Category: Economics & Investing

GG sent this article by Henry Blodget: Gary Shilling: Stock Market Will Crash as US Consumers Retrench Reader HPD sent a link to a recent post by Mish Shedlock: 500,000 Will Exhaust Unemployment Benefits by September, 1.5 Million by Year-end Desert T flagged this: As Boom Times Sour in Vegas, Upward Mobility Goes Bust Summers urges Banks to Lend Mores, Says Recovery Pace ‘in doubt.‘ Americans Pay Back Debts Most Since ’52 as Jobless Spur Savings More bodies go unclaimed as families can’t afford funeral costs. (First family pets, now family members) DD Sent these three items: Subprime brokers mutate …

F.G. forwarded this news story: Bank ‘walkaways’ from foreclosed homes are a growing, troubling trend. If foresaw buyers walking away from houses, but not banks! A piece that I missed from earlier this month: Banking system like South Sea bubble, says senior Bank of England official Reader MAM sent this fascinating piece from Columbia Journalism Review: Goldman Sachs to the Forefront. The plot thickens! LJ on England spotted this: Deflation fears as the underlying rate of inflation reaches its lowest level since 1948 Items from The Economatrix: Lawmakers Blast Paulson for His Response to Crisis Philadelphia Suspends Payment of Contracts …

DD sent this article: 23 metro areas where the recession is finally coming in for a landing. It includes a fascinating animated state-by-state map showing waves of recession since 1994. Pay no attention to their conclusions about incipient recovery. They are dreaming! The current recession is not a typical dip in the business cycle. It was caused by a collapse of the global credit market. This will last a long time, and may very well become a full-blown depression. Reader KAF flagged this: CIT collapse could ripple through retail industry. They are already begging for a Federal bailout. SurvivalBlog regular …

Reader Greg C. sent this: Larry Summers, White House Economic Advisor, cites Google search as progress. Greg’s comment: “If this White House thinks that determining the fitness of the economy is as simple as looking at what people search for on Google, then we are in bigger trouble than we originally thought. I wonder if they are looking at how many people are searching for ‘Economic Meltdown’ or ‘Revolution?’” Thanks to Mark N. for this: The Next Global Financial Crisis: Public Debt. “The cloud of the global financial meltdown has not even cleared, yet another crisis of massive proportions looms …

Some impeccable logic from Vice President Joe Biden: ‘We Have to Go Spend Money to Keep From Going Bankrupt’ From Greg C.: Foreclosures at record high in first half 2009 despite aid Frequent content contributor Karen H. sent the following items: Port of Long Beach imports down 28.4% Foreclosures rise 15% in the first half of 2009 Dem health RX a Poi$on Pill in NY – Terrifying 57% Tax looms for biggest earners. Social Security spends $700,000 on Phoenix Conference Industrial Production down 13.6% Map of Hardest Hit Regions of Unemployment in the U.K. CIT moving toward bankruptcy. Verleger Sees …

Reader IJS flagged this: Ron Paul: Obama Will ‘Destroy the Dollar’ Jim Sinclair (of JS Mineset) mentioned this chart posted at Contrary Investor, showing levels of derivatives exposure. Jim Sinclair raises and interesting question: Where does Goldman Sachs actually have the majority of their derivatives plays? And this chart is also illuminating. In the same piece, Sinclair included a link to this: Mobius Says Derivatives, Stimulus to Spark New Crisis. I have been warning folks for years that the derivatives market is like a ticking time bomb! A full-scale derivatives implosion could make the current economic crisis seem trivial, by …

From frequent content contributor GG: Commodities market is the place to be, says Jim Rogers. Rogers describes Ben Bernanke: “He’s an idiot.” Reader HPD mentioned this piece by Robert P. Murphy: Mish Should Ditch His Deflation Fears Who’s getting hit most by layoffs? LA mayor: City will pay costs from Jackson event. How can Los Angeles justify this expense, given their fiscal situation? Struggling Landlords Leaving Repairs Undone GG sent this: Federal tax receipts down 31% in Second Quarter Items from The Economatrix: Brand Name Companies Go Bankrupt Obama Says Unemployment Will Increase for Months How jobless numbers will respond …

My friend “X” in Japan pointed out an article that I overlooked last month: Confiscated US Bonds Were Headed For Swiss Free Port. OBTW, living near a “free port” (as described in the article) might have its advantages in a protracted economic depression. Commerce will slow globally, but port zones will probably continue to have profitable opportunities. Several SurvivalBloggers sent this: June budget gap $94.32 billion, record for June Eight readers mentioned this Wall Street Journal article: The Economy Is Even Worse Than You Think; The average length of unemployment is higher than it’s been since government began tracking the …

Tim Geithner Refuses to Answer Congressman Brad Sherman’s Question on Derivatives Bailouts Reader “Countrytek” recommended this NPR news story: Many Left Uncounted in Nation’s Official Jobless Rate Items from The Economatrix: Baby Boomers to Kids: Kiss the Inheritance Good-bye Obama Rejects Second Round of Stimulus First infusion [was] “not designed to work in four months…designed to work over two years.” Stocks Slipped 2% Last Week Christmas Creeps into July at Sears US Budget Deficit Tops $1 Trillion for First Time After Losing Homes, Families Move into Tents Awash With Cash (The Mogambo Guru) Major Lender Faces Crunch Study: State Budget …

I found this interview with the director of the president’s National Economic Council linked over at The Drudge Report: Lunch with the FT: Larry Summers. Reader Don W. suggested an excellent piece at Pajama’s TV by Bill Whittle: When Politicians Go Bad: From DC to New York & California The Government We Don’t Deserve Items from The Economatrix: SEC May Put California IOU’s Under Fraud Protection Rules May Trade Deficit Unexpectedly Drops With Assets Less Toxic, Banks Have Other Troubles Stocks Post Fourth Straight Week of Losses Banks Seen Ready to Join US Program that Revises Home-Equity Loan Terms Roubini: …

I have to admit that I’m a bit of a “silver bug.” I became enamored with the metal when I was 16 years old. That was the year that OPEC first jacked up the price of oil. Silver sold for only $3.14/oz. then (per Kitco.) A more accurate way of saying it is that one dollar equaled about one-third of an ounce of silver back then. Today one dollar will only buy about 1/13 of an ounce of silver (silver at $13/oz.) This implies that the dollar has lost about 75% of it’s purchasing power over the last 36 years, …

Reader Steve H,. sent an interesting quote from BHO: “But while our markets are improving, and we appear to have averted global collapse, we know that too many people are still struggling. So we agree that full recovery is still a ways off; that it would be premature to begin winding down our stimulus plans; and that we must sustain our support for those plans to lay the foundation for a strong and lasting recovery. We also agreed that it’s equally important that we return to fiscal sustainability in the midterm after the recovery is completed.” [Emphasis added.] Steve’s comment: …