Meltdown

[BachQ]

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 ...

[BachQ]

Russian Industrial Production Shrinks Most Since 1998

[Archaic Torso of Apollo]

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!  

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!

[ezodisy]

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) 

Meanwhile, 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."

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.

[ezodisy]

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.

[ezodisy]

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.


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.


More U.S. investors sue funds over Madoff


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.


Ripples of Madoff scandal spread everywhere


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."

[BachQ]

[BachQ]

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.

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.

The 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.

[ezodisy]

hahaha great!

Donna Werbner reveals her top three tips to get into better financial shape – and fulfil any financial goal.

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.

[BachQ]

Ripples of Madoff scandal spread everywhere

BTW, New York University has initiated litigation against synagogue leader J. Ezra Merkin for having negligently entrusted $24m with Madoff.

[ezodisy]

BTW, New York University has initiated litigation against synagogue leader J. Ezra Merkin 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.

[BachQ]

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.

[BachQ]

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.

[BachQ]

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."

[ezodisy]

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.

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, 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

[Lethevich]

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.

[BachQ]

"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. 

[BachQ]

Another UK analyst predicting an employment collapse for 2009.

http://www.cnbc.com/id/15840232?video=978164631 (4 minute video)

[drogulus]

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?

[BachQ]

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."

In the New York Times, Thomas L. Friedman opines:

A 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.