Category: Economics & Investing

Reader KAF forwarded this: U.S. Budget Deficit Hit Record $1.4 Trillion in 2009 Illinois State Comptroller Dan Hynes Says State Finances A Mounting Crisis, Things Getting Worse. (Thanks to Jeff B. for the link.) Matt in Tennessee alerted us to this video clip from Gerald Celente: The Dollar is Finished. And, BTW, Peter Schiff agrees. He announced “The carry trade [in US Dollars] is on!” Items from The Economatrix: Roubini: Housing Market Hasn’t Bottomed Yet Treasuries Fall After Weaker-Than-Average Demand at Bond Sale US Budget Deficit Balloons to $1.4 Trillion Questions Remain About Iceland’s Banking Collapse Latvia Threatens Foreign Banks …

Reader CP suggested a column piece by Malcolm Berko: Taking Stock. CP’s comment: “While Berko runs an investment advice column, he’s generally not a cheerleader for irrational exuberance. This response to a reader’s question is an general indictment of the markets and those who might as well be donning grass skirts dancing on a beach to appease the financial gods.” Commentary from Dan Denninger: Consumer Credit: Disaster, Down $12 billion Items from The Economatrix: US Consumers Cut Borrowing by $12 Billion in August Mortgage Rates Below 5% Fuel Re-Fi Boom Gold Price Hit Record High on Report to Ditch Dollar …

Thanks to reader GWC for this: U.K. Faced ‘Bank Runs, Riots’ as RBS and HBOS Neared Collapse GG spotted this key data point: Hours worked plummets to all time low Thanks to Damon for this news item: Venezuela inflation estimated at 26%, annually. (Prices were up 2.5% in September. But don’t worry. Comrade Hugo has a plan.) Mark G. found an interesting New York Times blog article: What Happened to Argentina? Items from The Economatrix: UN Calls For New Reserve Currency Australia Rate Hike Good Sign for World Economy National Retails Groups Forecasts Weak Holiday Season Weak Dollar, Strong Stock …

GG was the first of more than a dozen readers to mention this article by Robert Fisk (an outspokenly leftist journal list, so take it with a grain of salt.): The demise of the dollar; In a graphic illustration of the new world order, Arab states have launched secret moves with China, Russia and France to stop using the US currency for oil trading. Given the import of the preceding (if it is true), is it any wonder that the USDI is tanking, and the future and spot prices of precious metals are going through the roof? You’ve had plenty …

From the Dr. Housing Bubble blog: Three Westside Shadow Inventory Homes. Santa Monica, Culver City, and Rancho Park. Banks will not Hold Inventory Forever. John S. sent this: Bailout cop: Treasury set ‘unrealistic expectations’ Barofsky, reviewing the first big bailouts to 9 firms, concludes that the government was too rosy to the public about the banks’ health. (Read: They fibbed.) Tom B. thought this might be of interest: Baker Hughes: US Oil, Gas Rig Count Up 7 To 1,024 This Week Damon mentioned: Is world economy still in deep woods? (The IMF announced that it plans to sell 8% of …

Reader Eric S. spotted this: CIT debt swap could cost U.S. more than $1.8 billion By way of Market Oracle, Damon found these two links: News From 1930 and Zero Hedge discusses railroad carloading statistics. Items from The Economatrix: Jim Willie: Systemic Failure Approaches. “Numerous sustaining forces will contribute toward the inexorable path to systemic failure. It will begin with the relapse failure of the US banking system. Citigroup is facing real bankruptcy, whose numerous segments are underwater and growing worse. Bank of America is in a death spiral, whose CEO Ken Lewis departs amidst political and shareholder legal pressures. …

World Bank could run out of money ‘within 12 months’. (Thanks to Chris H. for the link.) Don W. flagged a New York Times piece: Too Rich to Worry? Not in This Downturn. JWR’s comment: When even the uber-wealthy feel the pinch, then it is clear that this is not just a typical market cycle-triggered recession! Items from The Economatrix: Stocks Fall Following Disappointing Jobs Report [Official] Jobless Rate Reaches 9.8% in September Jobs Data Sends Oil Prices Tumbling Below $70 Banks Have Us Flying Blind on Depth of Losses Banks With 20% Unpaid Loans at 18-Year High Amid Recovery …

Greg L. suggested this Housing Storm piece: Is it too early to declare mortgage modifications a complete failure? Reader HPD mentioned this commentary by Mish Shedlock: Collectively, Economists Are A Perpetually Optimistic Lot Ukraine’s Naftogaz indicates default on bonds (Thanks to Danny S. for the link.) The latest installment of the now predictable FDIC Friday Evening Follies: Three more banks go down. (Hat tip to Bill R. for the link.) Items from The Economatrix: Wall Street Money Rains on Senate, Especially Schumer Governments Dip Deeper Into Alcohol-Tax Well Shoppers Cash in on E-Coupons Job Seekers Exceed Openings by Record “Great …

Reader DLF spotted this: Detroit: Too broke to bury their dead Foreclosure Rate Rises 17 Percent. (Thanks to The Other Chris for the link.) A residential real estate shadow inventory case study. Items from The Economatrix: Manufacturing, Employment Pounds Stocks Jobs and Manufacturing Suggest Slow Recovery Banks Trim Use of Emergency Fed Programs September US Auto Sales Fall Amid Clunkers Letdown Natural Gas Tumbles with Most Ever in Storage Unprecedented US Corporate Defaults Seen for 2009 [JWR’s comment: So where is the “recovery” that the CNBC cheering section keeps talking about? I think that a recovery around 2022 may be …

A Year Later, TARP Inspector General Barofsky Sees a ‘Far More Dangerous’ Financial Situation Officials: Fed will need to boost rates quickly. (Thanks to El Jefe Jeff E. for the link.) Bob G. sent the link to this Wall Street Journal piece: Plenty More Bank Losses Expected Globally; Additional $1.5 Trillion in Write-Downs Forecast by End of 2010 Account overdrawn: FDIC Fund Goes Negative. Although the US Treasury is the guarantor of last resort, it now won’t take much to trigger bank runs. (A hat tip to K.T. for the link.) Items from The Economatrix: Hard Times Good for Your …

Reader GG spotted this sobering piece: Corpse of a Thousand Houses. More foreclosures will soon be flooding the market, further depressing the housing market. This is the negative feedback loop (aka “death spiral”) that I’ve been warning about since late 2006. From El Jefe Jeff E.: US large-loan bank losses triple to $53 billion; Regulators say US lenders expected to lose $53 billion in 2009 on loans larger than $20M. Jeff’s comment: “53 Billion is a lot to lose, and they were ‘surprised’ by the losses….I wonder what else is lurking that will cause these banks more surprises.” Also from …

From veteran blog content contributor GG: A $4 billion Postal Service bailout Also from GG: Ten reasons for an imminent stock market crash Reader mark S. flagged this: Another housing slump coming? Analysts say 7 million soon-to-be foreclosed properties have yet to hit the market. Items from The Economatrix: Simmons (Mattress) Plans to File for Chapter 11 Bankruptcy Protection Housing Crash to Resume on Seven Million Foreclosures The Long Slog: Out of Work, Out of Hope Volcker Unleashes Another Volley on the Wizards in Wall Street and D.C. Rare Earths are Vital and China Owns Them All US Issues $7 …

SurvivalBlog’s Editor at Large Michael Z. Williamson sent a link to: Dollar under scrutiny at G20 summit Lost Vegas: Living Underground in Flood Tunnels. In Las Vegas, 1 in every 33 homes is in foreclosure. Where did all the people go? The answer might surprise some. There are an estimated 700 troglodytes live beneath Las Vegas.. Do they realize the mortal danger in the uncommon event of a flood? (A tip of the hat to David R. for the link.) From Jim D.: Social Security strained by early retirements. An ever bigger budget deficit! Items from The Economatrix: FDIC is …

From Paul D.: US faces Armageddon if China and Japan don’t buy debt Investors gird for post-recession inflation HH latched on to this article: U.S. Debt Crisis May Cause ‘Fall of Rome’ Scenario, Duncan Says From FG: Detroit hits 28.9% unemployment Items from The Economatrix: Fed Admits Hiding Gold Swap Arrangements New Jobless Claims Drop Unexpectedly to 530,000 Fed Scales Back Two Emergency Lending Programs Iran Replaces the US Dollar with the Euro New Deadly Dollar Carry Trade Gold to Reach $1,500 This Fall?