Category: Economics & Investing

This headline appeared yesterday: Stress Test Data to be Released May 4th. Since the pre-release rumors have been bad, Monday, May 4th could be a key event. Be ready for turmoil in the weeks following this announcement. Have plenty of cash on hand, since it will be difficult to predict what the sheeple will do on or after May 4th–when presumably the majority of US banks will be declared insolvent. From DD: March existing home sales fall by three percent. “The results were ‘a little disappointing’ given that homes are more affordable than they’ve been in years and mortgage rates …

From frequent content contributor G.G.: Gold rush in the suburbs as shine disappears from economy D.D. suggested this: Why the bank stress tests are bunk; The Obama team has put banks under the microscope and plans to release the results. If the findings are bad, expect more market turmoil. If they’re rosy, who’ll believe them? Some sobering news in The New York Times: I.M.F. Puts Bank Losses From Global Financial Crisis at $4.1 Trillion Items from The Economatrix: Freddie Mac CFO Apparent Suicide Global Economy Expected to Shrink this Year Leading Economist Decries Power of Wall Street “Oligarchs” Five Reasons …

Allen C. sent this: Most Bailed Out Banks Reduced Lending Since Getting Funds KAF sent this bit of news on the continuing nationalization of US banking: U.S. May Convert Bank Bailouts to Common Stock Items from The Economatrix: GM to Cut 1,600 Jobs in Next Few Days Bank Bailout Plan’s “Stress Test” Already Causing Stress Recession Pits Small Banks Against Big Banks Drivers Paying Highest Gas Prices So Far in 2009 Expect another 20 cent rise for the summer. Geithner Defends Bank Rescue Program Amid Warnings GM, Chrysler to Get $5B More A Backdoor Nationalization: The Latest Treasury Brainstorm Will …

News about the results of the Federal Reserve’s “Stress Test” got out, and it sent a shock wave through the financial world. The news was quite disturbing. Although with the caveat that it is not yet confirmed, I recommend reading the summary at Hal Turner’s web site. Reader “NDSS” mentioned this bit of much-needed common sense from Charles Hugh Smith: Why a 50% Drop in Housing is Not the Bottom. JWR’s comment: Anyone that thinks that the US real estate market will soon “recover” is dreaming. The peak in Alt-A and Option ARM mortgage rate resets won’t be until 2011. …

Charley keyed in on a piece in The Atlantic, where Jeffrey Goldberg contemplates survivalism: Why I Fired My Broker. The accompanying video clip, titled “The Con Game” is quite entertaining and has some snippets about his acquaintance Cody Lundin–a survivalist and author.(Cody is the author of When All H*ll Breaks Loose: Stuff You Need To Survive When Disaster Strikes — currently around #300 in the Amazon ranks.) Here is a quote from the print article: “For the record, I don’t think the grid is buckling under the weight of consumer debt or the mistakes of AIG. But we’re in a …

D.S. flagged this:Why There will be no other Bubble to Save us from this 40 Year Financial Bubble: From Manufacturing, Technology, and Financial Services. Real Estate Bubble. Drop in Corporate Tax Receipts D.S. also recommended an Op-Ed piece by Paul Krugman in The New York Times: Green Shoots and Glimmers Kern County, California unemployment jumps to 15.9 percent. (Thanks to JWP for the link.) Krys in Idaho sent us this article. US regulators close American Sterling Bank. Krys’s comment: “In case anyone’s counting, that’s an average of almost 1.5 banks closed every week so far this year. It is only …

Craig W. recommended this Don McAlvany address, in MP3 format: The Global State of Emergency Made Local Reader G.G. sent this: Capital One sounds alert over surge in credit card loss rates D.S. flagged this: A Thought for Tax Day: The Real Fiscal Crisis Is Yet to Come. The numbers cited are staggering! Items from The Economatrix: A “Copper Standard” For The World’s Currency? “China has woken up. The West is a black hole with all this money being printed. The Chinese are buying raw materials because it is a much better way to use their $1.9 trillion of reserves.” …

From G.G.: Brace For Hyper-Inflation Spotted in the Drudge Report news links: Magazine Ad Pages Decline Almost 26% in First Quarter G.G. also sent a link to yesterday’s Dilbert cartoon strip. G.G.’s comment: Dilbert is channeling [economist Gerald] Celente. Items from The Economatrix: How Consumers Can Take Smart Advantage of Falling Prices Fed Finds Faint Signs Economy Starting to Level Off Ron Paul: Audit the Fed Art Market Crashes 401(k) Losses Devastate Retirees Glamour Dims as Hecklers Hit Auto Shows Gasoline Expected to Remain Cheap this Summer Food Auctions Thrive During Recession General Growth, 2nd Largest Mall Owner, Fails Historic …

Laura H. sent this: In uncertain times, all that glisters is a gold standard Chauncey sent this Five Bailout Absurdities Items from The Economatrix: “Green Shoots” a Mirage in Economic Desert US Taxpayers’ Costs Likely to Rise After AIG-FP Staff Quit Wall Street Holds its Breath as 1st Quarter Results Come In GM Told to Prep for “Surgical Bankruptcy” HSBC Faces Crisis Over US Credit Cards Consumer Prices Drop Unexpectedly in March Swiss Bank UBS Cutting 7,500 More Jobs Singapore Devalues Its Fading Dollar Obama’s Economic Optimism Falls on Deaf Ears US to Reveal Results of Stress Tests on 19 …

Reader HPD: suggested this piece by Mish Shedlock: Nationwide Tax Revolt is Coming Dave (at Captain Dave’s) mentioned an interesting article on Why our current credit crisis mirrors Weimar, over at the Seeking Alpha site. G.G. sent us this: Bernanke sees signs of economic stability “I can assure you that monetary policy-makers are fully committed to acting as needed to withdraw on a timely basis the extraordinary support now being provided to the economy, and we are confidence in our ability to do so,” Bernanke said in remarks prepared for delivery at Morehouse College in Atlanta.” G.G.’s comment: “Of course, …

G.G. sent a link to a piece in The Financial Times about the threat of mass inflation: Germany warns on ‘crisis after crisis’ “‘I am concerned that the countermeasures we are seeing around the world, financed by enormous amounts of debts, could be paving the road to the next crisis,’ Mr Steinbrück told Bild, a tabloid daily.” G.G. also forwarded a link to a Barron’s article: The Lessons of the Savings-and-Loan Crisis: “The current bank scandal dwarfs the 1980s savings-and-loan crisis — and could destroy the Obama presidency.The scale of fraud is immense.” “This whole bank scandal makes Teapot Dome …

From Greg C.: Fed Said to Order Banks to Stay Mum on Stress Test Results KAF forwarded this video link: Stop Spending Our Future – The Crisis From Richard R.: Two more banks fail, lifting this year’s tally to 23

HPD mentioned a piece in Mish’s Global Economic Trend Analysis: Bartering Services to Combat the Recession David V. sent this: Social Security Bomb About To Explode Items from The Economatrix: Economic Crisis: No End In Sight; Worse Than The Great Depression. “Today five US banks according to data in the just-released Federal Office of Comptroller of the Currency’s Quarterly Report on Bank Trading and Derivatives Activity, hold 96% of all US bank derivatives positions in terms of nominal values, and an eye-popping 81% of the total net credit risk exposure in event of default.” (JPMorganChase, BofA, Citibank, Goldman Sachs, HSBC, …