too. ...

At some point, American workers will rebel. US unemployment is already 17.5pc under the broad "U6" gauge followed by Barack Obama. Realty Track said that 332,000 properties were foreclosed in October alone. More Americans have lost their homes this year than during the entire decade of the Great Depression. A backlog of 7m homes is awaiting likely seizure by lenders. If you are not paying attention to this political time-bomb, perhaps you should.

continued
(http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6575883/China-has-now-become-the-biggest-risk-to-the-world-economy.html)

DM, Thanks for this article, which provides some very cogent analysis of the current world economy.

Title: Re: Meltdown
Post by: Coopmv on November 21, 2009, 06:45:38 PM

DM, David Broder is a totally non-partisan columnist ... :o

A budget-buster in the making

By David S. Broder

(http://www.washingtonpost.com/wp-dyn/content/article/2009/11/20/AR2009112002618_pf.html)

Title: Re: Meltdown
Post by: Coopmv on November 21, 2009, 07:34:47 PM

DM, If there should be one, I just do not see how Société Générale will be immune from the collapse itself ... ;D

Société Générale tells clients how to prepare for potential 'global collapse' (http://www.telegraph.co.uk/finance/economics/6599281/Societe-Generale-tells-clients-how-to-prepare-for-global-collapse.html)

Title: Re: Meltdown
Post by: Coopmv on November 22, 2009, 02:00:04 PM

DM, Pelosi's optimism was off the mark big-time. The US Senate is like the House of Lords in the UK ... ;D

Moderate Senate Democrats threatened Sunday to scuttle health-care legislation if their demands aren't met, while more liberal members warned their party leaders not to bend.

(http://finance.yahoo.com/news/Senate-Democrats-at-odds-over-apf-3640789539.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 22, 2009, 05:16:57 PM

DM, What a tragedy? This is as bad as what you find in some third world country ... :o

The abandoned corpses, in white body bags with number tags tied to each toe, lie one above the other on steel racks inside a giant freezer in Detroit's central mortuary, like discarded shoes in the back of a wardrobe.

Some have lain here for years, but in recent months the number of unclaimed bodies has reached a record high. For in this city that once symbolised the American Dream many cannot even afford to bury their dead.

(http://www.timesonline.co.uk/tol/news/world/us_and_americas/article6926247.ece)

Title: Re: Meltdown
Post by: Coopmv on November 23, 2009, 05:34:33 PM

DM, The ambulance chasers are ready to pounce ...

Federal government finds 'strong association' between Chinese drywall, corrosion in homes (http://finance.yahoo.com/news/Feds-find-association-between-apf-19968729.html?x=0&sec=topStories&pos=7&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 25, 2009, 08:15:33 PM

DM, Do you know what the hell is going on? I cannot wait till Jan 20th 2013 to see this incompetent administration become history ...

Dollar falls to 14-year low against yen after Fed signals US rates to remain low (http://finance.yahoo.com/news/Dollar-falls-to-14year-low-vs-apf-4198591361.html?x=0&.v=13)

Title: Re: Meltdown
Post by: Coopmv on November 25, 2009, 08:21:54 PM

A Monmouth Polling Institute survey in March found that New Jerseyans oppose giving illegal immigrants driver's licenses. And they even more strongly oppose extending in-state college tuition rates to them.

In a Quinnipiac University poll in December 2007, two-thirds of New Jersey voters surveyed said undocumented residents hurt the country more than they help it.

(http://finance.yahoo.com/news/ExCNN-host-Lou-Dobbs-weighs-apf-3582022554.html?x=0&.v=8)

Title: Re: Meltdown
Post by: Coopmv on November 26, 2009, 05:29:57 AM

DM, The Brits are gonna to have a pay czar too? I wonder if this trend will be extended to Germany and Switzerland where there are many large global banks as well ...

British banks should reveal number of staff earning more than $1.65 million, review says (http://finance.yahoo.com/news/British-banks-must-reveal-top-apf-565777914.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 26, 2009, 06:37:59 PM

DM, Meltdown in the Mid East? What happened to the oil revenues? :o

Dubai prospects as investment magnet get murkier as emirate requests 'standstill' on $60B debt (http://finance.yahoo.com/news/Dubai-request-for-debt-apf-3491812707.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 27, 2009, 07:48:10 PM

DM, Any thoughts about a surge of hedge funds making Switzerland their headquarters?

Hedge funds mull ditching UK for Switzerland, Asia
(http://finance.yahoo.com/news/Hedge-funds-mull-ditching-UK-apf-2764174730.html?x=0&sec=topStories&pos=4&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 28, 2009, 06:25:29 PM

DM, The other shoe is dropping big-time ... :o

Hotel owners, like home owners, behind on payments
Return to lender: US hotel owners, like home owners, going delinquent on debt (http://finance.yahoo.com/news/Hotel-owners-like-home-owners-apf-1306733990.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on November 29, 2009, 10:17:03 AM

DM, This is as expected, read on. Pelosi declared victory a bit too prematurely. I would love to see her become minority leader again come next November ...

The 60 votes aren't there any more. With the Senate set to begin debate Monday on health care overhaul, the all-hands-on-deck Democratic coalition that allowed the bill to advance is fracturing already.

(http://finance.yahoo.com/news/Turbulence-ahead-Senate-opens-apf-3101917505.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on December 04, 2009, 11:01:59 AM

DM, Is this new stats really something to be excited about?

As of now, more than 15 million people around the country remain out of luck. Beyond the 10% headline number in joblessness, the situation is actually worse. Factoring in people who have stopped looking for work and those in part-time positions who want a full-time job, the "underemployment" rate is 17.2%. In fairness, that was down from 17.5% in October, but it remains a daunting swath of the U.S. workforce struggling to make ends meet.
(http://finance.yahoo.com/tech-ticker/article/384684/This-Is-Progress-Jobs-Data-Optimism-Obscures-Harsh-Reality?tickers=dia,spy,qqqq,%5Egspc,%5Edji,gld&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on December 04, 2009, 03:45:20 PM

More bank closings ... :o

AmTrust, three Georgia banks closed by regulators (http://www.marketwatch.com/story/amtrust-bank-puts-2-billion-dent-in-fdic-fund-2009-12-04)

Title: Re: Meltdown
Post by: Coopmv on December 05, 2009, 04:44:43 AM

DM, This can be another boondoggle like the WTO if China and India (China in particular) can pollute any which way they want in order to export while the west will have its hands tied and companies will be closing in droves since the costs for compliance are too high. As it is, there is a need to re-negotiate the WTO agreements since China conned its way into the organization without complying with many of the WTO rules ...

Obama shifts visit to Copenhagen climate event to build on China, India moves toward deal

(http://finance.yahoo.com/news/Obama-shifts-Copenhagen-trip-apf-2461958447.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on December 05, 2009, 06:28:49 PM

DM, Only time will tell if this optimism is justified. The meltdown in commercial real estate may have a while to go yet. Values of NYC commercial properties have dropped some 47% from 07.

Unexpected drop in jobless rate sparks optimism (http://finance.yahoo.com/news/Unexpected-drop-in-jobless-apf-964681535.html?x=0)

Title: Re: Meltdown
Post by: snyprrr on December 06, 2009, 01:53:13 PM

It's OK!!!

As long as we have footbal, gaming, entertainment,escapism,...as long as we have THAT, then we can keep the common man diverted from getting involved.

As long as we keep people's attention on,say...health care,... then we can continue to silently pass other, just as nefarious, bills.

As long as the bread and circuses continue...

Learn how to can fruits!!!

...and read by the fire....

Title: Re: Meltdown
Post by: Coopmv on December 10, 2009, 04:51:46 PM

DM, This is getting truly interesting ... ;)

China's Economic Power Unsettles the Neighbors. In October, Indonesia's Trade Ministry invoked World Trade Organization rules and slapped a 145 percent safeguard tariff on Chinese nail imports, pending negotiations to settle complaints that the Chinese are competing unfairly.

(http://www.nytimes.com/2009/12/10/world/asia/10jakarta.html?pagewanted=1&_r=2&hp)

Title: Re: Meltdown
Post by: Coopmv on December 11, 2009, 07:05:50 PM

DM, This is the joke of a generation. China wants the west to help pay for its compliance with climate change. Who are they trying to kid? Not long ago, it even received ultra low interest loan from IMF. Does it make sense?

Differences still remain between China and the United States.

Veteran China watchers said, however, that both countries were closer than they appeared. Some problems could be settled with some work on language, translation or simply being more specific about actions each country should take, said David Doniger of the Natural Resources Defense Council.

China's public stance remained unyielding, and Vice Foreign Minister He Yafei took Stern to task for remarks Wednesday that no U.S. climate money would go to Beijing. In unusually blunt language, He said Stern either "lacks common sense" or was "extremely irresponsible."

In China's view, the U.S. and other rich nations have a heavy historical responsibility to cut emissions, and any climate deal should take into account a country's development level.

China, the world's largest polluter, is grouped with the developing nations at the talks. But Stern said the U.S. doesn't consider China one of the neediest countries when it comes to giving those nations financial aid.

(http://finance.yahoo.com/news/Tough-bargaining-still-ahead-apf-1840173398.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on December 12, 2009, 06:27:47 AM

DM, This is long overdue. More regulations and break'em up.

Obama blasts banks for opposing financial overhaul (http://finance.yahoo.com/news/Obama-blasts-banks-for-apf-2766740549.html?x=0&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on December 12, 2009, 07:12:32 AM

FM, Volcker statement makes a lot of sense. Lehman never got any US Government support, why should Goldman?

Goldman Sachs Trading Should Get No U.S. Backstop, Volcker Says (http://www.bloomberg.com/apps/news?pid=20601087&sid=a.O8G_pyd5ZE&pos=1)

Title: Re: Meltdown
Post by: Coopmv on December 12, 2009, 07:31:49 AM

DM, Here is another reason I did not care for John McCain but had to hold my nose to vote for him last year. When drugs are imported, how can the US prevent any counterfeit drugs from China not slip into the country given how lucrative that business is?

McCain Charges Democrats Pandering to Drugmakers on Import Ban (http://www.bloomberg.com/apps/news?pid=20601070&sid=a9cHvESqSQ2U)

Title: Re: Meltdown
Post by: BachQ on December 12, 2009, 12:13:31 PM

Quote from: Coopmv on July 12, 2009, 09:51:46 AM
There is a need for a taxpayer revolt in the US. Why should taxpayers be paying these outrageous pensions and other benefits for the public employees? Are we getting our money worth?

For feds, more get 6-figure salaries
Average pay $30,000 over private sector

By Dennis Cauchon
USA TODAY

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted.

Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.

The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high-tech and low-tech. The primary cause: substantial pay raises and new salary rules.

"There's no way to justify this to the American people. It's ridiculous," says Rep. Jason Chaffetz, R-Utah, a first-term lawmaker who is on the House's federal workforce subcommittee.

(http://img513.imageshack.us/img513/8734/1225853127171mg1.gif)

(http://www.usatoday.com/printedition/news/20091211/1afedpay11_st.art.htm?loc=interstitialskip)

Democrats plan nearly $2 trillion debt limit hike (http://www.google.com/hostednews/ap/article/ALeqM5hKpnLzrTqU5UX03EvKH9XieHMbrwD9CHCOI80)

Title: Re: Meltdown
Post by: Coopmv on December 12, 2009, 01:47:18 PM

Quote from: dm on December 12, 2009, 12:13:31 PM
For feds, more get 6-figure salaries
Average pay $30,000 over private sector

By Dennis Cauchon
USA TODAY

The number of federal workers earning six-figure salaries has exploded during the recession, according to a USA TODAY analysis of federal salary data.

Federal employees making salaries of $100,000 or more jumped from 14% to 19% of civil servants during the recession's first 18 months — and that's before overtime pay and bonuses are counted.

Federal workers are enjoying an extraordinary boom time — in pay and hiring — during a recession that has cost 7.3 million jobs in the private sector.

The highest-paid federal employees are doing best of all on salary increases. Defense Department civilian employees earning $150,000 or more increased from 1,868 in December 2007 to 10,100 in June 2009, the most recent figure available.

When the recession started, the Transportation Department had only one person earning a salary of $170,000 or more. Eighteen months later, 1,690 employees had salaries above $170,000.

The trend to six-figure salaries is occurring throughout the federal government, in agencies big and small, high-tech and low-tech. The primary cause: substantial pay raises and new salary rules.

"There's no way to justify this to the American people. It's ridiculous," says Rep. Jason Chaffetz, R-Utah, a first-term lawmaker who is on the House's federal workforce subcommittee.

(http://img513.imageshack.us/img513/8734/1225853127171mg1.gif)

(http://www.usatoday.com/printedition/news/20091211/1afedpay11_st.art.htm?loc=interstitialskip)

Democrats plan nearly $2 trillion debt limit hike
(http://www.google.com/hostednews/ap/article/ALeqM5hKpnLzrTqU5UX03EvKH9XieHMbrwD9CHCOI80)

DM,

Thanks for the article. This is an outrage ...

Title: Re: Meltdown
Post by: Coopmv on December 13, 2009, 01:08:11 PM

DM, This may be the last year Harry Reid holds his US Senate majority leader position. He can always join another former Democratic Senate leader Tom Daschle to become a shameless lobbyist. Read on ... ;D

Reid Trails All His Top Potential Republican Opponents in Nevada
(http://www.politicsdaily.com/2009/12/13/reid-trails-all-his-top-potential-republican-opponents-in-nevada/)

Title: Re: Meltdown
Post by: Coopmv on December 13, 2009, 01:18:29 PM

DM, Harry Reid is between a rock and a hard place. If he wins the vote, he is likely to lose his job come next November. If he doesn't, he will get the blame from his fellow liberal Democrats ...

Medicare buy-in plan runs into Senate resistance ...
Plan to let people 55 and up buy into Medicare finds resistance among Senate moderates (http://finance.yahoo.com/news/Medicare-buyin-plan-runs-into-apf-2321272283.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on December 16, 2009, 05:43:25 PM

DM, Check out this Bloomberg article I received from a friend. It makes me feel like immigrating to Switzerland ... ;D

By Frank Ahrens
Dec. 16 (Washington Post) -- Those of us above a certain age
who remember the 1970s also remember the "misery index," a
new-at-the-time measure of the economy. Invented by economist
Arthur Okun, the misery index added the U.S. unemployment and
inflation rates to create a number meant to show us how miserable
we are. Think of it as an economic windchill factor.
The old misery index peaked during the administration of
Jimmy Carter, in June 1980, at 21.98. Pretty miserable.
Tuesday, Moody's rolled out a New Misery Index and took it
global. As in the 1970s and early '80s, unemployment is a problem
today. But inflation is not (yet). Today, the problem is debt run
up by governments around the world during the bubble. Debt that
many of them are now having trouble repaying.
(CoughcoughGreececoughcough.)
Moody's Misery Index combines the projected 2010 national
unemployment rate with the projected 2010 budget deficit as a
percentage of GDP.
The list puts the U.S. at No. 8 among the world's miserable
nations. More miserable than Iceland but not quite as miserable
as Jamaica.
Here are the world's 16 Most Miserable Countries, according
to Moody's new index. When I get permission to reprint the
Moody's chart, breaking down the deficit and jobless rates for
each country, I'll insert it:
1. Spain
2. Latvia
3. Lithuania
4. Ireland
5. Greece
6. England
7. Iceland
8. United States
9. Jamaica
10. France
11. Estonia
12. Portugal
13. Hungary
14. Germany
15. Italy
16. Czech Republic
A few observations on the index:
Spain tops the list because of its Euro-leading
unemployment rate, the result of laid-off construction workers
who had worked in the country's booming housing industry.
The debt problems in Ireland, Greece and Iceland are by now
well-known.
Look at England's deficit as a percentage of its GDP. A lot
of people think this is a nation teetering on the brink, i.e.,
the next one to go down. England's banks are sick.
Estonia, upside: No debt! Downside: No jobs!
-- Frank Ahrens

Title: Re: Meltdown
Post by: Coopmv on December 21, 2009, 08:48:40 AM

DM, This could be wishful thinking, as the US is the biggest export market for Asian goods and clearly no Asian countries want to believe the US may well be going through a rolling recession like Japan since the early 1990's ...

Good News! America Isn't Following the Same Path as Japan, Asia Expert Says
(http://finance.yahoo.com/tech-ticker/good-news!-america-isn't-following-the-same-path-as-japan-asia-expert-says-395421.html?tickers=EWJ,JEQ,%5Edji,%5Egspc,TM,SNE,CAJ&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on December 21, 2009, 09:06:59 AM

DM, I have been loading up on shares of gas companies in anticipation of this. Looks like I may be right ... ;)

Gas could be the calvary in global warming fight
A fossil fuel gains stature in global warming fight: natural gas changes power equation

(http://finance.yahoo.com/news/Gas-could-be-the-calvary-in-apf-621944992.html?x=0&sec=topStories&pos=8&asset=&ccode=)

Title: Re: Meltdown
Post by: Florestan on December 22, 2009, 01:21:25 AM

Quote from: Coopmv on December 16, 2009, 05:43:25 PM
Here are the world's 16 Most Miserable Countries, according
to Moody's new index. When I get permission to reprint the
Moody's chart, breaking down the deficit and jobless rates for
each country, I'll insert it:
1. Spain
2. Latvia
3. Lithuania
4. Ireland
5. Greece
6. England
7. Iceland
8. United States
9. Jamaica
10. France
11. Estonia
12. Portugal
13. Hungary
14. Germany
15. Italy
16. Czech Republic

Wow! It seems US, France, Germany and England are much more miserable than my country --- Romania! Now that makes me happy! I only need a job and a home of my own to be perfectly happy! :D

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on December 22, 2009, 01:26:31 AM

Any index which puts Spain as the world's most miserable country cannot be taken seriously.

Title: Re: Meltdown
Post by: snyprrr on December 22, 2009, 08:38:02 AM

Well, gosh, I'll just have to move to Africa then...

...or Israel. Garaunteed GDP. ::)

Tennis, anyone?

Title: Re: Meltdown
Post by: Coopmv on December 22, 2009, 03:18:40 PM

Quote from: Velimir on December 22, 2009, 01:26:31 AM
Any index which puts Spain as the world's most miserable country cannot be taken seriously.

But doesn't Spain currently have the highest jobless rate within the EU?

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on December 22, 2009, 09:50:21 PM

Quote from: Coopmv on December 22, 2009, 03:18:40 PM
But doesn't Spain currently have the highest jobless rate within the EU?

Maybe. I'd still rather live there than Burundi, Paraguay, Chad or a lot of other places I could name.

Title: Re: Meltdown
Post by: Florestan on December 23, 2009, 12:05:12 AM

Quote from: Coopmv on December 22, 2009, 03:18:40 PM
But doesn't Spain currently have the highest jobless rate within the EU?

Yes it does. But apart from Velimir's comment, which I second, any index which doesn't feature Romania in top 13 European countries that experience harsh economic conditions but list instead Germany, France or England is seriously flawed. Trust me, I'm Romanian. :)

Title: Re: Meltdown
Post by: Coopmv on December 23, 2009, 07:56:52 AM

Quote from: Velimir on December 22, 2009, 09:50:21 PM
Maybe. I'd still rather live there than Burundi, Paraguay, Chad or a lot of other places I could name.

No doubt. Spain is the most livable country when Spanish is the first spoken language (this excludes the US) ...

Title: Re: Meltdown
Post by: Coopmv on December 23, 2009, 07:58:24 AM

Quote from: Florestan on December 23, 2009, 12:05:12 AM
Yes it does. But apart from Velimir's comment, which I second, any index which doesn't feature Romania in top 13 European countries that experience harsh economic conditions but list instead Germany, France or England is seriously flawed. Trust me, I'm Romanian. :)

I hear you. I don't know the people who did that calculation or survey. I just thought it was interesting to pass the information along.

Title: Re: Meltdown
Post by: Coopmv on December 23, 2009, 01:52:07 PM

DM, The Chinese can spend another $600B in stimulus if the double dip occurs ... ;)

"The recovery will be slow and things will be fairly fragile," and that might be the best we can hope for in 2010, according to Nariman Behravesh chief economist at Global Insight, the world's largest economic forecasting and consulting firm.

(http://finance.yahoo.com/tech-ticker/risk-of-double-dip-recession-in-2010-still-too-high-for-nariman-behravesh's-liking-395625.html?tickers=tlt,tbt,udn,uup,dia,spy,qqqq&sec=topStories&pos=10&asset=&ccode=)

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on December 23, 2009, 11:29:44 PM

Meanwhile, it's nice to know our betters are looking out for us - by preparing to blow even more money on idiotic "nation-building" exercises outside the US!!:

http://www.msnbc.msn.com/id/34580582/ns/politics-washington_post

"Gates's proposal goes beyond those conflicts to address what the military increasingly sees as the greatest threat to the United States -- failing states such as Yemen and Somalia that could provide a haven for terrorist groups."

9/11 could have been prevented by sensible immigration policy and the INS doing its job properly. But why go for such obvious solutions when you can throw money into rebuilding failed states halfway around the world?

Title: Re: Meltdown
Post by: Coopmv on December 24, 2009, 06:08:03 AM

Quote from: Velimir on December 23, 2009, 11:29:44 PM
Meanwhile, it's nice to know our betters are looking out for us - by preparing to blow even more money on idiotic "nation-building" exercises outside the US!!:

http://www.msnbc.msn.com/id/34580582/ns/politics-washington_post

"Gates's proposal goes beyond those conflicts to address what the military increasingly sees as the greatest threat to the United States -- failing states such as Yemen and Somalia that could provide a haven for terrorist groups."

9/11 could have been prevented by sensible immigration policy and the INS doing its job properly. But why go for such obvious solutions when you can throw money into rebuilding failed states halfway around the world?

Indeed, the US has been doing what the Romans were doing before the empire crumbled. Somehow, we have to impose our way of lives on other people. If we were so good, why did we have the housing meltdown and spread the near-depression economic condition to the rest of the road? $200B was too big a price tag to fix the crumbling roads and bridges in the US but we spent some $2T to fight the war in Iraq alone. I do not see much national interest to fight that war in Iraq, though a case could be made for Afghanistan since the Taliban sheltered the Al Qaeda. >:(

Title: Re: Meltdown
Post by: Coopmv on December 24, 2009, 06:10:35 AM

DM, I will not be surprised this deal falls apart at the House and Senate conference when they have to reconcile their differences. Deal or no deal, lets ask Howie Mandel ... ;)

Senate Passes Sweeping Health Care Reform, but Trouble Lies Ahead
(http://www.politicsdaily.com/2009/12/24/health-care-vote-senate-passes-sweeping-reform-but-trouble-lie/)

Title: Re: Meltdown
Post by: Coopmv on December 24, 2009, 06:36:03 AM

DM, What is $290B gonna to do, a drop in an ocean of red ink?

>:(

Congress raises debt ceiling to $12.4 trillion
Senate votes to raise ceiling on government's debt by $290 billion to $12.4 trillion (http://finance.yahoo.com/news/Congress-raises-debt-ceiling-apf-4039204513.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on December 24, 2009, 08:47:14 AM

DM, Lets hope this bank (bet you know which bank it is) and the one responsible for peddling these toxic assets get hit with some heavy fines and perhaps spend some times at the big house with Bernie Madoff ...

Banks Bundled Bad Debt, Bet Against It and Won (http://finance.yahoo.com/banking-budgeting/article/108476/banks-bundled-bad-debt-bet-against-it-and-won)

Title: Re: Meltdown
Post by: Coopmv on December 26, 2009, 01:42:51 PM

Credit crunch: Home equity lending evaporates
Hock the house? Home equity lending evaporates as real estate values fall, banks get stingy (http://finance.yahoo.com/news/Credit-crunch-Home-equity-apf-1280606101.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on December 28, 2009, 11:11:45 AM

DM, This is a fair question to ask for many ... ;)

One Year After Near Financial Collapse, Americans Wonder: Where's MY Bailout?
(http://finance.yahoo.com/tech-ticker/one-year-after-near-financial-collapse-americans-wonder-where's-my-bailout-396702.html?tickers=xlf,%5Edji,%5Egspc,%5Eixic,dia,spy&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on January 02, 2010, 04:13:50 PM

DM, the day of reckoning is closer than we thought ... ;)
Happy New Year!

Climate Plans May Cut China Exports 20%
A study from the World Bank says U.S. and EU proposals to cut greenhouse-gas emissions could slam Chinese exporters
(http://www.businessweek.com/globalbiz/content/dec2009/gb20091210_026721.htm)

Title: Re: Meltdown
Post by: Coopmv on January 02, 2010, 05:32:25 PM

DM, Here is another good one ...

China Property Bubble May Lead to U.S.-Style Real Estate Slump
(http://www.businessweek.com/news/2009-12-30/china-property-bubble-may-lead-to-u-s-style-real-estate-slump.html)

Title: Re: Meltdown
Post by: BachQ on January 03, 2010, 07:52:54 AM

Quote from: Coopmv on January 02, 2010, 05:32:25 PM
DM, Here is another good one ...

China Property Bubble May Lead to U.S.-Style Real Estate Slump
(http://www.businessweek.com/news/2009-12-30/china-property-bubble-may-lead-to-u-s-style-real-estate-slump.html)

Good catch, Coop. Apparently, the Chinese think that their real estate bubble(s) will be different than the bubbles that brought down the US, UK, Spain, Ireland, etc. ... However, because of their loose credit and extensive over-lending during the past several years, China's banks have been setting the groundwork for the sort of irrational exuberance that creates EPIC bubbles. (Funds were made readily available via artificially low interest rates, Beijing's massive stimulus plans, and Beijing's official encouragement of bank lending). Will China's bubbles be different? Buckle your seatbelt, and let's find out!

Quote"Once the bubble pops, our economic growth will stop," warns Yi Xianrong, a researcher at the Chinese Academy of Social Sciences' Finance Research Center.

That's putting it mildly. ::)

QuoteIn Beijing's Chaoyang district, which represents a third of all residential property deals in the capital, homes now sell for an average of almost $300 per square foot. That means a typical 1,000-square-foot apartment costs about 80 times the average annual income of the city's residents. *** Chinese consumers, fearing inflation will return and outstrip the tiny interest they earn on their savings, have pursued property ever more aggressively. Companies in the chemical, steel, textile, and shoe industries have started up property divisions too: The chance of a quick return is much higher than in their primary business.

Yikes! Bubblemania of epic dimensions.

Title: Re: Meltdown
Post by: Coopmv on January 03, 2010, 05:34:40 PM

DM, Here is an article you do not want to miss ... ;)

FDR kept deadly disease hidden for years - Some 65 years ago, as World War II raged in Europe and the Pacific, the American people faced an unprecedented constitutional crisis of which they were completely unaware -- and which has remained a secret ever since.

(http://www.nypost.com/p/news/national/fdr_kept_deadly_disease_hidden_for_5EQDNU3uhriRo1HQRdmTrN/0)

Title: Re: Meltdown
Post by: drogulus on January 03, 2010, 09:00:20 PM

Quote from: Coopmv on December 24, 2009, 06:08:03 AM
Indeed, the US has been doing what the Romans were doing before the empire crumbled. Somehow, we have to impose our way of lives on other people. If we were so good, why did we have the housing meltdown and spread the near-depression economic condition to the rest of the road? $200B was too big a price tag to fix the crumbling roads and bridges in the US but we spent some $2T to fight the war in Iraq alone. I do not see much national interest to fight that war in Iraq, though a case could be made for Afghanistan since the Taliban sheltered the Al Qaeda. >:(

Yes, we'll continue building our empire just like the Romans did, as long as we can. I'll do something similar by continuing to breathe until I die. Then a Doomster can say "see, what good did all that breathing do? He's dead, so it probably killed him."

My problem with Doomer "analysis" is that it connects all phenomena to a one sided story. Everything counts as evidence of failure, and this stands in for a realistic estimate of what actually works. So, you're in the position of the stroke victim that doesn't have 2 sides, only one. While the real story is a mixed one of disaster narrowly averted and a long slow climb to prosperity and something like full employment (it will take years to get back to 4%) the Doomer Narrative has no room for a balanceed picture with winners and losers rising and falling. No, instead everything falls apart and nothing gets put back together, nothing is invented, discovered or improved. But then I shouldn't expect anything more, should I?

It strikes me that the Doomer habit of seeing everything as bad resembles the bubble mania which sees prices going up forever. It's a kind of reversal of the boomtime optimism, and just as unrealistic in the long run.

Poor Doomers, stuck in the same boat with the Bubbleheads. You want a simple world that reduces to a formula you can understand. There is no reason to think the world is like that. Rome fell, but was worth the effort. In a sense we're still Romans, still building our palisades on the frontier. I don't exactly know why but somehow I feel this is what we're supposed to do, if there's any such thing as that.

QuoteIf we were so good, why did we have the housing meltdown and spread the near-depression economic condition to the rest of the road?

The answer is obvious: economies that "are so good" do experience these cycles and can't be entirely walled off from them. The best evidence is that boom psychology means there will be no technical fix. It's part of life, so we should take meliorative steps in the form of sensible regulation. That's it.

Title: Re: Meltdown
Post by: BachQ on January 04, 2010, 05:06:48 AM

Quote from: Coopmv on December 21, 2009, 08:48:40 AM
DM, This could be wishful thinking, as the US is the biggest export market for Asian goods and clearly no Asian countries want to believe the US may well be going through a rolling recession like Japan since the early 1990's ...

Good News! America Isn't Following the Same Path as Japan, Asia Expert Says
(http://finance.yahoo.com/tech-ticker/good-news!-america-isn't-following-the-same-path-as-japan-asia-expert-says-395421.html?tickers=EWJ,JEQ,%5Edji,%5Egspc,TM,SNE,CAJ&sec=topStories&pos=9&asset=&ccode=)

Japan's Return to '91 GDP Gives Markets Mega Risk Crisis (Update2)

By Aki Ito and Keiko Ujikane

Jan. 4 (Bloomberg) -- Japan's Prime Minister, Yukio Hatoyama, swept to power by a public seeking an end to economic and political stagnation, is failing to arrest the nation's decline.

Japanese gross domestic product shrank to an annualized 471 trillion yen ($5 trillion) in the third quarter, without accounting for changes in prices, the lowest level since 1991. The tumble is unprecedented among the biggest economies since the 1930s, according to Paul Sheard, global chief economist at Nomura Securities International Inc. in New York. As a result of the contraction, the Finance Ministry projects tax revenue this year will drop to a quarter-century low.

Hatoyama's 2010 budget, released Dec. 25, does nothing to rein in record deficits that threaten Japan's Aa2 rating, said Carl Weinberg, chief economist at High Frequency Economics. It avoided consumption-tax increases or deregulation to boost productivity; without policy changes, deflation and a shrinking population risk eroding the savings pool restraining Japan's bond yields.

"Japan's fiscal conditions are close to a melting point," said Takeshi Fujimaki, a former adviser to billionaire investor George Soros and now president of Fujimaki Japan, an investment advising company in Tokyo. "My biggest concern is whether the Japanese government will be able to sell all the bonds at auctions," he said, adding that such failures might send 10- year note yields climbing through 2.4 percent.

(http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aJFLmoxlrjhE)

QuoteMore than a fifth of Japanese are over 65, according to the National Institute of Population and Social Security Research. The nation's population began shrinking in 2006 from 127.8 million, and will drop by 3.2 percent in the coming decade, the Tokyo-based, state-sponsored institute estimates.

"National saving will soon decline," leading to higher interest rates, said Charles Horioka, a professor of economics at the Institute of Social and Economic Research of Osaka University and co-author of a paper with Harvard University's Martin Feldstein on international investment and savings patterns. "There is an urgent need to reconstruct the finances of the Japanese government." *** "Japan has never really escaped from the deflation situation of the 1990s," said Sheard at Nomura Securities, a unit of Japan's largest brokerage. *** The economic malaise may be creating another problem by eroding employment opportunities for the diminishing ranks of young Japanese.

Title: Re: Meltdown
Post by: Coopmv on January 07, 2010, 06:07:49 PM

Quote from: Soapy Molloy on January 07, 2010, 11:13:31 AM
Earth 'to be wiped out' by supernova explosion (http://www.telegraph.co.uk/science/space/6940111/Earth-to-be-wiped-out-by-supernova-explosion.html)

This should be a fitting end ...

Title: Re: Meltdown
Post by: Coopmv on January 08, 2010, 05:11:31 PM

DM, Here is an amusing email I received. I certainly am not making excuses for the US ...

Subject: Government Math

It's a slow day in a little Vermont town. The sun is beating down, and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit...

On this particular day a rich tourist from back east is driving through town. He stops at the motel and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs in order to pick one to spend the night.

As soon as the man walks upstairs, the owner grabs the bill and runs next door to pay his debt to the butcher.

The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.

The pig farmer takes the $100 and heads off to pay his bill at the supplier of feed and fuel.

The guy at the Farmer's Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her "services" on credit.

The hooker rushes to the hotel and pays off her room bill with the hotel owner.

The hotel proprietor then places the $100 back on the counter so the rich traveler will not suspect anything.

At that moment the traveler comes down the stairs, picks up the $100 bill, states that the rooms are not satisfactory, pockets the money, and leaves town.

No one produced anything. No one earned anything. Everyone is happy!!

The whole town is now out of debt and now looks to the future with a lot more optimism.

And that, ladies and gentlemen, is how the United States Government is conducting business today.

Title: Re: Meltdown
Post by: Coopmv on January 08, 2010, 05:20:16 PM

DM, Bankruptcy filing is just a matter of time ...

Official: Owners in huge NYC deal to miss payment
NYC councilman: Company that paid $5.4B for apartment complexes will miss loan payment
(http://finance.yahoo.com/news/Official-Owners-in-huge-NYC-apf-2265801173.html?x=0&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on January 09, 2010, 08:43:05 AM

DM, You should check out this article in its entirety. I think James Chanos is onto something. In the investment business, the majority is usually wrong ...

Contrarian Investor Sees Economic Crash in China
by David Barboza
Friday, January 8, 2010

James S. Chanos built one of the largest fortunes on Wall Street by foreseeing the collapse of Enron and other highflying companies whose stories were too good to be true.

Now Mr. Chanos, a wealthy hedge fund investor, is working to bust the myth of the biggest conglomerate of all: China Inc.

As most of the world bets on China to help lift the global economy out of recession, Mr. Chanos is warning that China's hyperstimulated economy is headed for a crash, rather than the sustained boom that most economists predict. Its surging real estate sector, buoyed by a flood of speculative capital, looks like "Dubai times 1,000 -- or worse," he frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent. More from NYTimes.com:

(http://finance.yahoo.com/retirement/article/108534/contrarian-investor-sees-economic-crash-in-china?mod=retire-planning)

Title: Re: Meltdown
Post by: Coopmv on January 09, 2010, 06:47:44 PM

DM, Harry Reid could be history after the next November election. Another Democratic Senate majority leader, Tom Daschle lost his re-election bid in 02 and is now a lobbyist.

Reid Apologizes for Racial Remark About Obama, and Also Sinks in a Poll (http://www.politicsdaily.com/2010/01/09/reid-apologizes-for-racial-remark-about-obama-and-also-sinks-in/)

Title: Re: Meltdown
Post by: Coopmv on January 09, 2010, 07:54:24 PM

DM, This is a big deal, JAL going under ... :o

JAL, One Of The World's Largest Airlines, Set To Go Under
(http://247wallst.com/2010/01/09/jal-one-of-the-worlds-largest-airlines-set-to-go-under/)

Title: Re: Meltdown
Post by: BachQ on January 10, 2010, 09:35:35 AM

Coop, for the first time in US history, the number of employees in the GOVERNMENT SECTOR has exceeded the total number of employees in the GOODS-PRODUCING SECTOR. This is the clearest example yet of the effects of the erosion of the US productive capacity (which is seemingly being replaced by inefficient government jobs).

(http://static.businessinsider.com/~~/f?id=4b43aad900000000006afad2)
"The decline of the jobs in goods producing sectors of the economy -- construction, manufacturing, mining and agriculture -- has largely been met with an increase in jobs on the government payroll. [The US has] gone from providing jobs in profit-making private industry to providing jobs in profit-eating government work. ... Welcome to the government payroll economy."

(http://olbroad.com/wp-content/uploads/2009/02/pig-pelosi.jpg)

(http://www.businessinsider.com/chart-of-the-day-goods-producing-wrokers-vs-government-payroll-2010-1)

Title: Re: Meltdown
Post by: BachQ on January 10, 2010, 09:41:37 AM

ZeroHedge: Why The Staggering U.S. Debt Load Is Sure To Prevent Economic Growth -- "...as debt levels rise towards historical limits, risk premia begin to rise sharply, facing highly indebted governments with difficult tradeoffs. Even countries that are committed to fully repaying their debts are forced to dramatically tighten fiscal policy in order to appear credible to investors and thereby reduce risk premia...[C]ountries that choose to rely excessively on short term borrowing to fund growing debt levels are particularly vulnerable to crises in confidence that can provoke very sudden and "unexpected" financial crises..."
(http://www.zerohedge.com/article/why-staggering-us-debt-load-sure-prevent-economic-growth)

Reuters -- U.S. growth prospects deemed bleak in new decade -- A dismal job market, a crippled real estate sector and hobbled banks will keep a lid on U.S. economic growth over the coming decade: "It will be difficult to have a robust recovery while housing and commercial real estate are depressed," said Martin Feldstein, a Harvard University professor and former head of the National Bureau of Economic Research. (http://www.reuters.com/article/idUSTRE6021LK20100103)

Title: Re: Meltdown
Post by: Coopmv on January 10, 2010, 10:18:36 AM

Quote from: dm on January 10, 2010, 09:35:35 AM
Coop, for the first time in US history, the number of employees in the GOVERNMENT SECTOR has exceeded the total number of employees in the GOODS-PRODUCING SECTOR. This is the clearest example yet of the effects of the erosion of the US productive capacity (which is seemingly being replaced by inefficient government jobs).

(http://static.businessinsider.com/~~/f?id=4b43aad900000000006afad2)
"The decline of the jobs in goods producing sectors of the economy -- construction, manufacturing, mining and agriculture -- has largely been met with an increase in jobs on the government payroll. [The US has] gone from providing jobs in profit-making private industry to providing jobs in profit-eating government work. ... Welcome to the government payroll economy."

(http://olbroad.com/wp-content/uploads/2009/02/pig-pelosi.jpg)
(http://www.businessinsider.com/chart-of-the-day-goods-producing-wrokers-vs-government-payroll-2010-1)

It is the folly of de-industrialization, i.e. outsourcing of all manufacturing jobs whenever there is chance that got the US into this jam. With the service economy that concentrates heavily in finance and legal and when these two sectors were crippled by the credit crunch, the engine of economic growth just sputtered. Germany does not have the same problem since 40% of its economy is still in manufacturing and mostly value-added manufacturing. Unfortunately, it took the US over a decade to decimate its industrial base, the rebuild cannot be done quickly enough to bail out its overall economy ... >:(

Title: Re: Meltdown
Post by: Coopmv on January 10, 2010, 10:47:55 AM

Quote from: dm on January 10, 2010, 09:41:37 AM
ZeroHedge: Why The Staggering U.S. Debt Load Is Sure To Prevent Economic Growth -- "...as debt levels rise towards historical limits, risk premia begin to rise sharply, facing highly indebted governments with difficult tradeoffs. Even countries that are committed to fully repaying their debts are forced to dramatically tighten fiscal policy in order to appear credible to investors and thereby reduce risk premia...[C]ountries that choose to rely excessively on short term borrowing to fund growing debt levels are particularly vulnerable to crises in confidence that can provoke very sudden and "unexpected" financial crises..."
(http://www.zerohedge.com/article/why-staggering-us-debt-load-sure-prevent-economic-growth)

Reuters -- U.S. growth prospects deemed bleak in new decade -- A dismal job market, a crippled real estate sector and hobbled banks will keep a lid on U.S. economic growth over the coming decade: "It will be difficult to have a robust recovery while housing and commercial real estate are depressed," said Martin Feldstein, a Harvard University professor and former head of the National Bureau of Economic Research.
(http://www.reuters.com/article/idUSTRE6021LK20100103)

I think the US may well be in the same jam Japan found itself in after the crash of its stock market in 1989 that took the Nikkei from close to 40,000 down to under 10,000. The Japanese also had a real estate market crash as well. For the US, it was the real estate market that took the stock market down.

Title: Re: Meltdown
Post by: BachQ on January 10, 2010, 10:54:12 AM

Quote from: Coopmv on January 10, 2010, 10:18:36 AM
It is the folly of de-industrialization, i.e. outsourcing of all manufacturing jobs whenever there is chance that got the US into this jam. With the service economy that concentrates heavily in finance and legal and when these two sectors were crippled by the credit crunch, the engine of economic growth just sputtered. Germany does not have the same problem since 40% of its economy is still in manufacturing and mostly value-added manufacturing. Unfortunately, it took the US over a decade to decimate its industrial base, the rebuild cannot be done quickly enough to bail out its overall economy ... >:(

Agreed ... and it's an ominous sign when the non-productive public sector begins replacing the productive manufacturing & goods-producing private sector. And the Obama-Pelosi-Frank-Reid juggernaut is eager to further expand the public sector even more ... >:D
(http://img513.imageshack.us/img513/8734/1225853127171mg1.gif)
(http://farm4.static.flickr.com/3014/3353079569_aeac6d42ca.jpg)

Washington Post -- "There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well."

(http://media3.washingtonpost.com/wp-dyn/content/graphic/2010/01/01/GR2010010101701.gif)
For most of the past 70 years, the U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households. But since 2000, the story is starkly different.The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation's growth. It was, according to a wide range of data, a lost decade for American workers.
(http://www.washingtonpost.com/wp-dyn/content/article/2010/01/01/AR2010010101196.html?hpid=topnews)

U.S. consumers and businesses are filing for bankruptcy at a pace that made 2009 the seventh-worst year on record, with more than 1.4 million petitions submitted, an Associated Press tally showed Monday. (http://online.wsj.com/article/SB126263231055415303.html)

Title: Re: Meltdown
Post by: BachQ on January 10, 2010, 10:56:18 AM

Bloomberg -- Silicon Valley 'Bloodbath' Leaves Entire Office Buildings Empty (More than 43 million sq ft -- the equivalent of 15 Empire State Buildings -- stood vacant at the end of 3Q; "commercial property foreclosures will at least double in 2010") (http://www.bloomberg.com/apps/news?pid=20601087&sid=a7pUR5eBwlJI&pos=6#)

Title: Re: Meltdown
Post by: BachQ on January 10, 2010, 10:57:55 AM

Forbes: -- (http://www.forbes.com/2009/12/18/government-budget-deficit-personal-finance-financial-advisor-network-treasury-debt.html)Total US debt + unfunded liabilities exceeds 840% of GDP ... placing the US in the company of Lebanon & Zimbabwe. "The world has not seen such debt levels in modern history. This debt is not serviceable. Imagine that total debt is 557% of GDP, without considering entitlements. The interest on the debt will consume all the tax revenues of the country in the not-too-distant future. Then there will be no way out but to create more debt in order to finance the old debt. It assures a period of economic devastation. In a last, desperate attempt, politicians at the federal and local levels will raise taxes to astronomical heights to raise revenues. And that only assures destruction of the economy. Forget the fable of economic recovery. Unless there is a change in Washington by next year's election, there will be no way to turn back."

Title: Re: Meltdown
Post by: Coopmv on January 10, 2010, 11:19:19 AM

Quote from: dm on January 10, 2010, 10:54:12 AM
Agreed ... and it's an ominous sign when the non-productive public sector begins replacing the productive manufacturing & goods-producing private sector. And the Obama-Pelosi-Frank-Reid juggernaut is eager to further expand the public sector even more ... >:D
(http://img513.imageshack.us/img513/8734/1225853127171mg1.gif)
(http://farm4.static.flickr.com/3014/3353079569_aeac6d42ca.jpg)

Washington Post -- "There has been zero net job creation since December 1999. No previous decade going back to the 1940s had job growth of less than 20 percent. Economic output rose at its slowest rate of any decade since the 1930s as well."

(http://media3.washingtonpost.com/wp-dyn/content/graphic/2010/01/01/GR2010010101701.gif)
For most of the past 70 years, the U.S. economy has grown at a steady clip, generating perpetually higher incomes and wealth for American households. But since 2000, the story is starkly different.The past decade was the worst for the U.S. economy in modern times, a sharp reversal from a long period of prosperity that is leading economists and policymakers to fundamentally rethink the underpinnings of the nation's growth. It was, according to a wide range of data, a lost decade for American workers.
(http://www.washingtonpost.com/wp-dyn/content/article/2010/01/01/AR2010010101196.html?hpid=topnews)

U.S. consumers and businesses are filing for bankruptcy at a pace that made 2009 the seventh-worst year on record, with more than 1.4 million petitions submitted, an Associated Press tally showed Monday.
(http://online.wsj.com/article/SB126263231055415303.html)

A government job has its attractiveness. For one, there is a pension provided for by the taxpayer largess. That is where those massive unfunded liabilities come from. The public sectors are not the productive parts of any national economy, whether it is the US, Japan or China. A neighbor down the street lost his marketing job over two years ago and he told my wife he was studying to pass an exam in order to take a federal job and he is not exactly in his 20's. It is sad people late in their careers have to look for jobs offered by Uncle Sam ...

Title: Re: Meltdown
Post by: Coopmv on January 10, 2010, 11:25:48 AM

Quote from: dm on January 10, 2010, 10:56:18 AM
Bloomberg -- Silicon Valley 'Bloodbath' Leaves Entire Office Buildings Empty (More than 43 million sq ft -- the equivalent of 15 Empire State Buildings -- stood vacant at the end of 3Q; "commercial property foreclosures will at least double in 2010")
(http://www.bloomberg.com/apps/news?pid=20601087&sid=a7pUR5eBwlJI&pos=6#)

Commercial properties market in the Silicon Valley is toast. That will not help CA for sure ...

Title: Re: Meltdown
Post by: Coopmv on January 10, 2010, 06:45:40 PM

DM, I am quite amused by this FT article on Chinese banks. Wait till its real estate market crashes, those book values will melt so fast ...

China banks eclipse US rivals - Chinese banks have cemented their position as the most highly valued financial institutions, taking four of the top five slots in a ranking of banks' share prices as a multiple of their book values.

(http://www.ft.com/cms/s/0/1c13f7f2-fe16-11de-9340-00144feab49a.html?referrer_id=yahoofinance&ft_ref=yahoo1&segid=03058&nclick_check=1)

Title: Re: Meltdown
Post by: Florestan on January 11, 2010, 12:38:29 AM

Gentlemen, you seem knowledgeable about economy and politics. What is the cause of all this mess acoss Western world: unrestricted, deregulated capitalism, as the Left claims, or on the contrary, an overregulated and state-influenced capitalism, as the Right claims? Or is it a constitutive default of ALL capitalism, regulated or not?

By capitalism, I mean private property, free market and liberal democracy.

Title: Re: Meltdown
Post by: Coopmv on January 11, 2010, 05:41:52 PM

Quote from: Florestan on January 11, 2010, 12:38:29 AM
Gentlemen, you seem knowledgeable about economy and politics. What is the cause of all this mess acoss Western world: unrestricted, deregulated capitalism, as the Left claims, or on the contrary, an overregulated and state-influenced capitalism, as the Right claims? Or is it a constitutive default of ALL capitalism, regulated or not?

By capitalism, I mean private property, free market and liberal democracy.

Exactly, unbridled deregulation and the steadfast refusal of American policymakers to admit that the promised benefits of free-trade have not been realized and probably will never be realized and therefore a new direction is needed. As the largest western economy, when the US chooses to stay the course, the Europeans feel that they do not have a choice but to follow.

Title: Re: Meltdown
Post by: Coopmv on January 11, 2010, 05:42:54 PM

DM, check this out ...

Buy American: "Anti-China Backlash" Coming, Gerald Celente Says
(http://finance.yahoo.com/tech-ticker/buy-american-%22anti-china-backlash%22-coming-gerald-celente-says-401461.html?tickers=FXI,PGJ,EEM,EWJ,WMT,%5EDJI,%5EGSPC)

Title: Re: Meltdown
Post by: Florestan on January 12, 2010, 12:49:19 AM

Quote from: Coopmv on January 11, 2010, 05:41:52 PM
Exactly, unbridled deregulation and the steadfast refusal of American policymakers to admit that the promised benefits of free-trade have not been realized and probably will never be realized and therefore a new direction is needed. As the largest western economy, when the US chooses to stay the course, the Europeans feel that they do not have a choice but to follow.

Well, free-trade is a term that's meaningless, IMHO. Has there ever been such a beast? I remember John Medaille's saying something to the effect that capitalism is the bitterest enemy of free-trade, since the dream of every capitalist is to produce cheaply, to sell expensively and to eliminate the competitors. And at least since the rise of multinational corporations whatever free-trade there was has gone the way of all flesh.

I firmly believe free-trade and free market can flourish and truly benefit people only within a "human-scale economy", one that is local, small-scale, personalistic and stable --- a far cry from today's global, gigantic, corporate and chaotic economy. Now, that one is doomed, but if private capitalism will be replaced by State capitalism then the cure is no better than the disease, see the rise and fall of the Swedish "model".

Title: Re: Meltdown
Post by: BachQ on January 12, 2010, 04:11:21 PM

Quote from: Coopmv on January 08, 2010, 05:20:16 PM
DM, Bankruptcy filing is just a matter of time ...

Official: Owners in huge NYC deal to miss payment
NYC councilman: Company that paid $5.4B for apartment complexes will miss loan payment
(http://finance.yahoo.com/news/Official-Owners-in-huge-NYC-apf-2265801173.html?x=0&sec=topStories&pos=9&asset=&ccode=)

Yep, Tishman Speyer is going down.

Vacant Manhattan Office Space Increases 38%, Cushman Says

By David M. Levitt

Jan. 12 (Bloomberg) -- New York has 38 percent more square feet of offices for lease than a year ago, as the economic slump and job cuts at financial firms keep demand low, according to Cushman & Wakefield Inc.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aStyY.jU6X10)

Out Of Work Americans Clear Out Of Apartments, Driving Vacancy Rates To 30 Year High (http://www.businessinsider.com/out-of-work-americans-clear-out-of-apartments-driving-vacancy-rates-to-30-year-high-2010-1?source=patrick.net)

Title: Re: Meltdown
Post by: BachQ on January 12, 2010, 04:13:08 PM

BLOOMBERG: Amid 46% surge in auto sales, China ends America's century-old reign as world's #1 auto market. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aE.x_r_l9NZE&source=patrick.net)

Title: Re: Meltdown
Post by: BachQ on January 12, 2010, 04:18:12 PM

CNBC: US mortgage originations to plunge 40% in 2010
(http://www.cnbc.com/id/34823265)

Non-Current Mortgages Hit Record High 13.2% (One in every 7.5 homeowners with a mortgage in the United States is either behind on their payments or in foreclosure, according to new data released by Lender Processing Services (LPS) Monday. That equates to a record high 13.2 percent of the nation's home loans.) (http://www.dsnews.com/articles/non-current-mortgages-hit-record-high-132-lps-2010-01-11)

Title: Re: Meltdown
Post by: BachQ on January 12, 2010, 04:19:47 PM

UK universities warn that they face 'meltdown' -- "It has taken more than 800 years to create one of the world's greatest education systems, and it looks like it will take just six months to bring it to its knees," according to an editorial by the group's Chairman Michael Arthur and Director Wendy Platt, published in The Guardian newspaper. (http://www.breitbart.com/article.php?id=D9D6BSAG0&show_article=1)

Title: Re: Meltdown
Post by: BachQ on January 12, 2010, 04:25:15 PM

Job Openings At Record Low: 50% Fewer Than 2007 --

(http://online.wsj.com/media/jolts_cs_20100112125942.jpg)

"There were nearly 6.4 unemployed workers, on average, for each available job at the end of November, according to Labor Department data released Tuesday. That's up from 6.1 in October and a record high. There were 1.7 jobless people for each opening in December 2007, when the recession began."
(http://www.huffingtonpost.com/2010/01/12/job-openings-at-record-lo_n_420182.html)

Henry Blodget: The Scariest Jobs Chart Ever

(http://static.businessinsider.com/~~/f?id=4b4a50b20000000000c71486&maxX=620&maxY=402)

(http://4.bp.blogspot.com/_pMscxxELHEg/S0c1SpJEkNI/AAAAAAAAHMs/lPW1FP1zchE/s1600-h/EmploymentRecessionsDec.jpg) (http://www.businessinsider.com/henry-blodget-the-scariest-jobs-chart-ever-2010-1)

Title: Re: Meltdown
Post by: BachQ on January 12, 2010, 04:27:32 PM

UK Independent: 20% of UK citizens mired in poverty
(http://www.independent.co.uk/news/uk/politics/britain-faces-return-to-victorian-levels-of-poverty-1831088.html)

Defaults in UK commercial property loans triple

(http://media.ft.com/cms/d9d6cce6-e06c-11de-8494-00144feab49a.jpg) (http://www.ft.com/cms/s/0/9be77406-e041-11de-8494-00144feab49a.html)

Title: Re: Meltdown
Post by: BachQ on January 12, 2010, 04:33:17 PM

This is 1 month old, but even more valid today ...

Howard Davidowitz: U.S. Consumers Getting "Dramatically Worse"

"The consumer is in worse shape since I was here last" in August, Davidowitz says, citing the following:

* Unemployment has exploded: "We've lost a ton of jobs since I was here last," Davidowitz says, noting the "real" unemployment rate is 17.5%. "That's an astounding number."
* Housing continues to sink: "The consumers' biggest asset is down trillions" in value while "foreclosures are exploding" and a huge percentage have negative equity -- 23% according to CoreLogic.
* Record numbers of consumer bankruptcies: The American consumer has "never been further behind...never defaulted more" on mortgages, student loans, auto loans, and credit card bills, he says.
* Poverty on the Rise: One in eight Americans and one in four children are receiving food stamps, as The NYT reported. (http://finance.yahoo.com/tech-ticker/article/381625/What-Recovery-U.S.-Consumers-Getting-%22Dramatically-Worse%C3%A2%E2%82%AC%C2%9D-Howard-Davidowitz-Says?tickers=RTH,XLP,XLY,WMT,TGT,HD,%5EDJI&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on January 12, 2010, 04:36:22 PM

1 month old, but even more valid today:

Hussman: 80% Chance Of A Market Crash Over The Next Year

We face two possible states of the world. One is a world in which our economic problems are largely solved, profits are on the mend, and things will soon be back to normal, except for a lot of unemployed people whose fate is, let's face it, of no concern to Wall Street. The other is a world that has enjoyed a brief intermission prior to a terrific second act in which an even larger share of credit losses will be taken, and in which the range of policy choices will be more restricted because we've already issued more government liabilities than a banana republic, and will steeply debase our currency if we do it again. ... In my estimation, there is still close to an 80% probability (Bayes' Rule) that a second market plunge and economic downturn will unfold during the coming year. (http://www.businessinsider.com/henry-blodget-hussman-80-chance-of-a-market-crash-over-the-next-year-2009-11)

Title: Re: Meltdown
Post by: Coopmv on January 12, 2010, 04:49:36 PM

Quote from: dm on January 12, 2010, 04:19:47 PM
UK universities warn that they face 'meltdown' -- "It has taken more than 800 years to create one of the world's greatest education systems, and it looks like it will take just six months to bring it to its knees," according to an editorial by the group's Chairman Michael Arthur and Director Wendy Platt, published in The Guardian newspaper.
(http://www.breitbart.com/article.php?id=D9D6BSAG0&show_article=1)

Harvard and Yale have had the American style meltdown. Their endowment funds were each down well over 20% in 2009, which translated into billions of dollars ... :o

Title: Re: Meltdown
Post by: Coopmv on January 12, 2010, 04:56:51 PM

It could be Dubai, Spain, Iceland and Ireland this year ...

Sovereign Debt Crisis Could Be Story of 2010 (http://www.dailyfinance.com/story/investing/sovereign-debt-crisis-could-be-story-of-2010/19311289/)

Title: Re: Meltdown
Post by: Coopmv on January 12, 2010, 04:58:14 PM

Google to end China censorship after e-mail breach
Google to end censorship in China, may leave over compromise of dissidents' e-mail accounts
(http://finance.yahoo.com/news/Google-to-end-China-apf-149991216.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on January 12, 2010, 05:02:23 PM

DM, I am sure you would love to see a meltdown - Beijing style ... ;)

For China, the worry now is growing too fast

China moves to curb high-risk loans, shifting focus to keeping economy from overheating (http://finance.yahoo.com/news/For-China-the-worry-now-is-apf-2143235375.html?x=0)

Title: Re: Meltdown
Post by: BachQ on January 13, 2010, 04:48:09 PM

California's credit rating on $64 billion of general obligation bonds was Cut to A- by S&P amid soaring $20 billion deficit ...

link (http://www.bloomberg.com/apps/news?pid=20601087&sid=aeEiJ2Fz4dfk&pos=5)

Title: Re: Meltdown
Post by: BachQ on January 13, 2010, 04:51:42 PM

Prime Jumbo Delinquencies Swell to 9.2% Delinquency of more than 60 days among prime jumbo residential mortgage-backed securities (RMBS) nearly tripled to 9.2% in December 2009, from 3.2% at the end of 2008, according to Fitch Ratings (a jumbo mortgage is one where the initial principal amount exceeds the $417,000 conventional loan limit set by Fannie/Freddie) ...

(http://www.housingwire.com/wp-content/uploads/2010/01/Picture-3.png)

link (http://www.housingwire.com/2010/01/13/prime-jumbo-rmbs-delinquencies-swell-to-9-2-fitch/)

Title: Re: Meltdown
Post by: Coopmv on January 13, 2010, 04:52:04 PM

DM, The west still has the upper hand when it comes to technologies. But it has to be smarter when it comes to technology transfer. Read on ...

Western Firms Resent Beijing's Many Rules
Google is far from alone among Western companies in its growing unhappiness with Chinese government policies, although it is highly unusual in threatening to pull out of the country entirely in protest.

(http://finance.yahoo.com/career-work/article/108568/western-firms-resent-beijings-many-rules?sec=topStories&pos=8&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on January 13, 2010, 04:56:16 PM

ABC News: US Consumer Confidence takes Nosedive
"Consumer confidence this week sustained one of its steepest one-week drops in the last quarter century, following last week's troubling jobs report with an all-hands retreat from what had been a tentative positive trend in consumer attitudes."

(http://a.abcnews.com/images/PollingUnit/cci_100112_mn.jpg)
The ABC News Consumer Comfort Index dropped 6 points to -47 on its scale of +100 to -100, a highly unusual shift. It's fallen this far or farther in a single week only 13 times in 24 years – more than 1,250 weeks – of ongoing polling. (http://abcnews.go.com/PollingUnit/abc-news-poll-consumer-confidence/story?id=9543262)

Title: Re: Meltdown
Post by: BachQ on January 13, 2010, 05:05:35 PM

London Times: Britain's recession the steepest for 88 years -- Britain's economy fell last year at the sharpest rate since 1921, despite hopes that it finally emerged from recession in the last three months of the year, according the National Institute of Economic and Social Research (NIESR) ... That means that, for the year as a whole, the economy contracted by 4.8 per cent, a bigger fall than in any year of the Great Depression and the biggest contraction for 88 years. ... official figures shocked economists by showing that the economy was still in recession, falling 0.3 per cent. That left Britain as the world's last major economy still in recession. (http://business.timesonline.co.uk/tol/business/economics/article6986312.ece)

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on January 14, 2010, 03:39:10 AM

Is it permissible to post something positive on this thread, or is that contrary to its spirit? :D

Wouldn't it be historically ironic if I, a US citizen, wound up staying in Russia (land of growth and opportunity) due to a US collapse?

http://www.themoscowtimes.com/opinion/article/a-promising-economic-start-to-a-new-decade/397235.html

"The past decade has been a roller-coaster ride for the Russian economy. From the depths of its 1998 financial crisis, which tested the proverbial patience of the Russian people, to the credit-fed boom of 2007 to the seeming meltdown of the economy just a year ago to its still seemingly unbelievable rebound as we start the new year, one learns to expect the unexpected when it comes to Russia."

Title: Re: Meltdown
Post by: Coopmv on January 14, 2010, 05:54:11 PM

DM, The Great Firewall of China is doing no better than the Great Wall of China, which could not keep out the Mongols ...

China's Web Users Prepare Workarounds If Google Leaves (http://online.wsj.com/article/SB10001424052748704363504575002772946324934.html?ru=yahoo&mod=yahoo_hs)

Title: Re: Meltdown
Post by: BachQ on January 14, 2010, 07:04:36 PM

Quote from: Velimir on January 14, 2010, 03:39:10 AM
http://www.themoscowtimes.com/opinion/article/a-promising-economic-start-to-a-new-decade/397235.html

"The past decade has been a roller-coaster ride for the Russian economy. From the depths of its 1998 financial crisis, which tested the proverbial patience of the Russian people, to the credit-fed boom of 2007 to the seeming meltdown of the economy just a year ago to its still seemingly unbelievable rebound as we start the new year, one learns to expect the unexpected when it comes to Russia."

I agree with the article's implication that many nations are on a collision course with unsustainable debt:

Quotethe critical point is that Russia — perhaps having learned the hard way about the folly of unmanageable debt in 1998 and guided by an economic team led by Finance Minister Alexei Kudrin and Central Bank Chairman Sergei Ignatyev seasoned by that ordeal — has avoided the pitfall of debt that has engulfed countries from the United States to the United Arab Emirates in a colossal balance sheet crisis. Highly indebted countries could face years of stagnation while paying down their debt burdens. It is likely that the future will be all about balance sheet deleveraging in the advanced economies, whereas most of the emerging market world will be largely unscathed by the scourge of debt — with the exception of a number of smaller, more distressed economies such as some on the fringe of Europe.

From the Washington Times: "In March, the Peter G. Peterson Foundation, led by former U.S. Comptroller General David Walker, calculated the total value of the federal government's "unfunded liabilities" as they stood at the end of fiscal 2008. These liabilities include the publicly held portion of the national debt plus the amount the government must pay to cover all the entitlement benefits it has promised to living Americans through Social Security, Medicare and other welfare-state programs minus the tax revenue the government can expect to collect to pay for these entitlements under existing tax law. The sum of these unfunded liabilities, the foundation discovered, stood at $56.4 trillion. That equals $435,000 for every full-time worker in the United States.

How did Mr. Obama respond to this problem? First, he signed a $787 billion stimulus law. ... [And] if Mr. Obama succeeds in enacting his health care reform, he will move on to his plan for a "comprehensive immigration reform" that will put illegal immigrants on a "pathway to citizenship" - making them eligible for the federal health care entitlement. If Mr. Obama succeeds, get ready for the crash. It is coming. (http://www.washingtontimes.com/news/2009/dec/05/all-is-not-well/)

Title: Re: Meltdown
Post by: BachQ on January 14, 2010, 07:09:18 PM

MSNBC: "Retail sales unexpectedly fell in December, leaving 2009 with the biggest yearly drop on record and highlighting the formidable hurdles facing the U.S. economy as it struggles to recover from the deepest recession in seven decades. In another disappointing economic report, the number of newly laid-off American workers requesting unemployment benefits rose more than expected last week as jobs remain scarce." (http://www.msnbc.msn.com/id/34857381/ns/business-retail/)

Title: Re: Meltdown
Post by: BachQ on January 14, 2010, 07:13:04 PM

Quote from: Velimir on January 14, 2010, 03:39:10 AM
Is it permissible to post something positive on this thread, or is that contrary to its spirit? :D

We love positive news!

NEW YORK (Reuters) - U.S. foreclosure actions shattered all records in 2009 and will do so again this year, with unemployment and wage cuts overcoming programs to remedy failing home loans, RealtyTrac said on Thursday.

(http://www.reuters.com/resources/r/?m=02&d=20100114&t=2&i=45361027&w=460&r=2010-01-14T102323Z_01_BTRE60D0SV500_RTROPTP_0_ROUTE-RECOVERY) (http://www.reuters.com/article/idUSTRE60D0LZ20100114?feedType=RSS&feedName=businessNews&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+reuters%2FbusinessNews+%28News+%2F+US+%2F+Business+News%29)

Title: Re: Meltdown
Post by: Coopmv on January 14, 2010, 07:19:51 PM

Quote from: dm on January 14, 2010, 07:04:36 PM
I agree with the article's implication that many nations are on a collision course with unsustainable debt:

From the Washington Times: "In March, the Peter G. Peterson Foundation, led by former U.S. Comptroller General David Walker, calculated the total value of the federal government's "unfunded liabilities" as they stood at the end of fiscal 2008. These liabilities include the publicly held portion of the national debt plus the amount the government must pay to cover all the entitlement benefits it has promised to living Americans through Social Security, Medicare and other welfare-state programs minus the tax revenue the government can expect to collect to pay for these entitlements under existing tax law. The sum of these unfunded liabilities, the foundation discovered, stood at $56.4 trillion. That equals $435,000 for every full-time worker in the United States.

How did Mr. Obama respond to this problem? First, he signed a $787 billion stimulus law. ... [And] if Mr. Obama succeeds in enacting his health care reform, he will move on to his plan for a "comprehensive immigration reform" that will put illegal immigrants on a "pathway to citizenship" - making them eligible for the federal health care entitlement. If Mr. Obama succeeds, get ready for the crash. It is coming.
(http://www.washingtontimes.com/news/2009/dec/05/all-is-not-well/)

It appears the Democrats will likely lose the seats in CT and SD (a conservative state) when Chris Dodd and Tim Johnson retire at the end of this year. Harry Reid may be voted out come November as well. There are also a few other seats up for grab where the Democratic incumbents are weak. Without 60 filibuster-proof votes in the US Senate, Obama's agenda are going nowhere. The sentiments against the illegals are the highest ever and I doubt Obama can muster enough votes from his own party to pass the mother of all amnesty bill.

Title: Re: Meltdown
Post by: BachQ on January 15, 2010, 03:12:04 PM

MISH: Small Business Trends Suggest No Recovery On Horizon

"Washington is offering nothing but higher taxes and fines and fees and more regulation. Congress is passing bills with thousands of pages of hidden bombs that will go off as the legislation is passed and implemented. Federal spending has soared amazingly, yet been ineffective except at pushing the federal deficit to incomprehensible heights, promising to double our national debt in just a few years. The interest burden this will place on average Americans is astounding. Uncertainty is the enemy of economic growth and investment, and Washington, D.C., the usual source of uncertainty, is delivering plenty of it. Confidence in our political leadership has tanked. ...." (http://globaleconomicanalysis.blogspot.com/2010/01/small-business-trends-suggest-no.html)

Title: Re: Meltdown
Post by: BachQ on January 15, 2010, 03:13:23 PM

Delinquencies for U.S. commercial mortgages is expected to soar to between 8% to 9% in 2010. (http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201001151507dowjonesdjonline000602&title=moodys-cmbs-delinquencies-rise-to-49-8-9-seen-this-year)

Title: Re: Meltdown
Post by: BachQ on January 15, 2010, 03:16:03 PM

ABC NEWS: Desperate for cash, Arizona succumbs to "sale-leasebacks" for its State Capitol building, prisons, and other state-owned buildings; AZ still faces a shortfall of at least $1.4 billion. (http://abcnews.go.com/Business/wireStory?id=9565030)

Title: Re: Meltdown
Post by: BachQ on January 15, 2010, 03:26:20 PM

MISH: Sovereign Debt Crisis Coming As Recovery Stalls (A fiscal crisis is brewing in the US, UK, Greece, Ireland, Spain, Japan, as well as the highly touted wunderkind, China).
(http://globaleconomicanalysis.blogspot.com/2010/01/sovereign-debt-crisis-coming-as.html)

MISH: Swiss Cheese Recovery, More Holes Than Cheese
(http://globaleconomicanalysis.blogspot.com/2010/01/swiss-cheese-recovery-more-holes-than.html)

Marc Faber: The Next Thing You Need To Worry About Is The PIIGS (Portugal, Ireland, Italy, Greece, and Spain). (http://finance.yahoo.com/tech-ticker/marc-faber:-the-next-thing-you-need-to-worry-about-is-the-piigs-403497.html)

Title: Re: Meltdown
Post by: BachQ on January 15, 2010, 03:28:26 PM

Why Shanghai Real Estate Is The Most Obvious Bubble Ever "Borrowers are maxing out all available lines of credit, fearing that they might miss out on this extraordinary opportunity." "One clear clue (regarding the rising real estate prices in China) is that the average price-to-income ratio in Beijing has reached 27:1, five times the world average..." (http://www.businessinsider.com/the-chinese-real-estate-bubble-is-the-most-obvious-bubble-ever-2010-1#property-values-are-rising-dramatically-1)

Title: Re: Meltdown
Post by: Coopmv on January 15, 2010, 04:47:07 PM

Quote from: dm on January 15, 2010, 03:12:04 PM
MISH: Small Business Trends Suggest No Recovery On Horizon

"Washington is offering nothing but higher taxes and fines and fees and more regulation. Congress is passing bills with thousands of pages of hidden bombs that will go off as the legislation is passed and implemented. Federal spending has soared amazingly, yet been ineffective except at pushing the federal deficit to incomprehensible heights, promising to double our national debt in just a few years. The interest burden this will place on average Americans is astounding. Uncertainty is the enemy of economic growth and investment, and Washington, D.C., the usual source of uncertainty, is delivering plenty of it. Confidence in our political leadership has tanked. ...."
(http://globaleconomicanalysis.blogspot.com/2010/01/small-business-trends-suggest-no.html)

Looks like a double dip is increasingly likely ... :(

Title: Re: Meltdown
Post by: Coopmv on January 15, 2010, 04:51:51 PM

Quote from: dm on January 15, 2010, 03:26:20 PM
MISH: Sovereign Debt Crisis Coming As Recovery Stalls (A fiscal crisis is brewing in the US, UK, Greece, Ireland, Spain, Japan, as well as the highly touted wunderkind, China).
(http://globaleconomicanalysis.blogspot.com/2010/01/sovereign-debt-crisis-coming-as.html)

MISH: Swiss Cheese Recovery, More Holes Than Cheese
(http://globaleconomicanalysis.blogspot.com/2010/01/swiss-cheese-recovery-more-holes-than.html)

Marc Faber: The Next Thing You Need To Worry About Is The PIIGS (Portugal, Ireland, Italy, Greece, and Spain).
(http://finance.yahoo.com/tech-ticker/marc-faber:-the-next-thing-you-need-to-worry-about-is-the-piigs-403497.html)

Obama is the new Jimmy Carter and will be a one-termer just like Carter. He can blame the Bush Administration for only so long. If things do not get measurably better come November, the Democrats will be toast in the mid-term election ...

Title: Re: Meltdown
Post by: Coopmv on January 15, 2010, 04:54:52 PM

Quote from: dm on January 15, 2010, 03:28:26 PM

Why Shanghai Real Estate Is The Most Obvious Bubble Ever "Borrowers are maxing out all available lines of credit, fearing that they might miss out on this extraordinary opportunity." "One clear clue (regarding the rising real estate prices in China) is that the average price-to-income ratio in Beijing has reached 27:1, five times the world average..."
(http://www.businessinsider.com/the-chinese-real-estate-bubble-is-the-most-obvious-bubble-ever-2010-1#property-values-are-rising-dramatically-1)

How do you say bubble in Mandarin? ;D

Title: Re: Meltdown
Post by: Coopmv on January 15, 2010, 07:06:59 PM

DM, Are you surprised at this outcome? I am not ...

Obama mortgage relief program fails to deliver
Obama mortgage plan doesn't deliver 11 months later; only 66,500 homeowners helped so far (http://finance.yahoo.com/news/Obama-mortgage-relief-program-apf-3990048159.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on January 15, 2010, 08:16:29 PM

DM, Selling more American arms to Taiwan is good for creating American jobs. What is wrong with that? Chinese sanctions against Raytheon, the maker of the Patriot Missles is totally worthless since the US will never sell any weapons to China anyway ...

US, China at Odds Over Taiwan Arms Deal

State media in China have reported that Chinese Internet users are calling for possible sanctions against U.S. companies that sell arms to Taiwan.

(http://www1.voanews.com/english/news/asia/US-China-at-Odds-Over-Taiwan-Arms-Deal-81700702.html)

Title: Re: Meltdown
Post by: Coopmv on January 15, 2010, 08:33:33 PM

DM, It is too funny for words, as a Republican may win the US Senate seat once held by Ted Kennedy. Even those liberal voters in MA are starting to see the US is going down the toilet ...

Massachusetts: 'Bottom has fallen out' of Coakley's polls; Dems prepare to explain defeat, protect Obama

(http://www.washingtonexaminer.com/opinion/blogs/beltway-confidential/Massachusetts-Bottom-has-fallen-out-of-Coakleys-poll-numbers-Dems-prepare-to-explain-defeat-protect-Obama-81681862.html)

Title: Re: Meltdown
Post by: Coopmv on January 16, 2010, 06:40:06 AM

DM, It is about time that the US stops being a paper tiger against China. When you are a small debtor, you have no leverage. But when you are a humongous sovereign debtor with potent military power, you have a lot of leverage. So what if the Chinese hold hundreds of billion dollars worth of US treasuries? It is just so amazing that so many western technology companies do not recognize they do not have to kowtow to the Chinese since they have the stronger hands. The Chinese are still technologically backward in many ways and will need the west for years to come ...

Google Gets U.S. Backing and Evidence China May Be Behind the Attack
(http://www.dailyfinance.com/story/company-news/google-gets-u-s-backing-and-evidence-china-may-be-behind-the-at/19318158/)

Title: Re: Meltdown
Post by: Coopmv on January 17, 2010, 02:42:50 PM

DM, When Patrick Buchanan railed against WTO and NAFTA, WTO in particular back in the early 90's, many in his (Republican) party called him an isolationist and alarmist. Well, all his predictions about the terrible consequences of the misguided free-trade push have come to pass. Check out the following link to his article ...

Is America's financial collapse inevitable?
(http://www.wnd.com/index.php?fa=PAGE.view&pageId=122030)

Title: Re: Meltdown
Post by: Coopmv on January 17, 2010, 03:44:33 PM

DM, This guy used to preach the gospel on how people could become real estate big shots by buying a lot of properties with no money down. I miss seeing him on TV these days ... ;D

Title: Re: Meltdown
Post by: Coopmv on January 17, 2010, 05:46:30 PM

DM, Dan Slane hit the nail right on its head, the short-term, total lack of strategic thinking in the executive suites of corporate America is so laughable ...

'All About Profit'

Dan Slane, chairman of the U.S.-China Economic and Security Review Commission, a federal agency, said he was surprised more companies aren't standing up with Google.

"It's all about profit, and I understand where the silence is coming from, but they are missing the long-term picture," Slane said in an interview. Chinese leaders' "end game is to extract as much technology out of American companies as they can, transfer that to their own companies and, when they feel those companies have reached a level of technical maturity, show the American companies the door."

(http://www.bloomberg.com/apps/news?pid=20601109&sid=aOyMuHml05Ak&pos=11)

Title: Re: Meltdown
Post by: Coopmv on January 17, 2010, 05:57:57 PM

DM, The Democrats will just step up creating new federal jobs ... ;)

WASHINGTON (Reuters) - Members of the U.S. Congress begin 2010 scrambling to reduce the double-digit U.S. jobless rate, knowing their own jobs will be at stake in the November election if they fail to deliver. (http://www.reuters.com/article/idUSTRE60G0ZI20100117)

Title: Re: Meltdown
Post by: Coopmv on January 18, 2010, 10:13:35 AM

DM, Here is an interesting article ... ;)

Spring Break: How Fannie & Freddie Will Bail Us Out

Sometime this Spring, on a quiet word from the White House, Fannie and Freddie will drop their lending requirements back to where they once were or even lower. They'll start buying mortgages from anyone on any property even if doing so makes no economic sense. They'll throw $1 trillion or more of off-the-budget money at the problem, buying crazy mortgages. And the bankers, who haven't learned all that much from this experience but still love to make crazy deals if they are profitable for a moment and can be sold on to some sucker, will start lending in earnest. For a while.
(http://www.housingwatch.com/2010/01/06/spring-break-how-fannie-and-freddie-will-bail-us-out/)

Title: Re: Meltdown
Post by: Coopmv on January 18, 2010, 04:41:05 PM

DM, Check out this article ...

Why America and China will clash (http://www.ft.com/cms/s/0/e9306da0-0461-11df-8603-00144feabdc0.html)

Title: Re: Meltdown
Post by: BachQ on January 18, 2010, 05:10:05 PM

It's just a matter of time until China becomes the world's #1 consumer of oil, knocking the US into the #2 spot. As noted by Bloomberg: China's Round-The-Clock Auto Factories Still Cannot Meet Demand (http://www.bloomberg.com/apps/news?pid=20601089&sid=av3dPlponcBw)

Title: Re: Meltdown
Post by: BachQ on January 18, 2010, 05:13:07 PM

Obama's home state, Illinois, is teetering on bankruptcy A record $5.1 billion in state bills was past due at yearend, almost doubling to 92 days from 48 days a year earlier the average amount of time it takes the state to pay vendors such as doctors, hospitals, non-profit service providers and other contractors. The resulting $5.1-billion backlog of unpaid bills doesn't include $1.4 billion in Medicaid and group health bills that haven't been processed, plus $2.25 billion in short-term borrowing that must be repaid soon. "We would like all the stakeholders of Illinois to recognize how close the state is to bankruptcy or insolvency," says Laurence Msall, president of the Civic Federation, a fiscal watchdog in Chicago. "Bankruptcy is the reality that looms out there," Republican gubernatorial candidate Andrew McKenna Jr. says. "We're close to de facto bankruptcy, if not de jure bankruptcy," said Jim Nowlan, senior fellow at the University of Illinois' Institute of Government and Public Affairs. (http://www.chicagobusiness.com/cgi-bin/mag/article.pl?articleId=32910&seenIt=1)

Title: Re: Meltdown
Post by: Coopmv on January 18, 2010, 05:34:15 PM

Quote from: dm on January 18, 2010, 05:10:05 PM
It's just a matter of time until China becomes the world's #1 consumer of oil, knocking the US into the #2 spot. As noted by Bloomberg: China's Round-The-Clock Auto Factories Still Cannot Meet Demand
(http://www.bloomberg.com/apps/news?pid=20601089&sid=av3dPlponcBw)

With all these vehicles, China still refuses to be bound by the global emission standard, which aims to reduce greenhouse gas ... ???

Title: Re: Meltdown
Post by: Coopmv on January 18, 2010, 06:49:24 PM

Quote from: dm on January 18, 2010, 05:13:07 PM
Obama's home state, Illinois, is teetering on bankruptcy A record $5.1 billion in state bills was past due at yearend, almost doubling to 92 days from 48 days a year earlier the average amount of time it takes the state to pay vendors such as doctors, hospitals, non-profit service providers and other contractors. The resulting $5.1-billion backlog of unpaid bills doesn't include $1.4 billion in Medicaid and group health bills that haven't been processed, plus $2.25 billion in short-term borrowing that must be repaid soon. "We would like all the stakeholders of Illinois to recognize how close the state is to bankruptcy or insolvency," says Laurence Msall, president of the Civic Federation, a fiscal watchdog in Chicago. "Bankruptcy is the reality that looms out there," Republican gubernatorial candidate Andrew McKenna Jr. says. "We're close to de facto bankruptcy, if not de jure bankruptcy," said Jim Nowlan, senior fellow at the University of Illinois' Institute of Government and Public Affairs.
(http://www.chicagobusiness.com/cgi-bin/mag/article.pl?articleId=32910&seenIt=1)

NY could be next, as all those lost financial jobs would not return ...

Title: Re: Meltdown
Post by: Coopmv on January 19, 2010, 05:45:51 PM

DM, Another bad day for the Dems ;)

CNN: Brown wins Massachusetts Senate race (http://www.cnn.com/2010/POLITICS/01/19/massachusetts.senate/index.html?hpt=T1)

Title: Re: Meltdown
Post by: BachQ on January 19, 2010, 06:13:50 PM

Quote from: Coopmv on January 19, 2010, 05:45:51 PM
DM, Another bad day for the Dems ;)

CNN: Brown wins Massachusetts Senate race (http://www.cnn.com/2010/POLITICS/01/19/massachusetts.senate/index.html?hpt=T1)

QuoteVoters across Massachusetts braved winter cold and snow for an election with high stakes -- the domestic agenda of President Obama, including his priority of health care reform. Brown's victory strips Democrats of the 60-seat Senate supermajority needed to overcome GOP filibusters against future Senate action on a broad range of White House priorities. Senate Democrats needed all 60 votes in their caucus to pass the health care bill, and the loss of one seat imperils generating that support again for a compromise measure worked out with the House.

AWESOME !!

QuoteNo Republican has won a U.S. Senate race in Massachusetts since 1972, and Democrats control the governorship, both houses of the state legislature, and the state's entire congressional delegation.

This is a major upset. Dems are GOING DOWN.

Title: Re: Meltdown
Post by: Coopmv on January 22, 2010, 06:05:24 PM

It is about time ...

Rep. Frank: Abolish Fannie Mae, Freddie Mac

Rep. Barney Frank calls for replacement of mortgage finance giants Fannie Mae, Freddie Mac

(http://finance.yahoo.com/news/Rep-Frank-Abolish-Fannie-Mae-apf-2556602798.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on January 22, 2010, 06:06:44 PM

Quote from: Coopmv on January 22, 2010, 06:05:24 PM
It is about time after over $100B bailout with taxpayer money ...

Rep. Frank: Abolish Fannie Mae, Freddie Mac

Rep. Barney Frank calls for replacement of mortgage finance giants Fannie Mae, Freddie Mac

(http://finance.yahoo.com/news/Rep-Frank-Abolish-Fannie-Mae-apf-2556602798.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on January 23, 2010, 09:21:55 AM

DM, Pelosi should have no problems hanging on to her job since she hails from the most liberal, anything goes neighborhood of San Fran. OTOH, Harry Reid will likely go down in his re-election bid ...

White House nightmare persists
(http://www.ft.com/cms/s/0/821dce96-0786-11df-915f-00144feabdc0.html)

Title: Re: Meltdown
Post by: Coopmv on January 23, 2010, 03:02:29 PM

DM, It looks like some of the PIIGS countries are in serious fiscal crises ...

Portugal, Italy, Ireland, Greece and Spain :o

ECB president: Greece must put finances in order ECB's Trichet: Greece and others with excessive deficits must put house in order (http://finance.yahoo.com/news/ECB-president-Greece-must-put-apf-3308745416.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on January 23, 2010, 03:21:20 PM

DM, What kind of game do you think China is trying to play here?

China May Consider One-Time Yuan Gain, Goldman's O'Neill Says (http://www.bloomberg.com/apps/news?pid=20601068&sid=aNpOCUK8o.O4)

Title: Re: Meltdown
Post by: Coopmv on January 25, 2010, 06:23:56 PM

DM, Is this too little too late to save the upcoming Dems bloodbaths at the polls?

Obama to seek freeze on part of budget
Obama will ask to freeze a part of govt spending for 3 years beginning in 2011 (http://finance.yahoo.com/news/AP-sources-Obama-to-seek-apf-3970217791.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on January 30, 2010, 06:28:50 AM

DM, This would have been major bad news if the US had not experienced a 10+% unemployment rate, as the illegals would be streaming across the border ... ;)

Mexico GDP down 6.8 percent in 2009
Mexico GDP down 6.8 percent in 2009, worst in 30 years

(http://finance.yahoo.com/news/Mexico-GDP-down-68-percent-in-apf-584826300.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on January 30, 2010, 11:09:20 AM

Quote from: Coopmv on January 25, 2010, 06:23:56 PM
DM, Is this too little too late to save the upcoming Dems bloodbaths at the polls?

Obama to seek freeze on part of budget
Obama will ask to freeze a part of govt spending for 3 years beginning in 2011 (http://finance.yahoo.com/news/AP-sources-Obama-to-seek-apf-3970217791.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Coop: Obama, Pelosi & Co. only know how to SPEND ... they have no concept of frugality.

Senate raises debt ceiling to record $14.3 trillion
By Michael Riley
The Denver Post
POSTED: 01/29/2010 01:00:00 AM MST
UPDATED: 01/29/2010 01:33:16 AM MST

The U.S. Senate on Thursday significantly upped the amount the federal government can go into the red, increasing the debt ceiling to a record $14.3 trillion in a hardly relished party-line vote. ... "We've got debt at historic levels, and we can't keep kicking the can down the road," Udall said.

The debt-ceiling measure — which passed 60-39 — effectively increases the limit on the federal government's credit card by $1.9 trillion, putting it at, by far, the highest level in the country's history. Failing to lift the debt ceiling would have forced a shutdown in government sometime in the next few weeks, crashing global financial markets. (http://www.denverpost.com/commented/ci_14290778?source=commented-)

Read more: http://www.denverpost.com/commented/ci_14290778?source=commented-#ixzz0e7zS630b

Title: Re: Meltdown
Post by: BachQ on January 30, 2010, 11:14:50 AM

California controller: State will run out of cash before April

By Denis C. Theriault
dtheriault@mercurynews.com
Posted: 01/22/2010 05:13:27 PM PST
Updated: 01/29/2010 02:40:55 PM PST

SACRAMENTO — State Controller John Chiang issued a stern warning Friday about California's cash reserves, telling legislative leaders and Gov. Arnold Schwarzenegger they must act on nearly $9 billion in budget cuts the governor is seeking by March — or the state will run out of cash to pay its bills. Without making those cuts — which Chiang says will pump $1.3 billion into the state's checking account — California would be broke by April 1 ... (http://www.insidebayarea.com/oaklandtribune/localnews/ci_14296056?source=rss)

Title: Re: Meltdown
Post by: BachQ on January 30, 2010, 11:16:39 AM

Obama wants record $708 billion for wars next year (http://economictimes.indiatimes.com/news/international-business/Obama-wants-record-708-billion-for-wars-next-year/articleshow/5441603.cms)

http://www.youtube.com/v/4LsSppYxSHk

"I will promise you this, that if we have not gotten our troops out by the time I am president, it is the first thing I will do. I will get our troops home. We will bring an end to this war. You can take that to the bank. " - Barack Obama Campaign Promise - October 27, 2007

Title: Re: Meltdown
Post by: Coopmv on January 30, 2010, 02:17:47 PM

Quote from: dm on January 30, 2010, 11:09:20 AM
Coop: Obama, Pelosi & Co. only know how to SPEND ... they have no concept of frugality.

Senate raises debt ceiling to record $14.3 trillion
By Michael Riley
The Denver Post
POSTED: 01/29/2010 01:00:00 AM MST
UPDATED: 01/29/2010 01:33:16 AM MST

The U.S. Senate on Thursday significantly upped the amount the federal government can go into the red, increasing the debt ceiling to a record $14.3 trillion in a hardly relished party-line vote. ... "We've got debt at historic levels, and we can't keep kicking the can down the road," Udall said.

The debt-ceiling measure — which passed 60-39 — effectively increases the limit on the federal government's credit card by $1.9 trillion, putting it at, by far, the highest level in the country's history. Failing to lift the debt ceiling would have forced a shutdown in government sometime in the next few weeks, crashing global financial markets. (http://www.denverpost.com/commented/ci_14290778?source=commented-)

Read more: http://www.denverpost.com/commented/ci_14290778?source=commented-#ixzz0e7zS630b

Harry Reid should be out of a job after the November election and the Dems may have to pick a new majority leader. But some pundits think the Republican may even have a shot at recapturing the majority in the US Senate since there are many vulnerable Democratic incumbents up for re-election in November. Pelosi should be able to hang in there since she represents the most liberal Congressional district in the country and liberals generally cannot even balance their checkbooks. As such, her constituents will not blame her for the red ink, they would continue to blame George Bush ... ;D

Title: Re: Meltdown
Post by: Coopmv on January 30, 2010, 02:19:14 PM

Quote from: dm on January 30, 2010, 11:14:50 AM
California controller: State will run out of cash before April

By Denis C. Theriault
dtheriault@mercurynews.com
Posted: 01/22/2010 05:13:27 PM PST
Updated: 01/29/2010 02:40:55 PM PST

SACRAMENTO — State Controller John Chiang issued a stern warning Friday about California's cash reserves, telling legislative leaders and Gov. Arnold Schwarzenegger they must act on nearly $9 billion in budget cuts the governor is seeking by March — or the state will run out of cash to pay its bills. Without making those cuts — which Chiang says will pump $1.3 billion into the state's checking account — California would be broke by April 1 ...
(http://www.insidebayarea.com/oaklandtribune/localnews/ci_14296056?source=rss)

As I suspected, these CA Dems are in serious denial. They still do not see the Day of Reckoning coming ... :o

Title: Re: Meltdown
Post by: Coopmv on January 30, 2010, 02:22:33 PM

Quote from: dm on January 30, 2010, 11:14:50 AM
California controller: State will run out of cash before April

By Denis C. Theriault
dtheriault@mercurynews.com
Posted: 01/22/2010 05:13:27 PM PST
Updated: 01/29/2010 02:40:55 PM PST

SACRAMENTO — State Controller John Chiang issued a stern warning Friday about California's cash reserves, telling legislative leaders and Gov. Arnold Schwarzenegger they must act on nearly $9 billion in budget cuts the governor is seeking by March — or the state will run out of cash to pay its bills. Without making those cuts — which Chiang says will pump $1.3 billion into the state's checking account — California would be broke by April 1 ...
(http://www.insidebayarea.com/oaklandtribune/localnews/ci_14296056?source=rss)

What can I say, as a young man back in the mid 70's when I was still at the university, I survived those idiotic policies pushed by Jimmy Carter and the Dems. Hopefully, I will survive Obama and his Dems until November 2012 when they will be swept away.

Title: Re: Meltdown
Post by: Coopmv on January 30, 2010, 07:59:16 PM

DM, Roubini has been right on the mark with the US housing meltdown and his prognosis for the 2010 second half may well be right again ...

Roubini Calls U.S. Growth 'Dismal and Poor,' Predicts Slowing (http://www.bloomberg.com/apps/news?pid=20601087&sid=aqLMEUObhysc&pos=2)

Title: Re: Meltdown
Post by: Coopmv on January 30, 2010, 08:08:00 PM

DM, Cheers to US weapons sales to Taiwan. It is a win-win for US and Taiwan. What is wrong with creating American jobs via these new weapons sales? What can China do anyway? ;)

China Suspends U.S. Military Ties on Taiwan Arms Sale (Update4) (http://www.bloomberg.com/apps/news?pid=20601087&sid=auTrAIsm2XrM&pos=9)

Title: Re: Meltdown
Post by: Coopmv on January 31, 2010, 02:41:30 PM

DM, There is no good news for the banks. It will be interesting to see how many local banks in CA will fail this year ...

Regulators shut down banks in 5 states
Regulators shutter banks in Calif., Fla., Ga., Minn., Wash., totaling 15 bank failures in 2010

WASHINGTON (AP) -- Regulators shut down a big bank in California on Friday, along with two banks in Georgia and one each in Florida, Minnesota and Washington. That brought to 15 the number of bank failures so far in 2010 atop the 140 shuttered last year in the punishing economic climate.

more ...
(http://finance.yahoo.com/news/Regulators-shut-down-banks-in-apf-1868747589.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on January 31, 2010, 11:05:09 PM

Quote from: Coopmv on January 30, 2010, 08:08:00 PM
DM, Cheers to US weapons sales to Taiwan. It is a win-win for US and Taiwan.

Dunno about you Coop, but I don't see why the US has to "guarantee the security" of a country it doesn't even officially recognize (Taiwan). Should we really be spoiling for a fight with the world's biggest country?

http://original.antiwar.com/justin/2010/01/31/will-the-dragon-awake/

Title: Re: Meltdown
Post by: Coopmv on February 01, 2010, 05:35:07 PM

Quote from: Velimir on January 31, 2010, 11:05:09 PM
Dunno about you Coop, but I don't see why the US has to "guarantee the security" of a country it doesn't even officially recognize (Taiwan). Should we really be spoiling for a fight with the world's biggest country?

http://original.antiwar.com/justin/2010/01/31/will-the-dragon-awake/

The Treaty of Taiwan was signed between the US and Taiwan when Taiwan agreed to give up its seat at the UN Security Council back in the 70's when Jimmy Carter was president.

Title: Re: Meltdown
Post by: Coopmv on February 02, 2010, 05:32:25 PM

DM, Time to break up the big banks and close the fed discount window on Goldman Sachs ...

Volcker Urges Lawmakers to End Era of 'Too Big to Fail'
(http://www.dailyfinance.com/story/volcker-urges-lawmakers-to-end-era-of-too-big-too-fail/19341675/)

Title: Re: Meltdown
Post by: Coopmv on February 02, 2010, 07:02:45 PM

Quote from: Velimir on January 31, 2010, 11:05:09 PM
Dunno about you Coop, but I don't see why the US has to "guarantee the security" of a country it doesn't even officially recognize (Taiwan). Should we really be spoiling for a fight with the world's biggest country?

http://original.antiwar.com/justin/2010/01/31/will-the-dragon-awake/

Modern warfare is no longer waged on manpower. I will not be surprised if there is ever any naval hostility in the Pacific between China and the US, the US Sixth Fleet should have no problems sinking the entire Chinese navy in a week ...

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on February 02, 2010, 09:51:19 PM

Quote from: Coopmv on February 02, 2010, 07:02:45 PM
I will not be surprised if there is ever any naval hostility in the Pacific between China and the US, the US Sixth Fleet should have no problems sinking the entire Chinese navy in a week ...

I'm afraid you have missed my larger point, Coop. Why would we even want to get ourselves into a situation where such a thing would happen?

Title: Re: Meltdown
Post by: BachQ on February 03, 2010, 02:43:30 PM

Quote from: Coopmv on January 30, 2010, 07:59:16 PM
DM, Roubini has been right on the mark with the US housing meltdown and his prognosis for the 2010 second half may well be right again ...

Roubini Calls U.S. Growth 'Dismal and Poor,' Predicts Slowing (http://www.bloomberg.com/apps/news?pid=20601087&sid=aqLMEUObhysc&pos=2)

Good catch, Coop.

Rosenberg: Expect Massive Downward Revisions to GDP "if you believe that GDP result, then you de facto are of the view that all of a sudden, with no capital deepening or major technological change in the past half decade to speak of, the potential growth rate in the United States has reached an epic scale of 7%." (http://www.zerohedge.com/article/rosenberg-expect-big-time-revisions-houdini-q4-gdp)

Title: Re: Meltdown
Post by: BachQ on February 03, 2010, 02:46:21 PM

Quote from: Coopmv on January 15, 2010, 04:54:52 PM
How do you say bubble in Mandarin? ;D

BLOOMBERG: China's Property Market `Bubble' Set to Burst on Lending Curbs, Xie Says China's property market "bubble" is set to burst as the government curbs credit growth and clamps down on speculation, according to independent economist Andy Xie.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aDZjmVQaQ.Ms)

BBC China overtakes Japan to become world's 2d largest economy.
(http://news.bbc.co.uk/2/hi/business/8471613.stm)

WSJ: China's fourth-quarter GDP rises 10.7% on-year, the fastest pace since 2007; China retail sales climb 15.5% in 2009; China December industrial output up 18.5% on-year.
(http://online.wsj.com/article/BT-CO-20100120-717544.html?mod=WSJ_latestheadlines)

Title: Re: Meltdown
Post by: BachQ on February 03, 2010, 02:47:39 PM

Barney Frank Named 'Porker of the Year' "He became a kind of a poster child for the financial meltdown," a spokeswoman for the group said. "For many, he's a porcine representation of wasteful spending in Washington," she added.
(http://i80.photobucket.com/albums/j186/DonaldDouglas/Americaneocon/barneyfranks.jpg)
(http://www.cnbc.com/id/35199562)

Huffington Post:Barney Frank Concedes Health Care Approach 'No Longer Appropriate' After Brown Beats Coakley
(http://www.huffingtonpost.com/2010/01/19/barney-frank-concedes-hea_n_429128.html)

Title: Re: Meltdown
Post by: BachQ on February 03, 2010, 02:48:47 PM

We are so screwed.

(http://www.investorsinsight.com/cfs-file.ashx/__key/CommunityServer.Blogs.Components.WeblogFiles/thoughts_5F00_from_5F00_the_5F00_frontline/jm012910image002_5F00_5BE3DE6C.jpg)

"...Increased deficits and rising debt-to-GDP is a long-term losing proposition. It simply puts off what will be a reckoning that will be even worse, with yet higher debt levels. You cannot borrow your way out of a debt crisis."
(http://www.businessinsider.com/we-are-so-screwed-2010-1)

Title: Re: Meltdown
Post by: BachQ on February 03, 2010, 02:49:46 PM

ZEROHEDGE: A Majority of States Are Now Insolvent

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/madoff/ProPublica%202.jpg)

"Using data provided by ProPublica, there are now 26 states which have depleted their trust funds which now rely exclusively on borrowings from the Federal government to prevent the cessation of insurance payments to recently unemployed workers. The most bankrupt states are California, with $6.8 billion in borrowings, Michigan ($3.4 billion), New York ($2.4 billion), Pennsylvania ($2.2 billion) and Ohio ($1.9 billion)."
(http://www.zerohedge.com/article/majority-states-are-now-insolvent-quantifying-disastrous-unemployment-situation)

Title: Re: Meltdown
Post by: BachQ on February 03, 2010, 02:50:39 PM

BLOOMBERG: Amid Whopping $3.8T Budget, Obama Seeks $1.9 Trillion Tax Rise on Rich, Business (Update1)

By Ryan J. Donmoyer

Feb. 1 (Bloomberg) -- The Obama administration wants to increase taxes on Americans earning more than $200,000 by almost $970 billion over the next decade and take in an additional $400 billion from businesses even as it retooled a proposed crackdown on international tax-avoidance techniques.The budget released today would reinstate 10-year-old income tax rates of 36 percent and 39.6 percent for single Americans earning more than $200,000 and joint filers who make more than $250,000 as part of a broad $1.9 trillion tax increase proposal.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aGJUjvI.Bdw8)

Title: Re: Meltdown
Post by: BachQ on February 03, 2010, 02:51:10 PM

Economists say U.S. poised for worsening financial catastrophes (http://digitaljournal.com/article/286769)

Title: Re: Meltdown
Post by: BachQ on February 03, 2010, 02:52:23 PM

Coop, it appears that UK voters have made the UK's soaring deficit a forefront issue for the upcoming election:

Amid "Albatross of Debt," the UK Risks 'Greek-Style' Crisis, Conservatives Say (Update1)

By Craig Stirling

Jan. 31 (Bloomberg) -- George Osborne, finance spokesman for Britain's opposition Conservatives, said the U.K. risks a "Greek-style budget crisis," as opinion polls showed his party may struggle to win sufficient electoral support to control the pace of debt-cutting measures. "Britain, with the largest debts, the largest borrowing of any major economy in the world, has to deal with this problem," Osborne told the British Broadcasting Corp.'s Sunday AM show today. "If we don't, we risk a Greek-style budget crisis that will put interest rates up."

With the election due by June, four polls published this weekend showed the Conservatives with less than a 10 percentage- point lead over Prime Minister Gordon Brown's ruling Labour Party. Analysts including Anthony Wells, a pollster at YouGov, say that's the margin needed to be certain of a Parliamentary majority. Osborne's call to prioritize budget cuts adds to the squabble between the parties in a campaign where the deficit has taken center stage.

... The budget deficit, expected by the Treasury to reach a postwar high of 12.6 percent of gross domestic product in the fiscal year through March, may remain the battleground as the election approaches. Osborne, Chancellor of the Exchequer Alistair Darling and Liberal Democrat Treasury spokesman Vince Cable may clash on the economy in a televised debate, the Sunday Times reported today.
(http://www.bloomberg.com/apps/news?pid=20601102&sid=aj4Q4VhMf7hA)

Brown faces nightmare of pre-poll credit downgrade (S&P rates UK alongside Chile and Portugal because of weak economy and debt)

By James Moore, Deputy Business Editor

Friday, 29 January 2010

Standard & Poor's yesterday issued its most strongly worded comments yet on the state of Britain's economy and banking system, raising the prospect of a credit downgrade just before the general election.

The loss of Britain's prized AAA rating would represent a serious blow to Gordon Brown in the lead-up to the vote and would almost certainly cause a run on the pound and a sharp increase in the cost of servicing Britain's enormous public-sector deficit. ... Contrary to what the banks have been saying, S&P said it believed that domestic bad debts would not peak until later this year and would remain at high levels throughout 2011. According to S&P: "We view UK economic risk to be high relative to other major, mature banking systems. This reflects the sharp decline in economic output and our expectation that the unwinding of the high level of debt (of the government, households, and certain industrial segments) will weigh heavily on relative economic growth prospects and banks' financial performance." ... ...S&P reiterated its warnings on the state of Britain's public finances, saying that public debt could reach 100 per cent of GDP by 2013 if action is not taken. "A government debt burden of that level, if sustained, would in Standard & Poor's view likely be incompatible with a 'AAA' rating."
(http://www.independent.co.uk/news/business/news/brown-faces-nightmare-of-prepoll-credit-downgrade-1882488.html)

Title: Re: Meltdown
Post by: BachQ on February 03, 2010, 02:56:07 PM

WSJ: US Wage and Benefit Growth Hits Historic Low -- Wages and benefits, "both before and after adjusting for inflation, grew more slowly in 2009 than in any year since the U.S. government began tracking data in 1982" (http://online.wsj.com/article/SB10001424052748704343104575033250546866096.html?mod=WSJ-hpp-LEFTWhatsNewsCollection)

The government sector is now twice as lucrative as the private sector:

Quote"State and local government workers' compensation in 2009 grew 2.4%, twice the pace of the 1.2% increases in the private sector...."

cllick for link (http://online.wsj.com/article/SB10001424052748704343104575033250546866096.html?mod=WSJ-hpp-LEFTWhatsNewsCollection)

Title: Re: Meltdown
Post by: Coopmv on February 03, 2010, 05:01:05 PM

Quote from: dm on February 03, 2010, 02:46:21 PM
BLOOMBERG: China's Property Market `Bubble' Set to Burst on Lending Curbs, Xie Says China's property market "bubble" is set to burst as the government curbs credit growth and clamps down on speculation, according to independent economist Andy Xie.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aDZjmVQaQ.Ms)

BBC China overtakes Japan to become world's 2d largest economy.
(http://news.bbc.co.uk/2/hi/business/8471613.stm)

WSJ: China's fourth-quarter GDP rises 10.7% on-year, the fastest pace since 2007; China retail sales climb 15.5% in 2009; China December industrial output up 18.5% on-year.
(http://online.wsj.com/article/BT-CO-20100120-717544.html?mod=WSJ_latestheadlines)

The housing bubble is not a bubble until it has popped, as a friend in NYC told me back in 2007.

The Chinese are probably building up major inventories of goods in preparation for a major export drive. The question is: Will the demand be there?

Title: Re: Meltdown
Post by: Coopmv on February 03, 2010, 05:02:53 PM

Quote from: dm on February 03, 2010, 02:50:39 PM
BLOOMBERG: Amid Whopping $3.8T Budget, Obama Seeks $1.9 Trillion Tax Rise on Rich, Business (Update1)

By Ryan J. Donmoyer

Feb. 1 (Bloomberg) -- The Obama administration wants to increase taxes on Americans earning more than $200,000 by almost $970 billion over the next decade and take in an additional $400 billion from businesses even as it retooled a proposed crackdown on international tax-avoidance techniques.The budget released today would reinstate 10-year-old income tax rates of 36 percent and 39.6 percent for single Americans earning more than $200,000 and joint filers who make more than $250,000 as part of a broad $1.9 trillion tax increase proposal.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aGJUjvI.Bdw8)

Obama does not have a clue. He can tax the rich 100% and there will not be enough money to close the soaring deficits without raising taxes on every American ...

Title: Re: Meltdown
Post by: Coopmv on February 03, 2010, 05:06:05 PM

Quote from: dm on February 03, 2010, 02:46:21 PM
BLOOMBERG: China's Property Market `Bubble' Set to Burst on Lending Curbs, Xie Says China's property market "bubble" is set to burst as the government curbs credit growth and clamps down on speculation, according to independent economist Andy Xie.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aDZjmVQaQ.Ms)

BBC China overtakes Japan to become world's 2d largest economy.
(http://news.bbc.co.uk/2/hi/business/8471613.stm)

WSJ: China's fourth-quarter GDP rises 10.7% on-year, the fastest pace since 2007; China retail sales climb 15.5% in 2009; China December industrial output up 18.5% on-year.
(http://online.wsj.com/article/BT-CO-20100120-717544.html?mod=WSJ_latestheadlines)

BTW, How many banks will the Chinese government have to bail out when that bubble bursts?

Title: Re: Meltdown
Post by: Coopmv on February 03, 2010, 05:08:48 PM

Quote from: dm on February 03, 2010, 02:56:07 PM
WSJ: US Wage and Benefit Growth Hits Historic Low -- Wages and benefits, "both before and after adjusting for inflation, grew more slowly in 2009 than in any year since the U.S. government began tracking data in 1982" (http://online.wsj.com/article/SB10001424052748704343104575033250546866096.html?mod=WSJ-hpp-LEFTWhatsNewsCollection)

The government sector is now twice as lucrative as the private sector:
cllick for link (http://online.wsj.com/article/SB10001424052748704343104575033250546866096.html?mod=WSJ-hpp-LEFTWhatsNewsCollection)

The public sector employees all enjoy pensions while few private sector employees have any pensions. I have a neighbor who lost his private sector marketing job over 2 years ago, he is hoping to pass the civil servant exam to take a public sector job. Why not, the benefits are great and layoffs are few and far between ... :o

Title: Re: Meltdown
Post by: Coopmv on February 03, 2010, 05:14:09 PM

Quote from: dm on February 03, 2010, 02:43:30 PM
Good catch, Coop.

Rosenberg: Expect Massive Downward Revisions to GDP "if you believe that GDP result, then you de facto are of the view that all of a sudden, with no capital deepening or major technological change in the past half decade to speak of, the potential growth rate in the United States has reached an epic scale of 7%."
(http://www.zerohedge.com/article/rosenberg-expect-big-time-revisions-houdini-q4-gdp)

The world economy may not be all that rosy in 2010 after all ...
:o

Title: Re: Meltdown
Post by: Coopmv on February 03, 2010, 07:22:57 PM

Quote from: Velimir on February 02, 2010, 09:51:19 PM
I'm afraid you have missed my larger point, Coop. Why would we even want to get ourselves into a situation where such a thing would happen?

Check out this interesting article ...

How We Would Fight China (http://www.theatlantic.com/doc/200506/kaplan)

Title: Re: Meltdown
Post by: BachQ on February 04, 2010, 05:05:25 PM

UK Telegraph: Fears of 'Lehman-style' tsunami as crisis hits Spain The Greek debt crisis has spread to Spain and Portugal as markets test whether Europe will shore up monetary union. "If not contained, this could result in a `Lehman-style' tsunami spreading across much of the EU." ... The core issue is that EMU's credit bubble has left southern Europe with huge foreign liabilities: Spain at 91pc of GDP (€950bn); Portugal 108pc (€177bn). This compares with 87pc for Greece (€208bn). By this gauge, Iberian imbalances are worse than those of Greece, and the sums are far greater. The danger is that foreign creditors will cut off funding, setting off an internal EMU version of the Asian financial crisis in 1998.

--- Credit default swaps (CDS) measuring bankruptcy risk on Portuguese debt surged 28 basis points on Thursday to a record 222 on reports that Jose Socrates was about to resign as prime minister after failing to secure enough votes in parliament to carry out austerity measures.

--- In Spain, default insurance surged 16 basis points after Nobel economist Paul Krugman said that "the biggest trouble spot isn't Greece, it's Spain". (http://www.telegraph.co.uk/finance/financetopics/financialcrisis/7159456/Fears-of-Lehman-style-tsunami-as-crisis-hits-Spain-and-Portugal.html)

Title: Re: Meltdown
Post by: BachQ on February 04, 2010, 05:09:07 PM

Washington Post -- Rising FHA default rate foreshadows a crush of foreclosures

By Dina ElBoghdady and Dan Keating
Washington Post Staff Writer
Tuesday, February 2, 2010

The share of borrowers who are falling seriously behind on loans backed by the Federal Housing Administration jumped by more than a third in the past year, foreshadowing a crush of foreclosures that could further buffet an agency vital to the housing market's recovery. About 9.1 percent of FHA borrowers had missed at least three payments as of December, up from 6.5 percent a year ago, the agency's figures show.
(http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020103527.html?hpid=topnews)

NYT – (http://www.nytimes.com/2010/02/03/business/03walk.html?ref=business)No Help in Sight, More Homeowners Walk Away

Title: Re: Meltdown
Post by: Coopmv on February 04, 2010, 05:56:44 PM

Quote from: dm on February 04, 2010, 05:09:07 PM
Washington Post -- Rising FHA default rate foreshadows a crush of foreclosures

By Dina ElBoghdady and Dan Keating
Washington Post Staff Writer
Tuesday, February 2, 2010

The share of borrowers who are falling seriously behind on loans backed by the Federal Housing Administration jumped by more than a third in the past year, foreshadowing a crush of foreclosures that could further buffet an agency vital to the housing market's recovery. About 9.1 percent of FHA borrowers had missed at least three payments as of December, up from 6.5 percent a year ago, the agency's figures show.
(http://www.washingtonpost.com/wp-dyn/content/article/2010/02/01/AR2010020103527.html?hpid=topnews)

NYT – (http://www.nytimes.com/2010/02/03/business/03walk.html?ref=business)No Help in Sight, More Homeowners Walk Away

Many Americans are just morally bankrupt IMO ...

Title: Re: Meltdown
Post by: karlhenning on February 05, 2010, 02:51:12 AM

Former Bank of America Chief Executive Ken Lewis now holds the inglorious distinction of being the first top figure from a major bank to be sued by the government over the financial industry's debacle of the last 18 months. (http://www.latimes.com/business/la-fi-cuomo-lewis5-2010feb05,0,1577493.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+%28L.A.+Times+-+Business%29)

Title: Re: Meltdown
Post by: karlhenning on February 05, 2010, 11:16:54 AM

State and federal regulators yesterday announced a $313 million settlement with State Street Corp. over allegations that it misled pension funds, towns, and other large clients across the country about risky investments in a bond fund. (http://www.boston.com/business/articles/2010/02/05/state_street_settles_complaints_it_misled_investors_for_313m/)

Title: Re: Meltdown
Post by: Florestan on February 05, 2010, 12:17:01 PM

When ~~Harry~~ Karl met ~~Sally~~ DM... :D

Title: Re: Meltdown
Post by: BachQ on February 05, 2010, 01:09:23 PM

Financial Times: US data send mixed message as 1m more jobs lost

By James Politi in Washington

Published: February 5 2010 20:04 | Last updated: February 5 2010 20:04

The US unemployment rate fell to a five-month low of 9.7 per cent in January, even as revisions to earlier data showed the economy losing almost 1m more jobs than previously thought since the recession began.

Friday's government report contained conflicting signals on the health of the US labour market. The dip in the unemployment rate was unexpected, and will lift hopes that businesses are beginning to hire again following the recession.
(http://www.ft.com/cms/s/0/ce92fdf2-128d-11df-a611-00144feab49a.html)

US Economy Losing 11,000 Jobs per day since December of 2007 ... 824,000 Jobs Lost in Statistical Revision ... 8 Million Jobs Lost Since Start of Recession ...Nationwide Unemployment Rate at 17 Percent.
(http://www.mybudget360.com/wp-content/uploads/2009/10/2007revised.jpg) (http://www.mybudget360.com/economy-losing-11000-jobs-per-day-since-december-of-2007-824000-jobs-lost-in-statistical-revision-8-million-jobs-lost-since-start-of-recession-nationwide-unemployment-rate-at-17-percent/)

Title: Re: Meltdown
Post by: BachQ on February 05, 2010, 01:12:07 PM

In the US, More than 5 Million Homes Will be Worth Less than 75% of Their Mortgage (http://www.dailyfinance.com/story/real-estate/more-than-5-million-homes-will-be-worth-less-than-75-of-their-m/19342799/?icid=patrick.net)

Title: Re: Meltdown
Post by: BachQ on February 05, 2010, 01:15:52 PM

CNN MONEY --- Next in line for a bailout: Social Security (http://money.cnn.com/2010/02/02/news/economy/social_security_bailout.fortune/index.htm)

Title: Re: Meltdown
Post by: BachQ on February 05, 2010, 01:40:16 PM

(http://www.zerohedge.com/sites/default/files/images/user5/imageroot/madoff/Global%20Comparison%20Min%20Fed.jpg) (http://www.zerohedge.com/article/charting-worst-and-soon-be-shortest-economic-recovery-ever)

link (http://www.zerohedge.com/article/charting-worst-and-soon-be-shortest-economic-recovery-ever)

Title: Re: Meltdown
Post by: Coopmv on February 05, 2010, 07:04:05 PM

Quote from: k a rl h e nn i ng on February 05, 2010, 02:51:12 AM
Former Bank of America Chief Executive Ken Lewis now holds the inglorious distinction of being the first top figure from a major bank to be sued by the government over the financial industry's debacle of the last 18 months. (http://www.latimes.com/business/la-fi-cuomo-lewis5-2010feb05,0,1577493.story?track=rss&utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+latimes%2Fbusiness+%28L.A.+Times+-+Business%29)

Ken Lewis deserves to be made a poor man by the lawsuit.

Title: Re: Meltdown
Post by: Coopmv on February 05, 2010, 07:06:30 PM

Quote from: k a rl h e nn i ng on February 05, 2010, 11:16:54 AM
State and federal regulators yesterday announced a $313 million settlement with State Street Corp. over allegations that it misled pension funds, towns, and other large clients across the country about risky investments in a bond fund. (http://www.boston.com/business/articles/2010/02/05/state_street_settles_complaints_it_misled_investors_for_313m/)

While Harvard and Yale had to eat their multi-billion endowment dollar losses for their investments in hedge funds.

Title: Re: Meltdown
Post by: Coopmv on February 06, 2010, 08:41:00 AM

Quote from: dm on February 03, 2010, 02:50:39 PM
BLOOMBERG: Amid Whopping $3.8T Budget, Obama Seeks $1.9 Trillion Tax Rise on Rich, Business (Update1)

By Ryan J. Donmoyer

Feb. 1 (Bloomberg) -- The Obama administration wants to increase taxes on Americans earning more than $200,000 by almost $970 billion over the next decade and take in an additional $400 billion from businesses even as it retooled a proposed crackdown on international tax-avoidance techniques.The budget released today would reinstate 10-year-old income tax rates of 36 percent and 39.6 percent for single Americans earning more than $200,000 and joint filers who make more than $250,000 as part of a broad $1.9 trillion tax increase proposal.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aGJUjvI.Bdw8)

Obama has good company in Jimmy Carter, who also ran the US economy into the ground. The Dems will keep blaming GW Bush for the economy until 2012 and many of them will be sent packing ...

Title: Re: Meltdown
Post by: Coopmv on February 06, 2010, 08:43:26 AM

Quote from: dm on February 03, 2010, 02:52:23 PM
Coop, it appears that UK voters have made the UK's soaring deficit a forefront issue for the upcoming election:

Amid "Albatross of Debt," the UK Risks 'Greek-Style' Crisis, Conservatives Say (Update1)

By Craig Stirling

Jan. 31 (Bloomberg) -- George Osborne, finance spokesman for Britain's opposition Conservatives, said the U.K. risks a "Greek-style budget crisis," as opinion polls showed his party may struggle to win sufficient electoral support to control the pace of debt-cutting measures. "Britain, with the largest debts, the largest borrowing of any major economy in the world, has to deal with this problem," Osborne told the British Broadcasting Corp.'s Sunday AM show today. "If we don't, we risk a Greek-style budget crisis that will put interest rates up."

With the election due by June, four polls published this weekend showed the Conservatives with less than a 10 percentage- point lead over Prime Minister Gordon Brown's ruling Labour Party. Analysts including Anthony Wells, a pollster at YouGov, say that's the margin needed to be certain of a Parliamentary majority. Osborne's call to prioritize budget cuts adds to the squabble between the parties in a campaign where the deficit has taken center stage.

... The budget deficit, expected by the Treasury to reach a postwar high of 12.6 percent of gross domestic product in the fiscal year through March, may remain the battleground as the election approaches. Osborne, Chancellor of the Exchequer Alistair Darling and Liberal Democrat Treasury spokesman Vince Cable may clash on the economy in a televised debate, the Sunday Times reported today.
(http://www.bloomberg.com/apps/news?pid=20601102&sid=aj4Q4VhMf7hA)

Brown faces nightmare of pre-poll credit downgrade (S&P rates UK alongside Chile and Portugal because of weak economy and debt)

By James Moore, Deputy Business Editor

Friday, 29 January 2010

Standard & Poor's yesterday issued its most strongly worded comments yet on the state of Britain's economy and banking system, raising the prospect of a credit downgrade just before the general election.

The loss of Britain's prized AAA rating would represent a serious blow to Gordon Brown in the lead-up to the vote and would almost certainly cause a run on the pound and a sharp increase in the cost of servicing Britain's enormous public-sector deficit. ... Contrary to what the banks have been saying, S&P said it believed that domestic bad debts would not peak until later this year and would remain at high levels throughout 2011. According to S&P: "We view UK economic risk to be high relative to other major, mature banking systems. This reflects the sharp decline in economic output and our expectation that the unwinding of the high level of debt (of the government, households, and certain industrial segments) will weigh heavily on relative economic growth prospects and banks' financial performance." ... ...S&P reiterated its warnings on the state of Britain's public finances, saying that public debt could reach 100 per cent of GDP by 2013 if action is not taken. "A government debt burden of that level, if sustained, would in Standard & Poor's view likely be incompatible with a 'AAA' rating."
(http://www.independent.co.uk/news/business/news/brown-faces-nightmare-of-prepoll-credit-downgrade-1882488.html)

The ECB is caught between a rock and a hard place. It may not be able to raise interest rate when it needs to or the PIIGS national economies will collapse. The Swiss were too smart to join the EU ... :o

Title: Re: Meltdown
Post by: Coopmv on February 07, 2010, 03:55:56 AM

DM, This may be wishful thinking ...

Retail Sales Probably Climbed in January: U.S. Economy Preview

By Timothy R. Homan

Feb. 7 (Bloomberg) -- The rebound in spending that gave U.S. retailers a lift during the holiday season probably carried over into the new year, signaling consumers may contribute more to growth, economists said before reports this week.

....

(http://www.bloomberg.com/apps/news?pid=20601087&sid=alhUnxe5Awx4&pos=2)

Title: Re: Meltdown
Post by: Coopmv on February 07, 2010, 05:12:11 PM

DM, The BRIC countries are being snubbed here. ;)

Arctic meeting a turning point for G-7
Finance officials meeting in Arctic consider whether the G-7 is out in the cold
...
Flaherty seized the opportunity of Canada inheriting the rotating presidency of the G-7 this year from Italy to focus discussions among nations with common issues, declining to invite Russia, which rounds out the G-8, or China and India, as Britain did when it held the chair.
...

(http://finance.yahoo.com/news/Arctic-meeting-a-turning-apf-3971455739.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 07, 2010, 06:09:01 PM

DM, Can you believe this guy? He is full of baloney ...

Geithner says US credit rating safe despite debt
Treasury secretary says US credit rating remains safe despite deficits, growing national debt

Treasury Secretary Timothy Geithner (GYT'-nur) says the U.S. government "will never" lose its sterling credit rating despite big budget deficits and a newly increased debt limit that now tops $14 trillion.

(http://finance.yahoo.com/news/Geithner-says-US-credit-apf-1486523126.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 08, 2010, 07:08:24 PM

DM, This could be sign of a double-dip ... :o

No Job Growth for Small Business Spurs Recovery Doubt (http://www.bloomberg.com/apps/news?pid=20601109&sid=apZULWyXpqhE&pos=10)

Title: Re: Meltdown
Post by: snyprrr on February 08, 2010, 07:31:37 PM

What else is happening during this snow diversion?

Title: Re: Meltdown
Post by: Coopmv on February 10, 2010, 02:20:39 PM

DM, Doube-dip in both home prices and the global economy? ;)

Double Dip in Home Prices Is Likely in 2010 (http://www.dailyfinance.com/story/real-estate/double-dip-in-home-prices-is-likely-in-2010/19352127/)

Title: Re: Meltdown
Post by: Coopmv on February 10, 2010, 03:18:57 PM

DM, More bad news. Effort to stave off a blood bath for the Dems at the polling booths come November does not look that promising ...

PROMISES, PROMISES: Jobs bill won't add many jobs
PROMISES, PROMISES: Bipartisan tax credit for hiring unemployed workers won't add many jobs (http://finance.yahoo.com/news/PROMISES-PROMISES-Jobs-bill-apf-1685856139.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 10, 2010, 03:26:38 PM

Debt woes in Europe could infect US recovery
Economic strife in Greece, other debt-laden European countries could crimp fragile US rebound
(http://finance.yahoo.com/news/Debt-woes-in-Europe-could-apf-3731211478.html?x=0&sec=topStories&pos=8&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 10, 2010, 03:46:31 PM

DM, More bad news for the Dems ... ;)

Economic Optimism Falters In February; Losing Faith In Gov't
(http://finance.yahoo.com/news/Economic-Optimism-Falters-In-ibd-732345763.html?x=0)

Title: Re: Meltdown
Post by: BachQ on February 11, 2010, 05:34:57 PM

UK Telegraph: US Sliding Deeper in Depression ... December was the worst month for US unemployment since the Great Recession began.

By Ambrose Evans-Pritchard
Published: 6:35PM GMT 10 Jan 2010

"The US labour force contracted by 661,000 [as] the broad U6 category of unemployment rose to 17.3pc. ... Realtytrac says defaults and repossessions have been running at over 300,000 a month since February. One million American families lost their homes in the fourth quarter. Moody's Economy.com expects another 2.4m homes to go this year. Taken together, this looks awfully like Steinbeck's Grapes of Wrath. ... The fuse has yet to detonate on the next mortgage bomb, $134bn (£83bn) of "option ARM" contracts due to reset violently upwards this year and next."

...The Fed's own Monetary Multiplier crashed to an all-time low of 0.809 in mid-December. Commercial paper has shrunk by $280bn ($175bn) in since October. Bank credit has been racing down a hair-raising black run since June. It has dropped from $10.844 trillion to $9.013 trillion since November 25. The MZM money supply is contracting at a 3pc annual rate. Broad M3 money is contracting at over 5pc. Professor Tim Congdon from International Monetary Research said the Fed is baking deflation into the pie later this year, and perhaps a double-dip recession. Europe is even worse. (http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/6962632/America-slides-deeper-into-depression-as-Wall-Street-revels.html)

Title: Re: Meltdown
Post by: BachQ on February 11, 2010, 05:38:20 PM

Quote from: Coopmv on February 07, 2010, 03:55:56 AM
DM, This may be wishful thinking ...

Retail Sales Probably Climbed in January: U.S. Economy Preview

By Timothy R. Homan

Feb. 7 (Bloomberg) -- The rebound in spending that gave U.S. retailers a lift during the holiday season probably carried over into the new year, signaling consumers may contribute more to growth, economists said before reports this week.

....

(http://www.bloomberg.com/apps/news?pid=20601087&sid=alhUnxe5Awx4&pos=2)

Coop, Americans have recently re-prioritized such that now, instead of paying off their mortgage, they're spending on credit. link (http://finance.yahoo.com/news/Forget-the-Mortgage-Im-Paying-usnews-816222158.html?x=0&.v=2)

Title: Re: Meltdown
Post by: BachQ on February 11, 2010, 05:39:14 PM

NYT: China Overtakes Germany as Top Exporter (http://www.nytimes.com/2010/02/10/business/global/10export.html?ref=business)

Title: Re: Meltdown
Post by: BachQ on February 11, 2010, 05:43:03 PM

Jumbo Mortgage 'Serious Delinquencies' Rise to 9.6% (Update1)

By Jody Shenn

Feb. 8 (Bloomberg) -- U.S. prime jumbo mortgages at least 60 days late backing securities reached 9.6 percent in January from 9.2 percent in December, the 32nd straight increase for "serious delinquencies," according to Fitch Ratings."The trend line for delinquencies indicates the 10 percent level could be reached as early as next month," Vincent Barberio, a Fitch managing director in New York, said today in a statement. The rate almost tripled in 2009, Fitch said.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aSmlkGHASRZ8&pos=4)

Title: Re: Meltdown
Post by: BachQ on February 11, 2010, 05:45:47 PM

Quote from: Coopmv on February 10, 2010, 03:46:31 PM
DM, More bad news for the Dems ... ;)

Economic Optimism Falters In February; Losing Faith In Gov't
(http://finance.yahoo.com/news/Economic-Optimism-Falters-In-ibd-732345763.html?x=0)

Dems are going down

Americans Reject Keynesian Economics; 83% Blame Deficit on Politicians (http://globaleconomicanalysis.blogspot.com/2010/02/americans-reject-keynesian-economics-83.html)

Title: Re: Meltdown
Post by: Coopmv on February 11, 2010, 05:57:47 PM

DM, check out this article sent to me by a buddy of mine. The first line was his comment ...

This should reduce much of the People's Republic's bluster.

+------------------------------------------------------------------------------+

Beijing Seen Vacant for 50% Commercial as Chanos Predicts Crash
2010-02-11 16:35:10.681 GMT

By Bloomberg News
Feb. 12 (Bloomberg) -- Jack Rodman, who has made a career
of selling soured property loans from Los Angeles to Tokyo, sees
a crash looming in China. He keeps a slide show on his computer
of empty office buildings in Beijing, his home since 2002. The
tally: 55, with another dozen candidates.
"I took these pictures to try to impress upon these people
the massive amount of oversupply," said Rodman, 63, president
of Global Distressed Solutions LLC, which advises private equity
and hedge funds on Chinese property and banking. Rodman figures
about half of the city's commercial space is vacant, more than
was leased in Germany's five biggest office markets in 2009.
Beijing's office vacancy rate of 22.4 percent in the third
quarter of last year was the ninth-highest of 103 markets
tracked by CB Richard Ellis Group Inc., a real estate broker.
Those figures don't include many buildings about to open, such
as the city's tallest, the 6.6-billion yuan ($965 million) 74-
story China World Tower 3.
Empty buildings are sprouting across China as companies
with access to some of the $1.4 trillion in new loans last year
build skyscrapers. Former Morgan Stanley chief Asia economist
Andy Xie and hedge fund manager James Chanos say the country's
property market is in a bubble.
"There's a monumental property bubble and fixed-asset
investment bubble that China has underway right now," Chanos
said in a Jan. 25 Bloomberg Television interview. "And
deflating that gently will be difficult at best."

Third Costliest

Investor concerns have spread beyond real estate. Among 15
major Asian markets, the benchmark Shanghai Composite Index is
valued third-highest relative to estimates for this year's
earnings, after Japan and India, even after falling 8.5 percent
in the past six months.
A glut of factories in China is "wreaking far-reaching
damage on the global economy," stoking trade tensions and
raising the risk of bad loans, the European Union Chamber of
Commerce in China said in November.
More than 60 percent of investors surveyed by Bloomberg on
Jan. 19 said they viewed China as a bubble, and three in 10 said
it posed the greatest downside risk. The quarterly poll
interviewed a random sample of 873 Bloomberg subscribers and had
a margin of error of 3.3 percentage points.
Digesting the debt from a popped property bubble may slash
bank lending and drag growth lower for years in an economy that
Nomura Holdings Inc., Japan's biggest brokerage, says will
provide more than a third of world growth in 2010.
The risks are so great that a decade of little or no
growth, as Japan experienced in the 1990s, can't be dismissed,
said Patrick Chovanec, an associate professor in the School of
Economics and Management at Beijing's Tsinghua University,
ranked China's top university by the Times newspaper in London.

'Astronomical Rates'

The Nikkei 225 Stock Average surged sixfold and commercial
property prices in metropolitan Tokyo rose fourfold before the
bubble burst in 1990. The Nikkei trades at about a quarter of
its December 1989 peak.
"You have state-owned enterprises using borrowed funds
from the stimulus bidding up the price of land -- not even
desirable plots of land -- in Beijing to astronomical rates,"
Chovanec said. "At the same time you have 30 percent-plus
vacancy rates and slumping rents in commercial property so it's
just a case of when you recognize the losses -- or don't."
China's lending surged to 1.39 trillion yuan in January,
more than in the previous three months combined. Property prices
in 70 cities climbed 9.5 percent from a year earlier, the most
in 21 months.

Reasonable Control

Policy makers are starting to rein in the loans that helped
fuel the property boom. Banks should "strictly" follow real
estate lending policies, the China Banking Regulatory Commission
said on its Web site on Jan. 27. It called for banks to
"reasonably control" lending growth.
"The liquidity bubble last year went to the property
market," said Taizo Ishida, San Francisco-based lead manager
for the $212-million Matthews Asia Pacific Fund, in a phone
interview. "I was in Shanghai and Shenzhen three weeks ago and
the prices were just eye-popping, just really amazing. Generally
I'm not buying Chinese stocks."
Chanos, founder of New York-based Kynikos Associates Ltd.,
predicted that China could be "Dubai times 100 or 1,000." Real
estate prices there have fallen almost 50 percent from their
2008 peak as the emirate struggles under at least $80 billion of
debt. The economy may shrink 0.4 percent this year, Shuaa
Capital, the biggest U.A.E. investment bank, says.
The commercial property space under construction in China
at the end of November was the equivalent of 6,800 Burj Khalifas
-- the 160-story Dubai skyscraper that's the world's tallest.

Industrial Loans

It's difficult to determine how exposed Chinese banks are
to real estate debt because loans booked to some state-owned
companies as industrial lending may have been used to invest in
property, say Xie and Charlene Chu, who analyzes Chinese banks
for London-based Fitch Ratings Ltd. in Beijing.
A downturn in the property market may be accompanied by a
surge in nonperforming loans. The Shanghai office of the banking
regulatory commission said on Feb. 4 that a 10 percent fall in
property values would triple the ratio of delinquent mortgages
there.
Shares of Industrial & Commercial Bank of China Ltd., the
world's largest bank by market capitalization, are down 13
percent this year. China Construction Bank Corp., the second-
largest, has fallen 10.2 percent. Both are based in Beijing. The
Shanghai index is down 9 percent.
Fund manager Joseph Zeng says he has a contrarian view on
China's banks, on the grounds that rising interest rates this
year will benefit their net interest margins.

Economic Cycle

"For us, non-performing loans are not expected to be a big
issue until 2013, the peak of the current economic cycle," said
Zeng, head of Greenwoods Asset Management Ltd.'s Hong Kong
office, in a phone interview. He declined to say what he is
buying. Greenwoods has more than $500 million under management.
China has firepower to deal with a crisis. The nation has
the world's largest foreign exchange reserves, at $2.4 trillion,
and government debt of only about 20 percent of GDP last year,
according to the International Monetary Fund. That compares with
85 percent in India and the U.S. and 219 percent in Japan.
CB Richard Ellis doesn't count empty office buildings
bought by banks and insurance companies when calculating vacancy
rates, since some of the space is for the owners' use. The Los
Angeles-based company said in a report that vacancy rates are
starting to fall and rents to rise for the best office buildings
as China's fast economic growth buoys demand.
Gross domestic product expanded 10.7 percent in the fourth
quarter from a year before, a two-year-high, after the
government introduced a $586-billion stimulus package.

Full Buildings

"In many cases when you look at these buildings and say,
that's never going to be fully occupied, somehow 12 to 18 months
later the building is full," said Chris Brooke, CB Richard
Ellis's Beijing-based president and chief executive officer for
Asia.
Overcapacity may be looming in manufacturing as well.
China's investments in new factories and properties surged 67
percent last year to 15.2 trillion yuan, more than Russia's
gross domestic product. Excess steel capacity may have reached
about 132 million tons in 2009, more than the 87.5 million tons
from Japan, the world's second-biggest producer. The Beijing-
based EU Chamber of Commerce report said a "looming deluge" of
extra cement capacity is being built.
While neither Xie nor Chu see nonperforming loan ratios
reaching the level of a decade ago, when they made up 40 percent
of total lending, they say banks will see deterioration in their
balance sheets.

Losing Money?

"A lot of people will lose a lot of money, but the banks
will probably not go down like in the 1990s," Xie said in a
phone interview. "Of course there will be a lot of bad debts.
There will be a lot of mortgages gone bad I think."
Rodman displays the slide show to private equity and hedge
fund clients brought in by banks such as Goldman Sachs Group
Inc. at his office in eastern Beijing.
"China is the only place in the world that despite having
more empty buildings than the rest of the world has yet to
reflect those valuations on their balance sheet," Rodman said.
Gazing south from the building that houses the Beijing
headquarters of Goldman Sachs, UBS AG and JPMorgan Chase & Co.,
one of the first structures in the field of vision is a 17-story
office tower at No. 9 Financial Street. Empty.
Farther along are the two 18-story towers of the Bank of
Communications Co. complex. Dirt is gathering at the doors and
the lobby is now a bicycle parking lot. A spokeswoman for the
Shanghai-based lender didn't return phone calls and emails.

More Offices

The supply of office buildings will continue to grow. Jones
Lang LaSalle Inc., a Chicago-based real-estate company,
estimates that about 1.2 million square meters (12.9 million
square feet) of office space in Beijing will come on line this
year, adding to the total stock of 9.2 million square meters.
The city government is driving growth regardless of the
market. Financial Street Holding Co., whose biggest shareholder
is the local municipal district, plans to build 1 million square
meters of additional office space starting this year, and is
talking to potential clients such as JPMorgan, said Lydia Wang,
the company's head of investor relations.
Across town, the district government is seeking to double
the size of the city's Central Business District, which already
has the highest vacancy rate ever recorded in Beijing. It was 35
percent at the end of 2009, according to Jones Lang LaSalle.

All Rented

For its part, Beijing-based Financial Street Holdings has
"100 percent" of its properties, which include the Ritz
Carlton hotel and a shopping mall, rented out, Wang said. The
empty buildings along Finance Street don't belong to the
company, which is 26.6 percent owned by the district government.
Zhong Rongming, deputy general manager of the Beijing-
based China World Trade Center Co., which built China World
Tower 3, said the company is "optimistic about 2010 prospects"
given China's accelerating economic growth. He said the new
tower will include tenants such as Mitsui & Co. and the Asian
Development Bank.
One new addition to Finance Street may give real estate
boosters cause for concern. No. 8 Finance Street will be the
headquarters for China Huarong Asset Management Corp.
The company's mission: selling bad debt from banks.

For Related News and Information:
Stories on China's real estate market: TNI CHINA REL <GO>
China World Trade Center Co. bonds: CHWRLD <Corp> DES <GO>
Top China stories: TOP CHINA <GO>
Stories on China's economy: TNI CHINA ECO <GO>
China's economic-data watch indexes: ESNP CH <GO>

--Michael Forsythe, Kevin Hamlin. With assistance from Shelley
Smith and Darren Boey in Hong Kong, Chris Bourke in London and
Margaret Brennan in New York. Editors: Anne Swardson, Chris
Anstey

To contact Bloomberg News staff on this story:
Michael Forsythe in Beijing at +8610-6649-7580 or
mforsythe@bloomberg.net.
Kevin Hamlin in Beijing on +86-10-6649-7573 or
khamlin@bloomberg.net

Title: Re: Meltdown
Post by: BachQ on February 12, 2010, 06:16:02 AM

Quote from: Coopmv on February 11, 2010, 05:57:47 PM
DM, check out this article sent to me by a buddy of mine. The first line was his comment ...

This should reduce much of the People's Republic's bluster.

+------------------------------------------------------------------------------+

Beijing Seen Vacant for 50% Commercial as Chanos Predicts Crash
2010-02-11 16:35:10.681 GMT

By Bloomberg News
Feb. 12 (Bloomberg) -- Jack Rodman, who has made a career
of selling soured property loans from Los Angeles to Tokyo, sees
a crash looming in China. He keeps a slide show on his computer
of empty office buildings in Beijing, his home since 2002. The
tally: 55, with another dozen candidates.
"I took these pictures to try to impress upon these people
the massive amount of oversupply," said Rodman, 63, president
of Global Distressed Solutions LLC, which advises private equity
and hedge funds on Chinese property and banking. Rodman figures
about half of the city's commercial space is vacant, more than
was leased in Germany's five biggest office markets in 2009.
Beijing's office vacancy rate of 22.4 percent in the third
quarter of last year was the ninth-highest of 103 markets
tracked by CB Richard Ellis Group Inc., a real estate broker.
Those figures don't include many buildings about to open, such
as the city's tallest, the 6.6-billion yuan ($965 million) 74-
story China World Tower 3.
Empty buildings are sprouting across China as companies
with access to some of the $1.4 trillion in new loans last year
build skyscrapers. Former Morgan Stanley chief Asia economist
Andy Xie and hedge fund manager James Chanos say the country's
property market is in a bubble.
"There's a monumental property bubble and fixed-asset
investment bubble that China has underway right now," Chanos
said in a Jan. 25 Bloomberg Television interview. "And
deflating that gently will be difficult at best."

Third Costliest

Investor concerns have spread beyond real estate. Among 15
major Asian markets, the benchmark Shanghai Composite Index is
valued third-highest relative to estimates for this year's
earnings, after Japan and India, even after falling 8.5 percent
in the past six months.
A glut of factories in China is "wreaking far-reaching
damage on the global economy," stoking trade tensions and
raising the risk of bad loans, the European Union Chamber of
Commerce in China said in November.
More than 60 percent of investors surveyed by Bloomberg on
Jan. 19 said they viewed China as a bubble, and three in 10 said
it posed the greatest downside risk. The quarterly poll
interviewed a random sample of 873 Bloomberg subscribers and had
a margin of error of 3.3 percentage points.
Digesting the debt from a popped property bubble may slash
bank lending and drag growth lower for years in an economy that
Nomura Holdings Inc., Japan's biggest brokerage, says will
provide more than a third of world growth in 2010.
The risks are so great that a decade of little or no
growth, as Japan experienced in the 1990s, can't be dismissed,
said Patrick Chovanec, an associate professor in the School of
Economics and Management at Beijing's Tsinghua University,
ranked China's top university by the Times newspaper in London.

'Astronomical Rates'

The Nikkei 225 Stock Average surged sixfold and commercial
property prices in metropolitan Tokyo rose fourfold before the
bubble burst in 1990. The Nikkei trades at about a quarter of
its December 1989 peak.
"You have state-owned enterprises using borrowed funds
from the stimulus bidding up the price of land -- not even
desirable plots of land -- in Beijing to astronomical rates,"
Chovanec said. "At the same time you have 30 percent-plus
vacancy rates and slumping rents in commercial property so it's
just a case of when you recognize the losses -- or don't."
China's lending surged to 1.39 trillion yuan in January,
more than in the previous three months combined. Property prices
in 70 cities climbed 9.5 percent from a year earlier, the most
in 21 months.

Reasonable Control

Policy makers are starting to rein in the loans that helped
fuel the property boom. Banks should "strictly" follow real
estate lending policies, the China Banking Regulatory Commission
said on its Web site on Jan. 27. It called for banks to
"reasonably control" lending growth.
"The liquidity bubble last year went to the property
market," said Taizo Ishida, San Francisco-based lead manager
for the $212-million Matthews Asia Pacific Fund, in a phone
interview. "I was in Shanghai and Shenzhen three weeks ago and
the prices were just eye-popping, just really amazing. Generally
I'm not buying Chinese stocks."
Chanos, founder of New York-based Kynikos Associates Ltd.,
predicted that China could be "Dubai times 100 or 1,000." Real
estate prices there have fallen almost 50 percent from their
2008 peak as the emirate struggles under at least $80 billion of
debt. The economy may shrink 0.4 percent this year, Shuaa
Capital, the biggest U.A.E. investment bank, says.
The commercial property space under construction in China
at the end of November was the equivalent of 6,800 Burj Khalifas
-- the 160-story Dubai skyscraper that's the world's tallest.

Industrial Loans

It's difficult to determine how exposed Chinese banks are
to real estate debt because loans booked to some state-owned
companies as industrial lending may have been used to invest in
property, say Xie and Charlene Chu, who analyzes Chinese banks
for London-based Fitch Ratings Ltd. in Beijing.
A downturn in the property market may be accompanied by a
surge in nonperforming loans. The Shanghai office of the banking
regulatory commission said on Feb. 4 that a 10 percent fall in
property values would triple the ratio of delinquent mortgages
there.
Shares of Industrial & Commercial Bank of China Ltd., the
world's largest bank by market capitalization, are down 13
percent this year. China Construction Bank Corp., the second-
largest, has fallen 10.2 percent. Both are based in Beijing. The
Shanghai index is down 9 percent.
Fund manager Joseph Zeng says he has a contrarian view on
China's banks, on the grounds that rising interest rates this
year will benefit their net interest margins.

Economic Cycle

"For us, non-performing loans are not expected to be a big
issue until 2013, the peak of the current economic cycle," said
Zeng, head of Greenwoods Asset Management Ltd.'s Hong Kong
office, in a phone interview. He declined to say what he is
buying. Greenwoods has more than $500 million under management.
China has firepower to deal with a crisis. The nation has
the world's largest foreign exchange reserves, at $2.4 trillion,
and government debt of only about 20 percent of GDP last year,
according to the International Monetary Fund. That compares with
85 percent in India and the U.S. and 219 percent in Japan.
CB Richard Ellis doesn't count empty office buildings
bought by banks and insurance companies when calculating vacancy
rates, since some of the space is for the owners' use. The Los
Angeles-based company said in a report that vacancy rates are
starting to fall and rents to rise for the best office buildings
as China's fast economic growth buoys demand.
Gross domestic product expanded 10.7 percent in the fourth
quarter from a year before, a two-year-high, after the
government introduced a $586-billion stimulus package.

Full Buildings

"In many cases when you look at these buildings and say,
that's never going to be fully occupied, somehow 12 to 18 months
later the building is full," said Chris Brooke, CB Richard
Ellis's Beijing-based president and chief executive officer for
Asia.
Overcapacity may be looming in manufacturing as well.
China's investments in new factories and properties surged 67
percent last year to 15.2 trillion yuan, more than Russia's
gross domestic product. Excess steel capacity may have reached
about 132 million tons in 2009, more than the 87.5 million tons
from Japan, the world's second-biggest producer. The Beijing-
based EU Chamber of Commerce report said a "looming deluge" of
extra cement capacity is being built.
While neither Xie nor Chu see nonperforming loan ratios
reaching the level of a decade ago, when they made up 40 percent
of total lending, they say banks will see deterioration in their
balance sheets.

Losing Money?

"A lot of people will lose a lot of money, but the banks
will probably not go down like in the 1990s," Xie said in a
phone interview. "Of course there will be a lot of bad debts.
There will be a lot of mortgages gone bad I think."
Rodman displays the slide show to private equity and hedge
fund clients brought in by banks such as Goldman Sachs Group
Inc. at his office in eastern Beijing.
"China is the only place in the world that despite having
more empty buildings than the rest of the world has yet to
reflect those valuations on their balance sheet," Rodman said.
Gazing south from the building that houses the Beijing
headquarters of Goldman Sachs, UBS AG and JPMorgan Chase & Co.,
one of the first structures in the field of vision is a 17-story
office tower at No. 9 Financial Street. Empty.
Farther along are the two 18-story towers of the Bank of
Communications Co. complex. Dirt is gathering at the doors and
the lobby is now a bicycle parking lot. A spokeswoman for the
Shanghai-based lender didn't return phone calls and emails.

More Offices

The supply of office buildings will continue to grow. Jones
Lang LaSalle Inc., a Chicago-based real-estate company,
estimates that about 1.2 million square meters (12.9 million
square feet) of office space in Beijing will come on line this
year, adding to the total stock of 9.2 million square meters.
The city government is driving growth regardless of the
market. Financial Street Holding Co., whose biggest shareholder
is the local municipal district, plans to build 1 million square
meters of additional office space starting this year, and is
talking to potential clients such as JPMorgan, said Lydia Wang,
the company's head of investor relations.
Across town, the district government is seeking to double
the size of the city's Central Business District, which already
has the highest vacancy rate ever recorded in Beijing. It was 35
percent at the end of 2009, according to Jones Lang LaSalle.

All Rented

For its part, Beijing-based Financial Street Holdings has
"100 percent" of its properties, which include the Ritz
Carlton hotel and a shopping mall, rented out, Wang said. The
empty buildings along Finance Street don't belong to the
company, which is 26.6 percent owned by the district government.
Zhong Rongming, deputy general manager of the Beijing-
based China World Trade Center Co., which built China World
Tower 3, said the company is "optimistic about 2010 prospects"
given China's accelerating economic growth. He said the new
tower will include tenants such as Mitsui & Co. and the Asian
Development Bank.
One new addition to Finance Street may give real estate
boosters cause for concern. No. 8 Finance Street will be the
headquarters for China Huarong Asset Management Corp.
The company's mission: selling bad debt from banks.

For Related News and Information:
Stories on China's real estate market: TNI CHINA REL <GO>
China World Trade Center Co. bonds: CHWRLD <Corp> DES <GO>
Top China stories: TOP CHINA <GO>
Stories on China's economy: TNI CHINA ECO <GO>
China's economic-data watch indexes: ESNP CH <GO>

--Michael Forsythe, Kevin Hamlin. With assistance from Shelley
Smith and Darren Boey in Hong Kong, Chris Bourke in London and
Margaret Brennan in New York. Editors: Anne Swardson, Chris
Anstey

To contact Bloomberg News staff on this story:
Michael Forsythe in Beijing at +8610-6649-7580 or
mforsythe@bloomberg.net.
Kevin Hamlin in Beijing on +86-10-6649-7573 or
khamlin@bloomberg.net

Good find, Coop ...

China Defaulting Loans Soar, Insolvency Lawyer Says

By Shelley Smith
February 5, 2010 04:25 EST

Feb. 5 (Bloomberg) -- Non-performing loans in China have risen into the "trillions of renminbi" because of poor lending practices, an insolvency lawyer said. "...There are literally trillions and trillions of renminbi of ... defaulting loans already in China that no one is doing anything about," Neil McDonald, a Hong Kong-based business restructuring and insolvency partner with Lovells LLP, said at an Asia-Pacific Loan Market Association conference yesterday. "At some point there's going to be a reckoning for that." (http://www.bloomberg.com/apps/news?pid=20601110&sid=aJhBD4AeX8WA)

Title: Re: Meltdown
Post by: BachQ on February 12, 2010, 06:22:43 AM

Euro Area Headed for 'Break-Up,' SocGen's Albert Edwards Says

By Alexis Xydias

Feb. 12 (Bloomberg) -- Southern European countries are trapped in an overvalued currency and suffocated by low competitiveness, a situation that will lead to the break-up of the euro bloc, according to Societe Generale SA strategist Albert Edwards.

The problem for countries including Portugal, Spain and Greece "is that years of inappropriately low interest rates resulted in overheating and rapid inflation," London-based Edwards wrote in a report today. Even if governments "could slash their fiscal deficits, the lack of competitiveness within the euro zone needs years of relative (and probably given the outlook elsewhere, absolute) deflation. Any help given to Greece merely delays the inevitable break-up of the euro zone." The euro has slumped 9.9 percent against the dollar since November on concern countries including Greece will struggle to tame their budget deficits. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aysDjUa__TRg&pos=6)

Title: Re: Meltdown
Post by: Coopmv on February 12, 2010, 04:18:52 PM

Quote from: dm on February 12, 2010, 06:22:43 AM

Euro Area Headed for 'Break-Up,' SocGen's Albert Edwards Says

By Alexis Xydias

Feb. 12 (Bloomberg) -- Southern European countries are trapped in an overvalued currency and suffocated by low competitiveness, a situation that will lead to the break-up of the euro bloc, according to Societe Generale SA strategist Albert Edwards.

The problem for countries including Portugal, Spain and Greece "is that years of inappropriately low interest rates resulted in overheating and rapid inflation," London-based Edwards wrote in a report today. Even if governments "could slash their fiscal deficits, the lack of competitiveness within the euro zone needs years of relative (and probably given the outlook elsewhere, absolute) deflation. Any help given to Greece merely delays the inevitable break-up of the euro zone." The euro has slumped 9.9 percent against the dollar since November on concern countries including Greece will struggle to tame their budget deficits.
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aysDjUa__TRg&pos=6)

Having the PIGS countries in the EU was as big a mistake as having Mexico being part of NAFTA. NAFTA should have excluded Mexico from Day 1 ...

Title: Re: Meltdown
Post by: Coopmv on February 12, 2010, 07:19:58 PM

Quote from: dm on February 12, 2010, 06:16:02 AM
Good find, Coop ...

China Defaulting Loans Soar, Insolvency Lawyer Says

By Shelley Smith
February 5, 2010 04:25 EST

Feb. 5 (Bloomberg) -- Non-performing loans in China have risen into the "trillions of renminbi" because of poor lending practices, an insolvency lawyer said. "...There are literally trillions and trillions of renminbi of ... defaulting loans already in China that no one is doing anything about," Neil McDonald, a Hong Kong-based business restructuring and insolvency partner with Lovells LLP, said at an Asia-Pacific Loan Market Association conference yesterday. "At some point there's going to be a reckoning for that."
(http://www.bloomberg.com/apps/news?pid=20601110&sid=aJhBD4AeX8WA)

DM, The Chinese would have to use much of its $2.0T foreign reserves to do the mother of all bailouts ... ;D

Title: Re: Meltdown
Post by: Coopmv on February 12, 2010, 07:39:06 PM

DM, It is too late for the Chinese government to take action now ...

China raises bank reserve level to cool credit
Government raises reserve level for Chinese banks in new effort to contain lending (http://finance.yahoo.com/news/China-raises-bank-reserve-apf-702871514.html?x=0&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 12, 2010, 07:44:01 PM

DM, I don't believe the Germans and the French have the stomach for the massive bailout of southern European countries ...

Euro currency union showing strains
Greek financial crisis exposes weakness and worry in monetary union; can Europe adapt?
(http://finance.yahoo.com/news/Euro-currency-union-showing-apf-2620579175.html?x=0&sec=topStories&pos=5&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 12, 2010, 08:39:47 PM

DM, It was the economy. Fewer people were flying and airlines were all losing their shirts.

Airline on-time arrivals in 2009 best since 2003
Government says US airlines had best on-time year since 2003; fewer mishandled bags, too (http://finance.yahoo.com/news/Airline-ontime-arrivals-in-apf-1609871198.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 12, 2010, 08:47:24 PM

DM, You can see why this US system is broken beyond repair. Government regulators should NEVER be allowed to work for companies they regulate even after they have retired from the government. The politicians watered down this rule time and again using the excuse that such stringent requirement would prevent qualified people from working for the government. There are a bunch of lobbyists working in Washington for the Chinese government as well. Very disgusting ...

Regulators Hired by Toyota Helped Halt Acceleration Probes

Feb. 13 (Bloomberg) -- At least four U.S. investigations into unintended acceleration by Toyota Motor Corp. vehicles were ended with the help of former regulators hired by the automaker, warding off possible recalls, court and government records show.

(http://www.bloomberg.com/apps/news?pid=20601087&sid=aTfVxj4_pJh4&pos=5)

Title: Re: Meltdown
Post by: Coopmv on February 14, 2010, 05:18:29 AM

DM, Is Spain gonna to be next in line to be bailed out? Borrow massively to grow at any costs - the American way - is a bankrupt idea IMO ... :o

Spanish government struggles with crisis message
Will Greek debt woes spread to Spain? Gov't says no but deficits have grown and growth is gone (http://finance.yahoo.com/news/Spanish-government-struggles-apf-1938532686.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 14, 2010, 05:23:14 AM

DM, The US is such a basket case. The Dems have to go and a third party should make its appearance ...

US debt will keep growing even with recovery
US debt will soon be unsustainable without higher taxes and spending cuts, even with recovery (http://finance.yahoo.com/news/US-debt-will-keep-growing-apf-219502322.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 14, 2010, 05:28:40 AM

DM, I am shocked to see Singapore, used to be called the Switzerland of Asia, to go down this path ... :o

Singapore tries luring foreigners as casino opens
Singapore opens first casino, hoping to lure tourists to tightly controlled country (http://finance.yahoo.com/news/Singapore-tries-luring-apf-2004624824.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on February 14, 2010, 05:31:58 AM

Not credible. I have heard the same from the Democrats-controlled CA legislature ...

Obama says new budget rules will rein in spending
Obama says new budget rules will ease deficits, require Congress to 'pay for what it spends'

(http://finance.yahoo.com/news/Obama-says-new-budget-rules-apf-1890164162.html?x=0&.v=9)

Title: Re: Meltdown
Post by: Coopmv on February 15, 2010, 12:56:47 PM

DM, Are the Dems finally getting a dose of reality? The jobless recovery is for real and the risk of a double dip is also quite real ...

Use of temps may no longer signal permanent hiring
Hiring of temps may no longer signal that employers will soon add permanent staffers (http://finance.yahoo.com/news/Use-of-temps-may-no-longer-apf-2453922630.html?x=0&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 15, 2010, 02:45:02 PM

DM, Only time will tell if such prognostication is right ...

This Icy Economy Will Melt ... (http://finance.yahoo.com/banking-budgeting/article/108832/this-icy-economy-will-melt)

Title: Re: Meltdown
Post by: BachQ on February 15, 2010, 06:09:28 PM

Quote from: Coopmv on February 14, 2010, 05:23:14 AM
DM, The US is such a basket case. The Dems have to go and a third party should make its appearance ...

US debt will keep growing even with recovery
US debt will soon be unsustainable without higher taxes and spending cuts, even with recovery (http://finance.yahoo.com/news/US-debt-will-keep-growing-apf-219502322.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Dems are beginning to realize that you can't solve a fiscal crisis by accumulating more debt ... and we'll see more Dems jumping ship as their flawed policies further destroy the US economy.

(http://1.bp.blogspot.com/_gcA0ZuKGkI8/S0Sbv5hDTNI/AAAAAAAAFbA/4EFtyN6H2P0/s640/Rats+jumping+ship.jpg)

Wow! Another Democrat Jumping Ship – Evan Bayh to Retire from Senate – Updated with Video (http://www.lonelyconservative.com/2010/02/15/wow-another-democrat-jumping-ship-evan-bayh-to-retire-from-senate/)

Title: Re: Meltdown
Post by: BachQ on February 15, 2010, 06:16:52 PM

Business Week: -- As young workers flee Ireland amid a staggering 33% unemployment rate, "Ireland will lose a whole generation of graduates." Meanwhile, Ireland faces a 13.8% overall unemployment rate. (http://www.businessweek.com/magazine/content/10_08/b4167050028125.htm)

Title: Re: Meltdown
Post by: Coopmv on February 16, 2010, 04:55:39 PM

Quote from: dm on February 15, 2010, 06:16:52 PM
Business Week: -- As young workers flee Ireland amid a staggering 33% unemployment rate, "Ireland will lose a whole generation of graduates." Meanwhile, Ireland faces a 13.8% overall unemployment rate.
(http://www.businessweek.com/magazine/content/10_08/b4167050028125.htm)

If EU ends up bailing out the PIIGS countries, French and Germans will be very upset while the Brits have their hands full with their own banking meltdown. I am sure the Brits wish they hadn't blindly followed the extremely short-sighted Americans where long-term investment is one-week and instant gratification is a must ...

Title: Re: Meltdown
Post by: Coopmv on February 16, 2010, 04:58:01 PM

DM, The market force will discipline the Dems. The independents who were instrumental in giving them the majority in Congress in 06 and 08 would severely punish them at the polls come November, which is a given ...

Foreigners cut Treasury stakes; rates could rise
Foreign demand for short-term Treasurys tumbles, led by China; chance of higher rates looms (http://finance.yahoo.com/news/Foreigners-cut-Treasury-apf-1402391707.html?x=0&sec=topStories&pos=7&asset=&ccode=)

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on February 17, 2010, 02:46:01 AM

This article (on how joblessness will transform America) has been getting a lot of attention:

http://www.theatlantic.com/doc/201003/jobless-america-future

Title: Re: Meltdown
Post by: Coopmv on February 17, 2010, 04:49:49 PM

Quote from: Velimir on February 17, 2010, 02:46:01 AM
This article (on how joblessness will transform America) has been getting a lot of attention:

http://www.theatlantic.com/doc/201003/jobless-america-future

No doubt about it, the US made the biggest policy blunder ever by pushing for this ridiculous concept of free trade which ushered in the era of de-industrialization and relentless outsourcing of manufacturing jobs. We only have ourselves to blame for electing those idiots who have gotten us into this situation ...

Title: Re: Meltdown
Post by: BachQ on February 17, 2010, 06:42:53 PM

Quote from: Coopmv on February 16, 2010, 04:58:01 PM
DM, The market force will discipline the Dems. The independents who were instrumental in giving them the majority in Congress in 06 and 08 would severely punish them at the polls come November, which is a given ...

Foreigners cut Treasury stakes; rates could rise
Foreign demand for short-term Treasurys tumbles, led by China; chance of higher rates looms (http://finance.yahoo.com/news/Foreigners-cut-Treasury-apf-1402391707.html?x=0&sec=topStories&pos=7&asset=&ccode=)

Good catch, Coop. Interest rates CANNOT rise significantly, or it's GAME OVER. The Fed may be stuck with quantitative easing (printing) or other forms of debt monetization ... Even adjusting for inflation, the US debt per capita is now increasing exponentially; if interest rates increase ... KABOOM:

(http://www.safehaven.com/images/rubino/15817.png) (http://www.safehaven.com/article-15817.htm)

Drowning in Debt: What the Nation's Budget Woes Mean for You --- "Within 12 years...the largest item in the federal budget will be interest payments on the national debt," said former U.S. Comptroller General David Walker. "[They are] payments for which we get nothing."
(http://abcnews.go.com/Politics/national-debt-budget-deficit-scary-forecast-taxpayers/story?id=9854459)

OTOH, the Bank of England (http://news.bbc.co.uk/2/hi/business/8519674.stm) voted unanimously to end (for now) its £200bn quantitative easing programme. The Bank members concluded that additional cash injections would cause asset bubbles.

Financial Times: A Greek crisis is coming to America ... "US government debt is a safe haven the way Pearl Harbor was a safe haven in 1941."
(http://www.ft.com/cms/s/0/f90bca10-1679-11df-bf44-00144feab49a.html?nclick_check=1)

Title: Re: Meltdown
Post by: BachQ on February 17, 2010, 06:44:23 PM

Rash of retirements pushes Social Security to brink (http://www.usatoday.com/news/washington/2010-02-07-social-security-red-retirements_N.htm)

Title: Re: Meltdown
Post by: BachQ on February 17, 2010, 06:50:15 PM

U.K. Unemployment Claims Jump to Highest Since 1997

By Jennifer Ryan

Feb. 17 (Bloomberg) -- U.K. unemployment unexpectedly jumped in January to the highest level since Tony Blair led the ruling Labour Party to power almost 13 years ago as the recession destroyed work at businesses from carmakers to banks. ... The Bank of England said last week that employment is at risk of falling "significantly further" if the economy's recovery from the longest recession on record falters. Prime Minister Gordon Brown is counting on the pickup to gather momentum and help him to claw back voter support in time for an election due by June. "The risk is that we get weak economic growth and public sector cutbacks and if we see both these things together it is likely that unemployment will rise significantly," John Philpott, chief economist at the Charted Institute of Personnel and Development, said in an Bloomberg Television interview before the report's release. ...
(http://www.bloomberg.com/apps/news?pid=20601087&sid=awg_6cu8ABhY)

UK sales fall prompts fears of 'double-dip' recession
By Edmund Conway, Economics Editor
Published: 6:01AM GMT 09 Feb 2010

Fears that Britain may already be succumbing to a "double-dip" recession materialised as it emerged that 2010 opened with the worst January for the high street since comparable records began 15 years ago. The VAT increase and unprecedented blizzards last month contributed to a sudden and unexpected collapse in retail sales, according to the British Retail Consortium. ... The figures come amid concern about Britain's capacity to finance itself in the international capital markets, with the spread between interest rates on benchmark UK gilts and German bunds widening, and arrive only days after the Bank of England signalled an end to its Quantitative Easing programme. January is among the most important retail months ... (http://www.telegraph.co.uk/finance/financetopics/recession/7191021/UK-sales-fall-prompts-fears-of-double-dip-recession.html)

Title: Re: Meltdown
Post by: Coopmv on February 17, 2010, 06:50:53 PM

Quote from: dm on February 17, 2010, 06:44:23 PM
Rash of retirements pushes Social Security to brink
(http://www.usatoday.com/news/washington/2010-02-07-social-security-red-retirements_N.htm)

The US economy is still lousy, even though it is technically out of a recession (2 consecutive quarters of negative GDP growth). If people who are eligible for retirement cannot find work, what else are they gonna to do - retire! It is a no-brainer. Only the Dems fail to see this connection. Most Dems cannot manage the economy based on my observations. Clinton did it because the Republicans had majority in both chambers of the US Congress and he could not spend like a typical Dems.

Title: Re: Meltdown
Post by: Coopmv on February 17, 2010, 06:52:25 PM

Quote from: dm on February 17, 2010, 06:50:15 PM

U.K. Unemployment Claims Jump to Highest Since 1997

By Jennifer Ryan

Feb. 17 (Bloomberg) -- U.K. unemployment unexpectedly jumped in January to the highest level since Tony Blair led the ruling Labour Party to power almost 13 years ago as the recession destroyed work at businesses from carmakers to banks. ... The Bank of England said last week that employment is at risk of falling "significantly further" if the economy's recovery from the longest recession on record falters. Prime Minister Gordon Brown is counting on the pickup to gather momentum and help him to claw back voter support in time for an election due by June. "The risk is that we get weak economic growth and public sector cutbacks and if we see both these things together it is likely that unemployment will rise significantly," John Philpott, chief economist at the Charted Institute of Personnel and Development, said in an Bloomberg Television interview before the report's release. ...
(http://www.bloomberg.com/apps/news?pid=20601087&sid=awg_6cu8ABhY)

UK sales fall prompts fears of 'double-dip' recession
By Edmund Conway, Economics Editor
Published: 6:01AM GMT 09 Feb 2010

Fears that Britain may already be succumbing to a "double-dip" recession materialised as it emerged that 2010 opened with the worst January for the high street since comparable records began 15 years ago. The VAT increase and unprecedented blizzards last month contributed to a sudden and unexpected collapse in retail sales, according to the British Retail Consortium. ... The figures come amid concern about Britain's capacity to finance itself in the international capital markets, with the spread between interest rates on benchmark UK gilts and German bunds widening, and arrive only days after the Bank of England signalled an end to its Quantitative Easing programme. January is among the most important retail months ...
(http://www.telegraph.co.uk/finance/financetopics/recession/7191021/UK-sales-fall-prompts-fears-of-double-dip-recession.html)

Gordon Brown is toast ... :D

Title: Re: Meltdown
Post by: BachQ on February 17, 2010, 06:56:36 PM

UK Independent-- Eurozone contagion fears spread to Spain
(http://www.independent.co.uk/news/world/europe/eurozone-contagion-fears-spread-to-spain-1901754.html)

Credit markets flash hottest warning signal since crisis --- European credit markets are flashing the most serious warnings signs in a year as the yields on risker bonds rise sharply and a string of companies cancel share flotations, raising fears that the recovery may falter in coming months.
(http://www.telegraph.co.uk/finance/economics/7251901/Credit-markets-flash-hottest-warning-signal-since-crisis.html)

Kiss That V-Shaped Recovery Good-Bye: The U.S. "Worse Than Greece," Says Economist -- "I've never seen a v-shaped recovery occur when commercial bank lending was down 7% year over year. So, small business are not getting loans to create capital goods and to expand and hire individuals," ... "US is worse than Greece" (http://finance.yahoo.com/tech-ticker/kiss-that-v-shaped-recovery-good-bye-the-u.s.-%22worse-than-greece%22-says-economist-423723.html?tickers=tlt,tbt,xli,udn,uup,spy,dia&sec=topStories&pos=9&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on February 17, 2010, 06:58:43 PM

Shortage of Rare Earth Elements Could Thwart Innovation

Now rare earth elements with exotic names such as europium and tantalum hold the key to hybrid cars, wind turbines and crystal-clear TV displays - that is, if a looming supply shortage doesn't stop innovation in its tracks. Rare earth elements, called "rare earths" by those who use and study them, often prove irreplaceable in green technologies and high-tech consumer products. Yet the world's production of rare minerals relies mainly upon China, and the Chinese government warned last year that its own rising demand will soon force it to stop exporting the precious elements.

"Countries and companies that have or plan to develop industries that need rare earth minerals to make products are concerned about China's growing consumption, which they fear will eliminate China's exports of rare earths," said W. David Menzie, chief of the international minerals section at the U.S. Geological Survey (USGS). (http://news.yahoo.com/s/livescience/20100216/sc_livescience/shortageofrareearthelementscouldthwartinnovation)

Title: Re: Meltdown
Post by: Coopmv on February 17, 2010, 06:59:44 PM

Quote from: dm on February 17, 2010, 06:56:36 PM
UK Independent-- Eurozone contagion fears spread to Spain
(http://www.independent.co.uk/news/world/europe/eurozone-contagion-fears-spread-to-spain-1901754.html)

Credit markets flash hottest warning signal since crisis --- European credit markets are flashing the most serious warnings signs in a year as the yields on risker bonds rise sharply and a string of companies cancel share flotations, raising fears that the recovery may falter in coming months.
(http://www.telegraph.co.uk/finance/economics/7251901/Credit-markets-flash-hottest-warning-signal-since-crisis.html)

Kiss That V-Shaped Recovery Good-Bye: The U.S. "Worse Than Greece," Says Economist -- "I've never seen a v-shaped recovery occur when commercial bank lending was down 7% year over year. So, small business are not getting loans to create capital goods and to expand and hire individuals," ... "US is worse than Greece"
(http://finance.yahoo.com/tech-ticker/kiss-that-v-shaped-recovery-good-bye-the-u.s.-%22worse-than-greece%22-says-economist-423723.html?tickers=tlt,tbt,xli,udn,uup,spy,dia&sec=topStories&pos=9&asset=&ccode=)

When you have a US administration that is totally incompetent when it comes to economic matters, that is bad. Like what an economist commented not long ago, the US has never had two bad presidents in a row. But we have seen them over the past two years ...

Title: Re: Meltdown
Post by: BachQ on February 17, 2010, 07:00:02 PM

Feb. 16 (Bloomberg) -- Companies are pulling bond sales at the fastest pace since the credit markets seized up 2 1/2 years ago on concern that the inability of European governments to trim their budget deficits will threaten a global recovery. (http://www.bloomberg.com/apps/news?pid=20601087&sid=aiqhWau3x1XU&pos=4)

Title: Re: Meltdown
Post by: Coopmv on February 17, 2010, 07:01:06 PM

Quote from: dm on February 17, 2010, 06:58:43 PM

Shortage of Rare Earth Elements Could Thwart Innovation

Now rare earth elements with exotic names such as europium and tantalum hold the key to hybrid cars, wind turbines and crystal-clear TV displays - that is, if a looming supply shortage doesn't stop innovation in its tracks. Rare earth elements, called "rare earths" by those who use and study them, often prove irreplaceable in green technologies and high-tech consumer products. Yet the world's production of rare minerals relies mainly upon China, and the Chinese government warned last year that its own rising demand will soon force it to stop exporting the precious elements.

"Countries and companies that have or plan to develop industries that need rare earth minerals to make products are concerned about China's growing consumption, which they fear will eliminate China's exports of rare earths," said W. David Menzie, chief of the international minerals section at the U.S. Geological Survey (USGS).
(http://news.yahoo.com/s/livescience/20100216/sc_livescience/shortageofrareearthelementscouldthwartinnovation)

The Chinese commies just want to corner the market. That plan has been in the work for some times ...

Title: Re: Meltdown
Post by: BachQ on February 17, 2010, 07:03:42 PM

Quote from: Coopmv on February 17, 2010, 06:52:25 PM
Gordon Brown is toast ... :D

I agree.

Single mother-of-six finds £2m mansion in London... and then gets UK taxpayers to pay rent of £80,000/yr (£7,000 a month).
(http://i.dailymail.co.uk/i/pix/2010/02/15/article-1250993-083360B5000005DC-656_468x622.jpg)

Read more: http://www.dailymail.co.uk/news/article-1250993/Single-mum-finds-mansion-net-gets-YOU-pay-7-000-month-rent.html#ixzz0ffLTsE5J (http://www.dailymail.co.uk/news/article-1250993/Single-mum-finds-mansion-net-gets-YOU-pay-7-000-month-rent.html#ixzz0ffLTsE5J)

Title: Re: Meltdown
Post by: Coopmv on February 17, 2010, 07:05:15 PM

Quote from: dm on February 17, 2010, 07:03:42 PM
I agree.

Single mother-of-six finds £2m mansion in London... and then gets UK taxpayers to pay rent of £80,000/yr (£7,000 a month).
(http://i.dailymail.co.uk/i/pix/2010/02/15/article-1250993-083360B5000005DC-656_468x622.jpg)

Read more: http://www.dailymail.co.uk/news/article-1250993/Single-mum-finds-mansion-net-gets-YOU-pay-7-000-month-rent.html#ixzz0ffLTsE5J
(http://www.dailymail.co.uk/news/article-1250993/Single-mum-finds-mansion-net-gets-YOU-pay-7-000-month-rent.html#ixzz0ffLTsE5J)

Some welfare payments!

Title: Re: Meltdown
Post by: BachQ on February 19, 2010, 03:58:35 AM

UK Independent -- Shock as British deficit equals that of Greece (http://www.independent.co.uk/news/business/news/shock-as-british-deficit-equals-that-of-greece-1904129.html)

Title: Re: Meltdown
Post by: Lethevich on February 19, 2010, 04:17:55 AM

Quote from: dm on February 19, 2010, 03:58:35 AM
UK Independent -- Shock as British deficit equals that of Greece
(http://www.independent.co.uk/news/business/news/shock-as-british-deficit-equals-that-of-greece-1904129.html)

I have yet to understand how the UK gets away with the same numbers as Ireland, Greece and Spain, but is viewed as still perfectly stable. More ability to call on emergency taxes/sell off assets or what?

Edit: Not fully related, but a news programme today has a fun spin on the current Falklands 'crisis' - "the oilrig that could solve Britain's debt"

Title: Re: Meltdown
Post by: Coopmv on February 19, 2010, 05:21:56 PM

Quote from: Lethe on February 19, 2010, 04:17:55 AM
I have yet to understand how the UK gets away with the same numbers as Ireland, Greece and Spain, but is viewed as still perfectly stable. More ability to call on emergency taxes/sell off assets or what?

Edit: Not fully related, but a news programme today has a fun spin on the current Falklands 'crisis' - "the oilrig that could solve Britain's debt"

London is still the largest and most important capital market in Europe, period.

Title: Re: Meltdown
Post by: Coopmv on February 20, 2010, 01:38:50 PM

DM, CA should be back in the hot water soon enough ... ;)

Governors brace for more economic turmoil
With states still reeling from recession, governors try to chart the tough road ahead
(http://finance.yahoo.com/news/Governors-brace-for-more-apf-3629070024.html?x=0&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 20, 2010, 01:46:38 PM

DM, The eye of the next foreclosure storm might have moved to China? Any clue? ;D

Report: Fewer people falling behind on home loans
New mortgage delinquencies fell at end of 2009 as foreclosure crisis begins to ebb (http://finance.yahoo.com/news/Report-Fewer-people-falling-apf-4164907724.html?x=0&sec=topStories&pos=7&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 21, 2010, 06:13:18 AM

DM, Is this too little too late? We both will be extremely eager to see how this bubble will pop? ;)

China tightens bank lending rules
China tightens rules to strengthen control over bank lending (http://finance.yahoo.com/news/China-tightens-bank-lending-apf-1499494910.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 21, 2010, 04:59:16 PM

DM, Americans used to wonder why unemployment in Germany and France routinely topped 10%. :o

The New Poor Millions of Unemployed Face Years Without Jobs
(http://www.nytimes.com/2010/02/21/business/economy/21unemployed.html?pagewanted=1&th&emc=th)

Title: Re: Meltdown
Post by: karlhenning on February 22, 2010, 09:00:07 AM

Judge approves SEC, Bank of America accord (http://www.washingtonpost.com/wp-dyn/content/article/2010/02/22/AR2010022202062.html?hpid=topnews)

Quote from: Zachary A. GoldfarbA federal judge on Monday morning approved a $150 million settlement between the Securities and Exchange Commission and Bank of America over allegations that the firm lied to investors about bonuses and mounting losses during the financial crisis of fall 2008.

Title: Re: Meltdown
Post by: Coopmv on February 26, 2010, 04:41:10 PM

DM, So Goldman pocketed some $12B of the bailout money AIG received. It also helped Greece to sell a bunch of junk debt as AAA sovereign bonds. Some sleazy bankers ...

In Greece's Crisis, Fed Studies Wall St.'s Activities
Greece's problems deepened on both sides of the Atlantic as the Federal Reserve disclosed it was investigating Goldman Sachs and other banks that helped the country mask its debts, and investors grew increasingly leery of lending any more money to a nation flirting with default.
(http://www.nytimes.com/2010/02/26/business/global/26greece.html?dbk)

Title: Re: Meltdown
Post by: Coopmv on February 26, 2010, 04:57:04 PM

Fannie Mae seeks $15.3B in gov't aid after 4Q loss
Fannie Mae asks for $15.3B in federal aid after posting $16.3 billion loss in fourth quarter
(http://finance.yahoo.com/news/Fannie-Mae-seeks-153B-in-govt-apf-941423971.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 26, 2010, 05:00:07 PM

DM, Come 2012, the Obama Administration would blame Bush for this record deficits leading up to the election ... ;)

Report shows government's liabilities surging
Annual report shows government's financial position hit $11.46 trillion deficit in 2009
(http://finance.yahoo.com/news/Report-shows-governments-apf-1771747627.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on February 28, 2010, 05:22:46 AM

DM, I am surprised EU has not let IMF take over, which will no doubt enforce some serious austerity measures on the G country in the PIIGS. Is Spain gonna to be next?

EU Demands Greece Act on Deficit as Bloc Crafts Aid Plan (http://www.bloomberg.com/apps/news?pid=20601087&sid=acUdZ95eNnGo&pos=3)

Title: Re: Meltdown
Post by: Coopmv on February 28, 2010, 05:33:02 AM

DM, Time for this turkey to face some music. How could this guy collect $100MM over ten years while serving as chairman and senior adviser to Citigroup, which ended up receiving $45B of taxpayer money to stay afloat?

Citigroup Adviser Rubin Said to Face Queries From Crisis Panel (http://www.bloomberg.com/apps/news?pid=20601108&sid=aiHCv3X1uQxQ)

Title: Re: Meltdown
Post by: BachQ on March 04, 2010, 10:30:50 AM

Quote from: Coopmv on February 26, 2010, 05:00:07 PM
DM, Come 2012, the Obama Administration would blame Bush for this record deficits leading up to the election ... ;)

Report shows government's liabilities surging
Annual report shows government's financial position hit $11.46 trillion deficit in 2009
(http://finance.yahoo.com/news/Report-shows-governments-apf-1771747627.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Coop, it appears that China is heading for a fiscal crisis by 2012:

China's Hidden Debt Risks 2012 Crisis, Northwestern's Shih Says (http://www.bloomberg.com/apps/news?pid=20601068&sid=aN94MF7BDx_A#)

QuoteBy Bloomberg News

March 3 (Bloomberg) -- China's hidden borrowing may push government debt to 96 percent of gross domestic product next year, increasing the risk of a financial crisis in the world's third-biggest economy, Professor Victor Shih said.

"The worst case is a pretty large-scale financial crisis around 2012," said Shih, a political economist at Northwestern University in Evanston, Illinois, who spent months researching borrowing transactions by about 8,000 local-government entities. "The slowdown would last at least two years and maybe longer," the author of the book "Factions and Finance in China" said in a phone interview March 1.

Surging borrowing by local-government entities, uncounted in official estimates of China's debt-to-GDP ratio, is the key reason for Shih's concern.

Asset Bubbles

Now, amid the risks of asset bubbles, soured loans and resurgent inflation, officials are reining in credit growth.

One focus of concern is lending to the investment companies set up by local governments to circumvent regulations that prevent them borrowing directly. Shih estimates that, already, borrowing by such entities may result in bad loans of up to 3 trillion yuan ($439 billion). ...

'Wave' of Bad Loans

Local-government entities may have had a total of 11.429 trillion yuan in outstanding debt by the end of last year, according to Shih. They have agreed credit lines with banks for an additional 12.767 trillion yuan, said Shih.

A crackdown on local-government borrowing could trigger a "gigantic wave" of bad loans as projects are left without funding, while a failure to rein in lending could lead to inflation of over 15 percent by 2012, Shih said. Either situation could trigger bank runs and a crisis as people lose confidence in the financial system, he said.

Title: Re: Meltdown
Post by: BachQ on March 04, 2010, 10:35:11 AM

50% of counterfeit goods come from China.
(http://static.businessinsider.com/image/4b7e92960000000000da5bbf-590-450/50-of-counterfeit-goods-come-from-china.jpg) (http://www.businessinsider.com/15-facts-about-china-that-will-blow-your-mind-2010-2#50-of-counterfeit-goods-come-from-china-14)

Title: Re: Meltdown
Post by: Coopmv on March 04, 2010, 05:27:16 PM

Quote from: dm on March 04, 2010, 10:30:50 AM
Coop, it appears that China is heading for a fiscal crisis by 2012:

China's Hidden Debt Risks 2012 Crisis, Northwestern's Shih Says (http://www.bloomberg.com/apps/news?pid=20601068&sid=aN94MF7BDx_A#)

DM, That will be a very pretty financial picture. We should meet at Tiananmen Square in 2012 to celebrate ...

Title: Re: Meltdown
Post by: Coopmv on March 04, 2010, 06:27:47 PM

DM, Many Americans are clueless that their politicians are the real culprits for the current economic debacle. Most US states are broke and people are still in denial.

Rowdy protests target funding cuts at US campuses (http://news.yahoo.com/s/ap/us_university_cuts_protests)

Title: Re: Meltdown
Post by: Coopmv on March 06, 2010, 06:11:37 AM

DM, The financial Armageddon is awaiting the US of A. These Democrats have to go ...

Congressional estimates show grim deficit picture
Congressional estimates see grimmer deficit picture than Obama administration

(http://finance.yahoo.com/news/Congressional-estimates-show-apf-2216760019.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on March 06, 2010, 05:42:47 PM

DM, We have both heard this story too many times already. Bottomline, the Chinese will never float their currency since it will appreciate against the currencies of most countries it exports to. It will then lose billions of dollars in exports and tens of millions of its factory workers will be out on the street.

China says it will move cautiously on currency
China says it will move cautiously on currency, exports need 2-3 years to recover

(http://finance.yahoo.com/news/China-says-it-will-move-apf-724218144.html?x=0&sec=topStories&pos=4&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on March 07, 2010, 04:37:13 AM

DM, Greece is toast. It has nothing to export it out of its debt problems. Maybe it can sell off a number of islands in the Adriatic Sea? ;)

Papandreou seeks French backing for debt crisis
Greek PM Papandreou heads to Paris seeking more EU support for harsh austerity measures (http://finance.yahoo.com/news/Papandreou-seeks-French-apf-3896178077.html?x=0&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on March 07, 2010, 05:15:35 AM

DM, Time to plan for an Icelandic vacation! I have been seeing huge discounts on Icelandic vacation sponsored by the Iceland Tourism Board on NYC subway billboards. Perhaps the largely bankrupt American tourists can help bail out Iceland ... ;D

Iceland votes 'no' to debt deal for collapsed bankIcelanders reject deal to pay back bank failure debts, but talks to continue on new agreement
(http://finance.yahoo.com/news/Iceland-votes-no-to-debt-deal-apf-1291274402.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on March 07, 2010, 01:46:41 PM

DM, If the unemployment situation does not improve, we both know what will happen in November mid-term election ...

Latest Round-Up of Obama Poll Ratings by State (http://www.politicsdaily.com/2010/03/07/latest-round-up-of-obama-poll-ratings-by-state/)

Title: Re: Meltdown
Post by: Coopmv on March 10, 2010, 06:47:53 PM

DM, We can't wait to see this crash landing happen ... ;)

Beijing fails to rein in property (http://www.ft.com/cms/s/0/658b78fe-2cad-11df-8abb-00144feabdc0.html)

Title: Re: Meltdown
Post by: Coopmv on March 10, 2010, 06:49:42 PM

DM, These commies showed their true color while the government looked the other way ...

70-year-old woman "buried alive by property developers after refusing to move"
(http://current.com/items/92303435_70-year-old-woman-buried-alive-by-property-developers-after-refusing-to-move.htm)

Title: Re: Meltdown
Post by: BachQ on March 11, 2010, 03:08:06 PM

Quote from: Coopmv on March 10, 2010, 06:49:42 PM
DM, These commies showed their true color while the government looked the other way ...

70-year-old woman "buried alive by property developers after refusing to move"
(http://current.com/items/92303435_70-year-old-woman-buried-alive-by-property-developers-after-refusing-to-move.htm)

Coop, that's very sad ...

China's ghost towns

(http://www.foreignpolicy.com/articles/2010/02/18/chinas_high_growth_ghost_towns?page=0,0)

QuoteBuilt in a breakneck five years, Kangbashi is a state-of-the-art city full of architectural marvels and sculpture gardens. There's just one thing missing: people. The city, built by the government and funded with coal money, its chief industries energy and carmaking, has been mostly vacant for as long as it has been complete, except for the massive municipal headquarters. It's a grand canyon of empty monoliths. In a paradox only possible in today's economic system, Kangbashi manages to be both a boom town and a ghost town at the same time.

Kangbashi represents a particularly destructive economic force at work in China today: an obsession with GDP that ignores all other metrics of progress or human capital. GDP as calculated in China -- or the rest of the world, for that matter -- doesn't make any distinction between quantity and quality, or between creative and destructive expenditures.Due to the industrial pollution billowing out of the country's GDP-enhancing factories and mines, cancer is the leading cause of death in China.

Title: Re: Meltdown
Post by: BachQ on March 11, 2010, 03:13:49 PM

Europe's banks brace for UK debt crisis (http://www.telegraph.co.uk/finance/economics/7423138/Europes-banks-brace-for-UK-debt-crisis.html)
UniCredit has alerted investors in a client note that Britain is at serious risk of a bond market and sterling debacle and faces even more intractable budget woes than Greece.

(http://i.telegraph.co.uk/telegraph/multimedia/archive/01408/parly_1408279c.jpg)

QuoteBy Ambrose Evans-Pritchard, International Business Editor
Published: 8:20PM GMT 11 Mar 2010

The Italian-German group, Europe's second largest bank, said Britain's tax structure will make it hard to raise fresh revenue quickly enough to restore confidence in UK public finances. "I am becoming convinced that Great Britain is the next country that is going to be pummelled by investors," said Kornelius Purps, Unicredit 's fixed income director and a leading analyst in Germany.

Mr Purps said the UK had been cushioned at first by low debt levels but the pace of deterioration has been so extreme that the country can no longer count on market tolerance.

"Britain's AAA-rating is highly at risk. The budget deficit is huge at 13pc of GDP and investors are not happy. The outgoing government is inactive due to the election. There will have to be absolute cuts in public salaries or pay, but nobody is talking about that," he told The Daily Telegraph.

"Sterling is going to fall further over coming months. I am not expecting a crash of the gilts market but we may see a further rise in spreads of 30 to 50 basis points."

--snip--

Title: Re: Meltdown
Post by: Coopmv on March 11, 2010, 05:35:07 PM

Quote from: dm on March 11, 2010, 03:08:06 PM
Coop, that's very sad ...

China's ghost towns
(http://www.foreignpolicy.com/articles/2010/02/18/chinas_high_growth_ghost_towns?page=0,0)

As over 60% of all the rivers and lakes are heavily polluted, China also has the highest cancer rate in the world. But then life is cheap in a country that has absolutely no respect for human rights anyway ...

Title: Re: Meltdown
Post by: Coopmv on March 11, 2010, 05:40:39 PM

Quote from: dm on March 11, 2010, 03:13:49 PM
Europe's banks brace for UK debt crisis (http://www.telegraph.co.uk/finance/economics/7423138/Europes-banks-brace-for-UK-debt-crisis.html)
UniCredit has alerted investors in a client note that Britain is at serious risk of a bond market and sterling debacle and faces even more intractable budget woes than Greece.

(http://i.telegraph.co.uk/telegraph/multimedia/archive/01408/parly_1408279c.jpg)

The Brits made the mistake of the century by following the American way of capitalism - relentless outsourcing of manufacturing jobs to China and a singular focus on financial alchemy. IIRC, credit default swap was dreamed up at the JP Morgan office in London ...

Title: Re: Meltdown
Post by: Coopmv on March 13, 2010, 06:06:05 AM

DM, is this a major typo? ;)

China to bid on US high-speed rail projects
Minister: China to bid for US high-speed rail projects; building lines in Venezuela, Turkey (http://finance.yahoo.com/news/China-to-bid-on-US-highspeed-apf-4135137999.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on March 16, 2010, 07:10:50 PM

Tarriffs on Chinese exports? Hmmm ..... things could get interesting ... if trade wars heat up.

Reuters -- Senate bill would penalize China over yuan (http://www.reuters.com/article/idUSTRE62E2VC20100317)

Quote9:06pm EDT

By Doug Palmer and Paul Eckert

WASHINGTON (Reuters) - Members of Congress on Tuesday threatened Beijing with duties on some of its exports if it fails to revalue its currency, pressuring the Obama administration to label China a currency manipulator.

A bipartisan bill introduced in the Senate merges previous legislative efforts to press China to change policies that critics say keep its yuan currency cheap, effectively subsidizing Chinese exports and taxing competing imports.

"When there's a 20 percent or 30 percent undervaluation that reduces the price of a product coming in, that's not fair. That's cheating," Democratic Senator Debbie Stabenow, a co-sponsor of the legislation, told a news conference.

"If they're not going to do it, we're going to force them," Republican Senator Sam Brownback added.

The bill, a rare show of bipartisan accord, reflects widespread concern about high U.S. unemployment. It follows two days after Chinese Premier Wen Jiabao dismissed U.S. complaints about China's exchange-rate policy as protectionist.

It also is likely to weigh on the Obama administration's deliberations whether to label China a currency manipulator in a semiannual Treasury Department report due on April 15. In the background is the realization that China is a major holder of U.S. debt.

Many U.S. lawmakers, with strong backing from economists, believe the yuan is undervalued by 25 percent to 50 percent, giving Chinese companies an unfair price advantage in trade --- a situation seen as more acute now that the U.S. economy is struggling to recover from the worst downturn since the 1930s.

***

...The legislation was crafted by Senators Charles Schumer, a Democrat, and Lindsey Graham, a Republican. The two got 67 Senate votes in 2005 for a bill threatening to put a 27.5 percent tariff on all Chinese goods.

"This is a good coalition to make something happen in the Senate, and I hope our colleagues in the House will follow," said Graham.

Senate Majority Leader Harry Reid said the bill was "something that committees with jurisdiction should take a look at."

***

Title: Re: Meltdown
Post by: Coopmv on March 16, 2010, 07:27:18 PM

Quote from: dm on March 16, 2010, 07:10:50 PM
Tarriffs on Chinese exports? Hmmm ..... things could get interesting ... if trade wars heat up.

Reuters -- Senate bill would penalize China over yuan (http://www.reuters.com/article/idUSTRE62E2VC20100317)

DM,

Great catch and this is long overdue. What is significant is a number of the pro free-trade Republicans actually joined rank with the Democrats to put together this 2/3 majority. The House is generally much less free-trade oriented and will no doubt passes its version of the bill. The pundits who claim the Chinese may dump treasuries on a massive scale to retaliate. Not so fast, the Chinese are too crafty to shoot themselves on the foot. It is not clear if they want to take tens of billion dollars in losses since they no doubt bought the treasuries at relatively high prices. Savings that many American have squirreled away since fall of 2008 can probably help soak up any treasuries the Chinese will dump.

Title: Re: Meltdown
Post by: Coopmv on March 16, 2010, 08:08:42 PM

DM, Deal or no deal - it is looking more like the Hummer story by the day - no deal. This article was from a Chinese daily, so there was no western propaganda there ... ;)

Geely faces hurdles in quest for Volvo
(http://www.chinadaily.com.cn/bizchina/2010-03/17/content_9601440.htm)

Title: Re: Meltdown
Post by: Coopmv on March 19, 2010, 07:17:38 PM

DM, This will be a record-shattering year, 37 banks seized through mid March ... :o

Regulators shut 7 banks in 5 states; 37 in 2010
Regulators shut banks in Alabama, Georgia, Minnesota, Ohio and Utah; makes 37 this year (http://finance.yahoo.com/news/Regulators-shut-7-banks-in-5-apf-2660571978.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on March 19, 2010, 07:20:39 PM

DM, Even the Democrats in NJ realize they have to cut benefits for the public employees but those idiots in CA still refuse to acknowledge the truth ... ;)

New Jersey Teachers Face Health Costs Under Curbs (Update2)
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aEUaxMK9d.Bk&pos=9)

Title: Re: Meltdown
Post by: Coopmv on March 20, 2010, 06:54:53 AM

DM, Good article but can you track down Parts I & II and post them? I am too lazy to do this at the moment since I have had a rough workweek ... ;)

China's Fragile Economy, Its Housing Bubble, and What It Means To Us: Part III
(http://dailycapitalist.com/2010/03/17/chinas-fragile-economy-its-housing-bubble-and-what-it-means-to-us-part-iii/)

Title: Re: Meltdown
Post by: Coopmv on March 20, 2010, 08:27:21 AM

DM, Germany and France are better off letting IMF do the bailout or the political parties that are in power now will be in serious trouble with their voters. I will be equally irate if the federal government decides to bail out CA one of these days.

Pressure mounts on EU states to bail out Greece (http://www.dw-world.de/dw/article/0,,5374078,00.html)

Title: Re: Meltdown
Post by: Coopmv on March 20, 2010, 08:01:53 PM

DM, This is absurd. Germany and France should just convince IMF to step in and allow the latter to demand the Greek government to impose a 30% across the board budget cut in exchange for an IMF bailout, end of story.

Greek leader warns Berlin that EU at risk if no aid (http://www.breitbart.com/article.php?id=CNG.245d04b7097c4e49c6dbbcfe46d41cdd.511&show_article=1)

Title: Re: Meltdown
Post by: Coopmv on March 21, 2010, 03:50:30 AM

DM, Both of us would love to see the US and the EU taking some meaningful actions. Talk is cheap ...

China warns US against sanctions over currencyChina warns US against sanctions over currency dispute, says may report trade deficit in March (http://finance.yahoo.com/news/China-warns-US-against-apf-2448997968.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: BachQ on March 21, 2010, 04:19:17 AM

Quote from: Coopmv on March 20, 2010, 06:54:53 AM
DM, Good article but can you track down Parts I & II and post them? I am too lazy to do this at the moment since I have had a rough workweek ... ;)

China's Fragile Economy, Its Housing Bubble, and What It Means To Us: Part III
(http://dailycapitalist.com/2010/03/17/chinas-fragile-economy-its-housing-bubble-and-what-it-means-to-us-part-iii/)

Coop, did you see this article in Business Week/Bloomberg? To call China's current manic expansion the "greatest bubble in history" is quite an assertion ... but there are many analysts that agree with him ... We know that there's a huge bubble in China, but if it's bigger than the US housing bubble, then China will have serious problems ...

China in Midst of 'Greatest Bubble in History,' Rickards Says (http://www.businessweek.com/news/2010-03-17/china-in-greatest-bubble-in-history-rickards-says-update2-.html)
March 17, 2010, 7:15 AM EDT

QuoteMarch 17 (Bloomberg) -- China is in the midst of "the greatest bubble in history," said James Rickards, former general counsel of hedge fund Long-Term Capital Management LP. The Chinese central bank's balance sheet resembles that of a hedge fund buying dollars and short-selling the yuan, said Rickards, now the senior managing director for market intelligence at McLean, Virginia-based consulting firm Omnis Inc.

"As I see it, it is the greatest bubble in history with the most massive misallocation of wealth," Rickards said at the Asset Allocation Summit Asia 2010 organized by Terrapinn Pte in Hong Kong yesterday. China "is a bubble waiting to burst." Rickards joins hedge fund manager Jim Chanos, Gloom, Boom & Doom publisher Marc Faber and Harvard University professor Kenneth Rogoff in warning of a potential crash in China's economy. The government has raised banks' reserve requirements twice this year after economic growth accelerated and property prices rallied.

--more--

Title: Re: Meltdown
Post by: BachQ on March 21, 2010, 04:25:35 AM

Quote from: Coopmv on March 19, 2010, 07:17:38 PM
DM, This will be a record-shattering year, 37 banks seized through mid March ... :o

Regulators shut 7 banks in 5 states; 37 in 2010
Regulators shut banks in Alabama, Georgia, Minnesota, Ohio and Utah; makes 37 this year (http://finance.yahoo.com/news/Regulators-shut-7-banks-in-5-apf-2660571978.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Coop, this is just the tip of the iceberg ... Unofficial Problem Bank List increases to 653 (http://www.calculatedriskblog.com/2010/03/unofficial-problem-bank-list-increases.html)

Title: Re: Meltdown
Post by: Coopmv on March 21, 2010, 04:29:25 AM

Quote from: dm on March 21, 2010, 04:19:17 AM
Coop, did you see this article in Business Week/Bloomberg? To call China's current manic expansion the "greatest bubble in history" is quite an assertion ... but there are many analysts that agree with him ... We know that there's a huge bubble in China, but if it's bigger than the US housing bubble, then China will have serious problems ...

China in Midst of 'Greatest Bubble in History,' Rickards Says (http://www.businessweek.com/news/2010-03-17/china-in-greatest-bubble-in-history-rickards-says-update2-.html)
March 17, 2010, 7:15 AM EDT

DM, As the saying goes, the bubble ain't a bubble until it has burst. Few in the US thought there was a housing bubble back in 2006 ... ;D

Title: Re: Meltdown
Post by: Coopmv on March 21, 2010, 04:31:07 AM

Quote from: dm on March 21, 2010, 04:25:35 AM
Coop, this is just the tip of the iceberg ... Unofficial Problem Bank List increases to 653 (http://www.calculatedriskblog.com/2010/03/unofficial-problem-bank-list-increases.html)

These guys at the FDIC are working double overtime ... LOL

Title: Re: Meltdown
Post by: BachQ on March 21, 2010, 04:44:55 AM

Mish Shedlock opines that Obamacare is a total mess, (http://globaleconomicanalysis.blogspot.com/2010/03/hatch-says-its-nuts-to-think-health.html) and he compiles a handful of articles to show how dysfunctional this issue has become. "What a mess ! ! !"

Title: Re: Meltdown
Post by: Coopmv on March 21, 2010, 04:55:54 AM

Quote from: dm on March 21, 2010, 04:44:55 AM
Mish Shedlock opines that Obamacare is a total mess, (http://globaleconomicanalysis.blogspot.com/2010/03/hatch-says-its-nuts-to-think-health.html) and he compiles a handful of articles to show how dysfunctional this issue has become. "What a mess ! ! !"

Obama, Pelosi and Reid just do not get it. With over 50% of the population against the bill, they are determined to ram the bill through Congress anyway. It will be bloodbath for the Dems who vote Yes today come November. The voters do not forget ...

Title: Re: Meltdown
Post by: Coopmv on March 21, 2010, 11:06:46 AM

DM, To be honest with you, I will be perfectly happy to see WalMart goes out of business, as this article mentioned how the fortune of WalMart is tied to Chinese goods. I have NEVER shopped at WalMart and never will. ;)

A Slow Boat From China
China said it will send an envoy to Washington to discuss the friction between the two countries over the value of the yuan. It will not matter. Too many members of Congress, CEOs of major exporters, and union presidents who use China's trade practices as a target for their plans to save millions of jobs need to get the yuan's value to "float" in the free market. That should, they reason, give America the chance to compete with China's exports based on price.
Continue here ... (http://247wallst.com/2010/03/19/a-slow-boat-from-china/)

Title: Re: Meltdown
Post by: Coopmv on March 21, 2010, 05:31:24 PM

DM, This Obama Administration is an unmitigated disaster. Not good when the papers issued by a number of private US companies actually have lower yields than treasuries of the same maturity ... :o

Obama Paying More Than Buffett as Bonds Show U.S. Losing AAA
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aYUeBnitz7nU)

Title: Re: Meltdown
Post by: BachQ on March 24, 2010, 05:02:28 AM

Quote from: Coopmv on March 21, 2010, 05:31:24 PM
DM, This Obama Administration is an unmitigated disaster. Not good when the papers issued by a number of private US companies actually have lower yields than treasuries of the same maturity ... :o

Obama Paying More Than Buffett as Bonds Show U.S. Losing AAA
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aYUeBnitz7nU)

Yep. First Greece was downgraded, now Portugal has been downgraded to AA- ... and the dominoes are beginning to fall ...

Bloomberg: (http://www.bloomberg.com/apps/news?pid=20601087&sid=axcFWcIiCP4g)

QuoteGreece "is going to default at some point," and Europe's failure to answer that challenge will hurt the common currency, UBS Investment Bank's London-based deputy head of global economics, Paul Donovan, said in an interview on Bloomberg Radio. "If Europe can't solve a small problem like this, how on earth is it going to solve the larger problem, which is the euro doesn't work," he said.

Title: Re: Meltdown
Post by: Coopmv on March 24, 2010, 05:14:46 PM

DM, The Chinese somehow think it is only the US that is having problems with job losses because of the cheap Chinese imports, which is quite laughable. My sense is once the US takes a tough line, EU may just fall in line quickly. Can China really afford to fight a two-front large-scale trade war? I think not. It will probably swallow hard to put up with some job losses due to trade sanctions instead of losing tens of millions jobs to retaliate ...

Pressure growing on China to revalue currency
Congress told US could gain up to 1.2 million jobs from Asian currency revaluations (http://finance.yahoo.com/news/Pressure-growing-on-China-to-apf-3372251399.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on March 24, 2010, 07:28:59 PM

DM, Angela Merkel knows full well if Germany were to bail out Greece, her party will be severely punished at the next election. She would rather have the IMF step in to do the dirty work ...

Frantic EU seeks solution to Greek debt crisis
European try to find solution to Greek debt crisis as euro slides, Portugal downgraded (http://finance.yahoo.com/news/Frantic-EU-seeks-solution-to-apf-1419386988.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on March 26, 2010, 06:46:06 PM

DM, They are just buying time. Providing new loans to Greece to pay off its old debt does not work.

Euro zone leaders: Greece plan to stabilize euro
Euro zone nations say bailout program for Greece, others will stabilize markets

(http://finance.yahoo.com/news/Euro-zone-leaders-Greece-plan-apf-2264258820.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on March 27, 2010, 02:37:19 PM

DM, According to this article, it is looking increasingly likely the Democratic Party will become the minority party after the upcoming November election in both houses of the US Congress. Recent statistics is looking more and more similar to those observed just before the GOP takeover in 1994 (http://www.timesunion.com/AspStories/story.asp?storyID=915922&category=OPINION&TextPage=1)

Title: Re: Meltdown
Post by: Coopmv on March 27, 2010, 08:47:59 PM

DM, Based on this poll, I think the Dems are toast come November because the voters will not forget. They may well become the minority party again in the shortest span of time ...
;)

Health Care Plan:
Favor / Oppose (http://www.pollster.com/polls/us/healthplan.php)

Title: Re: Meltdown
Post by: Coopmv on March 27, 2010, 08:57:54 PM

DM, It is bad news for the Dems. They will pay ...

Florida's unemployment hit 12.2 percent in February, the highest rate on record, soaring past even the rates recorded in the 1973-1975 recession, the state work force agency said Friday.
(http://www.sun-sentinel.com/business/fl-unemployment-february-20100326,0,4358873.story)

Title: Re: Meltdown
Post by: Coopmv on March 28, 2010, 06:06:24 AM

DM, Nothing seems to work right for CA these days. Here is another blow to its economy in addition to the housing meltdown ...

Moth forces wine country's secret into the open
Appearance of grape-eating moth in California's premier vineyards brings 'secret' to light (http://finance.yahoo.com/news/Moth-forces-wine-countrys-apf-2476748908.html?x=0)

Title: Re: Meltdown
Post by: drogulus on March 28, 2010, 09:18:52 AM

It's a typical midterm election, just like 1994. The same thing happened to Bush, too. It's possible that it won't be as bad as some polls indicate. Many voters will notice, for instance, that the Republicans have failed to promise to repeal the "death panels". Uh.....why not?

It depends largely on 2 factors, the unemployment rate (going down, but too slowly) and the public perception of the Obama health care victory. As the propaganda fades and realities replace it everyone will begin to see where they stand. Will they be able to change jobs without worrying about preexisting conditions? Can the 3 or 4 people with good insurance keep it? Will mean government bureaucrats tell you you can't see your doctor anymore?

Answers: Yes, Yes, and No. That could mean a smaller than usual midterm swing. Also, remember when Gingrich threatened to shut down the gov't and Clinton called his bluff? All Obama has to do IMO is keep on advancing his rather drearily centrist agenda and wait for the Stupid Party to implode. Maybe they won't, but I wouldn't bet against it. I'll bet this: Dems suffer a net loss of 20 seats in the House, 6 seats in the Senate.

Title: Re: Meltdown
Post by: Coopmv on March 28, 2010, 09:26:33 AM

Quote from: drogulus on March 28, 2010, 09:18:52 AM

It's a typical midterm election, just like 1994. The same thing happened to Bush, too. It's possible that it won't be as bad as some polls indicate. Many voters will notice, for instance, that the Republicans have failed to promise to repeal the "death panels". Uh.....why not?

It depends largely on 2 factors, the unemployment rate (going down, but too slowly) and the public perception of the Obama health care victory. As the propaganda fades and realities replace it everyone will begin to see where they stand. Will they be able to change jobs without worrying about preexisting conditions? Can the 3 or 4 people with good insurance keep it? Will mean government bureaucrats tell you you can't see your doctor anymore?

Answers: Yes, Yes, and No. That could mean a smaller than usual midterm swing. Also, remember when Gingrich threatened to shut down the gov't and Clinton called his bluff? All Obama has to do IMO is keep on advancing his rather drearily centrist agenda and wait for the Stupid Party to implode. Maybe they won't, but I wouldn't bet against it. I'll bet this: Dems suffer a net loss of 20 seats in the House, 6 seats in the Senate.

The independents will determine the outcome of the November election. Don't forget they were the voters who put the Democrats over the top in the last election. They pledge no loyalty to either party. The economy will continue to struggle and I do not see the unemployment rate to drop meaningfully between now and November ...

Title: Re: Meltdown
Post by: karlhenning on March 29, 2010, 06:19:06 AM

QuoteThe Treasury Department said Monday it will begin selling the stake it owns in Citigroup Inc., which could result in a profit of more than $8 billion.

Which I suppose means that some phase(s) of the bail-out may in effect turn out to have been investment.

Entire article. (http://www.washingtonpost.com/wp-dyn/content/article/2010/03/29/AR2010032900915.html?hpid=topnews)

Title: Re: Meltdown
Post by: snyprrr on March 29, 2010, 08:39:32 AM

Meltdown??,...what meltdown??

Everything is going better than it ever has in all of recorded history. What would I do without such a loving, caring God,...oops!, I meant,... government, seeking only what's best for me. Gosh, who AM I that my government should want to go out of its way to coddle me from cradle to grave without a thought from myself? Oh, how could I have ASKED for such a loving, benevolent government,... I am not worthy of your high ideals, oh thou great god of government,... I am but a worm,... oh, please, make all my decisions for me,... you know so much better than me what to do with me.

I am eternally grateful to My Government, and, most of all to you, Mr. Obama, whoever you are, and wherever you came from. You are truly the Divine Saviour sent to save this sick world. Jesus,... who'sthat?

It's all for you Damien,... it's all for you...

Title: Re: Meltdown
Post by: Coopmv on March 29, 2010, 04:48:22 PM

Quote from: k a rl h e nn i ng on March 29, 2010, 06:19:06 AM

Which I suppose means that some phase(s) of the bail-out may in effect turn out to have been investment.

Entire article. (http://www.washingtonpost.com/wp-dyn/content/article/2010/03/29/AR2010032900915.html?hpid=topnews)

This is just a spin from the government. In the context of trillion dollars, i.e. 1000 billion dollars of red ink, this $8B of profit is just rounding errors ... ::)

Title: Re: Meltdown
Post by: Coopmv on March 29, 2010, 04:49:24 PM

Quote from: snyprrr on March 29, 2010, 08:39:32 AM
Meltdown??,...what meltdown??

Everything is going better than it ever has in all of recorded history. What would I do without such a loving, caring God,...oops!, I meant,... government, seeking only what's best for me. Gosh, who AM I that my government should want to go out of its way to coddle me from cradle to grave without a thought from myself? Oh, how could I have ASKED for such a loving, benevolent government,... I am not worthy of your high ideals, oh thou great god of government,... I am but a worm,... oh, please, make all my decisions for me,... you know so much better than me what to do with me.

I am eternally grateful to My Government, and, most of all to you, Mr. Obama, whoever you are, and wherever you came from. You are truly the Divine Saviour sent to save this sick world. Jesus,... who'sthat?

It's all for you Damien,... it's all for you...

We should all work for the federal government ...

Title: Re: Meltdown
Post by: karlhenning on March 30, 2010, 02:30:44 AM

Oh, but we do. We do.

Title: Re: Meltdown
Post by: Coopmv on March 30, 2010, 05:16:47 PM

Quote from: k a rl h e nn i ng on March 30, 2010, 02:30:44 AM
Oh, but we do. We do.

On average, every working American works for the government until mid May ...

Title: Re: Meltdown
Post by: Scarpia on March 30, 2010, 05:39:48 PM

Quote from: Coopmv on March 30, 2010, 05:16:47 PM
On average, every working American works for the government until mid May ...

And the government works for us all year!

Title: Re: Meltdown
Post by: Coopmv on March 30, 2010, 06:18:38 PM

Quote from: Scarpia on March 30, 2010, 05:39:48 PM
And the government works for us all year!

I find this hard to believe. I have NEVER worked on any government jobs all my life and never attended any public colleges either ...

Title: Re: Meltdown
Post by: Coopmv on April 10, 2010, 04:54:23 AM

DM, The solution for this total lack of fiscal responsibility on the part of the Greek government is for the IMF to come in with a bailout package that requires a 30-40% cut in the Greek welfare state budget ...

Greece on the edge, bailout terms under discussion
Greece says not asking for a bailout; markets speculate rescue by EU, IMF may come within days (http://finance.yahoo.com/news/Greece-on-the-edge-bailout-apf-3763992951.html?x=0&sec=topStories&pos=7&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on April 10, 2010, 05:02:31 AM

DM, A friend of mine sent me this article yesterday and it was great to see these rich and famous who have always thought they are better than anyone else to take a fall ...

Foreclosures Hit Rich and Famous (http://finance.yahoo.com/real-estate/article/109288/foreclosures-hit-rich-and-famous)

Title: Re: Meltdown
Post by: Coopmv on April 10, 2010, 05:09:02 AM

DM, Lets hope the US and the EU show some backbone and play some hardball with the commies, who only recognize strength and nothing else ...

China's $7.24B March trade deficit 1st in 6 years
China reports $7.24 billion trade deficit in March as imports surge, first in almost 6 years (http://finance.yahoo.com/news/Chinas-724B-March-trade-apf-195908372.html?x=0)

Title: Re: Meltdown
Post by: Coopmv on April 11, 2010, 05:02:30 PM

DM, What kind of export does Greece have? Isn't it a country that counts tourism as its biggest industry?

Greece has been spending beyond its means for years, leaving it with a 2009 budget deficit of 12.9 percent of economic output. The revelation of its statistics fudging has slammed the euro and gutted market confidence, fueling higher borrowing costs.

Read on ...
(http://finance.yahoo.com/news/Euro-governments-offer-Greece-apf-1130874913.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Lethevich on April 15, 2010, 04:12:58 AM

Iceland gets its revenge on the British and Dutch for messing with their banks:

Iceland volcano grounds flights across northern Europe (http://www.usatoday.com/travel/flights/item.aspx?type=blog&ak=88096.blog)

In related news, one Washington Post blogger seems to have confused Iceland with Ireland - an easy mistake to make... ???

Volcanic ash in Northern Europe is wreaking havoc on air travelers. The ash clouds from Ireland have canceled flights, shut down London's Heathrow Airport and closed air space over parts of Europe. (http://voices.washingtonpost.com/getthere/2010/04/ash_shuts_down_european_flight.html?wprss=getthere)

Title: Re: Meltdown
Post by: Coopmv on April 15, 2010, 05:21:59 PM

Quote from: Lethe on April 15, 2010, 04:12:58 AM
Iceland gets its revenge on the British and Dutch for messing with their banks:

Iceland volcano grounds flights across northern Europe (http://www.usatoday.com/travel/flights/item.aspx?type=blog&ak=88096.blog)

In related news, one Washington Post blogger seems to have confused Iceland with Ireland - an easy mistake to make... ???

Volcanic ash in Northern Europe is wreaking havoc on air travelers. The ash clouds from Ireland have canceled flights, shut down London's Heathrow Airport and closed air space over parts of Europe. (http://voices.washingtonpost.com/getthere/2010/04/ash_shuts_down_european_flight.html?wprss=getthere)

Forgive the Americans, most are poor in geography in addition to not knowing how to do simple math. ;D

Title: Re: Meltdown
Post by: Coopmv on April 16, 2010, 08:03:42 PM

DM, Here is a mini meltdown in France ... ;)

Saint-Etienne Swaps Explode as Financial Weapons Ambush Europe
(http://www.bloomberg.com/apps/news?pid=20601109&sid=a30KHZKX1WJo&pos=15)

Title: Re: Meltdown
Post by: Coopmv on April 16, 2010, 08:46:13 PM

DM, It is bad news city for CA ... ;)

California jobless rate swells to 12.6 percent
SACRAMENTO, Calif. (AP) - California's unemployment rate hit a modern record of 12.6 percent in March, though it rose only a fraction over the previous month, the state Employment Development Department reported Friday.
Continued here ... (http://www.breitbart.com/article.php?id=D9F49LEO0&show_article=1)

Title: Re: Meltdown
Post by: Coopmv on April 17, 2010, 07:10:55 PM

DM, It is about time for EU to play some hardball. Between the US and EU, Chinese exports have a lot to lose - 70% of its total exports? ;)

EU Steps Up Pressure for Higher Yuan on Concerns About Recovery
(http://www.bloomberg.com/apps/news?pid=20601087&sid=apMF5BVSz3c8&pos=3)

Title: Re: Meltdown
Post by: Coopmv on April 17, 2010, 07:32:01 PM

DM, Looks like Goldman and China are in good company as they are both on the crap list with the US and the EU ... ;)

EU's Investigation of Goldman Will Be 'Profound,' Rehn Says
(http://www.bloomberg.com/apps/news?pid=20601087&sid=aSOZqbjxwdxI&pos=5)

Title: Re: Meltdown
Post by: Coopmv on April 18, 2010, 08:34:55 PM

DM, These SOB's deserve to get some serious punishments for their transgressions ... ;)

Goldman Sachs faces questions in Europe
UK's Gordon Brown lashes out at Goldman Sachs, calls for inquiry

(http://finance.yahoo.com/news/Goldman-Sachs-faces-questions-apf-195129330.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on April 25, 2010, 10:05:17 AM

DM, EU made the ultimate mistake by admitting Greece into the union. You can liquidate a company when things do not work out, but how do you liquidate a sovereign nation? ;)

This is wishful thinking of the higher order ... :o

Debt-plagued Greece optimistic on big loan package
Greece optimistic about big loan package to help Athens make large repayment due in May
(http://finance.yahoo.com/news/Debtplagued-Greece-optimistic-apf-593631387.html?x=0&sec=topStories&pos=1&asset=&ccode=)

Title: Re: Meltdown
Post by: Florestan on April 26, 2010, 12:39:33 AM

Quote from: Coopmv on April 25, 2010, 10:05:17 AM
DM, EU made the ultimate mistake by admitting Greece into the union. You can liquidate a company when things do not work out, but how do you liquidate a sovereign nation? ;)

You don't have to liquidate the nation, only its sovereignty. The Lisbon Treaty and the future EU development will take care of that. Good-bye European sovereign states, welcome European (Soviet Socialist) Union.

Title: Re: Meltdown
Post by: Coopmv on April 27, 2010, 03:59:58 PM

Quote from: Florestan on April 26, 2010, 12:39:33 AM
You don't have to liquidate the nation, only its sovereignty. The Lisbon Treaty and the future EU development will take care of that. Good-bye European sovereign states, welcome European (Soviet Socialist) Union.

In the capitalist world, the bondholders are the first to get paid when a debtor is liquidated. Are the German bondholders gonna to get the Parthenon in Berlin? :o

Title: Re: Meltdown
Post by: Coopmv on April 27, 2010, 04:42:08 PM

DM, EU is toast and the US is in bad shape. The Chinese will be toast too - where are they gonna to export all their products and the rapid formation of their middle class will be a mirage if their exports grind to a halt ... ;)

ATHENS (AP) -- Ratings agency Standard & Poor's pushed Greece to the brink of a financial abyss Tuesday and downgraded Portugal's debt, too, fueling fears of a continent-wide debt meltdown in Europe.
Continued here
(http://finance.yahoo.com/news/Europe-debt-crisis-spreads-to-apf-2454032847.html?x=0&sec=topStories&pos=6&asset=&ccode=)

Title: Re: Meltdown
Post by: Florestan on April 28, 2010, 05:22:08 AM

Quote from: Coopmv on April 27, 2010, 03:59:58 PM
In the capitalist world, the bondholders are the first to get paid when a debtor is liquidated. Are the German bondholders gonna to get the Parthenon in Berlin? :o

They don't need to get the Parthenon in Berlin. I think they'll satisfy themselves with the revenues from Parhenon tourism. :D

Title: Re: Meltdown
Post by: Coopmv on April 28, 2010, 05:47:11 PM

Quote from: Florestan on April 28, 2010, 05:22:08 AM
They don't need to get the Parthenon in Berlin. I think they'll satisfy themselves with the revenues from Parhenon tourism. :D

The Greeks will sell the Germans bonds that mature in Y3K with coupon and principal payments coming from revenues from Parthenon tourism ... ;D

Title: Re: Meltdown
Post by: Coopmv on May 01, 2010, 06:25:22 PM

DM, The Greeks are no different than the Argentines when it comes to finance. A few of my fellow Americans who have vacationed in Greece do not have very positive impressions about what they experienced over there. In short, it is not a particularly hard-working country ...

Greek unions protest expected austerity measures
Rioters clash with police at Athens rally as anger mounts over expected harsh austerity plan
(http://finance.yahoo.com/news/Greek-unions-protest-expected-apf-4127633637.html?x=0&sec=topStories&pos=2&asset=&ccode=)

Title: Re: Meltdown
Post by: Florestan on May 03, 2010, 01:45:06 AM

Quote from: Coopmv on May 01, 2010, 06:25:22 PM
DM, The Greeks are no different than the Argentines when it comes to finance. A few of my fellow Americans who have vacationed in Greece do not have very positive impressions about what they experienced over there. In short, it is not a particularly hard-working country ...

This reminds of a joke with an American billionaire who was spending his vacation in Greece. Going to beach every day, he noticed a Greek guy who sunbathed all day long, while al other village people went fishing at sea. He approached him after a few days, genuinely wanting to offer him a lesson in the American way.

- Hey, my friend, why don't you go fishing in a boat, like all other people in your village?

- And why should I? asked the Greek.

- Well, if you wake up and go at sea early enough, after a year or so you'll catch enough fish which you can sell and buy a faster and more reliable boat than everybody's else.

- And why should I?

- Having a faster and more reliable boat will enable you to catch even more fish, so after another few years you can make big money out of it.

- And why should I?

- Why, if you are rich, you can hire other people to work for you.

- And why should I?

- Because thus you'll have all the time in the world to do what you like without having to work.

To which the Greek replied:

- Hey, old man, that's exactly what I'm doing right now.

;D

Title: Re: Meltdown
Post by: Coopmv on May 16, 2010, 09:07:19 AM

DM, What a horror movie? Admitting Greece into the EU was as bad an idea as admitting Mexico into NAFTA :o (http://www.timesonline.co.uk/tol/news/world/europe/article7127621.ece)

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on May 18, 2010, 04:08:47 AM

On the general subject of collapse. I just found this site, by someone who directly experienced Argentina's recent economic meltdown. It discusses both the social consequences of such collapses, and strategies for surviving them:

http://www.survival-spot.com/survival-blog/argentina-collapse/

What's especially sobering about this is that Argentina used to be a rich, well-off country. It makes for scary but essential reading for all of us sitting comfortably in the so-called advanced world.

Title: Re: Meltdown
Post by: Coopmv on May 18, 2010, 04:50:27 PM

Quote from: Velimir on May 18, 2010, 04:08:47 AM
On the general subject of collapse. I just found this site, by someone who directly experienced Argentina's recent economic meltdown. It discusses both the social consequences of such collapses, and strategies for surviving them:

http://www.survival-spot.com/survival-blog/argentina-collapse/

What's especially sobering about this is that Argentina used to be a rich, well-off country. It makes for scary but essential reading for all of us sitting comfortably in the so-called advanced world.

This has got to be the third meltdown or more. Argentina was famous for its 300% inflation rate back in the 70's or 80's.

Title: Re: Meltdown
Post by: drogulus on May 22, 2010, 09:10:52 AM

(http://forums.mozillazine.org/images/smilies/icon_question.gif)

(http://forums.mozillazine.org/images/smilies/icon_idea.gif)

(http://forums.mozillazine.org/images/smilies/icon_twisted.gif)

Is it too early to buy BP?

Title: Re: Meltdown
Post by: drogulus on May 22, 2010, 09:23:28 AM

Why do I remain unconvinced that we in the U.S. (and this would apply to the U.K. as well) will experience either the apparently permanent decline of Japan or the extremes of financial foolery like Argentina or Greece? It's a question of nothing like that happening so far, in itself a dangerous kind of forcasting technique. However, you have to wonder why people point to these bad examples if it isn't obvious that we are not like these countries in some perceivable and perhaps measurable ways. It seems to me that you can't tell people to beware these terrible consequences without having a much better explanation of why we are still having to beware them instead of actually experiencing them. I provisionally conclude that many of the advanced economies (especially the larger ones) are better run overall with more fail-safes than the 3 countries I mentioned, and a close investigation would reveal that, or has revealed it.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2010, 09:45:29 AM

Quote from: drogulus on May 22, 2010, 09:23:28 AM
Why do I remain unconvinced that we in the U.S. (and this would apply to the U.K. as well) will experience either the apparently permanent decline of Japan or the extremes of financial foolery like Argentina or Greece? It's a question of nothing like that happening so far, in itself a dangerous kind of forcasting technique. However, you have to wonder why people point to these bad examples if it isn't obvious that we are not like these countries in some perceivable and perhaps measurable ways. It seems to me that you can't tell people to beware these terrible consequences without having a much better explanation of why we are still having to beware them instead of actually experiencing them. I provisionally conclude that many of the advanced economies (especially the larger ones) are better run overall with more fail-safes than the 3 countries I mentioned, and a close investigation would reveal that, or has revealed it.

In this world that is more driven by technologies than ever, who is the leading country that can replace the US in the near future, say the next 5 to 7 years. I do not see Japan and certainly not China or any of the European countries. Comparing the US to Greece or Argentina is totally inadequate since neither of those countries have much else to offer except agro-business.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2010, 09:48:45 AM

Quote from: drogulus on May 22, 2010, 09:10:52 AM
(http://forums.mozillazine.org/images/smilies/icon_question.gif)

(http://forums.mozillazine.org/images/smilies/icon_idea.gif)

(http://forums.mozillazine.org/images/smilies/icon_twisted.gif)

Is it too early to buy BP?

I would very much hesitate to compare BP with Exxon even if there are much similarities between the Exxon Valdez disaster and this BP Gulf disaster. Exxon was a AAA-rated company and its successor ExxonMobil continues to be one and among the very few companies in the world with that stellar credit rating. BP clearly does not have that rock-solid finance ...

Title: Re: Meltdown
Post by: drogulus on May 22, 2010, 12:18:38 PM

Quote from: Coopmv on May 22, 2010, 09:48:45 AM
I would very much hesitate to compare BP with Exxon even if there are much similarities between the Exxon Valdez disaster and this BP Gulf disaster. Exxon was a AAA-rated company and its successor ExxonMobil continues to be one and among the very few companies in the world with that stellar credit rating. BP clearly does not have that rock-solid finance ...

I was thinking more in terms of how far down conditions drive the price before they practically put a gun to your head and force you to buy. The yield is 7.5% today. They won't cut the dividend, and bad publicity does not kill an energy company for obvious reasons. So, if the price drops another 10%.......

Quote from: Coopmv on May 22, 2010, 09:45:29 AM
In this world that is more driven by technologies than ever, who is the leading country that can replace the US in the near future, say the next 5 to 7 years. I do not see Japan and certainly not China or any of the European countries. Comparing the US to Greece or Argentina is totally inadequate since neither of those countries have much else to offer except agro-business.

Isn't it the premise of Doomerism generally that all bad trends portend disaster, even those that contradict each other (we're all subject to a devastating inflation/deflation, a dark cloud with no lining at all....). In other words, the entire world is becoming a Restaurant So Crowded No One Goes There, hmm...??

Remember how giddy the Doomers were 2 years ago, when proof finally arrived. Except it sort of didn't, as it turned out. But no worries, when the Liberal Hoax melts all the glaciers the Doomers will be.....we do believe in the Liberal Hoax, don't we, or is that the other guys? _{(http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)}

Title: Re: Meltdown
Post by: Coopmv on May 22, 2010, 01:15:24 PM

Quote from: drogulus on May 22, 2010, 12:18:38 PM
I was thinking more in terms of how far down conditions drive the price before they practically put a gun to your head and force you to buy. The yield is 7.5% today. They won't cut the dividend, and bad publicity does not kill an energy company for obvious reasons. So, if the price drops another 10%.......

Not clear how safe that dividend is. At any rate, when the current yield of a stock gets too high, it means the market doubts the payout is sustainable. Crude price has come down substantially due to the Euro crisis. If the EU slips into another recession, the earnings of many large integrated oils such as BP will be seriously hurt ...

Quote from: drogulus
Isn't it the premise of Doomerism generally that all bad trends portend disaster, even those that contradict each other (we're all subject to a devastating inflation/deflation, a dark cloud with no lining at all....). In other words, the entire world is becoming a Restaurant So Crowded No One Goes There, hmm...??

Remember how giddy the Doomers were 2 years ago, when proof finally arrived. Except it sort of didn't, as it turned out. But no worries, when the Liberal Hoax melts all the glaciers the Doomers will be.....we do believe in the Liberal Hoax, don't we, or is that the other guys? _{(http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)}

Only time will tell if the proponents of global warming are a wrong-headed bunch. I think the truth is probably somewhere between the pro and the anti- global warming arguments. If the US continues to decline, it will follow a pattern very similar to the decline of the Roman Empire, i.e. it will linger on for years and perhaps centuries. There may be no clear successor to the US. I do not think China is likely to take over that role.

Title: Re: Meltdown
Post by: drogulus on May 22, 2010, 01:35:21 PM

Quote from: Coopmv on May 22, 2010, 01:15:24 PM
Not clear how safe that dividend is.

I'm not either, really, I was just speculating. Besides I'm not sure I could stomach buying into such a sleazy operation. Of course, many people are thinking exactly that, which will drive the price too low and.....

(http://forums.mozillazine.org/images/smilies/lildevil.gif)

Title: Re: Meltdown
Post by: Coopmv on May 22, 2010, 01:41:49 PM

Quote from: drogulus on May 22, 2010, 01:35:21 PM

I'm not either, really, I was just speculating. Besides I'm not sure I could stomach buying into such a sleazy operation. Of course, many people are thinking exactly that, which will drive the price too low and.....

(http://forums.mozillazine.org/images/smilies/lildevil.gif)

BP has had an appalling job safety records in the US over the past five years.

Title: Re: Meltdown
Post by: drogulus on May 22, 2010, 02:33:05 PM

That's part of it, certainly. The fallout from this could be huge. Maybe allowing these companies to capture the regulators isn't such a good idea. Sometimes there's nothing like a little "big gummint" to get these guys to do what they know is right. The fact is, ideology and self-interest proved to be a toxic (literally!) combination. I hope Obama wakes up to this. If he's the socialist devil the loons say he is he's choosing a piss-poor way of demonstrating it.

Title: Re: Meltdown
Post by: Coopmv on May 23, 2010, 05:01:05 PM

Quote from: drogulus on May 22, 2010, 02:33:05 PM
That's part of it, certainly. The fallout from this could be huge. Maybe allowing these companies to capture the regulators isn't such a good idea. Sometimes there's nothing like a little "big gummint" to get these guys to do what they know is right. The fact is, ideology and self-interest proved to be a toxic (literally!) combination. I hope Obama wakes up to this. If he's the socialist devil the loons say he is he's choosing a piss-poor way of demonstrating it.

We are witnessing the pendulum swing the other way. Extreme capitalism has ushered in the race to the bottom when all people who are not in the corridor of power have lost big-time in their standard of living.

Title: Re: Meltdown
Post by: Coopmv on May 23, 2010, 05:03:00 PM

DM, taking a long vacation?

Bad news for many Europeans - Fiscal crises threaten Europe's generous benefits ...
(http://apnews.myway.com/article/20100523/D9FSPCAO1.html)

Title: Re: Meltdown
Post by: Coopmv on May 30, 2010, 10:23:41 AM

DM,

With the Euro zone treading water due to the sovereign debt crisis and if the American consumers go on a strike, what would happen to 70% of the Chinese exports? US Consumer Spending Stalls Out In April
:o
(http://www.bloggingstocks.com/2010/05/30/consumer-spending-stalls-out-in-april/)

Title: Re: Meltdown
Post by: Coopmv on May 30, 2010, 10:27:06 AM

DM, check this article out ...

Short-Seller Jim Chanos: Red Flag Over China Charlie Rose talks to James Chanos of Kynikos Associates about the coming property bubble in China ...
(http://www.businessweek.com/magazine/content/10_16/b4174010646611.htm)

Title: Re: Meltdown
Post by: Coopmv on June 01, 2010, 09:36:35 AM

DM, This is shocking ... :o

Owners Stop Paying Mortgage ... And Stop Fretting About It Foreclosure procedures have been initiated against 1.7 million of the nation's households. (http://finance.yahoo.com/news/Owners-Stop-Paying-Mortgage-nytimes-4276925797.html?x=0&sec=topStories&pos=3&asset=&ccode=)

Title: Re: Meltdown
Post by: Coopmv on June 02, 2010, 06:55:18 AM

Quote from: drogulus on May 22, 2010, 01:35:21 PM

I'm not either, really, I was just speculating. Besides I'm not sure I could stomach buying into such a sleazy operation. Of course, many people are thinking exactly that, which will drive the price too low and.....

(http://forums.mozillazine.org/images/smilies/lildevil.gif)

The continued payout of that generous BP stock dividend is probably in jeopardy ...

BP spill costs could reach $37 billion: analyst (http://www.marketwatch.com/story/bp-spill-costs-could-reach-37-billion-analyst-2010-06-02?siteid=yhoof2)

Title: Re: Meltdown
Post by: Lethevich on July 20, 2010, 01:58:48 PM

Sea Otters, the Cutest Way to Fight Global Warming (http://www.reddit.com/tb/co4ct)

Title: Re: Meltdown
Post by: Coopmv on July 20, 2010, 04:54:37 PM

Quote from: Lethe on July 20, 2010, 01:58:48 PM
Sea Otters, the Cutest Way to Fight Global Warming (http://www.reddit.com/tb/co4ct)

And why did the dumb-ass humans hunt sea otters to almost extinction?

Title: Re: Meltdown
Post by: karlhenning on July 23, 2010, 10:59:21 AM

The number of Massachusetts residents filing for bankruptcy soared in the first half of 2010, as the continued weak economy left thousands of homeowners unable to pay their mortgages or sell their properties.

Nearly 12,000 people filed for bankruptcy in the first six months of this year, 25 percent more than in the first half of 2009, according to data released yesterday by the Warren Group, a Boston real estate information company. (http://www.boston.com/business/articles/2010/07/23/more_declaring_theyre_bankrupt/)

Title: Re: Meltdown
Post by: Coopmv on July 24, 2010, 06:03:11 PM

Quote from: k a rl h e nn i ng on July 23, 2010, 10:59:21 AM
The number of Massachusetts residents filing for bankruptcy soared in the first half of 2010, as the continued weak economy left thousands of homeowners unable to pay their mortgages or sell their properties.

Nearly 12,000 people filed for bankruptcy in the first six months of this year, 25 percent more than in the first half of 2009, according to data released yesterday by the Warren Group, a Boston real estate information company. (http://www.boston.com/business/articles/2010/07/23/more_declaring_theyre_bankrupt/)

While the economic picture in MA is not pretty, the one in CA is outright ugly ... :o

Title: Re: Meltdown
Post by: drogulus on August 29, 2010, 08:59:51 AM

The last few months should have been Doomer Heaven. Why is it so quiet here now that things look really, really bad? Unemployment, far from dropping due to the stimulus looks like it might go up, or at least stay where it is for a long time. There is no real good news in sight.

So, why aren't the Doomers crowing? I think it's just not as much fun to say things are bad when they are bad as it is to say things will get worse when the issue is in doubt. This is the worse, and the reality may make the fantasy less fun to indulge. Real bad news drives out the fake bad news, forcing people to think realistically against their nature. Oh well, it's just a theory...(http://www.good-music-guide.com/community/Smileys/classic/grin.gif)

Meanwhile, there are things happening that will change the direction of the country, both positively and negatively.

First the negative news, which is dealt with in this TNR article:

Let Them Eat Credit

How inequality is at the root of the Great Recession. (http://www.tnr.com/article/economy/77242/inequality-recession-credit-crunch-let-them-eat-credit)

The thesis is that politicians know that the growing income inequality and wage stagnation is at the root of the crisis, but know as well that the fixes are long term and will be fiercely contested at every step. There's no payoff there, so the alternative is to provide low cost credit to low income people to fuel consumption. This led to the housing crisis, the consumer debt crisis and where we are today. Until jobs come back and especially until incomes grow the problem can't be addressed except with gimmicks. The bad news is that this is unlikely to change.

Now the positive from Time magazine, a closer look at the Recovery Act:

How the Stimulus Is Changing America (http://www.time.com/time/printout/0,8816,2013683,00.html)

"Let's Just Go Build It!"

After Obama's election, Depression scholar Christina Romer delivered a freak-out briefing to his transition team, warning that to avoid a 1930s-style collapse, Washington needed to pump at least $800 billion into the frozen economy — and fast. "We were in a tailspin," recalls Romer, who is about to step down as chair of Obama's Council of Economic Advisers. "I was completely sympathetic to the idea that we shouldn't just dig ditches and fill them in. But saving the economy had to be paramount." Obama's economists argued for tax cuts and income transfers to get cash circulating quickly, emergency aid to states to prevent layoffs of cops and teachers and off-the-shelf highway projects to put people to work. They wanted a textbook Keynesian response to an economy in cardiac arrest: adding money to existing programs via existing formulas or handing it to governors, seniors and first-time home buyers. They weren't keen to reinvent the wheel.

But Obama and Biden also saw a golden opportunity to address priorities; they emphasized shovel-worthy as well as shovel-ready. Biden recalls brainstorming with Obama about an all-in push for a smarter electrical grid that would reduce blackouts, promote renewables and give families more control over their energy diet: "We said, 'God, wouldn't it be wonderful? Why don't we invest $100 billion? Let's just go build it!' "

Part of the answer to the question "Why hasn't the stimulus worked?" is that since it was too small (a problem I dealt with in a previous post on the "fork of fear") it didn't have a chance of working. Perhaps a better answer (a different version of the first one) is that it is working as well as can be expected given the size of the hole we are trying to climb out of. The other part of the answer is that a large chunk of the recovery plan was not intended as pump priming, and instead is long term investment that the crisis allowed us to attempt. I hope this turns out to be the right move. It's the move I would have made given a fixed amount of money (first choice would be a Krugman-style balls-to-the-wall effort (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)).

Title: Re: Meltdown
Post by: Coopmv on August 29, 2010, 09:14:22 AM

Quote from: drogulus on August 29, 2010, 08:59:51 AM
The last few months should have been Doomer Heaven. Why is it so quiet here now that things look really, really bad? Unemployment, far from dropping due to the stimulus looks like it might go up, or at least stay where it is for a long time. There is no real good news in sight.

So, why aren't the Doomers crowing? I think it's just not as much fun to say things are bad when they are bad as it is to say things will get worse when the issue is in doubt. This is the worse, and the reality may make the fantasy less fun to indulge. Real bad news drives out the fake bad news, forcing people to think realistically against their nature. Oh well, it's just a theory...(http://www.good-music-guide.com/community/Smileys/classic/grin.gif)

Meanwhile, there are things happening that will change the direction of the country, both positively and negatively.

First the negative news, which is dealt with in this TNR article:

Let Them Eat Credit

How inequality is at the root of the Great Recession. (http://www.tnr.com/article/economy/77242/inequality-recession-credit-crunch-let-them-eat-credit)

The thesis is that politicians know that the growing income inequality and wage stagnation is at the root of the crisis, but know as well that the fixes are long term and will be fiercely contested at every step. There's no payoff there, so the alternative is to provide low cost credit to low income people to fuel consumption. This led to the housing crisis, the consumer debt crisis and where we are today. Until jobs come back and especially until incomes grow the problem can't be addressed except with gimmicks. The bad news is that this is unlikely to change.

Now the positive from Time magazine, a closer look at the Recovery Act:

How the Stimulus Is Changing America (http://www.time.com/time/printout/0,8816,2013683,00.html)

"Let's Just Go Build It!"

After Obama's election, Depression scholar Christina Romer delivered a freak-out briefing to his transition team, warning that to avoid a 1930s-style collapse, Washington needed to pump at least $800 billion into the frozen economy — and fast. "We were in a tailspin," recalls Romer, who is about to step down as chair of Obama's Council of Economic Advisers. "I was completely sympathetic to the idea that we shouldn't just dig ditches and fill them in. But saving the economy had to be paramount." Obama's economists argued for tax cuts and income transfers to get cash circulating quickly, emergency aid to states to prevent layoffs of cops and teachers and off-the-shelf highway projects to put people to work. They wanted a textbook Keynesian response to an economy in cardiac arrest: adding money to existing programs via existing formulas or handing it to governors, seniors and first-time home buyers. They weren't keen to reinvent the wheel.

But Obama and Biden also saw a golden opportunity to address priorities; they emphasized shovel-worthy as well as shovel-ready. Biden recalls brainstorming with Obama about an all-in push for a smarter electrical grid that would reduce blackouts, promote renewables and give families more control over their energy diet: "We said, 'God, wouldn't it be wonderful? Why don't we invest $100 billion? Let's just go build it!' "

Part of the answer to the question "Why hasn't the stimulus worked?" is that since it was too small (a problem I dealt with in a previous post on the "fork of fear") it didn't have a chance of working. Perhaps a better answer (a different version of the first one) is that it is working as well as can be expected given the size of the hole we are trying to climb out of. The other part of the answer is that a large chunk of the recovery plan was not intended as pump priming, and instead is long term investment that the crisis allowed us to attempt. I hope this turns out to be the right move. It's the move I would have made given a fixed amount of money (first choice would be a Krugman-style balls-to-the-wall effort (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)).

The reason why the stimulus has not worked as expected is half that money probably went to China to stimulate its economy. Why have we not addressed the fundamental problem of trade imbalance? The administration has been dancing on the edge of these trade issues for a better part of two years. The WTO bylaw is supposed to provide the US president the authority to renegotiate the terms of this WTO Agreement.

Title: Re: Meltdown
Post by: bwv 1080 on August 29, 2010, 09:25:08 AM

Quote from: drogulus on August 29, 2010, 08:59:51 AM
The last few months should have been Doomer Heaven. Why is it so quiet here now that things look really, really bad? Unemployment, far from dropping due to the stimulus looks like it might go up, or at least stay where it is for a long time. There is no real good news in sight.

So, why aren't the Doomers crowing? I think it's just not as much fun to say things are bad when they are bad as it is to say things will get worse when the issue is in doubt. This is the worse, and the reality may make the fantasy less fun to indulge. Real bad news drives out the fake bad news, forcing people to think realistically against their nature. Oh well, it's just a theory...(http://www.good-music-guide.com/community/Smileys/classic/grin.gif)

Meanwhile, there are things happening that will change the direction of the country, both positively and negatively.

First the negative news, which is dealt with in this TNR article:

Let Them Eat Credit

How inequality is at the root of the Great Recession. (http://www.tnr.com/article/economy/77242/inequality-recession-credit-crunch-let-them-eat-credit)

The thesis is that politicians know that the growing income inequality and wage stagnation is at the root of the crisis, but know as well that the fixes are long term and will be fiercely contested at every step. There's no payoff there, so the alternative is to provide low cost credit to low income people to fuel consumption. This led to the housing crisis, the consumer debt crisis and where we are today. Until jobs come back and especially until incomes grow the problem can't be addressed except with gimmicks. The bad news is that this is unlikely to change.

Now the positive from Time magazine, a closer look at the Recovery Act:

How the Stimulus Is Changing America (http://www.time.com/time/printout/0,8816,2013683,00.html)

"Let's Just Go Build It!"

After Obama's election, Depression scholar Christina Romer delivered a freak-out briefing to his transition team, warning that to avoid a 1930s-style collapse, Washington needed to pump at least $800 billion into the frozen economy — and fast. "We were in a tailspin," recalls Romer, who is about to step down as chair of Obama's Council of Economic Advisers. "I was completely sympathetic to the idea that we shouldn't just dig ditches and fill them in. But saving the economy had to be paramount." Obama's economists argued for tax cuts and income transfers to get cash circulating quickly, emergency aid to states to prevent layoffs of cops and teachers and off-the-shelf highway projects to put people to work. They wanted a textbook Keynesian response to an economy in cardiac arrest: adding money to existing programs via existing formulas or handing it to governors, seniors and first-time home buyers. They weren't keen to reinvent the wheel.

But Obama and Biden also saw a golden opportunity to address priorities; they emphasized shovel-worthy as well as shovel-ready. Biden recalls brainstorming with Obama about an all-in push for a smarter electrical grid that would reduce blackouts, promote renewables and give families more control over their energy diet: "We said, 'God, wouldn't it be wonderful? Why don't we invest $100 billion? Let's just go build it!' "

Part of the answer to the question "Why hasn't the stimulus worked?" is that since it was too small (a problem I dealt with in a previous post on the "fork of fear") it didn't have a chance of working. Perhaps a better answer (a different version of the first one) is that it is working as well as can be expected given the size of the hole we are trying to climb out of. The other part of the answer is that a large chunk of the recovery plan was not intended as pump priming, and instead is long term investment that the crisis allowed us to attempt. I hope this turns out to be the right move. It's the move I would have made given a fixed amount of money (first choice would be a Krugman-style balls-to-the-wall effort (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)).

Given that the existing stimulus and bailouts are going to put the gross public debt / GDP ratio over 90% (where recent empirical studies find strong evidence of sustained impairment of economic growth) more debt-funded pork-barrel spending is hardly the solution. Although that is the predictable reaction of Keynesians to the abject failure of Obama's program, but we are already at the point where the solvency of the government is suspect (indeed if you take into account unfunded SS & Medicare liabilities, the US is bankrupt).

And I seriously doubt politicians have any real knowledge either on the causes of the financial crisis or the fixes (particularly because ultimately the politicians are the problem)

Title: Re: Meltdown
Post by: drogulus on August 29, 2010, 09:36:58 AM

Quote from: bwv 1080 on August 29, 2010, 09:25:08 AM
Given that the existing stimulus and bailouts are going to put the gross public debt / GDP ratio over 90% (where recent empirical studies find strong evidence of sustained impairment of economic growth) more debt-funded pork-barrel spending is hardly the solution. Although that is the predictable reaction of Keynesians to the abject failure of Obama's program, but we are already at the point where the solvency of the government is suspect (indeed if you take into account unfunded SS & Medicare liabilities, the US is bankrupt).

And I seriously doubt politicians have any real knowledge either on the causes of the financial crisis or the fixes (particularly because ultimately the politicians are the problem)

Pork barrel spending has never played a major role in the economy. It's mostly a distraction. As for calling stimulus spending or investments pork barrel, it really doesn't work. Most stimulus spending is designed to pass the "dig a hole, fill the hole" test. Classic stimulus spending is just an acceleration or intensification of normal spending. Pork barrel is tiny by comparison. Also, Ted Stevens and Robert Byrd are dead.

I also think that many politicians do know how to fix the crisis. There is no knowledge problem. It's just hard to move all the parts at once in a good direction. You have to combine a huge amount of immediate spending with a longer term tax/spending program in the Darman mold, a spending freeze with tax increases for the upper brackets to halt the upward redistribution.

Title: Re: Meltdown
Post by: Coopmv on August 29, 2010, 09:41:04 AM

Quote from: bwv 1080 on August 29, 2010, 09:25:08 AM
Given that the existing stimulus and bailouts are going to put the gross public debt / GDP ratio over 90% (where recent empirical studies find strong evidence of sustained impairment of economic growth) more debt-funded pork-barrel spending is hardly the solution. Although that is the predictable reaction of Keynesians to the abject failure of Obama's program, but we are already at the point where the solvency of the government is suspect (indeed if you take into account unfunded SS & Medicare liabilities, the US is bankrupt).

And I seriously doubt politicians have any real knowledge either on the causes of the financial crisis or the fixes (particularly because ultimately the politicians are the problem)

Because 98% (or perhaps even higher percentage) of the politicians are career politicians who have never worked in the private sectors. As such, they have no clue as to what works and what does not work. How many jobs has the US lost since China was admitted into the WTO? That trade imbalance should have been issue # 1 for the politicians to address. So far there have been only GATT's - the general agreement to talk and talk (but do nothing) ... >:(

Title: Re: Meltdown
Post by: drogulus on August 29, 2010, 10:06:12 AM

Quote from: Coopmv on August 29, 2010, 09:41:04 AM
Because 98% (or perhaps even higher percentage) of the politicians are career politicians who have never worked in the private sectors. As such, they have no clue as to what works and what does not work. How many jobs has the US lost since China was admitted into the WTO? That trade imbalance should have been issue # 1 for the politicians to address. So far there have been only GATT's - the general agreement to talk and talk (but do nothing) ... >:(

That doesn't show what you think. It shows that politicians are not willing to do something that's hard, with a low chance of a near-term payoff. They know they have to improve the schools, and put downward pressure on nondiscretionary spending because discretionary spending is where public investment is done.* You need a spending freeze on the entitlements and military, tax increases at the top, tax cuts at the bottom, and a reduction of middle class perks like home interest deductions (which are a bad idea anyway). All the cute tricks to convince people they aren't getting poorer should be done away with.

Then maybe we'll get some movement towards improving education. And entitlement spending restraint will make it easier to boost R & D. The history of this country is that government spending leads private investment, from the Erie Canal to the Homestead Act to communications satellites and the Internet. Private spending doesn't build things in a banana republic. If you don't want to live on a big plantation, stop listening to the plantation pols. There's a reason they don't want to build anything. It would make what they have worth less. How can you be really, really rich unless everyone else is really poor? That's the mentality.

_{* Eisenhower was sneaky and got the highways built as a defense measure. He was smarter than he appeared. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)}

Title: Re: Meltdown
Post by: bwv 1080 on August 29, 2010, 10:29:10 AM

Quote from: drogulus on August 29, 2010, 10:06:12 AM
government spending leads private investment, from the Erie Canal to the Homestead Act to communications satellites and the Internet. Private spending doesn't build things in a banana republic. If you don't want to live on a big plantation, stop listening to the plantation pols. There's a reason they don't want to build anything. It would make what they have worth less. How can you be really, really rich unless everyone else is really poor? That's the mentality.

_{* Eisenhower was sneaky and got the highways built as a defense measure. He was smarter than he appeared. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)}

So you trust congress to decide what areas the US should invest in, like corn ethanol perhaps? How do you propose to get around the Public Choice issues? You give a handful of examples of basic infrastructure or some serendipitous outcomes where a couple of programs wound up having later, unforeseen commercial applications. That actually is a pretty small list if you think about it, compared to the contributions of the private sector

Title: Re: Meltdown
Post by: drogulus on August 29, 2010, 10:41:10 AM

Quote from: bwv 1080 on August 29, 2010, 10:29:10 AM
So you trust congress to decide what areas the US should invest in, like corn ethanol perhaps? How do you propose to get around the Public Choice issues? You give a handful of examples of basic infrastructure or some serendipitous outcomes where a couple of programs wound up having later, unforeseen commercial applications. That actually is a pretty small list if you think about it, compared to the contributions of the private sector

I'm sorry, did you say contributions from the private sector? I don't know what that is. Generally the private sector will invest depending on what conditions allow, and by far the most important factors are the level of infrastructure and the availability of an educated workforce. As the plantationists convince more and more people that infrastructure improvements and public R & D investment is "pork barrel spending" the private sector will go elsewhere or it will content itself with fighting for a piece of a shrinking pie. But build things? No, it won't do that. That's not how the railroads were built, for example. Or airports and the airline industry. Or the auto industry. All of them were built on subsidies. The government decided that there should be winners, and we won. Now the plantationists tell us that deciding to win is "picking winners", a very bad thing. Apparently they have no problem with deciding to lose, which is somehow fairer.

Title: Re: Meltdown
Post by: bwv 1080 on August 29, 2010, 10:52:57 AM

Quote from: drogulus on August 29, 2010, 10:41:10 AM
I'm sorry, did you say contributions from the private sector? I don't know what that is. Generally the private sector will invest depending on what conditions allow, and by far the most important factors are the level of infrastructure and the availability of an educated workforce. As the plantationists convince more and more people that infrastructure improvements and public R & D investment is "pork barrel spending" the private sector will go elsewhere or it will content itself with fighting for a piece of a shrinking pie. But build things? No, it won't do that. That's not how the railroads were built, for example. Or airports and the airline industry. Or the auto industry. All of them were built on subsidies. The government decided that there should be winners, and we won. Now the plantationists tell us that deciding to win is "picking winners", a very bad thing. Apparently they have no problem with deciding to lose, which is somehow fairer.

Not sure where you came up with this term "Plantationists", but the railroads & auto industry were built by private capital. We live in a developed country, so we have an infrastructure. Aside from replacing some that is old & failing, there's not that much left to do. There is some role for public spending on basic R&D, but that is a long term investment, beside most of the basic R&D in the US is done by private non-profits and State Universities, not the Federal government. Furthermore, the gov funding on R&D is successful because it is dispersed into small amounts so that there is no payoff to interest groups fight to get a piece of it.

So what exactly are these obvious candidates for public investment that the private sector cannot compete?

Still have not addressed the public choice issues, how do we avoid getting programs like Corn Ethanol? Do you really think our politicians make decisions based upon a disinterested consideration of what is in the public good

Title: Re: Meltdown
Post by: Coopmv on August 29, 2010, 10:53:27 AM

Quote from: drogulus on August 29, 2010, 10:06:12 AM
That doesn't show what you think. It shows that politicians are not willing to do something that's hard, with a low chance of a near-term payoff. They know they have to improve the schools, and put downward pressure on nondiscretionary spending because discretionary spending is where public investment is done.* You need a spending freeze on the entitlements and military, tax increases at the top, tax cuts at the bottom, and a reduction of middle class perks like home interest deductions (which are a bad idea anyway). All the cute tricks to convince people they aren't getting poorer should be done away with.

Then maybe we'll get some movement towards improving education. And entitlement spending restraint will make it easier to boost R & D. The history of this country is that government spending leads private investment, from the Erie Canal to the Homestead Act to communications satellites and the Internet. Private spending doesn't build things in a banana republic. If you don't want to live on a big plantation, stop listening to the plantation pols. There's a reason they don't want to build anything. It would make what they have worth less. How can you be really, really rich unless everyone else is really poor? That's the mentality.

_{* Eisenhower was sneaky and got the highways built as a defense measure. He was smarter than he appeared. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)}

While all the points you have raised so far are true, you seem to totally ignore the trade imbalance issue. In my opinion, the loss of all those manufacturing jobs have had a severe impact on the middle class and also a bad multiplier effect on the overall US economy (i.e. when middle class cannot spend, many other jobs are impacted). American companies have been shipping many manufacturing jobs overseas and the trend is still continuing under this administration. How are new job creations going to help when we continue to lose existing jobs. All those talks of green jobs have been just talks. Without a resurgent middle class, there is no hope any of the issues that have been discussed so far can be addressed. A stronger middle class will bring in the additional tax revenues. The wealthiest 5% should pay higher taxes, but they alone cannot close that massive federal deficits.

Title: Re: Meltdown
Post by: Coopmv on August 29, 2010, 10:57:22 AM

Quote from: bwv 1080 on August 29, 2010, 10:29:10 AM
So you trust congress to decide what areas the US should invest in, like corn ethanol perhaps? How do you propose to get around the Public Choice issues? You give a handful of examples of basic infrastructure or some serendipitous outcomes where a couple of programs wound up having later, unforeseen commercial applications. That actually is a pretty small list if you think about it, compared to the contributions of the private sector

That corn ethanol is a major pork IMO and has been used to round up votes from the farm-belt. It helped to drive up food prices since the farm animals consume corn-based feed. They need to find other sources such as algae or anything else that can produce ethanol without jacking up food prices.

Title: Re: Meltdown
Post by: bwv 1080 on August 29, 2010, 11:01:15 AM

Quote from: Coopmv on August 29, 2010, 10:57:22 AM
That corn ethanol is a major pork IMO and has been used to round up votes from the farm-belt. It helped to drive up food prices since the farm animals consume corn-based feed. They need to find other sources such as algae or anything else that can produce ethanol without jacking up food prices.

Right, the point is government economic policies are co-opted by special interests. Environmental regulation, anti-trust action, tariffs protect uncompetitive businesses with good lobbyists, not the public good (which does not exist in most cases anyway)

http://en.wikipedia.org/wiki/Public_choice_theory (http://en.wikipedia.org/wiki/Public_choice_theory)

Title: Re: Meltdown
Post by: drogulus on August 29, 2010, 11:08:23 AM

Quote from: bwv 1080 on August 29, 2010, 10:52:57 AM
Not sure where you came up with this term "Plantationists", but the railroads & auto industry were built by private capital. We live in a developed country, so we have an infrastructure.

No, we don't live in a developed country. There are no such countries. We decided to develop it. We had natural advantages, to be sure, but deciding to develop them meant that Hamilton had to win an argument against Jefferson in favor of an industrial policy. We gave huge subsidies to the railroads to link up the country, huge subsidies to oil companies and rubber interests to build the auto industry, as well as creating an interstate highway system. Yes, private money was invested, but where it's invested matters. Where does private money invest in a country with no roads, bridges, or electricity? When will private industry create a miracle in countries where most of the people are illiterate? Will they build schools for everyone? When will this happen? Never is when it will happen. In a banana republic it's subversive to educate the peons.

Title: Re: Meltdown
Post by: bwv 1080 on August 29, 2010, 11:11:26 AM

Quote from: Coopmv on August 29, 2010, 10:53:27 AM
While all the points you have raised so far are true, you seem to totally ignore the trade imbalance issue. In my opinion, the loss of all those manufacturing jobs have had a severe impact on the middle class and also a bad multiplier effect on the overall US economy (i.e. when middle class cannot spend, many other jobs are impacted). American companies have been shipping many manufacturing jobs overseas and the trend is still continuing under this administration. How are new job creations going to help when we continue to lose existing jobs. All those talks of green jobs have been just talks. Without a resurgent middle class, there is no hope any of the issues that have been discussed so far can be addressed. A stronger middle class will bring in the additional tax revenues. The wealthiest 5% should pay higher taxes, but they alone cannot close that massive federal deficits.

100 years ago something like 90% of the population was employed in agriculture, now it is under 2%, where did all those agricultural jobs go? Why aren't we poorer because of it?

Before China, there was Japan, Taiwan and Hong Kong. The US lost its competitive advantage in manufacturing during the 1970s. It is not coming back, you can't just slap on a bunch of tariffs and hope that textile mills and television factories start sprouting up. You have a situation now where the wage differential between a US worker and an equally qualified Asian is 10-1 or more, you simply cannot compete on that and no government policy can fix it. The jobs created and lost this decade were overwhelmingly in construction and finance and are not coming back to any degree. The point is nobody knows how to fix this problem. There are no real public policy solutions other than to create an environment that supports entrepreneurship and exports. protectionist policies will destroy the only real potential source of wealth creation that I can see, which is providing goods and services to the growing economies of China, India, Brazil etc. The US still has competitive advantages in medical and information technology and if you look at the S&P 500, over 50% of the revenues are from outside the US with the majority of that growth coming from the developing world.

Title: Re: Meltdown
Post by: drogulus on August 29, 2010, 11:14:50 AM

Quote from: bwv 1080 on August 29, 2010, 11:01:15 AM
Right, the point is government economic policies are co-opted by special interests. Environmental regulation, anti-trust action, tariffs protect uncompetitive businesses with good lobbyists, not the public good (which does not exist in most cases anyway)

http://en.wikipedia.org/wiki/Public_choice_theory (http://en.wikipedia.org/wiki/Public_choice_theory)

To some extent, that's true. You have to do it anyway. Ethanol from corn is just the kind of inconsequential blip that allows the plantationists to say that government policies can't get it right. Meanwhile the subsidies for oil exploration continue, and perhaps they should as a bridge from the old to the new, but let's keep things in perspective, shall we? Doing nothing in a crisis is hardly better than mistakes made while doing the right thing.

Title: Re: Meltdown
Post by: bwv 1080 on August 29, 2010, 11:18:17 AM

Quote from: drogulus on August 29, 2010, 11:08:23 AM
No, we don't live in a developed country. There are no such countries. We decided to develop it. We had natural advantages, to be sure, but deciding to develop them meant that Hamilton had to win an argument against Jefferson in favor of an industrial policy. We gave huge subsidies to the railroads to link up the country, huge subsidies to oil companies and rubber interests to build the auto industry, as well as creating an interstate highway system. Yes, private money was invested, but where it's invested matters. Where does private money invest in a country with no roads, bridges, or electricity? When will private industry create a miracle in countries where most of the people are illiterate? Will they build schools for everyone? When will this happen? Never is when it will happen. In a banana republic it's subversive to educate the peons.

So then answer my earlier question, what are the obvious candidates for public investment that the private sector cannot compete?

No one is arguing against roads or public education, you seem to keep wanting to throw up strawmen here

Title: Re: Meltdown
Post by: Coopmv on August 29, 2010, 11:18:22 AM

Quote from: drogulus on August 29, 2010, 11:08:23 AM
Yes, private money was invested, but where it's invested matters. Where does private money invest in a country with no roads, bridges, or electricity? When will private industry create a miracle in countries where most of the people are illiterate? Will they build schools for everyone? When will this happen? Never is when it will happen. In a banana republic it's subversive to educate the peons.

While I have always favored small government, I am personally very much against for-profits educational institutions. The for-profits schools just want to please their investors and care little for their customers - the paying students.

Title: Re: Meltdown
Post by: Coopmv on August 29, 2010, 11:22:06 AM

Quote from: bwv 1080 on August 29, 2010, 11:18:17 AM
So then answer my earlier question, what are the obvious candidates for public investment that the private sector cannot compete?

No one is arguing against roads or public education, you seem to keep wanting to throw up strawmen here

What about those private contractors the Pentagon has hired to run various services in Iraq and Afghanistan other than doing the actual fighting? I have been reading all kinds of horror stories about those private contractors ...

Title: Re: Meltdown
Post by: bwv 1080 on August 29, 2010, 11:22:51 AM

Quote from: Coopmv on August 29, 2010, 11:18:22 AM
While I have always favored small government, I am personally very much against for-profits educational institutions. The for-profits schools just want to please their investors and care little for their customers - the paying students.

Its worse than that, they are taking advantage of the government student loan program to provide overpriced, worthless degrees to people who then default at a rate of about 66%.

People forget there is a third option - private non-profits - in this gov vs private industry debate.

Title: Re: Meltdown
Post by: bwv 1080 on August 29, 2010, 11:23:45 AM

Quote from: Coopmv on August 29, 2010, 11:22:06 AM
What about those private contractors the Pentagon has hired to run various services in Iraq and Afghanistan other than doing the actual fighting? I have been reading all kinds of horror stories about those private contractors ...

Yes, the Military / National Defense establishment is the worst example of this

Title: Re: Meltdown
Post by: Coopmv on August 29, 2010, 11:24:53 AM

Quote from: bwv 1080 on August 29, 2010, 11:22:51 AM
Its worse than that, they are taking advantage of the government student loan program to provide overpriced, worthless degrees to people who then default at a rate of about 66%.

People forget there is a third option - private non-profits - in this gov vs private industry debate.

It is time to shut down these for-profits schools since they do not serve any national interests.

Title: Re: Meltdown
Post by: drogulus on August 29, 2010, 11:27:33 AM

Quote from: Coopmv on August 29, 2010, 11:18:22 AM
While I have always favored small government, I am personally very much against for-profits educational institutions. The for-profits schools just want to please their investors and care little for their customers - the paying students.

The point is you have to step back and see the whole picture. How did the wealthy countries get that way when all of them are quasi-socialistic and have been that way for a century? Why isn't there one country, just one, that actually fulfills the conservative fantasy of free enterprise giving birth to itself owing nothing to nobody?

I have never and will never favor a size for government. That's a misdirection. It's the capability of government that matters. It needs to be big enough to do what it should do, which is provide for the improvements called for by changing conditions.

Title: Re: Meltdown
Post by: drogulus on August 29, 2010, 11:31:28 AM

Quote from: bwv 1080 on August 29, 2010, 11:23:45 AM
Yes, the Military / National Defense establishment is the worst example of this

That's what comes from shrinking the army while spending insane amounts of money on heavy weapons to keep those Soviet tanks from rolling across West Germany. (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)

Title: Re: Meltdown
Post by: bwv 1080 on August 29, 2010, 11:57:02 AM

Quote from: drogulus on August 29, 2010, 11:27:33 AM
The point is you have to step back and see the whole picture. How did the wealthy countries get that way when all of them are quasi-socialistic and have been that way for a century? Why isn't there one country, just one, that actually fulfills the conservative fantasy of free enterprise giving birth to itself owing nothing to nobody?

Perhaps because your characterization of classical liberalism is a strawman?

Title: Re: Meltdown
Post by: Coopmv on August 29, 2010, 12:09:38 PM

This was part of the $2T we borrowed to fight the war in Iraq ... >:( (http://finance.yahoo.com/news/AP-IMPACT-US-wasted-billions-apf-4048894300.html?x=0&sec=topStories&pos=main&asset=&ccode=)

Title: Re: Meltdown
Post by: Florestan on August 30, 2010, 01:15:19 AM

Quote from: drogulus on August 29, 2010, 11:27:33 AM
How did the wealthy countries get that way when all of them are quasi-socialistic and have been that way for a century?

Well, the bill for that century of ~~ignoring history, economy and common-sense~~ Socialism has just been issued. I pray and hope it wouldn't take another century to pay it. :D

Quote
Why isn't there one country, just one, that actually fulfills the conservative fantasy of free enterprise giving birth to itself owing nothing to nobody?

Why do you call it "conservative"? Does it look like something that Burke, Disraeli, Bismarck or Churchill would have suscribed to?

Quote
[Government] needs to be big enough to do what it should do, which is provide for the improvements called for by changing conditions.

Socialism in a nutshell. First, the government changes the conditions itself, then it provides for the improvements called for by the change --- improvements which of course are conceived and implemented by the government and which of course bring about new changes. A never-ending spiral.

Title: Re: Meltdown
Post by: drogulus on September 06, 2010, 11:51:17 AM

Quote from: Florestan on August 30, 2010, 01:15:19 AM

Why do you call it "conservative"? Does it look like something that Burke, Disraeli, Bismarck or Churchill would have suscribed to?

Bismarck practically invented the social safety net, and Churchill saw that it was good. Yes, I'm on the side of conservative and liberal statists against the fantasists who think paradise builds itself by pure free enterprise. This is a misunderstanding of Smith. Smith's invisible hand does not provide the engine of prosperity unless the overall system is designed with that end in mind: I'll build an airline if you build an airport and pay me to deliver the mail. You can't ignore the synergy of these webs. That's where the real action is.

Title: Re: Meltdown
Post by: Florestan on September 06, 2010, 12:33:58 PM

Quote from: drogulus on September 06, 2010, 11:51:17 AM
Bismarck practically invented the social safety net, and Churchill saw that it was good. Yes, I'm on the side of conservative and liberal statists against the fantasists who think paradise builds itself by pure free enterprise. This is a misunderstanding of Smith. Smith's invisible hand does not provide the engine of prosperity unless the overall system is designed with that end in mind: I'll build an airline if you build an airport and pay me to deliver the mail. You can't ignore the synergy of these webs. That's where the real action is.

Statism, liberal or conservative, is as wrong as it can gets. The State should assist and protect the "civil society" and should provide only those goods and services that society, i.e. people, are unable or unwilling to provide themselves. To think that an impersonal entity called "the State", or "the Government"', should take care of all the people in a country, from the craddle to the grave, taking away from them any responsibility for their own good and status, is the surest way to breed irresponsible citizens and ruin both society and State. Read Tocqueville. :D

I was, am and will always be opposed to doing people good against their will. Napoleon did that in Spain and Russia and failed miserably, because he was a rigid ideologue who thought that whatever fitted France would also fit Spain or Russia. After crushing defeats in both these countries, he judged Spanish or Russians unfit for civilization --- but he was dead wrong. There is no universal receipt for liberty and happiness, and I'm astonished to see that 200 years after, there are still reasonably intelligent people who think otherwise.

From my POV, liberty and happiness have nothing to do with airports and mail delivery and I will oppose any attempt to link them. People have had liberty and have been happy long before airplanes and mail services have been invented, let alone regulated by the State. One could easily argue that the things that make people happy are in no way related to, or depend of, State provided services. People are happy on their own and the State has got nothing to do with it, and I'm willing to take the bet that a Spanish / Italian / Romanian peasant in 1750 was freer and happier than an average Spanish / Italian / Romanian citizen in 2010. (I left out on purpose US because there were no US in 1750 :D )

Title: Re: Meltdown
Post by: Scarpia on September 06, 2010, 03:39:16 PM

Quote from: Florestan on September 06, 2010, 12:33:58 PM
Statism, liberal or conservative, is as wrong as it can gets. The State should assist and protect the "civil society" and should provide only those goods and services that society, i.e. people, are unable or unwilling to provide themselves. To think that an impersonal entity called "the State", or "the Government"', should take care of all the people in a country, from the craddle to the grave, taking away from them any responsibility for their own good and status, is the surest way to breed irresponsible citizens and ruin both society and State. Read Tocqueville. :D

Who do you think you are arguing with? The only leaders that I can think of who tried to create the sort of government you describe are Chairman Mao and Pol Pot, maybe Stalin, and I don't see much support for them on this board. There is a huge difference between such a state and one that maintains a social "safety net," runs a national pension plan, or manages a health care system for citizens.

Title: Re: Meltdown
Post by: drogulus on September 06, 2010, 03:45:35 PM

Quote from: Florestan on September 06, 2010, 12:33:58 PM
Statism, liberal or conservative, is as wrong as it can gets. The State should assist and protect the "civil society" and should provide only those goods and services that society, i.e. people, are unable or unwilling to provide themselves. To think that an impersonal entity called "the State", or "the Government"', should take care of all the people in a country, from the craddle to the grave, taking away from them any responsibility for their own good and status, is the surest way to breed irresponsible citizens and ruin both society and State. Read Tocqueville. :D

I was, am and will always be opposed to doing people good against their will. Napoleon did that in Spain and Russia and failed miserably, because he was a rigid ideologue who thought that whatever fitted France would also fit Spain or Russia. After crushing defeats in both these countries, he judged Spanish or Russians unfit for civilization --- but he was dead wrong. There is no universal receipt for liberty and happiness, and I'm astonished to see that 200 years after, there are still reasonably intelligent people who think otherwise.

From my POV, liberty and happiness have nothing to do with airports and mail delivery and I will oppose any attempt to link them. People have had liberty and have been happy long before airplanes and mail services have been invented, let alone regulated by the State. One could easily argue that the things that make people happy are in no way related to, or depend of, State provided services. People are happy on their own and the State has got nothing to do with it, and I'm willing to take the bet that a Spanish / Italian / Romanian peasant in 1750 was freer and happier than an average Spanish / Italian / Romanian citizen in 2010. (I left out on purpose US because there were no US in 1750 :D )

See, in order to get your model you have to go back 250 years. No wonder you can't explain how modern societies arrange to be free and prosperous. You won't even try. I'm not stuck in a fantasy of premodern happiness. It's not my business how happy people were before the Industrial Revolution because you can't get there from here, and I don't want to anyway. I want to improve this society.

I see a modern democratic state as the means that people use to take care of their wants, not something that stands in their way. And while I see that there's no universal recipe for liberty and happiness, there's also nothing to stop people from choosing from a recipe that works. But I have the biggest gripe with this part of what you say:

QuoteStatism, liberal or conservative, is as wrong as it can gets. The State should assist and protect the "civil society" and should provide only those goods and services that society, i.e. people, are unable or unwilling to provide themselves.

You could drive a monster truck through a loophole like that. It sounds like you're saying I'm wrong unless people want what I want, then I'm right. My gripe is....why are you giving up? (http://www.good-music-guide.com/community/Smileys/classic/grin.gif)

Oh, and check out this op-ed in the NYTimes from Paul "Crazy Eyes" Krugman:

(http://graphics8.nytimes.com/images/2006/04/02/opinion/ts-krugman-190.jpg)

1938 in 2010

Here's the situation: The U.S. economy has been crippled by a financial crisis. The president's policies have limited the damage, but they were too cautious, and unemployment remains disastrously high. More action is clearly needed. Yet the public has soured on government activism, and seems poised to deal Democrats a severe defeat in the midterm elections.

The president in question is Franklin Delano Roosevelt; the year is 1938. Within a few years, of course, the Great Depression was over. But it's both instructive and discouraging to look at the state of America circa 1938 — instructive because the nature of the recovery that followed refutes the arguments dominating today's public debate, discouraging because it's hard to see anything like the miracle of the 1940s happening again.

Now, we weren't supposed to find ourselves replaying the late 1930s. President Obama's economists promised not to repeat the mistakes of 1937, when F.D.R. pulled back fiscal stimulus too soon. But by making his program too small and too short-lived, Mr. Obama did just that: the stimulus raised growth while it lasted, but it made only a small dent in unemployment — and now it's fading out.

And just as some of us feared, the inadequacy of the administration's initial economic plan has landed it — and the nation — in a political trap. More stimulus is desperately needed, but in the public's eyes the failure of the initial program to deliver a convincing recovery has discredited government action to create jobs.

In short, welcome to 1938.

Read the rest here. (http://www.nytimes.com/2010/09/06/opinion/06krugman.html?ref=opinion)

Title: Re: Meltdown
Post by: Coopmv on September 06, 2010, 03:57:53 PM

Quote from: drogulus on September 06, 2010, 03:45:35 PM

And just as some of us feared, the inadequacy of the administration's initial economic plan has landed it — and the nation — in a political trap. More stimulus is desperately needed, but in the public's eyes the failure of the initial program to deliver a convincing recovery has discredited government action to create jobs.

In short, welcome to 1938.[/i]

Read the rest here. (http://www.nytimes.com/2010/09/06/opinion/06krugman.html?ref=opinion)

Most of the money from the first stimulus program went to stimulate the Chinese economy. Why do we need another transfer payment unless we can be assured that 90% or more of the stimulus money will be spent in the US?

Title: Re: Meltdown
Post by: Florestan on September 07, 2010, 12:28:32 AM

Quote from: drogulus on September 06, 2010, 03:45:35 PM
I want to improve this society.

A commendable intention. May I ask what do you do for that?

QuoteYou could drive a monster truck through a loophole like that. It sounds like you're saying I'm wrong unless people want what I want, then I'm right. My gripe is....why are you giving up?

Could you please use plain English and explain me what you mean?

Quote from: Scarpia on September 06, 2010, 03:39:16 PM
Who do you think you are arguing with?

I'm arguing with the statism that Drogulus advocates.

Title: Re: Meltdown
Post by: Coopmv on September 07, 2010, 04:26:40 PM

Quote from: Florestan on September 07, 2010, 12:28:32 AM

I'm arguing with the statism that Drogulus advocates.

I have no use for career politicians ...

Title: Re: Meltdown
Post by: Florestan on September 08, 2010, 04:28:12 AM

Quote from: Coopmv on September 07, 2010, 04:26:40 PM
I have no use for career politicians ...

Ernie is a career politician? :o

Title: Re: Meltdown
Post by: snyprrr on September 28, 2010, 06:30:07 AM

only 125 banks belly up this year! :D

Title: Re: Meltdown
Post by: Daverz on September 28, 2010, 11:07:24 AM

Quote from: Florestan on September 06, 2010, 12:33:58 PM
I'm willing to take the bet that a Spanish / Italian / Romanian peasant in 1750 was freer and happier than an average Spanish / Italian / Romanian citizen in 2010.

You must be operating with a really bizarre definition of "free".

Title: Re: Meltdown
Post by: bwv 1080 on September 29, 2010, 10:07:26 AM

Quote from: Daverz on September 28, 2010, 11:07:24 AM
You must be operating with a really bizarre definition of "free".

funny that those are three countries that still had serfdom in the 18th century

Title: Re: Meltdown
Post by: Florestan on October 04, 2010, 05:21:53 AM

Quote from: bwv 1080 on September 29, 2010, 10:07:26 AM
funny that those are three countries that still had serfdom in the 18th century

In 1750 only Spain was a country. Italy and Romania had to wait for more than a century to make their way on the map.

Nevertheless, serfdom in Wallachia was abolished in 1746; in Moldavia in 1749; and in Transylvania in 1781. The Thirteen Colonies of that time had to wait for more than a 100 years and a bloody cvil war to abolish a thing far more cruel than serfdom.

Just to put things in perspective...

Title: Re: Meltdown
Post by: Daverz on October 04, 2010, 07:18:12 AM

Quote from: Florestan on October 04, 2010, 05:21:53 AM
In 1750 only Spain was a country. Italy and Romania had to wait for more than a century to make their way on the map.

Nevertheless, serfdom in Wallachia was abolished in 1746; in Moldavia in 1749; and in Transylvania in 1781. The Thirteen Colonies of that time had to wait for more than a 100 years and a bloody cvil war to abolish a thing far more cruel than serfdom.

Just to put things in perspective...

Why not admit you made a very silly statement?

Title: Re: Meltdown
Post by: Scarpia on October 04, 2010, 07:19:09 AM

Quote from: Daverz on October 04, 2010, 07:18:12 AM
Why not admit you made a very silly statement?

It's a slippery slope.

Title: Re: Meltdown
Post by: Florestan on October 04, 2010, 09:11:44 AM

Quote from: Daverz on October 04, 2010, 07:18:12 AM
Why not admit you made a very silly statement?

I made no statement. I suggested a bet. Would you take it?

Title: Re: Meltdown
Post by: Daverz on October 04, 2010, 10:50:18 AM

Quote from: Florestan on October 04, 2010, 09:11:44 AM
I made no statement. I suggested a bet. Would you take it?

How can one make a "bet" on well known historical facts?! As I suggested, you'd have to have some bizarre definition of "free" for that bet to work out in your favor. Perhaps you also have a bizarre definition of citizen, not including women, Roma, Jews, Muslims, etc. Roma slavery, for example, was not abolished until the mid ~~18th~~ 19th Century. The walls of the Jewish Ghetto of Rome came down in 1870.

Title: Re: Meltdown
Post by: Coopmv on October 16, 2010, 01:19:41 PM

QE2 has been unveiled by the fed to avoid Meltdown II. But whose meltdown? :o

Title: Re: Meltdown
Post by: Florestan on October 16, 2010, 01:22:42 PM

Quote from: Daverz on October 04, 2010, 10:50:18 AM
How can one make a "bet" on well known historical facts?! As I suggested, you'd have to have some bizarre definition of "free" for that bet to work out in your favor. Perhaps you also have a bizarre definition of citizen, not including women, Roma, Jews, Muslims, etc. Roma slavery, for example, was not abolished until the mid ~~18th~~ 19th Century. The walls of the Jewish Ghetto of Rome came down in 1870.

I made no mention about "citizen", I wrote "peasant". Could you please explain me in what way the Jewish Ghetto of Rome stood in the way of a Calabrese peasant's notion and experience of freedom in 1800?

Title: Re: Meltdown
Post by: drogulus on October 17, 2010, 10:31:01 AM

I'm not arguing for more socialism, or less socialism, or even socialism. I'm arguing for a continuation of what we are doing now, only doing it better, so for example when a stimulus is proposed and it's pointed out that it's too small, I'm in favor of increasing its size, not because I want more government, but because I want the right amount whatever the circumstances indicate that happens to be. I take the position that the escalation of practical discussions of means into abstract arguments about the size of government relitigates a settled issue.

Let the academicians reexamine whether the Chad model of government disinvestment is appropriate for an industrial democracy of the size and sophistication of the U.S. I'm sure they will come to very interesting conclusions. Meanwhile we should find out what's good to invest in and do it. Actually we know a good deal about what that is, and though there are practical questions about the allocation of resources they don't amount to questions about whether we need government. There's no going back. If the Tea Party President gets in, he/she/it won't change things any more than Reagan did, that is a tiny course correction here or there. The size of government has remained stable for more than half a century, up a little then down a little. The supposedly big argument about government is just an inflated tussle of interests, worthwhile on its own but not a matter of high principle.

Title: Re: Meltdown
Post by: Coopmv on October 17, 2010, 10:38:44 AM

Quote from: drogulus on October 17, 2010, 10:31:01 AM
If the Tea Party President gets in, he/she/it won't change things any more than Reagan did, that is a tiny course correction here or there. The size of government has remained stable for more than half a century, up a little then down a little. The supposedly big argument about government is just an inflated tussle of interests, worthwhile on its own but not a matter of high principle.

But what exactly is a Tea Party President? Isn't he just another Republican who is more conservative than the average Republican who in recent years has agreed more with the Democrats in terms of big government spending?

Title: Re: Meltdown
Post by: drogulus on October 17, 2010, 11:11:19 AM

Quote from: Coopmv on October 17, 2010, 10:38:44 AM
But what exactly is a Tea Party President? Isn't he just another Republican who is more conservative than the average Republican who in recent years has agreed more with the Democrats in terms of big government spending?

There are Tea Party members who are convinced they are bringing about a radical change in government. They are being used by the professionals, poor things. See, I'm trying to be sympathetic! (http://www.good-music-guide.com/community/Smileys/classic/grin.gif)

Title: Re: Meltdown
Post by: Coopmv on October 17, 2010, 11:39:01 AM

Quote from: drogulus on October 17, 2010, 11:11:19 AM
There are Tea Party members who are convinced they are bringing about a radical change in government. They are being used by the professionals, poor things. See, I'm trying to be sympathetic! (http://www.good-music-guide.com/community/Smileys/classic/grin.gif)

As long as they are being used by the common folks who want the country to go in a better direction and not used by the big corporations and trial lawyers, I am all for it ...

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on October 25, 2010, 03:02:16 AM

Douglas Coupland (author of the iconic 90s novel Generation X) offers a pessimist's guide to the future. An excerpt:

"6) The middle class is over. It's not coming back

Remember travel agents? Remember how they just kind of vanished one day?

That's where all the other jobs that once made us middle-class are going – to that same, magical, class-killing, job-sucking wormhole into which travel-agency jobs vanished, never to return. However, this won't stop people from self-identifying as middle-class, and as the years pass we'll be entering a replay of the antebellum South, when people defined themselves by the social status of their ancestors three generations back. Enjoy the new monoclass!"

http://www.theglobeandmail.com/news/national/a-radical-pessimists-guide-to-the-next-10-years/article1750609/singlepage/

Title: Re: Meltdown
Post by: Coopmv on October 26, 2010, 06:21:35 PM

Quote from: Velimir on October 25, 2010, 03:02:16 AM
Douglas Coupland (author of the iconic 90s novel Generation X) offers a pessimist's guide to the future. An excerpt:

"6) The middle class is over. It's not coming back

Remember travel agents? Remember how they just kind of vanished one day?

That's where all the other jobs that once made us middle-class are going – to that same, magical, class-killing, job-sucking wormhole into which travel-agency jobs vanished, never to return. However, this won't stop people from self-identifying as middle-class, and as the years pass we'll be entering a replay of the antebellum South, when people defined themselves by the social status of their ancestors three generations back. Enjoy the new monoclass!"

http://www.theglobeandmail.com/news/national/a-radical-pessimists-guide-to-the-next-10-years/article1750609/singlepage/

He probably referred to the middle class of the western industrialized nations, the US in particular. While the middle class may be submerging in the western world, the new middle class is emerging in China, Brazil, India and Russia, aka the BRIC countries. That massive transfer of wealth has been going on for the past 15 years ...

Title: Re: Meltdown
Post by: snyprrr on November 19, 2010, 05:52:07 PM

Can I have a Pat Down with a side order of Quantitative Easing?

Title: Re: Meltdown
Post by: Coopmv on November 19, 2010, 06:10:37 PM

A cruise on the QE2 can be a dream come true for many ... ;D

Title: Re: Meltdown
Post by: snyprrr on December 12, 2010, 09:47:59 PM

How bout them pics of Obama walking away from the Bill at the podium for some Obama Presidency MELTDOWN?!?! :o wow!,... see ya later, buddy ::)

Also, what's up with all these fakey, FBI "Stings" of retar,...I mean "terrorists"??? And Walmart teaming up with DHS????, hahahahahaha!!!!!

And the Indian diplomat getting Ye Olde Pat Down????? :o

Has sh...stuff gone wacky in the last few weeks???

Just look for a "failed" something or other come around the holidays,... oy this is predictable. ::)

NUKES IN MY JOCK!

No, seriously! 8) :-*

Title: Re: Meltdown
Post by: Coopmv on January 01, 2011, 10:47:10 AM

So DM is now BachQ? We have not heard from him in a long time ...

EU will probably have to bail out Spain this year or the Euro will collapse ...

Title: Re: Meltdown
Post by: SonicMan46 on January 01, 2011, 02:26:46 PM

Quote from: Coopmv on January 01, 2011, 10:47:10 AM
So DM is now BachQ? We have not heard from him in a long time ...

EU will probably have to bail out Spain this year or the Euro will collapse ...

Stuart - well, can we expect some better prices from JPC & other Euro retailers? ;) ;D Dave

Title: Re: Meltdown
Post by: Coopmv on January 01, 2011, 03:34:11 PM

Quote from: SonicMan on January 01, 2011, 02:26:46 PM
Stuart - well, can we expect some better prices from JPC & other Euro retailers? ;) ;D Dave

The weak Euro probably will have little effect on those steep shipping costs from Germany. I only buy from MDT or Presto Classical anyway.

Title: Re: Meltdown
Post by: snyprrr on January 02, 2011, 07:03:56 PM

Quote from: Coopmv on January 01, 2011, 03:34:11 PM
those steep shipping costs from Germany

c'mon, it's only @$16 per cd.

And,... I'm paying with Fairy Easing Dust.

2011: $4 gallon gas

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on January 03, 2011, 02:26:48 AM

Welcome to another crappy year for America's middle class:

http://endoftheamericandream.com/archives/30-reasons-why-2011-is-going-to-be-another-crappy-year-for-americas-middle-class

Title: Re: Meltdown
Post by: Sergeant Rock on January 03, 2011, 03:33:56 AM

Quote from: snyprrr on January 02, 2011, 07:03:56 PM
2011: $4 gallon gas

Only $4? Count your blessings. I live in Gemany. I paid the equivalent of $8 a gallon yesterday.

Sarge

Title: Re: Meltdown
Post by: Archaic Torso of Apollo on January 03, 2011, 04:15:10 AM

Quote from: Sergeant Rock on January 03, 2011, 03:33:56 AM
I live in Gemany. I paid the equivalent of $8 a gallon yesterday.

The great thing about Europe is that there are many places where you don't need a car. Americans, outside of a handful of big cities, are slaves to their cars.

This year I am celebrating 10 years being Autofrei!

Title: Re: Meltdown
Post by: snyprrr on January 03, 2011, 07:49:24 AM

Quote from: Sergeant Rock on January 03, 2011, 03:33:56 AM
Only $4? Count your blessings. I live in Gemany. I paid the equivalent of $8 a gallon yesterday.

Sarge

Soylent Green is people!!! :o

Title: Re: Meltdown
Post by: Coopmv on January 03, 2011, 06:24:13 PM

Quote from: Sergeant Rock on January 03, 2011, 03:33:56 AM
Only $4? Count your blessings. I live in Gemany. I paid the equivalent of $8 a gallon yesterday.

Sarge

I have been loading up on energy stocks the last two years in anticipation of those $6/gal gas. All-electrical cars are years away from mass-market reality and is a pipe-dream IMO for probably at least the next 10 years. I have no use for a car that requires a few hours of recharge after only 100 miles ...

Title: Re: Meltdown
Post by: snyprrr on January 03, 2011, 07:17:20 PM

Quote from: Coopmv on January 03, 2011, 06:24:13 PM
I have been loading up on energy stocks the last two years in anticipation of those $6/gal gas. All-electrical cars are years away from mass-market reality and is a pipe-dream IMO for probably at least the next 10 years. I have no use for a car that requires a few hours of recharge after only 100 miles ...

They will be driven by the serfs.

Title: Re: Meltdown
Post by: Coopmv on January 03, 2011, 07:22:52 PM

Quote from: snyprrr on January 03, 2011, 07:17:20 PM
They will be driven by the serfs.

In reality, no cities or towns on the face of the earth have the necessary power grids/infrastructure in place that can handle the simultaneous recharging of hundred of electric cars ...

Title: Re: Meltdown
Post by: snyprrr on February 08, 2011, 06:29:49 PM

Hey! Prices for big screen TVs will be cheaper in 2011!

Hey! Prices for electronic bullshit will be cheaper in 2011!

Hey! Prices for things like food and shelter will... be...

Title: Re: Meltdown
Post by: Coopmv on February 08, 2011, 06:37:59 PM

Quote from: snyprrr on February 08, 2011, 06:29:49 PM
Hey! Prices for big screen TVs will be cheaper in 2011!

Hey! Prices for electronic bullshit will be cheaper in 2011!

Hey! Prices for things like food and shelter will... be...

That is life. People have to eat and need shelter. Big screen TV is not a necessity in life. I have no plan to go for a flat screen TV until I have to - converter box is no longer available or becomes too pricey ...

Title: Re: Meltdown
Post by: snyprrr on February 08, 2011, 06:57:49 PM

Quote from: Coopmv on February 08, 2011, 06:37:59 PM
That is life. People have to eat and need shelter. Big screen TV is not a necessity in life. I have no plan to go for a flat screen TV until I have to - converter box is no longer available or becomes too pricey ...

??? you mean,... by law??? ;D

Title: Re: Meltdown
Post by: Coopmv on February 09, 2011, 04:53:10 PM

Quote from: snyprrr on February 08, 2011, 06:57:49 PM
??? you mean,... by law??? ;D

Ths US law mandated 100% digital broadcast signals for TV as of last February but converter boxes are available so people can continue enjoying their old analog TV's ...

Title: Re: Meltdown
Post by: Florestan on February 10, 2011, 12:15:48 AM

Quote from: Coopmv on February 09, 2011, 04:53:10 PM
Ths US law mandated 100% digital broadcast signals for TV as of last February

The reason being... ? ???

Title: Re: Meltdown
Post by: Lethevich on February 10, 2011, 01:02:22 AM

Quote from: Florestan on February 10, 2011, 12:15:48 AM
The reason being... ? ???

From what I have gathered:

1. Digital is cheaper and more flexible to broadcast
2. Corrupt politicians are lobbied by electronics firms, because it means that many must replace their television sets

In the UK analogue is gradually being phased out over the coming years, one region at a time.

Title: Re: Meltdown
Post by: mc ukrneal on February 10, 2011, 01:19:31 AM

Quote from: Florestan on February 10, 2011, 12:15:48 AM
The reason being... ? ???

The short answer is that it freed up bandwidth/spectrum. Here is more information about that if you are interested: http://www.dtv.gov/consumercorner.html (http://www.dtv.gov/consumercorner.html)

Title: Re: Meltdown
Post by: Coopmv on February 10, 2011, 04:38:32 PM

Quote from: Florestan on February 10, 2011, 12:15:48 AM
The reason being... ? ???

Not sure. Perhaps it wanted US companies to cash in on the new digital broadcast technologies. But lo and behold, there are no US companies left to make TV's or broadcasting equipments ...

Title: Re: Meltdown
Post by: drogulus on February 10, 2011, 09:18:22 PM

Analog is old tech. It's being "disappeared" in an orderly manner. All the old TVs will continue to work with cable, satellite or cheap converter boxes for OTA. Rat Shack has the box for ~$60. So, it macht nichts.

Title: Re: Meltdown
Post by: Florestan on February 11, 2011, 12:45:18 AM

Quote from: drogulus on February 10, 2011, 09:18:22 PM
Analog is old tech. It's being "disappeared" in an orderly manner. All the old TVs will continue to work with cable, satellite or cheap converter boxes for OTA. Rat Shack has the box for ~$60. So, it macht nichts.

Nichts... except that a government dictates which technology is old and which is new, which TV sets are ok and which are not, punishing pecuniarily those who can't / won't bend to this "relentless cult of progress". ;D

Title: Re: Meltdown
Post by: Szykneij on February 11, 2011, 02:01:18 AM

Quote from: drogulus on February 10, 2011, 09:18:22 PM
Analog is old tech. It's being "disappeared" in an orderly manner. All the old TVs will continue to work with cable, satellite or cheap converter boxes for OTA. Rat Shack has the box for ~$60. So, it macht nichts.

In the case of television broadcasts, analog was better. The range of analog transmissions was much greater, so more over-the-air stations were available. And with digital, any type of interference either freezes or makes the signal disappear altogether. With analog, you could still watch a broadcast with a little snow or double image if the reception wasn't perfect.

Title: Re: Meltdown
Post by: Coopmv on February 11, 2011, 07:46:29 PM

Quote from: Florestan on February 11, 2011, 12:45:18 AM
Nichts... except that a government dictates which technology is old and which is new, which TV sets are ok and which are not, punishing pecuniarily those who can't / won't bend to this "relentless cult of progress". ;D

And I refuse to give these government bureaucrats the satisfaction by fully embracing the digital broadcast technology ... ;D

Title: Re: Meltdown
Post by: drogulus on February 12, 2011, 07:40:58 AM

Quote from: Florestan on February 11, 2011, 12:45:18 AM
Nichts... except that a government dictates which technology is old and which is new, which TV sets are ok and which are not, punishing pecuniarily those who can't / won't bend to this "relentless cult of progress". ;D

Government didn't cause the transition, it created the rules by which it was done in a non-chaotic manner so people wouldn't be left out (and to reapportion goods, like the broadcast spectrum). It's like "free markets", an invention of government to provide for efficient and relatively fair competition. Government sees a change and helps it happen better than it would in a state of nature. Conservatives always imagine that markets work on their own, but you will never see this in weak states. Markets grind into stasis as they are quickly captured by the strongest players, who then capture the state itself. It takes a strong liberal state to make conservative economics work. Conservative economics, as I see it, is a lobotomized version of liberal economics. (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)

There are things you have to try really hard not to understand, things like how we got where we are. After more than 2 centuries of state and private cooperation on huge projects that created the greatest economy in the world, conservatives still babble on about the evils of government. The Republican Party has become the home of amnesiac economics.* They've forgotten that Abraham Lincoln created a continental empire and fought a civil war at the same time.

Progress isn't a cult, it's a process that grinds to something close to a halt if it isn't eased along. Conservatives fear it so much that they don't notice that it can't be reversed the way they want. It just gets uglier and dirtier as the problems pile up.

In the Meltdown thread people on both the right and left say the world is coming to an end because of an accumulation of irreparable errors, both forced and unforced. Meltup types like me might reply that the world is always coming to an end (easy to see from"no privileged position"). Why not make the best of it and bring on the new?

(http://www.thewashingtonnote.com/twn_up_fls/alexander%20hamilton.jpg)

Alexander Hamilton is the author of the point of view I express here. Without his influence this country might well have been the poor agrarian paradise of Jefferson and the plantation owners. They wanted land to be more important than money and manufacture (because they had land in abundance. Money and manufacture made them poorer while the country got richer). It took the Civil War to decide once and for all that the future would belong to capitalism, science and industry.

_{* Liberals are also amnesiacs, though they aren't intellectually opposed to broad understandings. They see the alliance of government and big business as bad because business corrupts government, while conservatives see the alliance as bad because.....government corrupts business! I see the alliance as inevitable and potentially fruitful, one that must be regulated to give us what it can deliver.}

Title: Re: Meltdown
Post by: drogulus on February 12, 2011, 07:56:14 AM

Quote from: Szykniej on February 11, 2011, 02:01:18 AM
In the case of television broadcasts, analog was better. The range of analog transmissions was much greater, so more over-the-air stations were available. And with digital, any type of interference either freezes or makes the signal disappear altogether. With analog, you could still watch a broadcast with a little snow or double image if the reception wasn't perfect.

Yes, better in that way, T. Last night I switched from cable to rabbit ears to see what I could get on my little Samsung bedroom TV. The strong stations looked fantastic (you know, 2-4-7-25-38), waay better than the HD cable box. The weaker stations just froze into a blocky mess. Digital is a change with mixed results. I have to change with it to get the best result for me.

If I want to be a granny with no cable and a 25 year old CRT I can get the converter and watch all the digital stations that come in strongly, or get a basic cable package that will give me a much better range of options. In fact, I'm a quasi-granny with a fake old-fashioned CRT with an ATSC tuner connected to HD cable, while I have full HD digital in the other room. If you want to move slowly you can do option 1 with an old TV and a digital converter. You hook up basic cable for a few bucks a month and an antenna if you want to fool with that, too. Or use the antenna and switch to basic cable when you've had enough.

Title: Re: Meltdown
Post by: snyprrr on June 03, 2011, 08:51:39 AM

So, how long before the bottom falls out? I think I hear creaking.

Title: Re: Meltdown
Post by: Coopmv on June 03, 2011, 09:02:06 AM

Quote from: snyprrr on June 03, 2011, 08:51:39 AM
So, how long before the bottom falls out? I think I hear creaking.

Who knows?

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 09:07:19 AM

Quote from: snyprrr on June 03, 2011, 08:51:39 AMSo, how long before the bottom falls out? I think I hear creaking.

Before the bottom falls out from below what?

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 10:20:08 AM

Well, the point is people keep wondering when the recession will end, but there is no recession. This is the new economy. I suspect that US has entered a period of long-term economic decline and the only question is whether it will be smooth or bumpy.

Title: Re: Meltdown
Post by: Coopmv on June 03, 2011, 10:31:28 AM

It does not require the mind of a rocket scientist to realize the US is in a long-term irreversible decline. When our kids cannot even rank in the top twenty in math and science on a wordwide basis, the US faces an extremely bleak future.

Title: Re: Meltdown
Post by: Coopmv on June 03, 2011, 10:40:51 AM

Quote from: Leon on June 03, 2011, 10:33:07 AM
Aside from death, nothing is irreversible, least of all an economy.

Hundreds of billions dollars have been spent over the last 30 years in an attempt to arrest the decline in science and math in the US with little to show. Go check out the math and physical science departments at most graduate schools and you will realize the majority of their PhD candidates are foreign students from Asia.

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 10:51:38 AM

Quote from: Coopmv on June 03, 2011, 10:40:51 AM
Hundreds of billions dollars have been spent over the last 30 years in an attempt to arrest the decline in science and math in the US with little to show. Go check out the math and physical science departments at most graduate schools and you will realize the majority of their PhD candidates are foreign students from Asia.

I'd like to know where that figure of hundreds of billions of dollars comes from.

The US University system is still strong, however you are right that it is increasingly difficult to find qualified students from the US. The alarming thing is that it used to be that funding of science research in the US was so far ahead of the rest of the world that those foreign students all stayed here and contributed to the US economy. Now they are increasingly finding the environment here unattractive and are returning to their native countries with PhD's from the US. Much has been made of the projection that the economy of China will be larger than that of the US soon. Less widely known, but perhaps more significant, China is also projected to surpass the US in the number of papers published in western scientific journals within a decade or two.

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 11:02:15 AM

Quote from: Leon on June 03, 2011, 10:54:28 AM
The fact that they come here for their education, and most will stay here to work, undermines your overly negative prognosis. For sure, the US economy does have weaknesses, it's just that I don't find that a reason to diagnose the US with a terminal disease.

I said "used to" stay here. Some stay, obviously, but my perception is that a larger fraction do not chose to stay than in the past.

I do not think the decline is irreversible. It is due to the rest of the world catching up, and to the US making bad decisions. The US has cut it's tax rate to the lowest fraction of GDP since 1950, and an increasing fraction is going to supporting retired people, rather than investing in young, productive people. The US government simply does not have the money to invest in human and physical resources. Aside from that, I think the biggest problem is the attitude of young people, who think prosperity is a birth right and that college is mainly a social center. Soon they will confront reality.

Title: Re: Meltdown
Post by: Coopmv on June 03, 2011, 11:05:21 AM

Quote from: Leon on June 03, 2011, 10:54:28 AM
The fact that they come here for their education, and most will stay here to work, undermines your overly negative prognosis. For sure, the US economy does have weaknesses, it's just that I don't find that a reason to diagnose the US with a terminal disease.

You still do not get it. Years ago, when the US was the envy of the world when it came to math and science, the lion share of science and math PhD candidates at most US graduate schools were American. The US dominance in Nobel Prize is probably in its last leg as well.

Title: Re: Meltdown
Post by: Lethevich on June 03, 2011, 11:09:33 AM

Quote from: Il Barone Scarpia on June 03, 2011, 11:02:15 AM
Aside from that, I think the biggest problem is the attitude of young people, who think prosperity is a birth right and that college is mainly a social center. Soon they will confront reality.

Shouldn't that be less of a problem in the US than Europe, as there is less state help for people who don't work super hard (and indeed, similarly less for even those who do)?

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 11:13:10 AM

Quote from: Il Barone Scarpia on June 03, 2011, 10:20:08 AMWell, the point is people keep wondering when the recession will end, but there is no recession. This is the new economy. I suspect that US has entered a period of long-term economic decline and the only question is whether it will be smooth or bumpy.

Quote from: Coopmv on June 03, 2011, 10:31:28 AMIt does not require the mind of a rocket scientist to realize the US is in a long-term irreversible decline. When our kids cannot even rank in the top twenty in math and science on a wordwide basis, the US faces an extremely bleak future.

What pessimism! This isn't new. Exactly the same sentiments have been stated before – remember the jobless recoveries from the 1991 and 2001 recessions? In the early 90s, economists great and small lamented that the new "natural" rate of unemployment would have to be readjusted from 6% to 7%, and perhaps even 8%! Then it proceeded to drop to 4%. Just as people who claim that new, limitless expansions are the new norm, people make similar claims during recessions. This is the new normal. The new economy. Etc, etc, etc. This time it's different. Except it's not.

The US is in relative economic decline, and has been since its absolute peak in 1946. China and India are indeed reemerging as great powers, though both have a long way to go before they reach their potential – if they ever quite get there. (Both countries face formidable issues, with China also facing a demographic squeeze of its own making.) Assuming that the US gets its mid-term and long-term fiscal house in order*, long-term projections of economic growth put the US as the third largest economy in the latter part of the century and into the next century, behind the two Asian giants. The EU by comparison shrivels substantially. If memory serves, Brazil is projected to be roughly as large as the EU. Yes, long-term projections are not exactly accurate, though they can be startlingly close. Schumpeter's post-war Capitalism, Socialism, and Democracy had some surprisingly accurate forecasts for 30-40 years out, and when they erred on growth, they erred on the low side. While no one can tell the future, some trends are clear, and the doomsayers are wrong.

And I suppose one must also wonder what exactly constitutes decline. If the average material welfare of Americans improves, is it really important for the US to have unipolar political and military power, which it never really had anyway? Does the future really have to adhere to nationalism and other ideas carrying over from the 17th Century?

I rather like this quote from Thomas Macauley, from almost two centuries ago:

On what principle is it that, when we see nothing but improvement behind us, we are to expect nothing but deterioration before us.

It seems to be just as valid today.

* And the US will get its house in order, if for no other reason than it has to. This is not the first fiscal crisis the US has faced, it is not the last, and past political strife has been worse than now.

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 11:14:12 AM

Quote from: Leon on June 03, 2011, 11:06:37 AM
My post was not in response to yours but to the same one you responded to, and we agree more than we disagree - but this is not something that keeps me awake at night.

It keeps me awake at night.

Given that our young people in the US perform much more poorly than those in Urban China, India, etc, what basis does the US have for assuming it is a high-wage country and China and India are low-wage countries? Why should the iPad be designed in the US and assembled in China if people there are smarter than here? The natural order of things is the reverse, future technical advances will be discovered, developed and designed in China, India, Korea and made in American sweat shops, to be sent to be used by consumers in Asia. We just have to pray that they don't manage to get protection of intellectual property working in the "undeveloped" countries.

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 11:28:54 AM

Quote from: Leon on June 03, 2011, 11:24:23 AM
I would not judge this generation of young people so harshly. After all, some of the biggest companies were created by young people, in the US, and have become worth billions (Microsoft, Google, Facebook, etc.) - and the young people who created Google and Microsoft, did not even have college degrees.

There will always be both energetic and enterprising as well as slacker young people - in every generation - and sometimes the slackers end up being very productive later in life.

Google was started by Stanford University PhD students. Bill Gates dropped out of Harvard, not because he was a slacker, but because he was so driven to make Microsoft a success he had no time to finish his degree. Microsoft, Apple, Facebook may be driven by lunatic founders, but they are staffed by legions of extremely well trained engineers who actually make the stuff work. What will happen when the US startups founder because they can't find competent engineers, but Shanghai and Mumbai startups have brilliant engineers packed to the rafters?

Title: Re: Meltdown
Post by: Coopmv on June 03, 2011, 11:37:29 AM

Quote from: Leon on June 03, 2011, 11:24:23 AM
I would not judge this generation of young people so harshly. After all, some of the biggest companies were created by young people, in the US, and have become worth billions (Microsoft, Google, Facebook, etc.) - and the young people who created Google and Microsoft, did not even have college degrees.

There will always be both energetic and enterprising as well as slacker young people - in every generation - and sometimes the slackers end up being very productive later in life.

The two cofounders of Google actually met in Stanford graduate school, though I am not sure if they actually finished their masters. At any rate, both clearly finished college or they would not be in grad school.

Will history like Microsoft repeat, i.e. Bill Gates founded a company that set the pace for an industry? Given the general lack of drive and good work ethics of the younger generation that continue to think having a good life is a birth right, I am not optimistic ...

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 11:37:51 AM

Quote from: Il Barone Scarpia on June 03, 2011, 11:28:54 AMbut Shanghai and Mumbai startups have brilliant engineers packed to the rafters?

There may be more to the stats than meets the eyes. (http://www.businessweek.com/smallbiz/content/dec2005/sb20051212_623922.htm) Though I suppose it is a few years old and things have changed dramatically since then. And I mean it's BusinessWeek.

The "shortage" of engineers, if that's what it is, would really only be a problem if labor flows didn't change to meet demand. Of course, the US visa policy is not exactly in the best shape, and it needs to be revised.

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 11:44:11 AM

Quote from: Coopmv on June 03, 2011, 11:37:29 AMGiven the general lack of drive and good work ethics of the younger generation that continue to think having a good life is a birth right, I am not optimistic ...

Do you have empirical evidence to back up this statement? If not, it reads like a variation of "In my day . . ."

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 11:53:02 AM

Quote from: Todd on June 03, 2011, 11:44:11 AM

Do you have empirical evidence to back up this statement? If not, it reads like a variation of "In my day . . ."

Time college students spend studying has dropped by almost 50% between 1960 and 1993 (as reported by the American enterprise institute).

http://www.econ.ucsb.edu/~babcock/LeisureCollege_4.pdf

I know someone who has taught introductory physics at the same major US university for 20 years or so. He says that teaching the same material with essentially the same textbook and giving an identical final exam the average score is 15% lower than it was when he started (i.e., mean is 65% instead of 80%). There are still some brilliant students out there, but most sit in lecture slumped in their chair watching youtube videos during their lectures.

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 11:58:47 AM

Quote from: Il Barone Scarpia on June 03, 2011, 10:51:38 AMThe alarming thing is that it used to be that funding of science research in the US was so far ahead of the rest of the world that those foreign students all stayed here and contributed to the US economy.

Your assertion seems rooted in something other than empirical reality. According the National Science Foundation, R&D as a percent of GDP rose 1981 and 2007 in constant dollars. Sure, the OECD rate of growth was higher, but so what? The allocation has changed to be funded more by corporations than the government, which is as it should be, but the money is being spent. Maybe the gains have all been reversed since 2007, though I doubt it.

(http://www.nsf.gov/statistics/seind10/c4/fig04-13.gif)

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 12:00:08 PM

Quote from: Leon on June 03, 2011, 11:57:36 AM
That could also be because of technology changes which allow students to accomplish more studying in less time, or studying in ways which are not quantified by this kind of study, for example social media is where a lot of studying takes place today, not in the library.

The study address that specifically and showed evidence that this is not the case. Deployment of such technology in college teaching is a relatively recent innovation and most of the decline occurred before this the new technology was introduced.

Title: Re: Meltdown
Post by: DavidW on June 03, 2011, 12:07:16 PM

I think that grade inflation is the culprit, these days an A has no meaning and a B is for those students that can't be bothered to try, anything lower is for students that simply can't be bothered to show up for exams.

But there is an important missing variable-- time spent in college. Been on the rise I think. People used to get their degrees in 4 years, now it is taking more like 5-6 years.

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 12:08:10 PM

Quote from: Il Barone Scarpia on June 03, 2011, 11:53:02 AM
Time college students spend studying has dropped by almost 50% between 1960 and 1993 (as reported by the American enterprise institute).

Yes, but I must ask: So what? How does this translate to a dimished work ethic? The average number of hours worked has increased in the past several decades, as has productivity, at least according to the Labor Department. If college were truly a good predictor of work ethic and productivity, one would have thought the opposite would have occured. (I do acknowledge that productivity numbers are not always spot on.)

In that same time, there have been some pretty impressive technology advances, new industries created, old ones reinvented, and so on. I'm failing to see how the study shows much beyond some shortcomings of colleges themselves.

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 12:08:18 PM

Quote from: Todd on June 03, 2011, 11:58:47 AM

Your assertion seems rooted in something other than empirical reality. According the National Science Foundation, R&D as a percent of GDP rose 1981 and 2007 in constant dollars. Sure, the OECD rate of growth was higher, but so what? The allocation has changed to be funded more by corporations than the government, which is as it should be, but the money is being spent. Maybe the gains have all been reversed since 2007, though I doubt it.

(http://www.nsf.gov/statistics/seind10/c4/fig04-13.gif)

Your claim is contradicted by the graphic. It shows gross R&D funding, not normalized per GDP. It is hard to read but it shows the US level doubling from 1980 to 2007. During that time GDP went up by a fact of more than 5, so R&D funding as a fraction of GDP went down by more than a factor of 2.

I am also concerned about Federally funded R&D, which is the seed from which commercial R&D grows. This has also declined as a fraction of GDP, and even in absolute dollars recently.

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 12:13:40 PM

Quote from: Il Barone Scarpia on June 03, 2011, 12:08:18 PMIt shows gross R&D funding, not normalized per GDP.

Wrong. The graph states that it is in constant 2000 PPP dollars.

Per the NSF: "According to OECD statistics (figure 4-13 ), total R&D by the EU-27 nations has been growing in real dollars over the past 10 years at an average annual rate of 3.3%. The pace of real growth during the same period for Germany, France, and the United Kingdom has been slower: averaging 2.9%, 1.8%, and 3.0%, respectively. By comparison, the U.S. pace of growth, on the same basis, has averaged 3.3%. Growth in Japan has been slower, at an annual average rate of 3.0%. For the OECD as a whole, real growth in R&D expenditures has also expanded on average at a rate of 3.6% annually over the past 10 years."

That's 3.3% real growth per year. Not nominal. Real. R&D did not shrink by a factor of two.

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 12:16:20 PM

Quote from: Todd on June 03, 2011, 12:08:10 PM

Yes, but I must ask: So what? How does this translate to a dimished work ethic? The average number of hours worked has increased in the past several decades, as has productivity, at least according to the Labor Department. If college were truly a good predictor of work ethic and productivity, one would have thought the opposite would have occured. (I do acknowledge that productivity numbers are not always spot on.)

In that same time, there have been some pretty impressive technology advances, new industries created, old ones reinvented, and so on. I'm failing to see how the study shows much beyond some shortcomings of colleges themselves.

So you're argument is that we should not be worried that US students are behind students from almost every other developed countries in math/science knowledge, and that US students can't be bothered to study, because the US is doing so great?

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 12:19:03 PM

Quote from: Il Barone Scarpia on June 03, 2011, 12:16:20 PMSo you're argument is that we should not be worried that US students are behind students from almost every other developed countries in math/science knowledge, and that US students can't be bothered to study, because the US is doing so great?

No, I'm saying that the Cassandra-esque warnings of doom are both silly and wrong. A study of college students, during a period when the college population and number of colleges jumped rather dramatically, does not at all reflect on the work ethic of "kids today."

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 12:21:47 PM

Quote from: Todd on June 03, 2011, 12:13:40 PM

Wrong. The graph states that it is in constant 2000 PPP dollars.

Per the NSF: "According to OECD statistics (figure 4-13 ), total R&D by the EU-27 nations has been growing in real dollars over the past 10 years at an average annual rate of 3.3%. The pace of real growth during the same period for Germany, France, and the United Kingdom has been slower: averaging 2.9%, 1.8%, and 3.0%, respectively. By comparison, the U.S. pace of growth, on the same basis, has averaged 3.3%. Growth in Japan has been slower, at an annual average rate of 3.0%. For the OECD as a whole, real growth in R&D expenditures has also expanded on average at a rate of 3.6% annually over the past 10 years."

That's 3.3% real growth per year. Not nominal. Real. R&D did not shrink by a factor of two.

I am correct. Constant PPP dollars means it is normalized to inflation. You stated it increasing as a fraction of GDP (gross domestic product). From 1980 to 2007 R&D shows an increase from 140 billion to 300 billion, a bit more than a factor of 2. From 1980 to 2007 the GDP grew from 2.8 trillion to 14.7 trillion, an increase of a factor of 5. R&D grew more slowly than the economy in general, and became a smaller fraction of the economy (GDP).

However, I am more concerned about federally funded basic R&D, which is the seen from which commercial R&D grows, and which is a predictor of future growth. That has been declining in absolute inflation-corrected dollars in recent years.

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 12:25:17 PM

Quote from: Il Barone Scarpia on June 03, 2011, 12:21:47 PMI am correct...From 1980 to 2007 the GDP grew from 2.8 trillion to 14.7 trillion

No, you are wrong. You are citing nominal GDP in your figures. To come up with a number that compares to the NSF figures, you would need to quote both the starting and ending GDP figures in 2000 dollars. If you do that, you end with something more like the below chart, though it is in 2009 dollars I believe:

(http://chart.apis.google.com/chart?cht=lxy&chs=750x384&chd=e:AAAzBmCZDNEAEzFmGaHNIAIzJmKZLNMAMzNmOZPMQAQzRmSZTNUAUzVmWZXMYAYzZmaZbMb.czdmeZfMgAgzhmiZjMj.kzlmmZnMn.oypmqZrMr.sztmuZvMv.wyxmyZzMz.0y1l2Z3M3.4y5m6Z7M7.8y9l-Z.M....,FlE6EcDyECEnE-FmGAFlGEGuISJgK1LpLiLQKdKdKQLhMTMdNJNCOUPCPZPDQGQjQ2R.SuTyVPW0XTYlZeZTaFbvd5dpc9eOf-hzijhAhHfyhSjik0lfnPonpsp8pAqTrEsptcuxwPyI0c2T2H3W4f7B9D-P..-t9m9m&chco=0000FF&chxt=x,x,y,r&chxl=0:%7C%7C1930%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1940%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1950%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1960%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1970%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1980%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1990%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C2000%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1:%7C1929%7C2009&chxr=2,0,15524.4172694%7C3,0,15524.4172694&chxp=3,14943.2987596&chxs=0,666666,12,0,lt,dddddd%7C2,666666,12,0,lt,dddddd%7C3,666666,12,0,lt,dddddd&chxtc=0,-384%7C2,-750&chm=o,FF0000,0,82,5,0)

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 12:33:55 PM

Quote from: Todd on June 03, 2011, 12:25:17 PM

No, you are wrong. You are citing nominal GDP in your figures. To come up with a number that compares to the NSF figures, you would need to quote both the starting and ending GDP figures in 2000 dollars. If you do that, you end with something more like the below chart, though it is in 2009 dollars I believe:

(http://chart.apis.google.com/chart?cht=lxy&chs=750x384&chd=e:AAAzBmCZDNEAEzFmGaHNIAIzJmKZLNMAMzNmOZPMQAQzRmSZTNUAUzVmWZXMYAYzZmaZbMb.czdmeZfMgAgzhmiZjMj.kzlmmZnMn.oypmqZrMr.sztmuZvMv.wyxmyZzMz.0y1l2Z3M3.4y5m6Z7M7.8y9l-Z.M....,FlE6EcDyECEnE-FmGAFlGEGuISJgK1LpLiLQKdKdKQLhMTMdNJNCOUPCPZPDQGQjQ2R.SuTyVPW0XTYlZeZTaFbvd5dpc9eOf-hzijhAhHfyhSjik0lfnPonpsp8pAqTrEsptcuxwPyI0c2T2H3W4f7B9D-P..-t9m9m&chco=0000FF&chxt=x,x,y,r&chxl=0:%7C%7C1930%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1940%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1950%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1960%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1970%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1980%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1990%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C2000%7C%7C%7C%7C%7C%7C%7C%7C%7C%7C1:%7C1929%7C2009&chxr=2,0,15524.4172694%7C3,0,15524.4172694&chxp=3,14943.2987596&chxs=0,666666,12,0,lt,dddddd%7C2,666666,12,0,lt,dddddd%7C3,666666,12,0,lt,dddddd&chxtc=0,-384%7C2,-750&chm=o,FF0000,0,82,5,0)

Ooops, you're right, I was looking at a GDP graph without inflation correction. R&D increases slightly as a function of GDP since 1980. However, I am also concerned with federally funded R&D, which is the seed from which future commercial R&D grows.

Title: Re: Meltdown
Post by: Todd on June 03, 2011, 12:41:44 PM

Quote from: Il Barone Scarpia on June 03, 2011, 12:33:55 PMHowever, I am also concerned with federally funded R&D, which is the seed from which future commercial R&D grows.

Fair enough, though I think we've discussed this before. I'm not at all opposed to government funded R&D, but I see a lot of good from private sector R&D, particularly since it results in goodies people want. Think Xparc, for a rather conspicuous instance. (Were they only all that good.) Buried somewhere on the NSF site is a post-war chart of R&D spending by sector (government vs corporate), and the peak of government R&D not surprisingly was during the peak of the Cold War. Do we really want another major diversion to military R&D? (That's not to say that all of the funding was for military research.) I would like to see more government funding for medical research, and in other areas, but there are cases where I'm not sold on the benefits of more government R&D spending.

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 12:53:13 PM

Quote from: Todd on June 03, 2011, 12:41:44 PMFair enough, though I think we've discussed this before. I'm not at all opposed to government funded R&D, but I see a lot of good from private sector R&D, particularly since it results in goodies people want. Think Xparc, for a rather conspicuous instance. (Were they only all that good.) Buried somewhere on the NSF site is a post-war chart of R&D spending by sector (government vs corporate), and the peak of government R&D not surprisingly was during the peak of the Cold War. Do we really want another major diversion to military R&D? (That's not to say that all of the funding was for military research.) I would like to see more government funding for medical research, and in other areas, but there are cases where I'm not sold on the benefits of more government R&D spending.

The statistic I've seen is the in the 1990's government R&D was 1.1% of GDP, and now it is 0.8%. We saved 0.3%, but that is a 30% cut to basic research being done.

Not all of that research amounts to something, but almost all commercial technology is an unforeseen outcome of some basic research done years before. The CAT scanner, for instance, was based on an idea by a particle physicsist working at Tufts. All of the sequencing schemes being exploited by biotech companies started in physics or chemistry labs funded by the NSF or DOE. And academically funded research provides the training for scientists and engineers who subsequently work in industry. Saying we don't have the money to fund academic science research is like a farmer saying can't afford to buy seed.

Title: Re: Meltdown
Post by: Coopmv on June 03, 2011, 04:36:11 PM

Basic research done in the US private sector is not what it used to be. Until some 20 years ago, we could count on the great Bell Lab, which was still a part of Ma Bell after the 1984 decree that split up the Bell System. For years, Bell Lab and IBM Research were the only two corporate-owned research groups that performed basic research. In it heyday, Bell Lab had groups doing research in astronomy and number theory, just to name a few areas of basic research. Bell Lab was the place where stereo recording and transistor were invented and has produced seven Nobel laureates. But where is Bell Lab today? After Lucent was taken over by Alcatel, a French telecom equipment outfit, it has largely disappeared from the basic research space. Apparently, it has not done so great in applied research either since few ground breaking telecom products have emerged from the lab to benefit Alcatel-Lucent, which some feel may go the way of Nortel in a few years.

As for statistics released for federally funded R&D, it is not easy to tell if any significant budget increases over the years may be related to weapon-related research such as satellite killer, the ongoing missile defense shield research, etc. I bet the NIH has not received a lot of funding increases over the past decade since so much money has been spent on the wars - $2T and counting ... >:(

Title: Re: Meltdown
Post by: Scarpia on June 03, 2011, 04:44:30 PM

Quote from: Coopmv on June 03, 2011, 04:36:11 PMAs for statistics released for federally funded R&D, it is not easy to tell if any significant budget increases over the years may be related to weapon-related research such as satellite killer, the ongoing missile defense shield research, etc. I bet the NIH has not received a lot of funding increases over the past decade since so much money has been spent on the wars - $2T and counting ... >:(

During the Clinton Administration there was a push to double the NIH budget. Since then it has been flat in inflation corrected dollars.

It is true that Bell Labs no longer does any basic research. Half of Bell Labs was split off to support Bell Core (the Holmdel campus) and that facility, which was a state-of-the-art research campus, now stands empty. Murry Hill is still open, as far as I know, but basic research is no longer done.

(http://blog.nj.com/ledgerupdates_impact/2008/08/large_bell.JPG)

Title: Re: Meltdown
Post by: Coopmv on June 04, 2011, 06:35:06 AM

I watched a program on CNBC last night. I think the name of the program is Americans spend, Chinese save. The program is an indictment of most American companies for their quick profit mindset and myopia. Are you ready for this, Boeing has been transferring aerospace know-how to the Chinese, as if GM has not done enough in transferring auto technologies to that country. In a few years, all airplanes in China will be mostly domestically made and both Airbus and Boeing will be shut out of that market. On his last visit to that country, the current occupant of the WH even suggested aerospace technologies sharing when he visited a Chinese aircraft factory - guess who will be gaining. In many ways, we are our own worst enemy. >:(

Title: Re: Meltdown
Post by: Todd on June 04, 2011, 09:48:59 AM

Quote from: Coopmv on June 04, 2011, 06:35:06 AMThe program is an indictment of most American companies for their quick profit mindset and myopia.

This has been a common complaint about American companies for decades, yet for decades American companies have been coming up with new products and services and investing for the future. Why, see the NSF info on R&D spending earlier in this same thread - R&D spending has increased as as a percentage of GDP while the goverment portion has fallen, meaning various companies' managements see a lot of value in spending on items that don't yield an immediate profit. You'd figure after decades of the same old tired arguments - American companies are short-sighted, etc - the readily available empirical evidence to the contrary would finally start to sink in. It doesn't appear that way.

When I see arguments that companies like Airbus and Boeing - by far the largest players in the space - will be shut out of the Chinese market, I must conclude that people who make such statements simply ignore reality. For instance, China will have to deal with inevitable complaints filed with the WTO, and as much as the government may want to support its national champions above all else, it will have to yield at least somewhat. The Chinese government is keen on being part of the international trading system that is making it richer by the day, which means truly myopic policies like shutting out foreign companies altogether will not prevail in the end, by which I mean the short-to-medium term.

I also find such statements as "we are our own worst enemy" a bit anachronistic. Such a statement would have been more appropriate in the 19th Century, or perhaps the interwar years, but the aerospace industry is global, dominated by multinationals with huge investments in multiple nations, and will only benefit by increased engagement with China. For instance, the 787 has major portions built in Japan. Is Boeing (and us by extension, I suppose) its own worst enemy for including Japan in its supply chain? What benefit accrues from using them? I mean, let's see, Japan manipulates its currency to maintain an exporting advantage; Japan has a huge store of US debt; Japan has trade restrictions in place for a variety of industries. Should Boeing bring its manufacturing back home to prevent the wily Japanese from, what, gaining top secret aerospace technology?

As to the answer to your facetious question "who will be gaining," the answer is: Everyone.

Title: Re: Meltdown
Post by: Scarpia on June 04, 2011, 10:30:12 AM

Quote from: Todd on June 04, 2011, 09:48:59 AM

This has been a common complaint about American companies for decades, yet for decades American companies have been coming up with new products and services and investing for the future. Why, see the NSF info on R&D spending earlier in this same thread - R&D spending has increased as as a percentage of GDP while the goverment portion has fallen, meaning various companies' managements see a lot of value in spending on items that don't yield an immediate profit. You'd figure after decades of the same old tired arguments - American companies are short-sighted, etc - the readily available empirical evidence to the contrary would finally start to sink in. It doesn't appear that way.

When I see arguments that companies like Airbus and Boeing - by far the largest players in the space - will be shut out of the Chinese market, I must conclude that people who make such statements simply ignore reality. For instance, China will have to deal with inevitable complaints filed with the WTO, and as much as the government may want to support its national champions above all else, it will have to yield at least somewhat. The Chinese government is keen on being part of the international trading system that is making it richer by the day, which means truly myopic policies like shutting out foreign companies altogether will not prevail in the end, by which I mean the short-to-medium term.

I also find such statements as "we are our own worst enemy" a bit anachronistic. Such a statement would have been more appropriate in the 19th Century, or perhaps the interwar years, but the aerospace industry is global, dominated by multinationals with huge investments in multiple nations, and will only benefit by increased engagement with China. For instance, the 787 has major portions built in Japan. Is Boeing (and us by extension, I suppose) its own worst enemy for including Japan in its supply chain? What benefit accrues from using them? I mean, let's see, Japan manipulates its currency to maintain an exporting advantage; Japan has a huge store of US debt; Japan has trade restrictions in place for a variety of industries. Should Boeing bring its manufacturing back home to prevent the wily Japanese from, what, gaining top secret aerospace technology?

As to the answer to your facetious question "who will be gaining," the answer is: Everyone.

Yes, I remember they made the same complaint when in the late 80's. AT&T's western electric division was the world leader in digital signal processing chips and there was a bit stink made when they needed to raise cash and sold their software for designing chips to a Japanese company. Everything was fine in the end....Oh, wait. Is Western Electric even in business anymore?

Title: Re: Meltdown
Post by: Todd on June 04, 2011, 11:37:32 AM

Quote from: Il Barone Scarpia on June 04, 2011, 10:30:12 AMEverything was fine in the end....Oh, wait. Is Western Electric even in business anymore?

I can't remember the details, but did Western Electric have gigantic defense contracts that could keep the company alive for decades? I'm not sure if your counterexample is meaningful, but even if Boeing died (unlikely) or shrunk (quite possible), so what?

Title: Re: Meltdown
Post by: Coopmv on June 04, 2011, 02:06:50 PM

Quote from: Todd on June 04, 2011, 09:48:59 AM

When I see arguments that companies like Airbus and Boeing - by far the largest players in the space - will be shut out of the Chinese market, I must conclude that people who make such statements simply ignore reality. For instance, China will have to deal with inevitable complaints filed with the WTO, and as much as the government may want to support its national champions above all else, it will have to yield at least somewhat. The Chinese government is keen on being part of the international trading system that is making it richer by the day, which means truly myopic policies like shutting out foreign companies altogether will not prevail in the end, by which I mean the short-to-medium term.

You are completely blind to reality. Does China give a damn about any WTO rules? The answer is NO. It has conned its way into the WTO and it can now do whatever suits its purpose. It has restricted the exports of rare earth metals so it can corner the market and harm foreign competitors. Is this in the spirit of WTO? (http://www.economyincrisis.org/content/china%E2%80%99s-restriction-rare-earth-exports-causes-price-skyrocket) In fact, it was a Chinese professor at Fudan University interviewed on that CNBC program that said emphatically once China has achieved the aircraft building know-how, both Boeing and Airbus will be mostly shut out of the Chinese market. I don't believe you are more qualified than this insider to prognosticate what China will do or will not do ...

Title: Re: Meltdown
Post by: snyprrr on June 05, 2011, 07:24:36 AM

Quote from: Todd on June 03, 2011, 11:44:11 AM

Do you have empirical evidence to back up this statement? If not, it reads like a variation of "In my day . . ."

1950s = people shocked by Elvis's hips

2011 = people NOT shocked by Murder Rap

It should be obvious that the 50 Yard Line HAS moved just a teeny weeny smidgeon.

EDWARD BERNAYS

EDWARD BERNAYS

EDWARD BERNAYS

Title: Re: Meltdown
Post by: Todd on June 05, 2011, 07:37:55 AM

Quote from: Coopmv on June 04, 2011, 02:06:50 PMDoes China give a damn about any WTO rules? The answer is NO. It has conned its way into the WTO and it can now do whatever suits its purpose.

I detect a wee bit of xenophobia in your response. I can almost hear the huffing and puffing, too. I'm quite aware of Chinese actions. And yes, they do in fact care about WTO rules, which is why they engage in official processes. Some of their responses and actions are undesirable from your perspective, but they are generally within the "spirit of the WTO," just as continuing US protectionist policies in some industries (eg, the 200 year protection of the sugar industry to take a silly example), or punitive actions with respect to tires, are in the spirit of the WTO.

Let's take your rare earth issue. You do realize that the US and other countries actually have deposits of many of these metals, and that the US, in particular, used to be the largest producer of some of them, right? (The article you linked to points out that China has only about 30% of one rare earth metal in its territory.) There are alternatives to Chinese sourcing. However, other countries have opted to stop mining. In the US, there are environmental restrictions that prevent some mining, and you can rest assured that environmental groups would fight to prevent any expansion of mining. As you wrote in a prior post, we are our own worst enemies sometimes.

As to the pronouncements of the Chinese professor, well, I think you should place a little less faith in what you see on TV. First of all, the producers of the show almost certainly edited the interview to elicit a certain type of response – your response. Second, you state the person interviewed was a professor. That would seem to imply that he or she is not in a policy making role. I hear and read pronouncements by professors all the time. They are quite often wrong. I remember when professional economists like Lester Thurow used to say, back in the late 80s and early 90s, that Japan and Germany were crushing the US in export markets and that Japan would overtake the US, and that the only way to prevent this was to formulate a comprehensive industrial policy. He and others wrote books, gave interviews, and produced tons of charts and graphs. And he and others were wrong. I disagreed with them, but surely they were in a position to know much more than me, right? I also disagreed with professors and industry insiders who thought that the late 90s tech boom ushered in a new economy and that the Dow would hit 36000 in a short time, etc, etc. They were all far smarter and more in-the-know than me. Yet they, too, were wrong. I take professorial pronouncements with a grain of salt. You, it appears, do not.

Now this professor you cite may have more precise insights, and for all I know, he or she may have been in meetings with Chinese officials where bold statements were made. What you need to keep in mind is that he or she is stating a desired outcome, at least by some, not a certain one, not even close. Perhaps official Chinese policy is to become self-sufficient in the aerospace industry, and possibly in other industries, but one thing the Chinese cannot do, not by a long shot, is change fundamental economic realities. The global aerospace industry will continue to advance whether or not Boeing or Airbus have access to the Chinese markets, and the Chinese will want these technologies. The easiest, fastest, and cheapest way to get them is to enagage with the global industry, to be part of the global economy. Chinese policy since the days of Deng has been to be more open to the global economy. I don't see them altering course. There very well could be some tariffs here and non-tariff barriers there, but that's not a fundamental shift like the one you are so concerned about. Self sufficiency is a myth.

Title: Re: Meltdown
Post by: Todd on June 05, 2011, 07:42:20 AM

Quote from: snyprrr on June 05, 2011, 07:24:36 AM
1950s = people shocked by Elvis's hips

Yes, but they were not quite so shocked by segregation and lynching. What's your point?

Title: Re: Meltdown
Post by: Coopmv on June 05, 2011, 12:48:58 PM

Quote from: Todd on June 05, 2011, 07:37:55 AM

I detect a wee bit of xenophobia in your response. I can almost hear the huffing and puffing, too. I'm quite aware of Chinese actions. And yes, they do in fact care about WTO rules, which is why they engage in official processes. Some of their responses and actions are undesirable from your perspective, but they are generally within the "spirit of the WTO," just as continuing US protectionist policies in some industries (eg, the 200 year protection of the sugar industry to take a silly example), or punitive actions with respect to tires, are in the spirit of the WTO.

May I know if you even speak a foreign language? You are probably no different than many of the so called China experts who do not even speak the language or have a deep understanding for the culture and yet they have been publishing voluminous research papers that many free-trade at all costs idiots have come to embrace. That is why many US foreign policies for East Asia and the Middle East have been major failures. The WTO is a toothless tiger and it will not fight a country that has 20% of the world population, get real. The Chinese academic also has much closer ties to the the government than you think. In fact, this professor in question rhetorically asked the interviewer that he did not understand why Boeing was dumb enough to agree to the technology transfer. There is no point for you to argue if you have not even watched that program. Look it up on CNBC for a future re-run.

Title: Re: Meltdown
Post by: Todd on June 05, 2011, 02:47:54 PM

Quote from: Coopmv on June 05, 2011, 12:48:58 PMMay I know if you even speak a foreign language?

I studied German for four years in my youth, but since I never had a reason to use it, I stopped, so I do not speak a foreign language. Neither Mandarin nor Cantonese were taught when I was interested in such things.

I've never claimed to be a China expert - do point out where I did so - but rather I'm more than a bit skeptical of claims like the ones you make, especially based on one program on CNBC. I think I'll continue to gather my information from other sources. History is riddled with all manner of claims that do not come true, so it makes sense to cast a broader net, don't you think?

As to the WTO being toothless, well, I suppose this raises an interesting question. Just what type of organization do you think it should be, and how receptive do you think potential members would be if a supranational organization had truly potent enforcement mechanisms? As such, I'm not sure how the WTO can "fight" any country. What does that even mean? Please elaborate.

Your reply implies quite strongly that you fancy yourself something of an expert in foreign policy, so please offer a description of your special credentials in this field, and exactly how various policies are failures and what, precisely, you would do differently. Also, implied in your response is a repudiation of free trade - or more specifically, "free trade at all costs", which is what exactly? - so please, offer some detail as to how your more mercantilist outlook would be superior, would benefit the economy as a whole, and individuals in particular. You level blanket criticisms against authors of various research papers, most of which I assume you have never read nor will ever read, so may I ask more broadly, what is the source of your special insight into the world generally, and China in particular - other than CNBC shows, that is?

Also, returning to one of your earlier posts, where you critiqued US companies for being myopic, please provide examples as to how, say, ExxonMobil or Microsoft, or Wal Mart, or IBM, or Coca Cola, or any other Fortune 500 company that has been around for decades could be more successful. In addition to foreign policy expertise, you are apparently a business tycoon, so I'm quite sure that aspiring businesspeople on this forum could learn from your well-considered, non-hackneyed reply. I mean, I'd like something better than a stock, intellectually lazy 'kids today don't have a good work ethic' type response and preferably something based on something more significant than a basic cable show, so do put a little effort into it. You would enlighten many.

Title: Re: Meltdown
Post by: snyprrr on June 08, 2011, 08:46:33 PM

http://dailybail.com/home/no-need-to-audit-the-federal-reserve-according-to-gop-flavor.html

Enjoy!

Title: Re: Meltdown
Post by: Lethevich on July 05, 2011, 09:03:41 AM

Solution to the rare earth problem could come from the sea (http://www.asahi.com/english/TKY201107040260.html)

Title: Re: Meltdown
Post by: Coopmv on September 05, 2011, 08:59:13 AM

Major European stock markets took a deep dive today ... :(

Title: Re: Meltdown
Post by: Coopmv on September 05, 2011, 04:57:17 PM

Greek 1-year bond yields rising to a record 82.1 per cent. :o

Fears rise again over Europe debt crisis

By Richard Milne in London

German benchmark borrowing costs fell below 2 per cent to all-time lows while Italy's shot up as worries about the eurozone debt crisis and the fragility of banks once more intensified.

European lenders bore the brunt of a broad-based sell-off across equity markets while the cost of insuring bank and government debt hit record highs as investors fled from risky assets to safer ones.

German 10-year Bund yields fell 16 basis points to 1.85 per cent, their lowest ever. The move below 2 per cent tracked that of US Treasuries, which closed below that level for the first time since 1950 on Friday and were not traded on Monday due to a public holiday.

Angela Merkel, the German chancellor, told parliamentary colleagues that the situation in Greece and Italy was "extremely fragile", Reuters quoted a party official as saying.

Investors' intense concerns about the likelihood of a Greek default were underlined by Greek 1-year bond yields rising to a record 82.1 per cent.

That has fed into concern about the banking sector, which was stoked on Monday by a speech from Josef Ackermann. The chief executive of Deutsche Bank underlined how close some European banks were to collapse while ruling out the forcible recapitalisation proposed by the International Monetary Fund.

"It is obvious, not to say a truism, that many European banks would not cope with writing down the government bonds held in the banking book to market value," he told a banking conference in Frankfurt.

Italy, which has the world's third-largest bond market, saw the sharpest rise in its benchmark costs in almost two months with 10-year yields leaping 27bp to 5.56 per cent. Investors have been unnerved by the political disputes over a new austerity package in Rome.

The jump in yields on Italian debt came despite aggressive intervention from the European Central Bank last week, which bought €13.3bn in eurozone government bonds, twice as much as the previous week. Spain's 10-year yields increase 14bp to 5.26 per cent on Monday.

Mario Draghi, who takes over as head of the ECB on November 1, described the purchasing programme as "temporary" in a speech in Paris. In what might he been a message aimed at his own government in Rome, he added: "It cannot be used to circumvent the fundamental principle of budgetary discipline; in other words, it should not be taken for granted by member states."

Italy's main trade union federation will on Tuesday stage nationwide strikes as parliament starts its debate on the emergency budget.

The fall in German Bund yields meanwhile will heighten fears that some western markets could be sucked into a Japanese-style scenario of extremely weak economic growth and poor returns for shares. Once Japanese yields dropped below 2 per cent in 1997 they only rose above it again for a few weeks.

"Perhaps 2 per cent yields will look very attractive compared with where we are going in the months ahead, should the ominous eurozone and broader macroeconomic forecasts of some turn out to be true," said Simon Ballard, credit strategist at Royal Bank of Canada.

Wolfgang Schäuble, Germany's finance minister, writes in today's Financial Times that sticking to austerity is the answer for the eurozone. "There is a trade-off between short-term pain and long-term gain," he says.

Many investors disagree and are counting on central banks, led by the US Federal Reserve, to provide more stimulus to markets and the economy. Capital Economics said it was now pencilling in rate cuts from the ECB, the only one of the main western central banks to have raised interest rates since the financial crisis, in December and March.

Stock markets suffered another poor day with Germany's Dax-30 falling 5.3 per cent, France CAC-40 4.7 per cent and the FTSE 100 in London 3.6 per cent. Royal Bank of Scotland plummeted 12 per cent, Deutsche Bank and Société Générale were off 9 per cent while Credit Suisse dropped 8 per cent.

Title: Re: Meltdown
Post by: Coopmv on September 06, 2011, 08:46:04 AM

The death of the EU? I don't blame the Germans that they are opposed to bailing out Greece. I would be equally outraged if the US has to bail out Mexico. Admission of Mexico into NAFTA was a mistake but admission of Greece into the EU was an even bigger mistake ... :o

U.S. Investors woke to heavy selling led by European markets as questions surrounding the very existence of the European Union rose yet again. The fate of the noble EU experiment could effectively be decided as soon as this week when the German Constitutional Court votes to determine if it's constitutional for the ECB to buy the debt of foreign nations. If Germany refuses to participate in an expansion of the ECB's balance sheet, none of the other nations have the wherewithal to chip into the kitty, if you will. Given that the German economy is even closer to an official recession than the U.S., it seems a long-shot that German citizens will opt to send more money abroad.

I asked Rod Smyth, Chief Investment Strategist at Riverfront Investment Group to help piece together exactly what's going on in Europe. Suffice it say, it's not great. The German Constitutional Court's "vote could not be coming at a worse time," noted Smyth. "What you need in Europe is exactly what the Federal Reserve did in 2008; you need a lot of money to secure a lot of bonds."

Whatever you think of the Fed's TARP program, it wasn't much of a problem getting it enacted. There's one US central bank - the Federal Reserve- whose power is recognized by 50 states. The ECB represents 17 different countries bound only by a series of treaties. Seceding from the European Union is a decision Germany can and will make, should their citizenry balk at picking up even more of the ECB's tab.

"It's a very tenuous situation," said Smyth, one he is loathe to handicap (at least verbally). In terms of voting with his investment feet, Smyth said he's "as underweight in Europe as we've ever been." He thinks a European recession is in the cards regardless of Germany's and France's actions; it's just a matter of the depth and whether or not European nations go into the downturn together or individually.

I've said it before and will no doubt say it again: The EU's death is fast upon us and will seem obvious in retrospect. What that means for European, global economies, and stocks is just about anyone's guess.

Title: Re: Meltdown
Post by: Todd on September 06, 2011, 09:05:45 AM

Quote from: Coopmv on September 06, 2011, 08:46:04 AMThe death of the EU? I don't blame the Germans that they are opposed to bailing out Greece. I would be equally outraged if the US has to bail out Mexico. Admission of Mexico into NAFTA was a mistake but admission of Greece into the EU was an even bigger mistake ... :o

Huh? This makes no sense. First of all, NAFTA is a trade agreement only, with each nation retaining its own currency and issuing sovereign debt in said currency. The type of problem that exists in Europe cannot occur under NAFTA. That written, the US did help bail out Mexico in the 90s. Note that the world did not end as a result of that bailout.

Second, the EU is distinct from the Euro and the related crises in some countries. It would be possible for the EU to remain in place while either eliminating the Euro or kicking some countries out. There is too much at stake to let the EU die, though the currency may be scaled back. I'm far more inclined to think that the long-term outcome of this will be to further centralize power in the EU so that it may deal with economic crises more effectively.

Title: Re: Meltdown
Post by: Coopmv on September 06, 2011, 09:14:42 AM

Quote from: Todd on September 06, 2011, 09:05:45 AM

Huh? This makes no sense. First of all, NAFTA is a trade agreement only, with each nation retaining its own currency and issuing sovereign debt in said currency. The type of problem that exists in Europe cannot occur under NAFTA. That written, the US did help bail out Mexico in the 90s. Note that the world did not end as a result of that bailout.

Second, the EU is distinct from the Euro and the related crises in some countries. It would be possible for the EU to remain in place while either eliminating the Euro or kicking some countries out. There is too much at stake to let the EU die, though the currency may be scaled back. I'm far more inclined to think that the long-term outcome of this will be to further centralize power in the EU so that it may deal with economic crises more effectively.

Ever heard of Brady Bond? There is no free lunch in this world! (http://www.investorwords.com/567/Brady_bond.html)

Title: Re: Meltdown
Post by: Todd on September 06, 2011, 09:18:20 AM

Quote from: Coopmv on September 06, 2011, 09:14:42 AM Ever heard of Brady Bond? There is no free lunch in this world! (http://www.investorwords.com/567/Brady_bond.html)

Yes, I know what Brady bonds are. What does your use of the 'no free lunch' have to do with this, or anything as it pertains to financial crises, for that matter?

Title: Re: Meltdown
Post by: Coopmv on September 06, 2011, 09:22:45 AM

Quote from: Todd on September 06, 2011, 09:18:20 AM

Yes, I know what Brady bonds are. What does your use of the 'no free lunch' have to do with this, or anything as it pertains to financial crises, for that matter?

But do you know if all the Brady Bonds have been fully repaid by the LatAM countries? If not, who ended up paying for them? Remember, government does not generate revenues ...

Title: Re: Meltdown
Post by: snyprrr on September 06, 2011, 09:30:29 AM

Quote from: Coopmv on September 06, 2011, 09:22:45 AM
But do you know if all the Brady Bonds have been fully repaid by the LatAM countries? If not, who ended up paying for them? Remember, government does not generate revenues ...

Ooo... Ooo... I know this one. Pick me! Pick me!!

Title: Re: Meltdown
Post by: Todd on September 06, 2011, 09:58:20 AM

Quote from: Coopmv on September 06, 2011, 09:22:45 AMBut do you know if all the Brady Bonds have been fully repaid by the LatAM countries? If not, who ended up paying for them? Remember, government does not generate revenues ...

There have been some defaults, which of course means that taxpayers pay for them. What has this to do with the 'no free lunch' concept? And one must weigh the cost of the bonds in this case to various scenarios of directly bailing out banks in a more overt fashion.

Also, though the government doesn't generate revenues in the traditional sense, but it is worth noting that the Fed is one of the most "profitable" entities in the world over the past few decades, and TARP may still end up yielding a postive return for taxpayers. Some specific parts already have. (One might almost expect that given that several Goldman guys helped construct it.)

Title: Re: Meltdown
Post by: Coopmv on September 06, 2011, 10:11:07 AM

Quote from: Todd on September 06, 2011, 09:58:20 AM

Quote
There have been some defaults, which of course means that taxpayers pay for them. What has this to do with the 'no free lunch' concept?

If someone ended up having to pay for those defaulted Brady Bonds, then it was no free lunch, plain and simple. What is your definition of free lunch?

Quote

And one must weigh the cost of the bonds in this case to various scenarios of directly bailing out banks in a more overt fashion.

Wasn't this done to bail out our financial institutions in 08 and 09?

Quote

Also, though the government doesn't generate revenues in the traditional sense, but it is worth noting that the Fed is one of the most "profitable" entities in the world over the past few decades, and TARP may still end up yielding a postive return for taxpayers. Some specific parts already have. (One might almost expect that given that several Goldman guys helped construct it.)

I am not so convinced if the US government is profitable from the TARP OVERALL. If you want to pick your individual case, sure. There will be some isolated cases of profits. How much did the government pump into AIG? I thought it was $180B. What is current federal debt to GDP ratio?

Title: Re: Meltdown
Post by: Bulldog on September 06, 2011, 10:19:05 AM

Quote from: Coopmv on September 06, 2011, 08:46:04 AM
I've said it before and will no doubt say it again: The EU's death is fast upon us and will seem obvious in retrospect.

I doubt there will a death of the EU. For better or worse, we are slowly heading toward a global economy/government. The EU is part of that trend. What's "fast" and "obvious" to you just doesn't track with reality.

Title: Re: Meltdown
Post by: Todd on September 06, 2011, 10:23:58 AM

Quote from: Coopmv on September 06, 2011, 10:11:07 AMWhat is your definition of free lunch?

I am not so convinced if the US government is profitable from the TARP OVERALL. If you want to pick your individual case, sure. There will be some isolated cases of profits. How much did the government pump into AIG? I thought it was $180B. What is current federal debt to GDP ratio?

Free lunch is an opportunity cost concept in economics. The standard "definition" is that if someone pays for your lunch, it is not free because you are giving up other opportunities to eat that lunch. In more basic parlance, it means you don't get something for nothing. I'm not sure how either definition fits the scenario you describe, especially when alternatives to Brady Bonds were discussed and tried in prior crises. No one I am aware of stated that bailing out any institution has no financial or opportunity cost. Can you point out cases where that happened?

As to TARP, if you read what I wrote a bit more carefully, you will notice that I wrote it "may still end up yielding a postive return for taxpayers." That is decidedly different from stating it has, though in specific cases it has. Not all of the expenditures are finally resolved yet, including AIG, and taxpayers may very well lose a lot of money on that specific part of the bailout.

Title: Re: Meltdown
Post by: snyprrr on September 07, 2011, 06:15:35 AM

Quote from: Bulldog on September 06, 2011, 10:19:05 AM
I doubt there will a death of the EU. For better or worse, we are slowly heading toward a global economy/government. The EU is part of that trend. What's "fast" and "obvious" to you just doesn't track with reality.

...mmm...

Title: Re: Meltdown
Post by: eyeresist on September 07, 2011, 07:54:40 PM

Quote from: snyprrr on September 07, 2011, 06:15:35 AM
...mmm...

I remember reading the Protocols of Zion years ago, and thinking, "Actually, this all sounds pretty good to me."

Title: Re: Meltdown
Post by: snyprrr on September 08, 2011, 07:24:30 AM

Quote from: eyeresist on September 07, 2011, 07:54:40 PM
I remember reading the Protocols of Zion years ago, and thinking, "Actually, this all sounds pretty good to me."

Interestingly, hoax or not, the things outlined in there are happening in the world today. Gosh! Soooomeone's taking it seriously.

Yes, we are all benevolent dictators, haha!

Title: Re: Meltdown
Post by: drogulus on September 30, 2011, 12:39:02 PM

From the Krugman blog at the NYTimes:

September 30, 2011, 9:33 am

Defeatism

Martin Wolf is getting frantic, as well he should. The austerians have brought us to the brink of a vast disaster. A recession in Europe looks more likely than not; and the question for the United States is not whether a lost decade is possible, but whether there is any plausible way to avoid one.

Wolf directs us to a recent speech by Adam Posen (pdf) (http://www.bankofengland.co.uk/publications/speeches/2011/speech517.pdf), which opens with a passage that very much mirrors my own thoughts:

Both the UK and the global economy are facing a familiar foe at present: policy defeatism. Throughout modern economic history, whether in Western Europe in the 1920s, in the US and elsewhere in the 1930s, or in Japan in the 1990s, every major financial crisis-driven downturn has been followed by premature abandonment—if not reversal—of the macroeconomic stimulus policies that are necessary to sustained recovery. Every time, this was due to unduly influential voices claiming some combination of the destructiveness of further policy stimulus, the ineffectiveness of further policy stimulus, or the political corruption from further policy stimulus. Every time those voices were wrong on each and every count. Those voices are being heard again today, much too loudly. It is the duty of economic policymakers including central bankers to rebut these false claims head on. It is even more important that we do the right thing for the economy rather than be slowed, confused, or intimidated by such false claims.

Indeed. Posen's "unduly influential voices" are my Very Serious People. And it has been an awesome spectacle watching the VSPs search, obsessively, for reasons not to fight mass unemployment. Fiscal policy must tighten to appease the invisible bond vigilantes and please the confidence fairy. Interest rates must rise because, well, um, inflation, well, no, low rates cause moral hazard — yes, that must be it.

And we're not (just) talking about ignorant politicians. This stuff has been coming from the European Central Bank, the Organization for Economic Cooperation and Development, the Bank for International Settlements.

I don't fully understand it. But a large part of it, it seems obvious, is the intense desire to see economics as a morality play of sin and punishment, where the sinners are, of course, workers and governments, not the bankers. Pain is not an unfortunate consequence of policies, it's what is supposed to happen.

How obsessive are these people? So obsessive that when the financial doom they predict fails to materialize, they consider this a bad thing: punishment must be administered, so what are the markets waiting for? Here's Alan Greenspan a while back:

Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences.

Gosh, it's regrettable that the markets aren't confirming my warnings! And today Ronald McKinnon laments, yes, laments the failure of the invisible bond vigilantes to show themselves — they're supposed to be "disciplining the government", so why aren't they here?

Just to reiterate a point I've made before, none of this reflects actual economic theory. Throughout this crisis, people like Adam Posen and yours truly have been basing our arguments on standard textbook macroeconomics, whereas the Very Serious People have been making up stories on the fly to justify their calls for pain. As Wolf, who really seems to have eaten his Wheetabix, puts it,

The waste is more than unnecessary; it is cruel. Sadists seem to revel in that cruelty. Sane people should reject it. It is wrong, intellectually and morally.

And this cruelty rules our world.

Title: Re: Meltdown
Post by: bwv 1080 on September 30, 2011, 12:57:46 PM

Quote from: Todd on September 06, 2011, 10:23:58 AM

Free lunch is an opportunity cost concept in economics. The standard "definition" is that if someone pays for your lunch, it is not free because you are giving up other opportunities to eat that lunch.

the saying has nothing to do with opportunity cost - it refers to the 19th century practice of saloons offering free lunches with a drink purchase - the cost of the lunch was reflected in the hidden in the price of the drink, hence it really was not free.

Title: Re: Meltdown
Post by: bwv 1080 on September 30, 2011, 12:59:32 PM

Quote from: drogulus on September 30, 2011, 12:39:02 PM
From the Krugman blog at the NYTimes:

September 30, 2011, 9:33 am

Defeatism

Martin Wolf is getting frantic, as well he should. The austerians have brought us to the brink of a vast disaster. A recession in Europe looks more likely than not; and the question for the United States is not whether a lost decade is possible, but whether there is any plausible way to avoid one.

Wolf directs us to a recent speech by Adam Posen (pdf) (http://www.bankofengland.co.uk/publications/speeches/2011/speech517.pdf), which opens with a passage that very much mirrors my own thoughts:

Both the UK and the global economy are facing a familiar foe at present: policy defeatism. Throughout modern economic history, whether in Western Europe in the 1920s, in the US and elsewhere in the 1930s, or in Japan in the 1990s, every major financial crisis-driven downturn has been followed by premature abandonment—if not reversal—of the macroeconomic stimulus policies that are necessary to sustained recovery. Every time, this was due to unduly influential voices claiming some combination of the destructiveness of further policy stimulus, the ineffectiveness of further policy stimulus, or the political corruption from further policy stimulus. Every time those voices were wrong on each and every count. Those voices are being heard again today, much too loudly. It is the duty of economic policymakers including central bankers to rebut these false claims head on. It is even more important that we do the right thing for the economy rather than be slowed, confused, or intimidated by such false claims.

Indeed. Posen's "unduly influential voices" are my Very Serious People. And it has been an awesome spectacle watching the VSPs search, obsessively, for reasons not to fight mass unemployment. Fiscal policy must tighten to appease the invisible bond vigilantes and please the confidence fairy. Interest rates must rise because, well, um, inflation, well, no, low rates cause moral hazard — yes, that must be it.

And we're not (just) talking about ignorant politicians. This stuff has been coming from the European Central Bank, the Organization for Economic Cooperation and Development, the Bank for International Settlements.

I don't fully understand it. But a large part of it, it seems obvious, is the intense desire to see economics as a morality play of sin and punishment, where the sinners are, of course, workers and governments, not the bankers. Pain is not an unfortunate consequence of policies, it's what is supposed to happen.

How obsessive are these people? So obsessive that when the financial doom they predict fails to materialize, they consider this a bad thing: punishment must be administered, so what are the markets waiting for? Here's Alan Greenspan a while back:

Despite the surge in federal debt to the public during the past 18 months—to $8.6 trillion from $5.5 trillion—inflation and long-term interest rates, the typical symptoms of fiscal excess, have remained remarkably subdued. This is regrettable, because it is fostering a sense of complacency that can have dire consequences.

Gosh, it's regrettable that the markets aren't confirming my warnings! And today Ronald McKinnon laments, yes, laments the failure of the invisible bond vigilantes to show themselves — they're supposed to be "disciplining the government", so why aren't they here?

Just to reiterate a point I've made before, none of this reflects actual economic theory. Throughout this crisis, people like Adam Posen and yours truly have been basing our arguments on standard textbook macroeconomics, whereas the Very Serious People have been making up stories on the fly to justify their calls for pain. As Wolf, who really seems to have eaten his Wheetabix, puts it,

The waste is more than unnecessary; it is cruel. Sadists seem to revel in that cruelty. Sane people should reject it. It is wrong, intellectually and morally.

And this cruelty rules our world.

i.e. 1937

QuoteWhen the dollar was re-pegged to gold at $35 per oz. in January 1934, the US essentially went back on a gold standard. Gold reserves constituted 85% of the monetary base and changes in those reserves accounted for most of the changes in the monetary base. Because the US received large gold inflows in the mid-1930s, monetary policy was expansionary. This was the primary reason for the economic recovery (Romer 1992).
But when the Roosevelt administration began to worry about the potential for higher inflation, the Treasury Department decided to sterilise all gold inflows starting in December 1936. In essence, its new gold holdings were held in an inactive account rather than with the Federal Reserve, where it would have become part of the monetary base and money supply. Thus, instead of allowing the monetary base to grow with the inflow of gold, the monetary base was essentially frozen at its existing level.

http://www.voxeu.org/index.php?q=node/6965

Title: Re: Meltdown
Post by: Todd on September 30, 2011, 01:04:16 PM

Quote from: bwv 1080 on September 30, 2011, 12:57:46 PMthe saying has nothing to do with opportunity cost

Well, then, you and I learned economics at different times and with different texts because that's how it was covered in micro courses.

Quote from: drogulus on September 30, 2011, 12:39:02 PMGosh, it's regrettable that the markets aren't confirming my warnings!

Krugman is being disingenuous, but then he is on occasion. While there are certainly those who foolishly want austerity now, the (or at least a) long term concern is that continuing fiscal profligacy will lead to unpleasant outcomes, namely high inflation, and that while in theory it's possible – hell, it's easy – to boost spending for a while and then curb it when things are better, it's a whole lot harder to do in the real world. Spending programs foster groups dependent on the programs, thus possibly turning short-term expansionary spending into structural spending. While I think Krugman and other Keynesians are essentially correct that additional spending is needed now and for the short-term (12-18 months, maybe 24 months) followed by long-term, structural fiscal changes, it's more complex than that, and Krugman knows it.

His comment about "standard textbook macroeconomics" is a wee bit flippant, too, methinks. Policy-makers of the 60s and 70s often followed then textbook macroeconomics, and we ended up with stagflation.

Title: Re: Meltdown
Post by: drogulus on September 30, 2011, 01:31:57 PM

Here's one explanation for why this lunacy continues: The failure to implement expansionist policies, or the failure to continue them even when the signs appear they are having the predicted effect, is seen as the failure of the policies themselves. So, when the stimulus applied in 2009-2010 produced 3 million jobs, roughly what was expected, and the 3 million turned out to be much less than enough to reverse a worldwide downturn, the contractionists blamed the expansionist measures, not our feckless underutilization of them. You see, they said, it doesn't work. Of course the evidence is that they did work as expected and if all we needed to fill the hole was half a hole's worth of dirt, then we accomplished the mission.

Maybe the example of Europe makes it easier to understand. While we cautiously expanded, they contracted, because they were more worried about debt than economic collapse. That made our job harder as we fought through the headwinds of budget cutting and balancing abroad as well as at home at the level of state and local governments, which cut employment because the aid from the federal government to keep people employed was inadequate. Nothing about our predicament is hard to understand, and the solutions are obvious and known to work (not applying them is not, contra the conservatives, an instance of them not working).

Quote from: Todd on September 30, 2011, 01:04:16 PM

Krugman is being disingenuous, but then he is on occasion. While there are certainly those who foolishly want austerity now, the (or at least a) long term concern is that continuing fiscal profligacy will lead to unpleasant outcomes, namely high inflation, and that while in theory it's possible – hell, it's easy – to boost spending for a while and then curb it when things are better, it's a whole lot harder to do in the real world. Spending programs foster groups dependent on the programs, thus possibly turning short-term expansionary spending into structural spending. While I think Krugman and other Keynesians are essentially correct that an additional spending is needed now and for the short-term (12-18 months, maybe 24 months) followed by long-term, structural fiscal changes, it's more complex than that, and Krugman knows it.

His comment about "standard textbook macroeconomics" is a wee bit flippant, too, methinks. Policy-makers of the 60s and 70s often followed then textbook macroeconomics, and we ended up with stagflation.

Krugman has on occasion talked about deficits as though they were a primary rather than a secondary concern. This is wrong IMO. Only ability to pay matters in my book. All other questions about deficits are answered by examining what the deficits are used for, and the use is the question, not the deficits.

Expanding into an overheated economy isn't a good thing, nor is it going to produce the same results when exogenous shocks like oil embargoes bring about inflation. I don't see this as relevent in a period of contraction like we are in now. Nor do I think inflation is an absolute evil in current circumstances. We could add a couple of percent to inflation as a price of expansion with positive results overall. But we can't convince the Germans to go along.

Title: Re: Meltdown
Post by: Todd on September 30, 2011, 01:42:06 PM

Quote from: drogulus on September 30, 2011, 01:31:57 PMOnly ability to pay matters in my book.

I would hesitate to make such a categorical claim. Large, sustained fiscal deficits can and usually do lead to higher rates as well as crowding out of private investment. These are not big concerns today, of course, but over time they are.

Title: Re: Meltdown
Post by: drogulus on September 30, 2011, 01:45:03 PM

When the economy is booming you can cut back and raise taxes. See Bush I and Clinton. Of course the practical problem is made difficult by boom-and-bust psychology which tends to magnify underlying economic trends. That's why we contract in a recession and accelerate booms when we should pull back. But though I understand how bubbles and busts are amplified by human predilections I don't think we should just throw up our hands and give up.

Quote from: Todd on September 30, 2011, 01:42:06 PM

I would hesitate to make such a categorical claim. Large, sustained fiscal deficits can and usually do lead to higher rates as well as crowding out of private investment. These are not big concerns today, of course, but over time they are.

I think Krugman said something like that. In the long run deficits matter is how it goes. I don't believe it.

Title: Re: Meltdown
Post by: Todd on September 30, 2011, 01:54:19 PM

Quote from: drogulus on September 30, 2011, 01:45:03 PMWhen the economy is booming you can cut back and raise taxes. See Bush I and Clinton.

I'm well aware of Keynesian concepts. I don't know if I would use Clinton as the best instance as his terms coincided with a huge windfall in revenue that allowed structual defects to go unaddressed. I would also hesitate to say that policy changes are as neat as you suggest. Look at the 60s and 70s and the end result there.

Title: Re: Meltdown
Post by: bwv 1080 on September 30, 2011, 01:59:41 PM

the problem with the stimulus was not the quantity, it was the fact that it amounted to political patronage where key interest groups - unions, bank creditors, bankers etc were bailed out without any real restructuring of debts - which is the key issue for recovery. The money center banks were capitalized in the bond market far more than they were with insured deposits so the bondholders should have been converted to equity with the cap structure below them wiped out - there would have been no need for TARP or any of these other programs. Secondly, mortgage principal values should have been haircut to approximations of current market values with Franny bondholders taking the bulk of the hit for agency mortgages (i.e. the guarantees on Agency MBS would be made good) and the recapitalized banks and bond holders taking the hit on non-agency MBS. Its likely, given the costs and market disruptions of foreclosures that the overall costs would have been less. Then you would have Fed borrowing power able to really do stimulus that was not simply throwing good money after bad

Title: Re: Meltdown
Post by: drogulus on September 30, 2011, 02:01:53 PM

Quote from: Todd on September 30, 2011, 01:54:19 PM

I'm well aware of Keynesian concepts. I don't know if I would use Clinton as the best instance as his terms coincided with a huge windfall in revenue that allowed structual defects to go unaddressed. I would also hesitate to say that policy changes are as neat as you suggest. Look at the 60s and 70s and the end result there.

Well, yeah, I'm critical of what happens when booms are mishandled just as I am with busts. I also think the playbook is harder to read in good times when disaster doesn't force you to confront basic issues. When times are good, though, you have latitude for stupidity, or so it seems. But I did say that in my last post. There are errors of confidence as well as errors of pessimism. People have a tendency to project current conditions into the future, so Clintonites mused about what would happen if we actually paid off the debt.

Title: Re: Meltdown
Post by: drogulus on September 30, 2011, 02:17:26 PM

Regarding the long term consequences of debt, I favor the view that not having a sufficient debt load is bad for an economy. It's either a symptom of the underlying weakness that makes borrowing difficult and expensive, or it's a sign of poor thinking by decision makers. Debt is handled by growth, and facilitates it. This is what history shows, and policy makers are acting on this principle even if they don't realize what they're doing. The future is built on debt, and the fact that debt is also misused on occasion does not negate the principle that no modern nation can grow without its use.

I'm philosophically opposed to the idea that only absolute truths are really true. Only models based on probabilities with the possibility of error can guide effective actions. We never know with certainty that what worked before will work again, we just estimate that it will. I estimate that "in the long run" never happens, that there's never a day of reckoning for the sin of borrowing your way to prosperity. I await evidence, not theology, that I'm wrong.

Title: Re: Meltdown
Post by: drogulus on September 30, 2011, 02:41:26 PM

Quote from: bwv 1080 on September 30, 2011, 01:59:41 PM
the problem with the stimulus was not the quantity, it was the fact that it amounted to political patronage where key interest groups - unions, bank creditors, bankers etc were bailed out without any real restructuring of debts - which is the key issue for recovery. The money center banks were capitalized in the bond market far more than they were with insured deposits so the bondholders should have been converted to equity with the cap structure below them wiped out - there would have been no need for TARP or any of these other programs. Secondly, mortgage principal values should have been haircut to approximations of current market values with Franny bondholders taking the bulk of the hit for agency mortgages (i.e. the guarantees on Agency MBS would be made good) and the recapitalized banks and bond holders taking the hit on non-agency MBS. Its likely, given the costs and market disruptions of foreclosures that the overall costs would have been less. Then you would have Fed borrowing power able to really do stimulus that was not simply throwing good money after bad

You might be right, though I think size was a big problem, too. I'm taking into consideration that stimulus will be less than optimally designed. It will work anyway, and in fact it did work as predicted. More should have been done about the housing crisis from the standpoint of the suffering borrowers, for one. Also, I don't think bailing out interest groups is bad in itself. The auto bailout was a good idea, for example, and a success by any reasonable measure. I'm not concerned about the fact that it was in addition a bailout of an interest group.

Title: Re: Meltdown
Post by: drogulus on October 01, 2011, 06:05:35 AM

Quote from: Todd on September 30, 2011, 01:54:19 PM

I'm well aware of Keynesian concepts. I don't know if I would use Clinton as the best instance as his terms coincided with a huge windfall in revenue that allowed structual defects to go unaddressed. I would also hesitate to say that policy changes are as neat as you suggest. Look at the 60s and 70s and the end result there.

If I don't say why I'm saying these things they won't be understood. I know you understand, but not everyone does.

About Clinton, I don't care who or what constitutes a best example, whatever that is. Presumably a best example is one so good it never existed, so I'll content myself with real examples, flawed as they are. (http://www.good-music-guide.com/community/Smileys/classic/tongue.gif) Furthermore, you may be chastened by the example of '60s overconfidence, but in order to get to overconfidence you first have to pass through confidence. We're on the other side now, pursuing policies that are deeply pessimistic and bound to make matters far worse. Can someone explain to me how a contracting economy trying to balance the budget with declining revenues provides jobs and grows fast enough to pay off debt? Does anybody here know how to play this game?

Title: Re: Meltdown
Post by: Coopmv on October 01, 2011, 06:44:07 AM

There are a number of things that must be done to address the serious structural problems that have been plaguing the US economy.

1. Most tax loopholes for both corporations and weathy individuals (such as interest income from muni bonds with no caps) should be closed.
2. Effective corporate tax rates should be lowered to bring jobs back to the US. Some small town in Switzerland has been dangling 15% corporate tax and a number of US companies have already relocated there. When an advanced economy can offer such deal, the outdated US corporate tax system simply cannot compete.
3. Put an end to that blind faith in free trade - free trade only works when it is fair as well. China has conned its way into the WTO and is it abiding by the WTO rules?
4. Enforce all US intellectual properties with some serious teeth.
5. Scrutinize and if necessary reject all technology transfer demands from China. The latter has extracted tons of concessions from the west on technologies ranging from bullet train, telecommunication, you name it. Supposedly, these acts are not allowed under the WTO agreements.
6. Significantly downsize the federal government.
7. Eliminate all federal regulations that serve no public interests but add burden to small businesses.
8. Any corporate tax incentives must be tied to explicit job creations in the US, not in foreign countries.

Do I have any hope most of these changes will be adopted? Not really since the current political system will not change. Corporate lobbyists (both US and foreign) control Washington.

Title: Re: Meltdown
Post by: bwv 1080 on October 01, 2011, 07:07:17 AM

Quote from: Coopmv on October 01, 2011, 06:44:07 AM
There are a number of things that must be done to address the serious structural problems that have been plaguing the US economy.

1. Most tax loopholes for both corporations and weathy individuals (such as interest income from muni bonds with no caps) should be closed.
2. Effective corporate tax rates should be lowered to bring jobs back to the US. Some small town in Switzerland has been dangling 15% corporate tax and a number of US companies have already relocated there. When an advanced economy can offer such deal, the outdated US corporate tax system simply cannot compete.
3. Put an end to that blind faith in free trade - free trade only works when it is fair as well. China has conned its way into the WTO and is it abiding by the WTO rules?
4. Enforce all US intellectual properties with some serious teeth.
5. Scrutinize and if necessary reject all technology transfer demands from China. The latter has extracted tons of concessions from the west on technologies ranging from bullet train, telecommunication, you name it. Supposedly, these acts are not allowed under the WTO agreements.
6. Significantly downsize the federal government.
7. Eliminate all federal regulations that serve no public interests but add burden to small businesses.
8. Any corporate tax incentives must be tied to explicit job creations in the US, not in foreign countries.

Do I have any hope most of these changes will be adopted? Not really since the current political system will not change. Corporate lobbyists (both US and foreign) control Washington.

why not totally eliminate corporate income taxes? Every dollar of corporate income becomes a dollar of personal income at some point in the chain. Along with the elimination of corp income taxes you would be able to get rid of lower rates for dividends and capital gains. There is some evidence that corporate income tax costs the economy more revenue than it brings in once you account for the costs of compliance.

Title: Re: Meltdown
Post by: snyprrr on October 01, 2011, 08:08:23 PM

How are we supposed to pay them money that doesn't exist?

Oh, that's right,... with our grandchildren. >:D

Title: Re: Meltdown
Post by: Coopmv on October 22, 2011, 02:00:43 PM

As if that stalemate in European debt negotiation is not enough ...

Monster Prediction From BofA: Another US Debt Downgrade Is Coming In Just A Few Weeks

(http://www.businessinsider.com/huge-prediction-from-bofa-another-us-debt-downgrade-is-coming-in-just-a-few-weeks-2011-10)

Title: Re: Meltdown
Post by: Coopmv on October 22, 2011, 02:16:15 PM

I will be as outraged as the ordinary German citizens if we Americans have to help bail out Mexico ...

European Union looks to recapitalize banks
Move comes ahead of Merkel-Sarkozy pre-summit meeting (http://www.marketwatch.com/story/european-union-looks-to-recapitalize-banks-2011-10-22)

Title: Re: Meltdown
Post by: Coopmv on October 22, 2011, 02:19:52 PM

Chanos: China's hard-landing has already begun
China's bust will be a thousand times worse than Dubai (http://www.marketwatch.com/story/chanos-chinas-hard-landing-has-already-begun-2011-10-17)

Title: Re: Meltdown
Post by: snyprrr on November 01, 2011, 07:55:01 AM

How bout that Corzine, huh?

Title: Re: Meltdown
Post by: Karl Henning on November 01, 2011, 08:00:14 AM

I worry a little when I see you posting in the Meltdown thread, fella.

Title: Re: Meltdown
Post by: Karl Henning on November 01, 2011, 10:20:04 AM

BofA sees the light, drops $5/mo debit card fee (http://www.washingtonpost.com/business/economy/bank-of-american-drops-debit-card-fee/2011/11/01/gIQADvugcM_story.html?hpid=z1)

Title: Re: Meltdown
Post by: Coopmv on November 01, 2011, 06:33:36 PM

When Greece stops melting down, the stock markets world wide start melting up and vice-versa. There is no hope for Greece ... :(

Title: Re: Meltdown
Post by: Coopmv on November 06, 2011, 12:59:21 PM

What is gonna to happen next? Are we expecting an Italian meltdown?

Title: Re: Meltdown
Post by: snyprrr on November 06, 2011, 06:51:45 PM

Quote from: Coopmv on November 01, 2011, 06:33:36 PM
When Greece stops melting down, the stock markets world wide start melting up and vice-versa. There is no hope for Greece ... :(

How about Iceland though? They rejected the bailout and threw the crooked politicians and bankers out, no?

Title: Re: Meltdown
Post by: Coopmv on November 06, 2011, 07:02:19 PM

Quote from: snyprrr on November 06, 2011, 06:51:45 PM
How about Iceland though? They rejected the bailout and threw the crooked politicians and bankers out, no?

Iceland so far has been the only Nordic country that has gotten into trouble, the rest of Scandinavia is doing just fine. Finland may have some exposure to the trouble Nokia, its biggest private-sector employer, is currently experiencing due to how pathetically poor the company has been managed over the past few years. Most of the Nordic countries and countries such as Holland and Germany are doing just fine and that is why they have refused to offer Greece bailout after bailout. Most of the Mediterranean countries are in serious trouble due to their Club Med mentality - they want to live a good life on borrowed money. It was a big mistake to have accepted Greece into the EU, period.

Title: Re: Meltdown
Post by: North Star on November 06, 2011, 10:10:07 PM

Quote from: Coopmv on November 06, 2011, 07:02:19 PM
Iceland so far has been the only Nordic country that has gotten into trouble, the rest of Scandinavia is doing just fine. Finland may have some exposure to the trouble Nokia, its biggest private-sector employer, is currently experiencing due to how pathetically poor the company has been managed over the past few years. Most of the Nordic countries and countries such as Holland and Germany are doing just fine and that is why they have refused to offer Greece bailout after bailout. Most of the Mediterranean countries are in serious trouble due to their Club Med mentality - they want to live a good life on borrowed money. It was a big mistake to have accepted Greece into the EU, period.

Accepting Italy seems to have been a lot bigger mistake. If Italy goes down, we're in real trouble.

Title: Re: Meltdown
Post by: mc ukrneal on November 06, 2011, 10:29:35 PM

Quote from: Coopmv on October 22, 2011, 02:16:15 PM
I will be as outraged as the ordinary German citizens if we Americans have to help bail out Mexico ...

We already did that many years ago...

Title: Re: Meltdown
Post by: Coopmv on November 07, 2011, 06:59:05 PM

Quote from: mc ukrneal on November 06, 2011, 10:29:35 PM
We already did that many years ago...

Hopefully, there will be no Bailout 2. BTW, isn't ironic that the wealthiest man in the world hails from a country (our southern neighbor) where 50% of its citizens want to bail out and become illegals in the US?

Title: Re: Meltdown
Post by: Coopmv on November 07, 2011, 07:01:03 PM

Quote from: North Star on November 06, 2011, 10:10:07 PM
Accepting Italy seems to have been a lot bigger mistake. If Italy goes down, we're in real trouble.

Hopefully, better sense prevails this week and our Italian friends will kick out this buffoon named Berlusconi from power ...

Title: Re: Meltdown
Post by: The new erato on November 08, 2011, 02:43:11 AM

(http://www.hifisentralen.no/forum/index.php?action=dlattach;topic=26951.0;attach=278248;image)
(http://www.hifisentralen.no/forum/index.php?action=dlattach;topic=26951.0;attach=278249;image)
(http://www.hifisentralen.no/forum/index.php?action=dlattach;topic=26951.0;attach=278250;image)

Title: Re: Meltdown
Post by: Todd on November 08, 2011, 06:34:20 AM

Europe's got it figured out: (http://www.reuters.com/article/2011/10/20/eu-ratings-idUSL5E7LK1Y520111020) don't like downgrades, (attempt to) silence the ratings agencies!

Title: Re: Meltdown
Post by: springrite on November 08, 2011, 06:37:16 AM

Quote from: Todd on November 08, 2011, 06:34:20 AM
Europe's got it figured out: (http://www.reuters.com/article/2011/10/20/eu-ratings-idUSL5E7LK1Y520111020) don't like downgrades, (attempt to) silence the ratings agencies!

The rest of the world are turning Chinese...

Title: Re: Meltdown
Post by: North Star on November 09, 2011, 12:00:17 AM

Quote from: Coopmv on November 07, 2011, 07:01:03 PM
Hopefully, better sense prevails this week and our Italian friends will kick out this buffoon named Berlusconi from power ...

Woo! Italy might actually have a chance to end Berlusconis democrazy.

___________________________________

"These rating agencies should probably be considered one of the causes of this crisis," said Michel Barnier, the former French foreign minister who is now the EU commissioner in charge of regulating finance.

So, the Greek and Italian governments haven't done anything wrong, it's the rating agencies fault!
Right...

Title: Re: Meltdown
Post by: Lethevich on November 09, 2011, 12:11:23 AM

They still seem quite keen on the old paedophile. I think that some of them genuinely believe that the rest of the world imagines Italy as a country of glamorous ladies men when they see him on the world stage...

Title: Re: Meltdown
Post by: Coopmv on November 09, 2011, 04:47:03 PM

Quote from: Lethe Dmitriyevna Pettersson on November 09, 2011, 12:11:23 AM
They still seem quite keen on the old paedophile. I think that some of them genuinely believe that the rest of the world imagines Italy as a country of glamorous ladies men when they see him on the world stage...

Most of these Mediterranean countries live in fantasy world IMO. The Club Med mentality is now coming back to bite them big-time ...

Title: Re: Meltdown
Post by: snyprrr on November 09, 2011, 05:11:57 PM

Quote from: Coopmv on November 07, 2011, 06:59:05 PM
Hopefully, there will be no Bailout 2. BTW, isn't ironic that the wealthiest man in the world hails from a country (our southern neighbor) where 50% of its citizens want to bail out and become illegals in the US?

Do I Have this straight?: the US (ahem ::), taxpayer) is the biggest (by far) contributor to the IMF, so, would WE not be bailing Greece, or whomever, out, at any time, because it is the taxpaying Americans who are... ???... paying for?...everything? :'(

E-VER-Y-THING? >:D

Title: Re: Meltdown
Post by: Coopmv on November 09, 2011, 05:31:51 PM

Quote from: snyprrr on November 09, 2011, 05:11:57 PM
Do I Have this straight?: the US (ahem ::), taxpayer) is the biggest (by far) contributor to the IMF, so, would WE not be bailing Greece, or whomever, out, at any time, because it is the taxpaying Americans who are... ???... paying for?...everything? :'(

E-VER-Y-THING? >:D

My Bailout #2 referred to Latam countries, not the US banks. Indeed, the US is still the largest single contributor to the IMF with Japan being the second largest IIRC ...

Title: Re: Meltdown
Post by: Coopmv on November 11, 2011, 08:09:43 AM

Stock markets worldwide are melting up today as it appears both Italy and Greece are making progress with their debt crisis.

Title: Re: Meltdown
Post by: snyprrr on November 12, 2011, 05:29:23 AM

Quote from: Coopmv on November 11, 2011, 08:09:43 AM
Stock markets worldwide are melting up today as it appears both Italy and Greece are making progress with their debt crisis.

These plus-300/minus-300 days are coming fast and furious these days! Oh, hey, just business as usual in a psychopathic economy.

DEATH THROES ::)

The markets are rigged. If Penn St. can get away with for 15 years, well, then it's no surprise that this giant illusion can keep going until the magic words used to buoy it dry up. It will happen in the twinkling of an eye (IMHO!).

Title: Re: Meltdown
Post by: Coopmv on November 12, 2011, 06:25:42 AM

Quote from: snyprrr on November 12, 2011, 05:29:23 AM
These plus-300/minus-300 days are coming fast and furious these days! Oh, hey, just business as usual in a psychopathic economy.

DEATH THROES ::)

The markets are rigged. If Penn St. can get away with for 15 years, well, then it's no surprise that this giant illusion can keep going until the magic words used to buoy it dry up. It will happen in the twinkling of an eye (IMHO!).

In the name of democracy and unbridled capitalism, split second program trading is allowed and even promoted, all for the benefits of Wall Street firms and hedge funds but adds not an iota of value to the overall economy. What is good for the Ferrari dealers does not help the average Joe.

Title: Re: Meltdown
Post by: Todd on November 12, 2011, 07:30:16 AM

Seriously, whining about stock market tumult? As none other than JP Morgan himself said, many, many moons ago, stocks tend to fluctuate. (That's why he was mostly in bonds.) The stock market is not now, never has been, and never should be, for the Average Joe. The stock market is not a financial tool designed to help people retire by returning safe, predictable returns.

Title: Re: Meltdown
Post by: drogulus on November 12, 2011, 07:40:35 AM

Quote from: snyprrr on November 09, 2011, 05:11:57 PM
Do I Have this straight?: the US (ahem ::), taxpayer) is the biggest (by far) contributor to the IMF, so, would WE not be bailing Greece, or whomever, out, at any time, because it is the taxpaying Americans who are... ???... paying for?...everything? :'(

E-VER-Y-THING? >:D

You can imagine how pissed the ~~Chinese~~ taxpayers must be at what's happened to all their money. But then, how pissed will we be when China drags the world into a genuine depression in a few years when the export model kills their growth the way it did for Japan? An aging society that not only practices crony capitalism but has no independent institutions to tell the government to change course will hit a wall in 10 to 20 years. India will adapt, China won't. China is the bridge to the future, so let's cross it before it goes down. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

Just speculatin'....(http://www.good-music-guide.com/community/Smileys/classic/tongue.gif)

Title: Re: Meltdown
Post by: Todd on November 12, 2011, 07:45:45 AM

Quote from: drogulus on November 12, 2011, 07:40:35 AMBut then, how pissed will we be when China drags the world into a genuine depression in a few years when the export model kills their growth the way it did for Japan?

Wait, there are flaws with China's economic system? No way. China is going to rule the world. I even have a book in my to-read stack that says so right in the title! No, you must be mistaken.

Title: Re: Meltdown
Post by: drogulus on November 12, 2011, 08:10:50 AM

(http://g-ecx.images-amazon.com/images/G/01/ciu/20/ac/e9099833e7a01fe9ff541110.L.jpg)

Title: Re: Meltdown
Post by: Coopmv on November 12, 2011, 08:39:34 AM

Quote from: Todd on November 12, 2011, 07:45:45 AM

Wait, there are flaws with China's economic system? No way. China is going to rule the world. I even have a book in my to-read stack that says so right in the title! No, you must be mistaken.

If you cannot read Chinese, your claim is pretty hollow. You need to read what they are writing, which unfortunately are rarely translated into English.

Title: Re: Meltdown
Post by: Todd on November 12, 2011, 10:10:26 AM

Quote from: Coopmv on November 12, 2011, 08:39:34 AMIf you cannot read Chinese, your claim is pretty hollow.

What am I claiming?

Title: Re: Meltdown
Post by: Coopmv on November 25, 2011, 03:03:12 PM

Quote from: ~ Que ~ on November 25, 2011, 02:52:18 PM
I'm planning to get that Victoria set. I've had some good experiences with Noone and his ensemble.

It get the thumbs up by Harry! :)

Q

One thing that the EU politicians fail to grasp and that is, the longer they drag their feet to come up with a sound solution to resolve the EU debt crisis, the more financial damage will be inflicted on American consumers like me via our investment portfolios. At some point, we may just scale back buying from across the pond in a big way ...

Title: Re: Meltdown
Post by: kishnevi on November 25, 2011, 04:02:40 PM

OTOH, if the Euro devalues sufficiently I might actually get around to ordering those CDs from BeethovenHaus....

Title: Re: Meltdown
Post by: Coopmv on November 25, 2011, 04:07:12 PM

Quote from: Jeffrey Smith on November 25, 2011, 04:02:40 PM
OTOH, if the Euro devalues sufficiently I might actually get around to ordering those CDs from BeethovenHaus....

That exchange rate advantage for the Dollar is a piddling amount compared with the losses most of us have already sustained in our 401K and IRA accounts and the end is nowhere in sight ...

Title: Re: Meltdown
Post by: Karl Henning on November 28, 2011, 05:40:49 AM

Quote from: Ezra KleinFew thought the Eurozone's problems would ever get bad enough to threaten Italy's stability, much less Germany's bond sales. But it did. That doesn't really mean we've hit bottom. It means we don't really know where the bottom is.

RTWT here.

Title: Re: Meltdown
Post by: snyprrr on November 28, 2011, 07:01:08 AM

So, who gets downgraded today?

Title: Re: Meltdown
Post by: Karl Henning on November 28, 2011, 09:50:28 AM

You've heard it said ere now: When the going gets tough, the tough go shopping . . . .

Quote from: Hayley TsukayamaBlack Friday sales set records this year, pulling in $52.4 billion, according to figures from the National Retail Foundation. Those numbers, which represent sales over a four-day period that starts on Thanksgiving, are up 16.7 percent compared with the same period last year.

RTWT here.

Title: Re: Meltdown
Post by: drogulus on December 04, 2011, 05:40:21 AM

Quote from: Coopmv on November 25, 2011, 04:07:12 PM
That exchange rate advantage for the Dollar is a piddling amount compared with the losses most of us have already sustained in our 401K and IRA accounts and the end is nowhere in sight ...

Remember back in 2009 when some people were predicting a slow and largely jobless recovery? I do. So I'd say that the end, in the sense that developments have been foreseen, has been in sight all along. The jobs will begin to appear after the election, when the Republican strategy of destroying any possibility of recovery will have either failed or succeeded, but in any case have been replaced by a new one. Hmmm....what's the Republican word for stimulus?

Oh yeah, last week Crazy Eyes Krugman said something I really liked that went like this:

Newt Gingrich is a stupid person's idea of what a smart person is like.

Exactamente! (http://www.good-music-guide.com/community/Smileys/classic/grin.gif)

Title: Re: Meltdown
Post by: Todd on December 04, 2011, 06:09:57 AM

Quote from: drogulus on December 04, 2011, 05:40:21 AMNewt Gingrich is a stupid person's idea of what a smart person is like.

I hope Krugman didn't try to pass that off as his own, because it's a chestnut that's been around since at least the mid-90s.

Title: Re: Meltdown
Post by: drogulus on December 04, 2011, 06:28:07 AM

I think he was quoting. I saw him on the Sunday show where George Will says Wise Things.

Title: Re: Meltdown
Post by: drogulus on December 04, 2011, 07:38:35 AM

Give Newt credit for a very shrewd move. His immigration statement shows he knows how to sacrifice base appeal (in both senses (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)) for the sake of a general election position that makes him look like a problem solver, someone who wants to get an important task done. In effect he tells voters that he's just as good as Romney on governance. But do Republicans care about this? Evidently not, but Independents care a great deal about exactly that. Newt thinks he has a good chance at the nomination, so the earlier he pivots towards the electorate as a whole the better chance he has of winning in 2012. I think he will burn out like the last few Fox darlings of the week, but this is the right way to play the hand Newt has dealt himself so far.

Title: Re: Meltdown
Post by: Coopmv on December 04, 2011, 11:11:49 AM

Quote from: drogulus on December 04, 2011, 05:40:21 AM
Remember back in 2009 when some people were predicting a slow and largely jobless recovery? I do. So I'd say that the end, in the sense that developments have been foreseen, has been in sight all along. The jobs will begin to appear after the election, when the Republican strategy of destroying any possibility of recovery will have either failed or succeeded, but in any case have been replaced by a new one. Hmmm....what's the Republican word for stimulus?

Oh yeah, last week Crazy Eyes Krugman said something I really liked that went like this:

Newt Gingrich is a stupid person's idea of what a smart person is like.

Exactamente! (http://www.good-music-guide.com/community/Smileys/classic/grin.gif)

Unfortunately, we always have a bunch of misfits who want to be president ...

Title: Re: Meltdown
Post by: Coopmv on December 04, 2011, 11:14:06 AM

Quote from: drogulus on December 04, 2011, 07:38:35 AM
Give Newt credit for a very shrewd move. His immigration statement shows he knows how to sacrifice base appeal (in both senses (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)) for the sake of a general election position that makes him look like a problem solver, someone who wants to get an important task done. In effect he tells voters that he's just as good as Romney on governance. But do Republicans care about this? Evidently not, but Independents care a great deal about exactly that. Newt thinks he has a good chance at the nomination, so the earlier he pivots towards the electorate as a whole the better chance he has of winning in 2012. I think he will burn out like the last few Fox darlings of the week, but this is the right way to play the hand Newt has dealt himself so far.

Newt is no Ronald Reagan. Lets leave it at that ...

Title: Re: Meltdown
Post by: snyprrr on December 04, 2011, 05:34:00 PM

Which Beatles song most aptly describes where we are along the 'Meltdown' timeline?

It Won't Be Long?

Taxman?

Title: Re: Meltdown
Post by: Coopmv on December 05, 2011, 06:22:44 PM

Quote from: snyprrr on December 04, 2011, 05:34:00 PM
Which Beatles song most aptly describes where we are along the 'Meltdown' timeline?

It Won't Be Long?

Taxman?

The Long and Winding Road certainly describes this housing debacle that has no end in sight. As the Russians say, we are beginning to see the tunnel at the end of light ... ;D

Title: Re: Meltdown
Post by: North Star on December 08, 2011, 08:28:04 AM

Help!

Title: Re: Meltdown
Post by: drogulus on December 08, 2011, 01:43:13 PM

I'm reading a book by an economist that says I'm wrong about stimulating the economy. Well, he doesn't really say that, but he suggests that stimulus jobs are too expensive, the wrong jobs, and delay needed reforms. But there are other things in the book that puzzle me a bit. I wish he would explain the concept of "overinvestment" a little more. How would he explain the rise of Google, for example, a private initiative that wouldn't exist without a whole series of government investments that made it possible. Computers, the internet and GPS are all government projects that found private uses. Our economy would collapse in hours without them. Is that overinvestment? But perhaps the author is only suggesting that government investment has a poor batting average (Solyndra, for instance). Maybe, but in baseball 30% makes you an All Star. How good does government investment need to be in order to make the payoff worthwhile? What if one of our energy investments leads to a huge new industry?

This is the book:

(http://cambridgeforecast.files.wordpress.com/2010/06/faultbook.gif)

There's more to the book than what I question, though, and in fact it's very good on the causes of the meltdown, which Rajan says are multiple and diffuse in nature. I'm learning from it.

Title: Re: Meltdown
Post by: drogulus on December 08, 2011, 01:46:56 PM

I didn't even mention Apple and Microsoft. What is overinvestment in the context of these companies? Then you can go back and look at the railroads, the highways and bridges, dams and canals. Wow, this country was awful socialistic in the 19th century! (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)

Title: Re: Meltdown
Post by: Coopmv on December 08, 2011, 02:04:57 PM

Quote from: drogulus on December 08, 2011, 01:43:13 PM
I'm reading a book by an economist that says I'm wrong about stimulating the economy. Well, he doesn't really say that, but he suggests that stimulus jobs are too expensive, the wrong jobs, and delay needed reforms. But there are other things in the book that puzzle me a bit. I wish he would explain the concept of "overinvestment" a little more. How would he explain the rise of Google, for example, a private initiative that wouldn't exist without a whole series of government investments that made it possible. Computers, the internet and GPS are all government projects that found private uses. Our economy would collapse in hours without them. Is that overinvestment? But perhaps the author is only suggesting that government investment has a poor batting average (Solyndra, for instance). Maybe, but in baseball 30% makes you an All Star. How good does government investment need to be in order to make the payoff worthwhile? What if one of our energy investments leads to a huge new industry?

This is the book:

(http://cambridgeforecast.files.wordpress.com/2010/06/faultbook.gif)

There's more to the book than what I question, though, and in fact it's very good on the causes of the meltdown, which Rajan says are multiple and diffuse in nature. I'm learning from it.

I saw some statistics a while back that showed the last stimulus plan - the $800B one, created a number of jobs at $300,000 each. Surely, the job recipients did not make that kind of money. That was what gave opponents to the stimulus plan the ammunition against any new stimulus plan.

Title: Re: Meltdown
Post by: drogulus on December 08, 2011, 02:31:24 PM

But that's the cost of the whole plan, which was designed to keep the economy from completely collapsing. Only a portion of it was to create jobs. The main goal was to prevent the loss of millions of additional jobs. The plan, undersized as it was, worked on both counts. But you're right that the cost of the plan made further stimulus politically undoable. That's typical. The same thing happened in 1937, and we didn't recover until 1940, when a different kind of stimulus kicked in.

(http://upload.wikimedia.org/wikipedia/commons/thumb/d/da/GDP_depression.svg/800px-GDP_depression.svg.png)

Title: Re: Meltdown
Post by: Coopmv on December 08, 2011, 02:33:47 PM

Quote from: drogulus on December 08, 2011, 02:31:24 PM

But that's the cost of the whole plan, which was designed to keep the economy from completely collapsing. Only a portion of it was to create jobs. The main goal was to prevent the loss of millions of additional jobs. The plan, undersized as it was, worked on both counts. But you're right that the cost of the plan made further stimulus politically undoable. That's typical. The same thing happened in 1937, and we didn't recover until 1940, when a different kind of stimulus kicked in.

(http://upload.wikimedia.org/wikipedia/commons/thumb/d/da/GDP_depression.svg/800px-GDP_depression.svg.png)

The US got out of the Great Depression because of WWII, plain and simple. Without the war, I doubt any of FDR's plans would have produced any meaningful results ...

Title: Re: Meltdown
Post by: drogulus on December 08, 2011, 02:55:04 PM

Hmmm, I don't know. It looks like we were heading out of it anyway, at least the chart would support that view. But rearmament starting in 1940 accelerated the recovery which was in progress. You could make the argument that, as in the current case, the effect of stimulative policies was in moderating the decline. I think stimulus should be seen as a holding action and an opportunity to enact projects which will have long term benefits. Rajan doesn't like this. He disapproves of Rahm Emmanuel for saying that you shouldn't waste a crisis, believing this is just an excuse for pork barrel projects. I think this is too negative. Some projects are wasteful, others pay off. Most bridges are not to nowhere. (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)

Title: Re: Meltdown
Post by: Karl Henning on January 18, 2012, 05:56:50 AM

Quote from: Chris Cilizza & Aaron BlakeIndependents, widely considered the most critical voting bloc this fall, continue to blame Bush far more than Obama for the economic troubles. Fifty-seven percent of unaffiliated voters put the blame on the former Republican president, while 25 percent believe the blame rests more with Obama.

Quote from: Chris Cilizza & Aaron BlakeWe've written for quite some time that the longer Obama is in office (and the longer Bush is out of it), the more likely it is that blame for the economy would shift toward him. But, these numbers suggest — gasp! — we were wrong.

"The economy? It's still Bush's fault"

Title: Re: Meltdown
Post by: Karl Henning on January 19, 2012, 07:30:03 AM

Bank of America, reversing loss, earns $2 billion in fourth quarter (http://www.washingtonpost.com/business/bank-of-america-reversing-loss-earns-2-billion-in-fourth-quarter/2012/01/19/gIQAhPmNAQ_story.html?hpid=z4)

Quote from: Associated PressThe bank set aside $1.5 billion for litigation expenses, mostly related to fighting lawsuits from mortgage loans.

"That's not much," remarked Mitt Romney . . . .

Title: Re: Meltdown
Post by: Todd on January 19, 2012, 08:06:34 AM

Quote from: karlhenning on January 19, 2012, 07:30:03 AMThe bank set aside $1.5 billion for litigation expenses, mostly related to fighting lawsuits from mortgage loans.

Well, you have to be able to pony up for firms like Gibbs & Bruns. $85,000,000.00 settlement payments don't grow on trees. Fortunately, such firms are out for the public good.

Title: Re: Meltdown
Post by: Karl Henning on January 19, 2012, 08:07:50 AM

Nice to see they were able to turn such a nice profit even though they gave up the monthly debit card fee . . . .

Title: Re: Meltdown
Post by: drogulus on January 19, 2012, 03:11:39 PM

If more people blame Bush than Obama for current economic conditions it may explain why people also tend to blame Congress for inaction on the economy. People are being realistic, and I don't know if I should be surprised or not. There is all the emotionality around the Tea Party and the Occupiers, but there's a solid center of the country that seems to be taking a longer view that doesn't depend on finding a scapegoat but fixing responsibility where it belongs. We had a near depression on top of a huge ballooning deficit that made corrective measures politically untenable, but these events occurred before Obama arrived, and the inability to respond effectively was due to a very public strategy of sabotage. No President, not Bush II, not Clinton, not Bush I, and certainly not Reagan has been the object of such total obstructionism. The public sees that and the polls reflect that reality. For this reason I think Obama will be reelected, even though by traditional reckoning he should lose.

Title: Re: Meltdown
Post by: Coopmv on January 19, 2012, 06:01:36 PM

IMO, the Obama Care is a complete failure, as employees all over the country are paying more for their shares of the work-provided health insurance starting this year. The program has not been able to force down the insurance rates because elderly statesman like Tom Daschle, the former Democratic Senate Majority Leader is on the payroll of United Heathcare, go figure ...

Red State, Blue State but money is always green. >:(

Title: Re: Meltdown
Post by: Coopmv on January 19, 2012, 06:11:46 PM

Quote from: drogulus on January 19, 2012, 03:11:39 PM
If more people blame Bush than Obama for current economic conditions it may explain why people also tend to blame Congress for inaction on the economy. People are being realistic, and I don't know if I should be surprised or not. There is all the emotionality around the Tea Party and the Occupiers, but there's a solid center of the country that seems to be taking a longer view that doesn't depend on finding a scapegoat but fixing responsibility where it belongs. We had a near depression on top of a huge ballooning deficit that made corrective measures politically untenable, but these events occurred before Obama arrived, and the inability to respond effectively was due to a very public strategy of sabotage. No President, not Bush II, not Clinton, not Bush I, and certainly not Reagan has been the object of such total obstructionism. The public sees that and the polls reflect that reality. For this reason I think Obama will be reelected, even though by traditional reckoning he should lose.

According to some computer model, Obama will lose his re-election bid. The model has only missed 2 presidential elections: It predicted Ford to win in 76 and Bush I to win in 92. As such, the model is quite accurate.

Title: Re: Meltdown
Post by: Karl Henning on January 20, 2012, 05:54:21 AM

Quote from: Coopmv on January 19, 2012, 06:01:36 PM
IMO, the Obama Care is a complete failure, as employees all over the country are paying more for their shares of the work-provided health insurance starting this year.

Well, I may have news for you: in practically each of the past four or five years, my health care premium has gone up, or there has been a marginal roll-back in the benefit, or both. I fail to see that as an invidious result of "Obamacare." The cost structure of the health service is a problem; the drive to make sure that all Americans are covered by health insurance is not the problem there, although it is not yet positioned to be quite the solution, either.

Title: Re: Meltdown
Post by: Karl Henning on January 20, 2012, 05:57:25 AM

Quote from: Coopmv on January 19, 2012, 06:11:46 PM
According to some computer model, Obama will lose his re-election bid. The model has only missed 2 presidential elections: It predicted Ford to win in 76 and Bush I to win in 92. As such, the model is quite accurate.

As such, the model may miss this year, too.

However, if you wish to put your faith in that computer model, that is your prerogative : )

Title: Re: Meltdown
Post by: snyprrr on January 20, 2012, 08:49:52 AM

Quote from: Coopmv on January 19, 2012, 06:01:36 PM
IMO, the Obama Care is a complete failure, as employees all over the country are paying more for their shares of the work-provided health insurance starting this year. The program has not been able to force down the insurance rates because elderly statesman like Tom Daschle, the former Democratic Senate Majority Leader is on the payroll of United Heathcare, go figure ...

Red State, Blue State but money is always green. >:(

Our company, 7 years ago, 'upgraded' their brand, blah blah, and now, after all, they're switching back,... but not, get this, until after Novemeber,... which I thought was interesting.

Is everyone putting off their 'decisions' until after...um ::)... 'November'???

Things That Make You Go...Hmmm

Title: Re: Meltdown
Post by: drogulus on January 20, 2012, 02:00:53 PM

The AARP has this on the effects of the new law.

Benefits in Effect Now

Expanded coverage for preventive care and screenings

People who have Medicare Part B as well as those covered by many individual and employer-sponsored health plans are eligible for free — i.e., no deductibles or copayments — preventive and wellness benefits, such as annual health exams, immunizations, mammograms and other screenings for diseases including diabetes and certain cancers. For instance, Medicare Part B enrollees can have a free wellness visit with their doctor every year. (See "What You Need to Know About the New, Free Medicare Checkup.") People with other types of insurance can ask their insurance company or physician about the free preventive services now available to them.
Related

New options for people with pre-existing conditions

Adults whom private insurers consider to be "high-risk" due to prior or current health problems — and who have been uninsured for at least six months — are eligible to buy insurance through the federal Pre-Existing Condition Insurance Plan (PCIP) in their state.

Lowered costs for people in the Medicare Part D "Doughnut Hole"

People with Medicare Part D who fall into the prescription drug coverage gap will automatically receive a 50 percent discount on most brand-name prescriptions and biologic drugs, as well as a discount on generic drugs. For 2011, the generic drug discount is 7 percent; in 2012, it will be 14 percent. (To learn more, see the Ms. Medicare columns "Paying Less for Drugs in the Doughnut Hole" and "Can a Drug Cost You Less in the Doughnut Hole?")

Greater consumer protections against insurance cancellations

A common practice among insurers seeking to deny payments for costly medical care has been to re-examine customers' initial applications and cancel or "rescind" policies. So long as you pay your premiumns, your health insurance is guaranteed. The health care law prohibits insurers from rescinding coverage because of unintentional mistakes or minor omissions on an application.

An end to lifetime limits on health insurance coverage

Insurers can no longer limit how much they will pay out in essential medical benefits over a person's lifetime. This benefit is now automatically in effect on all insurance policies.

Higher annual limits on health insurance coverage

Most insurance plans must now cover medical expenses up to at least $750,000 per year. (See page 3 for more about annual coverage limits).

Expanded coverage for adult children up to age 26

Young adults who don't have access to an employer health plan now can stay on a parent's health insurance policy until they turn 26, even if they are married or don't live at home. Previously, most insurance plans kicked young adults off family policies when they turned 18 or, if the young adult was in college, soon after graduation.

Insurance supports for early retirees

If you have retiree health coverage through your work and are between 55 and 64, funding from the new Early Retirees Reinsurance Program will enourage your former employer to maintain your health benefit until you reach Medicare age.

Greater protections for children with pre-existing conditions

Under most individual and group insurance plans, children up to age 19 with prior or current health problems can no longer be denied coverage.

Free wellness care for babies and children

Children are eligible for free annual wellness exams and immunizations from birth to age 21.

Easy-to-use resources for finding affordable insurance

Consumers seeking to research private and public health insurance plans, obtain rate information, and better understand their insurance options can now visit a one-stop shopping website established by the federal government.

Easier access to specialty care

Among the "patient bill of rights" provisions in effect now are rules that prevent insurance companies from requiring primary-care physician referrals for ob/gyn visits or out-of-network emergency care.

Expanded rights of appeal

If an insurer rejects a claim or cancels coverage, customers of most plans now have the right to appeal the decision to an outside review panel. Unlike in the past, insurers will have to abide by that group's findings.

Greater protections for nursing home residents

The new health care law provides expanded resources, such as access to quality ratings and complaint reports, for families seeking nursing home care and greater protections for nursing home residents.

Insurance supports for small-business employers

Business tax credits have been established for employers who have fewer than 25 employees and want to provide health insurance to their workers.

Benefits Still to Come

An end to denials and expensive premiums due to gender or pre-existing conditions

As of Jan. 1, 2014, insurance companies will no longer be able to deny adults health coverage because of pre-existing conditions, or charge higher premiums due to gender or gender-specific medical needs, such as childbearing.
Health Law: An Overview

The creation of health insurance exchanges

Also in 2014, most individuals and families will be required to carry a minimal level of health insurance. Those without employer or other group coverage will be able to purchase insurance more affordably through state-based health insurance exchanges. Premium subsidies will be available for individuals and families with limited incomes. People who select not to have health insurance coverage could face a fine.

Expanded mental health and substance abuse services

While many group insurance plans today do include mental health and addiction services, by 2014 most individual and small group insurance plans will be required to do the same.

An end to annual insurance limits on health coverage

In 2012, insurers will be required to cover medical expenses of up to $1.2 million per year. In 2013, the ceiling will rise to $2 million; in 2014, it will be eliminated entirely.

Insurance coverage for more low-income people

In 2014, people who earn less than about $15,000 a year (and about $29,000 for a family of four) will be eligible to enroll in Medicaid, the federally run public health insurance program for low-income people.

End of the Medicare Part D Doughnut Hole

In 2020, the Medicare Part D coverage gap, or doughnut hole, will completely close.

Since people often oppose the law without much idea of what's in it, I thought it would be good to know what the law really does.

As for the law increasing your premiums, my premiums go up all the time. That probably won't change much for most people.

Title: Re: Meltdown
Post by: Coopmv on January 20, 2012, 06:32:55 PM

Quote from: snyprrr on January 20, 2012, 08:49:52 AM
Our company, 7 years ago, 'upgraded' their brand, blah blah, and now, after all, they're switching back,... but not, get this, until after Novemeber,... which I thought was interesting.

Is everyone putting off their 'decisions' until after...um ::)... 'November'???

Things That Make You Go...Hmmm

Many middle and small businesses are waiting for the regime change in Washington after this November before they put their hiring plans in effect.

Title: Re: Meltdown
Post by: Coopmv on January 20, 2012, 06:35:16 PM

Quote from: karlhenning on January 20, 2012, 05:54:21 AM
Well, I may have news for you: in practically each of the past four or five years, my health care premium has gone up, or there has been a marginal roll-back in the benefit, or both. I fail to see that as an invidious result of "Obamacare." The cost structure of the health service is a problem; the drive to make sure that all Americans are covered by health insurance is not the problem there, although it is not yet positioned to be quite the solution, either.

But you are missing the point. The increases many people are seeing for 2012 are the biggest in a number of years ...

Title: Re: Meltdown
Post by: drogulus on January 21, 2012, 07:19:17 AM

Quote from: Coopmv on January 20, 2012, 06:35:16 PM
But you are missing the point. The increases many people are seeing for 2012 are the biggest in a number of years ...

Smart move, I'd say. Raise the premiums and blame it on the new law. The past increases were just increases and anger focused on the insurers. This is a freebie for them. They also have the Heritage Foundation spreading FUD.

The truth is that unless you fall into one of the categories I referenced above you won't notice anything. That means you won't see the difference until you get into trouble, and then you can ask Heritage "but, but why didn't you tell me?". Or, you can decide that objective information is worth more than propaganda. Not that AARP is objective, mind you, but they do outline the provisions which Heritage propaganda doesn't, (I know, I checked). In case there's any doubt, always prefer information sources that increase the information supply, rather than restrict it. It amazes me that more people don't get this point. You should never trust a single source for information, but you should especially distrust sources that tell you a bill is bad without explaining what is actually in the bill. See, they're afraid you'll find out that there's more to the story. The best rule to follow is to give your trust to sources that want you to know more, not less. But don't trust anyone completely.

Title: Re: Meltdown
Post by: Coopmv on January 21, 2012, 08:27:51 AM

Quote from: drogulus on January 21, 2012, 07:19:17 AM
Smart move, I'd say. Raise the premiums and blame it on the new law. The past increases were just increases and anger focused on the insurers. This is a freebie for them. They also have the Heritage Foundation spreading FUD.

The truth is that unless you fall into one of the categories I referenced above you won't notice anything. That means you won't see the difference until you get into trouble, and then you can ask Heritage "but, but why didn't you tell me?". Or, you can decide that objective information is worth more than propaganda. Not that AARP is objective, mind you, but they do outline the provisions which Heritage propaganda doesn't, (I know, I checked). In case there's any doubt, always prefer information sources that increase the information supply, rather than restrict it. It amazes me that more people don't get this point. You should never trust a single source for information, but you should especially distrust sources that tell you a bill is bad without explaining what is actually in the bill. See, they're afraid you'll find out that there's more to the story. The best rule to follow is to give your trust to sources that want you to know more, not less. But don't trust anyone completely.

If the law was so good, why wasn't a public health insurance exchange where people can buy more afforable health insurance coverage included as part of the package? Giving the private health insurers a healthy dose of competitions is a sure way to drive down insurance premium.

Title: Re: Meltdown
Post by: Coopmv on January 21, 2012, 01:29:53 PM

Another recession is on its way according to Gary Shilling ... (http://www.marketwatch.com/story/shilling-says-new-global-recession-is-here-2012-01-20?pagenumber=2)

Title: Re: Meltdown
Post by: mc ukrneal on January 21, 2012, 01:45:04 PM

Quote from: Coopmv on January 20, 2012, 06:35:16 PM
But you are missing the point. The increases many people are seeing for 2012 are the biggest in a number of years ...

My premiums have gone up EVERY year for the past 20 (in those years I had insurance, which was most of them). It's gone up regarldless of whether a Republican or a Democrat was in office. It's gone up in good years and in bad. It's gone up, up, and up no matter what laws were or were not enacted.

Title: Re: Meltdown
Post by: Todd on January 21, 2012, 01:54:50 PM

Quote from: mc ukrneal on January 21, 2012, 01:45:04 PMIt's gone up in good years and in bad. It's gone up, up, and up no matter what laws were or were not enacted.

That will change after the 2012 election. I promise.

Title: Re: Meltdown
Post by: Karl Henning on January 22, 2012, 08:04:43 AM

Todd, have I expressed appreciation before, of your sense of humor?

Title: Re: Meltdown
Post by: Coopmv on January 22, 2012, 09:24:36 AM

European rating agency could launch in 2012. I believe the American rating agencies gave the Greek debt some excellent rating as well a number of years ago. Go figure ... (http://finance.yahoo.com/news/european-rating-agency-rival-p-140734600.html)

Title: Re: Meltdown
Post by: Todd on January 22, 2012, 09:30:29 AM

Hmm, a few months ago the Europeans talked about limiting the ability of ratings agencies to donwgrade during dire situations, and now they are aiming to create a new ratings agency, with the twist that it will be legally liable for the ratings. Nope, I don't see any political involvement here . . .

Title: Re: Meltdown
Post by: Karl Henning on January 22, 2012, 11:33:03 AM

They may just be too accustomed to centralization, to allow for the old healthy checks-&-balances . . . .

Title: Re: Meltdown
Post by: Coopmv on January 28, 2012, 06:27:41 PM

Quote from: karlhenning on January 22, 2012, 11:33:03 AM
They may just be too accustomed to centralization, to allow for the old healthy checks-&-balances . . . .

What checks & balances? Both parties are controlled by the lobbyists ...

Title: Re: Meltdown
Post by: DavidW on January 28, 2012, 07:18:48 PM

Quote from: Coopmv on January 28, 2012, 06:27:41 PM
What checks & balances? Both parties are controlled by the lobbyists ...

I thought that until I saw politicians step back from sopa when people made their voice heard. I think it's more like if we don't object they'll let lobbyists do their thinking. So we just have to let our voices be heard more often.

Title: Re: Meltdown
Post by: Coopmv on January 28, 2012, 07:27:01 PM

Quote from: DavidW on January 28, 2012, 07:18:48 PM
I thought that until I saw politicians step back from sopa when people made their voice heard. I think it's more like if we don't object they'll let lobbyists do their thinking. So we just have to let our voices be heard more often.

Perhaps. But from what I have observed over the years, the passing or the defeat of any legislation merely reflects which lobbying camp wins out. I am particularly leery of the free trade advocacy, you have to wonder if they are the paid lobbyists for China.

Title: Re: Meltdown
Post by: snyprrr on January 31, 2012, 07:35:08 AM

Seven-ish years ago I got a job at this... store... and shortly thereafter they changed over to the company's more upscale brand name. Well, we just got the news that we will be changing BACK,... yes, the old store sign will be gotten out of mothballs,... oh, this is so rich,... this company (no, I will not) is just so typical in its corporate bad mistakes policy kind of way.

~~I guess, since I'm asking everyone else,... what would I possibly go back to school for?~~

oh, forget it, I'm just being a provoking asshole here. >:D

I have this horrible urge to just get free money for life,... my body just won't bust its own ass for slave wages,... for what???,... ha, this company I work for has a 1% raise policy...

Hey, if this is a fiat economy, why is 'stealing' bad? It's all money out of thin air, so, what, would I be stealing...air???? Since you can't steal air, how can scamming the system be fraud?

All of a sudden, I feel I can see the logic that Our Masters use for their own benefit. (good for us, but you don't get to play)

Will we REALLY have riots in the US, or are we just too dumb, lazy, whatever??

I think 2012 just hit me. ??? ??? ??? ??? ??? ??? ???

Title: Re: Meltdown
Post by: snyprrr on January 31, 2012, 07:52:16 PM

Quote from: snyprrr on January 31, 2012, 07:35:08 AM
Seven-ish years ago I got a job at this... store... and shortly thereafter they changed over to the company's more upscale brand name. Well, we just got the news that we will be changing BACK,... yes, the old store sign will be gotten out of mothballs,... oh, this is so rich,... this company (no, I will not) is just so typical in its corporate bad mistakes policy kind of way.

~~I guess, since I'm asking everyone else,... what would I possibly go back to school for?~~

oh, forget it, I'm just being a provoking asshole here. >:D

I have this horrible urge to just get free money for life,... my body just won't bust its own ass for slave wages,... for what???,... ha, this company I work for has a 1% raise policy...

Hey, if this is a fiat economy, why is 'stealing' bad? It's all money out of thin air, so, what, would I be stealing...air???? Since you can't steal air, how can scamming the system be fraud?

All of a sudden, I feel I can see the logic that Our Masters use for their own benefit. (good for us, but you don't get to play)

Will we REALLY have riots in the US, or are we just too dumb, lazy, whatever??

I think 2012 just hit me. ??? ??? ??? ??? ??? ??? ???

oh boy, this guy is bitter ::)

Title: Re: Meltdown
Post by: Karl Henning on February 01, 2012, 05:19:42 AM

Katrina vanden Heuvel to the Occupiers: Grow Up (http://www.washingtonpost.com/opinions/time-to-run-for-office-99-percenters/2012/01/30/gIQAdnHweQ_story.html)

Title: Re: Meltdown
Post by: DavidW on February 01, 2012, 05:26:40 AM

Quote from: karlhenning on February 01, 2012, 05:19:42 AM
Katrina vanden Heuvel to the Occupiers: Grow Up (http://www.washingtonpost.com/opinions/time-to-run-for-office-99-percenters/2012/01/30/gIQAdnHweQ_story.html)

I strongly disagree with that article. For those rebelling against the system... become part of the system, what!? ???

Also the people like that on the other side, the tea party republicans ruin everything by refusing to cooperate at any level with not only dems but other republicans! They've become part of the problem and not the solution. More of the same on the other side would be just as bad. In fact, I bet it would make the congress completely ineffectual instead of mostly ineffectual.

And I'm also sick and tired of mavericks being popular just because it's seen as a bad thing to have political experience. Excuse me but I'm sick of unqualified people being elected... okay rant over. >:D

Title: Re: Meltdown
Post by: Karl Henning on February 01, 2012, 05:31:01 AM

Nice rant! : )

Title: Re: Meltdown
Post by: snyprrr on February 01, 2012, 07:27:04 AM

Quote from: karlhenning on February 01, 2012, 05:19:42 AM
Katrina vanden Heuvel to the Occupiers: Grow Up (http://www.washingtonpost.com/opinions/time-to-run-for-office-99-percenters/2012/01/30/gIQAdnHweQ_story.html)

Join us, join us, join us

C'mon,... Katrina vanden Heuvel???... that's not 'Merkin!! >:D This is the devil saying, C'mon, we've got bright shiny lights here, join us.

Great, let's ALL become pundits! That should solve the problem.

Bend over and say, Ahhhh!!!

Maybe Katrina should GET A JOB!!!!!!! HUH?

Amerika is f*****. Why not just get a job as a stormtrooper so you can go and bash people in the head? Hey, join us!!!! We, the Elite, are a fun bunch of crooks...

Katrina, have you ever held a job (no, what you do is not a job, it is part of your inheritance,... who the **** cares what this ************* says???? ***** you Katrina, you old dog ******* ***** ** ******* **** **8****

oh, and btw, *** ** ******* * ******** **** ****** *** ** **********!!!!!!!!!! (oh yea, that will leave them reeling!!!!)

I've got a 'job' for ya >:D

yea, I'm still bitter from yesterday,... will probably rant much more this year...

Hey Katrina, why don't you just go invade Iran for Israel, or something?

Yea, 'join' the Elite,... just how do you do that? I didn't get my invitation...

spit, spit, spit

(I could do this all day,... I really have some therapy to keyboard out ;) ;D)

Maybe you secretly want to be a dirty hippie?

ok, rant: OFF

Title: Re: Meltdown
Post by: Todd on February 01, 2012, 07:42:14 AM

Quote from: DavidW on February 01, 2012, 05:26:40 AMIn fact, I bet it would make the congress completely ineffectual instead of mostly ineffectual.

The American system has it pluses. The tendency for Congress to act slowly, if at all, is, or can be, a good thing.

For instance, despite the tough talk from Republicans, and upcoming budget "cuts" in defense, etc, the US federal government has in fact been pursuing a moderately expansionary policy and will continue to do so. In contrast, most Europeans just showed how effective their political system is by opting for greater fiscal coordination and fiscal austerity. Based on evidence where "austere" (read: contractionary) fiscal policies have been pursued in the last few years, this may not end up benefitting everyone. Germany may benefit, though.

Further, the US is further along in deleveraging private debt than most of Europe is now, or Japan was at a similar time after its bubble burst. That is, privately held debt is down, though public debt is up. There are a variety of reasons for this, and things are not necessarily as rosy as the McKinsey study that pointed this out states, but one big reason for this is because in the US, it is still comparatively easy to foreclose on homes. (Shhh, don't ever let anyone know that getting/forcing borrowers out from under debt they cannot afford could have beneficial effects.) Yes, the federal government and some state governments have tried to slow the asset disposition process – and in New York, New Jersey, and Florida the state governments have done a good job of it – but overall they have not and really cannot stop the process.

(The federal efforts [eg, HAMP] are really poorly designed and cumbersome to execute, and result in silly scenarios. For instance, under HAMP, if a borrower and servicer meet all performance criteria, both the borrower and asset owner receive an incentive payment. The borrower incentive payment is sent directly to the servicer and must be passed through to the asset owner as a principal reduction. This means that the asset owner gets paid twice, and instead of assisting borrowers with paying the next installment, which is generally more important from their perspective, their debt burden is reduced by an irrelevant amount while they may go delinquent again. Thank goodness the program is being extended to non-owner occupied homes and larger scale debt reduction. I don't see tons of opposition from asset owners, either.)

Title: Re: Meltdown
Post by: drogulus on February 01, 2012, 01:42:45 PM

Quote from: Todd on February 01, 2012, 07:42:14 AM

The American system has it pluses. The tendency for Congress to act slowly, if at all, is, or can be, a good thing.

For instance, despite the tough talk from Republicans, and upcoming budget "cuts" in defense, etc, the US federal government has in fact been pursuing a moderately expansionary policy and will continue to do so. In contrast, most Europeans just showed how effective their political system is by opting for greater fiscal coordination and fiscal austerity. Based on evidence where "austere" (read: contractionary) fiscal policies have been pursued in the last few years, this may not end up benefitting everyone. Germany may benefit, though.

Further, the US is further along in deleveraging private debt than most of Europe is now, or Japan was at a similar time after its bubble burst. That is, privately held debt is down, though public debt is up. There are a variety of reasons for this, and things are not necessarily as rosy as the McKinsey study that pointed this out states, but one big reason for this is because in the US, it is still comparatively easy to foreclose on homes. (Shhh, don't ever let anyone know that getting/forcing borrowers out from under debt they cannot afford could have beneficial effects.) Yes, the federal government and some state governments have tried to slow the asset disposition process – and in New York, New Jersey, and Florida the state governments have done a good job of it – but overall they have not and really cannot stop the process.

(The federal efforts [eg, HAMP] are really poorly designed and cumbersome to execute, and result in silly scenarios. For instance, under HAMP, if a borrower and servicer meet all performance criteria, both the borrower and asset owner receive an incentive payment. The borrower incentive payment is sent directly to the servicer and must be passed through to the asset owner as a principal reduction. This means that the asset owner gets paid twice, and instead of assisting borrowers with paying the next installment, which is generally more important from their perspective, their debt burden is reduced by an irrelevant amount while they may go delinquent again. Thank goodness the program is being extended to non-owner occupied homes and larger scale debt reduction. I don't see tons of opposition from asset owners, either.)

I don't think the Repubs are acting slowly. For one thing they have no useful modifications or alternatives to offer, just a more brutal contraction than the Europeans.

How about this for acting slowly? Why don't we let the Bush tax cuts lapse? We could blame "gridlock", and at one stroke we'd get rid of the largest component of future deficits, and I predict that if we do that there will be moaning from taxpayers about the new (old) high tax rates and on the next up-cycle we'd go into surplus.

Title: Re: Meltdown
Post by: Todd on February 01, 2012, 02:32:53 PM

Quote from: drogulus on February 01, 2012, 01:42:45 PMI don't think the Repubs are acting slowly. For one thing they have no useful modifications or alternatives to offer, just a more brutal contraction than the Europeans.

Well, only if you take their rhetoric at face value. What they say and what they do are not always the same. And of course, Republicans as a rule want to maintain existing tax cuts and offer new ones, which is expansionary by nature, though it also increases the deficit and thus debt, and thus contributes to long-term fiscal issues. You need to keep both sides of the budget in mind. Federal spending cuts don't always amount to real spending cuts. Even after the defense cuts on offer now, defense spending will be higher in ten years than it is today and any drop as a percentage of GDP will be relatively small. And that's if the spending reductions aren't themselves curbed, which they almost certainly will be. This is how it is with most federal spending.

If all of the Bush tax cuts lapsed, the effect would be to reduce spending further down the income spectrum (not just the rich got a cut), which would have a contractionary effect. Increasing taxes on higher income people would also have a contractionary effect, though far less of one. It seems that partisanship leads to even basic Keynesian thought being forgotten. With Democrats now in full campaign mode offering basically meaningless policy options like the so-called Buffett Rule – sounds good, raises comparatively insignificant amounts of revenue – little progress will likely be made until after November. Also, Medicare and Medicaid spending increases represent the largest component(s) of potential future outlays, and hence potential future deficits. Even Democratic budgeting folks say that.

What is most intriguing about recent developments – the Fed pledging to keep rates at current level until 2014, US debt deleveraging, and minimal changes to fiscal policy in the short term on this side of the Atlantic, and a more parsimonious ECB and pledges to pursue fiscal austerity by most European countries on the other side – is that there will be quantifiable evidence on which macroeconomic approaches works better. Recent history in European countries that have cut back significantly show the outcome, but this will offer an even more significant contrast. Assuming, of course, the Europeans do what they say they are going to do.

Title: Re: Meltdown
Post by: DavidW on February 01, 2012, 03:52:28 PM

You make some valid points Todd... but it is pretty frustrating right now because it feels as if is urgent to make important, useful decisions to shape our economy and our future... and nobody will bend even a little to see it done. :-\

I don't want to see the agenda of either party pushed through, I think both are damaging. I want to see both parties work with each other to come up with legislature that benefits the American people. That would be preferable to stalemate.

Title: Re: Meltdown
Post by: Todd on February 01, 2012, 05:11:41 PM

Quote from: DavidW on February 01, 2012, 03:52:28 PMbut it is pretty frustrating right now because it feels as if is urgent to make important, useful decisions to shape our economy and our future

I guess the key word here is 'urgent'. We need to do something right now. Except maybe we don't. Pass appropriations to keep the government going, sure, and perform some other housekeeping items (eg, the annual AMT fix), but long-term budget fixes do not need to happen in the next few months, or even this year. I'd rather that reforming the tax code and entitlements took a while to hash through everything. If that takes ever mounting pressure on both sides, that's what it takes.

Title: Re: Meltdown
Post by: Karl Henning on February 02, 2012, 03:58:34 AM

The search for an actual solution is one of the first casualties of our election campaigns. Todd's points well taken, that the feeling of urgency may be a shadow of the rhetorical hype; and that the solution will probably be a matter of responsible slogging. If there could be responsible bipartisan slogging, all the better . . . .

Title: Re: Meltdown
Post by: drogulus on February 02, 2012, 04:30:10 AM

Quote from: DavidW on February 01, 2012, 03:52:28 PM
You make some valid points Todd... but it is pretty frustrating right now because it feels as if is urgent to make important, useful decisions to shape our economy and our future... and nobody will bend even a little to see it done. :-\

The points are valid. I would let the cuts lapse anyway and balance elsewhere with spending increases. Why cancel the Bush cuts now? Because you can get a very useful and necessary policy reversal, a huge amount of revenue, something close to a balanced budget without damaging any programs people care about. It's a big win. The contractionary effects can be fought and we'll get the expansionary effects fairly soon. My observations of how business decisions are influenced by fiscal developments leads me to estimate that a program like the one I recommend would have a stimulative effect.

Quote from: DavidW on February 01, 2012, 03:52:28 PM

I don't want to see the agenda of either party pushed through, I think both are damaging. I want to see both parties work with each other to come up with legislature that benefits the American people. That would be preferable to stalemate.

Oh please, spare us these "I wish the Nazis and Jews would stop being mean to each other" equivalencies. The Republicans are far worse. The worst thing about the Dems is they can't get it done. What they want to do is generally good. Not perfect, but good.

Title: Re: Meltdown
Post by: snyprrr on February 02, 2012, 06:17:21 AM

Diebold Voting Machines made in Israel

Title: Re: Meltdown
Post by: Todd on February 02, 2012, 06:33:49 AM

Quote from: drogulus on February 02, 2012, 04:30:10 AMThe worst thing about the Dems is they can't get it done.

That's a very bad thing if one is talking about elected leaders.

Title: Re: Meltdown
Post by: eyeresist on February 02, 2012, 03:39:22 PM

Quote from: snyprrr on February 02, 2012, 06:17:21 AM
Diebold Voting Machines made in Israel

Surreptitious circumcision attachment optional.

Quote from: drogulus on February 02, 2012, 04:30:10 AMThe worst thing about the Dems is they can't get it done. What they want to do is generally good.

Problem is, the dems want to lead by consensus, whereas the reps won't respect you unless you slam it home without any lube.

I apologise for the disgusting imagery.

Title: Re: Meltdown
Post by: snyprrr on February 03, 2012, 07:03:48 AM

Quote from: eyeresist on February 02, 2012, 03:39:22 PM
Surreptitious circumcision attachment optional.

Ouch-vey!! ;)

Title: Re: Meltdown
Post by: Karl Henning on February 09, 2012, 09:57:10 AM

Greece secures last-minute bailout deal, but it will hurt (http://www.csmonitor.com/World/Europe/2012/0209/Greece-secures-last-minute-bailout-deal-but-it-will-hurt)

Title: Re: Meltdown
Post by: Todd on February 09, 2012, 10:20:29 AM

Quote from: karlhenning on February 09, 2012, 09:57:10 AMGreece secures last-minute bailout deal, but it will hurt (http://www.csmonitor.com/World/Europe/2012/0209/Greece-secures-last-minute-bailout-deal-but-it-will-hurt)

I like this blurb: "They also indicated they are considering a freeze in private sector salaries until the national unemployment rate decreases from its current level of 19 percent to below 10 percent, although it is unclear how that could be done."

Wage and price controls have a fantastic record of success during peacetime. Waiting for a nine point drop means people are stuck at there current salary for how many years? And I must wonder if the intention is for a freeze, or just a freeze on increases. Surely no one would care if many non-minimum wage workers took a pay cut. I wonder about labor market mobility, as well. No, forget all that, the plan looks solid.

Title: Re: Meltdown
Post by: Karl Henning on February 09, 2012, 10:52:18 AM

They could be business geniuses:

Postal Service loses $3.3 billion in first quarter (http://www.washingtonpost.com/blogs/federal-eye/post/postal-service-loses-33-billion-in-first-quarter/2012/02/09/gIQANsGV1Q_blog.html?hpid=z4)

Title: Re: Meltdown
Post by: mc ukrneal on February 09, 2012, 11:03:49 AM

Quote from: karlhenning on February 09, 2012, 10:52:18 AM
They could be business geniuses:

Postal Service loses $3.3 billion in first quarter (http://www.washingtonpost.com/blogs/federal-eye/post/postal-service-loses-33-billion-in-first-quarter/2012/02/09/gIQANsGV1Q_blog.html?hpid=z4)

Actually, they have been warning for many months that they are in trouble. But Congress has to approve the changes they want to make. I think Congress denied their request to close a huge number of post offices, which would allow them to stablize. Soon, they won't have to worry about it (or the pensions of those employees) when the post office goes bust.

Title: Re: Meltdown
Post by: Todd on February 09, 2012, 11:12:53 AM

Quote from: karlhenning on February 09, 2012, 10:52:18 AM
They could be business geniuses:

The USPS faces three main issues that I see: 1.) It is in a declining industry; 2.) it is not allowed to react quickly enough, if at all, to market needs; 3.) it is hammered by the Congressional requirement that it "pre-fund" its future retiree health care expenses. Items 2 & 3 are the fault of Congress, to be fair. Really, should the USPS keep open a rural office that serves literally tens of people a month? Should it be required to pre-fund to the tune of over $5 billion a year for ten years when no one else has to? (More conspiracy minded folks on the left say that the pre-funding requirement is a way to force dreaded privatization on the USPS.) Perhaps if people stopped using the internet so much . . .

Title: Re: Meltdown
Post by: Karl Henning on February 09, 2012, 11:27:33 AM

Aye, could be a driver for yet less satisfaction with Congress . . . .

Title: Re: Meltdown
Post by: Coopmv on February 11, 2012, 12:50:09 PM

Quote from: karlhenning on February 09, 2012, 10:52:18 AM
They could be business geniuses:

Postal Service loses $3.3 billion in first quarter (http://www.washingtonpost.com/blogs/federal-eye/post/postal-service-loses-33-billion-in-first-quarter/2012/02/09/gIQANsGV1Q_blog.html?hpid=z4)

When someone like myself who still paid his bills via snail mail two years ago has finally embraced online payments, the USPS is clearly in serious trouble ...

Title: Re: Meltdown
Post by: Coopmv on February 11, 2012, 12:52:07 PM

Quote from: karlhenning on February 09, 2012, 09:57:10 AM
Greece secures last-minute bailout deal, but it will hurt (http://www.csmonitor.com/World/Europe/2012/0209/Greece-secures-last-minute-bailout-deal-but-it-will-hurt)

Greece cooked its books with help from Goldman Sachs to gain entry into the EU. Why hasn't EU gone after GS?

Title: Re: Meltdown
Post by: eyeresist on February 12, 2012, 03:04:24 PM

Quote from: Coopmv on February 11, 2012, 12:50:09 PM
When someone like myself who still paid his bills via snail mail two years ago has finally embraced online payments, the USPS is clearly in serious trouble ...

But what about all these CDs etc we are ordering? Have couriers taken ALL that business?

Title: Re: Meltdown
Post by: Coopmv on February 12, 2012, 03:08:19 PM

Quote from: eyeresist on February 12, 2012, 03:04:24 PM
But what about all these CDs etc we are ordering? Have couriers taken ALL that business?

All CD etailers in the US still ship via USPS. I think the problem USPS is facing may be somewhat unique. How are the postal systems in other countries doing these days anyway?

Title: Re: Meltdown
Post by: eyeresist on February 12, 2012, 04:20:30 PM

Quote from: Coopmv on February 12, 2012, 03:08:19 PM
All CD etailers in the US still ship via USPS. I think the problem USPS is facing may be somewhat unique. How are the postal systems in other countries doing these days anyway?

Australia Post (http://en.wikipedia.org/wiki/Australia_Post) is government-owned but self-funding, and in 09/10 made a before-tax profit of 103 million.

Title: Re: Meltdown
Post by: Coopmv on February 12, 2012, 04:38:38 PM

Quote from: eyeresist on February 12, 2012, 04:20:30 PM
Australia Post (http://en.wikipedia.org/wiki/Australia_Post) is government-owned but self-funding, and in 09/10 made a before-tax profit of 103 million.

I think the USPS may have a better future if the politicians allow it to adopt the business model used by successful postal systems in other countries. The only problem is the US is run by a bunch of morons who think we are the best in everything we do and there must be an American solution, which usually does not work ...

Title: Re: Meltdown
Post by: nesf on February 12, 2012, 04:49:20 PM

Quote from: Coopmv on February 12, 2012, 03:08:19 PM
How are the postal systems in other countries doing these days anyway?

Pretty crappy in Ireland for letters but doing ok off parcel delivery because of internet shopping. EU regulations requiring competition are going to make it *interesting*. Knowing our Government they'll implement it in a cack handed fashion.

Title: Re: Meltdown
Post by: Coopmv on February 12, 2012, 04:59:26 PM

Quote from: nesf on February 12, 2012, 04:49:20 PM
Pretty crappy in Ireland for letters but doing ok off parcel delivery because of internet shopping. EU regulations requiring competition are going to make it *interesting*. Knowing our Government they'll implement it in a cack handed fashion.

USPS has to become self-funding in order to dig inself out of this deep hole because the politicians in Washington have the tendency to get their hands on whatever pot of money they can get their hands on to make the federal deficits look better. We badly need to have a regime change or this country will go bankrupt ...

Title: Re: Meltdown
Post by: Karl Henning on February 13, 2012, 03:54:30 AM

Gosh, and here's the first time I've learnt that the post office's financial crisis is the fault of the Obama administration!!!

Title: Re: Meltdown
Post by: Karl Henning on February 13, 2012, 03:55:28 AM

Quote from: Coopmv on February 12, 2012, 09:38:38 PM (http://www.good-music-guide.com/community/index.php?topic=3519.msg600938#msg600938)

I think the USPS may have a better future if the politicians allow it to adopt the business model used by successful postal systems in other countries. The only problem is the US is run by a bunch of morons who think we are the best in everything we do and there must be an American solution, which usually does not work ...

Well, and isn't that what American "Exceptionalism" means? That we really cannot larn nuthin from no one else?

Title: Re: Meltdown
Post by: DavidW on February 13, 2012, 04:01:14 AM

Quote from: karlhenning on February 09, 2012, 10:52:18 AM
They could be business geniuses:

Postal Service loses $3.3 billion in first quarter (http://www.washingtonpost.com/blogs/federal-eye/post/postal-service-loses-33-billion-in-first-quarter/2012/02/09/gIQANsGV1Q_blog.html?hpid=z4)

That was brutally unfair. USPS has been trying for YEARS to make changes to their business so that this won't happen. Congress always shuts down any fiscally responsible plan because all they hear is the outrage of the slightly inconvenienced voters who act like spoiled, overly pampered brats.

Title: Re: Meltdown
Post by: DavidW on February 13, 2012, 04:05:06 AM

Quote from: Coopmv on February 12, 2012, 04:59:26 PM
USPS has to become self-funding in order to dig inself out of this deep hole because the politicians in Washington have the tendency to get their hands on whatever pot of money they can get their hands on to make the federal deficits look better.

Agree, I think the USPS would do better if privatized.

QuoteWe badly need to have a regime change or this country will go bankrupt ...

No. $:)

Title: Re: Meltdown
Post by: Karl Henning on February 13, 2012, 04:09:29 AM

Quote from: DavidW on Today at 09:01:14 AM (http://www.good-music-guide.com/community/index.php?topic=3519.msg601022#msg601022)

That was brutally unfair.

Oh, I understand. The figure, though, did give me pause . . . made me reflect that the USPS can lose more money than the GNP of most nations on the planet. And I thought of Mario Cuomo's retort to the SUNY board when, on being required to examine their budget to see if there were any cost saves they could make, they answered, "No, everything in our operations is just as it ought to be." Cuomo snarked, "What are you guys, business geniuses?"

Title: Re: Meltdown
Post by: DavidW on February 13, 2012, 08:13:04 AM

Sorry for being so cranky, too early in the am for posting. :)

Title: Re: Meltdown
Post by: Todd on February 13, 2012, 08:32:09 AM

Quote from: karlhenning on February 13, 2012, 04:09:29 AMmade me reflect that the USPS can lose more money than the GNP of most nations on the planet.

Of course it can, because it is the only company (?) in the country that exists by Constitutional mandate. It must exist, and must keep going, even if it loses piles of cash every quarter. Congress will always come up with a work-around to keep it going. While not as significant as it was before the 1940s or so, it is still very useful for incumbents in terms of delivering jobs and mailers come election time. Hence the fierce political battles to keep open even podunk branches. I cannot envision how the USPS can ever be truly privatized given its Constitutional origin.

One thing is for sure, strip away the health care pre-funding, and a huge chunk of the financial problems go away immediately. Then the USPS could focus on improving operations. Let them raise rates, let them close branches, and let them offer new products. And I say let them offer discriminatory pricing, so they can jack up rates steeply on FedEx and UPS, both of which rely on the USPS for rural delivery. How many other companies are in a bind whereby they must help their competitors?

Title: Re: Meltdown
Post by: Karl Henning on February 13, 2012, 09:39:34 AM

Quote from: DavidW on Today at 01:13:04 PM (http://www.good-music-guide.com/community/index.php?topic=3519.msg601104#msg601104)

Sorry for being so cranky, too early in the am for posting. :)

No worries!

Title: Re: Meltdown
Post by: drogulus on February 13, 2012, 07:31:23 PM

There's no problem with a government mandated corporation. We should try to make it work and it will succeed. We need to stop planning for failure.

Quote from: Todd on February 13, 2012, 08:32:09 AM

Of course it can, because it is the only company (?) in the country that exists by Constitutional mandate. It must exist, and must keep going, even if it loses piles of cash every quarter. Congress will always come up with a work-around to keep it going. While not as significant as it was before the 1940s or so, it is still very useful for incumbents in terms of delivering jobs and mailers come election time. Hence the fierce political battles to keep open even podunk branches. I cannot envision how the USPS can ever be truly privatized given its Constitutional origin.

One thing is for sure, strip away the health care pre-funding, and a huge chunk of the financial problems go away immediately. Then the USPS could focus on improving operations. Let them raise rates, let them close branches, and let them offer new products. And I say let them offer discriminatory pricing, so they can jack up rates steeply on FedEx and UPS, both of which rely on the USPS for rural delivery. How many other companies are in a bind whereby they must help their competitors?

We can do all that and more. Poor people with no bank accounts should cash their checks at the Post Office. They could do their banking there, complete with ATM cards and savings plans. A credit union for American citizens and illegal aliens! Sign up today and fill out forms for a jobs and residence permit, and send your remittances home while-U-wait!

Title: Re: Meltdown
Post by: drogulus on February 14, 2012, 11:30:43 PM

Here's an interesting view from an investor columnist named Morgan Housel at

(http://4.bp.blogspot.com/_TZIN3wCHiCs/Ssse6zGP-rI/AAAAAAAAA5c/t56gK1nc0sY/s320/motley_fool.jpg)

This recession was caused by an overdose in debt, particularly in the household and banking sector. And I'll say it until I'm hoarse: The main reason the economy is slow today is because households and banks are relieving themselves of that debt about as fast as they can. That's why our recovery has been slow, but it's what makes it real. We're attacking the root cause of our problems, not just the symptoms.

Since 2008, mortgage debt has declined by about $1 trillion. Credit card debt has dropped by $180 billion. Household debt payments as a percentage of income are now at the lowest level in 18 years. Even when government debt is taken into account, the economy's total debt-to-GDP ratio has been declining for four years, and faster than nearly any other developed nation on Earth.

I'll add this: this deleveraging amounts to the good part a contractionary trend. Recovery takes a long time when consumption is deferred as the government doesn't do its Keynesian duty by offsetting the paydown with a countervailing stimulus. That is, we did a half-assed job.

The author has a good overview on the Obama budget showing how it compares to the historical trend since 1960. One point sticks out: If Obama talked like a Republican he'd be recognized as an economic conservative. The numbers don't lie: while the private economy has picked up steam the government has continued to shrink, and the shrinkage is damaging. We will recover in spite of it, not because of it.

Here are the articles:

More on the Recovery (http://www.fool.com/investing/general/2012/02/09/more-on-the-recovery.aspx?source=ihpdspmra0000001&lidx=1)

Just the Facts: Everything You Need to Know About Obama's Budget (http://www.fool.com/investing/general/2012/02/14/just-the-facts-everything-you-need-to-know-about-o.aspx?source=ihpdspmra0000001&lidx=2)

It's good reading for the fact-head minority that visits the Shrine of The Perpetual Meltdown. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

Title: Re: Meltdown
Post by: nesf on February 15, 2012, 01:12:31 AM

It's pretty much true that credit bubbles, and financial crises, produce recessions like these because of the need for debt deleveraging after the crisis point in households and business causing a longer slowdown. Just be glad you're not Ireland and ended up with a National Budget Deficit of 33% to deal with on top of this deleveraging. :/

Title: Re: Meltdown
Post by: Karl Henning on February 15, 2012, 03:47:35 AM

Quote from: drogulus on Today at 04:30:43 AM (http://www.good-music-guide.com/community/index.php?topic=3519.msg601609#msg601609)

Here's an interesting view from an investor columnist named Morgan Housel at

>(http://4.bp.blogspot.com/_TZIN3wCHiCs/Ssse6zGP-rI/AAAAAAAAA5c/t56gK1nc0sY/s320/motley_fool.jpg)

This recession was caused by an overdose in debt, particularly in the household and banking sector. And I'll say it until I'm hoarse: The main reason the economy is slow today is because households and banks are relieving themselves of that debt about as fast as they can.

Which, meseems, must after all be a good thing . . . .

Title: Re: Meltdown
Post by: nesf on February 15, 2012, 03:52:56 AM

Quote from: karlhenning on February 15, 2012, 03:47:35 AM
Which, meseems, must after all be a good thing . . . .

Just very painful short term making it unpopular with voters and making them look for someone to blame for their misery other than themselves. Etc.

Title: Re: Meltdown
Post by: Todd on February 15, 2012, 06:54:12 AM

Quote from: drogulus on February 14, 2012, 11:30:43 PMRecovery takes a long time when consumption is deferred as the government doesn't do its Keynesian duty by offsetting the paydown with a countervailing stimulus. That is, we did a half-assed job.

The article offers nothing new. Deleveraging has been talked about and written about since before the 2008 collapse.

As to half-assed, well, first, this is a democracy. Not everyone believes in Keynesian theory - including some Nobel Prize winners in economics - and therefore compromises must be reached. Plus there's all the standard political wrangling to carve up political spending. Second, even with all that, the US has done a good job deleveraging, and the expansionary policies of the Fed have been ground-breaking in their scope (which is bad to some people, of course), and US federal debt has increased by over $4 trillion in the last four years. Rather than half-assed measures, the US has pursued intrinsically expansionary policies the whole time. The incontrovertible evidence is in the numbers, not the rhetoric. Yes, it's not enough for some, and die-hard Keynesians want more, more, more. But political reality must be taken into account. Decades hence, the US response will probably be looked at in a pretty good light. It's not academically perfect, but that's irrelevant.

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 02:09:33 PM

My point was to combine what the articles said to give a broader picture. The deleveraging is good for us while the government contraction undercuts it. Far from being new, this is exactly what was predicted. The point is to show that it really, really would have been right to send aid to states and localities so they wouldn't cut jobs and programs. We lost 9 million jobs in total and so far have got 3 million back. If we had lost fewer jobs we'd be in a good position now. Everyone ought to think carefully about whether the Republicans were disagreeing with a theory or preventing a more rapid recovery which Obama would benefit from. I don't think Republicans really live on a different planet. They know what they say is mendacious nonsense. This is not a disagreement about a theory. Republicans didn't oppose Obama's efforts because they thought they would fail. They opposed them because they knew that government efforts would largely succeed, as they have to the extent that they were applied. So theory is largely epiphenomenal here, and a bit of a smokescreen.

Title: Re: Meltdown
Post by: Todd on February 15, 2012, 02:11:30 PM

Quote from: drogulus on February 15, 2012, 02:09:33 PMwhile the government contraction undercuts it.

What government contraction are you referring to? The federal government has not shrunk, and the cuts at the state level are due to a variety of state laws enacted under a variety of state level administrations. If people want state governments to run deficits, laws need to be passed at the appropriate level of government. I don't see a smaller federal deficit and larger state deficits as a trade off of any particular value from an economic standpoint.

Quote from: drogulus on February 15, 2012, 02:09:33 PMIf we had lost fewer jobs we'd be in a good position now.

Well, the same can be said about every recession or depression.

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 02:29:44 PM

Karl, the positive efforts of private individuals and companies to recover from a disaster are good things. That doesn't mean that the disaster was good, or that the government was right to respond in the inadequate way that it did. The stimulus was too small, and that's not just a "die-hard" point of view, although it is a "die-hard" point of view. Now it's time for the people who were wrong to see their views die a little.

QuoteWhat government contraction are you referring to? The federal government has not shrunk, and the cuts at the state level are due to a variety of state laws enacted under a variety of state level administrations. If people want state governments to run deficits, laws need to be passed at the appropriate level of government. I don't see a smaller federal deficit and larger state deficits as a trade off of any particular value from an economic standpoint.

I'm referring to the shrinkage in employment at the federal, state, and local levels. The deficit increase is due to loss of revenues from the recession and the stimulus spending. As a proportion of the total economy the government is smaller today than it was in 2008 even with the stimulus.

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 02:35:44 PM

We should have frozen employment across the board and given aid to states to balance their budgets and run a larger federal deficit. That's the "orthodox" response to the crisis.

I have to say that the idea that the government is bigger if it has less revenue is not very convincing. That's what Republicans say, of course, but they have to say something.

Here's a source of confusion. In spending terms the government looks big, while in revenue terms the government has been shrinking. When you subtract the stimulus spending and the Bush tax cuts we get back to historic norms. Since both the spending and cuts are temporary, that's the best way to look at it. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

Title: Re: Meltdown
Post by: Todd on February 15, 2012, 03:03:13 PM

Quote from: drogulus on February 15, 2012, 02:29:44 PMAs a proportion of the total economy the government is smaller today than it was in 2008 even with the stimulus.

First of all, if true, that's not necessarily a bad thing. Second, the data does not support your assertion.

(http://mercatus.org/sites/default/files/Expenditures_as_share_of_GDP.jpg)

The federal deficit ballooned because federal expenditures increased while revenues cratered. Any offsetting reductions in state spending were not sufficient to decrease government spending as a percentage of GDP because of federal spending and GDP reduction. Total government spending as a percent of GDP has gone up in the last few years, not down.

Quote from: drogulus on February 15, 2012, 02:35:44 PMHere's a source of confusion. In spending terms the government looks big

No, it looks and it is enormous. There's nothing confusing about it. Further, as public health care expenditures continue to grow, government expenditures as a percent of GDP will continue to grow. The notion that we will get back to historic "norms" is hardly comforting. The historical "norm" is for government to grow.

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 03:08:32 PM

Since unemployment is the big problem (here I am following Keynes) it makes more sense to look at how many people the government employs as a measure of size, as well as spending programs with substantial positive or negative effects on employment. The story is one of cross purposes with cuts and boosts offsetting each other, a totally preventable drag on the recovery. It's not good enough to say that nothing is perfect or politics is the art of compromise. I know that's true, but I think the balance point was set so far to one side by Republican (and conservative Democrat) intransigence that we ended up far worse off than we might have been if we had decided that this is a difference that shouldn't be split. Obama would have been better off if he had FDR'd the opposition. Notice that he has finally decided under the pressure of reelection to do just that. He finally got the message that you can't do bipartisanship with a Congress of the opposing party. They will do everything they can to prevent such an outcome.

Title: Re: Meltdown
Post by: Bulldog on February 15, 2012, 03:12:08 PM

Quote from: Coopmv on February 12, 2012, 04:59:26 PM
USPS has to become self-funding in order to dig inself out of this deep hole because the politicians in Washington have the tendency to get their hands on whatever pot of money they can get their hands on to make the federal deficits look better. We badly need to have a regime change or this country will go bankrupt ...

Coopmv for President!!!

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 03:32:16 PM

Quote from: Todd on February 15, 2012, 03:03:13 PM

No, it looks and it is enormous. There's nothing confusing about it. Further, as public health care expenditures continue to grow, government expenditures as a percent of GDP will continue to grow. The notion that we will get back to historic "norms" is hardly comforting. The historical "norm" is for government to grow.

That's a good chart. Now, overlay the GDP on it so you can understand it better. Notice the decline during the 90s. What happened to the GDP? It went up. Did the government shrink? I doubt it. Now what about the last few years? How much GDP did we lose in 2009-10? I don't know the figures but my portfolio tells me it was bad enough to make the spike in spending look more scary than it should be. But yeah, spending grew while other measures, like employment, declined. I shudder to think what would have happened if the deficit vultures had prevailed and the government had actually shrunk the way they wanted it to.

Title: Re: Meltdown
Post by: Coopmv on February 15, 2012, 04:41:00 PM

Quote from: Todd on February 15, 2012, 02:11:30 PM

What government contraction are you referring to? The federal government has not shrunk, and the cuts at the state level are due to a variety of state laws enacted under a variety of state level administrations. If people want state governments to run deficits, laws need to be passed at the appropriate level of government. I don't see a smaller federal deficit and larger state deficits as a trade off of any particular value from an economic standpoint.

Well, the same can be said about every recession or depression.

There is no evidence the federal government has shrunk. In fact, the size of the federal government has increased since 2000. Furthermore, there are now an amazing number of federal jobs that pay north of $100K. No wonder the federal deficit has been running at $1T+ a year. As recently as a decade ago, I read that the average congressman had about 40 staffers. When Nixon was the vice president in the Eisenhower Administration, he only had about a half-dozen staffers. Only state and local governments have been shedding jobs over the past few years since they are required to have balanced budgets even in a poor economy while the federal government has not shed any jobs.

Title: Re: Meltdown
Post by: eyeresist on February 15, 2012, 05:45:04 PM

Quote from: drogulus on February 15, 2012, 03:32:16 PMThat's a good chart

I wonder how much of the govt expenditure increase is simply due to the collapse of the dollar.

Title: Re: Meltdown
Post by: Coopmv on February 15, 2012, 05:47:12 PM

Quote from: eyeresist on February 15, 2012, 05:45:04 PM
I wonder how much of the govt expenditure increase is simply due to the collapse of the dollar.

The collapsing dollar certainly has played a part. There is a steep price to be paid for having the cheap dollar policy.

Title: Re: Meltdown
Post by: eyeresist on February 15, 2012, 06:13:13 PM

Quote from: Coopmv on February 15, 2012, 05:47:12 PMThe collapsing dollar certainly has played a part. There is a steep price to be paid for having the cheap dollar policy.

When the Australian dollar is at parity with the US, there is definitely something wrong! OTOH, it's nice to think my extra Amazon orders are helping prop up your economy :)

Title: Re: Meltdown
Post by: Coopmv on February 15, 2012, 06:42:59 PM

Quote from: eyeresist on February 15, 2012, 06:13:13 PM
When the Australian dollar is at parity with the US, there is definitely something wrong! OTOH, it's nice to think my extra Amazon orders are helping prop up your economy :)

The Australian government probably does not have the kind of deficit-spending problem the US has ...

Title: Re: Meltdown
Post by: Todd on February 15, 2012, 07:09:26 PM

Quote from: drogulus on February 15, 2012, 03:08:32 PMSince unemployment is the big problem (here I am following Keynes) it makes more sense to look at how many people the government employs as a measure of size, as well as spending programs with substantial positive or negative effects on employment.

I'm not sure how you are following Keynes exactly, but his analysis and prescriptions were premised on boosting aggregate demand via public spending in a case where monetary tools will not work rather than on government employment per se. (Perhaps you can refer me to the appropriate chapter in The General Theory that supports your assertion.) Your assertion that it somehow makes more sense to look at how many people are employed by government is false. The bulk of US federal spending is related to transfer payments, and that will continue to grow in importance over time. Trying to shift focus to government employment misses both Keynesian theory and the reality of government spending today, and for the last several decades.

As to job losses, what evidence do you have that the public sector was hit hardest, and thus decreased as a percent of total employment? The numbers I've all point to the opposite. Public sector losses, if there were in fact any losses, were less significant than private sector losses.

Here's one chart.

(http://mercatus.org/sites/default/files/PrivatePublicJobsJPGsmaller.jpg)

Now this says that there public sector job gains. That cannot be right. Let's say it's not.

Let's say that the highest number of public sector job losses was about 750,000. (That's the highest number I've seen, perhaps you can offer something else.) Out of about 19.8 million total civilian government employees (per the US Census Bureau), that's around 4% gone. That's bad. So if we assume the labor force started at around 155 million (roughly what it was when the recession hit) and full employment, and back out the public workforce, we end up with about 135 million private sector workers. Let's say 8.7 million jobs were lost (or bump it to 9 million, if you want), that means that roughly 8 million private sector jobs were lost. That would be about 6% of the total workforce. 6% is more than 4%. That would mean that government employment as a percentage of total employment increased. That is, not only is total government spending a higher percentage of the total, but government employment is a higher percentage of the total. The economy is more reliant on the government now than before the recession.

Again, if you have any actual figures, they would be helpful. As it is, you appear to be making counterfactual assertions.

Quote from: drogulus on February 15, 2012, 03:32:16 PMNow, overlay the GDP on it so you can understand it better.

I understand it perfectly well. Your prior assertion was that the government had shrunk as a percentage of the "total economy." Everywhere else, that means GDP. You have established your own definition. Be that as it may, as a percent of GDP, government has grown since the recession began. I made it clear that was the result of federal spending and GDP reduction. Looking to the 90s, yes there was more rapid economic growth which resulted in a decrease in government spending as a percent of total GDP. However, you obviously missed the larger point. If you overlay the spending trend line the direction is quite clear. Government spending is rising and will continue to rise.

People really need to get over the 90s, because back then, Boomers were not retiring. Now they are. That changes the entire outlook for spending going forward. Social Security and especially Medicare expenditures are going to rise more quickly than in the past. These programs will need to be cut to be made sustainable. Repealing the Bush tax cuts won't solve the problem. That's well known even among Democratic policy makers.

Quote from: Coopmv on February 15, 2012, 04:41:00 PMThere is no evidence the federal government has shrunk.

Nope, and I ain't the one saying it has.

Quote from: eyeresist on February 15, 2012, 05:45:04 PMI wonder how much of the govt expenditure increase is simply due to the collapse of the dollar.

Increases tied to the CPI would mean relatively little is attributed to inflation. Increases tied to other indices may result in slightly higher numbers.

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 07:26:22 PM

Quote from: Coopmv on February 15, 2012, 04:41:00 PM
There is no evidence the federal government has shrunk. In fact, the size of the federal government has increased since 2000. Furthermore, there are now an amazing number of federal jobs that pay north of $100K. No wonder the federal deficit has been running at $1T+ a year. As recently as a decade ago, I read that the average congressman had about 40 staffers. When Nixon was the vice president in the Eisenhower Administration, he only had about a half-dozen staffers. Only state and local governments have been shedding jobs over the past few years since they are required to have balanced budgets even in a poor economy while the federal government has not shed any jobs.

No, the federal government has shed jobs under Obama. All branches have shrunk. This is not what a proper stimulus would allow for, yet we let it happen.

The government spends lots of money when it expands and it spends more when it contracts. And because of the job shedding it has to spend more while it contracts and revenues plunge. Is this big government? I wonder just how completely useless (in fact criminally negligent) a government would have to be to be small enough to satisfy the Meltdowners?

It isn't the size of government that matters, it's the size of the task it must take on that tells you how big it has to be. Naturally there will be disagreement about the nature of the task and the means to undertake it, but I think the argument will go better if we give up the myth that we're concerned with the size of government in absolute terms.

Todd, government spending has gone up, employment and revenues have gone down. I'm not following Keynes in detail since I haven't read him. I'm following him in terms of his concern for employment, which he hoped to assist by, as you say, boosting aggregate demand, which would in turn boost employment.

What was the title of the Keynes book? I should read it. (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)

I was wrong about the federal jobs losses. They have been severe but there has actually been a small net gain. This is from U.S. News a couple of weeks ago:

Federal government. President Obama may claim that the government he leads has gotten better under his watch, but he can't claim that it's gotten smaller. Overall, the federal bureaucracy has grown by about 39,000 workers since Obama took office at the beginning of 2009. That includes a loss of about 111,000 jobs at the troubled postal service, and a gain of 53,000 Defense Department jobs, which includes the uniformed military. Excluding defense and the postal service, the core federal workforce—what many people think of as the "Washington bureaucracy"—has grown by about 97,000 jobs since Obama took office.

From the U.S. Bureau of Labor Statistics for January, after noting gains in private employment:

Government employment changed little in January. Over the past 12
months, the sector has lost 276,000 jobs, with declines in local
government; state government, excluding education; and the U.S. Postal
Service.

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 07:33:40 PM

QuoteAs to job losses, what evidence do you have that the public sector was hit hardest, and thus decreased as a percent of total employment? The numbers I've all point to the opposite. Public sector losses, if there were in fact any losses, were less significant than private sector losses.

None, I think. Do I need any? I'm not asserting that government was hit worse, I'm asserting that it was worse that government was hit, too. And, as we all know, the latter was a situation we had some control over.

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 07:53:12 PM

Incidentally, a significant point about the BLS numbers on government job loss is that the period covers 2011, not 2009-2010. The story here is that even as late as this January government job losses continue to delay the recovery.

Title: Re: Meltdown
Post by: Todd on February 15, 2012, 07:54:23 PM

Quote from: drogulus on February 15, 2012, 07:26:22 PMI was wrong about the federal jobs losses. They have been severe but there has actually been a small net gain.

How can losses be severe yet result in a small net gain? That is Orwellian doublespeak at its finest. Either there are more federal employees or there are fewer. It cannot be both.

Quote from: drogulus on February 15, 2012, 07:26:22 PMTodd, government spending has gone up, employment and revenues have gone down.

Incorrect. Federal spending has increased, federal government employment has increased, and federal revenues have fallen. And government employment as a percentage of total employment has risen, as well.

Keynes' major work is The General Theory of Employment, Interest, and Money. I'd recommend adding something by Paul Samuelson to augment it if you want a more thorough review of the theories and analysis.

Quote from: drogulus on February 15, 2012, 07:33:40 PMNone, I think. Do I need any? I'm not asserting that government was hit worse, I'm asserting that it was worse that government was hit, too. And, as we all know, the latter was a situation we had some control over.

Well, let's start here.

Quote from: drogulus on February 15, 2012, 02:29:44 PMI'm referring to the shrinkage in employment at the federal, state, and local levels.

It's a statement that even you now say is not true at least with respect to the federal government. And just what is the aggregate effect on state and local government employment over the period 2008 to 2012? Perhaps I inferred that you were implying government employment was harder hit, and that was not correct. Of course, if aggregate government employment is up, it is impossible to say it went down. So I revise my prior post to say this: government growth appears to have been slowed slightly during the recession. When things pick up, the government will grow faster.

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 09:04:43 PM

QuoteIt's a statement that even you now say is not true at least with respect to the federal government.

The losses in the states, cities and towns were real, as were the losses at the federal level (113,000 postal workers) which were felt all around the country. I'm sure the increases in the Washington, D.C. area were very helpful there, and I'm glad those jobs were not cut. Some of them will be soon, as we fight the next contractionary phase. But for now we have reason to be glad that I was wrong about the total federal employment, and sad that I was right over all that the drop in government employment has delayed the recovery, and, if expectations about future cuts are correct, will continue to do so.

Here's the next paragraph from the U.S. News article I quoted earlier:

The size of the federal workforce may have peaked, however. The postal service is likely to continue shrinking, and fresh cuts are coming in defense. Many agencies have hiring freezes in place, and cuts in discretionary spending due to begin in 2013 seem certain to further shrink the federal payroll. Intensifying budget pressures could compel whoever wins the presidency in November to enact even bigger cuts in 2013 and beyond. So Tea Party government-shrinkers may eventually get what they're after, no matter what.

I think that's probably right. Obama is no Keynesian, and his team is whipsawed between the 2 camps. As a result Obama will do what's right when sheer terror makes him (just like Bush did), and split the difference the rest of the time. I expect full employment will take 3 more years at the current pace. If the Repubs are elected it will be about the same. They will be well motivated to walk back from the precipice once they get back in.

Title: Re: Meltdown
Post by: drogulus on February 15, 2012, 10:34:09 PM

Barron's has a cool cover this week:

(http://barrons.wsj.net/public/resources/images/ON-AW327_cover0_KS_20120211004922.jpg)

This is what I'm expecting, actually. If it comes to pass I'll be.....pret-ty, pret-ty good.

(http://www.iwatchstuff.com/2011/05/02/larry-david.jpg)

Title: Re: Meltdown
Post by: Todd on February 16, 2012, 06:41:32 AM

Quote from: drogulus on February 15, 2012, 09:04:43 PMThe losses in the states, cities and towns were real, as were the losses at the federal level (113,000 postal workers) which were felt all around the country.

First of all, as your quote showed, there were no losses at the federal level. There was an increase in employment. Yes, the USPS had to shed jobs, but the overall number of federal workers went up, not down. As to state and local, where are the hard numbers, please? I'd like to see just how hard hit the government really was. Then it could be compared to government job growth over the last seven decades. A bit of trimming may very well be a good thing.

Further reductions in the future would be good, too, though I'm a bit more skeptical about whether those cuts will appear. Budget cuts usually just mean a drop in the rate of growth, not absolute cuts, just like the military cuts Obama and team are trying to push through. Of course, Obama may be betting that even Republicans don't want to really cut defense and will alter or eliminate proposed cuts. There may be greater success in other government agencies, though it would be more telling to revisit the figures in ten years to see what really happens. It's pretty standard for politicians and pundits to talk about how cuts are needed and as such will happen this time, but it's a rare thing indeed for cuts to materialize. And that doesn't even take into account ever expanding transfer payments.

Everything I've seen or heard from Obama indicates that he's Keynesian with hints of Institutionalism thrown in. But first and foremost, he's a politician, which means that he must change course as conditions change. I have a hard time thinking of a President who was actually a Keynesian. FDR most certainly was not. Maybe Nixon.

Title: Re: Meltdown
Post by: drogulus on February 16, 2012, 03:39:13 PM

In 2011 the total loss at all levels was 276,000 according to the BLS.

Quote from: Todd on February 16, 2012, 06:41:32 AM

A bit of trimming may very well be a good thing.

No, it is not in any sense a good thing now or in the last few years. It might be a good thing in a couple of years to shed jobs in areas while staffing up in others. If the total was lower, that would have good effects. It does not have good effects now, or at least the bad effects make the good ones irrelevent. I don't want to throw people out of work in a recession because it makes the budget numbers better. And it might not even do that. Efforts to balance budgets while in a downward spiral are like pilots trying to climb out of a stall.

Edit: The Europeans climbed and stalled, we timidly dived and now the economy is growing. My question is this: If we had done what the Europeans did and refused to stimulate would we have been better off? That's what the Euro-Republicans are saying. Are they right? No, they are wrong, and Obama went down the right road, though not far enough as I see it.

Title: Re: Meltdown
Post by: drogulus on February 16, 2012, 03:43:24 PM

Quote from: Todd on February 16, 2012, 06:41:32 AM

First of all, as your quote showed, there were no losses at the federal level.

The losses were considerable for the people who lost the jobs and the communities where the losses were felt, and while it was good that they were offset by gains elsewhere, they were still very bad and from a policy perspective counterproductive. There should not have been such losses. We should only have had gains.

Title: Re: Meltdown
Post by: drogulus on February 16, 2012, 03:49:07 PM

Herbert Hoover is supposed to be dead. If need be I'll dig up his corpse to make sure, because all this talk about how good it is to balance budgets and fire workers and boohoo the deficits while unemployment skyrockets is a little too surreal for my blood. I'm done quibbling about whether job losses are real if someone else gets a job in Washington. I'm glad for the good, but it doesn't make the bad OK.

Title: Re: Meltdown
Post by: Coopmv on February 16, 2012, 05:55:26 PM

Quote from: drogulus on February 16, 2012, 03:43:24 PM
The losses were considerable for the people who lost the jobs and the communities where the losses were felt, and while it was good that they were offset by gains elsewhere, they were still very bad and from a policy perspective counterproductive. There should not have been such losses. We should only have had gains.

There have been no net job losses at the federal level, period. Those job losses at the USPS were due to early retirements and buyouts, as I personally know someone who is a supervisor at the local post office who will do exactly that in 2 months. Keep in mind that there is this homeland security department, which did not even exist prior to 2001, that department has been growing by leaps and bounds. With the annual federal deficit set to exceed $1T for the fourth year in a row, how can you even argue the federal government has been shrinking?

Title: Re: Meltdown
Post by: Todd on February 17, 2012, 09:03:33 AM

Quote from: drogulus on February 16, 2012, 03:39:13 PMEfforts to balance budgets while in a downward spiral are like pilots trying to climb out of a stall.

States must balance budgets by law. That's life. It's not good policy from my standpoint, but it currently must be done. However, the federal deficit has been so large as to ensure that in the aggregate, the US has run a deficit, which is intrinsically expansionary. I know that some people have been talking about balanced budgets and balanced budget amendments (not me, though), but that's talk. Ain't no balanced budgets at the federal level in sight in the real world.

Quote from: drogulus on February 16, 2012, 03:43:24 PMThe losses were considerable for the people who lost the jobs and the communities where the losses were felt, and while it was good that they were offset by gains elsewhere, they were still very bad and from a policy perspective counterproductive. There should not have been such losses. We should only have had gains.

Job losses are often, but not always, considerable for people. The sting is often muted, and sometimes non-existent, if jobs are lost through attrition (eg, early retirement) as Coopmv pointed out. No doubt not all of the losses were so kindly. That's life. The notion that somehow federal jobs, especially at a money drain like the USPS, are somehow sacred is ludicrous. And so is the notion that there were real losses. The federal payroll has increased. It's simple fact.

As to Euro-Republicans, a new and rather confused phrase, well, that's meaningless. Again, there is talk, and plenty of it, about cutting spending, etc, but the fiscal reality is simple. We've been running and will continue to run $1 trillion+ deficits. There are no spending cuts. There ought not to be in the near future (through at least 2013), but at some point in the not too distant future, serious fiscal reform is needed, and that means higher taxes and big spending cuts, especially in Social Security and Medicare. Seems pretty simple to me, but many Republicans won't admit the former, and many Democrats deny the latter.

Title: Re: Meltdown
Post by: Coopmv on February 17, 2012, 07:26:45 PM

Here is a good wake-up call: Social Security Is Failing Even Faster Than We Thought
(http://www.dailyfinance.com/2012/02/14/social-security-is-failing-even-faster-than-we-thought/?icid=maing-grid7%7Cmain5%7Cdl7%7Csec1_lnk3%26pLid%3D136039)

Title: Re: Meltdown
Post by: drogulus on February 22, 2012, 12:47:13 AM

Quote from: Todd on February 17, 2012, 09:03:33 AM

States must balance budgets by law. That's life.

No, it's death, stupid, preventable and in hindsight as bad as it was in forsight when economists warned that we should not permit it. Now sadder and wiser, we shouldn't have permitted it.

The Republicans have been pushing European austerity without calling it that, of course. Somehow they think there's a successful American way of shrinking towards prosperity that will work better than the European version. But there is not a way to do that.

It's true that we will eventually recover from a crisis without doing enough to remedy it, and so will the Europeans who've done less. Generally economists say that you don't get back the lost GDP, you just rebuild from the lower base. And of course there are the ruined lives, millions of them. It curious how important the "job creators", the Repub term for upper income people, are supposed to be (they must be shielded from even the slightest disturbance lest they refuse to shower us with benefits!), and how unimportant the actual jobs and, least important, the people who would do them if the jobs existed. Quick, find a job creator and cut his taxes, pray to Zeus, do anything, anything but take practical steps to save jobs or make new ones!

Title: Re: Meltdown
Post by: drogulus on February 22, 2012, 01:14:59 AM

By the way, Obama, or a minion, announced that they will seek to reduce the corporate tax rate from 35% to 28% while closing loopholes. Excellent, cut the rates and make the deadbeats pay! For one, corporate taxes really are too high, and it calls the bluff of all those who said they couldn't repatriate their profits because of the rates. Obama is outflanking the evildoers from the right and left all at once! Yeah, baby! (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)

And.....I made $9,000 in one day. Happy days are here again......

Now a word about G. W. Bush. Only a truly extraordinary leader could have created so few jobs while piling up massive deficits. Historians will ask how was it done, so big a giveaway for such a puny result. He didn't build anything, he didn't create jobs, he just pissed it away. Obama at least has a goal for what he does slightly more elevated than rewarding his contributors.

And as unhappy as I am that the job was not done to my liking, he at least did it. Once again, the Republicans prove they can't be trusted to do anything but run the country down, and it takes a tax-and-spend liberal to put the economic house in order. You've seen the charts, and it's true, the country as a whole fares better under the Democrats. Pragmatism beats theory, again and again and again. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

Title: Re: Meltdown
Post by: Todd on February 22, 2012, 07:09:16 AM

Quote from: drogulus on February 22, 2012, 12:47:13 AMwhen economists warned that we should not permit it

Generally economists say that you don't get back the lost GDP, you just rebuild from the lower base

Which economists are these? You portray economists as though they hold the same views. Explain what Robert Lucas or other supporters of Rational Expectations theory say about your assertions.

Your assertion that you don't get back lost GDP doesn't make any sense since GDP is a measure of total output. GDP doesn't lead a physical existence. How, for instance, would one get back forgone services, which, of course, represent a pretty significant proportion of US GDP?

As to state laws that shouldn't have been permitted, well, how does that work? The laws exist and must be followed. I'm not sure what "we shouldn't have permitted them" even means. What does that mean? And will the laws change?

Quote from: drogulus on February 22, 2012, 01:14:59 AMYou've seen the charts, and it's true, the country as a whole fares better under the Democrats.

What are "the charts"? I've seen so many charts, graphs, and tables of economic data that I can tell the difference between raw data, and small chunks of data used specifically for political purposes. Here's a long-term graph chart of real GDP per capita growth from 1871 through 2009. It basically reinforces what Milton Friedman demonstrated in the 1960s regarding long-term growth. Contrary to what politicians and their most ardent supporters wish people to believe, real economic growth generally proceeds apace with little regard for which party controls Congress or the White House. That's not to say that policy doesn't have an important impact, especially during the worst of times, just that it's hard to argue, based on basic national income accounting data, that either party has the magic elixir for the economy.

Now, if you want to get into fiscal policy specifically, well, there both parties have their glaring weaknesses. You obviously fail to see that.

(http://visualecon.wpengine.netdna-cdn.com/wp-content/uploads/RealGDPperCapita-650x450.png)

Quote from: drogulus on February 22, 2012, 01:14:59 AMBy the way, Obama, or a minion, announced that they will seek to reduce the corporate tax rate from 35% to 28% while closing loopholes. Excellent, cut the rates and make the deadbeats pay! For one, corporate taxes really are too high, and it calls the bluff of all those who said they couldn't repatriate their profits because of the rates. Obama is outflanking the evildoers from the right and left all at once! Yeah, baby!

You may need to cut back on coffee intake. You are aware this is an election year, right?

Title: Re: Meltdown
Post by: Coopmv on February 22, 2012, 05:18:24 PM

Quote from: drogulus on February 22, 2012, 01:14:59 AM
By the way, Obama, or a minion, announced that they will seek to reduce the corporate tax rate from 35% to 28% while closing loopholes. Excellent, cut the rates and make the deadbeats pay! For one, corporate taxes really are too high, and it calls the bluff of all those who said they couldn't repatriate their profits because of the rates. Obama is outflanking the evildoers from the right and left all at once! Yeah, baby! (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)

And.....I made $9,000 in one day. Happy days are here again......

Now a word about G. W. Bush. Only a truly extraordinary leader could have created so few jobs while piling up massive deficits. Historians will ask how was it done, so big a giveaway for such a puny result. He didn't build anything, he didn't create jobs, he just pissed it away. Obama at least has a goal for what he does slightly more elevated than rewarding his contributors.

And as unhappy as I am that the job was not done to my liking, he at least did it. Once again, the Republicans prove they can't be trusted to do anything but run the country down, and it takes a tax-and-spend liberal to put the economic house in order. You've seen the charts, and it's true, the country as a whole fares better under the Democrats. Pragmatism beats theory, again and again and again. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

Should I remind you that the great American job outsourcing began under Bill Clinton? Clinton was also instrumental in approving the repeal of the Glass–Steagall Act in 98, which created the necessary conditions to bring about the financial debacle in 2008.

The Obama corporate tax cut is a joke. There are towns in Switzerland that offer corporate tax rate of 15% and have attracted the relocations of American companies. To be minimally competitive, the US corporate tax rate should be at most 20%. This is nothing but election year gimmick.

Title: Re: Meltdown
Post by: drogulus on February 22, 2012, 07:44:05 PM

Quote from: Todd on February 22, 2012, 07:09:16 AM
Your assertion that you don't get back lost GDP doesn't make any sense since GDP is a measure of total output. GDP doesn't lead a physical existence. How, for instance, would one get back forgone services, which, of course, represent a pretty significant proportion of US GDP?

As to state laws that shouldn't have been permitted, well, how does that work? The laws exist and must be followed. I'm not sure what "we shouldn't have permitted them" even means. What does that mean? And will the laws change?

No, it wouldn't make sense that you could make up lost GDP, which might be your point of you were agreeing with me, which you would have been wise to do. The point is that it's not a good idea to let assets waste because the markets in their wisdom waste them, to say nothing of the human suffering. Markets, and the people who shape them, are only inconsistently rational and sometimes "rationally" want things like cutting deficits or tightening the money supply on the basis of a theory rather than experience, which as we all know isn't rational, but is comprehensible.

As for the state laws on balanced budgets, I'll say what I said in earlier posts: that's what the federal government stimulus should have been for (and it was to a degree). You build new infrastructure, aid state and local governments so they don't lay people off, and postpone cuts in the federal workforce until conditions improve. The state and local cuts should not have been permitted. No state laws are changed.

QuoteExplain what Robert Lucas or other supporters of Rational Expectations theory say about your assertions.

What assertions? You mean about the stimulus or not cutting jobs or spending during a crisis? Why would I care what they say? They don't have a useful model. Rather than model the world they try to fit the world into their model, and if it doesn't fit it's the worlds fault. So there aren't supposed to be market failures. If people are unemployed that's just a particular rational outcome, just something to understand, but not to remedy, because there are no market failures. Only people fail, see, so we must protect the markets from them. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

Title: Re: Meltdown
Post by: drogulus on February 22, 2012, 07:54:16 PM

Quote from: Coopmv on February 22, 2012, 05:18:24 PM
Should I remind you that the great American job outsourcing began under Bill Clinton? Clinton was also instrumental in approving the repeal of the Glass–Steagall Act in 98, which created the necessary conditions to bring about the financial debacle in 2008.

Good points. These were terrible events.

About outsourcing, I should say that I think we should allow it but not subsidize it. I'm a free trader, or would be if there was such a thing as a free market, which there isn't. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

Quote from: Coopmv on February 22, 2012, 05:18:24 PM

The Obama corporate tax cut is a joke. There are towns in Switzerland that offer corporate tax rate of 15% and have attracted the relocations of American companies. To be minimally competitive, the US corporate tax rate should be at most 20%. This is nothing but election year gimmick.

Who cares? I'd rather pay a 28% joke than a 35% any day, wouldn't you? Anyway, the point is not to get in a downward race with the Cayman Islands but to reduce the incentive effect of the tax difference. For that you don't have to spiral downwards and obviously shouldn't. As for 28%, I'm agnostic. I'll take 25%, and rake them over the coals on loopholes. Deal? (http://www.good-music-guide.com/community/Smileys/classic/grin.gif)

Title: Re: Meltdown
Post by: drogulus on February 22, 2012, 08:33:20 PM

Oh, here's the chart on income growth during various political combinations over a 60 year period, broken down by quintiles:

(http://i9.photobucket.com/albums/a64/anjiaoshi/incomegrowth.jpg)

So, when I said "you've seen the charts", I meant the many charts over the years that tell the same story, but of course this one.

I'm not satisfied with the lack of provenance, so I found this:

(http://i.imgur.com/Tt8qs.png)

I know, what about inflation? My first reaction to the chart was that while the overall point about the superiority of Dems to Repubs was unlikely to be false, I felt and still feel the chart is just a little too good to be entirely credible. If this chart is correct the Repubs are far worse than merely incompetent, they are actively working to further an agenda that subordinates the good of the country to the benefit of a tiny minority. Yes, one can believe that, especially in a "quiet room" with no Dems present, but this isn't a dream, it's really happening! So, I want confirmation.

Title: Re: Meltdown
Post by: drogulus on February 23, 2012, 01:13:19 AM

(http://www.tnr.com/sites/default/themes/tnr/images/tnr_sm.gif)

EXCLUSIVE: The Memo that Larry Summers Didn't Want Obama to See

Noam Scheiber February 22, 2012

For the past three years, Washington journalists and politicos have obsessed over a 57-page memo that Barack Obama's incoming economic team prepared for him in late 2008. The document has achieved such totemic status for good reason: It decisively shaped the Obama administration's initial response to the economic crisis. The memo outlined the president-elect's options for dealing with the teetering banks, the cash-strapped automakers, and the country's tidal wave of foreclosures. Above all, the memo laid out options for a massive stimulus package—the mix of tax cuts and government spending designed to end the recession and boost employment. The economic team presented the contents of the memo to Obama at his transition headquarters on December 16, 2008, at which point they collectively settled on a proposed stimulus of nearly $800 billion.

Last month, my friend and former colleague, Ryan Lizza, wrote a much-discussed piece in The New Yorker based on a copy of this and several other previously-unpublished memos. The piece and the corresponding memo described the stimulus options that Obama's team—including Larry Summers, his top economic adviser, and Christy Romer, soon to be his chief White House economist—ultimately sent him. The options ranged from about $550 billion to just under $900 billion.

Intriguingly, Lizza also noted that Romer "was frustrated that she wasn't allowed to present an even larger option," suggesting that while the memo he obtained may have been the end of the story, it was far from the whole story.

Now, based on reporting I've done for my forthcoming book on the Obama administration, I can fill in a major gap in the narrative—an earlier version of the same memo that includes Romer's larger option. (A source provided the memo on the condition that he not be named.) In this version of the memo, Romer calculated that it would take an eye-popping $1.7-to-$1.8 trillion to fill the entire hole in the economy—the "output gap," in economist-speak. "An ambitious goal would be to eliminate the output gap by 2011–Q1 [the first quarter of 2011], returning the economy to full employment by that date," she wrote. "To achieve that magnitude of effective stimulus using a feasible combination of spending, taxes and transfers to states and localities would require package costing about $1.8 trillion over two years." Alas, these words never made it into the memo the president saw.

The rest is here (http://www.tnr.com/article/politics/100961/memo-Larry-Summers-Obama)

Title: Re: Meltdown
Post by: Todd on February 23, 2012, 07:46:02 AM

Quote from: drogulus on February 22, 2012, 07:44:05 PMThe point is that it's not a good idea to let assets waste because the markets in their wisdom waste them

This doesn't make sense, particularly in the context of service related output, which was my point. But beyond that, one of the outcomes of a recession (and depression) is an accelerated reallocation of capital to more productive uses. This is a good thing. And a necessary thing. Just because an "asset" exists (which is what, precisely, in your definition?) doesn't mean it is socially or economically useful. It can be a very good idea to let assets waste away.

Quote from: drogulus on February 22, 2012, 07:44:05 PMThey don't have a useful model. Rather than model the world they try to fit the world into their model, and if it doesn't fit it's the worlds fault.

It's clear that you don't know what alternative models are, as you only offer caricature in response. You haven't read Keynes by your own admission. Somehow I don't think you've read Lucas.

You may also want to be a little more cautious about clinging so tightly to Keynesian policies. Keynesian economics was dealt a severe blow by stagflation. That was not supposed to be able to happen. It did. Keynesian academics and policy makers have adjusted prior theories and models, and established new ones, but the problem is that even those models do not really address the policies being used today - the vast expansion of credit combined with sustained deficit spending resulting in an ever higher proportion of debt held by the public, including foreign governments and corporations. This really is a novel macroeconomic experiment, and far more expansionary than you give it credit for being. And the long-term consequences are unknown.

Yes, Romer wanted a bigger stimulus. So did others. That's old news. At the time the stimulus was passed there was plenty of discussion about the size of the stimulus. Even many Democrats would never have gone along with a near multi-trillion dollar expenditure. Politics trumps economics in such cases. Especially when there are in fact real theoretical and practical questions about the outcomes of policies.

Quote from: drogulus on February 22, 2012, 08:33:20 PMSo, I want confirmation.

When you get that confirmation, please publish the data. The charts you have provided deal with two related set of outcomes - ie, income growth and the inferred change in income distribution. There are others concerns.

Title: Re: Meltdown
Post by: eyeresist on May 14, 2012, 09:33:44 PM

Probably more appropriate here than in the 2012 US Presidential Race thread:

This article from the Guardian:
What happens if Greece exits Europe's single currency (http://www.smh.com.au/world/what-happens-if-greece-exits-europes-single-currency-20120515-1ynvo.html)

Three experts give their views, focusing on Greece rather than Europe (or the global economy). My synthesis of their arguments is that Greece would suffer a short sharp shock, but provided govt kept control and provided buffers would go on to benefit from devalued currency - though losing whatever advantages adhere to being in the Euro, e.g. subsidies and policy influence, plus would no longer be compelled to rationalise its system, thus deferring advancement.

Title: Re: Meltdown
Post by: drogulus on May 15, 2012, 12:11:26 AM

Quote from: Todd on February 23, 2012, 07:46:02 AM

This doesn't make sense, particularly in the context of service related output, which was my point. But beyond that, one of the outcomes of a recession (and depression) is an accelerated reallocation of capital to more productive uses. This is a good thing. And a necessary thing. Just because an "asset" exists (which is what, precisely, in your definition?) doesn't mean it is socially or economically useful. It can be a very good idea to let assets waste away.

That's the market fundamentalism I object to. It ignores the possibility that markets do not just decide correctly for us. In what sense is the waste of years of unemployment at high levels the proper reallocation of assets? What gain in production is worth the destruction we've seen? No such gain is worth waiting for while our future prospects are savagely reduced now. But what gets me is that such a view only works within the context of the fundamentalist assumption that what markets decide is right, no matter what "they" or "it" decides.

The personification of markets as capable of being right is gratuitous and weird. Markets are as incapable of being right or wrong as your car is incapable of "correctly" smashing into a tree when you drive into one. You're the driver, the car doesn't drive you! Markets are molded by a complex of decisions at many levels, and rationality would indeed play a big part if the one actor capable of being rational at a high level chose to do so. That would be the government, of course, which even market fanatics count on to act rationally. Part of that rationality would be to recognize the set of conditions in which markets enter into paradoxical freezups, such as the simultaneous de-leveraging of all parties.

Everyone stops spending or cuts back, all for perfectly good "rational" reasons, the result being utterly irrational: the necessarily rational spending to break the logjam can't be done by any party, because they're all being rational and tightening their belts, which is what a market fundamentalist tells you to do. But it's wrong. Not because markets are wrong, but because policy makers get to decide, and what's "right" can only be determined by the outcome of policy decisions made. There is no right or wrong from the market point of view, because markets don't have points of view, and even if it did have one it wouldn't count for anything next to the fate of people whose views and suffering we're obligated to respect.

Title: Re: Meltdown
Post by: Karl Henning on May 15, 2012, 03:57:41 AM

A "terrible, egregious mistake."

JPMorgan Chase acknowledges $2 billion trading loss and 'many errors' (http://www.washingtonpost.com/business/jpmorgan-ceo-dimon-acknowledges-800-million-in-recent-losses-on-investments/2012/05/10/gIQAhyaPGU_story.html)

Title: Re: Meltdown
Post by: Todd on May 15, 2012, 06:03:19 AM

Quote from: drogulus on May 15, 2012, 12:11:26 AMThat's the market fundamentalism I object to.

It's not market fundamentalism so much as an historical observation. It's really rather obvious that times of economic distress result in the creation of new companies and new, more efficient cost structures. You can look to the 1890s and 1930s and see the birth of a disproportionate number of large, succesful companies, many still around. (These are the most notable examples, but the same holds true for the 70s and early 90s.) There's absolutely no reason to believe that this time is different. Of course there will be firms that fail and waste capital, and markets will fail to various degrees, but that happens with government involvement, too, just with taxpayers' money directly thrown in.

Contrary to what you write, not everyone tightens belts; risk-taking firms are always looking for the next thing to pump money into. But of course, in these days of acute, what, suffering, things like vulture capital firms are just plain evil. I mean, they swoop into and pay as little as possible for productive assets, and then redeploy them. Yes, that will result in some layoffs, and some companies being entirely liquidated. Companies, though, are not people; they can and do and should be allowed to die (Fortune 500 companies have an average "life-span" less than a real person's) so that new widgets and services can be provided from more efficiently deployed capital. I have no problem with government spending money, but it should be on public works type projects (how about another $200 billion+ in infrastructure spending) and targeted changes to the tax system, mostly geared toward the lower income end of the spectrum. Government should more or less keep out of picking and choosing corporate winners and losers.

Title: Re: Meltdown
Post by: snyprrr on May 15, 2012, 06:44:00 AM

Quote from: karlhenning on May 15, 2012, 03:57:41 AM
A "terrible, egregious mistake."

JPMorgan Chase acknowledges $2 billion trading loss and 'many errors' (http://www.washingtonpost.com/business/jpmorgan-ceo-dimon-acknowledges-800-million-in-recent-losses-on-investments/2012/05/10/gIQAhyaPGU_story.html)

I sent Dimon flowers,... poor poor guy, sniff...

Title: Re: Meltdown
Post by: Todd on May 15, 2012, 06:50:33 AM

Quote from: snyprrr on May 15, 2012, 06:44:00 AMI sent Dimon flowers,... poor poor guy, sniff...

This is outdated now.

(http://www.us-forex.net/images/Last%20Man%20Standing%20Jamie%20Dimon%20Vs%20Sandy%20Weill%20-%20Sep%2017%202009.jpg)

Dimon's possible dream of being Treasury Secretary is now dashed, too. No way Obama would appoint him now.

Title: Re: Meltdown
Post by: Karl Henning on May 15, 2012, 07:01:36 AM

Fortune rota volvitur . . . .

Title: Re: Meltdown
Post by: Todd on May 15, 2012, 07:05:58 AM

Quote from: karlhenning on May 15, 2012, 07:01:36 AMFortune rota volvitur . . . .

I just hope the hundreds of millions he has can soften the blow. And in this economy, one needs a cushion if one loses a job. Will it be enough? I lose sleep thinking about the fate of the bank CEOs.

Title: Re: Meltdown
Post by: Karl Henning on May 15, 2012, 07:18:09 AM

John Thain set the benchmark for Golden Parachutes . . . .

Title: Re: Meltdown
Post by: Todd on May 15, 2012, 07:27:34 AM

Quote from: karlhenning on May 15, 2012, 07:18:09 AMJohn Thain set the benchmark for Golden Parachutes . . . .

Fancy credenzas don't buy themselves.

Title: Re: Meltdown
Post by: snyprrr on May 15, 2012, 03:48:58 PM

Quote from: Todd on May 15, 2012, 06:50:33 AM

Dimon's possible dream of being Treasury Secretary is now dashed, too. No way Obama would appoint him now.

Really? I thought this was the interview!! Don't we always reward incompetence with a promotion? I say he's a shoe-in. ;) ;D

Title: Re: Meltdown
Post by: Coopmv on May 15, 2012, 05:07:26 PM

Quote from: Todd on May 15, 2012, 06:50:33 AM

This is outdated now.

(http://www.us-forex.net/images/Last%20Man%20Standing%20Jamie%20Dimon%20Vs%20Sandy%20Weill%20-%20Sep%2017%202009.jpg)

Dimon's possible dream of being Treasury Secretary is now dashed, too. No way Obama would appoint him now.

But does he really care to be the next treasury secretary? He has to take a severe pay cut to take that job ...

Title: Re: Meltdown
Post by: Todd on May 15, 2012, 05:23:04 PM

Quote from: Coopmv on May 15, 2012, 05:07:26 PMBut does he really care to be the next treasury secretary? He has to take a severe pay cut to take that job ...

He reputedly did. The thinking was that he would leave JP Morgan as a hero, almost as legendary as Pierpont himself, and then go into public service to do good things. You know, he'd be the next Robert Rubin or Hank Paulson.

Title: Re: Meltdown
Post by: Coopmv on May 15, 2012, 05:44:19 PM

Quote from: Todd on May 15, 2012, 05:23:04 PM

He reputedly did. The thinking was that he would leave JP Morgan as a hero, almost as legendary as Pierpont himself, and then go into public service to do good things. You know, he'd be the next Robert Rubin or Hank Paulson.

Robert Rubin is a disgrace. While he received $100M as the chairman of Citigroup but under his watch, Citi took on all the toxic debt that ultimately resulted in a $45B taxpayer bailout. Hank Paulson's decision to let Lehman go down was a poor decision, perhaps it was deliberate so he could get rid of a serious competitor to Goldman where he had accumulated most of his personal wealth.

Title: Re: Meltdown
Post by: Todd on May 15, 2012, 05:55:14 PM

In all fairness, Rubin did not run Citi. He was chairman only briefly, for a bit over a month in late 2007. He was brought in to be a rainmaker. From what I've read, he voiced concerns here and there, but there really was nothing he could do. I've seen no evidence that Paulson let Lehman go under because of his ties to Goldman, though conspiracy theories will always exist. The decision was clearly a poor one, but the various accounts of the decisions being made indicate that his concern was more to prevent every financial firm from getting government funds. Didn't really work out that way in the end.

Title: Re: Meltdown
Post by: eyeresist on May 16, 2012, 01:27:17 AM

Quote from: Coopmv on May 15, 2012, 05:07:26 PM
But does he really care to be the next treasury secretary? He has to take a severe pay cut to take that job ...

He'll take a consultancy instead. That's where the money is.

Title: Re: Meltdown
Post by: snyprrr on May 22, 2012, 07:39:35 AM

Hollande:

GROWTH FINANCED BY DEBT!!

Woo hoo, oh dear, here we go! ;)

Wow, gosh, if we'd just heard about this sooner, maybe we wouldn't be in the mess we are in now, huh?

Title: Re: Meltdown
Post by: Todd on May 22, 2012, 07:51:56 AM

Quote from: snyprrr on May 22, 2012, 07:39:35 AMGROWTH FINANCED BY DEBT!!

Alexander Hamilton proposed something similar in the 1790s. Turned out pretty good, all things considered. But what did Hamilton know?

Title: Re: Meltdown
Post by: DieNacht on May 22, 2012, 07:54:10 AM

So did he:

(http://media-3.web.britannica.com/eb-media/19/78319-004-545F8CDD.jpg)

Title: Re: Meltdown
Post by: Todd on May 22, 2012, 08:17:03 AM

Quote from: DieNacht on May 22, 2012, 07:54:10 AM
So did he:

(http://media-3.web.britannica.com/eb-media/19/78319-004-545F8CDD.jpg)

Sort of. FDR maintained a fiction that the regular budget was balanced and that only his emergency measures resulted in debt. Um, okay. He then turned his focus to balancing the budget after 1936, which helped lead to the 1937 boo-boo. Few American politicians have ever been as blatantly pro-debt as Hamilton. Can you imagine someone today saying "A national debt, if it is not excessive, will be to us a national blessing"? I cannot. Yet a national debt, if it is not excessive, is critical to the proper functioning of the financial system as a whole, which in the case of the US means the global financial system, and to proper public finances. The question, of course, is what does "not excessive" mean? I think it's safe to say that current levels are excessive in the long run, but in the short run not so much.

Ironically, Alan Greenspan – he's a devil now, don't you know? – explained a similar position in The Age of Turbulence, though his concern had more to do with proper administration of monetary policy and the mounting surpluses of the late Clinton years. If there is no national debt, then a central bank would not be able to direct short term rates by buying and selling public debt; it would have to turn to private debt, and that would be bad. Of course, if you're a Paulite, you say get rid of the central bank. Problem solved!

The public debate on public expenditures unfortunately is unsophisticated and jingoistic.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2012, 05:39:01 PM

Quote from: Todd on May 22, 2012, 08:17:03 AM

Sort of. FDR maintained a fiction that the regular budget was balanced and that only his emergency measures resulted in debt. Um, okay. He then turned his focus to balancing the budget after 1936, which helped lead to the 1937 boo-boo. Few American politicians have ever been as blatantly pro-debt as Hamilton. Can you imagine someone today saying "A national debt, if it is not excessive, will be to us a national blessing"? I cannot. Yet a national debt, if it is not excessive, is critical to the proper functioning of the financial system as a whole, which in the case of the US means the global financial system, and to proper public finances. The question, of course, is what does "not excessive" mean? I think it's safe to say that current levels are excessive in the long run, but in the short run not so much.

Ironically, Alan Greenspan – he's a devil now, don't you know? – explained a similar position in The Age of Turbulence, though his concern had more to do with proper administration of monetary policy and the mounting surpluses of the late Clinton years. If there is no national debt, then a central bank would not be able to direct short term rates by buying and selling public debt; it would have to turn to private debt, and that would be bad. Of course, if you're a Paulite, you say get rid of the central bank. Problem solved!

The public debate on public expenditures unfortunately is unsophisticated and jingoistic.

It was a big mistake when Reagan did not retain Volcker but brought in the Bubble Man to the Fed instead ...

Title: Re: Meltdown
Post by: Todd on May 22, 2012, 05:57:06 PM

Quote from: Coopmv on May 22, 2012, 05:39:01 PMIt was a big mistake when Reagan did not retain Volcker but brought in the Bubble Man to the Fed instead ...

Not really. The Fed's response to the 1987 crash was generally considered to be just about right, and the policy of increasing rates in 1994 was also correct. Greenspan is now one of the villains of 2008, of course, but it's hard to see how the Fed could have prevented the meltdown by itself. The federal government pushed to open lending; Glass Steagall was repealed, allowing banks to take unacceptable risks, including excess leverage; new financial products came to market which increased risk; and raising short term rates may not have been able to have the desired effect. The Fed could have done that, and taken heat like they did in 1994, and they could have also raised reserve requirements, which would have brought even greater howls of protest from right and left, but starting in the mid-90s, and really sooner, a variety of policy and industry changes set up the conditions for a panic. Both parties are to blame, and as powerful as the Fed is, the chairman is not omnipotent, nor is he a king. It's also questionable whether either Clinton or Dubya would have stood by and supported unpopular policies the way Reagan did with Volcker. We'll never know, now, but the notion that one person bears a huge portion of the blame is too simplistic.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2012, 06:08:46 PM

Quote from: Todd on May 22, 2012, 05:57:06 PM

Not really. The Fed's response to the 1987 crash was generally considered to be just about right, and the policy of increasing rates in 1994 was also correct. Greenspan is now one of the villains of 2008, of course, but it's hard to see how the Fed could have prevented the meltdown by itself. The federal government pushed to open lending; Glass Steagall was repealed, allowing banks to take unacceptable risks, including excess leverage; new financial products came to market which increased risk; and raising short term rates may not have been able to have the desired effect. The Fed could have done that, and taken heat like they did in 1994, and they could have also raised reserve requirements, which would have brought even greater howls of protest from right and left, but starting in the mid-90s, and really sooner, a variety of policy and industry changes set up the conditions for a panic. Both parties are to blame, and as powerful as the Fed is, the chairman is not omnipotent, nor is he a king. It's also questionable whether either Clinton or Dubya would have stood by and supported unpopular policies the way Reagan did with Volcker. We'll never know, now, but the notion that one person bears a huge portion of the blame is too simplistic.

There is no doubt in my mind that by keeping the Fed Fund rate at 1% (IIRC) for an unnecessarily long period of time, Greenspan was laregely responsible for causing the housing bubble. Where was the risk premium that ought to be there in a 1% money market rate environment?

Title: Re: Meltdown
Post by: Todd on May 22, 2012, 06:18:24 PM

Quote from: Coopmv on May 22, 2012, 06:08:46 PMThere is no doubt in my mind that by keeping the Fed Fund rate at 1% (IIRC) for an unnecessarily long period of time, Greenspan was laregely responsible for causing the housing bubble. Where was the risk premium that ought to be there in a 1% money market rate environment?

(http://www.moneycafe.com/library/ratecharts/ratecharts2.gif)

The Fed Funds rates were cut after 9/11 and started increasing again in late '04. The rate was at 1% for about a year starting in June 2003. The rate was between 4-5% in the early stages of the meltdown. When was the unnecessarily long time period you refer to?

Title: Re: Meltdown
Post by: Coopmv on May 22, 2012, 06:19:32 PM

Here is the bottomline. The US is run by a bunch of lunatics. One party absolutely refuses to raise taxes while the other absolutely refuses to cut spending. The only cure for this exploding federal deficit is to do both. Taxing the rich alone simply will not solve the deficit problem ...

Title: Re: Meltdown
Post by: Todd on May 22, 2012, 06:21:33 PM

Quote from: Coopmv on May 22, 2012, 06:19:32 PMOne party absolutely refuses to raise taxes while the other absolutely refuses to cut spending. The only cure for this exploding federal deficit is to do both. Taxing the rich alone simply will not solve the deficit problem ...

I agree, and have written as much multiple times. It is still important to rely on accurate facts when discussing what happened, and what types of policies should be pursued.

Title: Re: Meltdown
Post by: Coopmv on May 22, 2012, 06:23:48 PM

Quote from: Todd on May 22, 2012, 06:18:24 PM

(http://www.moneycafe.com/library/ratecharts/ratecharts2.gif)

The Fed Funds rates were cut after 9/11 and started increasing again in late '04. The rate was at 1% for about a year starting in June 2003. The rate was between 4-5% in the early stages of the meltdown. When was the unnecessarily long time period you refer to?

Ok, it was sub-2%. That was good enough to cause speculation in the housing market. Based on your graph, the rate stayed at 2% or below for some 3 years ...

Title: Re: Meltdown
Post by: Todd on May 22, 2012, 06:33:03 PM

Quote from: Coopmv on May 22, 2012, 06:23:48 PMOk, it was sub-2%. That was good enough to cause speculation in the housing market. Based on your graph, the rate stayed at 2% or below for some 3 years ...

It's not "my" graph, but simply a representation of Fed Funds rate data. As I pointed out previously, the rates were cut after 9/11 and starting increasing in 2004, and were between 4-5% when the meltdown started. It is pretty clear that in the post-9/11 economy, rates would have been and should have been lowered. Rates were kept too low for too long - ie, there was excess liquidity - and that contributed to the problem, but there were other significant factors as well. Had banks not been able to put as much capital at risk as they did due to changes in regulation under both Democratic and Republican administrations, then the damage would likely have been less severe. Let me ask you, when should rates have been raised, and to what level, and what data do you have from that time that offer such conclusive support for that? In hindsight, everything is clear, but it was not so clear in 2003, for instance.

Title: Re: Meltdown
Post by: Coopmv on May 24, 2012, 05:55:38 PM

Quote from: Todd on May 22, 2012, 06:33:03 PM

It's not "my" graph, but simply a representation of Fed Funds rate data. As I pointed out previously, the rates were cut after 9/11 and starting increasing in 2004, and were between 4-5% when the meltdown started. It is pretty clear that in the post-9/11 economy, rates would have been and should have been lowered. Rates were kept too low for too long - ie, there was excess liquidity - and that contributed to the problem, but there were other significant factors as well. Had banks not been able to put as much capital at risk as they did due to changes in regulation under both Democratic and Republican administrations, then the damage would likely have been less severe. Let me ask you, when should rates have been raised, and to what level, and what data do you have from that time that offer such conclusive support for that? In hindsight, everything is clear, but it was not so clear in 2003, for instance.

But when rate at relatively normal time (compared to the last three years) stayed at 2% or below for some 3 years, that was a long enough period for the housing bubble to develop. I certainly do not feel the few years after 9/11 were that different from normal time. The ensuing recession was quite shallow when compared with the recession in the early 1980's.

Title: Re: Meltdown
Post by: Todd on May 25, 2012, 07:13:05 AM

Quote from: Coopmv on May 24, 2012, 05:55:38 PMI certainly do not feel the few years after 9/11 were that different from normal time. The ensuing recession was quite shallow when compared with the recession /in the early 1980's.

Then you disagree with a large number of economists, left and right. That's certainly your prerogative, but the decrease in industrial output and financial activity were serious enough to warrant action.

I'm not quite sure what comparing the (pre and) post 9/11 recession to the early 80s recession has to do with anything; the 80s recession was, up until 2008, the sharpest downturn since the Great Depression by every measure except deflation (last experienced in 1948). Are you implying that the government and Fed should only take action if the economy is hovering around 9% unemployment and industrial production drops by around 8% in a year? The economic data for 2001 show that the economy was already in recession when 9/11 occurred, and the Fed had already started easing credit, which is standard policy during recession. The unemployment rate started to move up from a low level of 4.7% annualized in 2001 to 5.8% annualized in 2002, per the BLS, showing the standard lag in unemployment during recessions. Industrial production also decreased. To prevent any additional shock that may result from 9/11, additional measures were taken. This is pretty standard fare, and all but the most ardent free-market economists support basic stabilization policies, with the emphasis being the biggest difference (ie, use of fiscal or monetary policy). It seems you disagree, so let me ask you, based on data from the time, what policy actions should the Fed have taken and when should they have started increasing rates?

Title: Re: Meltdown
Post by: Karl Henning on May 30, 2012, 09:12:34 AM

The percentage of Americans between 25 and 54 years old who have jobs is at its lowest in 23 years. (http://www.washingtonpost.com/business/economy/job-recovery-is-scant-for-americans-in-prime-working-years/2012/05/29/gJQAnza9zU_story.html)

Title: Re: Meltdown
Post by: Coopmv on June 02, 2012, 06:53:23 AM

Quote from: karlhenning on May 30, 2012, 09:12:34 AM
The percentage of Americans between 25 and 54 years old who have jobs is at its lowest in 23 years. (http://www.washingtonpost.com/business/economy/job-recovery-is-scant-for-americans-in-prime-working-years/2012/05/29/gJQAnza9zU_story.html)

and this number may get worse ...

Title: Re: Meltdown
Post by: snyprrr on June 12, 2012, 11:08:14 AM

Nothing to see here. Just move along:

http://www.reuters.com/article/2012/06/12/us-usa-economy-budget-idUSBRE85B16B20120612?feedType=RSS

Title: Re: Meltdown
Post by: Todd on June 12, 2012, 11:27:40 AM

The deficit is down to $844.50 billion through May, a drop from last year. Excellent. We may come in under the $1.296 trillion from last year. $1.289 trillion, maybe?

Title: Re: Meltdown
Post by: Coopmv on June 12, 2012, 05:14:49 PM

Quote from: snyprrr on June 12, 2012, 11:08:14 AM
Nothing to see here. Just move along:

http://www.reuters.com/article/2012/06/12/us-usa-economy-budget-idUSBRE85B16B20120612?feedType=RSS

I wonder how the federal government did in April due to the tax filing?

Title: Re: Meltdown
Post by: bwv 1080 on June 13, 2012, 01:23:17 PM

Good piece by John Hempton

http://www.businessinsider.com/how-the-chinese-kleptrocracy-works-2012-6#ixzz1xi6Z4HC1

China is a kleptocracy. Get used to it.

...

China has huge underlying economic growth from moving peasants into the modern economy

Every economy that has moved peasants to an export-orientated manufacturing economy has had rapid economic growth. Great Britain industrialized at about 1 percent per annum. It was slow because all the technology needed to be invented for the first time. During the 19th Century US economic growth – once started – ran about twice the rate of the UK. They copied the technology which was faster than inventing it. Later economies (eg Japan, Malaysia, Thailand, Korea) went later and faster. As a general rule the later you industrialized the faster you went – as the ease of copying went up. In the globalized internet age copying foreign manufacturing techniques and seeking global markets is easier than ever – so China is growing faster than any prior economy.

This fast economic growth – which would happen in a more open economy – is creating the fuel for the Chinese kleptocracy.

The other key fuel for kleptocracy is a copious supply of domestic savings to loot. The reason Chinese savings levels are so high is the one-child policy.

In most developing countries the way that people save is they have multiple children hopefully to generate a gaggle of grandchildren all of whom are trained to respect their elders. Given most people did not live to old age if you did you became a treasured (and well cared for) family member.

This does not work in China. Longevity in China is increasing rapidly and the one-child policy results in a grandchild potentially having four grandparents to look after. The "four grandparent policy" means the elderly cannot expect to be looked after in old age. Four grandparents, one grand-kid makes abandoning the old-folk looks easy and near certain.

Nor can the elderly rely on a welfare state to look after them. There is no welfare state.

So the Chinese save. Unless they save they will starve in old age. This has driven savings levels sometimes north of fifty percent of GDP. Asian savings rates have been high through all the key industrializations (Japan, Korea, Singapore etc). However Chinese savings rates are over double other Asian savings rates – this is the highest savings rate in history and the main cause is the one-child policy.

The Chinese lower income and middle class people have extremely limited savings options. There are capital controls and they cannot take their money out of the country. So they can't invest in any foreign assets.

Their local share market is unbelievably corrupt. I have looked at many Chinese stocks listed in Shanghai and corruption levels are similar to Chinese stocks listed in New York. Expect fraud.

What Chinese are left with is bank deposits, life insurance accounts and (maybe) apartments.

Bank deposits rates are regulated. You can't get much different from 1 percent in a bank deposit. Life insurance contracts (a huge savings mechanism) are just rebadged bank deposits – attractive because the regulated rate is slightly higher.

This is a lousy savings mechanism because inflation has been between 6 and 8 percent (but is now lower than that and is falling fast). At almost all times (except during the height of the GFC) the inflation rate has been higher – often substantially higher – than the regulated bank deposit (or life insurance contract) rate.

In other words real returns for bank accounts are consistently negative – sometimes sharply negative.

You might ask why people save with sharply negative returns. But then you are not facing starvation in your old age because of the "four grandparent policy". Moreover because of the underlying economic growth (moving peasants into a manufacturing economy) there are increasing quantities of these savings every year. This is the critical point – the negative return to copious and increasing Chinese bank deposits drives a surprising amount of the global economy and makes sense of many things inside and outside China.

...
It is commonplace amongst Western investors to view the see-through apartment buildings of China as insane. And they may be a poor use of capital. But from the perspective of the investors – well they look better than bank deposits.

Negative returns on bank deposits and the Chinese kleptocracy

Most Chinese savings however are not invested in see-through apartment buildings. Bank deposits still dominate. The Chinese banks are the finest deposit franchises in human history. They can borrow huge amounts at ex-ante negative real returns.

And those deposits are mostly lent to State Owned enterprises.

The SOEs are the center of the Chinese kleptocracy. If you manage your way up the Communist Party of China and you play your politics really well may wind up senior in some State Owned Enterprise. This is your opportunity to loot on a scale unprecedented in human history.

Read more: http://www.businessinsider.com/how-the-chinese-kleptrocracy-works-2012-6#ixzz1xi6Z4HC1

Title: Re: Meltdown
Post by: Coopmv on June 14, 2012, 06:15:08 PM

Quote from: bwv 1080 on June 13, 2012, 01:23:17 PM
Good piece by John Hempton

http://www.businessinsider.com/how-the-chinese-kleptrocracy-works-2012-6#ixzz1xi6Z4HC1

China is a kleptocracy. Get used to it.

...

China has huge underlying economic growth from moving peasants into the modern economy

Every economy that has moved peasants to an export-orientated manufacturing economy has had rapid economic growth. Great Britain industrialized at about 1 percent per annum. It was slow because all the technology needed to be invented for the first time. During the 19th Century US economic growth – once started – ran about twice the rate of the UK. They copied the technology which was faster than inventing it. Later economies (eg Japan, Malaysia, Thailand, Korea) went later and faster. As a general rule the later you industrialized the faster you went – as the ease of copying went up. In the globalized internet age copying foreign manufacturing techniques and seeking global markets is easier than ever – so China is growing faster than any prior economy.

This fast economic growth – which would happen in a more open economy – is creating the fuel for the Chinese kleptocracy.

The other key fuel for kleptocracy is a copious supply of domestic savings to loot. The reason Chinese savings levels are so high is the one-child policy.

In most developing countries the way that people save is they have multiple children hopefully to generate a gaggle of grandchildren all of whom are trained to respect their elders. Given most people did not live to old age if you did you became a treasured (and well cared for) family member.

This does not work in China. Longevity in China is increasing rapidly and the one-child policy results in a grandchild potentially having four grandparents to look after. The "four grandparent policy" means the elderly cannot expect to be looked after in old age. Four grandparents, one grand-kid makes abandoning the old-folk looks easy and near certain.

Nor can the elderly rely on a welfare state to look after them. There is no welfare state.

So the Chinese save. Unless they save they will starve in old age. This has driven savings levels sometimes north of fifty percent of GDP. Asian savings rates have been high through all the key industrializations (Japan, Korea, Singapore etc). However Chinese savings rates are over double other Asian savings rates – this is the highest savings rate in history and the main cause is the one-child policy.

The Chinese lower income and middle class people have extremely limited savings options. There are capital controls and they cannot take their money out of the country. So they can't invest in any foreign assets.

Their local share market is unbelievably corrupt. I have looked at many Chinese stocks listed in Shanghai and corruption levels are similar to Chinese stocks listed in New York. Expect fraud.

What Chinese are left with is bank deposits, life insurance accounts and (maybe) apartments.

Bank deposits rates are regulated. You can't get much different from 1 percent in a bank deposit. Life insurance contracts (a huge savings mechanism) are just rebadged bank deposits – attractive because the regulated rate is slightly higher.

This is a lousy savings mechanism because inflation has been between 6 and 8 percent (but is now lower than that and is falling fast). At almost all times (except during the height of the GFC) the inflation rate has been higher – often substantially higher – than the regulated bank deposit (or life insurance contract) rate.

In other words real returns for bank accounts are consistently negative – sometimes sharply negative.

You might ask why people save with sharply negative returns. But then you are not facing starvation in your old age because of the "four grandparent policy". Moreover because of the underlying economic growth (moving peasants into a manufacturing economy) there are increasing quantities of these savings every year. This is the critical point – the negative return to copious and increasing Chinese bank deposits drives a surprising amount of the global economy and makes sense of many things inside and outside China.

...
It is commonplace amongst Western investors to view the see-through apartment buildings of China as insane. And they may be a poor use of capital. But from the perspective of the investors – well they look better than bank deposits.

Negative returns on bank deposits and the Chinese kleptocracy

Most Chinese savings however are not invested in see-through apartment buildings. Bank deposits still dominate. The Chinese banks are the finest deposit franchises in human history. They can borrow huge amounts at ex-ante negative real returns.

And those deposits are mostly lent to State Owned enterprises.

The SOEs are the center of the Chinese kleptocracy. If you manage your way up the Communist Party of China and you play your politics really well may wind up senior in some State Owned Enterprise. This is your opportunity to loot on a scale unprecedented in human history.

Read more: http://www.businessinsider.com/how-the-chinese-kleptrocracy-works-2012-6#ixzz1xi6Z4HC1

The number of billionaires China now has is only second to the US. The problem is its income per capita is still stuck at $6000 USD and IIRC, there are some 100 countries that have higher income per capita based on an article I read recently. How long can such dichotomy exist without any revolution is anyone's guess?

Title: Re: Meltdown
Post by: eyeresist on June 14, 2012, 06:26:41 PM

Quote from: bwv 1080 on June 13, 2012, 01:23:17 PMhttp://www.businessinsider.com/how-the-chinese-kleptrocracy-works-2012-6#ixzz1xi6Z4HC1

Nor can the elderly rely on a welfare state to look after them. There is no welfare state.

A "Communist" country without a welfare state - what a gyp!

Title: Re: Meltdown
Post by: Coopmv on June 14, 2012, 06:43:45 PM

Given its close to 1.5B population, the world's largest, it $3T foreign reserves only work out to $2000 per person. For a country that really does not provide much of a safety net, is it really a lot of money?

Title: Re: Meltdown
Post by: drogulus on June 16, 2012, 12:47:20 PM

China is learning that GDP is not everything, that it matters how wealth is distributed. After they learn it it will be time for us to relearn it. Henry Ford knew it mattered whether his workers could afford the cars he made. Today the billionaires have their own country (with no borders) which they can run on the export model, and since there's no such thing as an unemployed billionaire and the customer base is world wide all unemployment is externalized wherever it happens. The Country of the Unemployed is the country we don't care about. Let Nature run its course for them, and save our concern for Us, a smaller, more manageable group.

What's changed is at the conceptual level, how decisions are rationalized. The billionaires have their economists who say that unemployment is natural (like cancer), but (the good part, you'll like this) it's unnatural to cure it! I swear they really do say that. That is, the market has a natural cycle and no matter how devastating it is to human beings the natural and therefore right* thing to do is to let markets naturally destroy everything in their path (not under protection by a billionaire) and whatever you do to impede the progress of the disaster to help anyone is "unnatural" and therefore wrong. If this looks like religious dogma you're right, it is, but that doesn't mean it isn't economics. In a perverse way it's that, too.

I don't know where the myth of the natural market got started but I can say that in all my experience with stupid ideas I have never encountered a more anti-empirical notion. As a reasonably normal person I can say that history shows that the modern ideas of markets and banking, credit and government management of economic affairs have evolved together for more than a thousand years, that rather than government being the innovation it is the idea of the limited liability company and then the corporation that arrived as "unnatural" inventions, though with familiarity with the history of these developments the idea that they can be fenced off into "natural" and "unnatural" corrals seems pointless. The only point of making it is to invent a really clever way of disguising what would otherwise be blatant selfishness on a grand scale. I don't know, I think the disguise is pretty thin, it still looks like selfishness to me.

Quote from: Coopmv on June 14, 2012, 06:43:45 PM
Given its close to 1.5B population, the world's largest, it $3T foreign reserves only work out to $2000 per person. For a country that really does not provide much of a safety net, is it really a lot of money?

Haven't you heard? Safety nets are unnnatural. Their existence threatens the market. All those rich countries with welfare states were an illusion the Devil created to fool us. The Devil wants us to think that a country is poor if its people are poor, no matter how many billionaires it has. What a jerk! He obviously never studied economics. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

_{* It's a particularly nightmarish religion that decides that nature, of all things, is right because it exists. One would ordinarily think that religion existed to combat nature, not force us to conform to it's savagery. Oh well, you learn something new every day, if you want to.} (http://www.good-music-guide.com/community/Smileys/classic/tongue.gif)

Title: Re: Meltdown
Post by: bwv 1080 on June 16, 2012, 02:02:39 PM

Quote from: Coopmv on June 14, 2012, 06:43:45 PM
Given its close to 1.5B population, the world's largest, it $3T foreign reserves only work out to $2000 per person. For a country that really does not provide much of a safety net, is it really a lot of money?

the $3T is offset by RMB issued by the central bank and loaned out through the banking system to SOEs, so its not really there to tap

a safety net would reduce the incentive to save and lead to less deposits into the banking system and could threaten the whole shell game

Title: Re: Meltdown
Post by: Coopmv on June 16, 2012, 02:09:00 PM

Quote from: bwv 1080 on June 16, 2012, 02:02:39 PM
the $3T is offset by RMB issued by the central bank and loaned out through the banking system to SOEs, so its not really there to tap

a safety net would reduce the incentive to save and lead to less deposits into the banking system and could threaten the whole shell game

Yeah. The one thing Bernie Madoff had it right was when he called social security the world's largest Ponzi Scheme run by Uncle Sam. Who can argue with that? SS is indeed a giant Ponzi Scheme, I have always found it hard to believe this pay-as-you-go system can work over the long-term.

Title: Re: Meltdown
Post by: bwv 1080 on June 16, 2012, 02:25:42 PM

Quote from: Coopmv on June 16, 2012, 02:09:00 PM
Yeah. The one thing Bernie Madoff had it right was when he called social security the world's largest Ponzi Scheme run by Uncle Sam. Who can argue with that? SS is indeed a giant Ponzi Scheme, I have always found it hard to believe this pay-as-you-go system can work over the long-term.

SS is no more a ponzi scheme than what any insurance company does, its just an issue of adequate funding vs projected benefits

Title: Re: Meltdown
Post by: Karl Henning on June 25, 2012, 06:26:30 AM

Timing your stock purchases in possession of material non-public information . . . criminal in the private sector, but if you're in Congress, it's cool (http://www.washingtonpost.com/politics/lawmakers-reworked-financial-portfolios-after-talks-with-fed-treasury-officials/2012/06/24/gJQAnQPg0V_story.html?hpid=z2).

Title: Re: Meltdown
Post by: snyprrr on June 25, 2012, 06:49:14 AM

Start at about 1:05:

https://www.youtube.com/watch?v=efKchHKMb2k

So, we're just slaves to usurers, hmm?

Title: Re: Meltdown
Post by: Coopmv on June 25, 2012, 12:12:20 PM

Quote from: karlhenning on June 25, 2012, 06:26:30 AM
Timing your stock purchases in possession of material non-public information . . . criminal in the private sector, but if you're in Congress, it's cool (http://www.washingtonpost.com/politics/lawmakers-reworked-financial-portfolios-after-talks-with-fed-treasury-officials/2012/06/24/gJQAnQPg0V_story.html?hpid=z2).

This double standard needs to go away ...

Title: Re: Meltdown
Post by: Coopmv on June 25, 2012, 12:18:05 PM

Quote from: bwv 1080 on June 16, 2012, 02:25:42 PM
SS is no more a ponzi scheme than what any insurance company does, its just an issue of adequate funding vs projected benefits

The comparison is not quite correct. The SS payment recipients are no longer paying into the system, what they are receiving are payments that are currently being paid into the system by non-retired taxpayers. On the other hand, to be eligible to receive any insurance payout (excluding injury awards paid by other insurance companies), one has to be currently paying into the applicable insurance policy of a given pool.

Title: Re: Meltdown
Post by: bwv 1080 on June 25, 2012, 06:41:04 PM

Quote from: Coopmv on June 25, 2012, 12:18:05 PM
The comparison is not quite correct. The SS payment recipients are no longer paying into the system, what they are receiving are payments that are currently being paid into the system by non-retired taxpayers. On the other hand, to be eligible to receive any insurance payout (excluding injury awards paid by other insurance companies), one has to be currently paying into the applicable insurance policy of a given pool.

I don't understand the distinction or why it some rule of insurance. Obviously this is not the case for beneficiaries of life insurance or disability policies. When SS started in the 30s the retirement age of 65 was a couple years past male life expectancy, so it was an easily supportable system, and will be again with means testing and a higher retirement age

Title: Re: Meltdown
Post by: bwv 1080 on June 26, 2012, 01:54:40 PM

Quote from: BachQ on October 31, 2009, 08:52:48 AM
Telegraph -- Return of high oil prices threatens real damage ... "prices have nearly doubled so far this year and at more than $80 a barrel, they are again high enough to cause real economic damage."
(http://blogs.telegraph.co.uk/finance/jeremywarner/100001422/return-of-high-oil-prices-threatens-real-damage/)

Peak oil before 2020 a 'significant risk', say experts
David Strahan

8th October, 2009 A new report highlights how woefully unprepared the Government is for a looming peak in oil production There is a 'significant risk' that conventional oil production will peak before 2020, and forecasts that delay the event beyond 2030 are based on assumptions that are 'at best optimistic and at worst implausible'. So says a major new report that puts the excitement over recent 'giant' oil discoveries into perspective and directly contradicts the British government's position. It also warns that failure to recognise the threat of peak oil could undermine efforts to combat climate change. The report, entitled 'Global Oil Depletion: An assessment of the evidence for a near-term peak in global oil production', comes from the UK Energy Research Centre, an independent group funded by the Research Councils, whose mission is to resolve contentious technical issues and deliver clear guidance for policymakers. This report is significant because it is the first dispassionate academic attempt to reconcile the highly polarised debate over whether and when oil supplies will start to decline, yet its conclusions chime with a growing number of recent forecasts that warn of an early peak in production.

... The UKERC found that total production from existing fields is declining at 4 per cent or more each year, meaning the world has to add 3 million barrels of daily production capacity annually just to stand still, equivalent to developing a new Saudi Arabia every three years. This will present 'a major challenge, even if 'above-ground' conditions are favourable', says the report.

... The UKERC argues that each additional 1 billion barrels delays peak oil by less than a week. To postpone the peak by a year would take 7 times what was discovered in 2007. 'We're unlikely to explore our way out of this,' says Sorrel

... "If you don't even recognize the problem you will inevitably be unprepared. The Government needs to wake up to oil depletion and start planning, because it's going to mean major changes infrastructure, investment and lifestyles."
(http://www.theecologist.org/News/news_analysis/333587/peak_oil_before_2020_a_significant_risk_say_experts.html)

Good thing that peak oil turned out to be bunk

QuoteOil is not in short supply. From a purely physical point of view, there are huge volumes of conventional and unconventional oils still to be developed, with no "peak-oil" in sight. The real problems concerning future oil production are above the surface, not beneath it, and relate to political decisions and geopolitical instability.
• Other things equal, any significant setback to additional production in Iraq, the United States, and Canada would have a strong impact on the global oil market, considering the contribution of these countries to the future growth of oil supply.
• The shale/tight oil boom in the United States is not a temporary bubble, but the most important revolution in the oil sector in decades. It will probably trigger worldwide emulation over the next decades that might bear surprising results - given the fact that most shale/tight oil resources in the world are still unknown and untapped. What's more, the application of shale extraction key-technologies (horizontal drilling and hydraulic fracturing) to conventional oilfield could dramatically increase world's oil production.
• In the aggregate, conventional oil production is also growing throughout the world at an unexpected rate, although some areas of the world (Canada, the United States, the North Sea) are witnessing an apparently irreversible decline of the conventional production.
• The age of "cheap oil"‡
• The oil market will remain highly volatile until 2015 and prone to extreme movements in opposite directions, thus representing a major challenge for investors, in spite of its short and long term opportunities. After 2015, however, most of the projects considered in this paper will advance significantly and contribute to a strong build-up of the world's production capacity. This could provoke a major phenomenon of overproduction and lead to a significant, stable dip of oil prices, unless oil demand were to grow at a sustained yearly rate of at least 1.6 percent for the entire decade. is probably behind us, but it is still uncertain what the future level of oil prices might be. Technology may turn today's expensive oil into tomorrow's cheap oil.
‡ The expression "cheap oil" has not exact boundaries. Generally, in the oil literature it is used in reference to the cheap oil prices prevailing over the second half of the 20th Century, when oil price in real terms (2000 U.S. dollars) ranged between $20 to $30 per barrel, with some noteworthy exception (such as during the period of the oil shocks in the 1970s and early 1980s, when the price of oil largely exceed $100 per barrel in real terms).
• A revolution in environmental and emission-curbing technologies is required to sustain the development of most unconventional oils – along with strong enforcement of existing rules. Without such a revolution, a continuous clash between the industry and environmental groups will force the governments to delay or constrain the development of new projects.
• Some of the major geopolitical consequences of the oil revolution include Asia becoming the reference market for the bulk of the Middle East oil, and China becoming a new protagonist in the political affairs of the whole region.
• At the same time, the Western Hemisphere could return to a pre-World War II status of theoretical oil self-sufficiency, and the United States could dramatically reduce its oil import needs.
• However, quasi oil self-sufficiency will neither insulate the United States from the rest of the global oil market (and world oil prices), nor diminish the critical importance of the Middle East to its foreign policy. At the same time, countries such as Canada, Venezuela and Brazil may decide to export their oil and gas production to markets other than the U.S. for purely commercial reasons, making the notion of Western Hemisphere self-sufficiency irrelevant.
• It's also true, however, that over the next decades, the growing role of unconventional oils will make the Western hemisphere the new center of gravity of oil exploration and production

http://belfercenter.ksg.harvard.edu/files/Oil-%20The%20Next%20Revolution.pdf

Title: Re: Meltdown
Post by: Coopmv on June 26, 2012, 06:02:13 PM

It looks like the peak oil theorists have failed to take into consideration that there is abundant natural gas supply in the US to last at least 100 years. IMO, the only reason there has not been more push for natgas powered cars is it is not politically as big a winner as electric-powered cars and promotion of ethanol wins votes in the farm-belt ...

Title: Re: Meltdown
Post by: bwv 1080 on June 26, 2012, 06:49:59 PM

Yes but electric cars are essentially natural gas as well

Title: Re: Meltdown
Post by: Coopmv on June 26, 2012, 06:53:03 PM

Quote from: bwv 1080 on June 26, 2012, 06:49:59 PM
Yes but electric cars are essentially natural gas as well

But natgas powered car still uses an internal combustion engine while an electric powered car does not ...

Title: Re: Meltdown
Post by: bwv 1080 on June 27, 2012, 05:08:42 AM

Quote from: Coopmv on June 26, 2012, 06:53:03 PM
But natgas powered car still uses an internal combustion engine while an electric powered car does not ...

The point is that nat gas is the marginal source of electricity generation for the grid. Nat gas is a far inferior transportation fuel to gasoline with CNN cars having ranges at or below that of electric cars and my guess is there is a lot more room to improve on electric technology

Title: Re: Meltdown
Post by: Coopmv on June 27, 2012, 04:45:59 PM

Quote from: bwv 1080 on June 27, 2012, 05:08:42 AM
The point is that nat gas is the marginal source of electricity generation for the grid. Nat gas is a far inferior transportation fuel to gasoline with CNN cars having ranges at or below that of electric cars and my guess is there is a lot more room to improve on electric technology

The problem with electric-powered car is the charging time and the range. I can never see charging time to be as short as the time it takes to fill up your tank of your gas powered car.

Title: Re: Meltdown
Post by: Todd on June 29, 2012, 09:50:00 AM

Quote from: bwv 1080 on June 26, 2012, 01:54:40 PMGood thing that peak oil turned out to be bunk

The first prognostications of doom with respect to oil date to the late 19th Century, if memory serves. The warnings were incorrect. So, per a Harvard paper, this time is not different. Next time will be, though.

(Oh, does anyone know how much oil is beneath the Atlantic and Pacific and Indian and Arctic Oceans?)

Title: Re: Meltdown
Post by: Karl Henning on June 29, 2012, 10:01:30 AM

But — There be sea-monsters! Or Balrogs, or something . . . .

Title: Re: Meltdown
Post by: bwv 1080 on June 29, 2012, 06:57:57 PM

Quote from: Todd on June 29, 2012, 09:50:00 AM

The first prognostications of doom with respect to oil date to the late 19th Century, if memory serves. The warnings were incorrect. So, per a Harvard paper, this time is not different. Next time will be, though.

(Oh, does anyone know how much oil is beneath the Atlantic and Pacific and Indian and Arctic Oceans?)

Read something about a "peak coal" scare around 1900

Title: Re: Meltdown
Post by: Coopmv on June 30, 2012, 06:26:46 AM

Quote from: bwv 1080 on June 29, 2012, 06:57:57 PM
Read something about a "peak coal" scare around 1900

The Swiss Alps has also experienced the effect of global warming, as its glaciers have rapidly dwindled or disappeared. There is no doubt that the BRIC countries have contributed much to this problem due to their rapid industrialization over the last two decades. Renewable energy must be made a more important factor in the energy supply equation or the consequence will be very dire for all of us ...

Title: Re: Meltdown
Post by: Todd on June 30, 2012, 06:54:27 AM

Quote from: bwv 1080 on June 29, 2012, 06:57:57 PMRead something about a "peak coal" scare around 1900

I vaguely recall reading about similar scares with coal. I need a good laugh, so perhaps I will look up some original warnings. There's the whole problem with food, too, we should remember, whether one considers Malthus or Ehrlich or whoever makes such warnings today. Wait, sorry, this time is different.

Quote from: Coopmv on June 30, 2012, 06:26:46 AMThere is no doubt that the BRIC countries have contributed much to this problem due to their rapid industrialization over the last two decades.

The Economist recently published an eye opening article on Chinese CO2 emission. Looks like the official Chinese CO2 numbers may be understated. Yes, I know, such a revelation is quite shocking. Apparently, aggregated provincial data on CO2 emissions is about 20% higher than the published national figure. In this case, the 20% difference is roughly equal to the CO2 emissions from Japan, which itself is the fourth largest CO2 emitter. As China is the largest CO2 producing nation, with increases each year, this problem may get worse. How to get the Chinese to reduce their output? (Of course, a quick search online yields a report by a Chinese scientist claiming that CO2 emissions are overstated.)

Title: Re: Meltdown
Post by: Coopmv on June 30, 2012, 07:06:23 AM

Quote from: Todd on June 30, 2012, 06:54:27 AM

The Economist recently published an eye opening article on Chinese CO2 emission. Looks like the official Chinese CO2 numbers may be understated. Yes, I know, such a revelation is quite shocking. Apparently, aggregated provincial data on CO2 emissions is about 20% higher than the published national figure. In this case, the 20% difference is roughly equal to the CO2 emissions from Japan, which itself is the fourth largest CO2 emitter. As China is the largest CO2 producing nation, with increases each year, this problem may get worse. How to get the Chinese to reduce their output? (Of course, a quick search online yields a report by a Chinese scientist claiming that CO2 emissions are overstated.)

Not surprising. The latest official GDP number from China was inflated because many provincial governments fudged their growth numbers. For CO2 emission, the lower the better for the image of China and the published number has to come down from the real number. Never mind what the Chinese scientist said, he knows he may go to jail or labor camp if he contradicts what his government has announced to the world ...

Title: Re: Meltdown
Post by: snyprrr on July 25, 2012, 07:19:50 PM

JUST PRINT MORE MONEY!!

http://www.youtube.com/watch?v=q6vi528gseA

What a smart man, mm mm mm

Title: Re: Meltdown
Post by: Todd on July 25, 2012, 07:22:58 PM

Quote from: snyprrr on July 25, 2012, 07:19:50 PMWhat a smart man, mm mm mm

Yep, a smart man indeed, since he well knows that not every country has the ability to print away debt.

I would have thought you would have mentioned that several more European countries are facing downgrades, including mighty Germany. Only Finland is secure in its AAA rating. For now.

Title: Re: Meltdown
Post by: Karl Henning on July 26, 2012, 03:59:11 AM

Germany has to decide on the lesser of two evils, hasn't it? What a mess.

Title: Re: Meltdown
Post by: snyprrr on July 26, 2012, 08:31:52 AM

Quote from: Todd on July 25, 2012, 07:22:58 PM

Yep, a smart man indeed, since he well knows that not every country has the ability to print away debt.

I would have thought you would have mentioned that several more European countries are facing downgrades, including mighty Germany. Only Finland is secure in its AAA rating. For now.

What about Iceland, the only country on the planet that seems to have gone after the bad guys? What's going on there?

uhhh,... you can't print away debt,... you can FORGIVE debt,... debt IS debt

Are you familiar with 'The Eleventh Marble'?

Title: Re: Meltdown
Post by: Coopmv on July 26, 2012, 05:10:58 PM

It certainly sounds like the ECB is about to do its own QE ...

Title: Re: Meltdown
Post by: Todd on July 26, 2012, 06:00:23 PM

Quote from: snyprrr on July 26, 2012, 08:31:52 AMuhhh,... you can't print away debt,... you can FORGIVE debt,... debt IS debt

Uhhhh, a nation that controls its own currency can print all the money it needs to in order to pay obligations. Creditors need not forgive debt. There are consequences to such policies - high inflation - but it's hardly a secret that it can be done.

Title: Re: Meltdown
Post by: snyprrr on July 26, 2012, 08:06:43 PM

Quote from: Todd on July 26, 2012, 06:00:23 PM

Uhhhh, a nation that controls its own currency can print all the money it needs to in order to pay obligations. Creditors need not forgive debt. There are consequences to such policies - high inflation - but it's hardly a secret that it can be done.

If Congress can print its own money for free, why does it borrow said fiat money from a CB at a fee? Why does Congress add the extra burden of usury to the already dire situation we are now in, why, why, why???

The money that the Fed collects as interest on their loans... or whatever it is they call printing paper fairy dust and selling it at a profit,... where foes the money come from that pays their cut?

Any good merchant knows you cut out the middleman.

Is there really REAL debt in the world, REAL DEBT?, or is it mostly just endless compound interest purportedly owed to CBs, which is... bullshit? Do we really OWE the Fed ANYTHING? What if we just stopped paying,... it's just a game, right? We don't even have to pay them back, but we do?

Oh where would we be if the great World Bank didn't condescend to men of such simple means, ohh where ohhh where?? Oh, I bow me thee down before thee oh great Banker-Priest and bless me with your low low Rates (TM), oh slurp, smooch smooch, oh great master of the mystery of why we owe you one red cent, oh please please make your money out of nothing and sell it to me for interest so you will get everything in the end...

oh look, here comes the United Staes Government to save me :-* from that evil Global-Bank-Vampire-Squid,... oh, wait :)... wait :(... wait >:(... wait :-\,... wait >:D... OHHH, their NOT coming to save me from the evil bank, but their helping the bank rape everyone... oh no, what are we gonna do Opie? ??? hump hump hump

hump hump

hey, this endless debt slavery is starting to feel good.

hump hump

oh, and with lube or reach around... wow, feel so blessed!! :-* :-* thanks everybody!! :-* :-*

oh, I just feel the bankers and my gov just, mm, loving me sooo much, they are so wonderful to me, I just love them sooo much... yay! 8)

Title: Re: Meltdown
Post by: Todd on July 26, 2012, 08:13:17 PM

You're voting for Ron Paul, aren't you?

Title: Re: Meltdown
Post by: snyprrr on July 26, 2012, 08:17:36 PM

Quote from: Todd on July 26, 2012, 08:13:17 PM
You're voting for Ron Paul, aren't you?

You're working for Rombama, right? ;D

Title: Re: Meltdown
Post by: Todd on July 26, 2012, 08:19:05 PM

Quote from: snyprrr on July 26, 2012, 08:17:36 PMRombama

I see what you did there, combining the two names. Clever-ish.

Title: Re: Meltdown
Post by: snyprrr on July 26, 2012, 08:28:26 PM

And, I thought I was so clever in coming up with 'Rombama' that I had to check. Mmm,... late to the party:

http://www.rombama2012.com/index.html

::)

btw Todd, no, I'm not voting for Paul,... we're fucked all ways. Hopefully something will happen that will stymy the whole cauldron so that nothing gets 'done'. I keep saying, Get a bunch of credit cards and run 'em up up up and don't even worry about paying one cent, it's all fake money anyway and they're all willingly involved in this fake system so why not just do it up right?

Caviar? 8)

Title: Re: Meltdown
Post by: Todd on July 26, 2012, 08:30:40 PM

I see, you want a handout.

Title: Re: Meltdown
Post by: snyprrr on July 26, 2012, 08:39:40 PM

Quote from: Todd on July 26, 2012, 08:30:40 PM
I see, you want a handout.

I just want them to STOP STEALING MY MONEY! TRAITORS!

Usury. Do you like it Todd? Do you make a living from it? Aye, you can never pay them back.

Handout?

Handout?

Iceland didn't want a handout!! >:D

You know what? You sound like you're just all for the DOJ not even bothering with any indictments for the mortgage backed securities fraud.

You brought Rob Newman here and you are an apologist for the Vampire Squid sucking the wealth out of our country with the complicity of our own so-called 'elected' officials. Oy yay Todd, wonderful, life is just so never been better and I'm so looking forward to the rosy future.

Where did I misplace that trust fund?

Title: Re: Re: Meltdown
Post by: Karl Henning on July 27, 2012, 03:26:16 AM

Quote from: snyprrr on July 26, 2012, 08:39:40 PM
I just want them to STOP STEALING MY MONEY! TRAITORS!

As soon as the US Mint Gift Boutique issues a Xenakis commemorative gold piece, your tune will change....

Title: Re: Meltdown
Post by: Todd on July 27, 2012, 06:31:27 AM

Quote from: snyprrr on July 26, 2012, 08:39:40 PMUsury. Do you like it Todd?

Usury? Who falls prey to usury, aside from folks who use payday lenders (at least in the US)? Looks like you are confused, as well as wanting a hand-out.

(Sorry, but suggesting that people ought to run up bills with no intention of paying them back is nothing but a handout in practice.)

Title: Re: Meltdown
Post by: snyprrr on July 27, 2012, 06:40:37 AM

Quote from: Todd on July 27, 2012, 06:31:27 AM

Usury? Who falls prey to usury, aside from folks who use payday lenders (at least in the US)? Looks like you are confused, as well as wanting a hand-out.

(Sorry, but suggesting that people ought to run up bills with no intention of paying them back is nothing but a handout in practice.)

Aye, ok Todd, you're right, I'm just a lazy hippie smoking pot all all day. Thank you for being so wonderful and seeing through my pain... I wasn't loved as a child... I'm off to sign up for welfare

oh, and, btw,... it... was... a... joke

So, you're saying that the Fed doesn't charge the US Gov INTEREST on its 'loans' to the same US Gov? Do you make your living off of interest?

I've had enough.

And you haven't mentioned ICELAND.

What about ICELAND Todd.

ICELAND!!

Title: Re: Meltdown
Post by: Todd on July 27, 2012, 06:44:14 AM

Iceland is irrelevant, sorry. I suggest you go read about debt monetization and usury and then come back and offer sane comments.

Title: Re: Meltdown
Post by: snyprrr on July 27, 2012, 07:18:08 AM

http://economistsview.typepad.com/economistsview/2005/09/what_is_debt_mo.html

Yea, no, I don't need a CB period. There IS a way of thinking, a worldview, that legitimizes 'legal' theft. Mmm...

THEFT!!

I'm glad you're doing well for yourself.

Title: Re: Meltdown
Post by: Todd on July 27, 2012, 07:41:43 AM

Explain how it is theft.

Title: Re: Meltdown
Post by: Coopmv on September 08, 2012, 08:21:22 AM

Looks like Mario Draghi will be running that printing press 24/7 to crank out those Euros. It is too bad, Spain and Greece should NEVER be bailed out, let them sink ...

Title: Re: Meltdown
Post by: Todd on September 08, 2012, 08:27:28 AM

Quote from: Coopmv on September 08, 2012, 08:21:22 AMLooks like Mario Draghi will be running that printing press 24/7 to crank out those Euros. It is too bad, Spain and Greece should NEVER be bailed out, let them sink ...

Yes, but the effort is only slightly more than half-hearted. (http://online.barrons.com/article/SB50001424053111904294104577633523971967772.html?mod=BOL_hpp_highlight_bottom) This is not the ultimate solution to the chronic Euro problems.

Title: Re: Meltdown
Post by: snyprrr on September 08, 2012, 08:34:02 AM

Quote from: Coopmv on September 08, 2012, 08:21:22 AM
Looks like Mario Draghi will be running that printing press 24/7 to crank out those Euros. It is too bad, Spain and Greece should NEVER be bailed out, let them sink ...

OH NOES!! :o

If you said that about GM you might get a tongue lashing in the 'Objective' Thread! :P

I say they should just issue a semi-auto to all citizens and leave it at that.

If I were sane, it would make me crazy!! ???

And, all of a sudden,... oh, nevermind, I've probably already got myself in plenty of trouble today. sigh ::)

Title: Re: Meltdown
Post by: Coopmv on September 08, 2012, 08:39:44 AM

Quote from: snyprrr on September 08, 2012, 08:34:02 AM
OH NOES!! :o

If you said that about GM you might get a tongue lashing in the 'Objective' Thread! :P

I say they should just issue a semi-auto to all citizens and leave it at that.

If I were sane, it would make me crazy!! ???

And, all of a sudden,... oh, nevermind, I've probably already got myself in plenty of trouble today. sigh ::)

To hell with GM. Taxpayers will lose their shirts on that bailout. The bailout money is used to make those UAW guys pensions whole. GM continues to crank out garbage. For the record, I have NEVER owned any cars made by the Detroit Three.

Title: Re: Meltdown
Post by: Coopmv on September 08, 2012, 08:43:59 AM

At the end of the day, no country will be happier than China since all those stimulus monies printed by the Fed and the ECB will be flowing over to China for its products ...

Title: Re: Meltdown
Post by: snyprrr on September 08, 2012, 10:23:23 PM

Quote from: Coopmv on September 08, 2012, 08:43:59 AM
At the end of the day, no country will be happier than China since all those stimulus monies printed by the Fed and the ECB will be flowing over to China for its products ...

num num num num

yummy

I think I am resigned. :(

Title: Re: Meltdown
Post by: Coopmv on September 09, 2012, 02:11:57 PM

Quote from: snyprrr on September 08, 2012, 10:23:23 PM
num num num num

yummy

I think I am resigned. :(

Indeed, I saw some wag who made the case against any stimulus 3 years ago: Whose economy is this stimulus supposed to stimulate? Sadly, he did have a case and was right ...

Title: Re: Meltdown
Post by: snyprrr on September 13, 2012, 09:51:06 AM

WOO HOO!! QE3 QE3 QE3

Cut me a check, m'man!

... goin' down t'paaartay...

Pop the corks! :-*

Title: Re: Meltdown
Post by: drogulus on September 13, 2012, 08:13:08 PM

Quote from: Coopmv on September 08, 2012, 08:43:59 AM
At the end of the day, no country will be happier than China since all those stimulus monies printed by the Fed and the ECB will be flowing over to China for its products ...

No, the happy people will be the consumers who buy Chinese products with stimulus monies that magically appeared in their bank accounts.

Do you remember unemployment, and the decision to contract state, local and federal government simultaneously to prevent a recovery? No, you don't remember that? I'm not surprised, because all the attention paid to the Fed sideshow seems to leave too few brain cells for a full understanding of just why it is that efforts to stimulate the economy by monetary policy alone have produced so little. The answer isn't hard to see once the hypnotic spell is broken: This is a job for fiscal policy, it always has been and always will be basic macroeconomics to spend to create jobs, spend to make state and local governments whole, to restore job cuts and prevent impending additional cuts, to halt federal job losses. Almost none of that has been done since the original stimulus money ran out.

You've heard of the Fiscal Cliff, no doubt. But do you know why it's such a scary thing? Because it is more of the same thing we're suffering from now. That's how we know how bad it is, because we know, a tiny minority of nonhypnotized brain cells, that is, what we have done, with perfect forsight, no less, to deliberately run down a huge rich economy with purposeful neglect driven by bad theorizing. What a lousy, stinking pathetic demonstration of blindness this has been.

Title: Re: Meltdown
Post by: snyprrr on September 13, 2012, 09:30:37 PM

Quote from: drogulus on September 13, 2012, 08:13:08 PM
No, the happy people will be the consumers who buy Chinese products with stimulus monies that magically appeared in their bank accounts.

Do you remember unemployment, and the decision to contract state, local and federal government simultaneously to prevent a recovery? No, you don't remember that? I'm not surprised, because all the attention paid to the Fed sideshow seems to leave too few brain cells for a full understanding of just why it is that efforts to stimulate the economy by monetary policy alone have produced so little. The answer isn't hard to see once the hypnotic spell is broken: This is a job for fiscal policy, it always has been and always will be basic macroeconomics to spend to create jobs, spend to make state and local governments whole, to restore job cuts and prevent impending additional cuts, to halt federal job losses. Almost none of that has been done since the original stimulus money ran out.

You've heard of the Fiscal Cliff, no doubt. But do you know why it's such a scary thing? Because it is more of the same thing we're suffering from now. That's how we know how bad it is, because we know, a tiny minority of nonhypnotized brain cells, that is, what we have done, with perfect forsight, no less, to deliberately run down a huge rich economy with purposeful neglect driven by bad theorizing. What a lousy, stinking pathetic demonstration of blindness this has been.

But,... Ben 'hopes' it's going to work. :'(

Come on, let's do the hope-y dance.

Hope-y, hope-y, hope-y, ope-y, tra la la la,..

mm mm, hm mm

Title: Re: Meltdown
Post by: drogulus on September 13, 2012, 10:14:28 PM

Quote from: snyprrr on September 13, 2012, 09:30:37 PM
But,... Ben 'hopes' it's going to work. :'(

Come on, let's do the hope-y dance.

Hope-y, hope-y, hope-y, ope-y, tra la la la,..

mm mm, hm mm

You don't know what "it" you're talking about. There are 2 of them. One is monetary action to avoid asset deflation which, if it were to occur, would make things far worse. This "it" is working, reflected in the stock market and steady home prices, recovering in some regions. We don't need more wealth destruction. What a genius Bernanke must be to have figured this out! Except, it doesn't take genius at all if your mind hasn't been rotted out by theory and conspiracy. Bernake IOW is a kind of normal guy, remarkably so for a Republican free marketeer.

As for the other "it", that's a different story. The offensive job of restoring employment , as opposed to the defensive job of preventing further declines, is largely a matter of appropriation by Congress. A bill is passed and the President signs it, money is spent, preferably gigantic truckloads of it, and people go back to work.

Title: Re: Meltdown
Post by: eyeresist on September 13, 2012, 10:43:20 PM

Quote from: drogulus on September 13, 2012, 10:14:28 PMAs for the other "it", that's a different story. The offensive job of restoring employment , as opposed to the defensive job of preventing further declines, is largely a matter of appropriation by Congress. A bill is passed and the President signs it, money is spent, preferably gigantic truckloads of it, and people go back to work.

Let's knock down the Hoover dam, then build it up again :) [/frivolity]

Title: Re: Meltdown
Post by: drogulus on September 14, 2012, 12:35:37 AM

Quote from: eyeresist on September 13, 2012, 10:43:20 PM
Let's knock down the Hoover dam, then build it up again :) [/frivolity]

I think we can do better than that, but that would be better than what we are doing now, and that is not a joke.

We don't ordinarily think of money spent purely on income support in terms of productivity, but we should. It's counterintuitive to suggest that such spending enriches a country, but if it prevents people from being poor, it does exactly that. The costs of poverty are high. It's cheaper to give people money to break rocks or stay at home watching soap operas than allow them to drift down to the level they will reach if we don't intervene. This is why all rich countries have social safety nets, not because we love the poor (actually, I kind of hate them _{(http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)}) but because we will all be dragged down by the damage they cause if we don't help them. It's expensive, but less so than repairing the damage of widespread poverty.

Title: Re: Meltdown
Post by: Florestan on September 14, 2012, 12:56:29 AM

Quote from: drogulus on September 14, 2012, 12:35:37 AM
This is why all rich countries have social safety nets, not because we love the poor (actually, I kind of hate them _{(http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)}) but because we will all be dragged down by the damage they cause if we don't help them.

Bismarck would have put it exactly the same way. To call this attitude "progressive" would be a gross misnomer --- it is reactionary to the core: things have to change (the rich should help the poor) in order to remain the same (the rich to go on with their rich life and the poor with their bread and circuses). ;D

Title: Re: Meltdown
Post by: Todd on September 14, 2012, 05:53:19 AM

Quote from: drogulus on September 13, 2012, 08:13:08 PMThe answer isn't hard to see once the hypnotic spell is broken: This is a job for fiscal policy, it always has been and always will be basic macroeconomics to spend to create jobs

For Keynesians, yes, however, there are alternative theories, and it is essential to point out that monetary policy is only ineffective in Keynesian theory under certain circumstances, rather like the liquidity trap we are in or close to being in now. It is also essential to point out that "spending" can and does take the form of both direct federal expenditures and tax cuts and rebates. It is clear what you would prefer, but policy makers will hopefully keep a broader mix in mind. We don't need another NRA, or anything like that.

Title: Re: Meltdown
Post by: Coopmv on September 14, 2012, 02:37:05 PM

Quote from: snyprrr on September 13, 2012, 09:30:37 PM
But,... Ben 'hopes' it's going to work. :'(

Come on, let's do the hope-y dance.

Hope-y, hope-y, hope-y, ope-y, tra la la la,..

mm mm, hm mm

Have you watched the Forex market laterly? The Dollar has dropped into a toilet against the Pound, the Yen and even the sickly Euro. Pretty soon, folks will be paying $10 for a Big Mac. Where is the inflation? The beltway folks see no inflation ...

Title: Re: Meltdown
Post by: Coopmv on September 14, 2012, 02:41:50 PM

Quote from: Todd on September 14, 2012, 05:53:19 AM

For Keynesians, yes, however, there are alternative theories, and it is essential to point out that monetary policy is only ineffective in Keynesian theory under certain circumstances, rather like the liquidity trap we are in or close to being in now. It is also essential to point out that "spending" can and does take the form of both direct federal expenditures and tax cuts and rebates. It is clear what you would prefer, but policy makers will hopefully keep a broader mix in mind. We don't need another NRA, or anything like that.

Unfortunately, for a former community organizer and a half-term US Senator from IL that needs adult supervision, fiscal policy is too complicated to comprehend, let alone put together one. The Fed is going way beyond its stated mandate ... >:(

Title: Re: Meltdown
Post by: Coopmv on September 14, 2012, 02:58:02 PM

By the way, another credit downgrade is on its way, probably after the New Year ...

Title: Re: Meltdown
Post by: Coopmv on September 14, 2012, 03:15:07 PM

Quote from: Coopmv on September 14, 2012, 02:58:02 PM
By the way, another credit downgrade is on its way, probably after the New Year ...

Actually, the downgrade has already happened, though it was not done by a first tier ratings agency ...

Title: Re: Meltdown
Post by: Todd on September 14, 2012, 03:42:12 PM

Quote from: Coopmv on September 14, 2012, 02:41:50 PMThe Fed is going way beyond its stated mandate ...

True, but the results have been less bad than the 30s, when the Fed was more restrained.

Quote from: Coopmv on September 14, 2012, 03:15:07 PMActually, the downgrade has already happened, though it was not done by a first tier ratings agency ...

I read about the Moody's warning, and given the current environment, I doubt it will have any impact on rates in the near term. The S&P downgrade resulted in lower rates. Perhaps the Moody's action will be different. Of course, almost every AAA nation has either been downgraded already, or has been warned about a downgrade, except for Finland, and rates don't seem to be moving in relation to ratings agency announcements much, so this is a 'so what' type of situation.

Title: Re: Meltdown
Post by: Coopmv on September 14, 2012, 04:03:09 PM

Quote from: Todd on September 14, 2012, 03:42:12 PM

True, but the results have been less bad than the 30s, when the Fed was more restrained.

I read about the Moody's warning, and given the current environment, I doubt it will have any impact on rates in the near term. The S&P downgrade resulted in lower rates. Perhaps the Moody's action will be different. Of course, almost every AAA nation has either been downgraded already, or has been warned about a downgrade, except for Finland, and rates don't seem to be moving in relation to ratings agency announcements much, so this is a 'so what' type of situation.

Ever heard of Egan-Jones? I have, but that was so long ago that I almost forgot about its existence. It downgraded the US debt today from AA to AA- ...

Title: Re: Meltdown
Post by: Todd on September 14, 2012, 04:12:03 PM

Quote from: Coopmv on September 14, 2012, 04:03:09 PMEver heard of Egan-Jones?

Yes, but they're a small player. I did not see that they had reduced the rating until you mentioned it in the last post. I doubt their downgrade has any impact on rates.

Title: Re: Meltdown
Post by: Coopmv on September 14, 2012, 04:13:46 PM

Quote from: Todd on September 14, 2012, 04:12:03 PM

Yes, but they're a small player. I did not see that they had reduced the rating until you mentioned it in the last post. I doubt their downgrade has any impact on rates.

I think the yield on the 10-year T bond has already moved up meaningfully, i.e. more than just a few basis points ...

Title: Re: Meltdown
Post by: Coopmv on September 14, 2012, 04:22:43 PM

I doubt the QE3 will increase employment much. We have been down that path before. The time for taking meaningful fiscal measures is long overdue. All those QE's are making lives for the seniors miserable since they live on fixed income. The interests on their savings they used to count on to implement their social security payments have evaporated ...

Title: Re: Meltdown
Post by: Todd on September 14, 2012, 05:35:21 PM

Quote from: Coopmv on September 14, 2012, 04:13:46 PMI think the yield on the 10-year T bond has already moved up meaningfully, i.e. more than just a few basis points ...

10 years closed up 13 bps today. To 1.88% Meaningful? I'm not convinced.

Quote from: Coopmv on September 14, 2012, 04:22:43 PMI doubt the QE3 will increase employment much. We have been down that path before. The time for taking meaningful fiscal measures is long overdue.

I also doubt QE3 does much for employment. It will probably cause more growth is asset prices, if anything. I'd have no issue with substantive fiscal policy changes, but I don't see the proper mix being able to materialize until after November.

Title: Re: Meltdown
Post by: Sammy on September 14, 2012, 05:55:15 PM

Quote from: Coopmv on September 14, 2012, 02:41:50 PM
Unfortunately, for a former community organizer and a half-term US Senator from IL that needs adult supervision, fiscal policy is too complicated to comprehend, let alone put together one. The Fed is going way beyond its stated mandate ... >:(

I don't care much for Obama's policies, but it's ridiculous to say that the man needs adult supervision and that fiscal policy is too difficult for him. Obama's a very smart man.

Title: Re: Meltdown
Post by: Coopmv on September 14, 2012, 06:19:18 PM

Quote from: Sammy on September 14, 2012, 05:55:15 PM
I don't care much for Obama's policies, but it's ridiculous to say that the man needs adult supervision and that fiscal policy is too difficult for him. Obama's a very smart man.

Think Carter, trained as a nuclear engineer and some have called him the smartest president we have ever had. Very nice man and I even gave to his Habitat for Humanity for a while but never cared for him as a president ...

BTW, I just paraphrased some journalist that the WH needed adult supervision in the aftermath of the first credit downgrade and the second one has already happened, albeit by a second-tier ratings agency ...

Title: Re: Meltdown
Post by: Coopmv on September 15, 2012, 03:21:54 PM

Oil prices will shoot up to $200/bbl when the conflict begins and oil stocks will be melting up big-time ...

Armada of British naval power massing in the Gulf as Israel prepares an Iran strike

An armada of US and British naval power is massing in the Persian Gulf in the belief that Israel is considering a pre-emptive strike against Iran's covert nuclear weapons programme.

Battleships, aircraft carriers, minesweepers and submarines from 25 nations are converging on the strategically important Strait of Hormuz in an unprecedented show of force as Israel and Iran move towards the brink of war.

Western leaders are convinced that Iran will retaliate to any attack by attempting to mine or blockade the shipping lane through which passes around 18 million barrels of oil every day, approximately 35 per cent of the world's petroleum traded by sea.

A blockade would have a catastrophic effect on the fragile economies of Britain, Europe the United States and Japan, all of which rely heavily on oil and gas supplies from the Gulf.

The Strait of Hormuz is one of the world's most congested international waterways. It is only 21 miles wide at its narrowest point and is bordered by the Iranian coast to the north and the United Arab Emirates to the south.

In preparation for any pre-emptive or retaliatory action by Iran, warships from more than 25 countries, including the United States, Britain, France, Saudi Arabia and the UAE, will today begin an annual 12-day exercise.

The war games are the largest ever undertaken in the region.

They will practise tactics in how to breach an Iranian blockade of the strait and the force will also undertake counter-mining drills.

The multi-national naval force in the Gulf includes three US Nimitz class carrier groups, each of which has more aircraft than the entire complement of the Iranian air force.

The carriers are supported by at least 12 battleships, including ballistic missile cruisers, frigates, destroyers and assault ships carrying thousand of US Marines and special forces.

The British component consists of four British minesweepers and the Royal Fleet Auxiliary Cardigan Bay, a logistics vessel. HMS Diamond, a brand-new £1billion Type 45 destroyer, one of the most powerful ships in the British fleet, will also be operating in the region.

In addition, commanders will also simulate destroying Iranian combat jets, ships and coastal missile batteries.

In the event of war, the main threat to the multi-national force will come from the Islamic Revolutionary Guards Corps navy, which is expected to adopt an "access-denial" strategy in the wake of an attack, by directly targeting US warships, attacking merchant shipping and mining vital maritime chokepoints in the Persian Gulf.

Defence sources say that although Iran's capability may not be technologically sophisticated, it could deliver a series of lethal blows against British and US ships using mini-subs, fast attack boats, mines and shore-based anti-ship missile batteries.

Next month, Iran will stage massive military manoeuvres of its own, to show that it is prepared to defend its nuclear installations against the threat of aerial bombardment.

The exercise is being showcased as the biggest air defence war game in the Islamic Republic's history, and will be its most visible response yet to the prospect of an Israeli military strike.

Using surface-to-air missiles, unmanned drones and state-of-the-art radar, Iran's Revolutionary Guards and air force will combine to test the defences of 3,600 sensitive locations throughout the country, including oil refineries and uranium enrichment facilities.

Brigadier General Farzad Esmaili, commander of the Khatam al-Anbiya air defence base, told a conference this month that the manoeuvres would "identify vulnerabilities, try out new tactics and practise old ones".

At the same time as the Western manoeuvres in the Gulf, the British Response Task Forces Group — which includes the carrier HMS Illustrious, equipped with Apache attack helicopters, along with the French aircraft carrier Charles de Gaulle - will be conducting a naval exercise in the eastern Mediterranean. The task force could easily be diverted to the Gulf region via the Suez Canal within a week of being ordered to do so.

The main naval exercise comes as President Barack Obama is scheduled to meet Benjamin Netanyahu, the Israeli prime minister, today to discuss the Iranian crisis.

Many within the Obama administration believe that Israel will launch a pre-emptive strike against Iran's nuclear facilities before the US presidential elections, an act which would signal the failure of one of Washington's key foreign policy objectives.

Both Downing Street and Washington hope that the show of force will demonstrate to Iran that Nato and the West will not allow President Mahmoud Ahmadinejad, the Iranian leader, to develop a nuclear armoury or close Hormuz.

Sir John Sawers, the head of MI6, the Secret Intelligence Service, reportedly met the Israeli prime minister and Ehud Barak, his defence secretary, two weeks ago in an attempt to avert military action against Iran.

But just last week Mr Netanyahu signalled that time for a negotiated settlement was running out when he said: "The world tells Israel 'Wait, there's still time.' And I say, 'Wait for what? Wait until when?'

"Those in the international community who refuse to put red lines before Iran don't have a moral right to place a red light before Israel."

The crisis hinges on Iran's nuclear enrichment programme, which Israel believes is designed to build an atomic weapon. Tehran has long argued that the programme is for civil use only and says it has no plans to an build a nuclear bomb, but that claim has been disputed by the West, with even the head of MI6 stating that the Islamic Republic is on course to develop atomic weapons by 2014.

The Strait of Hormuz has long been disputed territory, with the Iranians claiming control of the region and the entire Persian Gulf.

Rear Admiral Ali Fadavi of the Iranian Revolutionary Guard Corps recently boasted that "any plots of enemies" would be foiled and a heavy price exacted, adding: "We determine the rules of military conflict in the Persian Gulf and the Strait of Hormuz."

But Leon Panetta, the US defence secretary, warned that Iranian attempts to exercise control over the Strait of Hormuz could be met with force.

He said: "The Iranians need to understand that the United States and the international community are going to hold them directly responsible for any disruption of shipping in that region — by Iran or, for that matter, by its surrogates."

Mr Panetta said that the United States was "fully prepared for all contingencies" and added: "We've invested in capabilities to ensure that the Iranian attempt to close down shipping in the Gulf is something that we are going to be able to defeat if they make that decision."

That announcement was supported by Philip Hammond, the Defence Secretary, who added: "We are determined to work as part of the international community effort to ensure freedom of passage in the international waters of the Strait of Hormuz."

One defence source told The Sunday Telegraph last night: "If it came to war, there would be carnage. The Iranian casualties would be huge but they would be able to inflict severe blows against the US and British.

"The Iranian Republican Guard are well versed in asymmetrical warfare and would use swarm attacks to sink or seriously damage ships. This is a conflict nobody wants, but the rhetoric from Israel is unrelenting."

Title: Re: Meltdown
Post by: Sammy on September 16, 2012, 01:54:28 PM

Quote from: Coopmv on September 14, 2012, 06:19:18 PM
BTW, I just paraphrased some journalist that the WH needed adult supervision in the aftermath of the first credit downgrade and the second one has already happened, albeit by a second-tier ratings agency ...

The simple way to handle this is for you not to parade remarks as your own when they're not.

Title: Re: Meltdown
Post by: Brian on September 16, 2012, 02:02:12 PM

Stuart (Coop), the most I've agreed with you on this page is that Israel attacking Iran would set off an economic domino chain. The temptation for Netanyahu to meddle with the American presidential election must be strong, especially given his longstanding relationship with Romney - and the temptation for Romney, to parade himself as the more pro-Israeli candidate to the point of jingoism and warmongering, would be irresistible in the event of any kind of escalation with the Iranians. Let's hope cooler heads prevail.

Title: Re: Meltdown
Post by: Coopmv on September 16, 2012, 03:42:31 PM

Quote from: Sammy on September 16, 2012, 01:54:28 PM
The simple way to handle this is for you not to parade remarks as your own when they're not.

I have heard a good number of journalists making similar quotes. Have I violated some patent or copyright in making the same quote? My apology if I have offended some folks who used to work for the government.

Title: Re: Meltdown
Post by: Coopmv on September 16, 2012, 03:45:23 PM

Quote from: Brian on September 16, 2012, 02:02:12 PM
Stuart (Coop), the most I've agreed with you on this page is that Israel attacking Iran would set off an economic domino chain. The temptation for Netanyahu to meddle with the American presidential election must be strong, especially given his longstanding relationship with Romney - and the temptation for Romney, to parade himself as the more pro-Israeli candidate to the point of jingoism and warmongering, would be irresistible in the event of any kind of escalation with the Iranians. Let's hope cooler heads prevail.

I came across that article on the web and thought it would be interesting to post it on this thread. Obviously, I do not agree with 100% of the article ...

Title: Re: Meltdown
Post by: Sammy on September 16, 2012, 03:50:06 PM

Quote from: Coopmv on September 16, 2012, 03:42:31 PM
I have heard a good number of journalists making similar quotes. Have I violated some patent or copyright in making the same quote?

You used someone else's words and presented them as your own. If you feel fine about it, so be it.

Title: Re: Meltdown
Post by: snyprrr on September 16, 2012, 09:25:58 PM

Quote from: Coopmv on September 16, 2012, 03:42:31 PM
I have heard a good number of journalists making similar quotes. Have I violated some patent or copyright in making the same quote? My apology if I have offended some folks who used to work for the government.

DOH!! :o

Title: Re: Meltdown
Post by: CaughtintheGaze on September 17, 2012, 12:38:16 AM

Quote from: Coopmv on September 16, 2012, 03:42:31 PM
I have heard a good number of journalists making similar quotes. Have I violated some patent or copyright in making the same quote? My apology if I have offended some folks who used to work for the government.

If those journalists had any scruples, or anyone likewise, they would give credit where it is due.

Title: Re: Meltdown
Post by: Florestan on September 17, 2012, 12:39:22 AM

Quote from: Sammy on September 16, 2012, 03:50:06 PM
You used someone else's words and presented them as your own.

Hey, that's what the current Romanian Prime Minister did in his doctoral thesis no less --- and he really feels fine about it, ie doesn't care at all being exposed as a plagiator by the Ethics Committee of the University of Bucharest. ;D

Title: Re: Meltdown
Post by: drogulus on September 18, 2012, 08:14:48 PM

Quote from: Todd on September 14, 2012, 05:53:19 AM

For Keynesians, yes, however, there are alternative theories, and it is essential to point out that monetary policy is only ineffective in Keynesian theory under certain circumstances, rather like the liquidity trap we are in or close to being in now. It is also essential to point out that "spending" can and does take the form of both direct federal expenditures and tax cuts and rebates. It is clear what you would prefer, but policy makers will hopefully keep a broader mix in mind. We don't need another NRA, or anything like that.

I think the alternative theories have pretty much shit the bed at this point. We've tried contraction, and what a surprise! All of the pain and suffering that was supposed to be good for us was purely destructive. The long term decline in output and employment is textbook perfect macroeconomics confirmed. No alternative theory can stand up to a confirmation like this. You can argue all you want, but the failure to enact a proper fiscal rescue was the worst economic decision of a lifetime, a forseeable blunder that was actually foreseen.

It is clear what I would prefer, and unclear why you think some weaker, less "New Deal"-ish version would be better. Personally, I'm half-measured out. I'm sick of the weak response and think it's time to go all out.

Here's my program:

A Trillion dollar infrastructure and local government employment bill designed to take us all the way to Hillary's inauguration.

Delay the fiscal cliff, then go over it. Maybe phase in the tax increases so they act to cool off the economy overdriven by the stimulus.

As the deficit shrinks find new items to spend money on (fix Medicare and SS?) so we don't have a balanced budget. IMO Federal budgets should never be balanced without a damn good reason, and there aren't many of those. (http://www.good-music-guide.com/community/Smileys/classic/tongue.gif)

Title: Re: Meltdown
Post by: Todd on September 19, 2012, 06:00:40 AM

Quote from: drogulus on September 18, 2012, 08:14:48 PMI think the alternative theories have pretty much shit the bed at this point.

A Trillion dollar infrastructure and local government employment bill designed to take us all the way to Hillary's inauguration. Delay the fiscal cliff, then go over it. Maybe phase in the tax increases so they act to cool off the economy overdriven by the stimulus.

As to your first point, well, even America's most vocal Keynesian, Paul Krugman, pointed out in a recent column (last Friday's, I believe) that eventually all economies recover. Yes, there is lower output, employment, etc, but there are tradeoffs for all policies. You're confusing your preferred approach for the approach. They are not the same thing. I will concede that the "government" responded to the 2008 crisis in a series of half-assed measures, including at the state level in most judicial foreclosure states by restricting the ability of asset owners to foreclose on properties, which has the socially useful benefit of reducing overall debt burden. This isn't the same as the Mellon Liquidate! approach, and lefties fail to understand that such policies are in fact necessary in this kind of environment. But just as it wins votes to talk about the deficit, it wins votes to pretend that all people will be able to retain their homes.

Any additional trillion dollar project is doomed, irrespective of who is in office. The earlier stimulus, TARP, and continuing $1 trillion deficits make that politically impossible. The US is in a tough-ish position on fiscal policy. The debt burden is significantly higher now that it was in 1929, or any time other than 1946, and while interest rates are low now, and will remain so for years, they will not forever, and when they start to rise on 16, 18, 20, 25 trillion in debt, interest will start to consume a larger proportion of federal spending, causing another fiscal crisis. Republicans and serious, responsible Democrats should extract as the price for any stimulus – small or medium – some significant long-term spending cuts and restructuring.

Title: Re: Meltdown
Post by: DavidRoss on September 19, 2012, 07:03:22 AM

Quote from: Todd on September 19, 2012, 06:00:40 AM
The debt burden is significantly higher now that it was in 1929, or any time other than 1946, and while interest rates are low now, and will remain so for years, they will not forever, and when they start to rise on 16, 18, 20, 25 trillion in debt, interest will start to consume a larger proportion of federal spending, causing another fiscal crisis. Republicans and serious, responsible Democrats should extract as the price for any stimulus – small or medium – some significant long-term spending cuts and restructuring.

How refreshing (and novel!) to see some sense here on such issues for a change, and to see reasoning tied to facts instead of fantasies. You must have studied some economics in college! (Without which no one is educated sufficiently to have a right to an opinion on public policy). Indeed, servicing the existing debt is already all too likely to bankrupt us, even without increasing future obligations for "entitlements."

The time to act in response to the fiscal cliff is before we go over it, not after.

P.S. Remembering Keynes's dictum that in the long run we're all dead, "we" obviously excludes our children and grandchildren, for in the long run they suffer the consequences of our hateful, irresponsible, selfish profilgacy.

Title: Re: Meltdown
Post by: snyprrr on September 19, 2012, 07:38:57 AM

Quote from: DavidRoss on September 19, 2012, 07:03:22 AM
How refreshing (and novel!) to see some sense here on such issues for a change, and to see reasoning tied to facts instead of fantasies. You must have studied some economics in college! (Without which no one is educated sufficiently to have a right to an opinion on public policy). Indeed, servicing the existing debt is already all too likely to bankrupt us, even without increasing future obligations for "entitlements."

The time to act in response to the fiscal cliff is before we go over it, not after.

P.S. Remembering Keynes's dictum that in the long run we're all dead, "we" obviously excludes our children and grandchildren, for in the long run they suffer the consequences of our hateful, irresponsible, selfish profilgacy.

Make me a sammich!! :P

Title: Re: Meltdown
Post by: Todd on September 19, 2012, 07:56:44 AM

Quote from: DavidRoss on September 19, 2012, 07:03:22 AMP.S. Remembering Keynes's dictum that in the long run we're all dead, "we" obviously excludes our children and grandchildren, for in the long run they suffer the consequences of our hateful, irresponsible, selfish profilgacy.

I know that's a favorite argument against deficit spending - our children and children's children will pay - and while true, it rather minimizes the effect on the here and now. Whenever a government runs a material deficit, it distorts financial behavior right now; it results in crowding out right now.

Title: Re: Meltdown
Post by: DavidRoss on September 19, 2012, 09:06:44 AM

Quote from: Todd on September 19, 2012, 07:56:44 AM
I know that's a favorite argument against deficit spending - our children and children's children will pay - and while true, it rather minimizes the effect on the here and now. Whenever a government runs a material deficit, it distorts financial behavior right now; it results in crowding out right now.

While you're right about deficits distorting behavior right now, noting the long-term consequences of chronic huge deficits does not minimize their effect here and now. It says nothing whatsoever about their effect here and now.

The reason we remind people of the long run is not that there are no more immediate reasons to avoid deficit spending, but rather that some folks are surprisingly short-sighted. I know many people who would recoil in horror if you proposed that they sell their children into slavery tomorrow in exchange for a new car, cell phone, and wide-screen TV today, yet who blithely do exactly that every time they enter the voting booth.

Title: Re: Meltdown
Post by: Coopmv on September 19, 2012, 06:06:30 PM

Quote from: Todd on September 19, 2012, 06:00:40 AM

As to your first point, well, even America's most vocal Keynesian, Paul Krugman, pointed out in a recent column (last Friday's, I believe) that eventually all economies recover. Yes, there is lower output, employment, etc, but there are tradeoffs for all policies. You're confusing your preferred approach for the approach. They are not the same thing. I will concede that the "government" responded to the 2008 crisis in a series of half-assed measures, including at the state level in most judicial foreclosure states by restricting the ability of asset owners to foreclose on properties, which has the socially useful benefit of reducing overall debt burden. This isn't the same as the Mellon Liquidate! approach, and lefties fail to understand that such policies are in fact necessary in this kind of environment. But just as it wins votes to talk about the deficit, it wins votes to pretend that all people will be able to retain their homes.

Any additional trillion dollar project is doomed, irrespective of who is in office. The earlier stimulus, TARP, and continuing $1 trillion deficits make that politically impossible. The US is in a tough-ish position on fiscal policy. The debt burden is significantly higher now that it was in 1929, or any time other than 1946, and while interest rates are low now, and will remain so for years, they will not forever, and when they start to rise on 16, 18, 20, 25 trillion in debt, interest will start to consume a larger proportion of federal spending, causing another fiscal crisis. Republicans and serious, responsible Democrats should extract as the price for any stimulus – small or medium – some significant long-term spending cuts and restructuring.

Todd, you are exactly right. The US is not a saver nation. The Japanese national debt is over 100% of its GDP, yet the Yen has not sunk into the abyss. Why? I think the prodigious savings rate of the Japanese citizens probably prop up the Yen. OTOH, most Americans spend $1.20 or every dollar they earn. To be sure, major exporting countries like China love the American consumers. We only have ourselves to blame for our profligacy.

Title: Re: Meltdown
Post by: Todd on September 19, 2012, 06:56:17 PM

Quote from: Coopmv on September 19, 2012, 06:06:30 PMOTOH, most Americans spend $1.20 or every dollar they earn. To be sure, major exporting countries like China love the American consumers. We only have ourselves to blame for our profligacy.

If you are referring to the oft vaunted savings rate, there are a few problems with using it in the context of fiscal policy discussions. First, the US only briefly tipped over into "negative" savings and no longer is negative. Second, it is a derived value, and not a direct measure of private wealth generating assets, so it offers a distorted, incomplete picture of spending and investment patterns. Third, the US savings rate is higher than Japan's currently, not lower. People have been warning about a pending problem in Japan for a while. (Martin Feldstein wrote an article in 2010 about it, for instance.) Japan does not offer a model for the US, or any nation, to follow, in my estimation. (More recent data is available for up through at least 2010, but the trend is clear here.)

(http://www.mybudget360.com/wp-content/uploads/2009/11/japan-savings-rate.png)

Quote from: DavidRoss on September 19, 2012, 09:06:44 AMI know many people who would recoil in horror if you proposed that they sell their children into slavery tomorrow in exchange for a new car, cell phone, and wide-screen TV today, yet who blithely do exactly that every time they enter the voting booth.

Yawn.

Title: Re: Meltdown
Post by: Todd on October 02, 2012, 06:42:12 PM

But you can't touch granny's transfer payments! (http://www.economist.com/node/21563725)

Title: Re: Meltdown
Post by: snyprrr on October 10, 2012, 03:20:49 PM

Greece, Portugal, now Ireland...

Spain next?

Then what?

...tick tock, tick tock...

Title: Re: Meltdown
Post by: Coopmv on October 10, 2012, 04:44:20 PM

Quote from: snyprrr on October 10, 2012, 03:20:49 PM
Greece, Portugal, now Ireland...

Spain next?

Then what?

...tick tock, tick tock...

Maybe China? They have the mother of all real estate bubbles over there - massive overbuilding of commercial buildings, airports, you name it. But with some $3T in foreign reserves/investments, they can always dump all the US treasuries ...

Title: Re: Meltdown
Post by: DavidRoss on October 11, 2012, 02:46:28 AM

Quote from: snyprrr on October 10, 2012, 03:20:49 PM
Greece, Portugal, now Ireland...

Spain next?

Then what?

California, unless the self-absorbed, self-seeking idiots who populate our state come to their senses in time and throw the venal hucksters out in November. Fat chance. The arc of empires' ascendecy and decline is amazingly time-compressed in our age!

Edit: typo

Title: Re: Meltdown
Post by: Karl Henning on October 11, 2012, 02:57:56 AM

There's no other place on the planet quite like California.

Title: Re: Meltdown
Post by: Coopmv on October 11, 2012, 04:59:13 PM

Quote from: DavidRoss on October 11, 2012, 02:46:28 AM
California, unless the self-absorbed, self-seeking idiots who populate our state come to their senses in time and throw the venal hucksters out in November. Fat chance. The arc of empires' ascendecy and decline is amazingly time-compressed in our age!

Edit: typo

And one of your US Senators originally came from Brooklyn, NY. Wasn't she also the biggest check kiter when she was a member of the House?

Title: Re: Meltdown
Post by: Daverz on October 12, 2012, 12:55:53 PM

Quote from: Todd on October 02, 2012, 06:42:12 PM
But you can't touch granny's transfer payments! (http://www.economist.com/node/21563725)

Yeah, put granny on an ice floe. Selfish old biddy.

Title: Re: Meltdown
Post by: Todd on November 07, 2012, 02:58:06 PM

My takeaway: find a job in healthcare. (http://www.economist.com/node/21563714) (It's not really a "meltdown" topic, nor is it specifically political, but it does cover some challenges coming our way.)

Title: Re: Meltdown
Post by: Coopmv on November 08, 2012, 05:33:48 PM

Quote from: Todd on November 07, 2012, 02:58:06 PM
My takeaway: find a job in healthcare. (http://www.economist.com/node/21563714) (It's not really a "meltdown" topic, nor is it specifically political, but it does cover some challenges coming our way.)

I saw an article titled "70% of Doctors in the US feel like quitting" in the aftermath of ObamaCare a while back, though I did not bother to read the article ...

Title: Re: Meltdown
Post by: Scarpia on November 08, 2012, 06:04:55 PM

Quote from: Coopmv on November 08, 2012, 05:33:48 PM
I saw an article titled "70% of Doctors in the US feel like quitting" in the aftermath of ObamaCare a while back, though I did not bother to read the article ...

ObamaCare has not yet taken effect to any great extent, so if 70% of doctors feel like quitting it is presumably because of the environment before ObamaCare. I recall reading an article in the NY Times, which described a large fraction of doctors experiencing "burnout," meaning they feel frustrated and ineffective. The reason suggested was that rigid rules and cost controls from public and private insurers (HMO's, etc) made them feel like they were working on an assembly line.

http://well.blogs.nytimes.com/2012/08/23/the-widespread-problem-of-doctor-burnout/

The article describes this trend as developing over the last 10 years, but if you wish to attribute it to Obamacare, be my guest.

Title: Re: Meltdown
Post by: snyprrr on November 09, 2012, 07:37:16 AM

I'm ready for the Doomcast. Anyone care to enumerate all the horrors coming our way?

1) Fiscal Cliff: They'll kick the can to the summer,... next.

2) Ireland? Next.

3) My dance card? Now, HERE is some doo... hopefully not for long...

4)

Title: Re: Meltdown
Post by: Coopmv on November 09, 2012, 04:36:45 PM

Quote from: snyprrr on November 09, 2012, 07:37:16 AM
I'm ready for the Doomcast. Anyone care to enumerate all the horrors coming our way?

1) Fiscal Cliff: They'll kick the can to the summer,... next.

2) Ireland? Next.

3) My dance card? Now, HERE is some doo... hopefully not for long...

4)

It will be all blue smoke and mirrors. The next 4 years will be exactly like the last 4 years and the total federal deficit should exceed $20T by 2016 ...

In the meantime, nearly 1 in 5 Americans are on Medicaid, the joint health insurance program between the federal and state governments for the poor. The share of the national debt per American is now 35% higher than the Greeks.

Title: Re: Meltdown
Post by: snyprrr on November 09, 2012, 08:58:00 PM

Quote from: Coopmv on November 09, 2012, 04:36:45 PM
It will be all blue smoke and mirrors. The next 4 years will be exactly like the last 4 years and the total federal deficit should exceed $20T by 2016 ...

In the meantime, nearly 1 in 5 Americans are on Medicaid, the joint health insurance program between the federal and state governments for the poor. The share of the national debt per American is now 35% higher than the Greeks.

I've been living in the basement for 4 years. I keep saying I'll never be able to get another full time job ever again, and I'm really scrambling for creative solutions. Well, 'really scrambling' might be overstating it... scratch, burp :P

I feel like the guy playing blues on the corner. I've definitely been living a recession for 4 years. Thankfully, I learn gratitude.

I've always been poor, and always dreaded the 'Meltdown', and always dreaded old age ('hope I die before I get old') in a newly unfeeling world. Sometimes I feel like I'm going to be tortured to death in a concentration camp. brrrrr...

What goads me so much is this 'every' child, 'every' American, 'every' citizens... ENOUGH,... let the old people die, let the stupid people die, quit trying to keeping everyone alive for their check.... it's like we really ARE those human batteries for the powers that be to use our toil for their play money,... uh, which is of course worthless fiat blah blah...

RANT ALERT!!

I feel a rant coming on. I'll go to the next Thread.

Title: Re: Meltdown
Post by: Coopmv on November 10, 2012, 06:29:10 AM

Quote from: snyprrr on November 09, 2012, 08:58:00 PM
I've been living in the basement for 4 years. I keep saying I'll never be able to get another full time job ever again, and I'm really scrambling for creative solutions. Well, 'really scrambling' might be overstating it... scratch, burp :P

I feel like the guy playing blues on the corner. I've definitely been living a recession for 4 years. Thankfully, I learn gratitude.

I've always been poor, and always dreaded the 'Meltdown', and always dreaded old age ('hope I die before I get old') in a newly unfeeling world. Sometimes I feel like I'm going to be tortured to death in a concentration camp. brrrrr...

What goads me so much is this 'every' child, 'every' American, 'every' citizens... ENOUGH,... let the old people die, let the stupid people die, quit trying to keeping everyone alive for their check.... it's like we really ARE those human batteries for the powers that be to use our toil for their play money,... uh, which is of course worthless fiat blah blah...

RANT ALERT!!

I feel a rant coming on. I'll go to the next Thread.

Listening to classical music is my escape. Things have never been worse ...

Title: Re: Meltdown
Post by: snyprrr on December 17, 2012, 11:51:00 AM

Meanwhile, Wall St is enjoying life to the fullest. Good for them, they deserve it! Jamie Dimon & Lloyd Blankfein, you are the most wonderful, godlike people I've ever had the chance to know about. You make the world go around and christmas just wouldn't be it without all of god's work that you do, ensuring that our hearts dwell in the loving bosom of your trust.

I GIVE ALL FOR YOU.

I GIVE ALL FOR YOU.

I GIVE...

Title: Re: Meltdown
Post by: Karl Henning on December 17, 2012, 11:56:40 AM

Occupy Reno!

Title: Re: Meltdown
Post by: snyprrr on December 17, 2012, 07:32:53 PM

Quote from: karlhenning on December 17, 2012, 11:56:40 AM
Occupy Reno!

;)

Title: Re: Meltdown
Post by: Que on December 17, 2012, 10:29:49 PM

Quote from: snyprrr on November 09, 2012, 08:58:00 PM
I've been living in the basement for 4 years. I keep saying I'll never be able to get another full time job ever again, and I'm really scrambling for creative solutions. Well, 'really scrambling' might be overstating it... scratch, burp :P

I feel like the guy playing blues on the corner. I've definitely been living a recession for 4 years. Thankfully, I learn gratitude.

I've always been poor, and always dreaded the 'Meltdown', and always dreaded old age ('hope I die before I get old') in a newly unfeeling world. Sometimes I feel like I'm going to be tortured to death in a concentration camp. brrrrr...

What goads me so much is this 'every' child, 'every' American, 'every' citizens... ENOUGH,... let the old people die, let the stupid people die, quit trying to keeping everyone alive for their check.... it's like we really ARE those human batteries for the powers that be to use our toil for their play money,... uh, which is of course worthless fiat blah blah...

RANT ALERT!!

I feel a rant coming on. I'll go to the next Thread.

Well, I guess if worst comes to worst, you could always consider using your freely available GUN to rob a bank... 8). ;)

Q

Title: Re: Meltdown
Post by: Coopmv on December 18, 2012, 05:57:05 PM

Quote from: Que on December 17, 2012, 10:29:49 PM
Well, I guess if worst comes to worst, you could always consider using your freely available GUN to rob a bank... 8). ;)

Q

Or give up my US citizenship and move to a different country ... ;)

Title: Re: Meltdown
Post by: Karl Henning on December 19, 2012, 04:32:25 AM

Quote from: Coopmv on December 18, 2012, 05:57:05 PM
Or give up my US citizenship and move to a different country ...

You've put the cart before the horse. (Just sayin'.)

Title: Re: Meltdown
Post by: snyprrr on December 19, 2012, 08:44:36 AM

Quote from: Coopmv on December 18, 2012, 05:57:05 PM
Or give up my US citizenship and move to a different country ... ;)

I have dual citizenship with an unnamed country that's probably worse than US.

Quote from: Que on December 17, 2012, 10:29:49 PM
Well, I guess if worst comes to worst, you could always consider using your freely available GUN to rob a bank... 8). ;)

Q

Yea, right... by that time, money won't be any good (Germany in the '20s).

And, no, me personally, I'm NOT Mr. Gun. My dad wanted me to be, but I grew up a bleeding heart liberal...

I will say that when I was young, and got caught shoplifting at Safeway, I came back in the middle of the night in the dead of winter and shot out their windows with a bb gun. Cop showed up as I was reloading behind carts. I started running around back. Cop slid on ice. I run away screaming, gun waving in hand, screaming, "I don't have a gun." No poop in pants surprisingly.

I will defend YOUR gun rights to the death,... maybe. Kinda. Well...

No WAAAY do you want only the 'authorities' having guns. Isn't that what Amuricah's all about? I think the problem is the QUALITY OF HUDDLED MASSES. When you cultivate the dregs, you get worthless eaters. Don't make me put up "shoppers of walmart" to prove it.

y'know, we're getting pretty close to the PAGE 14 THREAD LOCK. Just sayin'...

Title: Re: Meltdown
Post by: Karl Henning on December 21, 2012, 05:01:41 AM

Quote from: Jennifer RubinThis sort of display suggests Republicans are not capable of governing. What was an argument by Democrats (They are unreasonable! They only care for the rich!) is now a political reality.

Congratulations, Boehner: when Jennifer Rubin writes that the GOP are incapable of governing, that's quite an accomplishment.

RTWT here.

Title: Re: Meltdown
Post by: Karl Henning on December 21, 2012, 05:11:51 AM

QuoteAmerica's CEOs have a message for Washington

http://itstimetoact.brt.org/

Title: Re: Meltdown
Post by: Coopmv on December 21, 2012, 04:29:05 PM

Those conservative Republicans are a bunch of fools and totally out of touch. There are not enough people who make at least $1M a year who can help them win the next presidential election. Why are they fighting so hard for the less than 1% when they call themselves the champions of small businesses, whose owners make nowhere close to $1M a year ...

Title: Re: Meltdown
Post by: Brian on December 24, 2012, 08:58:48 AM

I haven't seen Todd on the board in a few days, but I'm sure he's enjoying Paul Krugman's newest column, where Krugman trashes the economic forecasts of the Wall Street Journal, Erskine Bowles, Alan Simpson, AND Alan Greenspan.

Title: Re: Meltdown
Post by: Coopmv on December 25, 2012, 09:54:24 AM

Quote from: Brian on December 24, 2012, 08:58:48 AM
I haven't seen Todd on the board in a few days, but I'm sure he's enjoying Paul Krugman's newest column, where Krugman trashes the economic forecasts of the Wall Street Journal, Erskine Bowles, Alan Simpson, AND Alan Greenspan.

I think the Nobel Economics Committee made the worst mistake when it selected this NY Times moonlighter to be a Nobel Laureate of Economics ...

Title: Re: Meltdown
Post by: Coopmv on December 25, 2012, 05:42:30 PM

Quote from: karlhenning on December 19, 2012, 04:32:25 AM
You've put the cart before the horse. (Just sayin'.)

For someone with a networth of $1M USD, New Zealand will grant its citizenship ...

Title: Re: Meltdown
Post by: Coopmv on December 25, 2012, 05:46:46 PM

Quote from: snyprrr on December 19, 2012, 08:44:36 AM
I have dual citizenship with an unnamed country that's probably worse than US.

Zimbalwe by any chance? ;D

Title: Re: Meltdown
Post by: Coopmv on December 29, 2012, 09:18:31 AM

It will not be pretty come 1/1/13 the way things are going ... :(

Title: Re: Meltdown
Post by: drogulus on December 29, 2012, 12:28:56 PM

I think we should take a look at the argument that stimulus can't be done because it adds to debt. First, adding to debt plays no role in our problem. The problem is output constrained by low spending, caused by the simultaneous contraction of spending by 1) individuals 2) businesses 3) government. The problem we have is that by focusing on the most capable and least constrained spender we have effectively ruined our ability to respond to the real crisis and are then tempted to bleed the patient with austerity. This isn't a cure, it's a punishment, and those who endorse it don't want the economy to recover, they want to aggrandize their position in the reduced (shall we say chastened?) circumstances that result from their prescription. Other people must tighten their belts, though I know of no case on record where surplus pundits were cashiered expressly to lighten the load for everyone else. But wait, maybe this would be a good idea, not because firing people strengthens the economy, but to encourage recalcitrant economists to discover how the lost output, in their own cases at least, actually raises more than it saves costs as the economy shrinks. Suddenly the importance of income would be clear, and a superior economic theory might result from having the right people chastened. Adam Smith would approve, I reckon. _{(http://www.good-music-guide.com/community/Smileys/classic/tongue.gif)}
Second, while debt is no part of the problem, it is part of the means by which the country recovers, even if only as half measures like the weak stimulus of 2009 and the countercyclical spending increase that always accompanies downturns as people resort to unemployment insurance and food stamps. The argument against? Mainly that it doesn't work because moving forward spending is zero sum, the grandkiddies pay the bill. This is true only in the sense that we pay for Sherman tanks and P-47 Thunderbolts to beat the Nazis in 1944. When was the last time you worried about that terrible burden our irresponsible grandparents placed on our backs?

But why don't we worry about the gigantic debt when applied to us the way we're supposed to worry about what we don't pay forward? The answer is that the costs of our society in goods and services are paid by the goods and services we produce, and the grandparents/kiddies pay from their means, not ours. The numbers are just to keep score. Over time they change, roughly according to the increase in means with an added inflation factor. Oh, and having arrived at this insight, it suddenly becomes evident why concern with real output and employment is so much more important than the metaphysics of future indebtedness.

(http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

Title: Re: Meltdown
Post by: Coopmv on December 29, 2012, 12:42:14 PM

The Keynesian economic theory is dead ...

Title: Re: Meltdown
Post by: drogulus on December 29, 2012, 01:00:20 PM

Short version:

We didn't worry about the debt peonage of our grandchildren after Pearl Harbor. We must have realized then that what mattered was how we responded to the crisis as it unfolded. Or maybe we acted out of desperation. I've heard that some economists, good Keynesians among them, thought the GD would resume after the war. Instead we had a mild slump followed by the greatest expansion of wealth in human history. But what about the crushing debt??

Quote from: Coopmv on December 29, 2012, 12:42:14 PM
The Keynesian economic theory is dead ...

The essentials seem to be functioning quite well.

Title: Re: Meltdown
Post by: snyprrr on December 31, 2012, 09:48:34 PM

It's Jan. 1, 2am,... I can't quite get the news,... did we go over?

Title: Re: Meltdown
Post by: Coopmv on January 01, 2013, 10:47:59 AM

Quote from: snyprrr on December 31, 2012, 09:48:34 PM
It's Jan. 1, 2am,... I can't quite get the news,... did we go over?

The US Senate overwhelmingly approved a deal last night. Now it is up to the US House. Both parties live in fantasy land. IMO, taxes have to go up across the board in order to stop this ever escalating federal debt, the less well off and the middle class should pay a little more tax too and defense spending needs to be dramatically cut. Why should the US still maintain over 100 military bases around the world? Why should the Pentagon support a research that studied the likely colors of dinosaur feathers to the tune of some $500K? Give me a freaking break. This is a government that is totally out of control in its finance ...

Title: Re: Meltdown
Post by: snyprrr on January 02, 2013, 07:38:12 AM

Quote from: Coopmv on January 01, 2013, 10:47:59 AM
The US Senate overwhelmingly approved a deal last night. Now it is up to the US House. Both parties live in fantasy land. IMO, taxes have to go up across the board in order to stop this ever escalating federal debt, the less well off and the middle class should pay a little more tax too and defense spending needs to be dramatically cut. Why should the US still maintain over 100 military bases around the world? Why should the Pentagon support a research that studied the likely colors of dinosaur feathers to the tune of some $500K? Give me a freaking break. This is a government that is totally out of control in its finance ...

Conveniently, my unemployment just ran out, yay!!

Title: Re: Meltdown
Post by: Karl Henning on January 02, 2013, 07:43:25 AM

Quote from: snyprrr on January 02, 2013, 07:38:12 AM
Conveniently, my unemployment just ran out, yay!!

I'm guessing that is not code for I've found work, yippee!!

Title: Re: Meltdown
Post by: Coopmv on January 02, 2013, 04:50:21 PM

Quote from: snyprrr on January 02, 2013, 07:38:12 AM
Conveniently, my unemployment just ran out, yay!!

What is this non-sense talk that the economy is on the mend? The next four years will be exactly like the last four years. But I have a good conscience, I did not vote for that man ...

Title: Re: Meltdown
Post by: snyprrr on January 02, 2013, 07:14:31 PM

Quote from: karlhenning on January 02, 2013, 07:43:25 AM
I'm guessing that is not code for I've found work, yippee!!

No. :(

Quote from: Coopmv on January 02, 2013, 04:50:21 PM
What is this non-sense talk that the economy is on the mend? The next four years will be exactly like the last four years. But I have a good conscience, I did not vote for that man ...

I am/am not looking forward to the exciting future I have for myself. Looking for love, and work, are THE two things in my life that have brought me down.

I'm feeling really mad today at the lying liars,... you know, those guys who should have their faces ripped off,... don't get me started, I live in one of the most gerrymandered....aaaaahaahahaahahahahhhhhhhhhhhh!!!!!!!!!!!

Title: Re: Meltdown
Post by: Coopmv on January 13, 2013, 03:26:56 PM

The new American dream is to have a job or a new job when your current job is absolutely crummy and your boss is the lowest of the low lives, like what I have been going through the past two years ...

Title: Re: Meltdown
Post by: snyprrr on January 13, 2013, 06:01:34 PM

Quote from: Coopmv on January 13, 2013, 03:26:56 PM
The new American dream is to have a job or a new job when your current job is absolutely crummy and your boss is the lowest of the low lives, like what I have been going through the past two years ...

Growing up in the uSA, I was assured a pension, house, blah blah, just for being young, high, & free.

Now, Gentile-Leader tells me if I work rrreeealll hard, I HAVE A SHOT at the middle class. Work like a slave for a shot to live 1/4 as well as my folks? SUUURE, sounds like a wonderful deal. Where do I sign up?

Title: Re: Meltdown
Post by: Daverz on January 13, 2013, 06:16:33 PM

Quote from: snyprrr on January 13, 2013, 06:01:34 PM
Now, Gentile-Leader tells me if I work rrreeealll hard

Obama is our first non-Jewish President (or is that first non-Mormon President?)

Title: Re: Meltdown
Post by: Florestan on January 14, 2013, 08:53:09 AM

Quote from: snyprrr on January 13, 2013, 06:01:34 PM
Gentile-Leader

You mean Gentle, ain't it? Anyway, nice Freudian slip... ;D ;D ;D

Title: Re: Meltdown
Post by: Coopmv on January 14, 2013, 06:05:04 PM

Quote from: snyprrr on January 13, 2013, 06:01:34 PM
Growing up in the uSA, I was assured a pension, house, blah blah, just for being young, high, & free.

Now, Gentile-Leader tells me if I work rrreeealll hard, I HAVE A SHOT at the middle class. Work like a slave for a shot to live 1/4 as well as my folks? SUUURE, sounds like a wonderful deal. Where do I sign up?

Don't forget, any success is due to the government. I am sure Jimmy Carter must be mad as well that he did not get a second term ...

Title: Re: Meltdown
Post by: snyprrr on February 10, 2013, 07:28:37 AM

Why won't the villagers storm the castle?? :'( :'( :'( :'( :'(

Title: Re: Meltdown
Post by: Coopmv on February 10, 2013, 07:53:39 AM

Quote from: snyprrr on February 10, 2013, 07:28:37 AM
Why won't the villagers storm the castle?? :'( :'( :'( :'( :'(

While the French Revolution was pretty bloody, culminated by the beheading of Maria Antonia and Louis XVI at the guillotine and ended the French monarchy, it did bring about meaningful changes. With one in six Americans on food stamps and 20% on Medicaid, will these trends reverse themselves in the foreseeable future. I am not too optimistic ...

Title: Re: Meltdown
Post by: Coopmv on February 11, 2013, 02:24:21 PM

Quote from: Daverz on January 13, 2013, 06:16:33 PM
Obama is our first non-Jewish President (or is that first non-Mormon President?)

How about the first Muslim president? >:D

Title: Re: Meltdown
Post by: ralfy on February 14, 2013, 09:14:52 PM

"The Real Reason the Economy Is Broken (and Will Stay That Way)"

"If we want to understand why all of the tried-and-true monetary and fiscal efforts have failed, we have to appreciate the headwinds that are offered by both a condition of too-much-debt and expensive energy. Neither alone can account for the economic malaise that stalks the world."

http://www.zerohedge.com/news/2013-02-13/real-reason-economy-broken-and-will-stay-way

In short, we are looking at the effects of only a fraction of over a quadrillion dollars in unregulated derivatives worldwide masking conventional oil production not keeping up with demand since 2005, and the effects of droughts and floods leading to crop destruction, mining and manufacturing disruption, and in turn high food prices, etc.

Title: Re: Meltdown
Post by: drogulus on February 15, 2013, 12:24:21 AM

Quote from: Coopmv on January 01, 2013, 10:47:59 AM
IMO, taxes have to go up across the board in order to stop this ever escalating federal debt, the less well off and the middle class should pay a little more tax too and defense spending needs to be dramatically cut.

No, taxes won't go up to pay for past debt. Past debt is not paid, nor should it be. If we paid it, it would cause a depression. There is no reason to pay it, and every reason not to. _{(http://www.good-music-guide.com/community/Smileys/classic/grin.gif)}

Title: Re: Meltdown
Post by: Coopmv on February 15, 2013, 06:45:59 PM

Quote from: drogulus on February 15, 2013, 12:24:21 AM
No, taxes won't go up to pay for past debt. Past debt is not paid, nor should it be. If we paid it, it would cause a depression. There is no reason to pay it, and every reason not to. _{(http://www.good-music-guide.com/community/Smileys/classic/grin.gif)}

Past debt is being repaid as we speak. The quarterly treasury refunds essentially use proceeds from the sales of new debt to repay the old (maturing) debt. You and I have no say on the matter, it has been decided for us a long time ago, whether we like it or not ...

Title: Re: Meltdown
Post by: Coopmv on February 16, 2013, 12:01:39 PM

Quote from: Coopmv on February 15, 2013, 06:45:59 PM
Past debt is being repaid as we speak. The quarterly treasury refunds essentially use proceeds from the sales of new debt to repay the old (maturing) debt. You and I have no say on the matter, it has been decided for us a long time ago, whether we like it or not ...

BTW, this is a giant Ponzi scheme. If we do it, we go to jail ... >:(

Title: Re: Meltdown
Post by: Coopmv on February 18, 2013, 11:03:37 AM

Are we better off than we were 4 years ago? >:(

Title: Re: Meltdown
Post by: snyprrr on February 19, 2013, 07:16:49 AM

Quote from: Coopmv on February 18, 2013, 11:03:37 AM
Are we better off than we were 4 years ago? >:(

ASSHOLE!!: (not you Coop)

http://www.dailymail.co.uk/news/article-2280855/Obama-pictured-leaving-1m-golfing-weekend-Tiger-Woods-imposed-controversial-photo-black-out.html

Title: Re: Meltdown
Post by: Florestan on February 19, 2013, 08:23:44 AM

Quote from: snyprrr on February 19, 2013, 07:16:49 AM
http://www.dailymail.co.uk/news/article-2280855/Obama-pictured-leaving-1m-golfing-weekend-Tiger-Woods-imposed-controversial-photo-black-out.html

Government of the people, by the people, for the people, shall not perish from the earth.... my ass. ;D ;D ;D

Title: Re: Meltdown
Post by: snyprrr on February 19, 2013, 09:00:53 AM

Quote from: Florestan on February 19, 2013, 08:23:44 AM
Government of the people, by the people, for the people, shall not perish from the earth.... my ass. ;D ;D ;D

Not only that, Barry's gay lover Reggie Love was spotted getting off the plane in DC. hubba hubba

Title: Re: Meltdown
Post by: Coopmv on February 19, 2013, 09:29:10 AM

Quote from: snyprrr on February 19, 2013, 07:16:49 AM

ASSHOLE!!: (not you Coop)

http://www.dailymail.co.uk/news/article-2280855/Obama-pictured-leaving-1m-golfing-weekend-Tiger-Woods-imposed-controversial-photo-black-out.html

If we are unfortunate enough, the next four years could be even worse than the last four years. Barry cannot handle a real international crisis alongside a wobbly US economy. We know who he is gonna to blame for his failures ... >:(

Title: Re: Meltdown
Post by: Coopmv on February 23, 2013, 07:01:09 PM

ObamaCare pushes your boss to dump your wife ... (http://www.marketwatch.com/story/why-your-boss-is-dumping-your-wife-2013-02-22?link=MW_story_popular)

Title: Re: Meltdown
Post by: ibanezmonster on February 23, 2013, 07:55:56 PM

What does everyone think of this?
http://www.youtube.com/v/5hfEBupAeo4

Title: Re: Meltdown
Post by: snyprrr on February 26, 2013, 05:29:20 PM

Quote from: Greg on February 23, 2013, 07:55:56 PM
What does everyone think of this?
http://www.youtube.com/v/5hfEBupAeo4

How dare you say the jews are behind all wars!! ;D

Title: Re: Meltdown
Post by: Coopmv on March 02, 2013, 10:31:21 AM

So what is so big deal about sequestration, the world financial markets have not gone into a meltdown mode? The US stock market actually went up yesterday. Any downsizing of the US government is a good thing ...

Title: Re: Meltdown
Post by: ibanezmonster on March 02, 2013, 06:51:20 PM

Would be better if they actually focused the cuts on the waste, like stuff nobody really needs and doesn't provide a large enough return.
But of course, who could expect something even remotely sensible from our useless government...

Title: Re: Meltdown
Post by: Coopmv on March 03, 2013, 02:15:05 PM

Quote from: Greg on March 02, 2013, 06:51:20 PM
Would be better if they actually focused the cuts on the waste, like stuff nobody really needs and doesn't provide a large enough return.
But of course, who could expect something even remotely sensible from our useless government...

You are absolutely correct. How about giving out a research grant to the tune of $500K to research the color of the dinosaur feathers? Do we really care? What about the 100+ military bases around the world. Now, this is real money ...

Title: Re: Meltdown
Post by: ibanezmonster on March 03, 2013, 08:00:56 PM

But the dinosaurs might be offended if people think they were different colors than they are...
:P

Title: Re: Meltdown
Post by: Coopmv on March 07, 2013, 04:55:58 PM

Quote from: Greg on March 03, 2013, 08:00:56 PM
But the dinosaurs might be offended if people think they were different colors than they are...
:P

It is politically incorrect to discriminate against anything - gimme a break ...

Title: Re: Meltdown
Post by: Coopmv on March 10, 2013, 01:23:09 PM

Why the unemployment rate is so misleading, 'Real' jobless rate is about 2 percentage points higher (http://www.marketwatch.com/story/why-the-unemployment-rate-is-so-misleading-2013-03-08)

Title: Re: Meltdown
Post by: snyprrr on March 12, 2013, 02:03:40 PM

Quote from: Coopmv on March 10, 2013, 01:23:09 PM
Why the unemployment rate is so misleading, 'Real' jobless rate is about 2 percentage points higher (http://www.marketwatch.com/story/why-the-unemployment-rate-is-so-misleading-2013-03-08)

What's it officially down to this month, 7.1?

:Ptitter

Title: Re: Meltdown
Post by: Coopmv on March 12, 2013, 05:07:20 PM

Quote from: snyprrr on March 12, 2013, 02:03:40 PM
What's it officially down to this month, 7.1?

:Ptitter

We all know who the media are friendly with. There are many people who have given up hope and I know a few of them.

Title: Re: Meltdown
Post by: Karl Henning on March 12, 2013, 07:14:41 PM

Dude, this isn't Germany in the 30s: could giving up hope be lack of imagination?

Title: Re: Meltdown
Post by: Karl Henning on March 12, 2013, 07:16:29 PM

snypsss, I know you may have given up hope... but I've got the complete Incredible Flutist....

Title: Re: Meltdown
Post by: drogulus on March 12, 2013, 09:37:44 PM

The debt "crisis" is over. (http://www.good-music-guide.com/community/Smileys/classic/tongue.gif) (http://www.good-music-guide.com/community/Smileys/akyhne/tongue.gif) (http://www.good-music-guide.com/community/Smileys/classic/tongue.gif) The cyclical half is declining fast. Our biggest problem (real as opposed to imaginary) will be keeping spending high enough against tax receipts flooding in.

Time to look at a chart! This one is super special:

(http://av.r.ftdata.co.uk/files/2012/02/Sector-Financial-balances.jpg)

Pretty cool, eh, sort of in a "why didn't I think of it" way?

What a surprise that the deficit is balanced by the private and foreign surpluses, and that when we ran trade surpluses the deficits were smaller. No surprise at all.....how could it be otherwise?

The question arises, what is more important, the government balancing its budget or the government balancing the national account at a level high enough to permit the private sector to spend and earn and save to the level we want? Hmmmm?

To assist in this inquiry let's watch an educational film. I always liked that in school. This one is fun in a serious way, and it's called:

Modern Money & Public Purpose 2: Governments Are Not Households

You can skip the introductions and go straight to Warren Mosler (2:20) followed by Stephanie Kelton.

http://www.youtube.com/v/ba8XdDqZ-Jg

Oh, I forgot the most important thing, the Mosler MT900. (http://www.good-music-guide.com/community/Smileys/classic/cheesy.gif)

(http://www.thesupercars.org/wp-content/uploads/2007/01/mosler-900s.jpg)

It goes zero to 100 to zero in less than 12 seconds. Therefore Mosler is a great economist. (http://www.good-music-guide.com/community/Smileys/classic/smiley.gif)

Title: Re: Meltdown
Post by: Coopmv on March 16, 2013, 03:51:54 PM

The financial markets actually like the sequestration, stock markets in particular - both the US and Japanese markets keep making new highs. The only folks that do not like sequestration are the federal workers or some state workers whose jobs depend on continuing federal funding ...

Title: Re: Meltdown
Post by: ibanezmonster on March 16, 2013, 05:47:47 PM

Quote from: Coopmv on March 16, 2013, 03:51:54 PM
The financial markets actually like the sequestration, stock markets in particular - both the US and Japanese markets keep making new highs. The only folks that do not like sequestration are the federal workers or some state workers whose jobs depend on continuing federal funding ...

Hopefully it stays that way.

Title: Re: Meltdown
Post by: Coopmv on March 16, 2013, 06:22:48 PM

Quote from: Greg on March 16, 2013, 05:47:47 PM
Hopefully it stays that way.

I am not complaining ... LOL

Title: Re: Meltdown
Post by: snyprrr on March 17, 2013, 08:15:52 AM

Quote from: Coopmv on March 16, 2013, 06:22:48 PM
I am not complaining ... LOL

Oh, and here I'd predicted that you were going to mention teh CYPRUS BANK ACCOUNT CONFISCATIONS!!! Get popcorn ready!!

put on your shit-fan goggles!!

Title: Re: Meltdown
Post by: Daverz on March 17, 2013, 05:24:32 PM

Quote from: snyprrr on March 17, 2013, 08:15:52 AM
Oh, and here I'd predicted that you were going to mention teh CYPRUS BANK ACCOUNT CONFISCATIONS!!! Get popcorn ready!!

put on your shit-fan goggles!!

What could possibly go wrong. How do I invest in Cyprian mattress retailers?

Title: Re: Meltdown
Post by: snyprrr on March 18, 2013, 01:59:33 PM

Quote from: Daverz on March 17, 2013, 05:24:32 PM
What could possibly go wrong. How do I invest in Cyprian mattress retailers?

...apparently russian mobsters have a lot of money in cletus...

Title: Re: Meltdown
Post by: Daverz on March 18, 2013, 02:42:38 PM

Quote from: snyprrr on March 18, 2013, 01:59:33 PM
...apparently russian mobsters have a lot of money in cletus...

(https://si0.twimg.com/profile_images/130559913/cletus.gif)

Title: Re: Meltdown
Post by: Todd on March 18, 2013, 05:38:53 PM

Quote from: snyprrr on March 17, 2013, 08:15:52 AMput on your shit-fan goggles!!

Time to buy gold and guns?

Title: Re: Meltdown
Post by: Brian on March 18, 2013, 05:41:05 PM

I just opened a Roth IRA today, so I expect the global economy to collapse any second.

Title: Re: Meltdown
Post by: Todd on March 18, 2013, 05:47:06 PM

Quote from: Brian on March 18, 2013, 05:41:05 PMI just opened a Roth IRA today, so I expect the global economy to collapse any second.

I've been building up cash since last time I bought stocks during the last mini-meltdown a couple years ago or so. A good panic represents a good buying opportunity. Remember the advice of Baron Rothschild: Buy when there's blood in the streets.

Title: Re: Meltdown
Post by: Brian on March 18, 2013, 05:58:05 PM

Quote from: Todd on March 18, 2013, 05:47:06 PM
I've been building up cash since last time I bought stocks during the last mini-meltdown a couple years ago or so. A good panic represents a good buying opportunity. Remember the advice of Baron Rothschild: Buy when there's blood in the streets.

Yeah, I also have a significant chunk of change sitting in my checking account waiting for the next big panic. It's kind of sad to me that it's in checking, but bank savings don't really offer interest anymore, so I might as well wait for opportunity.

Title: Re: Meltdown
Post by: Todd on March 18, 2013, 06:03:33 PM

Quote from: Brian on March 18, 2013, 05:58:05 PMIt's kind of sad to me that it's in checking, but bank savings don't really offer interest anymore, so I might as well wait for opportunity.

Indeed. I have a nice checking account now, and I looked, briefly, into moving my money into a nice, safe, liquid money market account, but the extra money I would earn by going from .00003% to .0003% wasn't enough to justify the paperwork. I exaggerate, of course, but only slightly.

Title: Re: Meltdown
Post by: Szykneij on March 19, 2013, 05:45:08 AM

Quote from: Todd on March 18, 2013, 06:03:33 PM

Indeed. I have a nice checking account now, and I looked, briefly, into moving my money into a nice, safe, liquid money market account, but the extra money I would earn by going from .00003% to .0003% wasn't enough to justify the paperwork. I exaggerate, of course, but only slightly.

My bank sent me a letter warning if I exceed my monthly limit of computer transfers from savings, they would have to switch me to a non-interest-bearing account. Last month, my interest payment was $ .11. It cost them five times as much in postage to send the letter!

Title: Re: Meltdown
Post by: snyprrr on March 19, 2013, 07:10:32 AM

Quote from: Todd on March 18, 2013, 05:47:06 PM

I've been building up cash since last time I bought stocks during the last mini-meltdown a couple years ago or so. A good panic represents a good buying opportunity. Remember the advice of Baron Rothschild: Buy when there's blood in the streets.

Don't forget, "First, CAUSE the blood in the streets!!"

The first insider trader? Damn the pigeons!!

Did you know DLLR considers me a 'customer'??

Title: Re: Meltdown
Post by: Karl Henning on March 19, 2013, 07:53:55 AM

Quote from: Szykneij on March 19, 2013, 05:45:08 AM
My bank sent me a letter warning if I exceed my monthly limit of computer transfers from savings, they would have to switch me to a non-interest-bearing account. Last month, my interest payment was $ .11. It cost them five times as much in postage to send the letter!

I think I can guess your bank ; ) It's a few years ago now, but I do remember needing to modify (not radically) my savings-transfer behavior, in the interests of avoiding superfluous fees . . . .

Title: Re: Meltdown
Post by: Daverz on March 19, 2013, 01:44:04 PM

Interview with Christopher Pissarides on the Cyprus situation:

"Did the EU, ECB, and IMF inadequately monitor the Cypriot banking system?

No! They seem to think that all big depositors are Russians with dirty money. But after months of searching they couldn't find a single one. In a large system two banks misbehaved and the troika solution is [to] destroy half the system. There are other ways of monitoring and regulating large banking systems, not through destruction and massive unemployment."

http://www.businessweek.com/articles/2013-03-19/a-cypriot-nobelist-appalled-by-the-bailout-bank-tax#r=hp-lst

Title: Re: Meltdown
Post by: Coopmv on March 23, 2013, 09:39:23 AM

Quote from: Todd on March 18, 2013, 05:38:53 PM

Time to buy gold and guns?

Absolutely!

Title: Re: Meltdown
Post by: Coopmv on March 23, 2013, 09:41:02 AM

Quote from: Brian on March 18, 2013, 05:58:05 PM
Yeah, I also have a significant chunk of change sitting in my checking account waiting for the next big panic. It's kind of sad to me that it's in checking, but bank savings don't really offer interest anymore, so I might as well wait for opportunity.

Big Ben lends money to Wall Street at 0% interests so they can gamble via high frequency trading ...

Title: Re: Meltdown
Post by: Coopmv on March 23, 2013, 09:43:25 AM

Quote from: Szykneij on March 19, 2013, 05:45:08 AM
My bank sent me a letter warning if I exceed my monthly limit of computer transfers from savings, they would have to switch me to a non-interest-bearing account. Last month, my interest payment was $ .11. It cost them five times as much in postage to send the letter!

Your bank still pays you interests on your checking account? The big US banks have stopped paying interests for checking accounts for some times ...

Title: Re: Meltdown
Post by: ibanezmonster on March 23, 2013, 10:10:37 PM

Quote from: Coopmv on March 23, 2013, 09:43:25 AM
Your bank still pays you interests on your checking account? The big US banks have stopped paying interests for checking accounts for some times ...

I remember when I was in elementary school and my mom opened a savings account for me, trying to teach me about earning interest through saving money. LOL

Title: Re: Meltdown
Post by: Coopmv on March 24, 2013, 05:39:04 AM

Quote from: Greg on March 23, 2013, 10:10:37 PM
I remember when I was in elementary school and my mom opened a savings account for me, trying to teach me about earning interest through saving money. LOL

Instead of the Thief of Baghdad, we now have the Thief of Washington who is none other than Ben Bernanke, who has been providing interest free overnight loans to the big banks to gamble in the markets at the expense of ordinary citizens. The elderies have never had a tougher life since the interest income they have come to rely on has vanished ...

Title: Re: Meltdown
Post by: snyprrr on March 24, 2013, 06:26:48 AM

Quote from: Coopmv on March 24, 2013, 05:39:04 AM
Instead of the Thief of Baghdad, we now have the Thief of Washington who is none other than Ben Bernanke, who has been providing interest free overnight loans to the big banks to gamble in the markets at the expense of ordinary citizens. The elderies have never had a tougher life since the interest income they have come to rely on has vanished ...

Can we just be clear? Tell me if I'm wrong:

The Federal Reserve is NOT part of the US Gov.

The Fed is a PRIVATE ENTITY made up of, what, european bankers?

The IRS is NOT part of the US Gov. The IRS is the Collection Agency for the Fed.

So, a foreign entity is at the HEART of the US?

Could someone please clarify this for me, m'kay??

"pay your taxes", yea, ok

Title: Re: Meltdown
Post by: ibanezmonster on March 25, 2013, 06:19:32 AM

um... this should clarify.
http://en.wikipedia.org/wiki/Federal_reserve

It doesn't say that it is part of the government; just the central bank.

Title: Re: Meltdown
Post by: snyprrr on March 25, 2013, 07:09:17 AM

Quote from: Greg on March 25, 2013, 06:19:32 AM
um... this should clarify.
http://en.wikipedia.org/wiki/Federal_reserve

It doesn't say that it is part of the government; just the central bank.

I didn't get too far before my BP started to throb. Yea, it's not part of big brother.

Where WERE we in 1913?

Anyhow... la la la la la... find the happy place...la la la...

Title: Re: Meltdown
Post by: ibanezmonster on March 25, 2013, 07:50:04 AM

(https://sphotos-b.xx.fbcdn.net/hphotos-ash3/602160_634465303245651_1807787224_n.jpg)

Title: Re: Meltdown
Post by: Coopmv on March 26, 2013, 05:27:48 PM

Quote from: snyprrr on March 25, 2013, 07:09:17 AM
I didn't get too far before my BP started to throb. Yea, it's not part of big brother.

Where WERE we in 1913?

Anyhow... la la la la la... find the happy place...la la la...

And it was all downhill since 1913 ...

Title: Re: Meltdown
Post by: snyprrr on March 27, 2013, 06:12:34 AM

Quote from: Coopmv on March 26, 2013, 05:27:48 PM
And it was all downhill since 1913 ...

The Monster from Jekyll Island!

Title: Re: Meltdown
Post by: Coopmv on March 28, 2013, 06:22:44 PM

Quote from: snyprrr on March 27, 2013, 06:12:34 AM
The Monster from Jekyll Island!

Alan Greenspan should be hung for producing all those bubbles - first the tech bubble, then the real estate bubble. Then his successor has to bail us out from the certain economic collapse by printing new money 24/7. Has the price of a Big Mac hit $10 yet? >:(

Title: Re: Meltdown
Post by: ibanezmonster on March 28, 2013, 09:01:54 PM

Quote from: Coopmv on March 28, 2013, 06:22:44 PM
Alan Greenspan should be hung for producing all those bubbles - first the tech bubble, then the real estate bubble. Then his successor has to bail us out from the certain economic collapse by printing new money 24/7. Has the price of a Big Mac hit $10 yet? >:(

An Ayn Rand disciple who thought the banks could regulate themselves. Sure, that's a recipe for success.

Title: Re: Meltdown
Post by: Coopmv on March 29, 2013, 11:21:44 AM

Another folly of the US government, giving the Pentagon a free check to build a battle ship that is not battle-ready, to the tune of $37B and counting ... (http://finance.yahoo.com/news/ships-costing-u-s---37-billion-lack-firepower--navy-told-154342721.html)

Title: Re: Meltdown
Post by: Coopmv on April 06, 2013, 10:25:26 AM

The March job report released yesterday was a joke. It was even worse than the worst forecast made by the most pessimistic economist. This was a good wake-up call for those buffoons who voted for this clueless individual for four more years last November. During the economic recovery years back in the 1980's, 500K new jobs were created each month. It is clear Bush will continue to be blamed for this poor employment picture for the next four years ...

Title: Re: Meltdown
Post by: Todd on April 06, 2013, 11:11:09 AM

Quote from: Coopmv on April 06, 2013, 10:25:26 AMIt is clear Bush will continue to be blamed for this poor employment picture for the next four years ...

Well, Bush and Boehner and Cantor and possibly McConnell. Anyone but the Prez. Never the Prez. On the bright side, the mid-term elections are only a year and a half away, after which, barring a big war in Iran or North Korea, Obama will be a lame duck. Can't come soon enough.

Title: Re: Meltdown
Post by: Coopmv on April 06, 2013, 11:20:44 AM

Quote from: Todd on April 06, 2013, 11:11:09 AM

Well, Bush and Boehner and Cantor and possibly McConnell. Anyone but the Prez. Never the Prez. On the bright side, the mid-term elections are only a year and a half away, after which, barring a big war in Iran or North Korea, Obama will be a lame duck. Can't come soon enough.

Unfortunately, we do not have a European style parliamentary system here or a snap election will be called by next year to elect a new leader for the country instead of having to wait till 2016 ...

Title: Re: Meltdown
Post by: Todd on April 06, 2013, 11:25:58 AM

Quote from: Coopmv on April 06, 2013, 11:20:44 AMUnfortunately, we do not have a European style parliamentary system here

Must disagree here. A parliamentary system here would be a horror. Look at the national leaders who might replace Obama right now; they couldn't be worse, but they may not be better.

I suppose it's a sad time when I'd gladly take Hillary Clinton over the current occupant of the White House.

Title: Re: Meltdown
Post by: Coopmv on April 06, 2013, 11:28:30 AM

Quote from: Todd on April 06, 2013, 11:25:58 AM

Must disagree here. A parliamentary system here would be a horror. Look at the national leaders who might replace Obama right now; they couldn't be worse, but they may not be better.

I suppose it's a sad time when I'd gladly take Hillary Clinton over the current occupant of the White House.

Agree. Hillary is much less of a socialist then the current occupant of the WH. In hindsight, we would have been much better off with another Clinton than with this clueless leader ...

Title: Re: Meltdown
Post by: Octave on April 06, 2013, 12:00:21 PM

What suits you guys are.

Title: Re: Meltdown
Post by: Parsifal on April 06, 2013, 02:23:39 PM

Quote from: Octave on April 06, 2013, 12:00:21 PM
What suits you guys are.

Yes, I only wish these two would turn off their CD players, for once, so they could get on with fixing the global economic crisis. ;D

Title: Re: Meltdown
Post by: snyprrr on April 06, 2013, 08:18:51 PM

Quote from: snyprrr on March 24, 2013, 06:26:48 AM
Can we just be clear? Tell me if I'm wrong:

The Federal Reserve is NOT part of the US Gov.

The Fed is a PRIVATE ENTITY made up of, what, european bankers?

The IRS is NOT part of the US Gov. The IRS is the Collection Agency for the Fed.

So, a foreign entity is at the HEART of the US?

Could someone please clarify this for me, m'kay??

"pay your taxes", yea, ok

well, it saaaays irs.gov

Is the IRS actually part of the US Government?

Beyond that, I celebrate a year without a job. It's really just shocking.

Title: Re: Meltdown
Post by: snyprrr on April 08, 2013, 10:42:15 AM

Putey Pute has FINALLY seen a pair of women's breasts!! Surely he'll been in therapy for the rest of his life. This is a disaster!!!! :laugh:

Title: Re: Meltdown
Post by: Coopmv on April 11, 2013, 05:42:00 PM

Quote from: Todd on April 06, 2013, 11:25:58 AM

I suppose it's a sad time when I'd gladly take Hillary Clinton over the current occupant of the White House.

I know Margaret Thatcher and Hillary Clinton is NO Margaret Thatcher ... ;D

Title: Re: Meltdown
Post by: Karl Henning on April 17, 2013, 11:41:50 AM

Yes, I should call a $25 million daily loss, a "broken business model" . . . . (http://www.washingtonpost.com/blogs/federal-eye/wp/2013/04/17/usps-losing-25-million-daily-with-broken-business-model/?hpid=z5)

Title: Re: Meltdown
Post by: Todd on April 17, 2013, 12:27:04 PM

Quote from: karlhenning on April 17, 2013, 11:41:50 AMYes, I should call a $25 million daily loss, a "broken business model" . . . . (http://www.washingtonpost.com/blogs/federal-eye/wp/2013/04/17/usps-losing-25-million-daily-with-broken-business-model/?hpid=z5)

Is that every day, or every business day? Inquiring minds wanna know.

Title: Re: Meltdown
Post by: Coopmv on April 19, 2013, 06:22:03 PM

Quote from: Todd on April 17, 2013, 12:27:04 PM

Is that every day, or every business day? Inquiring minds wanna know.

Name me a branch of the federal government that is run efficiently. There is none ...

Title: Re: Meltdown
Post by: Todd on April 19, 2013, 06:32:23 PM

Quote from: Coopmv on April 19, 2013, 06:22:03 PMName me a branch of the federal government that is run efficiently. There is none ...

The Fed. It pretty much always runs a (hefty) annual profit, and has accounting tricks that prevent it from ever incurring an annual loss. Of course, that's not necessarily due to efficiency, per se.

Title: Re: Meltdown
Post by: Coopmv on April 20, 2013, 05:46:07 AM

Quote from: Todd on April 19, 2013, 06:32:23 PM

The Fed. It pretty much always runs a (hefty) annual profit, and has accounting tricks that prevent it from ever incurring an annual loss. Of course, that's not necessarily due to efficiency, per se.

The fed has been doing all the futile quantitative easing the past 2 years because of the clueless political leadership in Washingon that does not know how to grow the economy, especially the current occupant of the WH, who does not even know economics 101 and is doing his best to avoid talking about the economy these days ...

Title: Re: Meltdown
Post by: Parsifal on April 20, 2013, 06:52:33 AM

Quote from: Coopmv on April 19, 2013, 06:22:03 PM
Name me a branch of the federal government that is run efficiently. There is none ...

The National Institutes of Health has supported 138 recipients of the Nobel Prize.

http://www.nih.gov/about/almanac/nobel/

Title: Re: Meltdown
Post by: snyprrr on April 20, 2013, 06:55:39 AM

Quote from: Todd on April 19, 2013, 06:32:23 PM

The Fed. It pretty much always runs a (hefty) annual profit, and has accounting tricks that prevent it from ever incurring an annual loss. Of course, that's not necessarily due to efficiency, per se.

The Fed is a Private Bank, no?

Title: Re: Meltdown
Post by: Todd on April 20, 2013, 06:58:04 AM

Quote from: snyprrr on April 20, 2013, 06:55:39 AMThe Fed is a Private Bank, no?

No.

Title: Re: Meltdown
Post by: snyprrr on April 20, 2013, 07:01:20 AM

what's the scoop, coop?

Title: Re: Meltdown
Post by: Coopmv on April 20, 2013, 07:17:19 AM

Quote from: snyprrr on April 20, 2013, 07:01:20 AM
what's the scoop, coop?

Most of us know the former fed chairman Alan Greenspan was buddy buddy with the occupants of the WH. We are still paying the price for his monetary policy ... >:(

Title: Re: Meltdown
Post by: Coopmv on April 20, 2013, 07:22:28 AM

Quote from: James on April 20, 2013, 07:13:48 AM
Audit the Fed.

http://www.youtube.com/v/n0NYBTkE1yQ

This is Congressman Alan Grayson questioning Federal Reserve
Chairman Ben Bernanke on $550B of loans to foreigners (or
'central liquidity swaps' in Federal Reserve-ese').

Which financial institutions received this money?
Bernanke's answer: I don't know.

http://www.youtube.com/v/nE3BmhhWFFQ

Rep. Alan Grayson asks the Federal Reserve Inspector General
about the trillions of dollars lent or spent by the Federal Reserve
and where it went, and the trillions of off balance sheet obligations.
Inspector General Elizabeth Coleman responds that the IG does
not know and is not tracking where this money is.

The money was probably used to bail out UBS and Credit Suisse, which have been badly hurt by the Obama Administration leaning hard on offshore banking, i.e. Swiss accounts for those ultra wealthy to avoid paying more federal taxes. No wonder the US is in such serious trouble - government officials have zero accountability and that the IG watching over the fed does not even know how the fed spent all those printed monies ...

Title: Re: Meltdown
Post by: Todd on April 20, 2013, 07:38:32 AM

I say the Employment Act of 1946, and the subsequent revision of Fed goals from 1977*, needs an overhaul. The Fed should pursue price stability alone. Congress should then act like responsible grown-ups and set prudent fiscal policy. One of the more obscene developments over the past few years has been just how badly Keynes' name has been sullied by those who profess to be Keynesian. True Keynesian fiscal policy takes a full business cycle view, where the government runs deficits during contractions and runs surpluses during expansions.

Contrast that with what today's Democrats want to do. Based on the Senate Democrats' budget projections, there will still be a $500 billion deficit ten years out. They don't even pretend to be Keynesian. They are simply profligate. Yes, I understand the technical argument that in ten years such a large deficit will be under the desirable long-term average deficit to GDP ratio of 3%, but when the economy is growing strongly (?), deficits should shrink a whole lot more. Democrats, however, want a more intrusive and ultimately destructive federal government with expanding control over the economy. Republicans aren't really any better, with a destructive tax cut fetish that results in large deficits and not a whole lot of shrinkage in the scope and reach of the federal government.

(Keep in mind that I'm not a Keynesian – I'm more inclined toward Monetarism – but I can't stand the abuse Keynes has taken recently.)

* From the Fed's own web-site, the '77 revision states:

"The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices and moderate long-term interest rates."

Thanks a lot, Jimmy Carter.

Title: Re: Meltdown
Post by: Todd on April 20, 2013, 07:48:19 AM

Quote from: James on April 20, 2013, 07:45:44 AMTodd you should cut down on the meaningless jargon. Saves time.

It's not my fault you don't understand it.

Title: Re: Meltdown
Post by: Coopmv on April 20, 2013, 07:50:59 AM

Quote from: Todd on April 20, 2013, 07:48:19 AM

It's not my fault you don't understand it.

Yeah, there are some of us, though very few, who know a lot more than just classical music ... ;D

Title: Re: Meltdown
Post by: Todd on April 20, 2013, 07:51:09 AM

Quote from: James on April 20, 2013, 07:49:45 AMWhat the meaningless jargon?

What meaningless jargon? You mean tough words like "fiscal"?

Title: Re: Meltdown
Post by: Todd on April 20, 2013, 07:56:32 AM

Quote from: James on April 20, 2013, 07:54:27 AMNah .. just your typical political, economic babble that often says & means nothing.

A rejoinder devoid of substance. Pray tell, wise James, what would the best mix of economic policies be? You may use simple words so that all may understand.

Title: Re: Meltdown
Post by: Coopmv on April 20, 2013, 07:59:17 AM

Quote from: James on April 20, 2013, 07:57:31 AM
Or more like 'pretend' they do. ;)

There is no pretension, whatsoever. Todd and I understand exactly what we have been saying ...

Title: Re: Meltdown
Post by: Parsifal on April 20, 2013, 08:00:05 AM

Quote from: Coopmv on April 20, 2013, 07:50:59 AM
Yeah, there are some of us, though very few, who know a lot more than just classical music ... ;D

Do you know anything about classical music except how many thousands of CDs you have?
;D

Title: Re: Meltdown
Post by: Coopmv on April 20, 2013, 08:02:42 AM

Quote from: Parsifal on April 20, 2013, 08:00:05 AM
Do you know anything about classical music except how many thousands of CDs you have?
;D

Jealousy does not get a person very far. I know enough about classical music to sidestep many of the garbage recordings out there ...

Title: Re: Meltdown
Post by: Sammy on April 20, 2013, 10:20:40 AM

Quote from: Coopmv on April 20, 2013, 08:02:42 AM
I know enough about classical music to sidestep many of the garbage recordings out there ...

You forgot to mention that you can perform your "sidestep" magic without even listening to that garbage.

Title: Re: Meltdown
Post by: Coopmv on April 20, 2013, 10:22:55 AM

Quote from: Sammy on April 20, 2013, 10:20:40 AM
You forgot to mention that you can perform your "sidestep" magic without even listening to that garbage.

You must be internet-illiterate.

Title: Re: Meltdown
Post by: Sammy on April 20, 2013, 10:37:21 AM

Quote from: Coopmv on April 20, 2013, 10:22:55 AM
You must be internet-illiterate.

From the man who is incapable of adequately describing the characteristics of a musical performance.

By the way, I don't think anyone around here is jealous of your record collection. I'm sure you consider it a wonderful collection (and you should because you bought it), but that's no reason to think others want anything to do with it.

Title: Re: Meltdown
Post by: Coopmv on April 20, 2013, 10:42:55 AM

Quote from: Sammy on April 20, 2013, 10:37:21 AM
From the man who is incapable of adequately describing the characteristics of a musical performance.

By the way, I don't think anyone around here is jealous of your record collection. I'm sure you consider it a wonderful collection (and you should because you bought it), but that's no reason to think others want anything to do with it.

Do your thread-crapping elsewhere. This thread is meant for discussions of economic issues and I do not consider you to be remotely qualified to join the discussions.

Title: Re: Meltdown
Post by: knight66 on April 20, 2013, 10:55:52 AM

I am calling time on this specific exchange guys, back to the thread topic, grim though it is.

Thanks,

Knight

Title: Re: Meltdown
Post by: Sammy on April 20, 2013, 02:17:43 PM

Quote from: Coopmv on April 20, 2013, 10:42:55 AM
Do your thread-crapping elsewhere. This thread is meant for discussions of economic issues and I do not consider you to be remotely qualified to join the discussions.

I have a four-year degree in economics (specializing in public finance), a Masters in micro-economics and 35 years appraising, buying and selling a wide variety of real estate. What I don't have is a penchant for making definitive pronouncements about highly complex matters that even divide the best economists.

Title: Re: Meltdown
Post by: Parsifal on April 20, 2013, 03:32:19 PM

La comedia e finita!

;D

Title: Re: Meltdown
Post by: ibanezmonster on April 21, 2013, 06:01:58 AM

Quote from: Todd on April 20, 2013, 07:38:32 AM
Contrast that with what today's Democrats want to do. Based on the Senate Democrats' budget projections, there will still be a $500 billion deficit ten years out.

I'm trying to find out how a $500 billion deficit is still a bad thing when the GDP is what, $15 trillion?... and ten years seems to be a reason amount time for cutting for cutting the massive amount of debt that there is now.

Title: Re: Meltdown
Post by: Todd on April 21, 2013, 07:08:33 AM

Quote from: Greg on April 21, 2013, 06:01:58 AMI'm trying to find out how a $500 billion deficit is still a bad thing when the GDP is what, $15 trillion?... and ten years seems to be a reason amount time for cutting for cutting the massive amount of debt that there is now.

The point is that the Democrats' own budget, which presumes a pretty decent economic growth scenario over the next decade, doesn't even attempt to bring the deficit down more, let alone reduce the debt. They are opting instead for structural deficits, which means increased dependence on the government, and attendant rent-seeking by a variety of parties, and they are in no way Keynesian, which some profess to be. The US national debt would be $20 trillion+ at the end of the ten years if the budget were followed.

Title: Re: Meltdown
Post by: snyprrr on April 21, 2013, 07:51:34 AM

$125 Million going to Syrian rebels...hey!, don't WE need that?

Title: Re: Meltdown
Post by: Todd on April 21, 2013, 07:53:08 AM

Quote from: snyprrr on April 21, 2013, 07:51:34 AM$125 Million going to Syrian rebels...hey!, don't WE need that?

Defense contractors and their shareholders do.

Title: Re: Meltdown
Post by: ibanezmonster on April 21, 2013, 08:12:31 AM

Quote from: Todd on April 21, 2013, 07:08:33 AM

The point is that the Democrats' own budget, which presumes a pretty decent economic growth scenario over the next decade, doesn't even attempt to bring the deficit down more, let alone reduce the debt. They are opting instead for structural deficits, which means increased dependence on the government, and attendant rent-seeking by a variety of parties, and they are in no way Keynesian, which some profess to be. The US national debt would be $20 trillion+ at the end of the ten years if the budget were followed.

Oh, okay, gotcha. Just had a mixup between what you referring to as deficit, which you meant as yearly.

Title: Re: Meltdown
Post by: Coopmv on April 21, 2013, 12:41:11 PM

Quote from: Todd on April 21, 2013, 07:08:33 AM

The point is that the Democrats' own budget, which presumes a pretty decent economic growth scenario over the next decade, doesn't even attempt to bring the deficit down more, let alone reduce the debt. They are opting instead for structural deficits, which means increased dependence on the government, and attendant rent-seeking by a variety of parties, and they are in no way Keynesian, which some profess to be. The US national debt would be $20 trillion+ at the end of the ten years if the budget were followed.

You are absolutely correct. It is all smoke and mirrors for the Democrat controlled US Senate when it comes to deficit projection. They also paint the rosiest economic scenario. What can I say, they all love big government. I cannot stand big government, particularly the federal government that is growing bigger by the day. The US national debt may well hit $20T by 2016. There are trillion dollars additional liabilities that are not even being counted. I cannot wait to see the verdict for the case of City of Stockton (now bankrupt), CA pensioners vs. the bondholders and certainly hope the bondholders prevail. There is no right for any government to borrow money from private investors to pay out unsustainable pension benefits, then refuse to make the bondholders whole.

Title: Re: Meltdown
Post by: Karl Henning on April 22, 2013, 03:51:48 AM

Thank goodness the problem is as simple as the fact that there are Democrats . . . that certainly relieves the Republican party from any resp0nsibility!

Title: Re: Meltdown
Post by: Todd on April 22, 2013, 05:52:58 AM

Quote from: karlhenning on April 22, 2013, 03:51:48 AMThank goodness
the problem is as simple as the fact that there are Democrats . . . that certainly relieves the Republican party from any responsibility!

At least the Republican budget proposals attempt to bring the deficit down more aggressively over the next ten years. Democrats don't even pretend anymore. I guess you could call such honesty refreshing. These are merely bargaining positions, of course, so perhaps something more like the 1990 budget deal comes about.

Title: Re: Meltdown
Post by: snyprrr on April 22, 2013, 06:49:26 AM

Quote from: Coopmv on April 21, 2013, 12:41:11 PM
then refuse to make the bondholders whole.

but it's only riiiiiiight, Coop, it's only riiiiight :laugh:

those nasty bondholders... bad.... bad boys!

Every time someone tells me they work for the gov, I really get a look... sometimes I'll just ride them. Sorry, but would most of them compete in the private sector?

btw-last unemploy check... now I get to call and see if they can't find some 'available funds'... thanks everybody!!!

and trust me... it hasn't been but gas and milk money

Title: Re: Meltdown
Post by: Karl Henning on April 22, 2013, 06:52:25 AM

Quote from: snyprrr on April 22, 2013, 06:49:26 AM
. . . and trust me... it hasn't been but gas and milk money

Hey, I knew that . . . .

Title: Re: Meltdown
Post by: Brian on April 24, 2013, 08:05:26 AM

Unsurprisingly, Stephen Colbert is having a LOT of fun with the discovery that Reinhart/Rogoff's economic paper was mistaken. Part 1 (http://www.colbertnation.com/the-colbert-report-videos/425748/april-23-2013/austerity-s-spreadsheet-error), part 2 (http://www.colbertnation.com/the-colbert-report-videos/425749/april-23-2013/austerity-s-spreadsheet-error---thomas-herndon).

Title: Re: Meltdown
Post by: Todd on April 24, 2013, 08:34:09 AM

Quote from: Brian on April 24, 2013, 08:05:26 AMUnsurprisingly, Stephen Colbert is having a LOT of fun with the discovery that Reinhart/Rogoff's economic paper was mistaken.

Well, in their defense, Excel is a tough program to master. Wait, no it's not.

Fortunately, the Fed just keeps on buying bonds at a trillion dollar a year pace, and the federal government keeps on running annual deficits larger than the GDP of most countries. (It's currently hovering around the GDP of Turkey or the Netherlands, depending on which measure you prefer.)

Title: Re: Meltdown
Post by: Brian on April 24, 2013, 08:52:59 AM

Quote from: Todd on April 24, 2013, 08:34:09 AM
Well, in their defense, Excel is a tough program to master. Wait, no it's not.

Fortunately, the Fed just keeps on buying bonds at a trillion dollar a year pace, and the federal government keeps on running annual deficits larger than the GDP of most countries. (It's currently hovering around the GDP of Turkey or the Netherlands, depending on which measure you prefer.)

So what you're saying is that every year we should invade the Netherlands and sell it to China.

Title: Re: Meltdown
Post by: Todd on April 24, 2013, 09:17:46 AM

Quote from: Brian on April 24, 2013, 08:52:59 AMSo what you're saying is that every year we should invade the Netherlands and sell it to China.

Yes.

Title: Re: Meltdown
Post by: snyprrr on May 11, 2013, 08:16:51 AM

Yes, I spent my last unemployment money on a Roger Sessions Symphony!

I have appeal meeting coming up, but, it's still only $70 a week. I am preparing myself for some kind of retail humiliation, if ANYTHING >:D... my whole 'customer is always right' attitude left the building a long time ago. I don't think I can handle today's demanding consumer... narf narf nom nom...

gulp, the NEW REALITY is hitting home hard fast soon now ahhhh!!!!!!! It seems that the foreclosure thing is finally starting to hit in this most prosperous of counties.

A good percentage of my high school chums are now about ready to move out of from wherever they have been (their own places)... ONLY chums with government jobs (and the lawyer) HAVE jobs. I won't comment.

I can feel my bowels turning to water, and I buy Sessions? ::) I guess I figure hunger goes better with Sessions?

Haven't had a full time job since Dec '08, right before I sought console here. No love, no job. Only Roger & Me. :blank:

Title: Re: Meltdown
Post by: Coopmv on May 11, 2013, 11:10:22 AM

With so many folks who have dropped out of the workforce and are no longer counted, no wonder the unemployment rate has been drifting down. Gee, it sounds like we have a blooming economy, doesn't it? Sequestration is necessary to force some discipline on the free spending politicians ...

Title: Re: Meltdown
Post by: snyprrr on May 11, 2013, 03:12:31 PM

Quote from: Coopmv on May 11, 2013, 11:10:22 AM
With so many folks who have dropped out of the workforce and are no longer counted, no wonder the unemployment rate has been drifting down. Gee, it sounds like we have a blooming economy, doesn't it? Sequestration is necessary to force some discipline on the free spending politicians ...

Yea, it's like we're living in NeverEverLand. I suppose those that are doing well ARE doing well!!! ???

Title: Re: Meltdown
Post by: ibanezmonster on May 11, 2013, 08:09:46 PM

Quote from: Coopmv on May 11, 2013, 11:10:22 AM
Sequestration is necessary to force some discipline on the free spending politicians ...

It is good for that, but if it creates jobs (which more mean more tax revenue), I'd be surprised.

Title: Re: Meltdown
Post by: ralfy on May 12, 2013, 09:18:08 AM

The global financial crisis masks a more serious threat, which is peak oil, which in turn is connected to something even worse, which is global warming and environmental damage.

For more details, try this lecture:

"The Twin Sides of the Fossil Fuel Coin"

http://www.youtube.com/watch?v=Ina16XSJQvM

Title: Re: Meltdown
Post by: Parsifal on May 12, 2013, 09:42:34 AM

Quote from: ralfy on May 12, 2013, 09:18:08 AM
The global financial crisis masks a more serious threat, which is peak oil, which in turn is connected to something even worse, which is global warming and environmental damage.

For more details, try this lecture:

"The Twin Sides of the Fossil Fuel Coin"

http://www.youtube.com/watch?v=Ina16XSJQvM

Peak oil? Peak oil is 20 years in the future, always has been, always will be.

Carbon is not going anywhere. When we burn up all that is readily available in one form, we will find another form, including using vegetation to pull CO2 out of the air and making fuel out of it. When energy becomes expensive there fill finally be an incentive to use it efficiently.

Environmental degradation and climate change is a serious issue, and not just to the tinfoil hat crowd.

Title: Re: Meltdown
Post by: Todd on May 12, 2013, 10:20:18 AM

Quote from: ralfy on May 12, 2013, 09:18:08 AMThe global financial crisis masks a more serious threat, which is peak oil, which in turn is connected to something even worse, which is global warming and environmental damage.

The Western US alone has an estimated 2 trillion+ barrels of oil shale, and current technology could extract around half of that. Some estimates of total global oil extraction since the discovery of oil in Titusville in 1859 hover around 1 trillion barrels. Throw in conventional oil, deep sea oil, the massive Central Asian fields still under development, the massive field offshore in Brazil, and more efficient extraction from partly depleted existing fields, and the threat of peak oil is about as real as the same warnings that first appeared in the late 19th Century. And that doesn't even include natural gas, which is abundant in may areas, or natural gas hydrates, which dwarf even conventional natural gas reserves. There's plenty of carbon based energy still to be exploited. (And then there's also burning "biomass" - largely wood - which is back in vogue in parts of Europe.)

With the recent news that the level of carbon in the atmosphere has passed 400 PPM - apparently some magical threshold - environmental concerns are indeed real, though it should be pointed out that average temperature readings taken over the last five years by real scientists at real universities (eg, the University of Reading) are below the levels that were predicted in models preferred by entities like the IPCC. The future is uncertain, though an upward trend seems most probable.

I would say a more immediate concern is access to potable water. Time to look into water treatment ETFs.

Title: Re: Meltdown
Post by: Parsifal on May 12, 2013, 07:56:58 PM

Quote from: Coopmv on May 11, 2013, 11:10:22 AM
With so many folks who have dropped out of the workforce and are no longer counted, no wonder the unemployment rate has been drifting down. Gee, it sounds like we have a blooming economy, doesn't it? Sequestration is necessary to force some discipline on the free spending politicians ...

Different parties have their own motivations for portraying the US economy in a positive or negative light at different times. But the one overriding fact was dramatically represented in a cover story in the Economist a few years ago. Between 2000 and 2010, the net job creation in the US was zero. The ~11 million jobs lost in the 2008 crisis wiped out a decade of job creation. Since then meager job gains have barely kept up with population increase and the employment situation is not substantially better now than it was at the depth of the crisis. Many have given up hope of finding a job and many others have replaced middle-class jobs with jobs paying poverty level wages and/or part time work.

However, I find the suggestion that sequestration is beneficial to be absurd. The US needs to resolve its budget problem, but if sequestration stands the US will fall into an economic pit from which it will never emerge.

Title: Re: Meltdown
Post by: Todd on May 13, 2013, 05:36:41 AM

Quote from: Parsifal on May 12, 2013, 07:56:58 PM. . . but if sequestration stands the US will fall into an economic pit from which it will never emerge.

A bit of melodrama? The sequestration "cuts" aren't big enough to do anything of the sort. First of all, they are only 2% cuts to most, but not all, "discretionary" programs, and when one looks at the decade long projections of the budget impact, it only really slows the growth of the spending. It's impossible to get from those projections to "an economic pit", whatever that is. Second, Congress has until October of this year to bring overall budget levels back up to normal for the affected programs by either reinstating old budgets or passing special appropriations (like with the FAA). Perhaps that was part of the political calculus all along.

Title: Re: Meltdown
Post by: snyprrr on May 13, 2013, 07:31:22 AM

DOOM ON!: Amazon has raised their Shipping $1!!!!!

??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ??? ???

Title: Re: Meltdown
Post by: Parsifal on May 13, 2013, 08:12:03 AM

Quote from: Todd on May 13, 2013, 05:36:41 AM

A bit of melodrama? The sequestration "cuts" aren't big enough to do anything of the sort. First of all, they are only 2% cuts to most, but not all, "discretionary" programs, and when one looks at the decade long projections of the budget impact, it only really slows the growth of the spending. It's impossible to get from those projections to "an economic pit", whatever that is. Second, Congress has until October of this year to bring overall budget levels back up to normal for the affected programs by either reinstating old budgets or passing special appropriations (like with the FAA). Perhaps that was part of the political calculus all along.

In the last decade federal support for basic science and technology research in the US has decreased as a fraction of GDP while it has increased in virtually every other developed or developing country. Total research and development (including the private sector) has also fallen. Americans seem to think that we are so far ahead he can afford to let up a bit, but it is not so. We have already fallen behind and our competitors are increasing their lead. That's the real reason for economic growth in the US which is effectively zero.

Sequestration adds an 8% cut to federal support of science and technology. One in 12 science jobs in the US disappears this year. Scientists who are well established will be able to maintain their positions, but scientists trying to establish their careers have two choices, give up on science or abandon the US. Most of the students earning science and technology PhDs are not US citizens, and increasingly they are finding that they have better career options if they leave the US. The world changing science/technology discoveries of the future will be made by this generation of scientists, and they won't be doing it here.

Here is an interesting interview with Elias Zerhouni, the previous director of the NIH. As he describes it, the 8% sequestration cut will reduce finding of new science almost to zero and create a generational gap in US science.

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/21/former-nih-director-the-sequester-will-set-back-medical-science-for-a-generation/

This is also pleasant, inspirational reading

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/02/26/the-coming-rd-crash/

Title: Re: Meltdown
Post by: Todd on May 13, 2013, 08:48:01 AM

Quote from: Parsifal on May 13, 2013, 08:12:03 AMTotal research and development (including the private sector) has also fallen.

Not according to the National Science Foundation. Total R&D has increased very slightly as a percentage of GDP, though the allocation has changed to be more reliant on the private sector. (This was covered previously in this thread.) So now government data is at odds with a blog. Hmm.

R&D spending is one factor in economic growth, which, incidentally, is not zero. Growth is positive, if too sluggish to boost employment sufficiently. Further, there is mounting evidence that the US is, unfortunately, experiencing an expansion of "underground" economic activity (ie, under the table work, in addition to more traditional black market activity), which makes understanding the true economic picture harder, and of course hits government revenue, among other things.

As to Mr Zerhouni's prognostication of doom – a generational gap will result if our funding is cut! – well, that's to be expected. Any good bureaucrat, current or former, can come up with convincing reasons why his or her program really is more important than anything else, and why it spells disaster if budgets decline. I have no problem with publicly funded research, or with sensible immigration policy to encourage foreign PhDs and so on to stay in the US, but the consequences of reduced public R&D in the US must be weighed against other concerns and the risks ought not to be overblown.

And, economic nationalism, national pride, and so on aside, what is the special benefit of the US maintaining a large lead in R&D? If basic research in England or Germany or South Korea or even China yields some whiz-bang breakthrough in X, and it is widely published, and everyone can benefit from spillover benefits, where is the harm exactly? How is the Average Joe in the US (or anywhere else) being hurt? Is it that the US must be number one? (U! S! A! U! S! A!, etc) Does it truly threaten future economic growth? Does it compromise national security? One thing the blog gets right is the mention of the alarmist view. Oh well.

Title: Re: Meltdown
Post by: Florestan on May 14, 2013, 08:59:09 AM

Quote from: Todd on May 13, 2013, 08:48:01 AM
Any good bureaucrat, current or former, can come up with convincing reasons why his or her program really is more important than anything else, and why it spells disaster if budgets decline.

So true! That's why the world won't get any better until it gets rid of all bureaucrats, good or bad alike! ;D

Quote
And, economic nationalism, national pride, and so on aside, what is the special benefit of the US maintaining a large lead in R&D? If basic research in England or Germany or South Korea or even China yields some whiz-bang breakthrough in X, and it is widely published, and everyone can benefit from spillover benefits, where is the harm exactly? How is the Average Joe in the US (or anywhere else) being hurt? Is it that the US must be number one? (U! S! A! U! S! A!, etc) Does it truly threaten future economic growth? Does it compromise national security? One thing the blog gets right is the mention of the alarmist view. Oh well.

Who cares about Average Joe? He is nothing and means nothing - damn his insignificant life and his petty interests! Long live the race, the nation, the State, the party, the class, the whatever community (real or imaginary) who has the numerical power to impose its will!... ;D

Title: Re: Meltdown
Post by: Parsifal on May 14, 2013, 02:31:45 PM

Quote from: Florestan on May 14, 2013, 08:59:09 AM
So true! That's why the world won't get any better until it gets rid of all bureaucrats, good or bad alike! ;D

I see we are at the level of discussion where the viewpoint of Dr. Zerhouni, who at the age of 51 has been a medical doctor, a Professor of Medicine, a Dean of Johns Hopkins University, the founder and chief scientist of several successful companies, as well as the head of the National Institutes of Health, can be dismissed by labeling him "a bureaucrat." Too bad he doesn't post on internet forums, then at least we'd have some reason to take his viewpoint seriously.

Title: Re: Meltdown
Post by: Florestan on May 15, 2013, 04:32:36 AM

Quote from: Parsifal on May 14, 2013, 02:31:45 PM
I see we are at the level of discussion where the viewpoint of Dr. Zerhouni, who at the age of 51 has been a medical doctor, a Professor of Medicine, a Dean of Johns Hopkins University, the founder and chief scientist of several successful companies, as well as the head of the National Institutes of Health, can be dismissed by labeling him "a bureaucrat." Too bad he doesn't post on internet forums, then at least we'd have some reason to take his viewpoint seriously.

With such credentials he must surely be on Twitter. ;D

Title: Re: Meltdown
Post by: Todd on May 15, 2013, 05:44:06 AM

Quote from: Parsifal on May 14, 2013, 02:31:45 PMI see we are at the level of discussion where the viewpoint of Dr. Zerhouni, who at the age of 51 has been a medical doctor, a Professor of Medicine, a Dean of Johns Hopkins University, the founder and chief scientist of several successful companies, as well as the head of the National Institutes of Health, can be dismissed by labeling him "a bureaucrat."

I'm not sure who questioned his credentials. However, it's impossible not to see self-serving aspects to what he writes, especially when it includes alarmist proclamations about generational this or that.

Hey, wait, he worked for the government, in a very important position. He must be correct. And unbiased. Better just fund what he says at the levels he says. Same goes for all other very important government leaders – former, current, and future. And when such leaders decide their favored programs need less funding, I'm certain they'll say so. Honest assessments of budgetary requirements are common for bureaucrats.

Title: Re: Meltdown
Post by: Florestan on May 15, 2013, 05:55:50 AM

Quote from: Todd on May 15, 2013, 05:44:06 AM
Hey, wait, he worked for the government, in a very important position. He must be correct. And unbiased. Better just fund what he says at the levels he says. Same goes for all other very important government leaders – former, current, and future. And when such leaders decide their favored programs need less funding, I'm certain they'll say so. Honest assessments of budgetary requirements are common for bureaucrats.

Title: Re: Meltdown
Post by: Karl Henning on May 21, 2013, 07:17:18 AM

You can't make this stuff up:

Nutella demands immediate cancellation of World Nutella Day (http://grist.org/list/nutella-demands-immediate-cancellation-of-world-nutella-day/)

Title: Re: Meltdown
Post by: snyprrr on June 07, 2013, 08:27:19 AM

Barry on TV right now basically doing the most jaw dropping Buish Sr. impersonation I've ever seen. Absolutely Shocking Moment in History!!!! ??? ??? ??? :o :o :o ??? ??? ???

This is going to make the most incredible hi-lite tape. ??? :o ???

There are so many zingers here,... I'm in shock,... shock...

Title: Re: Meltdown
Post by: snyprrr on June 07, 2013, 08:29:58 AM

Quote from: snyprrr on June 07, 2013, 08:27:19 AM
Barry on TV right now basically doing the most jaw dropping Buish Sr. impersonation I've ever seen. Absolutely Shocking Moment in History!!!! ??? ??? ??? :o :o :o ??? ??? ???

This is going to make the most incredible hi-lite tape. ??? :o ???

There are so many zingers here,... I'm in shock,... shock...

On facial expressions alone! ???WOW!!! :o

Feel safer anyone?

Title: Re: Meltdown
Post by: snyprrr on June 07, 2013, 08:31:20 AM

Quote from: snyprrr on June 07, 2013, 08:29:58 AM
On facial expressions alone! ???WOW!!! :o

Feel safer anyone?

msnbc Alex Wagner summarizes: "I know it sounds Orwellian, but trust us!"

Title: Re: Meltdown
Post by: Todd on June 07, 2013, 08:49:20 AM

I think what I like best about the whole NSA thing is how many lefties/liberals/Progressives on the interwebs have basically resorted to a fall-back position of "Bush did it first." You know, the Patriot Act, FISA (though that's from the Carter era), etc. And here I thought Barry would change all that. I mean, didn't he campaign on it?

(http://entreed.files.wordpress.com/2008/10/obama.jpg)

Title: Re: Meltdown
Post by: snyprrr on June 07, 2013, 09:32:14 AM

Quote from: Todd on June 07, 2013, 08:49:20 AM
I think what I like best about the whole NSA thing is how many lefties/liberals/Progressives on the interwebs have basically resorted to a fall-back position of "Bush did it first." You know, the Patriot Act, FISA (though that's from the Carter era), etc. And here I thought Barry would change all that. I mean, didn't he campaign on it?

(http://entreed.files.wordpress.com/2008/10/obama.jpg)

I mean... really... 'most transparent ever'...mm hmm... yawn...

Seriously, did you watch his facial expressions as he was continuing? Was that unscripted? It seemed like he said too much?

"Ve vill find that 'intent' ve arr searching for... I'm sure it's deep inside your rectum."

Title: Re: Meltdown
Post by: Todd on June 07, 2013, 09:57:40 AM

Quote from: snyprrr on June 07, 2013, 09:32:14 AMSeriously, did you watch his facial expressions as he was continuing? Was that unscripted? It seemed like he said too much?

Haven't seen the footage yet. Will watch it tonight. I need a chuckle.

Title: Re: Meltdown
Post by: snyprrr on June 09, 2013, 04:57:07 PM

Quote from: Todd on June 07, 2013, 09:57:40 AM

Haven't seen the footage yet. Will watch it tonight. I need a chuckle.

Didya didya??

"No one's reading your emails!"

It all depends on the definition of 'your', doesn't it?

Title: Re: Meltdown
Post by: Todd on June 09, 2013, 05:36:53 PM

Quote from: snyprrr on June 09, 2013, 04:57:07 PMDidya didya??

Yeah, and I can sum up his response up in eight words: Tough shit, we're going to keep doing it.

I did notice that China's purportedly aggressive hacking ended up not being a big focus of the summit. I've also noticed a difference in how this topic has been covered by US vs non-US press outlets online.

The George W Obama, four term president, Facebook page has popped up in a few searches.

Title: Re: Meltdown
Post by: snyprrr on June 10, 2013, 08:34:07 AM

Quote from: Todd on June 09, 2013, 05:36:53 PM

Yeah, and I can sum up his response up in eight words: Tough shit, we're going to keep doing it.

The George W Obama, four term president, Facebook page has popped up in a few searches.

1) mmm

2) mm hmm

Actually, one needs to compare with Bush, Sr. Barry's no W!!

And yea, he did say FU. Go back to comm. college Barry, go back.

btw- Snowden??? fake??? funny tho,... Iceland WILL take him (the one country that kicked the bankers out).

Title: Re: Meltdown
Post by: Todd on June 10, 2013, 08:56:17 AM

I think Hong Kong is a good choice for Mr Snowden. It offers the chance for some great power positioning and jaw-boning. Will the Chinese cave to American pressure?

But really, I think it is time to come up with various conspiracy scenarios here. Just who is Eddie Snowden? And who is footing the bill for his stay in Hong Kong?

Option 1 – He is Republican/Right Wing plant/patsy, granted access to top secret files with the express intention of derailing Obama's second term.

Option 2 – He is a Chinese spy.

Option 3 – He is a Russian spy.

Option 4 – He is an Iranian spy.

Option 5 – He is a North Korean spy.

Option 6 – He is a corporate spy, planted to muck up Booz Allen's next bid.

Option 7 – He is a tool of the international banking cartel set on ruling the world. I mean, come on, Booz Allen is majority owned by the Carlyle Group, and we all know that various luminaries have sat on the board of this private equity firm in the past.

But this is not my area of expertise. Back to you snyprrr, as this is your area of expertise. Perhaps Sean can weigh in, as well.

Title: Re: Meltdown
Post by: Gurn Blanston on June 10, 2013, 10:51:24 AM

Quote from: Todd on June 10, 2013, 08:56:17 AM
I think Hong Kong is a good choice for Mr Snowden. It offers the chance for some great power positioning and jaw-boning. Will the Chinese cave to American pressure?

But really, I think it is time to come up with various conspiracy scenarios here. Just who is Eddie Snowden? And who is footing the bill for his stay in Hong Kong?

Option 1 – He is Republican/Right Wing plant/patsy, granted access to top secret files with the express intention of derailing Obama's second term.

Option 2 – He is a Chinese spy.

Option 3 – He is a Russian spy.

Option 4 – He is an Iranian spy.

Option 5 – He is a North Korean spy.

Option 6 – He is a corporate spy, planted to muck up Booz Allen's next bid.

Option 7 – He is a tool of the international banking cartel set on ruling the world. I mean, come on, Booz Allen is majority owned by the Carlyle Group, and we all know that various luminaries have sat on the board of this private equity firm in the past.

But this is not my area of expertise. Back to you snyprrr, as this is your area of expertise. Perhaps Sean can weigh in, as well.

Maybe, just maybe, he's an American Spy *gasp/choke* :o :o

I haven't made up my mind yet what I think of all this. Am I the last person on Earth again!

8)

Title: Re: Meltdown
Post by: Todd on June 10, 2013, 10:53:23 AM

Quote from: Gurn Blanston on June 10, 2013, 10:51:24 AMMaybe, just maybe, he's an American Spy *gasp/choke*

He is not. We do not have spies. We are the good guys.

Title: Re: Meltdown
Post by: Karl Henning on June 10, 2013, 10:56:05 AM

He was issued a SSN under the name John Smallberries

Title: Re: Meltdown
Post by: Gurn Blanston on June 10, 2013, 11:02:50 AM

Quote from: Todd on June 10, 2013, 10:53:23 AM

He is not. We do not have spies. We are the good guys.

Oh, dopey me, how in hell did I forget that?? Gotta be the Oldtimers Syndrome kickin' in. :(

8)

Title: Re: Meltdown
Post by: Florestan on June 10, 2013, 11:12:30 AM

Ever since the beginning of recorded history governments have been always constituted not of the people, sometimes without the people and oftentimes against the people --- can we move on? ;D ;D ;D

Title: Re: Meltdown
Post by: Gurn Blanston on June 10, 2013, 11:18:10 AM

Quote from: Florestan on June 10, 2013, 11:12:30 AM
Ever since the beginning of recorded history governments have been always constituted not of the people, sometimes without the people and oftentimes against the people --- can we move on? ;D ;D ;D

I don't know, but I'm pretty sure that this is the very essence of the different way that insiders and outsiders are taking this whole thing. It concerns me that I am more like an outsider. Can I be getting overcome by Sny-p-aranoia? Acckkk! :o :)

8)

Title: Re: Meltdown
Post by: Todd on June 10, 2013, 11:46:17 AM

Quote from: Gurn Blanston on June 10, 2013, 11:18:10 AMIt concerns me that I am more like an outsider.

There are possibilities that could put your mind at rest. Echelon has been known about for a long time, as has FISA, and the Patriot Act, with its various ins and outs, has been around since what, 2001, so is anyone surprised that the NSA has other programs and that US citizens are being tracked? Senator Ron Wyden has been warning of this for a couple years in cryptic fashion, and he is not a nut job*.

Perhaps it is as simple as a young Turk, full of vim and vigor, who thought he was going to change the world from the inside, and did something that may not in the end be the smartest thing for him to have done, only to be turned into a political pawn of powerful, unpleasant men. On the upside, this whole situation could expose the existence of incompetent government oversight, lax hiring standards, inefficient communication, and general bureaucratic malaise. Or perhaps a sinister, worldwide, or at least far-reaching plot. Which seems more plausible?

Maybe this can turn into a teachable moment, where the value of the Fourth Amendment (and the First!) is rediscovered, and the reach of the state is rolled back a bit. Alas, the recent SCOTUS ruling on DNA swabs does not really offer much hope that will happen.

* Full disclosure, Senator Wyden is one Democrat I have voted for, so my defense of his sanity may be self-serving.

Title: Re: Meltdown
Post by: Florestan on June 10, 2013, 11:50:57 AM

Gentlemen, have you ever heard of something called "the iron law of oligarchy (http://en.wikipedia.org/wiki/Iron_law_of_oligarchy)"? ;D

Title: Re: Meltdown
Post by: Todd on June 10, 2013, 12:01:57 PM

Quote from: Florestan on June 10, 2013, 11:50:57 AMGentlemen, have you ever heard of something called "the iron law of oligarchy (http://en.wikipedia.org/wiki/Iron_law_of_oligarchy)"?

A variant on a millennia old theme, it appears. The very nature of a Republic, such as the US, means the people don't directly rule. I'm not terribly concerned about that; I'm more concerned about continuing Constitutional encroachments.

I place faith in the self-serving nature of elected politicians. If enough people get antsy and complain, or, more important, if enough special interest groups start griping, I think politicians will force through some kind of change.

Title: Re: Meltdown
Post by: ralfy on June 10, 2013, 09:23:39 PM

Quote from: Parsifal on May 12, 2013, 09:42:34 AM
Peak oil? Peak oil is 20 years in the future, always has been, always will be.

Carbon is not going anywhere. When we burn up all that is readily available in one form, we will find another form, including using vegetation to pull CO2 out of the air and making fuel out of it. When energy becomes expensive there fill finally be an incentive to use it efficiently.

Environmental degradation and climate change is a serious issue, and not just to the tinfoil hat crowd.

You're too late. The IEA admitted that conventional oil production peaked back in 2005. That is why we are now resorting to non-conventional production.

Why are we now forced to use shale, tar sands, etc., to meet increasing demand? Because oil discoveries peaked in 1964.

Per country, two-thirds of oil-producing countries have reached or gone beyond peak production.

It's worse when you look at it per capita, which is more logical as production serves a growing population. Oil production per capita peaked back in 1979.

Why did we start experiencing high oil (and with that food) prices only during the last decade? Because it was only recently that the oil consumption for the rest of the world started rising and even making up for demand destruction from the US, EU, Japan.

The result, then, is economic meltdown for various rich countries, high oil and food prices, chronic unemployment, increasing resource demand for much of the world, and long-term effects of environmental damage coupled with global warming.

That's why the IEA is now warning of the effects of peak oil (which can happen even as demand exceeds production) and global warming.

Title: Re: Meltdown
Post by: ralfy on June 10, 2013, 09:27:40 PM

Quote from: Todd on May 12, 2013, 10:20:18 AM

The Western US alone has an estimated 2 trillion+ barrels of oil shale, and current technology could extract around half of that. Some estimates of total global oil extraction since the discovery of oil in Titusville in 1859 hover around 1 trillion barrels. Throw in conventional oil, deep sea oil, the massive Central Asian fields still under development, the massive field offshore in Brazil, and more efficient extraction from partly depleted existing fields, and the threat of peak oil is about as real as the same warnings that first appeared in the late 19th Century. And that doesn't even include natural gas, which is abundant in may areas, or natural gas hydrates, which dwarf even conventional natural gas reserves. There's plenty of carbon based energy still to be exploited. (And then there's also burning "biomass" - largely wood - which is back in vogue in parts of Europe.)

With the recent news that the level of carbon in the atmosphere has passed 400 PPM - apparently some magical threshold - environmental concerns are indeed real, though it should be pointed out that average temperature readings taken over the last five years by real scientists at real universities (eg, the University of Reading) are below the levels that were predicted in models preferred by entities like the IPCC. The future is uncertain, though an upward trend seems most probable.

I would say a more immediate concern is access to potable water. Time to look into water treatment ETFs.

The problem isn't reserves but flow rate:

http://resourceinsights.blogspot.com/2013/04/the-only-true-metric-of-energy_28.html

The energy returns for shale are much lower, and decline curves steeper:

http://www.slate.com/articles/health_and_science/science/2013/02/u_s_shale_oil_are_we_headed_to_a_new_era_of_oil_abundance.html

Finally, it gets even worse when you look at flow rate vs. demand. The best-case scenario is a production rate of 12 Mb/d for North America a few years from now. The current consumption rate for the U.S. alone is 19 Mb/d.

Title: Re: Meltdown
Post by: Parsifal on June 10, 2013, 09:34:09 PM

Quote from: ralfy on June 10, 2013, 09:27:40 PM
The problem isn't reserves but flow rate:

http://resourceinsights.blogspot.com/2013/04/the-only-true-metric-of-energy_28.html

The energy returns for shale are much lower, and decline curves steeper:

http://www.slate.com/articles/health_and_science/science/2013/02/u_s_shale_oil_are_we_headed_to_a_new_era_of_oil_abundance.html

Finally, it gets even worse when you look at flow rate vs. demand. The best-case scenario is a production rate of 12 Mb/d for North America a few years from now. The current consumption rate for the U.S. alone is 19 Mb/d.

Except that consumption in the US is actually decreasing (although it is increasing in other parts of the world like China). The US wastes a colossal amount of energy and if fossil fuels become scarce the price of energy will go up, which will encourage greater efficiency. That would probably be good, since it would slow down the accumulation of greenhouse gasses and the associated climate change.

Title: Re: Meltdown
Post by: ralfy on June 11, 2013, 06:34:29 PM

Quote from: Parsifal on June 10, 2013, 09:34:09 PM
Except that consumption in the US is actually decreasing (although it is increasing in other parts of the world like China). The US wastes a colossal amount of energy and if fossil fuels become scarce the price of energy will go up, which will encourage greater efficiency. That would probably be good, since it would slow down the accumulation of greenhouse gasses and the associated climate change.

It is decreasing for the U.S., EU, and Japan because of economic crisis. At the same time, it is increasing for the rest of the world because of a growing middle class and demand for basic needs (e.g., manufactured medicine and food production which are heavily dependent on oil):

http://ourfiniteworld.com/2013/04/11/peak-oil-demand-is-already-a-huge-problem/

At the same time, more oil consumption is ultimately needed for an economy to grow:

http://ourfiniteworld.com/2012/07/18/how-much-oil-growth-do-we-need-to-support-world-gdp-growth/

The implication, then, is that meltdown for debt-ridden economies will continue. Meanwhile, the effects of peak oil will be felt given increasing demand for the rest of the world. And the effects of global warming will still be felt as CO2 levels will still rise given increasing demand from the rest of the world.

Title: Re: Meltdown
Post by: snyprrr on June 11, 2013, 08:26:32 PM

Quote from: Todd on June 10, 2013, 12:01:57 PM

A variant on a millennia old theme, it appears. The very nature of a Republic, such as the US, means the people don't directly rule. I'm not terribly concerned about that; I'm more concerned about continuing Constitutional encroachments.

I place faith in the self-serving nature of elected politicians. If enough people get antsy and complain, or, more important, if enough special interest groups start griping, I think politicians will force through some kind of change.

There's too many ****** , *****. *********, ***, ****, and ***** in this country, that's for sure!!

Title: Re: Meltdown
Post by: Karl Henning on June 12, 2013, 06:16:09 AM

Quote from: Todd on June 09, 2013, 05:36:53 PM
[...] The George W Obama, four term president, Facebook page has popped up in a few searches.

The Elephant in the Parlor

The folks (of either extreme end of the spectrum) who chortle over how Obama is "just the same" as Dubya are forgetting one substantial difference.

And his name is Dick Cheney.

Biden may be an oaf at times, and I am okay with that. Whenever the press titters over a Biden incident, I send a prayer of gratitude to a Higher Power that he is no Dick Cheney.

Title: Re: Meltdown
Post by: Todd on June 12, 2013, 07:17:56 AM

Quote from: karlhenning on June 12, 2013, 06:16:09 AMThe folks (of either extreme end of the spectrum) who chortle over how Obama is "just the same" as Dubya are forgetting one substantial difference.

And his name is Dick Cheney.

Really? That is the best you can do? Dick Cheney? That's a diversion from the core issues that have arisen with the NSA "revelations." Obama has not rolled back surveillance that started decades ago and expanded under Bush II. Obama has at least continued, and probably expanded it. In addition, he has also vigorously prosecuted people under the Espionage Act - more so than Bush II, or anyone else - and made sure the press is squeezed a bit, too. He's shifted troops around and wound down one war, which was good, but he escalated a remote control war that claims innocent lives and retroactively labels some corpses combatants, and does so in countries the US is ostensibly allied with in some cases. But he has given assurances that this will change, that it will be better, that it will have judicial review. I assume that any special courts that are established will be more conscientious than the FISA courts. Oh, yes, and this man of peace, with the Prize to show for it, and the man who has declared his dream of seeing a nuclear-free world, decided that nukes in Europe should get an $11 billion upgrade.

Obama, like all politicians, is a hypocrite, sure, but it is both a tad unnerving and simultaneously predictably humorous to see so many so called liberals or Progressives, here and elsewhere, either remain silent or actually defend Obama's actions on so many fronts. The man who campaigned on change is really more of the same. Not that he ever was or ever could be much more. But he's got the right letter (ie, 'D') after his name. He can be trusted with protecting the First and Fourth Amendment. He took an oath to do so, after all.

On the upside, the recent spate of scandals has weakened Obama politically, and I'm guessing he will start to lose support even among some Democrats, thus moving up the inevitable lame duck status from November 2014 to, hopefully, this summer.

Title: Re: Meltdown
Post by: Karl Henning on June 12, 2013, 07:22:37 AM

Quote from: Todd on June 12, 2013, 07:17:56 AM
Really? That is the best you can do? Dick Cheney?

Dude, you're assailing a side-bar as if it were the core thesis.

Your points well taken.

Title: Re: Meltdown
Post by: Todd on June 12, 2013, 07:27:50 AM

Quote from: karlhenning on June 12, 2013, 07:22:37 AMDude, you're assailing a side-bar as if it were the core thesis.

But it is essential to do so. Bringing up the name Cheney is much like saying Bush did it first. Yes, Bush did some of these things first, and Cheney is not a very nice man. Barack Obama has been President since January 2009. It is June 2013. Time to change the targets, I would think.

Title: Re: Meltdown
Post by: Karl Henning on June 12, 2013, 07:31:29 AM

Quote from: Todd on June 12, 2013, 07:27:50 AM
But it is essential to do so. Bringing up the name Cheney is much like saying Bush did it first.

I should agree with you, if my point had been Obama is blameless, because Bush was in part the creature of Dick Cheney.

I am not. Although, in such a thread, I understand your reading the post in that light.

Title: Re: Meltdown
Post by: Florestan on June 12, 2013, 07:35:42 AM

Quote from: Todd on June 10, 2013, 12:01:57 PM
The very nature of a Republic, such as the US, means the people don't directly rule.

That people don't directly rule, is one thing; that the oligarchy that actually rules is just a self-serving gang which under the pretext of being "elected" as "representatives of the people" and as such "invested" with "expressing and exercising sovereignty" do everything they wish, without the people and even against the people but "in the name of the people" is quite another thing. Maybe USA are not yet there, but Romania is.

Quote
I'm more concerned about continuing Constitutional encroachments.

I have always wondered at the almost mystical reverence you Americans have for a piece of paper. The mere fact that continuing constitutional encroachments exist and are a cause of concern is proof that the constitution is not worth more than the paper is printed on. ;D

Quote
I place faith in the self-serving nature of elected politicians. If enough people get antsy and complain, or, more important, if enough special interest groups start griping, I think politicians will force through some kind of change.

Could you please name one single politician who has changed as a result of people getting antsy and complaining?

Title: Re: Meltdown
Post by: Todd on June 12, 2013, 07:42:03 AM

Quote from: karlhenning on June 12, 2013, 07:31:29 AMI should agree with you, if my point had been Obama is blameless, because Bush was in part the creature of Dick Cheney.

I thought the point was a humorous diversion. Bring up Darth Cheney and compare him to Foot In Mouth Biden. Things have gotten better. It's still a diversion.

Quote from: Florestan on June 12, 2013, 07:35:42 AMI have always wondered at the almost mystical reverence you Americans have for a piece of paper. The mere fact that continuing constitutional encroachments exist and are a cause of concern is proof that the constitution is not worth more than the paper is printed on.

Your second sentence really doesn't make any sense, to be honest. The Constitution establishes governing principles and limits, but it does not change the nature of power-hungry politicians. Some people will want to curtail certain rights. Other must and often will push back. Having a set of defined principles and limits is a most useful baseline for governance.

Quote from: Florestan on June 12, 2013, 07:35:42 AMCould you please name one single politician who has changed as a result of people getting antsy and complaining?

Obama's "emergency" contraception policy is a timely example

Title: Re: Meltdown
Post by: Florestan on June 12, 2013, 08:26:50 AM

Quote from: Todd on June 12, 2013, 07:42:03 AM
The Constitution establishes governing principles and limits,

Principles that have been broken and limits that have been trespassed long time ago. I would say that the Constitution rather enumerates than establishes, because in matters political the only thing that can establish (ie, secure) anything is people's firm faith in that something and their determination to defend it and rather perish in so doing rather than acquiescing to its subversion.

Quote
but it does not change the nature of power-hungry politicians.

Power-hungry politicians is a pleonasm. There is no other species of politicians, never was, never will be, because politics means exactly that: exercising power over other people.

QuoteHaving a set of defined principles and limits is a most useful baseline for governance.

Perhaps, with the caveat that, as change is the only constant in history, principles and limits that were reasonable and feasible in a certain era might not be so anymore at a later time (eg, a popular militia would have been reasonable and feasible in the small, autarkic, agrarian states of which the USA were originally composed of, but it would be utterly unreasonable and downright impracticable in the industrial, internationally-entangled colossus which they have become). Besides, the principles and limits can be, and in many cases are, not the result of any social consensus based on the organic evolution of the society but rather an ex nihilo creation, the work of some philosophers and politicians who thought that governmental affairs should be arranged according to their prefabricated schemes (eg, the constitution of the theocratic Republic of Geneva during Calvin and much later after his death). In the first case, there is no reason to preserve, and cling to, old schemes which obviously do not match the new situation; in the second case, there is no reason to preserve, and cling to, old schemes that are nothing but instruments of tyranny.

In any case --- and this is my main point by which I stand --- no written constitution has ever been, is or will ever be able to preserve the state of things which was the result of its application for the first time, unless a critical mass of the people have such firm in its value that they are willing to defend it at any cost, any time the slightest encroachment manifest itself. In what proportion this apply to the US constitution I leave it to you as an exercise to assess.

Quote
Obama's "emergency" contraception policy is a timely example

A tactical retreat means no defeat.

Title: Re: Meltdown
Post by: Todd on June 12, 2013, 08:56:59 AM

Quote from: Florestan on June 12, 2013, 08:26:50 AMI would say that the Constitution rather enumerates than establishes

It does both.

Quote from: Florestan on June 12, 2013, 08:26:50 AMPerhaps, with the caveat that, as change is the only constant in history

A platitude, but a nice one.

Quote from: Florestan on June 12, 2013, 08:26:50 AMIn any case --- and this is my main point by which I stand --- no written constitution has ever been, is or will ever be able to preserve the state of things which was the result of its application for the first time, unless a critical mass of the people have such firm [belief ?] in its value that they are willing to defend it at any cost, any time the slightest encroachment manifest itself. In what proportion this apply to the US constitution I leave it to you as an exercise to assess.

The US Constitution is not designed to preserve the state of things as they were in 1787. It allows for amendment, and governmental structure allows for judicial review. The Constitution has changed since it was drafted, though too slowly for some, and too much for others. Part of the beauty of the document is its brief, somewhat vague nature; it is not an EU-style monstrosity that incorporates policy. Whether a "critical mass" (a phrase that really should remain limited to nuclear physics) of the population is willing to defend it at any cost - by which I assume you mean the melodramatic To The Death - may not be as important as you state. The right to peaceably assemble and form political organizations to fight for interests can be quite effective at preserving liberties.

Quote from: Florestan on June 12, 2013, 08:26:50 AMA tactical retreat means no defeat.

Tactical retreat or not, it is one of numerous examples of politicians changing their stance on issues due to pressure and/or political calculation. I'm less concerned about purity of motivation (ie, do politicians believe in what they say) than the fact that they flip-flop, but then I'm not totalitarian.

Title: Re: Meltdown
Post by: Florestan on June 12, 2013, 09:22:23 AM

Quote from: Todd on June 12, 2013, 08:56:59 AM
Part of the beauty of the document is its brief, somewhat vague nature; it is not an EU-style monstrosity that incorporates policy.

I agree that EU constitution is a monstrosity and is actually a prime example of what I said about principles being created ex nihilo by politicians and bureaucrats in complete disregard of concrete, historical tradition.

QuoteThe right to peaceably assemble and form political organizations to fight for interests can be quite effective at preserving liberties.

I grant you that in almost 250 years of existence the USA have not known one single dictatorship, but only time will tell if the constitution really has a built-in safeguard or the time was just too short. :)

Quote
I'm less concerned about purity of motivation (ie, do politicians believe in what they say) than the fact that they flip-flop, but then I'm not totalitarian.

I don't get it. Asking politicians to be honest and principled amounts to totalitarianism? :o

Title: Re: Meltdown
Post by: Todd on June 12, 2013, 09:39:47 AM

Quote from: Florestan on June 12, 2013, 09:22:23 AMI don't get it. Asking politicians to be honest and principled amounts to totalitarianism?

Asking a politician to be honest and principled is an exercise in futility.

My mention of totalitarianism has to do with purity of motivation. It is quite common to hear and read lamentations about how this or that politician doesn't really believe what he or she is saying or doing. I'm interested in outcomes more than motivations. Better to have a calculating, soulless schemer who does the right thing for the wrong reasons than a well-intentioned do-gooder who does the wrong thing for the right reasons, if you will. Demanding that someone believe in what they are doing amounts to a latent form of thought policing; ie, it smacks of totalitarian tendencies. (Yes, I know, this is different from the actual imposition of totalitarian rule.)

Title: Re: Meltdown
Post by: Florestan on June 12, 2013, 10:27:00 AM

Quote from: Todd on June 12, 2013, 09:39:47 AM
Asking a politician to be honest and principled is an exercise in futility.

Precisely. What do we need them for, then? Why do we need dishonest and unprincipled men to regulate our life? ;D

QuoteBetter to have a calculating, soulless schemer who does the right thing for the wrong reasons than a well-intentioned do-gooder who does the wrong thing for the right reasons, if you will.

A platitude, but a nice one.

The problem is that we actually have are both calculating, soulless schemers and well-intentioned do-gooders, and all of them do the wrong thing for the wrong reasons. A list illustrating both categories would look like a Who's Who in Politics. ;D

Title: Re: Meltdown
Post by: Todd on June 12, 2013, 10:34:30 AM

Quote from: Florestan on June 12, 2013, 10:27:00 AMPrecisely. What do we need them for, then? Why do we need dishonest and unprincipled men to regulate our life?

People want social goods and services, but don't want to or cannot or should not participate in allocating resources. Politicians step in. They need restraints. That's why constitutions are good.

Title: Re: Meltdown
Post by: Florestan on June 12, 2013, 10:59:07 AM

Quote from: Todd on June 12, 2013, 10:34:30 AM
People want social goods and services, but don't want to or cannot or should not participate in allocating resources.

That's what politicians want us to believe in order to justify their otherwise unjustifiable existence. ;D

"No taxation without representation", the very principle of the American War of Independence, shows clearly that people want, can and should participate in allocating resources. That's actually the natural function of the society, which has been confiscated by the State, ie by politicians.

Quote
Politicians step in. They need restraints. That's why constitutions are good.

They are good as long as they are respected, which doesn't happen for a very long time. Pray tell, what article in the US constitution or what subsequent amendment allows for a federal standing army? What article in the US constitution or what subsequent amendment can be cited as supporting Patriot Act? What article in the US constitution or what subsequent amendment empowers the USA government to send the army to invade or bomb a country which has never threatened them (Iraq, Serbia)? ;D

Title: Re: Meltdown
Post by: Todd on June 12, 2013, 12:13:18 PM

Quote from: Florestan on June 12, 2013, 10:59:07 AM"No taxation without representation", the very principle of the American War of Independence, shows clearly that people want, can and should participate in allocating resources.

Taxation was one issue over which the war was fought, yes, but the "people" you refer to included only a subset of the population. The US revolt was not really a mass uprising.

Quote from: Florestan on June 12, 2013, 10:59:07 AMPray tell, what article in the US constitution or what subsequent amendment allows for a federal standing army? What article in the US constitution or what subsequent amendment can be cited as supporting Patriot Act? What article in the US constitution or what subsequent amendment empowers the USA government to send the army to invade or bomb a country which has never threatened them (Iraq, Serbia)?

Article I, Section 8, Clauses 11-13 assign to Congress the power to establish and maintain an army and a navy, and to declare war. Article II, Section 2, Clause 1 assigns the duty of Commander-in-Chief to the President; it is the primary duty of the office. The clause also differentiates between the army and navy, and the militia. The founders very clearly understood what they were doing when writing these clauses. That's why some of your questions are disingenuous. The debate about the existence of a standing army, and how large it should be, has been going on since Washington's time, but the power to establish the military plainly exists. War powers have been debated since at least 1803. More recently, Congress authorized the use force in Iraq twice, and Afghanistan once. Though not technically a declaration of war, most Constitutional scholars seem to agree that congressional authorization passes muster. In the case of Serbia, Clinton did not obtain congressional approval within 60 days of hostilities beginning, and didn't wind down in 30 days thereafter, so in some ways one can look at his war as illegal under US law, and indeed, there are some people who still want to prosecute him for it. (Ain't gonna happen.) Obama's intervention in Libya operated in something of a gray area, though I would maintain that it was warfare and subject to the WPR. The ongoing drone strikes also pose some thorny questions.

As to the Patriot Act, and the older FISA, they are now receiving more scrutiny and will likely be changed in some fashion. Other questionable laws have come and gone, and some are still on the books but often dormant and/or enforced for specific political reasons - eg, the Espionage Act, of which Obama is quite fond. These are indeed troubling laws, but finally it looks like some groups are starting to apply pressure and take legal action that will force some more public disclosure and debate, and I dare say there will be some changes, though perhaps (probably) not enough.

You seem to be confusing respect for a constitution with unfailing adherence to it. While such a scenario would be lovely, it will never happen. Far more important in the real world is that challenges can be mounted to existing laws.

Title: Re: Meltdown
Post by: ibanezmonster on June 12, 2013, 04:09:21 PM

Quote from: Florestan on June 12, 2013, 10:59:07 AM
That's what politicians want us to believe in order to justify their otherwise unjustifiable existence. ;D

"No taxation without representation", the very principle of the American War of Independence, shows clearly that people want, can and should participate in allocating resources. That's actually the natural function of the society, which has been confiscated by the State, ie by politicians.

Are you inferring an anarchist state would work? ???
For one, no one is going to invest in things like roads, which have no return in investment and require maintenance. Or should every road be a toll road?

Title: Re: Meltdown
Post by: snyprrr on June 12, 2013, 06:45:57 PM

I think our senators are in for life here (don't ask).

But hey, is there any more corrupt politics than DC? I mean oy vey indeed!!!

What is the single Most Liberal State?

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 01:22:52 AM

Quote from: Greg on June 12, 2013, 04:09:21 PM
Are you inferring an anarchist state would work? ???

No, but a state without professional politicians and political parties would.

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 01:26:28 AM

Quote from: Todd on June 12, 2013, 12:13:18 PM
Article I, Section 8, Clauses 11-13 assign to Congress the power to establish and maintain an army and a navy, and to declare war. Article II, Section 2, Clause 1 assigns the duty of Commander-in-Chief to the President; it is the primary duty of the office. [...]

Thank you for the detailed answer.

Title: Re: Meltdown
Post by: ibanezmonster on June 13, 2013, 07:22:13 AM

Quote from: Florestan on June 13, 2013, 01:22:52 AM
No, but a state without professional politicians and political parties would.

And this is where you lead to monarchy?

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 07:39:25 AM

Quote from: Greg on June 13, 2013, 07:22:13 AM
And this is where you lead to monarchy?

Not at all. Monarchy or republic, the choice is to be dictated by the history and traditions of each particular country. There is no political regime universally valid anywhere and everywhere. I advocate monarchy for my own country based on its history and organic evolution, yet I am fully aware that in other countries the republic is also the result of their history and organic evolution. Suum cuique.. I am sure that, had I been born in the US I'd have been a staunch republican. But I am Romanian and therefore a staunch monarchist.

Title: Re: Meltdown
Post by: Parsifal on June 13, 2013, 07:44:18 AM

Quote from: Florestan on June 13, 2013, 07:39:25 AM
Not at all. Monarchy or republic, the choice is to be dictated by the history and traditions of each particular country. There is no political regime universally valid anywhere and everywhere. I advocate monarchy for my own country based on its history and organic evolution, yet I am fully aware that in other countries the republic is also the result of their history and organic evolution. Suum cuique.. I am sure that, had I been born in the US I'd have been a staunch republican. But I am Romanian and therefore a staunch monarchist.

You want Ceaușescu back, yes?

Title: Re: Meltdown
Post by: ibanezmonster on June 13, 2013, 07:48:54 AM

Quote from: Florestan on June 13, 2013, 07:39:25 AM
Not at all. Monarchy or republic, the choice is to be dictated by the history and traditions of each particular country. There is no political regime universally valid anywhere and everywhere. I advocate monarchy for my own country based on its history and organic evolution, yet I am fully aware that in other countries the republic is also the result of their history and organic evolution. Suum cuique.. I am sure that, had I been born in the US I'd have been a staunch republican. But I am Romanian and therefore a staunch monarchist.

Okay, that makes sense, but I'm still confused about how *privatizing everything would be a good idea, which seems to be what you were implying. I wouldn't even be able to afford to drive to work if all roads were privatized. If there were no financial aid for school, I would be probably $50,000 in debt right now halfway through (but I wouldn't be able to afford to drive to school, either, so it wouldn't matter).

I won't go on, but am just pointing at part of the problem...

*spelled this with a British 's' at first... too much reading online, maybe? :P

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 08:12:34 AM

Quote from: Parsifal on June 13, 2013, 07:44:18 AM
You want Ceaușescu back, yes?

God forbid!!!

You seem to confuse "monarchy" with "dictatorship" and even "totalitarianism".

Title: Re: Meltdown
Post by: Parsifal on June 13, 2013, 08:32:06 AM

Quote from: Florestan on June 13, 2013, 08:12:34 AM
God forbid!!!

You seem to confuse "monarchy" with "dictatorship" and even "totalitarianism".

You seem to confuse modern monarchy, where the monarch's job is the cut ribbons at the opening ceremonies for new kindergardens, with monarchy in the days when the monarch had actual power. In those days the monarch was the person who cut the previous monarch's head off. If you had your monarchy Ceaușescu would be king.

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 08:33:38 AM

Quote from: Greg on June 13, 2013, 07:48:54 AM
I'm still confused about how *privatizing everything would be a good idea, which seems to be what you were implying.

I'm implying nothing of the sort. What I am implying is that the government should intervene and act only if and when the society itself cannot or will not intervene and act; by society I mean families, local communities, churches, professional associations, mutual-aid societies, cooperatives etc, etc, etc.

Quote
I wouldn't even be able to afford to drive to work if all roads were privatized. If there were no financial aid for school, I would be probably $50,000 in debt right now halfway through (but I wouldn't be able to afford to drive to school, either, so it wouldn't matter).

I won't go on, but am just pointing at part of the problem...

Look, I am not a libertarian. I don't think the state is inherently evil (nor do I think it is necessary good). The State is a mere tool; it can serve, assist and protect society (in which case it gets my full approval) or it can usurp its functions and absorb them altogether in its machinery (in which case I am oppose to it). Now, to build and maintain a national network of roads available to each and every person is, IMO, a necessary, reasonable and feasible task of the State, either directly or indirectly (for instance, in Germany and Austria the highways are state-owned and operated and as such free --- actually, not free at all since their price is included in the taxes, while the highways in France and Italy are privately owned and operated and you have to pay a toll for using them --- yet I have not heard a single Frenchman or Italian complaining about it). So rest assured that I don't want to rob you of the right to freely drive wherever you want, whenever you want. :D

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 08:37:11 AM

Quote from: Parsifal on June 13, 2013, 08:32:06 AM
In those days the monarch was the person who cut the previous monarch's head off.

I really wonder where you learned history. Was it in a public school?

Quote
If you had your monarchy Ceaușescu would be king.

It's obvious you know nothing about Ceausescu apart his name, let alone the history of Romania.

Title: Re: Meltdown
Post by: Parsifal on June 13, 2013, 08:43:00 AM

Quote from: Florestan on June 13, 2013, 08:37:11 AM
I really wonder where you learned history. Was it in a public school?

In the National Gallery?

(http://upload.wikimedia.org/wikipedia/commons/thumb/c/cb/PAUL_DELAROCHE_-_Ejecuci%C3%B3n_de_Lady_Jane_Grey_%28National_Gallery_de_Londres%2C_1834%29.jpg/718px-PAUL_DELAROCHE_-_Ejecuci%C3%B3n_de_Lady_Jane_Grey_%28National_Gallery_de_Londres%2C_1834%29.jpg)

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 08:48:59 AM

Is that the execution of Mary Stuart?

Please show me something similar in the history of France, Spain, The Holy Roman Empire,The Austrian Empire, Prussia, Denmark, Norway, Sweden, Belgium, The Netherlands, Luxembourg, Liechtenstein, Monaco and Romania.

Title: Re: Meltdown
Post by: Parsifal on June 13, 2013, 10:35:13 AM

Quote from: Florestan on June 13, 2013, 08:48:59 AM
Is that the execution of Mary Stuart?

Nope, Lady Jane Grey, another British queen. Richard III also comes to mind, who murdered his two nephews to secure the throne. The Tudor reign was facilitated by Richard III's head being smashed in at Bosworth.

Quote
Please show me something similar in the history of France, Spain, The Holy Roman Empire,The Austrian Empire, Prussia, Denmark, Norway, Sweden, Belgium, The Netherlands, Luxembourg, Liechtenstein, Monaco and Romania.

I freely admit I don't know much, if anything, about Monarchies in those counties. I see no reason to believe they would be any more civilized than that in England. I did open the Wikipedia page for the Spanish Monarchy. I didn't get past the first paragraph before learning the King Henry II of Spain attained the thrown by murdering his half-brother, King Peter in 1639.

Of course, I'm sure there have been many beneficent rulers, such as Ivan Grozny.

(http://www.russianartgallery.org/famous/images/repin_ivan_grozny.jpg)

I'll take your word for it that Monarchy is the best Romania can hope for.

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 10:38:00 AM

Quote from: Parsifal on June 13, 2013, 10:35:13 AM
I freely admit I don't know much, if anything, about Monarchies in those counties.

Thank you.

Quote
I'll take your word for it that Monarchy is the best Romania can hope for.

Don't take my word for anything. Do your own research and come up with your own conclusions.

Title: Re: Meltdown
Post by: Parsifal on June 13, 2013, 10:40:38 AM

Quote from: Florestan on June 13, 2013, 10:38:00 AM
Thank you.

Take one phrase out of my reply and quote it out of context. You'd be a natural as a politician. ;D

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 10:47:50 AM

Quote from: Parsifal on June 13, 2013, 10:40:38 AM
Take one phrase out of my reply and quote it out of context.

By your own admittance you know next to nothing about Romanian history, yet you a priori dismiss the Romanian monarchy. Does it seem to you a reasonable and rational stance?

Title: Re: Meltdown
Post by: Parsifal on June 13, 2013, 11:41:46 AM

Quote from: Florestan on June 13, 2013, 10:47:50 AM
By your own admittance you know next to nothing about Romanian history, yet you a priori dismiss the Romanian monarchy. Does it seem to you a reasonable and rational stance?

I have to admit, in 12 years of public education and in my undergraduate University studies Romainia was probably never mentioned. However, I am not entirely ignorant of history and for every country with whose history I am familiar reversion to Monarchy would be absurd. Perhaps in Romania monarchy is the only viable form of government. Then I would have to accept that Romania is unlike any other country in Europe.

Title: Re: Meltdown
Post by: Florestan on June 13, 2013, 11:58:32 AM

Quote from: Parsifal on June 13, 2013, 11:41:46 AM
I have to admit, in 12 years of public education and in my undergraduate University studies Romainia was probably never mentioned. However, I am not entirely ignorant of history and for every country with whose history I am familiar reversion to Monarchy would be absurd.

Spain reverted to Monarchy after Franco's death and the Monarchy was the main safeguard of the democratic transition.

Quote
Perhaps in Romania monarchy is the only viable form of government. Then I would have to accept that Romania is unlike any other country in Europe.

What European country are you familiar with, if I may ask? I'm talking not so much about politics, as about religion, history, customs, traditions and mentalities.

Title: Re: Meltdown
Post by: ibanezmonster on June 13, 2013, 07:27:56 PM

Quote from: Florestan on June 13, 2013, 08:33:38 AM
I'm implying nothing of the sort. What I am implying is that the government should intervene and act only if and when the society itself cannot or will not intervene and act; by society I mean families, local communities, churches, professional associations, mutual-aid societies, cooperatives etc, etc, etc.

Cool. My bad, man. I saw that after I wrote something similar, you agreed, so what you wrote had me a bit confused. I think we are pretty much on the same page, or at least in the same neighborhood. :)

Title: Re: Meltdown
Post by: Florestan on June 14, 2013, 12:20:38 AM

Quote from: Greg on June 13, 2013, 07:27:56 PM
I think we are pretty much on the same page, or at least in the same neighborhood. :)

Yes, so it seems. :)

Title: Re: Meltdown
Post by: Brian on June 24, 2013, 05:03:02 PM

Saw today that the IRS also did targeted searches for "progressive" and "Occupy", along with the previously-disclosed searches for Tea Party keywords. Hooray for bipartisan outrage! (Or boredom.)

Title: Re: Meltdown
Post by: Todd on June 24, 2013, 05:43:49 PM

Quote from: Brian on June 24, 2013, 05:03:02 PMSaw today that the IRS also did targeted searches for "progressive" and "Occupy", along with the previously-disclosed searches for Tea Party keywords. Hooray for bipartisan outrage! (Or boredom.)

The press may just be too scared to pursue such stories too vigorously, lest the Obama Administration engage in more intimidation tactics.

Title: Re: Meltdown
Post by: snyprrr on October 21, 2013, 10:54:00 AM

Yea, well I'm now officially homesless AND unemployed. :( So why am I at the library acting like I have the luxury of posting on a forum?

But, yea, no meltdown happening anywhere else, just here. Yea, oh boy am I looking forward to the coming years, yay!

Is everyone loving obamacare yet?? Apparently it's not 'Meltdown' worthy.

Frankly, I'm in my 'Why don't you all just go and die' moods lately... like... all the time now. ~~Seriously, don't flipping teach me to fish- just give me a flippin fish already.~~ I'm sorry, just bitter.

Is there ONE person on the forum who is as poor and miserable as this one here?? Anyone I can relate to?? Do you know what it's like to even KNOW what classical music is and to live like a street bum??? I mean, it's ridiculous.

Seriously, I have never had esteen issues or wanted to 'hurt' myself or anything, but I can see how, logically, one might want to just leave this planet. I can't. I HAVE to wake up everyday. If I knew I was never going to have sex again, well, I tell ya, ..... aye aye aye

Remember, in my book George Bush is a Liberal. So, you can see my problem with people in general. I mean, just listen to how simpering Jeb Bush sounds- he's just a total globalist loser no different than Schumer or anyone. You people who believe this hegelian Dialectic - I don't even know if you're human - golems all!!!!

FFFFFFFFFFFFFFFUUUUUUUUUUUUUUUUUUU........

1) They made cars you can't work on.

2) They put soy an' shit in all your food.

3) They printed free money for the banks so they could buy your mortgage with the same free money they didn't give you.

3) Now you haaaave to buy insurance or you're a crimminal in your own country.

4) Limbaugh leaves facts out just like Maher leaves out facts. Everyone's a liberal.

5) If you're not a liberal, you're a war mongering israeli-firster (HOW MANY countries has Iran invaded since 1979???). Again, how many congress people have dual citizenship with palest-I mean israel???

6) If I hear anyone else say "Just get a..." I'm going to scream, you old economy Steven (look up the 'Old Economy Steven' meme). Yea, I remember when I could quit one job and get another one on the way home,... yea, that was called the '80s!!!!!!!!!!!!!!!

7) EVERYTHING has soy in it. Chocolate-wtf?????????? banana chips, tuna fish (you know you know)

8) Food is flipping expensive. Have you ever tried buying a salad piecemeal???

I'm practically praying for a massive heart attack or something. I hate this planet.

Oh uh, it looks like library security is coming.......

Title: Re: Meltdown
Post by: Parsifal on October 21, 2013, 11:00:19 AM

How did you end up homeless? From your previous contribution I was under the impression you were living with relatives

Title: Re: Meltdown
Post by: Karl Henning on October 21, 2013, 11:05:28 AM

Quote from: snyprrr on October 21, 2013, 10:54:00 AM
. . . Have you ever tried buying a salad piecemeal???

Well, a head of Boston red lettuce isn't all that pricey.

The salad I make most often is diced cucumber, diced tomato (needn't be the costliest), diced red onion (all right, it's a lot of dicing, but you've got some time, right?), olive oil, apple cider vinegar. It's a dish whose expense doesn't flip all that much, I think . . . .

Title: Re: Meltdown
Post by: Karl Henning on October 21, 2013, 11:06:56 AM

You're in the library? Don't eat the books, snypsss! Put 'em down!

Title: Re: Meltdown
Post by: Brian on October 21, 2013, 12:01:56 PM

snyprrr, I posted for several years on GMG while working as a cashier at a Walmart. One of our other forum members has experience at Walmart, too. It's not the easy life, but it's a job, and just about anybody can do something at a store like that. Or try Costco, the pay's about double.

I don't know what your skills are, who you are, what jobs you've worked, but there's something for you out there. And I don't mean black helicopters! But they're waiting for you too

Title: Re: Meltdown
Post by: ibanezmonster on October 21, 2013, 07:13:50 PM

Costco would be much more ideal. You can actually live off what they pay you without relying on guh'ermeyn' welfare...

Title: Re: Meltdown
Post by: Daverz on October 22, 2013, 04:27:01 AM

Quote from: snyprrr on October 21, 2013, 10:54:00 AM
Yea, well I'm now officially homesless AND unemployed. :( So why am I at the library acting like I have the luxury of posting on a forum?

I'm really saddened to hear this. I hope you can find decent shelter soon.

Title: Re: Meltdown
Post by: Karl Henning on October 22, 2013, 04:29:54 AM

I'm not so sad to hear that he is in the library. (j/k)

Hope you have good news soon, O snypsss.

Title: Re: Meltdown
Post by: The new erato on October 22, 2013, 05:33:46 AM

Quote from: Daverz on October 22, 2013, 04:27:01 AM
I'm really saddened to hear this. I hope you can find decent shelter soon.

Me too. Best of luck.

Title: Re: Meltdown
Post by: milk on October 22, 2013, 05:51:10 AM

I also feel bad to hear of your hard times.

Title: Re: Meltdown
Post by: North Star on October 22, 2013, 05:56:53 AM

Good luck, snyprrrr! Meanwhile, enjoy the library!

Title: Re: Meltdown
Post by: The new erato on October 22, 2013, 06:17:34 AM

Quote from: North Star on October 22, 2013, 05:56:53 AM
Good luck, snyprrrr! Meanwhile, enjoy the library!

However beware of Conan the Librarian.

(http://tenaanval.files.wordpress.com/2011/10/conanthelibrarian.jpg)

Title: Re: Meltdown
Post by: snyprrr on October 22, 2013, 08:23:36 AM

Quote from: Scarpia on October 21, 2013, 11:00:19 AM
How did you end up homeless? From your previous contribution I was under the impression you were living with relatives

bingo!!!

Quote from: Brian on October 21, 2013, 12:01:56 PM
snyprrr, I posted for several years on GMG while working as a cashier at a Walmart. One of our other forum members has experience at Walmart, too. It's not the easy life, but it's a job, and just about anybody can do something at a store like that. Or try Costco, the pay's about double.

I don't know what your skills are, who you are, what jobs you've worked, but there's something for you out there. And I don't mean black helicopters! But they're waiting for you too

I turned down the gorilla mask job at the local haunted house, but now I wish I would have stayed. See, I haven't been making very good decisions. And then the carwash lady would have given me a job, but I was honest and said I would be looking for other work whilst there, and of course she wanted someone who would stay (I'm holding out, but if it comes to it, I'll approach her again).

I haaave been applying at the big grocery stores and this and that. Apparently, the fried fish shack is always hiring... and I was looking into another old restaurant.

PEOPLE- I spent my whole life being 'cool', and wake up a bum- fuuuu, I have a Mass Comm degree- from BEFORE the tech boom- I don't know shiiiiiiiiit about this new world, and frankly feel like someone in a Pekinpah oldtimer-can't-keep-up-with-the-new-times, and who wants to, anyway? ugh

Fuuuu... I almost wish I never picked up a guitar, or wrote, or drew, or came up with ideas.... but that's the part of me that keeps me from being in the news badly. God, I was lied to in school... ugh, no one could tell me anything when I was a young stud.

YOU COULD QUIT YOUR JOB AND HAVE A CHOICE OF THREE ON THE WAY HOME.

No wonder i took life like a breeze. And this went on until 2008. For the last five years, since I lost my job in 2008, it just seems like if-Kubrick-directed-Soylent-Green. No?

SHOULD JP MORGAN BE PUNISHED FOR BEAR STEARNS?

Anyhow, I digest... I mean, I digress...

I live in a state that promotes a fear of success (not telling). I just applied for food stamps. I stopped by unemployment to just talk to someone, and I left there really wondering statistically how many people succeed through their program.

I mean, I am ONLY 'disabled' in that I live in a world gone mad for welfare, where standing up for your success is punished. My friend has a business, and his health plan just got cancelled. It's not me I kvetch about- there are others more noble than me who are suffering surely much worse than me.

My other friend, after a year and a half after being IT laid-off, got a job contracting for the state (and he says their effeciancy is NOT, but if you fix their problems- YOU MAKE THE SLACKERS LOOK BAD- which means their boss looks bad, which means you're on the shit list.
aaaaaaaaaaaaaaaaaaaaaaaaaahhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh

WHO IS THE MOST RUGGED INDIVIDUALIST ON GMG?

People say, "No one will give you anything." But, ultimately, someone has to GIVE you a job, or what not.

People say, "JUST get a job and move out." I live in defence-contractor/real-estate/gubmint HEAVEN, so it's expensive here. You need $12.50/40hrs. JUST TO MAKE BANK. Rent here is astronomical and will only go higher. My old roomie has $1300 a month, and that's the best you're going to get around here (it was about $900 before 2008).

Well, I have to go apply at Guitar Bazaar. :P

Title: Re: Meltdown
Post by: snyprrr on October 22, 2013, 08:25:10 AM

Oh, and thanks to everyone for what appears to be sincere concern. I am touched guys. :'( ;) 8)

Title: Re: Meltdown
Post by: Karl Henning on October 22, 2013, 08:35:49 AM

Maybe they need help at the soy lecithin processing facility....

Title: Re: Meltdown
Post by: Todd on October 22, 2013, 09:03:07 AM

What's all this griping about a meltdown? Times are flush. (http://www.theguardian.com/business/2013/oct/22/top-earning-ceos-100m-paychecks-record)

(The SEC, which is in no way a paper tiger, has come up with a real solid plan for those who think top dogs get too many bones. (http://www.reuters.com/article/2013/09/18/us-usa-sec-ceopay-munis-idUSBRE98H0EX20130918))

Title: Re: Meltdown
Post by: Parsifal on October 22, 2013, 10:30:55 AM

Quote from: snyprrr on October 22, 2013, 08:23:36 AM...Fuuuu... I almost wish I never picked up a guitar, or wrote, or drew, or came up with ideas.... but that's the part of me that keeps me from being in the news badly....

The notion that being creative somehow exempts you from the need to do something to put food on the table seems to be a sticking point. Even in the good old days, artists had to make provision to feed and shelter themselves before doing their "art." That's not Barack Obama's doing.

Now that you've lost your grip on the middle class existance and slid to the bottom of the economic heirarchy you will have to learn from those who find themselves in similar economic difficulties, many of which are Latin American immigrants. You have advantages over many of them, you are documented, speak read and write English (after a fashion). They have one big advantage over you. They know how to work, really work. And they don't consider anything that will put food on the table and a roof over their heads to be beneath their dignity. You will have to learn that.

Title: Re: Meltdown
Post by: Octave on October 22, 2013, 10:13:37 PM

snyprrr, I hope things shape up soon. Courage!

Title: Re: Meltdown
Post by: snyprrr on October 24, 2013, 07:27:54 AM

Quote from: Scarpia on October 22, 2013, 10:30:55 AM
The notion that being creative somehow exempts you from the need to do something to put food on the table seems to be a sticking point. Even in the good old days, artists had to make provision to feed and shelter themselves before doing their "art." That's not Barack Obama's doing.

Now that you've lost your grip on the middle class existance and slid to the bottom of the economic heirarchy you will have to learn from those who find themselves in similar economic difficulties, many of which are Latin American immigrants. You have advantages over many of them, you are documented, speak read and write English (after a fashion). They have one big advantage over you. They know how to work, really work. And they don't consider anything that will put food on the table and a roof over their heads to be beneath their dignity. You will have to learn that.

I was raised by nannies. Cut me some slack! :laugh:

Seriously, though, I realize that being brought up a spoiled bratm doesn't help me break my back. The fact is is that at any given job I've ever taken, I always rise to the top because of my exceptional abilities, but then when the time comes for them to put their money where their mouth is ("Oh, you're doing suuuch a great job"), I end up getting f'd by the same people who lauded me. So, then, naturally, I shrink...

Anyway, I certainly don't like being compared to messicans. I'm not catholic, don't breed like a rabbit, and don't invade other peoples' sovern nation.

I haaave learned that I certainly can't speak like this without due reproof. WHERE IS my genetic "protestant work ethic", what happened to it? Let me make an analogy to an Alcoholics Anonymous principle: they say that you get sober so that you can be a "useful member of society" again, but, at this time, I would rather be a HINDRANCE to modren society rather than to 'progress' it. I'd rather be Robert DeNiro in 'Brazil' right now than some 'Dream Activist". WESTERN CIV IS NOW DONE, and we are beginning to head into The New Fuedalism. I'd be interested to see how many GMG'ers lose their middle-class staus in the next decade, through no fault of their own (unlike me).

Where do you get paid for whining?

At what point do YOU take "any" job? Surely you'd hold out for the full-time, well paying job for as long as possible before you'd don the uniform of the Retailnation?

So, if I believe McDonald's sells POISON, I still have to work there gladly because there are no scruples in the NewEconomy?

Does only Jaime Dimon get FREE MONEY to buy our defaulted mortgages?

I should be on the lecture circuit, haha.

Anyhow, I know I'm a pill. Just wish I could make a living being a dick! I do know how to yell at people.

And, I'll put it this way. I told the nice lady at the carwash (who would've hired me) that I would be still searching for work even if she hired me. But, she wanted someone to stay, so, what was supposed to do, fuck over this lady and find a better job in a couple of months? So, I mean, sometimes it just sounds like cutthroat to be taking any job for any reason, fucking people over at every turn just to advance yourself.

Or am I SUPPOSED to live life like a mongoose? Really, is this just the Hegelian "either Government or Industry" albatross? (hey, that almost makes a rhyme!)

I LIKE to 'work', to be of use, to astound with ability.

Here's a fear:

They make you clean the toilet, and you do such a good job that they say, 'We'll let you clean the toilets all the time because you're so good at it.' Or, you do such a bad job that they say, 'You need to keep cleaning the toilets until you do a better job.'

So, there's the catch-22 fear.

I mean, the Beatles had brian Epstein,... why don't i get my 'other half'? I have to be CreativeDirector AAAAAND BusinessDirector??????????????????

Ah, with every rant I dig a deeper GMG hole, don't I?

And I did apply at GuitarBazaar.

Title: Re: Meltdown
Post by: Karl Henning on October 24, 2013, 07:29:00 AM

Quote from: snyprrr on October 24, 2013, 07:27:54 AM
And I did apply at GuitarBazaar.

Is that the place with the gorilla outfit?

Title: Re: Meltdown
Post by: Todd on October 24, 2013, 07:39:43 AM

Quote from: snyprrr on October 24, 2013, 07:27:54 AMWESTERN CIV IS NOW DONE, and we are beginning to head into The New Fuedalism.

I believe the preferred nomenclature amongst the learned classes is Neo-Feudalism. Didn't Eric Blair point how a certain class of people like using Latin and Greek words rather than Anglo-Saxon ones to sound more learned? (A mix of the two surely must be super-learned.) Anyway, start sucking up to the appropriate prince or princeling now.

Title: Re: Meltdown
Post by: Karl Henning on October 24, 2013, 07:46:41 AM

Some of them go for a guy in a gorilla outfit.

Title: Re: Meltdown
Post by: ibanezmonster on October 24, 2013, 05:21:26 PM

Quote from: snyprrr on October 24, 2013, 07:27:54 AM
but then when the time comes for them to put their money where their mouth is ("Oh, you're doing suuuch a great job"), I end up getting f'd by the same people who lauded me. So, then, naturally, I shrink...

I know what you mean. The company I did programming work for in December 2010 initially acted like they were going to hire me if I could help them with the system. I did, it worked fine and I got paid for it. They changed their mind about needing help... I visited them a few months ago and they hadn't even added anything to the system at all (no new people, original programmer hasn't added anything), and they just said that it's been running fine, etc. I think that overall, businesses are just being as safe as possible with investments ever since, you know... 2008...

So that's why I still work at Lowe's and only get paid enough to live with my parents...

Title: Re: Meltdown
Post by: Florestan on October 25, 2013, 07:45:06 AM

snyprrrr, one comment and two questions, if I may...

The comment: as someone who's been unemployed for 4 years now, I fully sympathize with your condition and wish you the best of luck in finding a job!

The questions:

1. Did your relatives throw you off in the streets?
2. Is the USA economy that bad, as to offer only a masked-gorilla job for someone like you?

TIA for answering and once again, all the best to you!

Title: Re: Meltdown
Post by: Florestan on October 25, 2013, 07:50:22 AM

Quote from: Scarpia on October 22, 2013, 10:30:55 AM
Now that you've lost your grip on the middle class existance and slid to the bottom of the economic heirarchy you will have to learn from those who find themselves in similar economic difficulties, many of which are Latin American immigrants. You have advantages over many of them, you are documented, speak read and write English (after a fashion). They have one big advantage over you. They know how to work, really work. And they don't consider anything that will put food on the table and a roof over their heads to be beneath their dignity. You will have to learn that.

Even if the above were true --- and they certainly are ---, to put them so bluntly to poor snyprrrr whose only sin is to have pissed you off occasionally is not a mark of charity... but then again, what is to be expected from Scarpia, the worst villain in the whole operatic history? ;D :D ;D

Title: Re: Meltdown
Post by: Parsifal on October 25, 2013, 12:16:46 PM

Quote from: Florestan on October 25, 2013, 07:50:22 AM
Even if the above were true --- and they certainly are ---, to put them so bluntly to poor snyprrrr whose only sin is to have pissed you off occasionally is not a mark of charity... but then again, what is to be expected from Scarpia, the worst villain in the whole operatic history? ;D :D ;D

I assure you (and snyprrr) that I have only the best wishes for snyprrr. I did not intend to coddle him, for sure, but I am not sure coddling is what is needed now. I think blunt talk may be what is required in his current circumstances (to the extent that we know what those circumstances are).

Title: Re: Meltdown
Post by: Parsifal on October 25, 2013, 12:23:31 PM

Quote from: Greg on October 24, 2013, 05:21:26 PM
I know what you mean. The company I did programming work for in December 2010 initially acted like they were going to hire me if I could help them with the system. I did, it worked fine and I got paid for it. They changed their mind about needing help... I visited them a few months ago and they hadn't even added anything to the system at all (no new people, original programmer hasn't added anything), and they just said that it's been running fine, etc. I think that overall, businesses are just being as safe as possible with investments ever since, you know... 2008...

So that's why I still work at Lowe's and only get paid enough to live with my parents...

You can't expect your employer to take your interests into account and give you what you "deserve." They will pay you to the extent that they need you. If the programming work you did for them proved adequate for their needs it would be illogical for them to engage you to do additional unnecessary work on it.

The state of affairs in the US is that there is a labor surplus, and therefore labor is cheap and the strong middle class that characterized the 20th century in the US is evaporating.

Title: Re: Meltdown
Post by: Daverz on October 25, 2013, 01:33:40 PM

Quote from: Scarpia on October 25, 2013, 12:23:31 PM
You can't expect your employer to take your interests into account and give you what you "deserve."

I don't know how you read "deserve" into that description. He's simply describing the fecklessness I've experienced myself with many businesses.

Title: Re: Meltdown
Post by: ibanezmonster on October 25, 2013, 06:31:15 PM

Quote from: Daverz on October 25, 2013, 01:33:40 PM
I don't know how you read "deserve" into that description. He's simply describing the fecklessness I've experienced myself with many businesses.

Yeah, something like that. I mean, I could elaborate... on the very long process that it took for the programmer to even give me the source code (3 months, basically). And the fact that I had went to technical school for a year and a half and got a programming certificate, which was good enough for others to get a job, but I had graduated at a bad time, when Bachelor's apparently were getting far more in demand, or something. (No internship program in my area, either). Almost halfway through my Bachelor's now, and those credits did transfer...

But I didn't elaborate on that... because honestly I am sick of thinking about it. Not sure why I am even writing it. Can't wait for my 30's- I'll just pretend my 20's never happened. :P

Title: Re: Meltdown
Post by: Parsifal on October 26, 2013, 06:15:33 AM

I may have over-interpreted Greg's comment, but my basic point is simply that in the US the idea that labor has rights is now dismissed as socialist nonsense. Labor is a market and the economy is shrinking so there is a labor surplus. (The economy may be growing slowly in terms of goods produced, but those goods are being produced by a smaller and smaller number of people). The fraction of people with jobs is now at its lowest point since the 70's, if I recall correctly. When a commodity is in surplus its price goes down, so our labor surplus has surprised wages. When something is in surplus, you can afford to be very picky and discard anything that isn't just what you want, which explains our unemployment.

It has nothing to do with altruism of capitalists decreasing. The problem is decline in US competitiveness. In the old days things were made here because it was advantageous to make things here. Now, producing something in the US comes with a disadvantage, because people overseas work for less and are more highly skilled. It is not limited to low-skilled work. In the past 10 years, 300,000 jobs in the pharmaceutical industry have been moved from the US to Europe, India and China. Cuts to US support for scientific infrastructure and education, plus sequestration, have eviscerated US science and technology competitiveness. Expect things to get much worse in the coming generation, when the next crop of scientists comes of age in Asia and Europe instead of the US and the US becomes an economic backwater.

http://www.forbes.com/sites/matthewherper/2011/04/13/a-decade-in-drug-industry-layoffs/

Title: Re: Meltdown
Post by: milk on October 26, 2013, 07:08:31 AM

Quote from: snyprrr on October 24, 2013, 07:27:54 AM

Anyway, I certainly don't like being compared to messicans. I'm not catholic, don't breed like a rabbit, and don't invade other peoples' sovern nation.

I'm just skimming to clear this. Perhaps this is some kind of parody I missed.
Hmmm...I have to figure out how to "unsubscribe" to a thread.

Title: Re: Meltdown
Post by: Daverz on October 26, 2013, 08:03:42 AM

Quote from: milk on October 26, 2013, 07:08:31 AM
I'm just skimming to clear this. Perhaps this is some kind of parody I missed.

Soy makes people racist.

Title: Re: Meltdown
Post by: kishnevi on October 27, 2013, 05:42:31 AM

Quote from: milk on October 26, 2013, 07:08:31 AM
I'm just skimming to clear this. Perhaps this is some kind of parody I missed.
Hmmm...I have to figure out how to "unsubscribe" to a thread.

Apparently snyprrr doesn't usually post in the threads that most interest you. If so, just understand that he's one of the more interesting members of GMG, if you know what I mean.

As to the discussion between Greg and Scarpia--

There used to be (I think) an attitude among employers--that being loyal to one's employees reaped benefits, some of them intangible, such as employee loyalty to the the company, which could turn into tangible benefits (mostly along the lines of increased productivity). That's disappeared in the last couple of decades. Sometimes employers just can't afford it--for instance, providing health insurance is costly enough to bankrupt some businesses all by itself--but very often--perhaps more often--employers don't care. There used to be an "open door" policy at my place of work--meaning the manager's office was always open to any employee who had a complaint or suggestion to make. Now that policy has turned into a joke--not officially of course, but in practice, it's a case of "if you want to quit, the door is there, otherwise just shut up". As Scarpia points out, they can always hire someone else.....

Title: Re: Meltdown
Post by: milk on October 27, 2013, 07:04:27 AM

Quote from: Jeffrey Smith on October 27, 2013, 05:42:31 AM
Apparently snyprrr doesn't usually post in the threads that most interest you. If so, just understand that he's one of the more interesting members of GMG, if you know what I mean.

No, no...I really like, and have got much out of, his posts on piano trios, piano quintets, etc. I look forward to more of that.

Title: Re: Meltdown
Post by: ibanezmonster on October 27, 2013, 10:42:39 AM

Quote from: Jeffrey Smith on October 27, 2013, 05:42:31 AM
"if you want to quit, the door is there, otherwise just shut up". As Scarpia points out, they can always hire someone else.....

Pretty much what happens where I work now... something brought to my attention very much by others...

I don't mean to pick on the people I did the programming work for (they are a very small company and were nice to me), but seems they should have thought about things more before putting out a job ad...

Title: Re: Meltdown
Post by: snyprrr on November 29, 2013, 01:40:27 PM

Quote from: Octave on October 22, 2013, 10:13:37 PM
snyprrr, I hope things shape up soon. Courage!

Yes, I now have a part time minimum wage job- just to let everyone know- sooo, I don't know if that really counts as 'shaping up'? Ha! the food stamp card JUST arrived- a month later- well, looks like I'll be getting that Box Set- errr, I mean box LUNCH, box lunch- no, I mean, you don't think I'd really?... do you?? :laugh: Living conditions are acceptable for now (meaning I'm being put up with!!).

Frankly, haven't seen any discussion here about the absolutely ridiculous stuff coming out of the mouths of our masters... errr, public SERVANTS, lately. >:D

Title: Re: Meltdown
Post by: Florestan on November 30, 2013, 07:39:28 AM

At first sight I don't know if it belongs here or in the Quotes thread, but on second thought it might be of some relevance even here:

Capitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.
― John Maynard Keynes

Title: Re: Meltdown
Post by: Todd on November 30, 2013, 07:57:26 AM

Quote from: Florestan on November 30, 2013, 07:39:28 AMCapitalism is the astounding belief that the most wickedest of men will do the most wickedest of things for the greatest good of everyone.
― John Maynard Keynes

This is the same Lord Keynes who wrote and spoke: I can be influenced by what seems to me to be justice and good sense; but the class war will find me on the side of the educated bourgeoisie. Remember, he was supported directly by no less an economic personage than Alfred Marshall. Keynes was a capitalist and capitalist economist through and through, just not of the Austrian variety.

Title: Re: Meltdown
Post by: Florestan on November 30, 2013, 08:01:54 AM

Quote from: Todd on November 30, 2013, 07:57:26 AM
This is the same Lord Keynes who wrote and spoke: I can be influenced by what seems to me to be justice and good sense; but the class war will find me on the side of the educated bourgeoisie.

Wow, that's a very good one, too. Thanks for sharing! 8)

Quote
Remember, he was supported directly by no less an economic personage than Alfred Marshall. Keynes was a capitalist and capitalist economist through and through, just not of the Austrian variety.

Well, there is capitalism and capitalism. As I was posting elsewhere, "our" capitalism is at least better than "theirs". :D

Title: Re: Meltdown
Post by: snyprrr on December 09, 2013, 12:08:22 PM

WHY?, when Congress was given the power to print its own money, does it borrower from the Fed at interest and put our country in the path of certain doom? WHY???

100 years of the US Central Bank Demon- maybe it's time to call yer congressperson???

85 billion $$$ a MONTH!!!!!!!!!!!!!!!!!!!!!!!!!!

You got grandkids??? Hahahahahahahahah

And YOU let it happen!!

mm mm mm

Title: Re: Meltdown
Post by: Karl Henning on December 09, 2013, 12:08:48 PM

snyppsss is back! Now we can have Christmas!

Title: Re: Meltdown
Post by: snyprrr on December 09, 2013, 12:19:02 PM

Quote from: karlhenning on December 09, 2013, 12:08:48 PM
snyppsss is back! Now we can have Christmas!

Yaaay!!!

I'm cutting fruit for $7.50hr.!!! I'm losing my shit!!!

I WILL be breaking bad here shortly!! 8)

But seriously Karl, why does the gov get money for usury when they have/had the power to print their own??????

Title: Re: Meltdown
Post by: Karl Henning on December 09, 2013, 12:32:53 PM

You've got a job? Good to hear!

Today you're cutting fruit, tomorrow you'll be the COO of Georgia-Pacific.

Title: Re: Meltdown
Post by: milk on December 10, 2013, 01:46:27 AM

Well, here's one side of an argument, by none other than David Simon (of The Wire fame):

http://www.theguardian.com/world/2013/dec/08/david-simon-capitalism-marx-two-americas-wire

Just a quote on libertarianism from the middle of his rant (to whet some appetites):

"Ultimately we abandoned that and believed in the idea of trickle-down and the idea of the market economy and the market knows best, to the point where now libertarianism in my country is actually being taken seriously as an intelligent mode of political thought. It's astonishing to me. But it is. People are saying I don't need anything but my own ability to earn a profit. I'm not connected to society. I don't care how the road got built, I don't care where the firefighter comes from, I don't care who educates the kids other than my kids. I am me. It's the triumph of the self. I am me, hear me roar."

Title: Re: Meltdown
Post by: The new erato on December 10, 2013, 02:19:38 AM

Good stuff. I always knew the creators of The Wire had to be intelligent people.

Title: Re: Meltdown
Post by: Octave on December 10, 2013, 03:46:19 AM

You guys are warming the cockles of that (http://www.giraffeboards.com/images/smilies/emoticon-0152-heart.png)

Title: Re: Meltdown
Post by: milk on December 10, 2013, 04:26:36 AM

Quote from: The new erato on December 10, 2013, 02:19:38 AM
Good stuff. I always knew the creators of The Wire had to be intelligent people.

Simon was a crime reporter for the Baltimore Sun before writing for TV. Generation Kill and Treme are also pretty interesting shows. He's a smart guy, whether one agrees with him or not. I guess Treme is a subject for discussion, this being a music site. Much of the music on the show isn't my thing. However the theme is interesting. One of his theses seems to be that America doesn't care about it's authentic "cultural" heritage (New Orleans) and that unfettered capitalism and corrupt institutions destroy musical roots along with the middle class. Something like that maybe.

Title: Re: Meltdown
Post by: Todd on December 10, 2013, 07:49:21 AM

Quote from: milk on December 10, 2013, 01:46:27 AM"Ultimately we abandoned that and believed in the idea of trickle-down and the idea of the market economy and the market knows best, to the point where now libertarianism in my country is actually being taken seriously as an intelligent mode of political thought. It's astonishing to me. But it is. People are saying I don't need anything but my own ability to earn a profit. I'm not connected to society. I don't care how the road got built, I don't care where the firefighter comes from, I don't care who educates the kids other than my kids. I am me. It's the triumph of the self. I am me, hear me roar."

I've not read the entire article, but this quote is filled with errors and strawmen. Using the phrase trickle-down betrays a specific partisan outlook rather than a serious review of policy options of more serious libertarians or conservatives. I wonder if he or similarly minded lefties have bothered reading, say, Milton Friedman's policy ideas. I wonder how many of them would oppose, for instance, Friedman's idea of the negative income tax, which took practical form in the earned income tax credit. And where, may I ask, is the outrage at the years long easy money policy, including possible proposals (threats?) of negative nominal interest rates, which would directly harm people dependent on holding money in banks (ie, the little guy) while pushing even more money into financial markets helping those with money to invest (ie, the rich), which is nothing short of trickle-down – you know put more money to work in investment, creating more jobs, putting more money in the hands of the little guy? Sounds great.

The rest of this paragraph is basically false. While I have no doubt that there are some people who think as he describes, I've never come across any in person or on paper. Everyone knows who paid for public roads. (Quick related question: Who paid for all the logging roads on state and federal lands, and for all the private roads? Were those all publicly funded?) Everyone knows who pays for firefighters. Everyone knows who pays for schools, and except for those who home school, most people care greatly about who educates kids, as well as how much public money goes to the process. This becomes critical to consider since a typical lament of the American Left is that education gets short shrift, while the Department of Education shows that inflation adjusted spending has increased by a factor of about four or five since the early 1960s, and the US is one of the biggest spenders on education in the world on a per pupil basis. (This is not to argue for drastic cuts to education, it's just to point out that truckloads of money may not make kids smarter.) And why is it that the American Left so regularly laments the general state of public funding while ignoring the reality that total government spending in the US is actually quite close to most European and other "advanced" countries, and higher than some, at around 40% of GDP? The implication of what they say is that the public sector is being starved, or at least malnourished, when the data show otherwise. The issue is allocation, and anyone who looks at time series data will see the increasing proportion being devoted to transfer payments, which are not means tested.

Perhaps his last sentence is accurate: I am me, hear me roar. He would rather write in generalities, in partisan rhetoric, in an afactual haze of wishful thinking than address things more seriously. It's sort of slightly lengthier version of the You didn't build that! argument, though shorter and less sophisticated than what Elizabeth Warren offers, let alone serious non-politicians.

(Anyone who doubts the purely partisan nature of this article need not look beyond this sentence: I would date it in my country to about 1980 exactly... Ignore the beginning of deregulation under Ford and then Carter - remember Alfred Kahn?; ignore the changes to ERISA allowing pensions to invest in mortgages under Carter, sowing the earliest seeds of 2007-2008; ignore the first statistical indications of growing income disparity starting in the Nixon Administration – though this accelerated over time; ignore the adoption of fiat money in 1971. No! It was all Reagan's fault. Who doesn't love simplistic narratives?)

Quote from: milk on December 10, 2013, 04:26:36 AMOne of his theses seems to be that America doesn't care about it's authentic "cultural" heritage (New Orleans) and that unfettered capitalism and corrupt institutions destroy musical roots along with the middle class. Something like that maybe.

That's a common lament among the American Left generally – and not a few on the right I might add, though the cultural artifacts they wring their hands about are often different – and it has been voiced here as well. So what? I understand the irony when someone like myself, who enjoys classical music and other fruits of Western Culture poses this question, but still, so what? There's the whiff of worshipping the dead in the paeans to culture. Must everything deemed culturally valuable be enshrined and revered, or at least studied, on the public dime? And who determines what is culturally relevant? Clearly, various educated elites think they should. Who else is so sensitive, so sophisticated? But why should public funds be used to support traditional jazz or bluegrass or whatever other form of music, or art, at the expense of others? Why should anyone really care if this or that institution dies? Let those with the money and the inclination worry about saving important culture on their own.

Title: Re: Meltdown
Post by: Karl Henning on December 10, 2013, 08:21:35 AM

Quote
I would date it in my country to about 1980 exactly

I am sure you cited that accurately, Todd . . . but what blatant illiteracy, "about / exactly."

Title: Re: Meltdown
Post by: milk on December 10, 2013, 11:24:09 PM

Quote from: karlhenning on December 10, 2013, 08:21:35 AM
I am sure you cited that accurately, Todd . . . but what blatant illiteracy, "about / exactly."

It's described as an impromptu speech so maybe it can be forgiven. I don't think the point of Treme is that public money should be used to prop up certain musical forms. I think there's a more subtle argument going on. It's my fault for the lazy description. Actually, there's a plot line on the show in which developers want to build a jazz center. Honestly, I forget exactly how it's represented but I'm pretty sure the characters have their hands in the public till.

Title: Re: Meltdown
Post by: milk on December 10, 2013, 11:31:45 PM

Quote from: Todd on December 10, 2013, 07:49:21 AM

I've not read the entire article, but this quote is filled with errors and strawmen. Using the phrase trickle-down betrays a specific partisan outlook rather than a serious review of policy options of more serious libertarians or conservatives. I wonder if he or similarly minded lefties have bothered reading, say, Milton Friedman's policy ideas. I wonder how many of them would oppose, for instance, Friedman's idea of the negative income tax, which took practical form in the earned income tax credit. And where, may I ask, is the outrage at the years long easy money policy, including possible proposals (threats?) of negative nominal interest rates, which would directly harm people dependent on holding money in banks (ie, the little guy) while pushing even more money into financial markets helping those with money to invest (ie, the rich), which is nothing short of trickle-down – you know put more money to work in investment, creating more jobs, putting more money in the hands of the little guy? Sounds great.

The rest of this paragraph is basically false. While I have no doubt that there are some people who think as he describes, I've never come across any in person or on paper. Everyone knows who paid for public roads. (Quick related question: Who paid for all the logging roads on state and federal lands, and for all the private roads? Were those all publicly funded?) Everyone knows who pays for firefighters. Everyone knows who pays for schools, and except for those who home school, most people care greatly about who educates kids, as well as how much public money goes to the process. This becomes critical to consider since a typical lament of the American Left is that education gets short shrift, while the Department of Education shows that inflation adjusted spending has increased by a factor of about four or five since the early 1960s, and the US is one of the biggest spenders on education in the world on a per pupil basis. (This is not to argue for drastic cuts to education, it's just to point out that truckloads of money may not make kids smarter.) And why is it that the American Left so regularly laments the general state of public funding while ignoring the reality that total government spending in the US is actually quite close to most European and other "advanced" countries, and higher than some, at around 40% of GDP? The implication of what they say is that the public sector is being starved, or at least malnourished, when the data show otherwise. The issue is allocation, and anyone who looks at time series data will see the increasing proportion being devoted to transfer payments, which are not means tested.

Perhaps his last sentence is accurate: I am me, hear me roar. He would rather write in generalities, in partisan rhetoric, in an afactual haze of wishful thinking than address things more seriously. It's sort of slightly lengthier version of the You didn't build that! argument, though shorter and less sophisticated than what Elizabeth Warren offers, let alone serious non-politicians.

(Anyone who doubts the purely partisan nature of this article need not look beyond this sentence: I would date it in my country to about 1980 exactly... Ignore the beginning of deregulation under Ford and then Carter - remember Alfred Kahn?; ignore the changes to ERISA allowing pensions to invest in mortgages under Carter, sowing the earliest seeds of 2007-2008; ignore the first statistical indications of growing income disparity starting in the Nixon Administration – though this accelerated over time; ignore the adoption of fiat money in 1971. No! It was all Reagan's fault. Who doesn't love simplistic narratives?)

That's a common lament among the American Left generally – and not a few on the right I might add, though the cultural artifacts they wring their hands about are often different – and it has been voiced here as well. So what? I understand the irony when someone like myself, who enjoys classical music and other fruits of Western Culture poses this question, but still, so what? There's the whiff of worshipping the dead in the paeans to culture. Must everything deemed culturally valuable be enshrined and revered, or at least studied, on the public dime? And who determines what is culturally relevant? Clearly, various educated elites think they should. Who else is so sensitive, so sophisticated? But why should public funds be used to support traditional jazz or bluegrass or whatever other form of music, or art, at the expense of others? Why should anyone really care if this or that institution dies? Let those with the money and the inclination worry about saving important culture on their own.

I wonder if you would find anything to agree with in Simon's thinking. I think you might - somewhere in there...perhaps in his characterization of the war on drugs.

Title: Re: Meltdown
Post by: Todd on December 11, 2013, 05:39:58 AM

Quote from: milk on December 10, 2013, 11:31:45 PMI wonder if you would find anything to agree with in Simon's thinking.

If the portions of his very Guardianesque piece I read indicate his thinking and style, I have my doubts.

Title: Re: Meltdown
Post by: Florestan on December 11, 2013, 06:35:56 AM

From the comments section of Simon's article, this gem signed VelvetRevolutionary:

Thomas Jefferson, Benjamin Franklin, et al, were more inclined toward a Socialist vision, for America's future, than a Capitalist vision. One need only read their writings, in conjunction with the American Constitution, to fully appreciate this.

Title: Re: Meltdown
Post by: Todd on December 11, 2013, 06:57:55 AM

Quote from: Florestan on December 11, 2013, 06:35:56 AMThomas Jefferson, Benjamin Franklin, et al, were more inclined toward a Socialist vision, for America's future, than a Capitalist vision. One need only read their writings, in conjunction with the American Constitution, to fully appreciate this.

I wonder if the poster in question would be able to provide some support for this. (Actually, I don't.) The more common critique of the Constitution is that it protects the property owning (including slave owning) class from the tumultuous passions of the masses. And the poster seems to forget entirely Alexander Hamilton, who in no way could be considered a Socialist.

Title: Re: Meltdown
Post by: milk on December 11, 2013, 10:05:13 PM

Quote from: Todd on December 11, 2013, 05:39:58 AM

If the portions of his very Guardianesque piece I read indicate his thinking and style, I have my doubts.

Well I thought it fit here because it is, very literally, a rant (perhaps his crime reporting was more staid).
Not to mention his TV show, which is easily one of the best dramas ever to grace the boob tube. But that's no rant.

Found this:
"While some young Americans – most of them white and affluent – are getting a truly world-class education, those who attend schools in high poverty neighborhoods are getting an education that more closely approximates school in developing nations," says the 52-page report by the Equity and Excellence Commission, created by Congress to look into the disparity in educational opportunity.

here:
http://www.mcclatchydc.com/2013/02/19/183590/rich-poor-spending-gap-on-schools.html

Yeah, perhaps his hyperbole undermines more cogent criticisms of libertarianism .

Title: Re: Meltdown
Post by: Florestan on December 12, 2013, 05:40:35 AM

Quote from: Todd on December 11, 2013, 06:57:55 AM
I wonder if the poster in question would be able to provide some support for this. (Actually, I don't.) The more common critique of the Constitution is that it protects the property owning (including slave owning) class from the tumultuous passions of the masses. And the poster seems to forget entirely Alexander Hamilton, who in no way could be considered a Socialist.

You took it far too seriously, asking for arguments and considering counter-examples. I quoted him just for sheer fun. :D

Title: Re: Meltdown
Post by: Florestan on December 12, 2013, 05:47:00 AM

Quote from: milk on December 11, 2013, 10:05:13 PM
Yeah, perhaps his hyperbole undermines more cogent criticisms of libertarianism .

Is libertarianism the main ideology underpinning the US economic and social policy today, or has it been in the past? I don't think so.

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 05:59:32 AM

Quote from: milk on December 11, 2013, 10:05:13 PMhttp://www.mcclatchydc.com/2013/02/19/183590/rich-poor-spending-gap-on-schools.html

Ah, yes, the old throw more money at the problem solution:

Among other things, it recommended higher pay and better work conditions for teachers and principals, and universal high-quality early education. The commission said that the U.S. could afford to pay teachers more, and it argued that raising starting pay to $65,000, instead of today's average of $37,000, and increasing top salaries to $150,000, instead of around $70,000, would help attract better teachers.

Of course, with teaching, annual salaries are practically understated because, of course, almost all teachers in the US work less than the normal full time worker. But I guess they work hard, so making adjustments for actual hours worked is probably unfair. $37K on average to start is not too bad, really, though it depends on where one teaches. Where I live, teachers start in the low to mid 30s and advance within only a few years to north of $60K, which is well above the state average income. I'm not convinced that more money is the solution in every state. In a state like Arizona, it makes more sense to focus on bumping salaries.

And this ignores the double dipping phenomenon where teachers work until retirement, gain their pension, and return to teaching again, on either a part time or full time basis, thus having two incomes. It's pretty common where I live, though I haven't read up on all the stats. That's nothing short of manipulating the system for personal gain, all on the public dime.

One of the more interesting developments over the last couple decades has been the emergence of what some commentators - mostly minority, liberal/lefty minded commentators, I hasten to add - have called resegregation of schools, and it is turning out to be more pronounced in more affluent, more "liberal" areas. I find this most humorous. I suppose I would, since I live in the outskirts of a Deep Blue city - Portland, OR - which has the unique distinction of being the only major city in the US that became whiter between 1990 and 2010, at least per the Census Bureau. Portland leaders not only resegregated education, but everything else, too.

I'm sure libertarians and conservatives are responsible for all of these trends and changes somehow.

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 06:03:54 AM

Quote from: Florestan on December 12, 2013, 05:47:00 AMIs libertarianism the main ideology underpinning the US economic and social policy today, or has it been in the past? I don't think so.

Standard Lefty rhetoric holds this to be the case. Many firmly believe it. Such believers have an innate ability to ignore things such as old and new regulations, new agencies (I wonder how many people here have been paying attention to the CFPBs actions recently?), and government spending levels. This is so because the preferred solution to just about any social or economic problem, real or imagined, is more of the same. It's never enough when you only and always want more.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 06:21:32 AM

Quote from: Florestan on December 12, 2013, 05:47:00 AM
Is libertarianism the main ideology underpinning the US economic and social policy today, or has it been in the past? I don't think so.

I made no such suggestion.

Title: Re: Meltdown
Post by: Florestan on December 12, 2013, 06:28:38 AM

Quote from: milk on December 12, 2013, 06:21:32 AM
I made no such suggestion.

You didn't but Simon's article (which you apparently resonate with) seems to have made it all right. Anyway, I just wanted to point out that criticizing libertarianism for the current state of affairs in the US is pointless because it has never ever got the upper hand in the US politics.

Title: Re: Meltdown
Post by: Karl Henning on December 12, 2013, 06:33:11 AM

Just a bogey to whip up the fervor of the whackadoodle right ;)

Title: Re: Meltdown
Post by: milk on December 12, 2013, 06:46:38 AM

Quote from: Todd on December 12, 2013, 05:59:32 AM

Ah, yes, the old throw more money at the problem solution:

Among other things, it recommended higher pay and better work conditions for teachers and principals, and universal high-quality early education. The commission said that the U.S. could afford to pay teachers more, and it argued that raising starting pay to $65,000, instead of today's average of $37,000, and increasing top salaries to $150,000, instead of around $70,000, would help attract better teachers.

Of course, with teaching, annual salaries are practically understated because, of course, almost all teachers in the US work less than the normal full time worker. But I guess they work hard, so making adjustments for actual hours worked is probably unfair. $37K on average to start is not too bad, really, though it depends on where one teaches. Where I live, teachers start in the low to mid 30s and advance within only a few years to north of $60K, which is well above the state average income. I'm not convinced that more money is the solution in every state. In a state like Arizona, it makes more sense to focus on bumping salaries.

And this ignores the double dipping phenomenon where teachers work until retirement, gain their pension, and return to teaching again, on either a part time or full time basis, thus having two incomes. It's pretty common where I live, though I haven't read up on all the stats. That's nothing short of manipulating the system for personal gain, all on the public dime.

One of the more interesting developments over the last couple decades has been the emergence of what some commentators - mostly minority, liberal/lefty minded commentators, I hasten to add - have called resegregation of schools, and it is turning out to be more pronounced in more affluent, more "liberal" areas. I find this most humorous. I suppose I would, since I live in the outskirts of a Deep Blue city - Portland, OR - which has the unique distinction of being the only major city in the US that became whiter between 1990 and 2010, at least per the Census Bureau. Portland leaders not only resegregated education, but everything else, too.

I'm sure libertarians and conservatives are responsible for all of these trends and changes somehow.

None of this makes me any less concerned by what's suggested in the report about the kind of education the poor receive. Some of the relevancy escapes me. It's pretty darn sad, isn't it? As far as elected politicians go, yeah, I'd apportion to them responsibility at least equivalent to the percentage of seats they hold in various elected bodies. Probably, you and I should share some responsibility also.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 06:56:20 AM

Quote from: Florestan on December 12, 2013, 06:28:38 AM
You didn't but Simon's article (which you apparently resonate with) seems to have made it all right. Anyway, I just wanted to point out that criticizing libertarianism for the current state of affairs in the US is pointless because it has never ever got the upper hand in the US politics.

I disagree. Just because it hasn't the upper hand doesn't mean it doesn't have, or hasn't had influence. I think criticizing libertarianism is a good idea. I'm probably not the best man for the job...but anyway, libertarianism has obvious shortcomings.

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 07:10:43 AM

Quote from: milk on December 12, 2013, 06:46:38 AMNone of this makes me any less concerned by what's suggested in the report about the kind of education the poor receive.

I'm not poor, and my daughter attends a well funded public school, and I'm concerned about the quality of education she receives*, as well as the education everyone, including the poor, receives in general. The point of including what I included was to illustrate that the system is not working optimally, or close to it, and that increasing pay by itself or even as a primary solution won't address all of the issues involved. There are broader issues involved, some not directly related to education.

As it pertains to poorer kids, how does one get the financial and human resources where needed? Money is only part of it. And then there's the issue of measuring achievement. I'm not advocating the most extreme cases of firing teachers because this or that test score is sub-par, but some type of assessment is needed, to know where we as a district/state/country are at. But with the current system, even that is seemingly out of bounds. The same Mr Duncan who advocates high salaries to the general applause of teachers and their unions and other groups, received a decidedly less enthusiastic response within only the last few weeks when he talked about how poorly American students fared in PISA testing compared to other countries, with arguments ranging from class based discrepancies - which have foundation in reality, though in this case not as much since even the top scoring US students fared relatively poorly - to notions that testing doesn't offer useful information - which is fantasy.

* How could I not be? At her current school (she's in sixth grade), one of her teachers said, just a couple months ago, that spelling is not taught because kids can use spell check. During the same visit, her math teacher said he didn't grade homework because he wasn't here to grade homework. I'm not sure this is really worse than her prior school, though, where the principal took on important issues and made bold decisions like banning the singing of Happy Birthday in classrooms. These strike me as egregious examples of incompetence and foolishness, and I am certain that not all teachers and administrators are this bad - I've dealt with excellent examples of both - but if I experience it where I live, how many others have similar experiences?

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 07:15:01 AM

Quote from: milk on December 12, 2013, 06:56:20 AMlibertarianism has obvious shortcomings.

Of course it does. The fruitier proponents of libertarian thought advocate policies reminiscent of 19th Century thinking. That will not do. And then, of course, some libertarians are libertarian only in certain areas, usually as it pertains to what they perceive as free market economics, while still endorsing certain aspects of big government, namely the military.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 07:27:54 AM

Quote from: Todd on December 12, 2013, 07:10:43 AM

I'm not poor, and my daughter attends a well funded public school, and I'm concerned about the quality of education she receives*, as well as the education everyone, including the poor, receives in general. The point of including what I included was to illustrate that the system is not working optimally, or close to it, and that increasing pay by itself or even as a primary solution won't address all of the issues involved. There are broader issues involved, some not directly related to education.

As it pertains to poorer kids, how does one get the financial and human resources where needed? Money is only part of it. And then there's the issue of measuring achievement. I'm not advocating the most extreme cases of firing teachers because this or that test score is sub-par, but some type of assessment it needed, to know where we as a district/state/country are at. But with the current system, even that is seemingly out of bounds. The same Mr Duncan who advocates high salaries to the general applause of teachers and their unions and other groups, received a decidedly less enthusiastic response within only the last few weeks when he talked about how poorly American students fared in PISA testing compared to other countries, with arguments ranging from class based discrepancies - which have foundation in reality, though in this case not as much since even the top scoring US students fared relatively poorly - to notions that testing doesn't offer useful information - which is fantasy.

* How could I not be? At her current school (she's in sixth grade), one of her teachers said, just a couple months ago, that spelling is not taught because kids can use spell check. During the same visit, her math teacher said he didn't grade homework because he wasn't here to grade homework. I'm not sure this is really worse than her prior school, though, where the principal took on important issues and made bold decisions like banning the singing of Happy Birthday in classrooms. These strike me as egregious examples of incompetence and foolishness, and I am certain that not all teachers and administrators are this bad - I've dealt with excellent examples of both - but if I experience it where I live, how many others have similar experiences?

I wonder about testing though. Is it being overemphasized? Here in Japan, testing and rote learning is a lot of what they do. And it shows in the students' general weakness in confidence and in communication, creative, and logical and abstract thinking abilities. Although to be fair, the focus on testing is just one part of the problem.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 07:33:01 AM

Quote from: Todd on December 12, 2013, 07:15:01 AM

Of course it does. The fruitier proponents of libertarian thought advocate policies reminiscent of 19th Century thinking. That will not do. And then, of course, some libertarians are libertarian only in certain areas, usually as it pertains to what they perceive as free market economics, while still endorsing certain aspects of big government, namely the military.

It seems to me that libertarianism has no answer for the effects of something in the distant future. I'm not strong on economics. But I don't see how the market can bring any concern to bear on what will happen in fifty or a hundred or two hundred years.

Title: Re: Meltdown
Post by: Karl Henning on December 12, 2013, 07:34:11 AM

Quote from: Todd on December 12, 2013, 07:10:43 AM
. . . one of her teachers said, just a couple months ago, that spelling is not taught because kids can use spell check. During the same visit, her math teacher said he didn't grade homework because he wasn't here to grade homework.

To borrow one of my tenth grade English teacher's pet phrases (God rest his soul): Pinheads on parade!

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 07:35:30 AM

Quote from: milk on December 12, 2013, 07:27:54 AMIs it being overemphasized?

Probably, but it is essential, in my view, to assess where students are. I would think it should be used as a tool to guide where resources flow and not as a definitive measure of success.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 07:47:10 AM

Quote from: Todd on December 12, 2013, 07:35:30 AM

Probably, but it is essential, in my view, to assess where students are. I would think it should be used as a tool to guide where resources flow and not as a definitive measure of success.

Right. Here in Japan, universities throw enormous resources into entrance exams. Each one creates it's own exam and certain faculty members are assigned to the grueling year-long task. Any mistakes on entrance tests are big black marks on a university's reputation. Students are put under intense pressure to succeed on these all-important tests. The ones that can afford cram schools are, of course, likely to do better. Then, once students enter, they are guaranteed to graduate if they show up at the university. Most students do no more than one hour of homework a week while at university. This may all sound strange, but not to them. It fits into the general thinking about education and life in general. So this is an extreme I bet many Americans wouldn't imagine existed.

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 08:12:37 AM

Quote from: milk on December 12, 2013, 07:33:01 AMBut I don't see how the market can bring any concern to bear on what will happen in fifty or a hundred or two hundred years.

The conceptual key is accurate accounting of externalities. If all costs of economic activity can be accurately calculated, or at least reasonably estimated, then the market will become more efficient, with less probability of market failure. Pretty much everyone acknowledges externalities. It's been a good number of years since I studied economics in an academically rigorous fashion, but when I was studying it, the most potent criticism leveled against environmental economics, in particular, but also all arguments concerned with externalities, was that externalities were not being quantified. Right when I finished college, a lot of good work was being done in this area to accurately quantify externalities. (No more proclamations like "It will cost billions!", but rather statements like "Estimated remediation will cost X billion a year.") Now it is pretty common to see pretty good estimates of externalities and total social cost as it pertains to many policies. It's not perfect, of course, but it's better than what was in place years ago. Even so, sometimes the more efficient solution may be blunt government action - eg, a carbon tax would almost certainly be better and more efficient than carbon exchanges in reducing carbon emissions. (This assumes that one accepts that measured levels of carbon in the atmosphere are high and rising and anthropogenic in nature and harmful, but that is something different.)

This offers, in my view, a good example of the value of the perceived intransigence of some conservatives: rather than just accept that bad things are happening, that doom is assured, they demand that a monetary value be determined before acting or changing. After all, it's money that is used to pay for things, not ill feelings, and spending more on one policy may require spending less on another, at least in the short term.

Politics, of course, is often informed by other motivations, which can render all of the above irrelevant.

Title: Re: Meltdown
Post by: ibanezmonster on December 12, 2013, 02:14:20 PM

Quote from: milk on December 12, 2013, 07:47:10 AM
Right. Here in Japan, universities throw enormous resources into entrance exams. Each one creates it's own exam and certain faculty members are assigned to the grueling year-long task. Any mistakes on entrance tests are big black marks on a university's reputation. Students are put under intense pressure to succeed on these all-important tests. The ones that can afford cram schools are, of course, likely to do better. Then, once students enter, they are guaranteed to graduate if they show up at the university. Most students do no more than one hour of homework a week while at university. This may all sound strange, but not to them. It fits into the general thinking about education and life in general. So this is an extreme I bet many Americans wouldn't imagine existed.

I know about the entrance exams insanity but did not know about the near absence of homework while at a university. I guess I'm clueless about their university life, but I'm not sure how almost no homework would even work. That must mean extremely long classes, but how could you schedule that around work? Sounds like an odd system.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 03:34:08 PM

Quote from: Greg on December 12, 2013, 02:14:20 PM
I know about the entrance exams insanity but did not know about the near absence of homework while at a university. I guess I'm clueless about their university life, but I'm not sure how almost no homework would even work. That must mean extremely long classes, but how could you schedule that around work? Sounds like an odd system.

Ah! It's such a weird system that it's hard to guess how it works, isn't it? No, they have many classes! First-year students have 10-15 classes a week. That's 10-15 different teachers. Plus most students have part-time jobs and long train commutes to fill their time (more than half live at home; average commute is one hour each way. But there are many students who do more). Furthermore, university clubs and circles are deemed nearly the most important part of university life. Then, in their last two years, they spend lots of time doing job hunting. Japanese companies hire large groups of graduates every year and they start the hiring process in the students' junior year. Consequently, it's very hard to build anything one week to the next in the classroom or get the students interested.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 03:45:36 PM

Quote from: Todd on December 12, 2013, 08:12:37 AM

The conceptual key is accurate accounting of externalities. If all costs of economic activity can be accurately calculated, or at least reasonably estimated, then the market will become more efficient, with less probability of market failure. Pretty much everyone acknowledges externalities. It's been a good number of years since I studied economics in an academically rigorous fashion, but when I was studying it, the most potent criticism leveled against environmental economics, in particular, but also all arguments concerned with externalities, was that externalities were not being quantified. Right when I finished college, a lot of good work was being done in this area to accurately quantify externalities. (No more proclamations like "It will cost billions!", but rather statements like "Estimated remediation will cost X billion a year.") Now it is pretty common to see pretty good estimates of externalities and total social cost as it pertains to many policies. It's not perfect, of course, but it's better than what was in place years ago. Even so, sometimes the more efficient solution may be blunt government action - eg, a carbon tax would almost certainly be better and more efficient than carbon exchanges in reducing carbon emissions. (This assumes that one accepts that measured levels of carbon in the atmosphere are high and rising and anthropogenic in nature and harmful, but that is something different.)

This offers, in my view, a good example of the value of the perceived intransigence of some conservatives: rather than just accept that bad things are happening, that doom is assured, they demand that a monetary value be determined before acting or changing. After all, it's money that is used to pay for things, not ill feelings, and spending more on one policy may require spending less on another, at least in the short term.

Politics, of course, is often informed by other motivations, which can render all of the above irrelevant.

This gives me a bit of vertigo. Did you address here the question of a company's impact on resources or the environment in the long-term? I mean without government to intervene? I'll be reading this over again. I appreciate the effort you put into rehearsing these arguments.

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 04:20:58 PM

Quote from: milk on December 12, 2013, 03:45:36 PMDid you address here the question of a company's impact on resources or the environment in the long-term? I mean without government to intervene?

Government intervention is inevitable in certain areas, but it is at least conceptually possible to have comparatively less regulation and to rely more on the judiciary to help settle lawsuits between private parties. Obviously, things like taxation rely on the use of coercive state power, but then so does establishing a market in which to trade things like carbon emissions. Purists may seek an elimination of government involvement, but more practical sorts seek to minimize the inevitable involvement.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 05:02:55 PM

Quote from: Todd on December 12, 2013, 04:20:58 PM

Government intervention is inevitable in certain areas, but it is at least conceptually possible to have comparatively less regulation and to rely more on the judiciary to help settle lawsuits between private parties.

People in the future would need a time machine in that case, perhaps to force a lawsuit in the past and change outcomes.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 05:16:27 PM

Quote from: Todd on December 12, 2013, 04:20:58 PM

Government intervention is inevitable in certain areas, but it is at least conceptually possible to have comparatively less regulation and to rely more on the judiciary to help settle lawsuits between private parties. Obviously, things like taxation rely on the use of coercive state power, but then so does establishing a market in which to trade things like carbon emissions. Purists may seek an elimination of government involvement, but more practical sorts seek to minimize the inevitable involvement.

I guess you'd agree that actors in a marketplace unfettered by regulations would have little practical incentive to care about, or even find out about, the impact of their actions in a hundred or two hundred or three hundred years. They might also have little incentive to worry about how their actions affect people who haven't the resources to bring lawsuits or people who have no legal standing. Admittedly, governments and politicians are not exactly long-term thinkers and planners. But I seem to remember a certain Texas politician during the last presidential election struggling to form a list of government agencies to eliminate.

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 05:39:59 PM

Quote from: milk on December 12, 2013, 05:02:55 PMPeople in the future would need a time machine in that case, perhaps to force a lawsuit in the past and change outcomes.

The point is that factoring in externalities allows for more accurately determining the costs of environmental harm (or other types of harm) caused by companies - and governments - today, and that can be utilized in legal action by property owners and others with legal standing today, and reduces the burdens of direct regulation, and the inherent risk of regulatory capture. Regulation itself causes harm and it is, or at least may be, possible for some specific regulations to cause more economic or other harm than the activities meant to be curtailed.

Quote from: milk on December 12, 2013, 05:16:27 PMI guess you'd agree that actors in a marketplace unfettered by regulations would have little practical incentive to care about, or even find out about, the impact of their actions in a hundred or two hundred or three hundred years.

Usually, but not always. For instance, some logging companies in the local region undertook replanting programs on private lands decades ago, before any mandates were dreamed up, and keep it up today; the cost of replanting is small, the long term rewards are large. In purely extractive or transactional industries, there is little to no incentive to think that way.

I'm not familiar with Richard Rorty's work, but I can say that I think we're not doomed. Sure, humans will go extinct one day far in the future, as all currently living species will, but it won't be because of specific topics we are discussing today. Society will not crumble, democracy will (probably) not perish, and so forth.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 05:49:19 PM

Quote from: Todd on December 12, 2013, 05:39:59 PM

The point is that factoring in externalities allows for more accurately determining the costs of environmental harm (or other types of harm) caused by companies - and governments - today, and that can be utilized in legal action by property owners and others with legal standing today, and reduces the burdens of direct regulation, and the inherent risk of regulatory capture. Regulation itself causes harm and it is, or at least may be, possible for some specific regulations to cause more economic or other harm than the activities meant to be curtailed.

Usually, but not always. For instance, some logging companies in the local region undertook replanting programs on private lands decades ago, before any mandates were dreamed up, and keep it up today; the cost of replanting is small, the long term rewards are large. In purely extractive or transactional industries, there is little to no incentive to think that way.

I'm not familiar with Richard Rorty's work, but I can say that I think we're not doomed. Sure, humans will go extinct one day far in the future, as all currently living species will, but it won't be because of specific topics we are discussing today. Society will not crumble, democracy will (probably) not perish, and so forth.

Well, I'm not at all convinced by your examples here. But that's an impasse. I accept that you are making assertions about regulations and the economy. That is the argument from the right. I'm not saying it's never true or that we don't need a balance. I'm just saying I'm not convinced that the libertarian argument isn't a recipe for disaster.

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 06:13:58 PM

Quote from: milk on December 12, 2013, 05:16:27 PMBut I seem to remember a certain Texas politician during the last presidential election struggling to form a list of government agencies to eliminate.

Missed this before, and I'm not quite sure what bearing it has on anything, but to His Royal Hairness's credit, he championed meaningful judicial reform at the SCOTUS level.

Quote from: milk on December 12, 2013, 05:49:19 PMI'm just saying I'm not convinced that the libertarian argument isn't a recipe for disaster.

I gather you refer to the libertarian economic policies, or are you referring to social policy and foreign policy as well? In any event, libertarian economic policies have never fully been implemented. The closest the US experienced was the pre-Civil War era, but many conditions were vastly different. There is no going back to that. The best those on the American Right - libertarian and otherwise - can hope for is to reduce the power of and burden imposed by the state.

Title: Re: Meltdown
Post by: ibanezmonster on December 12, 2013, 06:16:45 PM

Quote from: milk on December 12, 2013, 03:34:08 PM
Ah! It's such a weird system that it's hard to guess how it works, isn't it? No, they have many classes! First-year students have 10-15 classes a week. That's 10-15 different teachers. Plus most students have part-time jobs and long train commutes to fill their time (more than half live at home; average commute is one hour each way. But there are many students who do more). Furthermore, university clubs and circles are deemed nearly the most important part of university life. Then, in their last two years, they spend lots of time doing job hunting. Japanese companies hire large groups of graduates every year and they start the hiring process in the students' junior year. Consequently, it's very hard to build anything one week to the next in the classroom or get the students interested.

Those would have to be some highly related classes, because I don't see how anyone could learn a subject in depth if taking 10-15 classes a week.

Title: Re: Meltdown
Post by: milk on December 12, 2013, 06:30:35 PM

Quote from: Greg on December 12, 2013, 06:16:45 PM
Those would have to be some highly related classes, because I don't see how anyone could learn a subject in depth if taking 10-15 classes a week.

Well my experience is in the humanities where there is no in-depth learning. The idea is not to learn. The idea is to continue socialization and to practice performing many obligations (I'd say most students are only able to sleep 5 or 6 hours a night). They have no time or freedom for depth. And very few have any idea that there is any other way. Unlike Koreans, Chinese and Indians, very few Japanese study at foreign universities. Their performances on TOEC and TOEFL are some of the lowest in Asia (ironic I'm citing tests now!).

Title: Re: Meltdown
Post by: milk on December 12, 2013, 06:34:45 PM

Quote from: Todd on December 12, 2013, 06:13:58 PM

Missed this before, and I'm not quite sure what bearing it has on anything, but to His Royal Hairness's credit, he championed meaningful judicial reform at the SCOTUS level.

I gather you refer to the libertarian economic policies, or are you referring to social policy and foreign policy as well? In any event, libertarian economic policies have never fully been implemented. The closest the US experienced was the pre-Civil War era, but many conditions were vastly different. There is no going back to that. The best those on the American Right - libertarian and otherwise - can hope for is to reduce the power of and burden imposed by the state.

I meant Perry and his interest in abolishing the EPA (or is it only Paul or both?). I mean what we were discussing. There is a logging company that planted trees. It doesn't convince me that companies will do what's right if there is no lawsuit possible (because they are affecting the far-future or powerless people) or regulatory body taking notice. One can always cherry pick examples like that.

Title: Re: Meltdown
Post by: Todd on December 12, 2013, 06:49:37 PM

Quote from: milk on December 12, 2013, 06:34:45 PMIt doesn't convince me that companies will do what's right if there is no lawsuit possible (because they are affecting the far-future or powerless people) or regulatory body taking notice.

There are actually many examples in that industry, and others in agriculture as well, and even in ranching. I already stated that purely extractive and transactional industries will have little to no incentive to act in a similar fashion. So what? For profit corporations must act in the best interest of investors. That is why they exist. But that is where the value of lawsuits and of accurate accounting of externalities come in, so interested parties can take action now. This is in addition to regulation. And at times private legal action, or government civil suits, may achieve better results than direct regulation, particularly in cases of pronounced regulatory capture. Surely you don't deny that exists?

(Hand wringing about future generations usually sounds well intentioned, but it is of dubious value and can be used by right or left, depending on what one is talking about.)

Title: Re: Meltdown
Post by: milk on December 12, 2013, 06:56:25 PM

Quote from: Todd on December 12, 2013, 06:49:37 PM

There are actually many examples in that industry, and others in agriculture as well, and even in ranching. I already stated that purely extractive and transactional industries will have little to no incentive to act in a similar fashion. So what? For profit corporations must act in the best interest of investors. That is why they exist. But that is where the value of lawsuits and of accurate accounting of externalities come in, so interested parties can take action now. This is in addition to regulation. And at times private legal action, or government civil suits, may achieve better results than direct regulation, particularly in cases of pronounced regulatory capture. Surely you don't deny that exists?

(Hand wringing about future generations usually sounds well intentioned, but it is of dubious value and can be used by right or left, depending on what one is talking about.)

I think it's an impasse here. You say it's of dubious value. I can't agree. But that's ok.

Title: Re: Meltdown
Post by: Karl Henning on December 13, 2013, 06:28:51 AM

Tangentially, it does my heart good knowing that our snypsss is preparing salad rather than just sitting in that dark, dark place. (And you know he's not putting any extraneous soy additives in that salad.)

Title: Re: Meltdown
Post by: Florestan on December 16, 2013, 01:28:01 AM

Quote from: milk on December 12, 2013, 06:56:20 AM
libertarianism has obvious shortcomings.

Sure, just like any other "ism"; well, probably a bit more. :)

(For the record, I am not a libertarian.)

Title: Re: Meltdown
Post by: snyprrr on December 22, 2013, 09:09:08 PM

So... does the chit hit the fan in 2014? After the dow hit 25,000?

Title: Re: Meltdown
Post by: Karl Henning on December 23, 2013, 11:03:57 AM

QuoteYou listened to Don't Worry Baby. Customers who bought this song also bought...

Baby, Baby by Amy Grant
Be My Baby by The Ronettes
Baby Love by The Supremes

Title: Re: Meltdown
Post by: snyprrr on February 05, 2014, 10:56:52 AM

Aw, just sunny skies ahead, no doom forever, everyone's just zippy

2014 the best year ever!

woo hoo

Title: Re: Meltdown
Post by: Johnll on February 05, 2014, 06:28:12 PM

Quote from: Todd on December 12, 2013, 06:49:37 PM

There are actually many examples in that industry, and others in agriculture as well, and even in ranching. I already stated that purely extractive and transactional industries will have little to no incentive to act in a similar fashion. So what? For profit corporations must act in the best interest of investors. That is why they exist. But that is where the value of lawsuits and of accurate accounting of externalities come in, so interested parties can take action now. This is in addition to regulation. And at times private legal action, or government civil suits, may achieve better results than direct regulation, particularly in cases of pronounced regulatory capture. Surely you don't deny that exists?

(Hand wringing about future generations usually sounds well intentioned, but it is of dubious value and can be used by right or left, depending on what one is talking about.)

Title: Re: Meltdown: JEB BUSH to Run for Res. as DEMOCRAT!
Post by: snyprrr on April 07, 2014, 07:48:59 AM

Did you read Jeb Bush's comments on how illegal immigration is an "act of love"? Without for one instance thinking of how that could be turned around? Do you believe this? Is Bush running as a Democrat? Ha!

Will you all now believe me when i say that there has NEVER been a so-called 'Conservative' in the WH? Obviously that was just a label invented by the ChiComs(chortle) to smoke out normal 'Muricans and consolidate power under the banking interests. Hmm??

Can you believe the things that are coming out of the mouths of ANY politician,... and, I don't mean can you "believe" them,... but can you believe it?!?!?

Americans must be the biggest bunch of pussy people that history has ever known- learn what a pitchfork is, oy! But, it happened to the Germans, so, I'm sure, it's guaranteed to happen here, and soon by the prevailing wind.

'IDIOCRACY' MUCH?

Title: Re: Meltdown: JEB BUSH to Run for Res. as DEMOCRAT!
Post by: milk on April 07, 2014, 09:14:00 AM

Quote from: snyprrr on April 07, 2014, 07:48:59 AM
Did you read Jeb Bush's comments on how illegal immigration is an "act of love"? Without for one instance thinking of how that could be turned around? Do you believe this? Is Bush running as a Democrat? Ha!

Will you all now believe me when i say that there has NEVER been a so-called 'Conservative' in the WH? Obviously that was just a label invented by the ChiComs(chortle) to smoke out normal 'Muricans and consolidate power under the banking interests. Hmm??

Can you believe the things that are coming out of the mouths of ANY politician,... and, I don't mean can you "believe" them,... but can you believe it?!?!?

Americans must be the biggest bunch of pussy people that history has ever known- learn what a pitchfork is, oy! But, it happened to the Germans, so, I'm sure, it's guaranteed to happen here, and soon by the prevailing wind.

'IDIOCRACY' MUCH?

People go where the money is and they'll put up with quite a lot of misery for a buck (pace working conditions for immigrants in places like the UAE). I don't know if it's an "act of love" but it certainly isn't a moral failing.
I don't get the comparison with "the Germans." If you mean Nazi Germany then I don't get how racial ideology, xenophobia, hatred of homosexuality and Jews, and nationalism have to do with the U.S. today (although racism is a fact of life I don't think politicians can get elected on a platform of overt racial superiority). But maybe you mean something else.
Politicians are professional liars. "Left" and "Right." But so are a lot of public jobs. Authenticity is in short supply.

Title: Re: Meltdown: JEB BUSH to Run for Res. as DEMOCRAT!
Post by: ibanezmonster on April 07, 2014, 09:42:46 AM

Quote from: milk on April 07, 2014, 09:14:00 AM
Politicians are professional liars. "Left" and "Right." But so are a lot of public jobs. Authenticity is in short supply.

Most jobs in general. Oh, sure, I'm a team player who likes a fast-paced working environment and likes plenty of brief interactions with random people that I'll never see again. Sure. ;)

It's like a comedian (I forget who) once said, "Do I have a passion for frozen yogurt? No! I just a need a job." Having to get a job just teaches you that you have to be dishonest to a certain extent in order to survive, and sadly it's no different for politicians. They have to make grand promises to impress us (who are in a sense their employers) in order to get elected, but if they are inclined to follow up on those promises is a different story...

Title: Re: Meltdown: JEB BUSH to Run for Res. as DEMOCRAT!
Post by: Todd on April 07, 2014, 09:56:56 AM

Quote from: snyprrr on April 07, 2014, 07:48:59 AMWill you all now believe me when i say that there has NEVER been a so-called 'Conservative' in the WH?

Not even William McKinley or Calvin Coolidge or Grover Cleveland?

Title: Re: Meltdown: JEB BUSH to Run for Res. as DEMOCRAT!
Post by: snyprrr on April 07, 2014, 06:14:20 PM

Quote from: Todd on April 07, 2014, 09:56:56 AM

Not even William McKinley or Calvin Coolidge or Grover Cleveland?

Sorry, I wasn't going back THAT far- all people know these days is Qlintoin and Bushe... endlessly ya ya ya,... so, I thought I was being provocative by alluding to the... shhh... "R" Word. Oh, I'm such a naughty!

I still like Andrew Jackson and leave it there "and by God and shall route you out!"

Title: Re: Meltdown: JEB BUSH to Run for Res. as DEMOCRAT!
Post by: Brian on April 07, 2014, 06:18:06 PM

Quote from: snyprrr on April 07, 2014, 06:14:20 PM
I still like Andrew Jackson and leave it there "and by God and shall route you out!"

You still like the first president to mandate a genocide on American soil? (Sorry, I just really don't like Andrew Jackson.)

Title: Re: Meltdown: JEB BUSH to Run for Res. as DEMOCRAT!
Post by: Todd on April 07, 2014, 07:01:12 PM

Quote from: Brian on April 07, 2014, 06:18:06 PMYou still like the first president to mandate a genocide on American soil? (Sorry, I just really don't like Andrew Jackson.)

Nah, snyprrr is thinking more along the line of:

(http://loc.harpweek.com/LCPoliticalCartoons/Disk3/5w/3a05364v5w.jpg)

Title: Re: Meltdown NO NEED FOR MELTDOWN THREAD ANYMORE! good times!!
Post by: snyprrr on July 11, 2014, 06:12:22 AM

Well, no,... not like anything untoward is happening. ::)

So, there's not one member since October who thought, "Hey, what's wrong with the world? I'm going to Post on the 'Meltdown' Thread."??

SHAME ON YOU ALL!! tsk tsk

Ready for the Global Financial Reset?

No se, no comprende, no tostitos

Can someone from another part of the world explain to me what's going on with La Migra in the US? Who runs their country like this? Oh, that's right, Sweden! and UK, and France... wtf??...

HOW AM I SUPPOSED TO FOLLOW LAWS THAT MY LEADERS IGNORE? in good conscience,... HOW?

Can you PROVE to me that Hamas kidnapped the three boys and that this wasn't just another shell game? Who benefited from their deaths? (apparently there were no worms on the boys' bodies)

Oh, hey, Yissyrel- I'm suuure we'd LOVE to take all those dirty arabs off your hands. Soccer moms all over the country are standing in line to prove they're not racist by adopting ten illegals each!- heck- throw a philistinian in there and we'll call it a baker's dozen?

Dimon is NOT in jail.

Not one politician in jail (Sarkozy??).

Citizens treated like crimminals.

De-Inflation

Oh, noooo- no one is trying to "overload the system to breaking so we can rebuild it in our image"

Noooo- that's NOT what's happening, no matter who tells you (they're just clinging to their god and guns- those poor schmiucks.

Well, as long as we can compare Shosty cds, who.the.fuck.cares.???

Firing squads- how far off?

Oh, and BTW- apparently this kind of shit already happened at least once in the last 100 Years. How many OF THEIR OWN CITIZENS (the Enemy) did they MURDER???

As if you don't know a flaming Libtard (oh, look, a squirrel) who WOULD declare, openly, that they would want to heinously slaughter you if you chimed in an opinion counter to their own. "Oh, you must be a republican." What kind of fucking response is that?? Do you really live in such a childish Either/Or paradigm that you can't come up with anything original Ashleigh Banfield wannabe?

Rachel Maddow = Bill O'Reilly

Obama = Bush

New Boss = Old Boss

Democracy = eventual Socialism

Go and throw yourself in that corpse pit you dug for us. You're not human. Banish Yourself!!!!

(RANT: temporarily on hold)

Title: Re: Meltdown
Post by: Ken B on July 11, 2014, 06:26:37 AM

The world, if you read contemporaneous accounts, is always getting worse. What a Nirvana it must have been a thousand years ago!

Title: Re: Meltdown NO NEED FOR MELTDOWN THREAD ANYMORE! good times!!
Post by: milk on July 11, 2014, 03:59:18 PM

Quote from: snyprrr on July 11, 2014, 06:12:22 AM
New Boss = Old Boss

We'll be fighting in the streets
With our children at our feet
And the morals that they worship will be gone
And the men who spurred us on
Sit in judgment of all wrong
They decide and the shotgun sings the song

I'll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I'll get on my knees and pray
We don't get fooled again

The change, it had to come
We knew it all along
We were liberated from the fold, that's all
And the world looks just the same
And history ain't changed
Cause the banners, they are flown in the next war

I'll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I'll get on my knees and pray
We don't get fooled again
No, no!

I'll move myself and my family aside
If we happen to be left half alive
I'll get all my papers and smile at the sky
Though I know that the hypnotized never lie
Do ya?

There's nothing in the streets
Looks any different to me
And the slogans are replaced, by-the-bye
And the parting on the left
Are now parting on the right
And the beards have all grown longer overnight

I'll tip my hat to the new constitution
Take a bow for the new revolution
Smile and grin at the change all around
Pick up my guitar and play
Just like yesterday
Then I'll get on my knees and pray
We don't get fooled again
Don't get fooled again
No, no!

Yeah!

Meet the new boss
Same as the old boss

Title: Re: Meltdown
Post by: snyprrr on July 14, 2014, 06:44:23 AM

Seriously, is the current administration (or government) of the US helping people cross the border illegally, and then giving them preferential treatment once they're here? They can board planes with no ID when grannies are being fondled? And they're being bussed, all hush hush like, to various undisclosed locations around the country? And that they're really NOT just "women and children"?

How do these people actually make it through Mexico when that country has such strict laws about this kind of thing (unless there is a coordinated effort amongst the participating countries)?

I live in a 'Sanctuary State'- what can I look forward to in the coming years? As far a jobs go?

Will they have 'Untouchable' status?

The New America?

My mom says she has a 'Social Conscience' and is a 'Humanitarian', but it seems that all that needs to be done is to say some 'feel good' 'emotional' thing and all of a sudden these 'refugees' are no the most needful christian concern. No critical thinking, just pure emotion- as if we don't have 'citizen refugees' right here- as if we don't ALREADY have a system stretched well beyond its ability (Cloward & Piven anyone?). Why is 'compassion' only measured in terms of how we can help anyone one but our own backyard?

Eliminate poverty in your own country first before you start acting all "everyone in the world is a citizen". wtf????

I simply DO NOT BELIEVE that all these bleeding heart types actually CARE for all this horde. Will they house them in their OWN houses? Yea, right.

If I were an evil leader, I could sure open up the borders to flood the country and break down the system so I could rebuild it in my image. Again, THIS IS TEXTBOOK '60S RADICAL BY-THE-NUMBERS.

AND NO- neither do I want

a) robber barons ruling me with their ill gotten gain

b) the government to ACT like robber barons for... who?... who is our government working for?? (answer:_____________)

I don't want communism OR fascism.

CAPITALISM is just another talmudic construct, the opposite side of the commie coin. Remember that Capitalism allows for no morals- your daughter is fair game- and porn is the end result (they don't "hate us for our freedoms"- they hate us for our wanting to turn their daughters into whores with our 'freedom to porn'- which is the EASIEST way to make the Capital)- and not to mention "financial PRODUCTS".

So, you're afraid of Sharia? You've been living under the Noachide laws since 1973. look it up!

Title: Re: Meltdown
Post by: kishnevi on July 14, 2014, 06:50:50 AM

Someone forgot to take his meds today, I see..

Title: Re: Meltdown ISIS LOVE JUMANGI!!~
Post by: snyprrr on August 13, 2014, 06:24:54 AM

So let me get this straight. The ISIS fighter(s) tweeted that they loved 'Jumangi'? Doesn't that just prove that they are See-Yi-Yay! or Emm-Eye-5 or Mussud? (you have to spell wrong or you will be flagged)

wtf people? Can't you see your Global Governance Body is pulling an Emanual Gooldsteen on you? Trying to make you feel like scared pussies in the face of the muslim horde- who are actually just actors and mercs from London and Brooklyn?

What did Bertrand Russel say about the Scientific Society? "Get 'em young and they'll believe whatever you tell them."?? Yea, look to Russell for where we're at today.

IT SURE DOESN'T SEEM LIKE ANYONE HERE IS WORRIED ONE SQUAT ABOUT WHAT'S GOING ON IN THE WORLD - SO, IT MUUUST BE FAKE!!

So, there's no looming Financial Meltdown to make '08 look like lottery winnings?

So, no corrupt gov would overload their own system with too many crises so that the thing buckles under its own weight so we can build it up again "in OUR image"?

No one's making fake olive oil?

The whole "they hate us for our freedoms" thing is starting to not make sense anymore as it seems certain people would looove to declare martial law and round up "the other side",... or whatever.

(again, don't make me a republican just cause I say this, puh-leeze- they both go to the same schools, join the same societies, and know the same handshakes)

EVERYONE (even the libbiest libber) IS CONSERVATIVE WITH THEIR OWN MONEY!!

Title: Re: Meltdown ISIS LOVE JUMANGI!!~
Post by: milk on August 13, 2014, 06:44:34 AM

Quote from: snyprrr on August 13, 2014, 06:24:54 AM
So let me get this straight. The ISIS fighter(s) tweeted that they loved 'Jumangi'? Doesn't that just prove that they are See-Yi-Yay! or Emm-Eye-5 or Mussud? (you have to spell wrong or you will be flagged)

wtf people? Can't you see your Global Governance Body is pulling an Emanual Gooldsteen on you? Trying to make you feel like scared pussies in the face of the muslim horde- who are actually just actors and mercs from London and Brooklyn?

What did Bertrand Russel say about the Scientific Society? "Get 'em young and they'll believe whatever you tell them."?? Yea, look to Russell for where we're at today.

IT SURE DOESN'T SEEM LIKE ANYONE HERE IS WORRIED ONE SQUAT ABOUT WHAT'S GOING ON IN THE WORLD - SO, IT MUUUST BE FAKE!!

So, there's no looming Financial Meltdown to make '08 look like lottery winnings?

So, no corrupt gov would overload their own system with too many crises so that the thing buckles under its own weight so we can build it up again "in OUR image"?

No one's making fake olive oil?

The whole "they hate us for our freedoms" thing is starting to not make sense anymore as it seems certain people would looove to declare martial law and round up "the other side",... or whatever.

(again, don't make me a republican just cause I say this, puh-leeze- they both go to the same schools, join the same societies, and know the same handshakes)

EVERYONE (even the libbiest libber) IS CONSERVATIVE WITH THEIR OWN MONEY!!

I'm interested in these types of opinions. You are saying that ISIS are actors and maybe the groups, such as the Yazadis also are not real (are these photos staged:
http://news.yahoo.com/photos/yazidis-in-iraq-flee-for-their-lives-1407427505-slideshow/ (http://news.yahoo.com/photos/yazidis-in-iraq-flee-for-their-lives-1407427505-slideshow/)?) You say, "can't you see..." So, I'm wondering what kind of evidence you might have for this claim (if it is so obvious)? Is it speculation...like, kind of a hunch? Or something more substantial? Certainly there is real evidence that governments are famously deceitful just as there is evidence that there are different types of violent fundamentalists, including types of jihadists, in the world. But I'm interested in the claim that things are controlled beyond how they seem. I tend to think that there is as much anarchy, surprise and incompetence in events as there is planning and control and that, while we've been deceived before, people often just want to see patterns where there is randomness and reasons where there are often few. But I'm willing to look at what people have to say with an open mind. If there is evidence of a world government and that ISIS is some kind of false flag then I'd certainly like to know about it.

Title: Re: Meltdown ISIS LOVE JUMANGI!!~
Post by: Sergeant Rock on August 13, 2014, 07:01:50 AM

Quote from: snyprrr on August 13, 2014, 06:24:54 AM
So let me get this straight. The ISIS fighter(s) tweeted that they loved 'Jumangi'? Doesn't that just prove that they are See-Yi-Yay! or Emm-Eye-5 or Mussud?

And Kim Jong-un loves Dennis Rodman and American basketball so obviously Kim's CIA too! Now that I think deeply about it (thanks to your insights) I realize North Korea must be one of the longest running CIA conspiracies in history! Wow, snyprrrr...thank you for showing us the horrifying truth :o

Quote from: snyprrr on August 13, 2014, 06:24:54 AM
(you have to spell wrong or you will be flagged)

Indeed...you are such a danger to the US and Israeli political and intelligence communities, I suggest you leave your place of dwelling immediately and take up permanent residence in your car. Keep on the move, dude...don't let them catch you! Without you, the world is lost. (And don't forget to pack your tin foil!)

Sarge

Title: Re: Meltdown ISIS LOVE JUMANGI!!~
Post by: milk on August 13, 2014, 07:09:30 AM

Quote from: snyprrr on August 13, 2014, 06:24:54 AM
So let me get this straight. The ISIS fighter(s) tweeted that they loved 'Jumangi'? Doesn't that just prove that they are See-Yi-Yay! or Emm-Eye-5 or Mussud? (you have to spell wrong or you will be flagged)

wtf people? Can't you see your Global Governance Body is pulling an Emanual Gooldsteen on you? Trying to make you feel like scared pussies in the face of the muslim horde- who are actually just actors and mercs from London and Brooklyn?

But I always wonder if your posts are satire or serious. It's hard to tell. If they're satire, I think they're clever and amusing. If you're serious, well, I don't see strong logic here.

Title: Re: Meltdown ISIS LOVE JUMANGI!!~
Post by: North Star on August 13, 2014, 07:11:44 AM

Quote from: milk on August 13, 2014, 06:44:34 AM
I'm interested in these types of opinions. You are saying that ISIS are actors and maybe the groups, such as the Yazadis also are not real (are these photos staged:
http://news.yahoo.com/photos/yazidis-in-iraq-flee-for-their-lives-1407427505-slideshow/ (http://news.yahoo.com/photos/yazidis-in-iraq-flee-for-their-lives-1407427505-slideshow/)?) You say, "can't you see..." So, I'm wondering what kind of evidence you might have for this claim (if it is so obvious)? Is it speculation...like, kind of a hunch? Or something more substantial? Certainly there is real evidence that governments are famously deceitful just as there is evidence that there are different types of violent fundamentalists, including types of jihadists, in the world. But I'm interested in the claim that things are controlled beyond how they seem. I tend to think that there is as much anarchy, surprise and incompetence in events as there is planning and control and that, while we've been deceived before, people often just want to see patterns where there is randomness and reasons where there are often few. But I'm willing to look at what people have to say with an open mind. If there is evidence of a world government and that ISIS is some kind of false flag then I'd certainly like to know about it.

It's no use, reason will not slow Snyprrrrrrr down.

Title: Re: Meltdown
Post by: Karl Henning on August 13, 2014, 07:26:36 AM

Can't stop the boogie!

Title: Re: Meltdown ISIS LOVE JUMANGI!!~
Post by: Cato on August 13, 2014, 07:34:13 AM

Quote from: North Star on August 13, 2014, 07:11:44 AM
It's no use, reason will not slow Snyprrrrrrr down.

"Logic is a little bird tweeting in meadow; logic is a wreath of pretty flowers which smell bad."

- Ultimate logician Mr. Spock (trying to confuse an alien) in Star Trek.

Title: Re: Meltdown
Post by: Ken B on August 13, 2014, 10:04:50 AM

It's lunatic really to pretend I understand any snyprrr post, but I do think he meant the CIA stuff ironically. He thinks people are seeking excuses for not noticing that ISIS has become a problem.

That's about all I can grok from his post.

Title: Re: Meltdown
Post by: Sergeant Rock on August 13, 2014, 12:33:41 PM

Quote from: Ken B on August 13, 2014, 10:04:50 AM
It's lunatic really to pretend I understand any snyprrr post, but I do think he meant the CIA stuff ironically. He thinks people are seeking excuses for not noticing that ISIS has become a problem.

That's about all I can grok from his post.

Unfortunately, you're wrong. snyprrr actually believes his rants. He thinks the CIA, the Jews and the "media" are behind everything, including 9/11.

Sarge

Title: Re: Meltdown
Post by: kishnevi on August 13, 2014, 04:35:34 PM

There is possible merit in the underlying idea of Snyps....that the political elites (which includes the media and others not normally thought of as politicians) are using the problem of jihadism to distract us from real problems and cement their authority over the rest of us. How they are doing it is of course nothing like Snyps' imaginings, if they are.

But Snyps knows the Jihadis are killing and looting en masse. His detachment from reality has not proceeded that far, I think.

Title: Re: Meltdown
Post by: milk on August 13, 2014, 04:57:13 PM

Quote from: Jeffrey Smith on August 13, 2014, 04:35:34 PM
There is possible merit in the underlying idea of Snyps....that the political elites (which includes the media and others not normally thought of as politicians) are using the problem of jihadism to distract us from real problems and cement their authority over the rest of us. How they are doing it is of course nothing like Snyps' imaginings, if they are.

But Snyps knows the Jihadis are killing and looting en masse. His detachment from reality has not proceeded that far, I think.

Oh yes...Maybe that's his real point and I just missed it.

Title: Re: Meltdown
Post by: ibanezmonster on August 13, 2014, 05:14:38 PM

Quote from: Jeffrey Smith on August 13, 2014, 04:35:34 PM
There is possible merit in the underlying idea of Snyps....that the political elites (which includes the media and others not normally thought of as politicians) are using the problem of jihadism to distract us from real problems and cement their authority over the rest of us. How they are doing it is of course nothing like Snyps' imaginings, if they are.

I have to agree with you here, and on both points.

Title: Re: Meltdown
Post by: Sergeant Rock on August 14, 2014, 05:38:44 AM

Quote from: Jeffrey Smith on August 13, 2014, 04:35:34 PM
There is possible merit in the underlying idea of Snyps....that the political elites (which includes the media and others not normally thought of as politicians) are using the problem of jihadism to distract us from real problems and cement their authority over the rest of us. How they are doing it is of course nothing like Snyps' imaginings, if they are.

You're being too kind. I believe you are misinterpreting snyprrr's rants. If he were just saying that government and media and Jews exploit situations for political and financial ends, then he'd be correct. Everyone exploits situations. But he goes beyond that by implying, even asserting, that those who benefit actually create the situations. He doesn't believe America went to the moon. He thinks it was staged. He believes the CIA took down the Twin Towers. Jihadists are attacking the world? No, in snyprrr's mind, it's the CIA and Mossad. snyprrr even claims Israel killed their own Jewish boys in the West Bank:

Quote from: snyprrr on July 11, 2014, 06:12:22 AM
Can you PROVE to me that Hamas kidnapped the three boys and that this wasn't just another shell game? Who benefited from their deaths? Oh, hey, Yissyrel-

He claims ISIS is US, British and Israeli intelligence:

Quote from: snyprrr on August 13, 2014, 06:24:54 AM
So let me get this straight. The ISIS fighter(s) tweeted that they loved 'Jumangi'? Doesn't that just prove that they are See-Yi-Yay! or Emm-Eye-5 or Mussud? (you have to spell wrong or you will be flagged)

wtf people? Can't you see your Global Governance Body is pulling an Emanual Gooldsteen on you? Trying to make you feel like scared pussies in the face of the muslim horde- who are actually just actors and mercs from London and Brooklyn?

The claims are so over-the-top, you all believe he's either a troll or it's just a joke--or the basis for some more reasonable interpretation (like Jeffrey's). But no, this dude believes his rants. Go back through his old posts. This isn't a joke to him; this is reality. He believes there is an international Jewish conspiracy and both Bush and Obama, the CIA and the media are in on it, all co-conspirators.

Do people exploit situations? Of course. Do people create situations to exploit? Sometimes, of course (I spent six years in military strategic communications; I saw that happen). But that doesn't mean everything you read or hear, everything the government tells you is a lie. To believe everything is a conspiracy is just insane. Obama and the Jews don't control the world; they don't control the media. Obviously. But snyprrr would have you think so.

Sarge

Title: Re: Meltdown
Post by: mc ukrneal on August 14, 2014, 05:46:08 AM

Quote from: Sergeant Rock on August 14, 2014, 05:38:44 AM
You're being too kind. I believe you are misinterpreting snyprrr's rants. If he were just saying that government and media and Jews exploit situations for political and financial ends, then he'd be correct. Everyone exploits situations. But he goes beyond that by implying, even asserting, that those who benefit actually create the situations. He doesn't believe America went to the moon. He thinks it was staged. He believes the CIA took down the Twin Towers. Jihadists are attacking the world? No, in snyprrr's mind, it's the CIA and Mossad. snyprrr even claims Israel killed their own Jewish boys in the West Bank:

He claims ISIS is US, British and Israeli intelligence:

The claims are so over-the-top, you all believe he's either a troll or it's just a joke--or the basis for some more reasonable interpretation (like Jeffrey's). But no, this dude believes his rants. Go back through his old posts. This isn't a joke to him; this is reality. He believes there is an international Jewish conspiracy and both Bush and Obama, the CIA and the media are in on it, all co-conspirators.

Do people exploit situations? Of course. Do people create situations to exploit? Sometimes, of course (I spent six years in military strategic communications; I saw that happen). But that doesn't mean everything you read or hear, everything the government tells you is a lie. To believe everything is a conspiracy is just insane. Obama and the Jews don't control the world; they don't control the media. Obviously. But snyprrr would have you think so.

Sarge

Nice post. I always just assumed it was the medication...

Title: Re: Meltdown
Post by: Karl Henning on August 14, 2014, 05:47:03 AM

Or, an interaction between the medication and the soy lecithin . . . .

Title: Re: Meltdown
Post by: milk on August 14, 2014, 08:12:09 AM

I'm kind of fascinated with this subject - especially because I watched a former friend take up these ideas and turn into someone with these same views. Not just that, but turn into someone who now dedicates his whole life to it.
Anyway, I thought this book was a fun and interesting read:
(http://www.thehippiebookworm.com/wp-content/uploads/2014/05/them.jpg)
Ronson is also an entertaining speaker. There's plenty of interesting interviews with him on various chat shows.

Title: Re: Meltdown n IF THIS COMPUTY DID LINKS, I WOULD!!!!!!
Post by: snyprrr on August 14, 2014, 09:19:17 AM

Quote from: Sergeant Rock on August 14, 2014, 05:38:44 AM
You're being too kind. I believe you are misinterpreting snyprrr's rants. If he were just saying that government and media and Jews exploit situations for political and financial ends, then he'd be correct. Everyone exploits situations. But he goes beyond that by implying, even asserting, that those who benefit actually create the situations. He doesn't believe America went to the moon. He thinks it was staged. He believes the CIA took down the Twin Towers. Jihadists are attacking the world? No, in snyprrr's mind, it's the CIA and Mossad. snyprrr even claims Israel killed their own Jewish boys in the West Bank:

He claims ISIS is US, British and Israeli intelligence:

The claims are so over-the-top, you all believe he's either a troll or it's just a joke--or the basis for some more reasonable interpretation (like Jeffrey's). But no, this dude believes his rants. Go back through his old posts. This isn't a joke to him; this is reality. He believes there is an international Jewish conspiracy and both Bush and Obama, the CIA and the media are in on it, all co-conspirators.

Do people exploit situations? Of course. Do people create situations to exploit? Sometimes, of course (I spent six years in military strategic communications; I saw that happen). But that doesn't mean everything you read or hear, everything the government tells you is a lie. To believe everything is a conspiracy is just insane. Obama and the Jews don't control the world; they don't control the media. Obviously. But snyprrr would have you think so.

Sarge

Roosevely didn't know about Pearl Harbour. Yea, sure Sarge.

THE USS LIBERTY was juuust a "mistake".

Sarge? Really? The jews don't "own" the Media? Are you like ADL's Abe Foxman, who says, "It just so happens that there are some jews in positions of power in Hollywood (etc.), but that in no way means they control it." (not a quote)

In 1899, in the First Zionist Congress, Theodore Hertzl didn't say that they had to make the suffering of the jews so extraordinary that they would eventually get their state?

As for 9/11- please tell me again WHY BUILDING 7 FELL? Remember, the building that NO PLANE HIT, fell ALSO that day. Three buildings fell. The Official Story of how Building 7 fell should separate the sheep from the thinkers.

As to the ISIS stuff. Do you remember ADAM YIYAHE GADAHN? The "American face of Al-Queda"? Please do look him up, jewishness and all.

And the ISIS guy, Abu al-Baghdadi? Is his real name Elliot Shimon?

YOU WANT A JOKE?? Here's a joke- OSAMA BIN LADEN is an actor named Herb Goldman. There, that's a JOKEm but it might as well be true.

ffs- you all really believe this muslim stuff, right? EMANUAL GOLDSTEIN.

I'll put it this way, and I'm sure Sarge can relate. To my dear dear government, and all that, I say- PLEASE, BRING ON THE MUSLIM HORDES. JUST LET ME BE ABLE TO DEFEND MYSELF (you fuckity fucks who can't stand the thought of an innocent defending himself with a firearm).

HUH?

You think I'm SCARED of dirty filthy muslim murderers beheading children? Fuck- let them try that on a country full of REAL MEN (yea, US WILL fall due to man boobs). Huh? Guess what, all the muzzie-hate on the TV hasn't scared me enough, fellas. Guess you're going to have to do better than that.

Scared of muzzies blowing up planes in US? FUCK NO!! The only "terror plots" uncovered here are the ones that the FBI CAJOLED SOME HAPLESS IDIOT MUZZIE IDIOT to be in the wrong place at the wrong time, buying explosives that the FBI supplied.

Seriously, this is ALL brought to you by the same people who LIED about WMDs. REMEMBER HOW THEY LIED AND SOME OF YOUR RELATIVES MIGHT HAVE DIED IN A USELESS BANKER WAR?

ffs guys- the US GOV IS FULL OF DUAL CITIZENSHIP ISRAELI CITIZENS. I thought the gov types weren't supposed to have a dual citizenship with ANY country? Explain THAT, Lucy!!

Sarge, you act like you DON'T believe George Orwell. You act like Totalitarianism ISN'T what's on the menu for the 21st Century. Yea, whether it's a Caliphate or the Noachide Laws, it ain't gonna be pretty.

oh, btw-

SO, YOU'RE AFRAID OF LIVING UNDER A CALIPHATE??

You've been living under the jew version of it since, what? 1973? They are called the NOACHIDE LAWS, please do look them up and when they were instituted.

OBVIOUSLY, "WAG THE DOG" WAS JUUUUUUUUUUST A MOVIE, based on nothing other than some fanciful idea that no one watching would even take seriously, or think to do.

~~Funny thing, all these muzzie terrorists are raping boys as well. I thought the muzzies weren't into that kind of stuff.~~

Sarge, you really believe that 19 "ninja muzzies with extraordinary ability" pulled off 9/11?? Who the flight instructors said COULDN'T FLY A PLANE if they wanted to?

Have you seen the superhuman banking manoover(sp.) that the Pentagon plane did? Have you seen them try to re-act that in a flight simulator- going at the speeds the plane was going?

Why the stand down order?

why why why Sarge? Why soooo many questions when all it was was 19 (CIA trained) stooges??? And the fact that they were- at least- on a first name basis with at least ONE "official" is part of the record, is it not?

Did you just read the Popular Science article written by Chertoff's cousin, and call it a day?

TWO BUILDINGS FELL INTO THEIR 'FOOTPRINT', JUST LIKE EVERY DEMOLISHED BUILDING IN HISTORY. So, even if that's not what happened, it's still curious that the falling buildings should fall so... perfectly... into... their own footprint... AS IF they were simply demolished.

EVERYONE- look again at the footage of the buildings turning into DUST. Is that REALLY what happens? Is it?

Sarge, there's a whole organization of Structural Engineers and such who have come out against- again- The Official Story. Yea, I'm sure they're ALL just a bunch of jew hating bastards.

Don't make me list all the US gov with dual citizships (it's out there- look it up) tTHEY'RE NOT FROM FLIPPIN ARABIA!!!!!

Sarge must be a fed through and through, believing everything his superiors tell him, without question. "We're the good guys" Yea, Sarge, go ahead and believe what the CIA FBI and Chertoff and Bush/Obama/Clinton/Bush/Reagen tell you- Cheney-

NONE HAVE SAVED EVEN ONE LIFE!! They are ALL murderers and they were murderers from the beginning.

OBAMA PROMISED

HE PROMISHED

And he just goes lockstep with the Liberal Bush. Hey, all this about him and Israel having problems? GREAT PSYCHOLOGICAL OPERATION, NO? Show me where Obama hasn't sucked Israel's balls clean dry. Show me where Obama is such a hater of Israel. Him and Yahoo are laughing all the way to the bank (of the Jordan).

Moon landing- frankly I don't give a flippin flap - either way none of that utopian shit ever panned out- so- Iif it happened I wouldn't be too proud of it. whatever- that's just a DISTRACTION

ALL WARS ARE BANKERS' WARS - so, whether they be saudi bankers, jew bankers, or rich-old-white-man bankers, or chinese bankers, THEY are the true rulers of this world, and NOTHING happens by accident.

Oh, Sarge, who said that in politics NOTHING happens by accident?

No, it wasn';t me, or some wing nut, or... it was Roosevelt.

And what did Woodrow Wilson say about the "powers that be" once he realized that he had sold the country down the river?

DO I REALLY NEED TO FIND THE GENOCIDAL QUOTES OF MOST ALL ISARELI LEADERS FROM THE FIRST TO THE LAST?

Fuck anyone who continually plays the victim card whilst at the same time acting in unconsciousable(sp.) violence.

So, who is the great threat to the world in your view, Sarge?

The War on Drugs was simply a war on the COMPETITION!!

Why is the US Military guarding and facilitating herion production in Afghanistan when the taliban had almost eradicated it? What exactly, if that's not the case, is the US Military DOING there?

Oh, that's right, keeping useless cookie eaters like me SAFE from the uncircumcised hordes who will rape our precious white wimmin.

THOSE WHO TRADE FREEDOM FOR SECURITY DESERVE NEITHER- Ben Franklin

Now I've completely forgotten what the question was.

Title: Re: Meltdown
Post by: Ken B on August 14, 2014, 09:27:48 AM

I see conspiracy theories as reverse IQ tests. Google "chem trails" for a widespread wacky one.

But I am not convinced snyprrr isn't pulling legs most of the time. Sarge has highlighted parts I think meant as satire/mockery. Or I hope are anyway :blank:

Title: Re: Meltdown
Post by: Karl Henning on August 14, 2014, 09:46:44 AM

snypsss, I'm not going over Building 7 again. There's nothing to see there. Take a deep breath.

And how you talk! As if anyone could "control Hollywood"!

Title: Re: Meltdown OH, TO ALL MY DEAREST JEWISH FRIENDS
Post by: snyprrr on August 14, 2014, 09:59:50 AM

Quote from: Ken B on August 14, 2014, 09:27:48 AM
I see conspiracy theories as reverse IQ tests. Google "chem trails" for a widespread wacky one.

But I am not convinced snyprrr isn't pulling legs most of the time. Sarge has highlighted parts I think meant as satire/mockery. Or I hope are anyway :blank:

I am a holocaust denying anti-semite.

As a goy, I HAVE to be against the agenda of international business/gov/religious jews. They have pushed multiculturalism on the whole world, whilst treating the african migrants and arabs and christians in their "own" land like animals- dogs and pigs.

Please go up to any group of israeli youth and go ahead and ask them some trick questions to hear the ear tingling answers you will get.

Jesus was NOT a jew. he was an hebrew. He was not necessarily a "judean" from which the poisoned gospel of the sanhedrin dropped like dew.

The jews KILLED their own God, their Messiah- "his blood be on our heads"- fuck whatever the pope says- he certainly sucks a bag of foreskins for his masters. (when will the German people finally say enough is enough- we had nothing to do with it- speaking of reparations)

At least the dirty muzzies "claim" that jesus is "one of the prophets" but the jews say he is the "son of a prostitute". HOW CAN FUNDY CHRISTIANS SUPPORT THIS? (uh, they are absolutely some of the dumbest people on the planet?)

"He who curses Israel, God will curse him"- or something? Well, that's old test. The new one says-

"WE (the blood soaked born again Believer) are the Israel OF GOD"

I was at an old fashioned baptist church once- the kind that preaches the old fashioned way- and in the middle of it, the guy goes on about the "holy RACE of jews". I was shocked. So, this is what Conservative, Bible Thumping, Fundy Christians know about their own Gospel?????

Even Billy Graham said something quite similar- such as "Jews don't need to be Saved."

Yea, I've got some questions for all my dearest jewish friends. I really really want to know what you really think about all the deep deep shit. I can no longer give any of my dearest jewish friends any slack. If they are not speaking out about the horrors that their own 'identified group' perpetuates, I HAVE to believe that they are on the side of the genocidists.

Just like 'white guilt' caused generations of whites to whip their own backs to SHOW the world how sad they were for all the committed- I NEED to see some collective outcry from the jewish community when they see that their own people are turning into the so-called monsters that persecuted them in the past.

if there is no outcry, then you are either just a scared puppy, or you actually believe all this Chosen stuff. Either way, you are useless to the cause of Peace and Love and Liberty and freedom FOR ALL PEOPLES.

And tell that to YOUR cousins the muzzies too. yea, THEY ARE SEMITES TOO YOU KNOW!!!

The only way i could be described as a self hating jew would be that I haven't done enough to expose the evils within my own group. But 'they' say you are self hating when you don't follow lockstep with what the International jewish Fabrication states is its interests. There's certainly NO discussion with the jewish community that is making ANY difference.

So, to all my dearest jewish friends- you ain';t doin' shit to stop the Coming Holocaust- so you might as well also be blamed for it. And if you don't think a real worldwide uber holocaust is coming- well- I just pray your flight be not in winter.

You know- how dare anyone call me out as ANYTHING. I am flesh and blood, I feel for any hurt person, innocent of crime. If you have read every word I've written and your conclusion is that I'm some stormfront type, or just a hater- or whatever,- then I'd certainly like to continue a dialogue to clarify any positions. I DO RESIST THE TOTALITARIAN DESIRE to "kill" all my enemies, - or say "The world would be better off without X". Because, only the Totalitarian Impulse is the one that constantly calls for everyone's murder.

If you all accuse me of being a nazi or something, I will be forced to - somehow- download all the pics of babies with the backs of their heads missing ffrom the current conflict/war. I will be forced to post all the quotes from all the bloodthirsty.

~~Maybe I like the Chinese, I don't know- but most of the worlds' cultures have no turned to shit- and I don't feel the need to be 'nice' just for the sake of argument.~~

Surely there are no arabs on this forum?? (I mean- they're not even human- much less so highly sophisticated as to actually listen to music with more than one note)

Let's just say this all started when they called Bernie Madoff a "white guy". That led to the discovery that the slave trade was a jewish construct, and that 'whitey' me wasn't really to blame. You mean all that white guilt was for naught? You mesan I don't owe Shaniqua my soul?

Seriously, I'd love to hear just one jew say something critical of their own (without fear of reprisal). Just one to say, Yea, we really fucked that one up- or- yea, I really struggle with my love of materialism- or- yea, my son works in a grocery store- ANYTHING.

And, if you think I'm bad, my half jew roommate is 1000 worse than what you get from me. He's on an anti-kosher anti-circumcision crusade that's literally quite embarrassing at times. I plead with him- "If you only had one issue, what would it be", and, he knows that exposing the corrupt usuary banking system is the thing- but, of course, it's not a sexy issue like kosher.

Explain usuary to me

Title: Re: Meltdown
Post by: Karl Henning on August 14, 2014, 10:00:38 AM

This (http://www.dailymail.co.uk/news/article-2056088/Footage-kills-conspiracy-theories-Rare-footage-shows-WTC-7-consumed-fire.html) won't make any difference to snypsss, but for anyone else yet curious.

Title: Re: Meltdown
Post by: Karl Henning on August 14, 2014, 10:01:48 AM

Quote from: snyprrr on August 14, 2014, 09:59:50 AM
Even Billy Graham said something quite similar

snypsss, the filter is your friend. The Delete button, too.

Title: Re: Meltdown
Post by: snyprrr on August 14, 2014, 10:09:41 AM

Quote from: karlhenning on August 14, 2014, 10:01:48 AM
snypsss, the filter is your friend. The Delete button, too.

What? Billy Graham didn't tell brand new jewish converts to "go back to the synagogue of your choice"?

By satire, do we mean that i'm actually on the side of the thing I criticize?

Quote from: karlhenning on August 14, 2014, 10:00:38 AM
This (http://www.dailymail.co.uk/news/article-2056088/Footage-kills-conspiracy-theories-Rare-footage-shows-WTC-7-consumed-fire.html) won't make any difference to snypsss, but for anyone else yet curious.

lolz- just read the comments

Yea, Karl, that's one MIGHTY BIG FIRE ::). Wow, it's amazing that the other surrounding buildings didn't fall too.

And how convenient that IT TOO fell into its own footprint.

btw- BLACK SMOKE IS INDICATIVE OF A FIRE NOT BURNING SO WELL

Larry Silverstein(Silverman?)- the landlord of the building, when talking about it, said, "PULL IT", which is demolition term for demolishing the building. He said it, not me.

NO PLANE HIT BUILDING 7

And that fire video is lame lame lame. Need I show the fire in that Spanish skyscraper that REALLY was on fire ALL NIGHT LONG and was still standing the next morning.

NO OTHER TIME IN HISTORY HAS FIRE BROUGHT DOWN A STEEL STRUCTURE (yea, that jet fuel must have been really hot in Building 7).

Building 7 finally made it onto CPAN recently.

Title: Re: Meltdown
Post by: snyprrr on August 14, 2014, 10:10:18 AM

Meanwhile back at the ranch ::)

Title: Re: Meltdown KARL RUNS HOLLYWOOD!!
Post by: snyprrr on August 14, 2014, 10:11:51 AM

ok, so if the jews don't run hollywood

then Bardem and P. Cruz won't be blacklisted, riiight? Just for criticizing Israel? hmm?

Title: Re: Meltdown
Post by: snyprrr on August 14, 2014, 10:13:14 AM

aND cAVIZEL AND gIBSON WERE CERTAINLY not blackballed, no, not at all.

(you're really wearing out my CapsLock finger,Karl)

Title: Re: Meltdown
Post by: Karl Henning on August 14, 2014, 10:16:04 AM

Quote from: snyprrr on August 14, 2014, 10:09:41 AM
lolz- just read the comments

I.e., "couldn't be bothered to read the article, so let me just repeat my previously-inculcated paranoid blather."

Too easy a call, really:

Quote from: karlhenning on August 14, 2014, 10:00:38 AM
This (http://www.dailymail.co.uk/news/article-2056088/Footage-kills-conspiracy-theories-Rare-footage-shows-WTC-7-consumed-fire.html) won't make any difference to snypsss ....

Title: Re: Meltdown albanians run hollywood
Post by: snyprrr on August 14, 2014, 10:24:41 AM

And, no, you are correct. Every film I've ever seen isn't produced by a... oh, what, yes, yes, they are!!

(oh, and I'm still trying to find details of all those hamas rockets they fire- like, where they land, what they're made out of- exactly how many)

Quote from: karlhenning on August 14, 2014, 10:16:04 AM
I.e., "couldn't be bothered to read the article, so let me just repeat my previously-inculcated paranoid blather."

Too easy a call, really:

holy fukk Karl- it was only 10 PARAGRAPHS!! Of course I "read" it. Yea, THE MOST INTENSE BLAZING FIRE I HAVE EVER EVER SEEN.

People, just watch the video- tell me- is that the kind of fire that the writer describes as (_____________) (I forgot the words used, but they are over the top)???

THAT WAS A BIG STEAMING PILE OF NON-EVIDENCE KARL. 10 PARAGRAPHS THAT ONLY PAID DEFERENCE TO NIST AND SUCH. YOU CAN DO BETTER!!

HOWEVER, the most interesting part of the writing is where he describes what was IN Building 7- CIA, IRS, Smith Barney---- perhaps there was a lot of paperwork that people thought might be best to get rid of?

Title: Re: Meltdown
Post by: snyprrr on August 14, 2014, 10:27:10 AM

So we're back at Ground Zero, are we?

And 19 incompetent arab "assets" did it, right? who couldn't fly?

And building 7 fell from the greatest fire anyone had ever seen. (to be fair to karl and the article, the article says that debris from the other falling buildings damaged 7 "beyond repair".... yea, the video really bears that out....not really)

Title: Re: Meltdown NO ONE ASKS QUESTIONS DURING A TRAGEDY
Post by: snyprrr on August 14, 2014, 10:38:07 AM

OPEN LETTER TO THE POWERS THAT BE,

Dear Sirs,

I just wanted to let you know that if you ever wanted to corral your subjects, all you would have to do is to - say- put some bombs in a shoppin mall, or skyscraper, or rail car, or plane,- set them off, and then - through your intelligence outlets, declare that a faction of some vague enemy did it (that lives in a country with lots of oil), and once all the people are rallied beneath you, you can pretty much do whatever you want, because no one really asks questions during a tragedy.

So, in case you needed some ideas on how the end justifies the means-

If you kill a bunch of people at once, normal people will go into a kind of hypnosis whereby which you can tell them pretty much anything, and as long as it comes from the TV, they will believe it.

Now, I know no one in any position of authority would ever think of perping a domestic-terror-incident on their own people. That's just crazy! BUT, ... IF.... in order to save "many", a "few" might have to be given the "President's Highest Honour" (innocent civilians being used as cannon fodder to start trouble), well, I think you can see that this way you can do the Dirty Work of Freedom without anyone having to later go to jail for it.

You welcome,

Just a Citizen Civilian

Title: Re: Meltdown
Post by: Karl Henning on August 14, 2014, 10:38:38 AM

Quote from: milk on August 14, 2014, 08:12:09 AM
I'm kind of fascinated with this subject - especially because I watched a former friend take up these ideas and turn into someone with these same views. Not just that, but turn into someone who now dedicates his whole life to it.
Anyway, I thought this book was a fun and interesting read:
(http://www.thehippiebookworm.com/wp-content/uploads/2014/05/them.jpg)
Ronson is also an entertaining speaker. There's plenty of interesting interviews with him on various chat shows.

Always an adventure, truly.

Title: Re: Meltdown
Post by: snyprrr on August 14, 2014, 10:42:54 AM

Good! :laugh:

I've scared them all away!

Now it's just you... and me.

Here... all alone!

Snuggles! ;)

(ahh, the peace and quiet of a big empty room!)

Now be on your day and don't blame the ~~Pope~~ ~~Chinese~~ ~~Aliens~~ God for everything!

Title: Re: Meltdown
Post by: snyprrr on August 14, 2014, 10:46:39 AM

Quote from: karlhenning on August 14, 2014, 10:38:38 AM
Always an adventure, truly.

I'll read that if you read 'The Unseen Hand: An Introduction to the Conspiratorial View of History' (1985) by A. Ralph Epperson! :-* From now on, I'll be Posting from that book on this Thread. And The, Good, Time,s wuz Had, By, All,!

Title: Re: Meltdown
Post by: mc ukrneal on August 14, 2014, 10:47:21 AM

This thread is aptly titled...:)

Title: Re: Meltdown
Post by: Karl Henning on August 14, 2014, 10:47:51 AM

ROFLMAO

Title: Re: Meltdown
Post by: ibanezmonster on August 14, 2014, 05:23:35 PM

Even if some of the stuff snyprrr posts were true, all you'd do is make yourself crazy thinking about it. There's really no point unless you want to join some sort of civilian militia or something.

Title: Re: Meltdown
Post by: Ken B on August 14, 2014, 05:26:53 PM

There are 3 kinds of people impervious to reason:
1. Creationists
2. Conspiracy theorists
3. Fans of Mennin's 8th.

Title: Re: Meltdown
Post by: kishnevi on August 14, 2014, 05:47:15 PM

The most eccentric provision of the Noachide Laws is the prohibition of eating a limb taken from a living animal. If Snyps's diet requires the limb of a live animal in a regular basis, the principle of saving human life no doubt would allow some flexibility.

Title: Re: Meltdown
Post by: milk on August 14, 2014, 06:39:35 PM

Quote from: karlhenning on August 14, 2014, 10:00:38 AM
This (http://www.dailymail.co.uk/news/article-2056088/Footage-kills-conspiracy-theories-Rare-footage-shows-WTC-7-consumed-fire.html) won't make any difference to snypsss, but for anyone else yet curious.

Thanks for posting that. It might come in handy some day. A guy a worked with (a different guy than the one I mentioned before) who believes all this stuff, got into this conspiracy theory about the Boston bomber last year and that was dispatched pretty quickly with a link. Though, yes, it won't make a difference to people of a certain mindset.

Title: Re: Meltdown
Post by: ibanezmonster on August 14, 2014, 07:05:53 PM

Quote from: milk on August 14, 2014, 06:39:35 PM
Thanks for posting that. It might come in handy some day. A guy a worked with (a different guy than the one I mentioned before) who believes all this stuff, got into this conspiracy theory about the Boston bomber last year and that was dispatched pretty quickly with a link. Though, yes, it won't make a difference to people of a certain mindset.

I saw someone on youtube who believed the Family Guy episode where Peter accidentally joins a terrorist organization was Seth MacFarlane's way of telling everyone he knew about the Boston bombings before they happened. "There were precisely 2 explosions," or something like that.

Title: Re: Meltdown
Post by: milk on August 14, 2014, 09:00:39 PM

Quote from: Greg on August 14, 2014, 07:05:53 PM
I saw someone on youtube who believed the Family Guy episode where Peter accidentally joins a terrorist organization was Seth MacFarlane's way of telling everyone he knew about the Boston bombings before they happened. "There were precisely 2 explosions," or something like that.

There's some ex CIA guy on youtube who claims that the 2011 Tsunami in Japan was the result of explosions detonated under the ocean by the U.S. government. An acquaintance of mine here in Japan, an educated guy, emailed me asking what I thought. At first I thought he was joking. But no! He really believes it and I couldn't talk him out of it!
That's a good idea for a new thread maybe: tell us the weirdest conspiracy theories that you've heard or know of.

Title: Re: Meltdown n IF THIS COMPUTY DID LINKS, I WOULD!!!!!!
Post by: Sergeant Rock on August 15, 2014, 07:19:46 AM

Quote from: snyprrr on August 14, 2014, 09:19:17 AM
As to the ISIS stuff. Do you remember ADAM YIYAHE GADAHN? The "American face of Al-Qaeda"? Please do look him up, jewishness and all.

An American Jew converts to Islam, joins al-Queda and you think that's proof that ISIS was created and is now run by the CIA and Mossad? Okay ;D

Consider this: There were Americans who fought for the Wehrmacht in the Second World War. Roosevelt became president in 1933...the very same year Hitler came to power! That can't be coincidence! Not in your world. It's obvious Roosevelt and the Jews created the Nazis :o Why? In order to fulfill this command apparently:

Quote from: snyprrr on August 14, 2014, 09:19:17 AM
In 1899, in the First Zionist Congress, Theodore Hertzl didn't say that they had to make the suffering of the jews so extraordinary that they would eventually get their state?

I can see why you like to play this fantasy game. Much more fun than reality. :laugh:

Sarge

Title: Re: Meltdown
Post by: Karl Henning on August 15, 2014, 08:30:55 AM

Sarge, with just a little coaching, we can make you a stand-up sensation! I know a source from which I can funnel you a steady stream of material . . . .

Title: Re: Meltdown n IF THIS COMPUTY DID LINKS, I WOULD!!!!!!
Post by: snyprrr on August 15, 2014, 01:01:15 PM

Quote from: Sergeant Rock on August 15, 2014, 07:19:46 AM
An American Jew converts to Islam, joins al-Queda and you think that's proof that ISIS was created and is now run by the CIA and Mossad? Okay ;D

Consider this: There were Americans who fought for the Wehrmacht in the Second World War. Roosevelt became president in 1933...the very same year Hitler came to power! That can't be coincidence! Not in your world. It's obvious Roosevelt and the Jews created the Nazis :o Why? In order to fulfill this command apparently:

I can see why you like to play this fantasy game. Much more fun than reality. :laugh:

Sarge

Did my nephew get on here again?!! :laugh:

Roosevelt = Rosenfeldt (Dutch jew)

Churchill = Jenny James (mother;jewess from Baltimore)

Stalin = Djugoslevski (guess what that means!)

Hit(ler) = well, we all know he's 1/16 jew :laugh:

Himm(ler) = well, we all know that any name ending in "-ler" is pretty much a jew)

Hiss(ler) = even (the jew) Nostradamus got that right

Mil(ler) = yes, even an apparent goy name like 'David Miller' is now considered predominantly jewish

Mil(LER)Light = you see where I'm goin' with this? :laugh:

I'm tellin' ya Sarge, you be in trouble if I could figure out how to Post charts and pics and stuff! ;)

Any (see? I was able to use the Backspace Tab- yay!!)

Title: Re: Meltdown
Post by: snyprrr on August 15, 2014, 01:28:05 PM

I'd love to just take you all on one by one :laugh:... but, ... anyhow...

1) Karl's Posting of the vid-link

Karl simply Posts a ten paragraph, short video link, and says, "There, you have it. Nothing you say is true." OK, so I read the ten paragraphs, and if we look for a Smoking Gun, there is nothing but "could have", "if", "maybe",... all suggestion. Then then go on to tell us that CIA, IRS, and Smith Barney were in Building 7, but failed to mention that

2) ENRON was in Building 7

Maybe someone should look this up, but all the stuff related to the Enron scandel was in Building 7, so, of course it was damage by falling debris that cause SUCH fires and structural damage that

3) JUST "LOOK" AT THE "BUCKLING" GIRDER BEAMS (or whatever you call them

In the video provided, and you can all see for yourselves, they state, and you seem to see, the verticals beams somewhat buckling or whatnot. But then when you stop for a second and realize- excuuuse me- THOSE ARE WINDOW PANES BUCKLING- wtf? guys, can't you see that? Obviously window panes aren't made out of the same thing as actual building beams.

I do NOT patronize, condescend, or insult ANY or yours' Intelligence. FINE- look closely and thoughtfully at the video and tell me whether those are actually the building beams or if they are merely the individual window panes which are obviously made out of a flimsy material.

Quote from: Greg on August 14, 2014, 05:23:35 PM
Even if some of the stuff snyprrr posts were true, all you'd do is make yourself crazy thinking about it. There's really no point unless you want to join some sort of civilian militia or something.

Yes, Greg. I too grew up in an Idealized America. I just wanted to be meMeME!! and I believed everything I was told- one the one hand I had this "Murica" thing that we all have (We're Number One), but I also got a good dose of the "your government sucks" thing (Johnson, Nixon).

So, what is it? White Picket Fences and American Dreams and Betty Crocker blowin' you after a turkey dinner, or is it all "beware the Military Industrial Complex"(Eiserhower)??

Is it Spielberg or Lynch, Greg? How can it be both? (and I'm being general in the analogy)

Is it 'Murica?... or is it Amerika?

Anyhow, I'm just being stupid there- OF COURSE WHO WOULD WANT TO KNOW THESE THINGS AS REALITY when most people will just believe what the Bell Curve tells them. All the whistleblowing in the world gets you no where.

I just have a question to the Total Naysayers: you are saying that the same people who lied to you about every other single thing they ever lied to you about should be trusted in this most delicate case?

I just recently watched the best overall 9/11 doc I've seen- 4-5 hours- done in sections- everything is considered from every angle- and really, people, with just the actual footage that anyone can see and hear it just IS obvious that 19 incompetent and worldly idiot savant dark fellers did NOT do shit.

WHY WERE THERE ISRAELIS FILMING AND DANCING THERE IN NYC? WHAT OF THE WHITE TRUCK (ISRAELIS AGAIN?) DETAINED ON THE BRIDGE. FULL OF EXPLOSIVES, AND THEN JUST LET GO? google "dancing israelis 9/11"

blah blah blah

I'm sorry I can't just be a Link Machine- maybe I'll just try to go there because I can't expect anyone to look up ANYTHING for themselves. (and I'm not being mean, just sayin')

Greg, I know you know the world is fuuuuu... you live in Florida, right? You've got enough wackiness there to keep you busy if you pay attention!! Yea, no one WANTS to think about this, but

"You want to live forever or something"

Lame Quote from 'Starship Troopers'

Title: Re: Meltdown
Post by: snyprrr on August 15, 2014, 01:29:38 PM

Quote from: karlhenning on August 14, 2014, 10:47:51 AM
ROFLMAO

THAT'S IT!! >:D You force me to call forth the Limbaugh Thread!! 8)

Title: Re: Meltdown
Post by: Todd on August 15, 2014, 01:56:55 PM

Quote from: snyprrr on August 15, 2014, 01:28:05 PM
2) ENRON was in Building 7

Enron, huh?

(Oh, and did Ken Lay fake his death?)

Title: Re: Meltdown
Post by: bwv 1080 on August 15, 2014, 02:02:28 PM

well blowing up the WTC did not seem to help Lay and Skilling that much

It comforts a lot of otherwise intelligent people to believe that someone, even if they are malevolent, is in control rather than believe that the world is really this chaotic

Title: Re: Meltdown
Post by: snyprrr on August 15, 2014, 02:06:54 PM

Quote from: Todd on August 15, 2014, 01:56:55 PM

Enron, huh?

(Oh, and did Ken Lay fake his death?)

Todd makes an appearance! 8)

Does your program alert you whenever ENRON is mentioned? Don't be cute. You know I mean the stuff no one wanted anyone to see was stored there- (you know I expect you to look this up, right? haha)-

I'm already on fire and I'm not going to let you fondle my cockles! >:D :laugh:

Quote from: bwv 1080 on August 15, 2014, 02:02:28 PM
well blowing up the WTC did not seem to help Lay and Skilling that much

It comforts a lot of otherwise intelligent people to believe that someone, even if they are malevolent, is in control rather than believe that the world is really this chaotic

Which brings us to the main point of Controversy. Do you know your History, my good man? Good!

What Are the Two Views of History?

1) Accidental

2) Conspiratorial

First, please let me know if there is any other option, before we proceed with today's lesson plan.

Title: Re: Meltdown
Post by: snyprrr on August 15, 2014, 02:08:18 PM

I really do hope you're all having as much fun as I am! Cheers!!

Title: Re: Meltdown
Post by: kishnevi on August 15, 2014, 02:13:23 PM

Ah, yes, the dancing Israelis....
http://www.911myths.com/html/dancing_israelis.html

whatever they were, they had nothing to do with the 19 hijackers. I can imagine them being happy at realizing that America was experiencing, and being forced to into the fight against, the same terror that would not let people eat pizza in Jerusalem without being blown to bits.

Quote from: snyprrr on August 15, 2014, 02:06:54 PM

Which brings us to the main point of Controversy. Do you know your History, my good man? Good!

What Are the Two Views of History?

1) Accidental

2) Conspiratorial

First, please let me know if there is any other option, before we proceed with today's lesson plan.

The Bible offers a completely different option, and so for that matter did Spengler.

but in truth history is merely people acting for their purposes to achieve their own goals, across the accumulation of time and geography and therefore instrinsically choatic.

Title: Re: Meltdown
Post by: lisa needs braces on August 15, 2014, 04:26:09 PM

Saw this on Tyler Cowen's blog:

"Humans Need Not Apply." Video about automation:

https://www.youtube.com/watch?v=7Pq-S557XQU&feature=youtu.be

The recent book The Second Machine Age is about this subject.

Title: Re: Meltdown
Post by: milk on August 15, 2014, 05:33:03 PM

Quote from: snyprrr on August 15, 2014, 02:08:18 PM
I really do hope you're all having as much fun as I am! Cheers!!

Some of it's funny enough but the secret Jews stuff, not so much. I asked for it but it turns out it's just the exact same stuff. I get it. I've been through this before more up close. Jews (some? all? I don't know, my dad, like his Hungarian Jewish dad, was NYC construction all his life and I wouldn't know how that compares to the average white power dude) are successful, more successful than you, therefore...
I don't want to engage on it - someone else can. I'm not saying this thread shouldn't survive (I'm all for free speech), but I'm surprised that it does. Again, I encouraged it, I can't say I didn't. I hope some people are willing to concentrate on this because it's necessary. I find I've quickly had my fill.

Title: Re: Meltdown
Post by: Karl Henning on August 18, 2014, 09:30:33 AM

Quote from: karlhenning on August 14, 2014, 10:00:38 AM
This (http://www.dailymail.co.uk/news/article-2056088/Footage-kills-conspiracy-theories-Rare-footage-shows-WTC-7-consumed-fire.html) won't make any difference to snypsss, but for anyone else yet curious.

All of this is a worthwhile read, and most of it makes me smile quietly to myself, but, in particular: (http://www.sawyerhome.net/whatilearned.html)

Quote99.9% of the world's top engineers, architects, physicists, and chemists are all wrong, and I am right, because I read the Intarweb and I am so smart.

Title: Re: Meltdown
Post by: Karl Henning on August 18, 2014, 09:46:23 AM

Quote from: milk on August 14, 2014, 06:39:35 PM
Thanks for posting that. It might come in handy some day. A guy a worked with (a different guy than the one I mentioned before) who believes all this stuff, got into this conspiracy theory about the Boston bomber last year and that was dispatched pretty quickly with a link. Though, yes, it won't make a difference to people of a certain mindset.

This (http://www.debunking911.com/pull.htm) is a good piece, too.

Title: Re: Meltdown
Post by: milk on August 18, 2014, 10:13:52 AM

Quote from: karlhenning on August 18, 2014, 09:46:23 AM
This (http://www.debunking911.com/pull.htm) is a good piece, too.

I haven't read through it all but this looks interesting too:
http://www.911myths.com/html/dancing_israelis.html (http://www.911myths.com/html/dancing_israelis.html)

Title: Re: Meltdown
Post by: snyprrr on August 18, 2014, 04:18:24 PM

Quote from: milk on August 15, 2014, 05:33:03 PM
Some of it's funny enough but the secret Jews stuff, not so much. I asked for it but it turns out it's just the exact same stuff. I get it. I've been through this before more up close. Jews (some? all? I don't know, my dad, like his Hungarian Jewish dad, was NYC construction all his life and I wouldn't know how that compares to the average white power dude) are successful, more successful than you, therefore...
I don't want to engage on it - someone else can. I'm not saying this thread shouldn't survive (I'm all for free speech), but I'm surprised that it does. Again, I encouraged it, I can't say I didn't. I hope some people are willing to concentrate on this because it's necessary. I find I've quickly had my fill.

oy vey! hungarian jews are the worst!! :laugh:

(just checking your humor! ;))

ahhh, mishpukah-

anyhow, I'm with you- "why can't we all just get along?"- but, I fear, there is going to be that makes the 20th century look like the 17th(?) century, and I, try, by any offensive means necessary, to keep things abreast- to show what is coming- for there appears to be a holocaust coming. I'm just being annoying enough to entertain the possibility within you.

times are coming to try men's souls? apparently we just won't learn?

Title: Re: Meltdown
Post by: milk on August 18, 2014, 05:29:29 PM

Quote from: snyprrr on August 18, 2014, 04:18:24 PM
oy vey! hungarian jews are the worst!! :laugh:

(just checking your humor! ;))

ahhh, mishpukah-

anyhow, I'm with you- "why can't we all just get along?"- but, I fear, there is going to be that makes the 20th century look like the 17th(?) century, and I, try, by any offensive means necessary, to keep things abreast- to show what is coming- for there appears to be a holocaust coming. I'm just being annoying enough to entertain the possibility within you.

times are coming to try men's souls? apparently we just won't learn?

Maybe I've the typical progressive's fears about where the bang is coming from: income inequality, environmental degradation, scarcity of resources, nuclear detonation, conventional war, disease, climate change, etc.
But hey, how does the song go? "Enjoy yourself, it's later than you think?"

Title: Re: Meltdown
Post by: snyprrr on August 19, 2014, 06:19:32 AM

Quote from: milk on August 18, 2014, 05:29:29 PM
Maybe I've the typical progressive's fears about where the bang is coming from: income inequality, environmental degradation, scarcity of resources, nuclear detonation, conventional war, disease, climate change, etc.
But hey, how does the song go? "Enjoy yourself, it's later than you think?"

umm... welcome to 1982, when we were all convinced of Mutually Assured Destruction...

We should RUN to what fears us. Don't hide from it.

I remember that Police song "When the world is running down you make the best of what's still around." THAT was the '80s- sheeesh, slouching towards Gomorrah here- how long will this drawn out death take? My point is- maybe these are mostly Orwellian fables to keep you so a=feared that you don't do anything about the bankers- which... seems to have worked. (on all of us)

Fact is, seems the only disaster seems to haves been our pocketbooks... hmmm

What if all media was state run... how would you feel about the information you're getting? Did you see the staged Don Lemon protest thingy today? Yes, Don Lemon and the police and the protesters all there, working together to bring you the pretty pictures they want you to see. Don "such a sweet young boy" Lemon milk!! (notice how the police don't hassle the cameraman)

I was watching a protest from Russia from the kefluffle two years ago. It looked like protesters vs police, but then I saw the COMPLETE video, the part BEFORE the newscast started, and the protester gave the "sign" to the cop, and then looked up at the camera, and then, on cue, the "protest" and "police brutality" was enacted- ENACTED- ACTED-ACTED.

Remember "Crisis Actors", those people who would put on fake blood and act like victims for a fire drill? Well, they've gone Professional.

and btw- if it really is Koch vs. Soros- what else do we need to know? Is it really "Koch vs Soros" or is "Koch + Soros vs YOU"?

I feel you fear of the future- but for OUR generation, I don't think we're going to have the luxury of fear. We're the ones who may end up having to be the actual participants (like some previous generations). We've grown up in a panty-waist society and we really need some crises to help us grow up out of our perpetual adolescence. Embrace discomfort my good man, embrace discomfort. Be comfortable in your discomfort. Just Say No to more 'Star Wars'. Just Say No to 'My Little Pony'. Just Say No to more Classical CDs... uh... well... wait a minute...

nevermind :laugh:

Title: Re: Meltdown
Post by: Karl Henning on August 19, 2014, 09:36:21 AM

Quote from: snyprrr on August 19, 2014, 06:19:32 AM
Just Say No to more 'Star Wars'.

Okay!

Title: Re: Meltdown
Post by: milk on August 19, 2014, 09:53:23 AM

Quote from: karlhenning on August 19, 2014, 09:36:21 AM
Okay!

But not My Little Pony.

Title: Re: Meltdown
Post by: Karl Henning on August 19, 2014, 10:03:19 AM

I'm not saying . . . .

Title: Re: Meltdown
Post by: ibanezmonster on August 19, 2014, 06:42:23 PM

Quote from: snyprrr on August 19, 2014, 06:19:32 AM
Just Say No to 'My Little Pony'.

This would be the hardest to say no to for anyone you think would need to. I haven't acquired a taste for this show, but I have for its moe equivalent, K-On!, and there's no way I could say no to it. It's practically the very definition of comfort...

Title: Re: Meltdown
Post by: milk on August 20, 2014, 05:54:22 AM

Quote from: Greg on August 19, 2014, 06:42:23 PM
This would be the hardest to say no to for anyone you think would need to. I haven't acquired a taste for this show, but I have for its moe equivalent, K-On!, and there's no way I could say no to it. It's practically the very definition of comfort...

I didn't realize this became a whole franchise. I just remember the TV commercial for the plastic toy from when I was a kid. But this keeps making me think of My Little Chicken:
https://www.youtube.com/v/mANusCvOl6s

Title: Re: Meltdown
Post by: snyprrr on August 20, 2014, 07:55:11 AM

Quote from: karlhenning on August 19, 2014, 10:03:19 AM
I'm not saying . . . .

Do I really write stuff like that? ???

Help is 'on the way'!! :laugh:

Quote from: Greg on August 19, 2014, 06:42:23 PM
This would be the hardest to say no to for anyone you think would need to. I haven't acquired a taste for this show, but I have for its moe equivalent, K-On!, and there's no way I could say no to it. It's practically the very definition of comfort...

Nooooooooo :o ??? :o ??? not you :'( Let 'The Searchers' comfort you! 0:)

btw-

Let's just get this out there now: this Ferguson thing is a Controlled Demolition no doubt. People are just drooling to see something really bad happen and there's people there who wanna do it. Have you see all the different videos of EveryOne Misbehaving badly- the cops, the Chicago Community Organization and the Joey Johnson(?) guy, the local thug life, even Don Lemon was caught staging a segment (he was pushed back by cops, but his cameraman was allowed to film the whole thing- and at the end the cops give up and let everyone through? funny). Now the cop with the foreign accent saying he'll kill plain old walking people, with his ar no less.

I'm not even going into how everything's playing in the media. Again, I want to point out how fakes from all sides show themselves to be fakes by keeping this as their story (Rush, and of course everyhone else- just being fair to "both" sides, hrmm - TWO WINGS OF THE SAME DOUBLE HEADED EAGLE- oh shiiii, there I go again, .,.... sorry!! 0:) 0:)

(you're RIGHT, Karl- I should've used the 'Delete' button, haha!! ;))

Title: Re: Meltdown
Post by: Karl Henning on August 20, 2014, 08:20:08 AM

Quote from: snyprrr on August 20, 2014, 07:55:11 AM
(you're RIGHT, Karl- I should've used the 'Delete' button, haha!! ;))

Trying to help (without putting myself at risk), is all . . . .

Title: Re: Meltdown
Post by: Ken B on September 26, 2014, 08:23:38 PM

Some days snyprrr seems one of the sane ones. Don't believe me? http://whyevolutionistrue.wordpress.com/2012/06/10/muslim-cleric-argues-that-homosexuality-is-a-well-known-medical-condition-cured-only-by-semen-and-that-shiites-are-immune/ (http://whyevolutionistrue.wordpress.com/2012/06/10/muslim-cleric-argues-that-homosexuality-is-a-well-known-medical-condition-cured-only-by-semen-and-that-shiites-are-immune/)

Title: Re: Meltdown
Post by: ibanezmonster on September 27, 2014, 03:15:02 AM

Quote from: Ken B on September 26, 2014, 08:23:38 PM
Some days snyprrr seems one of the sane ones. Don't believe me? http://whyevolutionistrue.wordpress.com/2012/06/10/muslim-cleric-argues-that-homosexuality-is-a-well-known-medical-condition-cured-only-by-semen-and-that-shiites-are-immune/ (http://whyevolutionistrue.wordpress.com/2012/06/10/muslim-cleric-argues-that-homosexuality-is-a-well-known-medical-condition-cured-only-by-semen-and-that-shiites-are-immune/)

Oh, so thaaaaaat's how it works...

Title: Re: Meltdown
Post by: milk on September 27, 2014, 06:00:29 PM

Quote from: Ken B on September 26, 2014, 08:23:38 PM
Some days snyprrr seems one of the sane ones. Don't believe me? http://whyevolutionistrue.wordpress.com/2012/06/10/muslim-cleric-argues-that-homosexuality-is-a-well-known-medical-condition-cured-only-by-semen-and-that-shiites-are-immune/ (http://whyevolutionistrue.wordpress.com/2012/06/10/muslim-cleric-argues-that-homosexuality-is-a-well-known-medical-condition-cured-only-by-semen-and-that-shiites-are-immune/)

I think there's enough room in the looney bin for everyone.

Title: Re: Meltdown
Post by: snyprrr on July 06, 2015, 07:04:37 PM

general doom bump

Title: Re: Meltdown
Post by: Todd on July 06, 2015, 07:08:43 PM

Quote from: snyprrr on July 06, 2015, 07:04:37 PM
general doom bump

Asian markets are mostly up for the 7th, so doom may not yet be upon us. Could be a good time to hunt for bargains in Yurpean markets.

Title: Re: Meltdown
Post by: (poco) Sforzando on July 06, 2015, 07:42:09 PM

Quote from: Ken B on September 26, 2014, 08:23:38 PM
Some days snyprrr seems one of the sane ones. Don't believe me? http://whyevolutionistrue.wordpress.com/2012/06/10/muslim-cleric-argues-that-homosexuality-is-a-well-known-medical-condition-cured-only-by-semen-and-that-shiites-are-immune/ (http://whyevolutionistrue.wordpress.com/2012/06/10/muslim-cleric-argues-that-homosexuality-is-a-well-known-medical-condition-cured-only-by-semen-and-that-shiites-are-immune/)

I never thought a lack of semen was a characteristic of homosexuality.

Title: Re: Meltdown
Post by: Todd on August 12, 2015, 07:51:22 AM

The end(-ish) is nigh(-ish). (http://www.businessinsider.com.au/albert-edwards-rest-of-the-world-will-import-deflation-from-asia-2015-8)

Title: Re: Meltdown
Post by: snyprrr on August 25, 2015, 04:02:29 PM

you're welcome ::)

Title: Re: Meltdown
Post by: Karl Henning on August 26, 2015, 01:36:13 AM

Quote from: snyprrr on August 25, 2015, 04:02:29 PM
you're welcome ::)

Now, now: you know that the occasional market correction is normal 8)

Title: Re: Meltdown OOPS!... THERE GOES THE TRUSTFUND
Post by: snyprrr on June 24, 2016, 09:24:43 AM

Whoops! There Goes the TrustFund

"Will Work 4 Food"

Title: Re: Meltdown
Post by: snyprrr on December 18, 2016, 06:36:38 AM

Quote from: k a rl h e nn i ng on August 13, 2014, 07:26:36 AM
Can't stop the boogie!

get down 2nite! ;)

GMG Classical Music Forum

The Back Room => The Diner => Topic started by: BachQ on September 20, 2007, 11:35:04 AM