Category: Economics & Investing

Economics and Investing:

Reader HPD mentioned this ominous news over at The Market Ticker: Possible Credit Dislocation: Be Warned From The Daily Bell: Dark pool trade limits to be reduced 95% in SEC plan Laura H. sent this: Democrats seek cover to boost debt limit Klaus sent this: China’s ‘Growth on Steroids’ Raises Danger of Renewed Slowdown [and Inflation!] Items from The Economatrix: Sept. Home Sales Rise 9.4%, Beat Forecasts Existing Home Sales Surge on Tax Credit Crude Rally Stalls, But Gasoline Prices Near Summer High UK Recession: Recovery Hopes Dashed as Economy Shrinks Again NY Delays $959 Million Payment to Pension Fund …


Economics and Investing:

Reader Troy W. spotted this: Guess What: The Next Housing Bubble is Already Underway Mr. W. sent this: A List of the Next Banks to Fail The Daily Bell asks: Derivatives don’t need regulation? Jeff B. sent us this: Worldwide Diesel Glut Could Slam Oil Prices. [JWR’s comment: Wait a few weeks before you refill your retreat’s fuel tanks! The recent 18 cent jump in the price of diesel is sure to see a correction.] Items from The Economatrix: Friday Follies: Failed Bank Tally for Aught Nine Now at 101 Galleon Group to Shut Down Hedge Funds Administration Plans Big …


Economics and Investing:

Regular content contributor GG sent us a link to this press release: Adam Storch Named Managing Executive of SEC’s Enforcement Division. “Unbelievable! The Securities & Exchange Commission last week appointed a 29-year old Goldman Sachs executive as the managing executive of its enforcement division. You already know about all the curious contacts Goldman’s leader Lloyd Blankfein has had with Treasury heads Hank Paulson and Tim Geithner. So I assume the SEC must also be aware of these contacts. While I have no reason to question Mr. Storch’s ethics or motives in taking this job that presumably pays a fraction of …


Economics and Investing:

Charles Hugh’ Smith’s assessment: Why We’ll See Stimulus 2.0, 3.0, 4.0, 5.0 (and so on), until The Great Implosion Reader Aaron C. suggested: 20 reasons America has lost its soul and collapse is inevitable Experts warn of ‘deluge’ of insolvencies to come in the UK K.T. sent this video link: The Goldman Sachs Profitability Magic Trick. After some travel, Peter Schiff is back to videoblogging. Items from The Economatrix: 40% of Working-Age Californians Jobless Treasuries Show No Lost Appetite as Dollar Declines Hollywood Film Output Likely to Fall By One-Third Fannie, Freddie Common Shares Worthless, Says KBW Einhorn Bets on …


Letter Re: Should I Rent, or Should I Buy Property?

Sir; I have a question that I think would be of interest to a lot of your Blog readers: “How to Survive the End of the World as We Know It“. I really enjoyed the book. It helped coalesce all of the concepts I learned in “Patriots”, [the now out-of-print] SurvivalBlog: The Best of the Blog Volume 1, and “Rawles on Retreats and Relocation”. One of your central precepts is that one should move to a “lightly populated rural area.” Okay. With some work, I can find and buy a suitable piece of property and/or house. But you repeatedly point …


Economics and Investing:

Reader Steven H. wrote to mention: VP Biden puts on his Captain Obvious cape and declares “This is a depression”. Of course, Joe Biden has developed quite a track record for the inability to keep his mouth shut–most notably when he revealed the “secret” nuclear blast bunker beneath the VP’s Residence. Ralph N. suggested this piece over at Volokh about how the FedGov conceals some of its debt: Treasury Inc.: The Shadow National Debt. (It is hidden under a TARP, dontcha know…) Commentary from analyst Niall Ferguson: The Dollar Is Dying a Slow Death. From the Housing Storm blog: Strategic …


Economics and Investing:

New Hampshire Senator Judd Gregg: U.S. could be on path to a ‘banana republic’ situation. (Thanks to Tom B. for the link.) Reader MP sent this piece in Business Week: What happens if the dollar crashes? MP also sent this from The Motley Fool: The recession’s second wave, subtitled “Green shoots? Sure, but there is actually little evidence of a solid recovery” GG flagged this: FDIC bank fund in the red until 2012. Tom R. suggested this piece: Intractability of Financial Derivatives Items from The Economatrix: Weiss: Bernanke Gone Berserk! Bank Reserves Explode! “Martin here with the most shocking new …


Twenty-Two Reasons Why this Recession is Different and Why it Will Endure

I find it surprising that I’m now getting inquiries from readers, asking if “we’ve reached bottom” in the current economic recession, and asking if the time has come to start buying stocks or residential real estate. It seems that the talking heads of mainstream media are using some sort of voodoo. How can anyone think that we’ve hit bottom, and an economic recovery is in progress? To dispel the myths from the CNBC Cheering Section, please consider the following. (And note that I’ve provided references for each assertion, just so you know that I’m not talking out of my camouflage …


Economics and Investing:

Karen H. kindly sent us the following items: Bank of America Posts Third-Quarter Loss on Defaults. “The idea that the financial crisis is over is a fantasy and it looks like the numbers bear that out,” GE Profit Falls 45% as Revenue Trails Estimated Buyers Suing Trump in Miami Condo Glut as Values Return to 1989 “There’s no recession in the real estate litigation community,” Focus growing on keeping the jobless in their homes. A Perfect storm’s brewing to cool petroleum demand. Items from The Economatrix: Workers Still on Job, But Making Half as Much Delaying Foreclosure Can Lead to …


Economics and Investing:

Ex-Cop Loses Bank as Dutch Critic Spurs Withdrawals. (A tip of the hat to Karen H. for the link.) Jonathan H. flagged this: DOW 10,000!!!! Oh Wait, Make That 7,537. Jonathan’s comment: Due to reduced buying power, the current DJIA at 10,000 is equivalent to only 75% of when the DJIA went through 10,000 a decade ago. Additionally,back then $10,000 would have bought 30 ounces of gold; now its only 10 ounces. Items from The Economatrix: California Bank Becomes 99th Closure Financial Meltdown in the Decade of Greed Food Giants Cut Back on Size But Price Remains the Same Bankers …


Two Letters Re: Abandonment of the Dollar is a Premature Rumor

Dear Editor: This civil debate on the status of the Dollar–and thanks, by the by, for keeping things civil on your blog–all comes down to a matter of not “if”, but just “when.” The United States Dollar will soon be dead meat. Finis. See this article: Reckoning Day for US Dollar Coming Next Year. We just need to ask: will the[definitive] end [for the dollar’s dominant reserve status] come in six months, or six years? So, no matter when, I’m hedging by building up my stash of silver and lead. (The kind that goes “bang.”) Since I’m still paying off …


Economics and Investing:

Dollar hit on Fed’s signal of low rates. Meeting minutes show Fed has strong lean to more debt monetization. (Thanks to GG for the link.) Brian H. sent us a link to a piece in Zero Hedge. that quotes Money magazine: “Now 5 institutions hold 97% of the notional value [face amount] and 88% of the market value in derivatives, and they are all basically in the same business and all basically hedge with each other. It is not a true hedge when the other side can’t pay, and history has clearly proven how easy it is for the other …


Three Letters Re: Abandonment of the Dollar is a Premature Rumor

James Wesley, Regarding the oil-denominated-in-dollars flurry, two important points must be noted. First, dollar denominated contracts can be immediately hedged in foreign exchange markets (FOREX) even before the oil is pumped out of the ground. The oil barons aren’t stuck holding their dollars any longer than they can call a FOREX desk or sovereign Treasury department (3/4 of the world’s oil is owned by governments, not Exxon/Chevron/etc.) The more important point of dollar-denominated oil contracts is dollar prestige. Documents from the Federal Reserve show that Arthur Burns not only was interfering with the gold markets three decades ago, but the …


Economics and Investing:

Karen H. mentioned this sobering piece, also subsequently sent in by several other readers: Foreclosures: ‘Worst three months of all time’ The latest from Dr. Housing Bubble: A Comprehensive Look at the Southern California Housing Market: 60,000 Properties Listed on the MLS but over 100,000 in Shadow Inventory. California and Nationwide Median Home Price Trends since 1968. Say Good-Bye to Option ARMs. Also from Karen: Dollar to Hit 50 Yen, Cease as Reserve IRS Intensifies Global Hunt for Secret Offshore Bank Accounts Desperate Dollar Heading to the Basement. (BTW, they concur with my comments on the USDI‘s crucial support level: …


Two Letters Re: Abandonment of the Dollar is a Premature Rumor

In response to InyoKern’s letter: The title of this discussion thread and the original text that went with it could just as well have been written by any of the well-scripted talking heads on mainstream F-TV (financial television). My initial inclination is to be diplomatic, but considering the exceptional economic times we are currently witnessing, I say, “Balderdash!” I could reasonably conclude that the majority of the readers of “Survivalblog” are more apt to follow unconventional economic sages such as Jim Sinclair, Jim Willie, Jim Rogers, Bob Chapman, or Peter Schiff as opposed to the well-orchestrated financial propaganda of CNBC, …