50% chance of recession? No wonder bonds are beloved

 

"Two days later and bond analysts — a category of financial professionals highly sensitive to the gloomy view of the world — are still mulling the San Francisco Federal Reserve’s gloom-and-doom call on the economy next year. For those of you that missed it (and yeah, the Tell was in that crowd) the Fed’s researchers on Monday released a paper entitled “Future Recession Risks: An Update” that contained this forecast:

 

Odds are greater than 50% that we will experience a recession sometime early in 2012."

http://blogs.marketwatch.com/thetell/2011/11/16/50-chance-of-recession-no-wonder-bonds-are-beloved/

 

 

 

Third-quarter economic growth revised downward

 

"The Commerce Department said Tuesday that the economy grew at an annual rate of 2 percent in the July-September quarter, lower than an initial 2.5-percent estimate made last month. The government also said after-tax incomes fell by the largest amount in two years, reflecting high unemployment and lower pay raises."

http://www.ibj.com/thirdquarter-economic-growth-revised-downward/PARAMS/article/30916

 

OECD issues stark warning on global economy

 

"PARIS—The Organization for Economic Cooperation and Development said Monday policy makers around the world must "be prepared to face the worst," as the economic impact of Europe's debt crisis threatens to spread around the developed world.

 

The Paris-based OECD said in its latest Economic Outlook that continued failure by EU leaders to stem the debt crisis that has spread from Greece to much-bigger Italy "could massively escalate economic disruption" and end in "highly devastating outcomes."

 

"Potentially, the ECB has unlimited financial firepower through its ability to print money. However, Germany finds the idea of monetizing debts unappealing, warning that it lets the more profligate countries off the hook for their bad practices. In addition, it conjures up bad memories of hyperinflation in Germany in the 1920s."

 

"The OECD now forecasts the eurozone economy to be in a six-month recession lasting through the first quarter of 2012, followed by a slow recovery that will leave the 17-nation bloc with only 0.2 percent growth next year."

http://www.boston.com/business/articles/2011/11/28/oecd_issues_stark_warning_on_global_economy/

 

Brookings reports the acceleration of changes in concentrated povery for the 00's. 2000 to 2009.  For Ohio This could be seen as a sympton of the "Long Recession"  of the 2000s, wiping out positive trends of the 1990s....

 

The Re-Emergence of Concentrated Poverty

 

Ohio is well represented in the Top 10  metro areas showing increases in concentrated poverty

 

For Center city, increases by %

 

National Rank:  2

Youngstown, 36.3% increase in concentrated poverty

 

National Rank: 4

Dayton, 25.2% increase in concentrated poverty

 

National Rank: 10

Toledo, 19.4% increase in concentrated poverty.

 

For concentratred poverty in suburbia:

 

National Rank: 4

Cleveland, 8% increase

 

National Rank 8

Toledo, 6.6% increase

 

National Rank 10

Youngstown 6.4% increase

 

Metro-wide the top rankings are:

 

Toledo, #1, 15.39% in concentrated poverty, with 15 tracts moving to this status during the decade

 

Youngstown, #3, 14.3% in concentrated poverty, with 11 tracts  moving to concentrated poverty status.

 

Dayton, #9, 9.9% in concentrated poverty, with 8 tracts shifting to concentrated poverty status in the 00s.

 

 

Europe's shrinking money supply flashes slump warning

 

"All key measures of the money supply in the eurozone contracted in October with drastic falls across parts of southern Europe, raising the risk of severe recession over coming months.

 

The three main gauges – M1, M2, and M3 – have each begun to decline in absolute terms after slowing sharply over the Autumn.

 

The broad M3 measure tracked closely by the European Central Bank as an early warning indicator shrank last month by €59bn to €9.78 trillion, a sign that Europe's long-feared credit squeeze is underway as banks retrench to meet tougher capital requirements.

 

"This is very worrying," said Tim Congdon from International Monetary Research. "What it shows is that the implosion of the banking system on the periphery is now outweighing any growth left in the core. We are seeing the destruction of money and it is a clear warning of serious trouble over the next six months."

http://www.telegraph.co.uk/finance/financialcrisis/8921720/Europes-shrinking-money-supply-flashes-slump-warning.html

 

The Euro and Europe are truly on the edge, can they kick the can down the road any further, or is the game over? Maybe the US, China and the IMF will step in and try and slowly release the air out of the balloon over a longer period of time, instead of letting it bust. This is what the US has done with housing, can it work on a bigger scale?

 

Should the Fed save Europe from disaster?

 

"The dam is breaking in Europe. Interbank lending has seized up. Much of the financial system is paralysed, setting off a credit crunch just as Euroland slides back into slump."

 

"The Euribor/OIS spread or`fear gauge’ is flashing red warning signals. Dollar funding costs in Europe have spiked to Lehman-crisis levels, leaving lenders struggling frantically to cover their $2 trillion (£1.3 trillion) funding gap.

 

America’s money markets are no longer willing to lend to over-leveraged Euroland banks, or only on drastically short maturities below seven days. Exposure to French banks has been slashed by 69pc since May."

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8918784/Should-the-Fed-save-Europe-from-disaster.html

 

Ireland demands debt relief, warns on EU treaties

 

"Europe's plans for treaty changes to enforce fiscal discipline in the eurozone may fall foul of popular anger in Ireland unless the EU creditor states agree to share more of the pain."

http://www.telegraph.co.uk/finance/financialcrisis/8911146/Ireland-demands-debt-relief-warns-on-EU-treaties.html

The push is on to jet the system and drive interest rates even lower in an effort to spur an increase in home buying.

 

Bond Dealers See Fed Buying $545 Billion of Home-Loan Debt in Third Easing

 

"The company forecasts the Fed will buy $800 billion of securities, which may include Treasuries.

 

Efforts to bolster the economy are taking on new urgency with $1.2 trillion in automatic government spending cuts slated to begin in 2013. The Commerce Department said last week that gross domestic product expanded at a 2 percent annual rate in the third quarter, less than the 2.5 percent it originally projected, and Europe’s worsening debt crisis threatens to further curb global growth.

 

The Fed is taking the view that “even if U.S. fundamentals look to be relatively OK, we’ve got to keep our eye on any contagion from the European stresses,” Dominic Konstam, head of interest-rate strategy at the primary dealer Deutsche Bank AG in New York, said in a Nov. 22 telephone interview. “It’s in that context that they’re willing to do more.”

http://www.bloomberg.com/news/2011-11-27/bond-dealers-see-fed-buying-545-billion-of-home-loan-debt-in-third-easing.html

 

Home Prices Disappoint, Hitting Futures

 

"The latest example is the Case-Shiller home-price index for September. It fell 0.6% from August, a harder drop than the 0.1% economists expected. The year-over-year decline fell to 4.11%, the worst since march.

 

This was the fifth straight monthly decline in home prices."

http://blogs.wsj.com/marketbeat/2011/11/29/home-prices-disappoint-futures-cool-a-smidgen/?mod=google_news_blog

If incomes are stagnant and falling and employment is not improving, what does that mean for the housing market?  Seriously, folks....

 

 

http://money.cnn.com/2011/11/29/markets/bofa_stock/index.htm?iid=Popular

 

They still too big to fail?

Slowly but surely, more and more info leaks out. Its becoming clearer and clearer who is the masters of our country.

 

Banks made billions on secret Federal Reserve loans

 

"The Federal Reserve and the big banks fought for more than two years to keep details of the largest bailout in U.S. history a secret. Now, the rest of the world can see what it was missing.

 

The Fed didn't tell anyone which banks were in trouble so deep they required emergency loans of a combined $1.2 trillion on Dec. 5, 2008, their single neediest day.

 

Bankers didn't mention that they took tens of billions of dollars at the same time they were assuring investors their firms were healthy. And no one calculated until now that banks reaped an estimated $13 billion of income by taking advantage of the Fed's below-market interest rates, Bloomberg Markets magazine reports in its January issue."

 

Dwarfed TARP loans

 

"The size of the bailout came to light after Bloomberg LP, the parent of Bloomberg News, won a court battle against the Fed and a group of the biggest banks called Clearing House Association LLC. The amount of money the central bank parceled out dwarfed the Treasury Department's better-known $700 billion Troubled Asset Relief Program, or TARP."

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2011/11/28/BUGK1M523B.DTL#ixzz1fD0vZKlR

http://money.cnn.com/2011/11/29/markets/bofa_stock/index.htm?iid=Popular

 

They still too big to fail?

 

At least up to this point, yes. I think they will finally be broken into pieces with the 'government' holdening the leasted valued assets.

Back above 400,000 with previous numbers revised upward, again.

 

Jobless claims back above 400,000 level again

Applications for compensation increase in Thanksgiving week

 

"Initial claims for unemployment compensation climbed by 6,000 to a seasonally adjusted 402,000, the Labor Department said Thursday. It was the highest level in a month.

 

Applications from two weeks ago were revised up to 396,000 from an original reading of 393,000. Economists surveyed by MarketWatch had expected new requests for jobless benefits to total 393,000 in the week ended Nov. 26, which included the Thanksgiving holiday."

http://www.marketwatch.com/story/jobless-claims-back-above-400000-level-again-2011-12-01

Yes, it will send your economy into a recession or even a potential depression. Ask Greece how that works and soon he can ask Italy, Ireland and Spain. When a country can no longer support its debt loads it has to pay the piper. He demanded the Greeks to do this, he demanded Ireland to do this, but now he is not sure he wants the French to have to do this. TO BAD.

 

This same issue is coming to America very soon.

 

Sarkozy: Austerity alone will lead to recession

 

"SAN FRANCISCO (MarketWatch) - French President Nicolas Sarkozy said Thursday that using austerity alone to solve the economic crisis afflicting France and the rest of Europe would lead to recession and possibly even depression. He said such an approach would make the French people pay nearly the whole cost of trying to recover from the crisis. "It would end in recession or depression," Sarkozy said in a speech in the southern French city of Toulon. Sarkozy said that cuts and economic reform were necessary but were only part of what were needed to help Europe emerge from its sovereign debt crisis."

http://www.marketwatch.com/story/sarkozy-austerity-alone-will-lead-to-recession-2011-12-01

Cuts can't make money; they can only save it.

I believed when the US was diving into the great recession all the actions being taken was to soften the landing as much as possible. It was never about not having a recession, that was already in the cards. The same holds true today, its about trying to soften the landing since another recession for most of the western world is already in the cards.

 

Factories stall worldwide, U.S. jobless claims rise

 

"(Reuters) - Manufacturing activity is contracting across Europe and most of Asia, data showed on Thursday, and a Chinese official declared that the world economy faces a worse situation than in 2008 when Lehman Brothers collapsed.

 

Factory activity shrank even further in the euro zone, reinforcing the view that the debt-strapped region is in recession, while British manufacturing contracted at the fastest pace in two years, raising the risk that the UK economy may suffer the same fate."

 

"China's official purchasing managers' index (PMI) showed factory activity shrank in November for the first time in nearly three years, while a similar PMI showed Indian factory growth slowed close to stall speed."

 

"The big picture here is this is an unwinding of a 20-year debt bubble," said Peter Dixon, global financial economist at Commerzbank. "It's going to be painful, and it's going to be nasty. What policymakers are aiming for is a smoothing of the path."

http://www.reuters.com/article/2011/12/01/us-global-economy-pmi-idUSTRE7B00WJ20111201

Eight point six

It definitely is going to be painful, and smoothing the landing is only the first task.  What I'm much more interested in (but don't expect to see for a long while yet--you don't worry about future fire safety while your house is currently on fire) is preventive measures that might prevent the inflation of another debt bubble and a repeat of this sorry episode ten or twenty years from now.  Of course, I guess saying that I don't expect to see it yet is optimistic--I don't expect to see it ever, because too many well-connected people make too much money both from the debt-fueled booms *and* from the deleveraging-fueled busts.

Eight point six

 

That's better then the 9 that was predicted

Even with seasonal employment boosts, that's pretty good, esepcially with the private sector numbers.  A nice way to end the week.

Eight point six

 

I can help the unemployment rate a lot. Get another 3 million Americans to give up looking for a job or have them run out of unemployment benefits and our unemployment rate will look like a healthy 4 percent. But its still means millions continue to be out of work. I also read that the Birth Death model (which the Labor Department has admitted doesn't works so well in a bad economy) added 102,000 jobs to the numbers. Add in seasonal hiring and the need for over 100,000 new jobs just to keep up with the incoming workforce and this number is not very good for the core of the holiday hiring season.

 

But, the headline looks great and that is what Wall Street and Washington are looking for.

 

Jobless rate falls to over 2-year low of 8.6%

Unemployment at lowest level since 2009 as labor force shrinks

 

"WASHINGTON (MarketWatch) — The U.S. economy created 120,000 jobs in November and the unemployment rate fell to 8.6%, its lowest level in more than two and a half years, the Labor Department said Friday.

 

The big drop in the jobless rate, which stood at 9.0% in October, stemmed mainly from a decline in the size of the labor force. Some 315,000 people stopped looking for jobs last month, which is usually not a good sign."

http://www.marketwatch.com/story/us-jobless-rate-falls-to-86120000-jobs-added-2011-12-02

 

I can't remember if it was in this thread or not where we were having the debate as to whether $150K a year is considered "rich" or "upper class," but according to this article, $50K is the median income now, so I would say this supports my argument that $150K, more than double that income, would be considered rich. What do you all think?

 

http://lifeinc.today.msnbc.msn.com/_news/2011/12/01/9145730-we-are-the-median-living-on-50000-a-year

 

 

These stats are a big goofy, since supporting yourself on 50K versus a spouse and 4 kids are two entirely different items, aside from housing costs in the bigger cities.  But yeah, if you're making $150K in Ohio and you're single or married with no kids, there's no excuse for not saving and investing at least a third of your income after taxes. 

 

 

Say rather that the stats don't purport to capture everything.  The median income stat is simply that--the median income.

 

If "lower class," "middle class," and "upper class" are matters of lifestyle rather than income to you, then the median income is only the starting point for the discussion.

 

Someone trying to support four people on $50k will obviously live a different lifestyle than someone supporting just themselves.

 

Someone making $50k at age 60 is probably in a very different situation than someone making $50k at age 30.

 

Someone making $50k in Manhattan will be living differently (in many ways) than someone making $50k in Toledo.

 

Someone making $50k with $60k in student loans will not have the same lifestyle as someone making $50k with no student loan debt.

 

You can introduce an unlimited number of complicating factors into the equation if you want.  Depending on your aim, that may be a bug or a feature.  For example, it's also true that someone with significant hands-on skills can be living above their income level because they can improve their own house, car, etc.  Do you count that in your discussion of whether someone is upper class or not?  What about if someone is simply a better shopper or otherwise better about spending their money?

My wife and I make a combined $130K or so and we certainly don't feel "rich."  We're not struggling by any means, but I wouldn't consider us "wealthy" or "rich" at all really.  We do both carry some significant college loan debt, but other than that and a car loan we're pretty much debt free.  And with all that money that we seem to make, neither of us have smart phones (unheard of for 25 year olds), we share a car, we live in a modest 2 bedroom apartment, rarely fly anywhere for vacation, and Time Warner still pisses me off with their rate hikes.  That may just be personal priorities though...

My guess is nobody ever "feels 'rich'" themselves, but if I was making a combined $130k I wouldn't try to play poor in public.

If you're making $50K, you're certainly in the top 5% in the world. 

 

The big issue is that if you were raised in a middle class environment AND your parents paid for all of your shit -- cars, apartments, etc. -- during college, AND you lucked out and got a decent salary job right out, you probably don't feel like a $50,000 lifestyle is any big deal. 

 

I fit solidly in the low 6 figure income category and certainly do not feel rich.  I am comfortable, but with 2 kids, a mortgage and minimal debt I don't feel like I can go off spending without discretion.

 

The funny thing is, I am the small business that the GOP purportedly is trying to help, but I feel more and more disenfranchised every day (by BOTH parties).  I pay more taxes proportionally than the bottom 40% and many millionaires, but get practically nothing in return.  No health care, no benefits, horrible roads and even worse services. 

 

The OWS and Tea Parties are on the fringe.  I am the middle class.  Not sure of the fraction of the 99% I represent, but I can tell you the time for change has come.  I don't expect anything for free, but I do expect SOMETHING for my hard work and taxes. 

Part of the reason many people in the six-figure income range don't feel particularly rich is that $100k doesn't buy what it used to.  (Granted, $900k is also a six-figure number.)  On this one point, Ron Paul and his hard-money hardliners may have found a grain of truth, though the policy platform they build around that fact is loaded with other unnecessary baggage and is not the only way to restore a measure of the dollar's lost power.

 

That said, the difficulties of someone with a $100k income who doesn't "feel" rich are still qualitatively different than the difficulties of someone trying to raise a family of four on $50k (or $30k, or $20k).

Back to the recession.

 

Turns out this could have been avoided.

 

Financial Crisis Was Avoidable, Inquiry Finds

 

WASHINGTON — The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street, according to the conclusions of a federal inquiry.

 

The commission that investigated the crisis casts a wide net of blame, faulting two administrations, the Federal Reserve and other regulators for permitting a calamitous concoction: shoddy mortgage lending, the excessive packaging and sale of loans to investors and risky bets on securities backed by the loans

 

Let the finger pointing begin. 

 

But, what this says is that we have systemic failure driven by greed, & the self-serving ideologies used to justify policy that facilitates this greed.

Well, in hindsight, almost all disasters are avoidable.  Even Hurricane Katrina could have been prevented from becoming the disaster that it did, depending on what steps we took in the decades prior to the storm.

>I am comfortable, but with 2 kids, a mortgage and minimal debt I don't feel like I can go off spending without discretion.

 

Perhaps the real definition of rich is having enough money, and being in the right sort of situation (mostly as a business owner), which allows you to more or less say whatever you want. 

 

Like this:

Rodney Dangerfield - CaddyShack!

Cleveland and Cuyahoga County are not the only ones that are in this boat and it goes way beyond the goverment, property owners and businesses are feeling these deflationary declines in property values as well. We are not at the bottom yet.

 

Cleveland, Cuyahoga County Property Values May Plunge Next Year, Fed Says

 

"Declining property values in Cuyahoga County and Cleveland, its largest city, may force local governments to raise taxes or cut services after parcels are reappraised in 2012, a report by Federal Reserve Bank of Cleveland researchers said.

 

Falling prices suggest that property values could be up to 45 percent lower than 2010 county estimates, according to a study issued today by Thomas J. Fitzpatrick IV and Mary Zenker. The impact on tax collections in municipalities already facing tight budgets, especially in Cleveland and its inner-ring suburbs, “could be significant,” the researchers said."

 

"Property values may be 38 percent to 45 percent lower than county estimates in Cleveland and 26 percent to 30 percent lower in inner-ring suburbs, the report said.

 

“If appraisals come in close to this far below the 2010 county estimates, Cleveland and the inner-ring suburbs may face a significant tax revenue shock in 2012,” the researchers said."

http://www.bloomberg.com/news/2011-12-06/cleveland-cuyahoga-county-property-values-may-plunge-fed-says-in-report.html

Guess now isn't the best time to buy after all.

Even if prices don't plummet next year, the odds that they will actually recover are very low.  Of course, "recover" might as well be "reinflate" in this context.

 

I'm still very surprised by how many $300k+ homes there are on the market in northeast Ohio, even $500k+ homes.  Under old conventional wisdom, your household income should be in the $200k range to buy a $500k home.  How many people in this area (or heck, even in Chicago or D.C.) really have that kind of income, even with two incomes and no kids?

 

I occasionally look at places, just to see what's out there.  I'm not as completely averse to buying as I was at this time last year, when I was seriously thinking I'd be a renter for life.  (Now I still think I *could* be a renter for life, but I at least entertain the possibility of buying a place of my own.  That may be the subtle, continuous influence of someone prettier than me who feels more attracted to the notion of yards--and yardwork [ick]--than I do.  But that's a separate discussion.)  When the Lady Gramarye and I go looking, though, we still don't really see the benefits as worth the combination of the cost and the responsibility.

There's a theory out there that the big postwar push for mass home ownership was a way to get ordinary citizens stuck in their respective cities in order to reduce movement within the United States. 

 

Yeah, housing prices aren't going to "recover".  We quite obviously had way more housing than people, which is why large sections of Detroit, Cleveland, and other cities were able to evaporate without people being thrown onto the street. 

Back to the recession, in light of the recent federal commission on the causes why haven't any banking executives been prosecuted for the low doc, no doc, liar loans or the robosigning scams?  60 Minutes did a story on it again this week...

^ Link to that 60 Minutes piece.

http://t.co/Q9FUsIys

Same twrrible reasons that Obama didn't investigate bush and his administration.  We have to move on, they are too big too fail/fall, and parasitic dependency are all factors.

I hear you about "moving on" but there's a big difference between prosecuting former administration, and prosecuting some renegade banking execs who violated their own procedures and signed false documents...  I don't think "too big to fail" has anything to do with it either.  Taking a stand and throwing the book at a few individuals might go a long way.  Doing nothing on the other hand...

I hear you about "moving on" but there's a big difference between prosecuting former administration, and prosecuting some renegade banking execs who violated their own procedures and signed false documents...  I don't think "too big to fail" has anything to do with it either.  Taking a stand and throwing the book at a few individuals might go a long way.  Doing nothing on the other hand...

 

Maybe its because the 'too big to fail' group is 'too big to prosecute'. These guys own Congress, they even had/have the SEC destroying documents for them.

http://www.marketwatch.com/story/sec-may-have-destroyed-documents-senator-says-2011-08-17?dist=afterbell

It looks like Mr. Volcker believes we never left the recession and it will continue well into the future. I think he is right. The only main reason GDP went positive is because of the printing presses. Without them GDP would still be negative.

 

Paul Volcker Says It's Recession and Inflation for the U.S.

 

"In a talk given on Wednesday night to a small audience at the Wall Street location of the American Museum of Finance, former Fed Chair Paul Volcker said the U.S. will be mired in recession for many more years and that it faces an inflation problem in the future. Volcker was the Fed Chair that tamed inflation in the 1980s. 

 

In a talk given to a small audience at the American Museum of Finance on Wednesday evening, former Federal Reserve Chair Paul Volcker stated that there was an ongoing recession in the U.S. and that we will be seeing inflation in the future because of the actions of the Fed and Treasury during the 2008 Credit Crisis."

 

"We're not going to end the recession in the next month or the next year. It's going to take several years before the recession is over." The U.S. government claims that the last recession ended in June 2009 and has repeatedly said that the U.S. has not fallen back into recession even though unemployment and consumer confidence have continuously remained at recession levels."

http://www.etfguide.com/research/726/23/Paul-Volcker-Says-It%27s-Recession-and-Inflation-for-the-U.S./

We probably should have just let the whole thing go down Tyler Durdin style.  That way the companies would have disappeared, the guilty would have fled the country and we could just not let them back in.  Then we'd just end up with some sort of mortgage amnesty and build back from the bottom up instead of this Jenga tower maneuvering we have going on.  :shoot: <half serious>

I hear you about "moving on" but there's a big difference between prosecuting former administration, and prosecuting some renegade banking execs who violated their own procedures and signed false documents...  I don't think "too big to fail" has anything to do with it either.  Taking a stand and throwing the book at a few individuals might go a long way.  Doing nothing on the other hand...

 

Well, more to the point, there is a difference between doing things that are wrong and doing things that are illegal.  Not every form of bad conduct even gives rise the civil liability, let alone criminal liability.

 

It's easy to find plenty of bad actors in the financial crisis, and still others in the aftermath.  Borrowers who lied on loan applications (an even bigger sin than not turning in any forms at all).  High-volume originators who churned NINJA loans through and got them off their books quickly when the market was liquid, thereby avoiding any need to consider the quality of what they were selling.  Ratings agencies that gave AAA ratings to securities backed by $600,000 mortgages given to individuals with $40,000 incomes.

 

The thing of it is, unless someone did something against a specific criminal law, you can't send them to jail.  Even with the absurd proliferation of criminal statutes (even criminal regulations, which I think are a constitutional abomination) in this country, that would be hard to prove.  Likewise, if you want to impose civil liability, you need to show that they breached a specific contract, committed a specific tort, etc.  I cringe when I hear people say that X group of people should go to jail for "bringing down the financial system" or "crashing the economy."  Those aren't criminal charges, they're rhetorical charges.

 

Some people have suggested fraud (in the ordinary state law sense) or securities fraud (the specific and more technical federal crime).  I'm not sure how much traction either of those would get.  I don't know what else is out there.

Good luck with this latest attempt to kick the can down the road a little more. Many of these countries will legally need to have a referendum on these measures. Something tells me we will see a lot of new riots and protest in Europe over the next 3 to 4 months.

 

Why Merkel-Sarkozy pact is doomed to fail

Commentary: Greece and Portugal have no reason to accept plan

 

"BOSTON (MarketWatch) — If you want to understand the latest Franco-German proposal to “save” the euro, imagine this.

 

Imagine the governments of China and Japan demanding they be given the legal right to override the U.S. budget’s legislative process if needed, and to impose tax hikes and spending cuts on the American people as needed.

 

After all, China and Japan are our biggest creditors. The U.S. government owes them trillions. We’re not quite as deeply in debt as a share of our economic output, as Europe’s naughtiest Nellies. But we’re not far behind either."

 

"Why would the Portuguese accept the right of Germany to impose budget cuts on their country? Why would the Greeks?

 

Would we accept that role for the Chinese and the Japanese, the biggest holders of Treasury debt? How would you feel if you opened the paper to be told that the new Sino-Japanese “Fiscal Stability Commission” in Washington had just slashed your grandma’s Social Security checks by one-third, scaled back federal highway repairs, and that it would impose a 10% national sales tax?

 

That is, after all, effectively what is being offered to the people of Greece, Italy, Spain, Portugal and Ireland."

http://www.marketwatch.com/story/why-merkel-sarkozy-pact-is-doomed-to-fail-2011-12-09

Add in some nice inflation during that time period and they are even poorer.

 

US household wealth takes biggest hit since 2008

US household wealth takes biggest hit since 2008 as stock and home values drop

 

"WASHINGTON (AP) -- Americans' wealth last summer suffered its biggest quarterly loss in more than two years as stocks, pension funds and home values lost value.

 

At the same time, corporations raised their cash stockpiles to record levels.

 

Household net worth fell 4 percent to $57.4 trillion in the July-September quarter, according to a Federal Reserve report released Thursday. It was the sharpest drop since the tumultuous period after the September 2008 bankruptcy of investment bank Lehman Brothers. And it was the second straight quarterly fall."

http://finance.yahoo.com/news/us-household-wealth-takes-biggest-170743179.html

They better not run out of workable ammo before things are stabilized or its going to explode like a supernova on them.

 

Fed, BoE bond buys moved markets, study finds

 

"WASHINGTON (MarketWatch) — Large-scale bond purchases made by the U.S. Federal Reserve and the Bank of England made big impacts on the market, a study released by the Bank for International Settlements on Sunday found.

 

The U.S. Federal Reserve has purchased $2.3 trillion worth of securities under the programs widely known as QE1 and QE2, and the Bank of England has set out to buy 275 billion pounds worth of bonds."

http://www.marketwatch.com/story/fed-boe-bond-buys-moved-markets-study-finds-2011-12-11

Recession will be much worse, say economists

 

"Britain will suffer a much worse recession than previously imagined but it will not be as bad as in Europe, leading economists forecast today.

 

Experts from Standard Chartered Bank are warning that the UK’s economy has already begun to shrink, as companies are laying off workers and household spending is under pressure.

 

The bank’s financial forecasters believe Britain’s economy will continue to falter until at least half way through next year, reducing by 1.3 per cent overall in 2012.

 

However, they predict that economies of eurozone countries, including France and Germany, are likely to see a worse drop of 1.5 per cent as they struggle with the area’s debt problems."

http://www.telegraph.co.uk/finance/financialcrisis/8949742/Recession-will-be-much-worse-say-economists.html

 

China Econs Warn On Recession As Euro Crisis Drags On: Press

 

"BEIJING (MNI) - Chinese government economists have joined the ranks of sceptics arguing that the latest efforts by European leaders to resolve the single currency union's debt crisis are inadequate, and that China needs to prepare for another recession in the advanced economies.

 

State Information Center economist Zhang Monan said the agreements finalized at last week's contentious European summit won't fundamentally resolve the crisis and warned that a wave of sovereign downgrades is inevitable in the coming year.

 

She said the imposition of overly-aggressive austerity packages on European economies will trigger greater social and political turmoil in the region.

 

"Solving the European debt crisis may have become more difficult than we can imagine," Zhang said."

https://mninews.deutsche-boerse.com/index.php/china-econs-warn-recession-euro-crisis-drags-press?q=content/china-econs-warn-recession-euro-crisis-drags-press

Looks like the Holiday season is turning out not be as great as the Retail Association headlines would have lead everyone to believe over the last few weeks. Would a trade organization really mislead people with happy headlines? Say it not so. The actual number came in about 40% of what the economist had predicted, that a pretty big miss. Look for the retailers to have some ugly numbers on profits in the near future. They are/had to discount significantly to get things off the selves, reducing profit magins significantly.

 

U.S. retail sales rise slightly in November

Consumers snap up electronics, spend less on food and drinks

 

"Sales at U.S. retailers increased a seasonally adjusted 0.2% in November, the Commerce Department reported Tuesday. Excluding the volatile automobile sector, sales also rose 0.2%. Automobile sales can swing sharply from month to month and obscure underlying retail trends.

 

Economists were expecting stronger sales in light of robust demand for automobiles and a record increase in spending during the Thanksgiving holiday weekend, which kicks off each year with the Black Friday shopping bonanza. Economists surveyed by MarketWatch expected retail sales to rise by 0.5% overall, or by 0.4% excluding the auto sector."

http://www.marketwatch.com/story/us-retail-sales-rise-slightly-in-november-2011-12-13

 

The real problem is people are taped out financially. Credit card debit is rising quickly again in the US and its not become people feel richer, its because they are broke and trying to hang on. Inflation is much hotter than what is being reported. Keep printing Bernanke and you will finally collapse the US economy.

 

Holiday Sales Appear to Stall: Are Big Discounts Next?

 

After early bird discounts fueled a Black Friday buying boom, retailers are seeing sales dry up halfway through the holiday sales period, a consumer survey completed Sunday showed. The trend may force discounts as deep as 70 percent on coats and flat panel TVs as Christmas Eve approaches.

 

Forty percent of consumers are completely done with their holiday shopping at this point, up from just 28 percent who were finished at the same time last year, according to the America’s Research Group/UBS Christmas Forecast Survey.

 

“You could push them over the edge at this point with a 60 to 70 percent discount,” said Britt Beemer, CEO of ARG, who has been conducting the phone survey and marketing research for 27 years. “But most would probably use a credit card, as their budgets are depleted.”

http://www.cnbc.com/id/45643812

Slowly but surely more and more info leaks out about how the boom and bust was manipulated by the banks and the NAR. Shocking. :wink:

 

Inflated home sales figures from 2007-10 to be lowered

 

"WASHINGTON – National home sales figures will be lowered dating back to 2007 after the private trade group that collects them said the numbers were too high."

 

"CoreLogic estimated that the Realtors group overstated sales in 2010 by at least 15%."

http://www.usatoday.com/money/economy/housing/story/2011-12-12/Home-sales-revision/51838420/1

 

There are going to be some juicy New Year sales! :clap: