Category: Economics & Investing

White House forecasts higher budget deficit: ” …a $1.75 trillion deficit, or 12.3 percent of GDP.” Skip sent me this: Is America About to Go Broke? WSJ Video: Dow 4,000 Still in the Cards (Thanks to Chris for the link.) From Greg: Commodities – Shortages stir coffee and sugar prices From Tom S.: Where are Argentina’s coins? Items from The Economatrix: US Red Ink Rises Even Higher, $1.8 Trillion The Federal government will have to borrow nearly 50 cents for every dollar it spends Chinese Deflation Picks Up Speed Local UK Governments Lose 2.5 Billion Income Enjoy The “Rally”…Sucker Punch …

Now, the truth comes out: Banks Won Concessions on Tests. I figured the “tests” were rigged, but not quite so blatantly. And here are some more details on the “Buddy-Buddy” Creative Accounting: Fed cut banks’ deficits after negotiations: report. (Thanks to Roger Y. for the links.) Reader D.D. sent his one: Next challenge for banks: Credit card losses Number usually tracks unemployment, but this time it may be worse Items from The Economatrix: Global Financial & Economic Crisis: How Much Time Do We Have Left? “The US-Dollar has been technically hyper inflated, even though no one is saying “the king …

From Eric S.: 24,700,000 Unemployed or Underemployed Americans: Job Losses Accelerate with 6 million unemployed over last year. Real Unemployment rate now at 15.8 Percent. Also from Eric: FDIC Insures $4.7 Trillion in Deposits with a $13.6 Billion Deposit Insurance Fund. This is Like Going into a Hurricane with a 99 Cent Store Umbrella. Items from The Economatrix: UK House Prices Continue To Plummet 401(k)s Hit By Withdrawal Freezes Global Crisis “Vastly Worse” Than 1930’s, Taleb Says “The global economy is facing “big deflation,” though the risks of inflation are also increasing as governments print more money, Taleb told the …

Swine Flu: Worst to Come in Autumn “Doctors are being warned to prepare for a second, “much worse” wave of swine flu hitting Britain in the autumn, the Health Secretary has disclosed.” Tamiflu Linked to Abnormal Behavior KAF sent this: Economic crisis in European Union Items from The Economatrix: Real Unemployment 15.8%; Highest Since ADA Began Tracking The Greatest Boondoggle in History Skousen: Bailouts & Bankruptcy: Undoing The Rule of Law GM Spots Bankruptcy In Rearview Mirror as it Burns Tankfuls of Gas Toyota First Annual Loss Stress Tests Show 10 Biggest Banks Need to Raise $75 Billion China Fears …

Warren M. wrote to mention that in their 2010 planning document, the US Mint is now considering a new, less expensive composition for the US Nickel. (The five-cent piece.) The Mint document states: “…the unit costs to manufacture the one-cent coin (penny) and 5-cent coin (nickel) are more than their face value for the third consecutive fiscal year. Changing the composition of all circulating coins to less expensive materials would ultimately result in significant taxpayer savings without compromising the utility of these coins. Accordingly, the United States Mint plans to work with the Department of the Treasury and the Congress …

Reader HPD pointed us to this commentary by Mish Shedlock: Preliminary Stress Test Results. What a sham! HPD also mentioned this: Futures Fall, BofA May Need $35 Billion in Capital. HP had these incisive comments: “Expect BofA (and Wells Fargo) stock to bounce after the initial decline. Geithner has taught the market that he will throw a lifeline to any large bank, no matter how insolvent. Thus is capital misallocated in a centrally planned economy.” He added in a later e-mail: “Outrageous! But did we really expect anything different? …Gee, I wonder why all the major servicers are sitting on …

Roddy sent this from the Guatemala Times: The Great Depression Analogy R.S. forwarded this from The Financial Times: If China loses faith the dollar will collapse A recent column by Libertarian commentator Vin Suprynowicz: Light at the end of the tunnel: They only need another $20 trillion DS liked this piece by Karl Denninger, over at Seeking Alpha: Independent Analyst Numbers Far Uglier than Official Stress Test Rumors. JWR’s comment If we take into account that most US residential real estate will likely fall another 30%, and most commercial property by another 50%, then the “official” stress test results will …

CPK mentioned a great piece over at Seeking Alpha: The Worst Case Scenario (Someone Has to Say It) Reader Allan G. sent this: Robert Gibbs: No bailout for newspapers Tamara, over at the excellent View From the Porch blog, mentioned an article that might be of interest to anyone who is considering setting up an offshore retreat:: Obama to introduce tax reforms that target overseas loopholes. Tamara’s comment: “Ah, Chicago politics writ large: Punish your foes and reward your supporters.” U.S. Home Prices May Be Lost for a Generation: John F. Wasik

Aubie Baltin comments on the $1,200 trillion ($1.2 quadrillion or $1.200,000,000,000,000) derivatives market, bonds, monetization, and hyperinflation. Items from The Economatrix: Desperate Car Dealers Get Useless Loans SBA’s redefinition of “small business” makes financing availabile…with strings attached. Pontiac, Pop Culture Icon, Hits the End of the Road Labor Day Rioting in Berlin Over Economy Gold Isn’t Going to $2,000 Per Ounce UK: Company Failures are “Tip of the Iceberg” Riots Across Europe Fueled By Economic Crisis France: May Day Warning Petraeus: Pakistan Could Be Two Weeks Away From Collapse

Three more failed banks taken over by regulators. (Thanks to Laura H. for the link) Items from The Economatrix: US Families Rely on Handouts in World’s Richest Country Flu Heightens Mexico’s Economic Sickness Government Nervous About Stress Test Results S&P Downgrades Seven Dubai Businesses US GDP Poised for Epic Collapse US Empire Built on False Prosperity Collapsing The Impending Mother of All Oil Shocks Credit Crisis Bank Stress Tests: If You Believe the Banks are Recovering… “They allow Goldman Sachs to bury the fact that they left December out of their financial results deep in their footnotes. Shockingly, Goldman lost …

U.S. Bank Test Results Delayed as Conclusions Debated. Gee, do you think they’d be delaying the reporting if the results had been good? Kevin A. suggested a recent piece on banking opacity, from Jim Quinn. Items from The Economatrix: Martin Weiss: A Depression is Unavoidable Consumer Spending Dips Trucking Bankruptcies Continue Obama Blasts Hedge Funds as Chrysler Heads into Bankruptcy Gold Falls Under Very Large Sell Orders US Still in Deep Recession Ford Reports 32% Decline in April “Torture” of Mortgage-Bond Owners Carries Risk Chevron Has Lowest Profit in Five Years Hartford Financial Drops After Posting Loss, Cutting Forecast Continental …

Barron’s mentioned a “Buy” indicator on Smith and Wesson. I second the motion, but to be more specific: Make it one of the early stainless steel S&Ws with the pinned barrel and recessed cylinder. (“Pinned and recessed.”) For revolvers, you can’t go wrong with an early production Model 629. I like the 6″ barrel length, (except for concealed carry), but the Barron’s didn’t give any details. What? You say he only owns S&W stock? You can’t stop a charging grizzly with a stock certificate. Invest in tangibles! Fed is Said to Seek Capital for at Least Six Banks Swine Flu …