jmski52, you mean they will do something similar to Goldman who didn't have to include their massive December losses in the 4th Qtr 2008 accounting.....nor in the 1st Qtr 2009.
Here's a fascinationg read of what JS was saying way back in 2002. You don't have to take anyone's word for it, here's a real interview with Jim Puplava doing the moderating. The basic principles are still the same and still trending the same way. This is a great read on how the gold miners were building their companies with non-recourse derivatives and how it will eventually shake out the industry. The road map that JS and JP layed out back in 2002 was dead nuts on. I think they expected the fall out to occur much sooner than 2007 but even then JS was prediccting a new all time high in gold with $1250 as a goal. Note that back then the total derivatives only tallied $75 TRILLION. That number eventually increased 9X to 15X depending on what means of BIS accounting methods one assumes.
<< <i>As far as I've read when the banks take over a property (ie foreclose) they become the owner and a sale occured. When the bank puts it up for auction and another middleman buys it for resale, another sale occurred. When the middleman dumps it to J6P, yet another sale occured. Same house 3 sales. When J6P loses his job, the chain repeats. It's no secret that the banks have been sitting on foreclosures to keep their net asset ratios in balance. So when those foreclosures come to market is up to the bankers. They can pick a particular month to unload a bunch or wait. Isn't the above similar to the stock broker's flash trading where false volume is created to lure in future buyers? The same thing has basically occured in numismatics in the key date arena. Key dates were flipped back and forth between dealers (and speculating "collectors" ) until eventually finding a retail buyer. The dealers justified the retail price because of what they had to pay to participate in the flash trading. But now you look at inventories and there are lots of key dates sitting around.
Home sale stats are about as accurate in this environment as is the CPI/PPI/jobs lost reports. An interesting note about the CPI yoy comparisons. It's been driven down for a number of months now because of the price of oil and commodities in general falling steadily back in summer/fall 2008. $147 oil in July 2008 to $65-$70 this past July. Huge drop. But what happens when that $147 oil gets replaced by $35 oil in the calculations? $35 to $70....huge increase. Same for copper, aluminum, etc. The financial media have taken great glee in reporting decades low yoy CPI's. So what will these numbers do starting in the later fall when oil and other commodities in 2009 are 2X their 2008 end of year lows? Then once again the pundits can report record yoy changes, but only this time in the + direction. >>
I don't really follow this thread, just jumping in.
I do real estate in Phoenix, and although I don't know the exact source and details of the housing numbers that are reported nationally, locally our inventory has been reduced from about 55k units in the MLS to 32k so far this year. These are numbers that I trust because the MLS represtents the inventory that I can go out and sell. I have buyers in the low end $100-150k and it is VERY difficult to find them a home, it's like a few years ago at the peak. Multiple offers over asking price. This is not happening with higher priced homes though which still languish on the market.
I suspect the low end is busy because there is a lot of money to be made there. You can buy these low-end homes and rent them out and cash-flow them for a few hundred per month easily. Investors buy the foreclosures with cash, bring them up to spec to qualify for FHA financing and dump them for a few thousand profit (at least). First time buyers are also taking advantage of the $8k tax credit.
So the housing market is turning around, kind of. The housing figures can't be completely dismissed. Local mean and median prices have bounced from a low a few months ago. Clearly we're at a stabilization point but I can't tell you how long it will last or if it will hold.
The $4500 cash for clunkers has "turned" the car market around for this quarter. But what about the 4th quarter and beyond? No doubt the $8000 incentive home incentive that will run out in November is spurring on new buyers who previously had no plans about buying a home in this environment. But just like fiat for clunkers, what do you think will happen to home demand when the latest incentive disappears? Are there going to be continuous consumer bail out plans for each future quarter?
<< <i>The $4500 cash for clunkers has "turned" the car market around for this quarter. But what about the 4th quarter and beyond? No doubt the $8000 incentive home incentive that will run out in November is spurring on new buyers who previously had no plans about buying a home in this environment. But just like fiat for clunkers, what do you think will happen to home demand when the latest incentive disappears? Are there going to be continuous consumer bail out plans for each future quarter? >>
I'm not convinced that the housing market will die or be hurt by the $8000 going away. I think the investor demand is sufficient at the moment to keep things humming. If you can buy a home for $90k, put $10k in it, and finance about $67.5k (75% of 90k at 7%), your payment is ~$450/mo, plus maybe $150T&I, and you can rent it for $900 or more, you're cash-flowing $300/mo. on about $33k cash, plus any appreciation. That's about 11% cash-on-cash return, and there's a perception of minimal risk due to "buying at the bottom" and positive cash flow margins. That's assuming 100% occupancy.
"Are there going to be continuous consumer bail out plans for each future quarter?"
Well, we seem to be at a national philosophical nexus regarding who's entitled to what and who is going to pay for it and no doubt that will be reflected in the media as the class wars become more mainstream. 2010 mid-term elections are going to be quite interesting for a change.
Different fires require different firefighting equipment. The last thing you want to have happen is to find yourself in a position of having to liquidate big portions of your gold to buy a few week’s worth of groceries. Just as it’s possible that the US dollar hyperinflates against gold, it’s possible that gold hyperinflates against food. Use gold to protect against the bankers’ scheme to devalue the world’s paper currencies. Use food, not gold, to protect against their plan to starve you.
Thomson has a different way of stating his point than your typical gold analyst. In this article he discusses how value will shift from the dollar to gold, to food, and possibly back to the dollar again.
It is time to quit listening, and just start looking (not like most people on this forum haven't been doing that for longer than I have even been registered)
<< <i>Two things that would help get us back on track, and could help the goverment stop spending and start working on real problems.
1) Term limits. >>
reCoinGuy,
I'd long been opposed to term limits as an intrusion on voter will. I'd considered it a sop for the lazy voter, at the expense of the informed one who determined that the person in office was worthy of reelection.
I'm always worried about the phenomenon of laws being passed as a perennial in response to some transient crisis. Laws amass because of that: the more we're in business as a republic, the more fringe atrocities inspire corrective legislative action, and burden generations ever after who are long remote from what ever crisis inspired the law in the first place.
As so in this case, I've been worried that a transient palliative to get rid of encrusted congressmen and senators who get endlessly reeected by inertia and gerrymandering, would result in a legislature of naive populists, out of touch with the long-term and the informed context of what they might propose.
Yet so entrenched is the current Congress, and so invested in their reelections, I've almost come around to your point of view.
God only knows whether some wise and more attuned legislature of the future will be able to undo such as change.
All these articles on China just make no sense. It should be obvious that China is a player in our debt market and will continue to do so until they have either spent most of the money, the U.S. passes trade restrictions on their products, or the rest of the world refuses to take dollars.
All these examples of potential foreclosures are really just nonsense. Foreclose on what? U.S. debt is backed by nothing; there is no collateral, only a “PROMISE” to pay.
In addition, private borrowers in the world do not have a printing press to just print the money the debt is denominated in.
China is not looking for a world currency! It is not going to stop buying American debt, it is not going to dump its debt.
The position it is in is not a bad one as long as it can continue to find suckers that will take U.S. dollars to buy hard assets. If it does anything to upset the apple cart it will turn its hundreds of billions of dollar reserves into monopoly money.
The Chinese have already made their decision, they will simply loan their dollar reserves to their own controlled national companies, which will slowly buy up world assets.
China’s ‘Problem’: Too Much Money August 23, 2009 Jeff Nielson It is becoming quite humorous watching the continual efforts of Western commentators (mostly American) to bash the Chinese economy. The accusations these pundits make are as numerous as they are ludicrous.
Perhaps the most-frequent criticism is that because it is the U.S.’s largest foreign “creditor” (i.e. lender), that China has a serious “problem” due to the fact that the U.S. is totally unable to repay what it has borrowed from China. Frankly, it is hard to imagine any adult without a severe mental disability reaching such an idiotic conclusion.
For anyone who places any credence in this assertion, I suggest that you do a little private research. Go to the bank who holds the mortgage on your house, and say to them, “I can’t pay my mortgage payments, which means that you have a serious problem.”
Once the bank’s loan officer finishes laughing, he or she would reply, “No problem. We’ll simply take your house.” In short, it is obvious that defaulting on debt is almost always a much more serious problem for the party defaulting than for the creditor.
To be honest, I never gave much thought to term limits until recently for congress, although I have heard the calls for them for some time.
You make some great points as to why not to have them, my only counter point to that is there are 300 Million people in America, surely we could replace them every 8 years or so with someone else as astute as their predecessor.
I think we are seeing the same thing currently, our respresentatives are no longer representing the people. They are insulated away from the public, not coming from us, the longer they are in office.
As to the accumulation of more and more laws and more and more government, that is happening anyway. Our tax code is rediculous, as an example. Without getting political, they need to abolish it and start over.
There are three branches to our government that are suppose to counterbalance each other. I just think there are enough members of the two branches of Congress, that fresh blood would do our country better than 30 year entrenched members who's only real concern is getting re-elected, and satisfying their donors so they have the money to get re-elected.
there is argument for no term limits ie experience and knowing the ropes leads to more expedience, but i disagree with that argument
yet if there were term limits, a simpler Congress may evolve, more able to address long term issues and seeing the "big picture" rather than pet projects. even though they may have only 8-12 years their position and duty to serve the country may become for a greater, better United States, than re-election.
Zions is one of a number of large, "conservative" regional thrifts with not so nice balance sheets and loan portfolios. What Reggie shows would make your head spin. 47% of their assets are in the Level 3 "marked to myth" category. Almost an identical number are in Level 2. They are leveraged 6.5X to equity in the mortgage dept. 33% of their loans are in CRE. Their balance sheet is a sea of red ink. They show from 8 to 16% investment losses in their major areas with leverage of 13X. This is just a typical regional thrift which you won't even find on the FDIC's "hot" 391 list.
Uh oh, the professor is back and is going to grade our "homework" to see how we did while he was on summer vacation. Hope I didn't say anything too stupid that might get me the tin foil dunce cap.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< <i>Uh oh, the professor is back and is going to grade our "homework" to see how we did while he was on summer vacation. Hope I didn't say anything too stupid that might get me the tin foil dunce cap.
Oil is at $70 dollars and going toward $100 because it is now trading against the dollar. Have you heard the term Black Gold?
The only thing that will solve any of our socialist problems in this country is 6-year term limits for congress. All the rest of the talking heads can forget about “ informing” the public, the socialists don’t care.
All of the reasons Not to have term limits are the very reasons to have them. Our Forefathers want a small government that was mostly talk and no action, a government that left the people alone.
Not to worry though we will not see term limits approved, so our down the toilet trajectory is still in place!
FDIC's Bair says does not expect to have to tap FDIC'S line of credit with Treasury "at this time"; emphasizes that FDIC insurance fund balance has already been adjusted downward for cost of failures expected over next year - Reuters
FDIC issues Q2 Quarterly Banking Profile; "Problem List" expands to 15-year high
Burdened by costs associated with rising levels of troubled loans and falling asset values, FDIC-insured commercial banks and savings institutions reported an aggregate net loss of $3.7 billion in the second quarter of 2009. Increased expenses for bad loans were chiefly responsible for the industry's loss. Insured institutions added $66.9 billion in loan-loss provisions to their reserves during the quarter, an increase of $16.5 billion (32.8 percent) compared to the second quarter of 2008.
Quarterly earnings were also adversely affected by writedowns of asset-backed commercial paper, and by higher assessments for deposit insurance. Almost two out of every three institutions (64.4 percent) reported lower quarterly earnings than a year ago, and more than one in four (28.3 percent) reported a net loss for the quarter. A year ago, the industry reported a quarterly profit of $4.7 billion, and fewer than one in five institutions (18 percent) were unprofitable. The average return on assets (ROA) was -0.11 percent, compared to 0.14 percent in the second quarter of 2008...
The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) increased for a 13th consecutive quarter, and the percentage of total loans and leases that were noncurrent reached a new record. Noncurrent loans and leases increased by $41.4 billion (14.3%) during the second quarter, led by 1-4 family residential mortgages (up $15.4 billion, or 12.7%), real estate construction and development loans (up $10.2 billion, or 16.6%), and loans secured by nonfarm nonresidential real estate properties (up $7.1 billion, or 29.2 percent)... This is the highest level for the noncurrent rate in the 26 years that insured institutions have reported noncurrent loan data. On a more positive note, loans that were 30-89 days past due declined by $16.7 billion (10.6%). This is the largest quarterly decline in dollar terms in the 26 years that these data have been reported, and the largest percentage decline since the first quarter of 2004, when 30-89 day past due loans were one-third the current level...
The number of insured commercial banks and savings institutions reporting financial results fell to 8,195 in the quarter, down from 8,247 reporters in the first quarter. Thirty-nine institutions were merged into other institutions during the quarter, twenty-four institutions failed, and there were twelve new charters added. During the quarter, the number of institutions on the FDIC's "Problem List" increased from 305 to 416, and the combined assets of "problem" institutions rose from $220.0 billion to $299.8 billion. This is the largest number of "problem" institutions since June 30, 1994, and the largest amount of assets on the list since December 31, 1993
FDIC's Bair says does not expect to have to tap FDIC'S line of credit with Treasury "at this time"; emphasizes that FDIC insurance fund balance has already been adjusted downward for cost of failures expected over next year - Reuters
FDIC issues Q2 Quarterly Banking Profile; "Problem List" expands to 15-year high
Burdened by costs associated with rising levels of troubled loans and falling asset values, FDIC-insured commercial banks and savings institutions reported an aggregate net loss of $3.7 billion in the second quarter of 2009. Increased expenses for bad loans were chiefly responsible for the industry's loss. Insured institutions added $66.9 billion in loan-loss provisions to their reserves during the quarter, an increase of $16.5 billion (32.8 percent) compared to the second quarter of 2008.
Quarterly earnings were also adversely affected by writedowns of asset-backed commercial paper, and by higher assessments for deposit insurance. Almost two out of every three institutions (64.4 percent) reported lower quarterly earnings than a year ago, and more than one in four (28.3 percent) reported a net loss for the quarter. A year ago, the industry reported a quarterly profit of $4.7 billion, and fewer than one in five institutions (18 percent) were unprofitable. The average return on assets (ROA) was -0.11 percent, compared to 0.14 percent in the second quarter of 2008...
The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) increased for a 13th consecutive quarter, and the percentage of total loans and leases that were noncurrent reached a new record. Noncurrent loans and leases increased by $41.4 billion (14.3%) during the second quarter, led by 1-4 family residential mortgages (up $15.4 billion, or 12.7%), real estate construction and development loans (up $10.2 billion, or 16.6%), and loans secured by nonfarm nonresidential real estate properties (up $7.1 billion, or 29.2 percent)... This is the highest level for the noncurrent rate in the 26 years that insured institutions have reported noncurrent loan data. On a more positive note, loans that were 30-89 days past due declined by $16.7 billion (10.6%). This is the largest quarterly decline in dollar terms in the 26 years that these data have been reported, and the largest percentage decline since the first quarter of 2004, when 30-89 day past due loans were one-third the current level...
The number of insured commercial banks and savings institutions reporting financial results fell to 8,195 in the quarter, down from 8,247 reporters in the first quarter. Thirty-nine institutions were merged into other institutions during the quarter, twenty-four institutions failed, and there were twelve new charters added. During the quarter, the number of institutions on the FDIC's "Problem List" increased from 305 to 416, and the combined assets of "problem" institutions rose from $220.0 billion to $299.8 billion. This is the largest number of "problem" institutions since June 30, 1994, and the largest amount of assets on the list since December 31, 1993 >>
Wait until the commercial loan problems and credit card defaults really start to impact the banks. That 416 number could easily double.
American Numismatic Association Governor 2023 to 2025 - My posts reflect my own thoughts and are not those of the ANA.My Numismatics with Kenny Twitter Page
I keep seeing articles that say that the US is going to default on its debt. What is actually meant by this? Can't and won't the US just print the money? Is the only way the US can default on the debt is if a conscious decision is made not to repay it?
Pay no attention to this man behind the curtain. Everything is okay. Nothing to see. Move along. Let the light shine into the dark interior of the Fed. A private bank. Owned by private interests. That has controlled the USD since 1913 and debased it's value by 97%. Time for change.
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<< <i>Pay no attention to this man behind the curtain. Everything is okay. Nothing to see. Move along. Let the light shine into the dark interior of the Fed. A private bank. Owned by private interests. That has controlled the USD since 1913 and debased it's value by 97%. Time for change. >>
As bad as the Fed can be the alternatives are no better.
A federal government with some fiscal responsibility would go a long way in easing the load that the Fed carries.
<< <i>I keep seeing articles that say that the US is going to default on its debt. What is actually meant by this? Can't and won't the US just print the money? Is the only way the US can default on the debt is if a conscious decision is made not to repay it? >>
Yes, there would need to be a conscious decision not to pay. This would be difficult as our G seems to usually be unconscious.
Seriously though, a default would mean our govt and economy is no better than that of Russia or Argentina. A more likely scenerio would be debt forbearance or forgiveness, much like we do for the rest of the world. But to put in context, Japan carries a debt load that is nearly 3x that of the USA on a GDP basis. Japan also has a much higher tax burden on its citizens. The USA has the ability to pay its debt through higher taxes, Japan may not. A default is much more likely in Japan than the USA.
I am highly confident the USA will not default on its debt.
“I keep seeing articles that say that the US is going to default on its debt. What is actually meant by this? Can't and won't the US just print the money? Is the only way the US can default on the debt is if a conscious decision is made not to repay it?”
For many years I believed that the U.S. would default, NO LONGER!
It was my belief that China, Japan or the Arabs would dump their debt holdings and cause a crises.
Unlike Jim Sinclair, Peter Schiff, et. al. I no longer think this will happen.
As the United States slowly takes its place among the worn out socialist countries of history a combination of debt and money printing will take place that will devalue our currency.
There is no other currency to take our place as a reserve currency.
World governments, who are all socialist or communist, will not give up the power of the printing press and therefore there will be no GOLD standard. Not to say that gold will not gain value against paper.
The Japanese, Arabs, and Chinese will fight to spend the dollars received from us to buy up world assets, and we will print the short falls creating a constant battle of perpetual inflation in food, medical, fuel costs etc. Forget the gov. stats they are all lies.
Americans will learn to do with less, and that is just the way the future will run its course.
The Japanese, Arabs, and Chinese, need us to purchase what products we can from them, and they will continue this game of buying our debt for many years to come. The interest rates will be low and interest that cannot be paid will be rolled into new debt.
Those that have built up wealth, and paid off debt, will be in the best financial condition for the next few decades. Those that did not will just be poorer, everyone will learn to adjust!
The concentrated wealth of the world will be moved away from the United States and spread among the billions that never had access to it.
All of you new comrades out there have a short amount of time to secure what you can for your families future, but you must be very careful. The money sharks in the real-estate business, wall street, and the government, are in the water and they are looking straight at you.
Over the next few years our new socialist government will means test Social Security, make it illegal to speculate in food and fuel futures, means test medical care, raise taxes at every level, redistribute wealth, etc. etc.
In Ten years none of us will recognize the United States.
ttown, the only part of that article that I question is his recommendation to keep some portion of your wealth outside of the country in which you reside.
Why can anyone think that a foreign government would have any inclination to protect your assets if you keep some of them there? In my opinion, it only makes it that much harder to keep an eye on things and provides no assurances that the foreigners don't have something nefarious in mind, down the road....
Q: Are You Printing Money? Bernanke: Not Literally
“Why can anyone think that a foreign government would have any inclination to protect your assets if you keep some of them there? In my opinion, it only makes it that much harder to keep an eye on things and provides no assurances that the foreigners don't have something nefarious in mind, down the road....”
I agree with this. If one is not smart enough to buy some gold and silver and hide it they are not smart enough to have money in foreign countries. What do you think will happen to Americans off shore investment accounts if the dollar goes to nothing? Do you think the foreigners will let you keep it?
Frozen accounts, and confiscation, is already in the handbook of most governments.
Look at what’s happening now to all the commodity ETF’S, as well as Swiss banks. Once the government gets a scent of your offshore money they will be on it!
Want to see what the U.S. will look like over the next few years?
Do you have your garage sale planned before the cash runs out?
By JUDY LIN, Associated Press Writer - Fri Aug 28, 2009 10:27AM EDT
SACRAMENTO, Calif. - Gov. Arnold Schwarzenegger is hoping that the "Great California Garage Sale" will turn government clutter like surplus prison uniforms and office furniture into cash to bulk up the state's depleted finances.
On offer as the state clears out clutter are nearly 600 state-owned vehicles and thousands of pieces of office furniture, computers, electronics, jewelry, pianos, even a surf board, a food saver and an Xbox 360 gaming system.
State officials estimate the giant two-day yard sale being held at a state warehouse will bring in hundreds of thousands of dollars. In addition to clearing out office products, the state is also selling unclaimed property from state parks and items confiscated by law enforcement, said California Department of General Services spokesman Eric Lamoureux.
The prison department contributed dental chairs and surplus prison shirts and jeans.
good articles and site. I read the info on the TRIN, seems to be another good indicator to keep abreast of.
What generally is the Schiff side of the fence?
I read, or skimmed a couple of his articles but not sure what or where he stands as to the markets or his overall philosophy of market dynamics. >>
Less Government, cut spending, unleash capitalism. The Austria school of economics who believe leaving the Gold Standard in 1971 to implement fiat currency was a monumental and historical mistake which allowed Governments and politicians to play Santa Claus and print currency forever. The imbalances won't be corrected w/o a severe recession and possibly a 10 year depression.
Jobs continue to be lost, with exaggerations and deceptions rampant. Seasonal adjustments and continued Birth-Death Model hokum continue to be relied upon. The end of the General Motors plant shutdown, and the magnificent but costly ‘Clunker’ rebate program do not a recovery make. Almost half a million people fell off the state unemployment insurance system in July, which was hailed as evidence of a recovery. The home prices continue to fall, but less quickly. The home loan delinquencies and foreclosures continue unabated, up 7% from June to July alone. The USGovt has become the pathetic new Subprime Lender of last resort, statistical details provided in HTLetter reports. The ugly story in the housing market is the hidden overhang of bank-owned (REO) properties, which bankers withhold from the market. So the home inventory figures are much worse than reported. The people and investment community desperately want a recovery to occur. Their lack of economic savvy permits them to be betrayed and misinformed consistently. They do not realize that debt cream cannot heal debt wounds from deep knife cuts at the hands of job loss and home equity loss. They do not realize that redemption of worthless mortgage bonds held by the big banks does not constitute a reform of the banks, who still hold deeply impaired bonds on their balance sheets, or rather off their balance sheets. They do not realize that ballooning USGovt deficits have failed to rebuild or revive American industry, which still lies in China. Nationalization is not Reconstruction. No, they come from the herd known as Homo Ovinus, the sheeple species. Thanks to John Mauldin's column for this artful work.
Plummeting tax revenues come when President Obama and USCongress pile up major deficits, from stimulus plans, from bank rescues, and expansion of health care. The numbers are worse than fiction. Tax receipts are on pace to drop 18% this year, the biggest single-year decline since the Great Depression. An Associated Press analysis provides details on the recession’s impact and federal insolvency. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever. Thus pressures build for more hidden monetization, and more retaliation by creditor nations.
The service sector, which makes up nearly 90% of the USEconomy, unexpectedly shrank at a faster pace in July than in the previous month. So economic activity continued to decline last month despite the propaganda promulgated by prattle specialists. The Institute for Supply Management (ISM) reported Wednesday that its non-manufacturing index declined to 46.4 last month from 47 in June. It was the first decrease since March. Readings below 50 indicate contraction, while readings above 50 represent expansion. Their report monitored business activity, employment, order backlogs and new orders, including those for export. They all declined slightly more in July than the previous month.
DeutscheBank forecasts 48% of all US mortgage loans to be underwater by 2011. Ouch! Borrowers of loan products with already high underwater rates will only grow worse. By 2011, DBank predicts 89% of Option ARM borrowers will be underwater, up from 77% in 2009. That is correct, 77% of current Option ARM mortgages are stuck with negative equity, upside down. That is a recovery??? No! It is the source of further home price declines, to any analyst that features a brain stem. They expect the rate of underwater subprime borrowers to increase from 50% to 69%, and underwater Alt-A borrowers to increase from 49% to 66%. Then there is the commercial mortgage wrecking ball soon to hit the financial bank structures. The $3.5 trillion commercial real estate market is eroding. Defaults are doubling on loans for apartment buildings, office buildings, housing complexes, strip malls, hotels, hospitals. A staggering amount of loans must be rolled over this year into refinancing, or else go bust with liquidation to follow. Prices in commercial real estate have fallen about 39% from the peak in mid 2007, according to the MIT Center for Real Estate, with no signs of improvement or abatement.
FDIC Chairman Sheila Bair believes up to 500 more banks could fail, according to conversations between US senators and Bair from recent meetings. That story received little if any coverage. The real number is 1000 banks, from Bair’s own conversations. Little banks are dropping like flies, and we are due for a big bank to fail very soon. No need to guess, since accidents will be random among the crippled edifices. The biggest bailed out banks merely invest in USTreasurys, capturing easy profits from the steep yield curve. Lastly, prepare for a big surprise. AIG will soon be forced to reveal it is bankrupt again, encountering another painful failure, despite all its falsified reports of revival. It is dead, even after $180 billion in aid. AIG has been busy conducting a shell game to move assets from recently audited subsidiaries to the next subsidiary to be audited, in order to hide its neverending bust played out. It is a veritable Black Hole under the USGovt roof. For each and every sector of the ailing defunct landscape, one can safely said THAT AINT RECOVERY, FOLKS!! Stimulus, rescue, bailouts, nationalizations, and more USDollar ruination lie directly ahead. Gold will thrive in the coming months, as panic sets in. Pressure (Countdown) Toward Breakdown
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There are many non-doomsdayers saying essentially what JW states. Read articles by Middleton, Hoye and others. These guys are all trying to find ways to survive in the current climate. If Shelia Bair thinks 500 banks might go under, you can be sure that the estimate is much understated. Does anyone really believe that like clockwork exactly 2, 3 or 4 banks have gone down each week for many months?
Less Government, cut spending, unleash capitalism. The Austria school of economics who believe leaving the Gold Standard in 1971 to implement fiat currency was a monumental and historical mistake which allowed Governments and politicians to play Santa Claus and print currency forever. The imbalances won't be corrected w/o a severe recession and possibly a 10 year depression.
I agree with all this. But even though the dropping of the gold standard started the mess rolling, the bankers, regulators and lobbyists found a way around fiat restrictions when they discovered that credit was better than cash. In essence the bankers created unlimited credit outside the monetary system (and for the most part off the balance sheets as well) when they discovered the world of totally unregulated and opaque derivatives. Where else could one create private contracts hidden from shareholders, investors and regulators, value it any way they choose with very optimistic models, and then declare huge profits and bonuses based on those estimates? In 1999 Congress gave them the ok to go ahead with that plan along with the blessing of Alan Greenspan. The merging of the investment and commercial banking interests at that same time was the last vital piece that the bankers needed. AG said who better to police the otc derivatives than the bankers themselves? The bankers would ensure that they took only the "appropriate" amount of risks (ie let the "free" markets police themselves). But....the bankers already knew that the FED would bail them out of any jams just as they did with LTCM, S&L's, and Asian money crisis.
So without free access to the money supply, the banks simply did an end-around Congress and ramped up world derivatives from <$10 TRILL to >$1,000 TRILLION (100X) in less than 10 yrs time....all legal and blessed by TPTB. Even with a gold standard still in place, the bankers would have taken these same steps. Ironically, even the FED/Treasury have now found ways to create money without hardly affecting M1/M2 stats. Between adding to the FED's balance sheet and conducting huge currency swaps with other nations, monetization can occur without creating alarm.
Banks weren't satisfied with their profits by 1999, they wanted even more money and more control. Did the bankers see the writing on the walls and realize that gains in the SM were soon to come to an end, therefore other vehicles and conduits were needed to keep their party going? Certainly the euphoria of never-ending massive market gains in '98-'99 might have presented the perfect emotional opportunity to slip such legislation by Congress. It certainly would not have flown well in 2001-2003. The only question remaining is how does one wind down the $593 TRILL in remaining listed otc derivatives as well as a similar quantity even further "off" the balance sheet that is not listed with BIS, OCC, etc.?
28-08-2009 15:54 Ukraine to replenish its gold reserves with USD 1.5 billion The International Monetary Fund (IMF) will officially implement the recently approved general allocation of special drawing rights (SDR) among its 186 members, equivalent to about USD 250 billion, on August 28, according to a statement by Director of the IMF External Relations Department Caroline Atkinson posted on the fund's official Web site.
Ukraine, in line with its quota in the fund, will receive USD 1.589 billion on August 28 and will transfer the funds to its gold forex reserves. On September 9, the IMF is about to implement a one-time allocation of 21.5 billion SDRs, about USD 33 billion, of which Ukraine will receive another USD 456
Many successful BST transactions ajia (x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes, mariner67, and Mikes coins
Congratulations, you made 10% on any gold you had in your pocket in January this year...good on ya. A whole lot better than that 2%, $10K, penalty for early withdrawal, 5 yr. cd, with 1099. Is gold gonna break out...I'm thinking that the price of gold is in the price of gold. Sure it could break out, it wants to break out but if you look at it, it is steadier than it has been in a long time, 950 and holding in a very narrow range, for a while...is this bad? We are surely in the cat bird seat.
Hummmmmmm...realestate, namely single family residential realestate, looking good. Lots of money on the sideline boomers, Chinese, and Mideasterners are vacuuming up anything that floats to the surface and they are fighting over it like vultures picking over the carcases of the old American Dream. Not to worry, the 20 and 30 somethings are gonna be there to pick these up from the folk that had a little cash on the sideline to buy up these properties. They were just over priced and the price had to come down some...actually, a lot. Not to worry, it's just evolution. The new generation of home owners, those reaching for a little corner of America to call their own...they're out there and they're gonna buy but they're probably not from Iowa either. The feel good talk about the govt helping all those afflicted with a.r.m.s and getting the banks to make them right again...it's gone, actually, it never happened, just a little smoke and mirrors to let the gov bail out the financial institutions...hee hee. Actually, the funniest thing was the proposed gov program to let the foreclosed people rent their homes from the govt till they can get caught up...HA! Don't you think that if they could pay rent that they would be able to keep up their mortgage or maybe it's just a way to give them a free house. So what if they don't pay the rent what would the gov do...kick them out...HA! The gov has no bidness at all in housing, that's what they tried with fannie and freddie and just look at them now. And now, with all the sidelined cash having a place to go, it's not so much of an issue any more, it's just evolution.
Ahhhhhhh, now the apartment owners...that's a different story. They never were gonna get any help anyway, promised or implied. So all those cash flush folks in 2006-2008 that bought apartment buildings are starting to wobble. Some starting to stop paying their tax assessments, stop paying the water bills, stop paying for the plumber or pay for the pool repair/servicing, can't repair the leaky roof or keep the stray dogs and rats out of the abandoned units, no money to keep the apartment buildings up. So the folk that live in the apartments are starting to show up on the news at night; poor, helpless souls, begging for mercy and public assistance because the apartment owner went belly up and there's no water and the crack freaks are in the abandoned units and there are gun shots at night. The problem is that the longer these hulks in the landscape decay, the more time and money it takes to get them back in the housing inventory. The response for now is to shuffle these hapless folk into some other apartment complex, preferrably public housing or if not, to pay for them to live in any available unit regardless of price via public assistance. So, what happens when the line is crossed, what happens when there are no more places to shuttle these people, what happens when enough of these commercial loans go bad, when there are more seekers than places to put them? What happens when the apartment owners say "Not in my complex"? Look for it in your local news broadcasts, this will be a news item to watch for.
It's just evolution, be sure and be on the right side of the curve.
Comments
What Jim Sinclair was saying in July 2002......years before Jim Puplava's Perfect Storm
Here's a fascinationg read of what JS was saying way back in 2002. You don't have to take anyone's word for it, here's a real interview with Jim Puplava doing the moderating. The basic principles are still the same and still trending the same way. This is a great read on how the gold miners were building their companies with non-recourse derivatives and how it will eventually shake out the industry. The road map that JS and JP layed out back in 2002 was dead nuts on. I think they expected the fall out to occur much sooner than 2007 but even then JS was prediccting a new all time high in gold with $1250 as a goal. Note that back then the total derivatives only tallied $75 TRILLION. That number eventually increased 9X to 15X depending on what means of BIS accounting methods one assumes.
Unofficial FDIC questionable bank list - see if yours is one of the 391
Mine is not there. Good for now.
roadrunner
<< <i>As far as I've read when the banks take over a property (ie foreclose) they become the owner and a sale occured. When the bank puts it up for auction and another middleman buys it for resale, another sale occurred. When the middleman dumps it to J6P, yet another sale occured. Same house 3 sales. When J6P loses his job, the chain repeats. It's no secret that the banks have been sitting on foreclosures to keep their net asset ratios in balance. So when those foreclosures come to market is up to the bankers. They can pick a particular month to unload a bunch or wait. Isn't the above similar to the stock broker's flash trading where false volume is created to lure in future buyers? The same thing has basically occured in numismatics in the key date arena. Key dates were flipped back and forth between dealers (and speculating "collectors" ) until eventually finding a retail buyer. The dealers justified the retail price because of what they had to pay to participate in the flash trading. But now you look at inventories and there are lots of key dates sitting around.
Home sale stats are about as accurate in this environment as is the CPI/PPI/jobs lost reports. An interesting note about the CPI yoy comparisons. It's been driven down for a number of months now because of the price of oil and commodities in general falling steadily back in summer/fall 2008. $147 oil in July 2008 to $65-$70 this past July. Huge drop. But what happens when that $147 oil gets replaced by $35 oil in the calculations? $35 to $70....huge increase. Same for copper, aluminum, etc. The financial media have taken great glee in reporting decades low yoy CPI's. So what will these numbers do starting in the later fall when oil and other commodities in 2009 are 2X their 2008 end of year lows? Then once again the pundits can report record yoy changes, but only this time in the + direction. >>
I don't really follow this thread, just jumping in.
I do real estate in Phoenix, and although I don't know the exact source and details of the housing numbers that are reported nationally, locally our inventory has been reduced from about 55k units in the MLS to 32k so far this year. These are numbers that I trust because the MLS represtents the inventory that I can go out and sell. I have buyers in the low end $100-150k and it is VERY difficult to find them a home, it's like a few years ago at the peak. Multiple offers over asking price. This is not happening with higher priced homes though which still languish on the market.
I suspect the low end is busy because there is a lot of money to be made there. You can buy these low-end homes and rent them out and cash-flow them for a few hundred per month easily. Investors buy the foreclosures with cash, bring them up to spec to qualify for FHA financing and dump them for a few thousand profit (at least). First time buyers are also taking advantage of the $8k tax credit.
So the housing market is turning around, kind of. The housing figures can't be completely dismissed. Local mean and median prices have bounced from a low a few months ago. Clearly we're at a stabilization point but I can't tell you how long it will last or if it will hold.
roadrunner
<< <i>The $4500 cash for clunkers has "turned" the car market around for this quarter. But what about the 4th quarter and beyond? No doubt the $8000 incentive home incentive that will run out in November is spurring on new buyers who previously had no plans about buying a home in this environment. But just like fiat for clunkers, what do you think will happen to home demand when the latest incentive disappears? Are there going to be continuous consumer bail out plans for each future quarter? >>
I'm not convinced that the housing market will die or be hurt by the $8000 going away. I think the investor demand is sufficient at the moment to keep things humming. If you can buy a home for $90k, put $10k in it, and finance about $67.5k (75% of 90k at 7%), your payment is ~$450/mo, plus maybe $150T&I, and you can rent it for $900 or more, you're cash-flowing $300/mo. on about $33k cash, plus any appreciation. That's about 11% cash-on-cash return, and there's a perception of minimal risk due to "buying at the bottom" and positive cash flow margins. That's assuming 100% occupancy.
Well, we seem to be at a national philosophical nexus regarding who's entitled to what and who is going to pay for it and no doubt that will be reflected in the media as the class wars become more mainstream. 2010 mid-term elections are going to be quite interesting for a change.
Thomson has a different way of stating his point than your typical gold analyst. In this article he discusses how value will shift from the dollar to gold, to food, and possibly back to the dollar again.
Stewart Thomson - ever changing value of the dollar
roadrunner
Well, there you go. No inflation for 2 years so toss your inflation linked bonds into the dumpster and get yourself some used houses to flip.
Box of 20
1) Term limits.
2) Stop this as promised by the current admin
And beware of the next Supposed emergency
It is time to quit listening, and just start looking (not like most people on this forum haven't been doing that for longer than I have even been registered)
<< <i>Two things that would help get us back on track, and could help the goverment stop spending and start working on real problems.
1) Term limits. >>
reCoinGuy,
I'd long been opposed to term limits as an intrusion on voter will. I'd considered it a sop for the lazy voter, at the expense of the informed one who determined that the person in office was worthy of reelection.
I'm always worried about the phenomenon of laws being passed as a perennial in response to some transient crisis. Laws amass because of that: the more we're in business as a republic, the more fringe atrocities inspire corrective legislative action, and burden generations ever after who are long remote from what ever crisis inspired the law in the first place.
As so in this case, I've been worried that a transient palliative to get rid of encrusted congressmen and senators who get endlessly reeected by inertia and gerrymandering, would result in a legislature of naive populists, out of touch with the long-term and the informed context of what they might propose.
Yet so entrenched is the current Congress, and so invested in their reelections, I've almost come around to your point of view.
God only knows whether some wise and more attuned legislature of the future will be able to undo such as change.
Here's a warning parable for coin collectors...
All these articles on China just make no sense. It should be obvious that China is a player in our debt market and will continue to do so until they have either spent most of the money, the U.S. passes trade restrictions on their products, or the rest of the world refuses to take dollars.
All these examples of potential foreclosures are really just nonsense. Foreclose on what?
U.S. debt is backed by nothing; there is no collateral, only a “PROMISE” to pay.
In addition, private borrowers in the world do not have a printing press to just print the money the debt is denominated in.
China is not looking for a world currency! It is not going to stop buying American debt, it is not going to dump its debt.
The position it is in is not a bad one as long as it can continue to find suckers that will take U.S. dollars to buy hard assets. If it does anything to upset the apple cart it will turn its hundreds of billions of dollar reserves into monopoly money.
The Chinese have already made their decision, they will simply loan their dollar reserves to their own controlled national companies, which will slowly buy up world assets.
China’s ‘Problem’: Too Much Money
August 23, 2009
Jeff Nielson
It is becoming quite humorous watching the continual efforts of Western commentators (mostly American) to bash the Chinese economy. The accusations these pundits make are as numerous as they are ludicrous.
Perhaps the most-frequent criticism is that because it is the U.S.’s largest foreign “creditor” (i.e. lender), that China has a serious “problem” due to the fact that the U.S. is totally unable to repay what it has borrowed from China. Frankly, it is hard to imagine any adult without a severe mental disability reaching such an idiotic conclusion.
For anyone who places any credence in this assertion, I suggest that you do a little private research. Go to the bank who holds the mortgage on your house, and say to them, “I can’t pay my mortgage payments, which means that you have a serious problem.”
Once the bank’s loan officer finishes laughing, he or she would reply, “No problem. We’ll simply take your house.” In short, it is obvious that defaulting on debt is almost always a much more serious problem for the party defaulting than for the creditor.
To be honest, I never gave much thought to term limits until recently for congress, although I have heard the calls for them for some time.
You make some great points as to why not to have them, my only counter point to that is there are 300 Million people in America, surely we could replace them every 8 years or so with someone else as astute as their predecessor.
I think we are seeing the same thing currently, our respresentatives are no longer representing the people. They are insulated away from the public, not coming from us, the longer they are in office.
As to the accumulation of more and more laws and more and more government, that is happening anyway. Our tax code is rediculous, as an example. Without getting political, they need to abolish it and start over.
There are three branches to our government that are suppose to counterbalance each other. I just think there are enough members of the two branches of Congress, that fresh blood would do our country better than 30 year entrenched members who's only real concern is getting re-elected, and satisfying their donors so they have the money to get re-elected.
there is argument for no term limits ie experience and knowing the ropes leads to more expedience, but i disagree with that argument
yet if there were term limits, a simpler Congress may evolve, more able to address long term issues and seeing the "big picture" rather than pet projects. even though they may have only 8-12 years their position and duty to serve the country may become for a greater, better United States, than re-election.
campaign funding is a whole other issue
8th Largest Oil Field in the World
Peak Oil? You figure it out.
I knew it would happen.
Zions is one of a number of large, "conservative" regional thrifts with not so nice balance sheets and loan portfolios. What Reggie shows would make your head spin. 47% of their assets are in the Level 3 "marked to myth" category. Almost an identical number are in Level 2. They are leveraged 6.5X to equity in the mortgage dept. 33% of their loans are in CRE. Their balance sheet is a sea of red ink. They show from 8 to 16% investment losses in their major areas with leverage of 13X. This is just a typical regional thrift which you won't even find on the FDIC's "hot" 391 list.
roadrunner
This usually means a drop in equity markets.
Comments from trip to follow in coming days. Im beat. 26 hours to get home. Ugh.
Knowledge is the enemy of fear
roadrunner
It doesnt make sense, demand its down and inventories are high
Groucho Marx
The second reason, is that the investment companies, (with our tax dollars) are
manipulating oil contracts thereby raising the price.
Camelot
<< <i>Back from vaca. >>
################################
Welcome home! Glad you are back safely.
###############################
As for oil - don't make me scream! Oil futures are one of the scams of the century.
<< <i>why its oil at $70 + ?
It doesnt make sense, demand its down and inventories are high >>
$70 is the new $140 from last year.
One more great one from goldseek.
"Ask, and it shall be given you; seek, and ye shall find; knock, and it shall be opened unto you." -Luke 11:9
"Hear, O Israel: The LORD our God is one LORD: And thou shalt love the LORD thy God with all thine heart, and with all thy soul, and with all thy might." -Deut. 6:4-5
"For the LORD is our judge, the LORD is our lawgiver, the LORD is our king; He will save us." -Isaiah 33:22
<< <i>Uh oh, the professor is back and is going to grade our "homework" to see how we did while he was on summer vacation. Hope I didn't say anything too stupid that might get me the tin foil dunce cap.
roadrunner >>
WTF is that BS comment for?
Knowledge is the enemy of fear
Welcome home Dave!
Oil is at $70 dollars and going toward $100 because it is now trading against the dollar.
Have you heard the term Black Gold?
The only thing that will solve any of our socialist problems in this country is 6-year term limits for congress. All the rest of the talking heads can forget about “ informing” the public, the socialists don’t care.
All of the reasons Not to have term limits are the very reasons to have them. Our Forefathers want a small government that was mostly talk and no action, a government that left the people alone.
Not to worry though we will not see term limits approved, so our down the toilet trajectory is still in place!
And, in fine form too. Welcome back!
FDIC's Bair says does not expect to have to tap FDIC'S line of credit with Treasury "at this time"; emphasizes that FDIC insurance fund balance has already been adjusted downward for cost of failures expected over next year - Reuters
FDIC issues Q2 Quarterly Banking Profile; "Problem List" expands to 15-year high
Burdened by costs associated with rising levels of troubled loans and falling asset values, FDIC-insured commercial banks and savings institutions reported an aggregate net loss of $3.7 billion in the second quarter of 2009. Increased expenses for bad loans were chiefly responsible for the industry's loss. Insured institutions added $66.9 billion in loan-loss provisions to their reserves during the quarter, an increase of $16.5 billion (32.8 percent) compared to the second quarter of 2008.
Quarterly earnings were also adversely affected by writedowns of asset-backed commercial paper, and by higher assessments for deposit insurance. Almost two out of every three institutions (64.4 percent) reported lower quarterly earnings than a year ago, and more than one in four (28.3 percent) reported a net loss for the quarter. A year ago, the industry reported a quarterly profit of $4.7 billion, and fewer than one in five institutions (18 percent) were unprofitable. The average return on assets (ROA) was -0.11 percent, compared to 0.14 percent in the second quarter of 2008...
The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) increased for a 13th consecutive quarter, and the percentage of total loans and leases that were noncurrent reached a new record. Noncurrent loans and leases increased by $41.4 billion (14.3%) during the second quarter, led by 1-4 family residential mortgages (up $15.4 billion, or 12.7%), real estate construction and development loans (up $10.2 billion, or 16.6%), and loans secured by nonfarm nonresidential real estate properties (up $7.1 billion, or 29.2 percent)... This is the highest level for the noncurrent rate in the 26 years that insured institutions have reported noncurrent loan data. On a more positive note, loans that were 30-89 days past due declined by $16.7 billion (10.6%). This is the largest quarterly decline in dollar terms in the 26 years that these data have been reported, and the largest percentage decline since the first quarter of 2004, when 30-89 day past due loans were one-third the current level...
The number of insured commercial banks and savings institutions reporting financial results fell to 8,195 in the quarter, down from 8,247 reporters in the first quarter. Thirty-nine institutions were merged into other institutions during the quarter, twenty-four institutions failed, and there were twelve new charters added. During the quarter, the number of institutions on the FDIC's "Problem List" increased from 305 to 416, and the combined assets of "problem" institutions rose from $220.0 billion to $299.8 billion. This is the largest number of "problem" institutions since June 30, 1994, and the largest amount of assets on the list since December 31, 1993
Knowledge is the enemy of fear
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
<< <i>From Briefing.com
FDIC's Bair says does not expect to have to tap FDIC'S line of credit with Treasury "at this time"; emphasizes that FDIC insurance fund balance has already been adjusted downward for cost of failures expected over next year - Reuters
FDIC issues Q2 Quarterly Banking Profile; "Problem List" expands to 15-year high
Burdened by costs associated with rising levels of troubled loans and falling asset values, FDIC-insured commercial banks and savings institutions reported an aggregate net loss of $3.7 billion in the second quarter of 2009. Increased expenses for bad loans were chiefly responsible for the industry's loss. Insured institutions added $66.9 billion in loan-loss provisions to their reserves during the quarter, an increase of $16.5 billion (32.8 percent) compared to the second quarter of 2008.
Quarterly earnings were also adversely affected by writedowns of asset-backed commercial paper, and by higher assessments for deposit insurance. Almost two out of every three institutions (64.4 percent) reported lower quarterly earnings than a year ago, and more than one in four (28.3 percent) reported a net loss for the quarter. A year ago, the industry reported a quarterly profit of $4.7 billion, and fewer than one in five institutions (18 percent) were unprofitable. The average return on assets (ROA) was -0.11 percent, compared to 0.14 percent in the second quarter of 2008...
The amount of loans and leases that were noncurrent (90 days or more past due or in nonaccrual status) increased for a 13th consecutive quarter, and the percentage of total loans and leases that were noncurrent reached a new record. Noncurrent loans and leases increased by $41.4 billion (14.3%) during the second quarter, led by 1-4 family residential mortgages (up $15.4 billion, or 12.7%), real estate construction and development loans (up $10.2 billion, or 16.6%), and loans secured by nonfarm nonresidential real estate properties (up $7.1 billion, or 29.2 percent)... This is the highest level for the noncurrent rate in the 26 years that insured institutions have reported noncurrent loan data. On a more positive note, loans that were 30-89 days past due declined by $16.7 billion (10.6%). This is the largest quarterly decline in dollar terms in the 26 years that these data have been reported, and the largest percentage decline since the first quarter of 2004, when 30-89 day past due loans were one-third the current level...
The number of insured commercial banks and savings institutions reporting financial results fell to 8,195 in the quarter, down from 8,247 reporters in the first quarter. Thirty-nine institutions were merged into other institutions during the quarter, twenty-four institutions failed, and there were twelve new charters added. During the quarter, the number of institutions on the FDIC's "Problem List" increased from 305 to 416, and the combined assets of "problem" institutions rose from $220.0 billion to $299.8 billion. This is the largest number of "problem" institutions since June 30, 1994, and the largest amount of assets on the list since December 31, 1993 >>
Wait until the commercial loan problems and credit card defaults really start to impact the banks. That 416 number could easily double.
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Let the light shine into the dark interior of the Fed. A private bank. Owned by private interests. That has controlled the USD since 1913 and debased it's value by 97%. Time for change.
(x2,Meltdown),cajun,Swampboy,SeaEagleCoins,InYHWHWeTrust, bstat1020,Spooly,timrutnat,oilstates200, vpr, guitarwes,
mariner67, and Mikes coins
<< <i>Pay no attention to this man behind the curtain. Everything is okay. Nothing to see. Move along.
Let the light shine into the dark interior of the Fed. A private bank. Owned by private interests. That has controlled the USD since 1913 and debased it's value by 97%. Time for change. >>
As bad as the Fed can be the alternatives are no better.
A federal government with some fiscal responsibility would go a long way in easing the load that the Fed carries.
<< <i>I keep seeing articles that say that the US is going to default on its debt. What is actually meant by this? Can't and won't the US just print the money? Is the only way the US can default on the debt is if a conscious decision is made not to repay it? >>
Yes, there would need to be a conscious decision not to pay. This would be difficult as our G seems to usually be unconscious.
Seriously though, a default would mean our govt and economy is no better than that of Russia or Argentina. A more likely scenerio would be debt forbearance or forgiveness, much like we do for the rest of the world. But to put in context, Japan carries a debt load that is nearly 3x that of the USA on a GDP basis. Japan also has a much higher tax burden on its citizens. The USA has the ability to pay its debt through higher taxes, Japan may not. A default is much more likely in Japan than the USA.
I am highly confident the USA will not default on its debt.
Knowledge is the enemy of fear
For many years I believed that the U.S. would default, NO LONGER!
It was my belief that China, Japan or the Arabs would dump their debt holdings and cause a crises.
Unlike Jim Sinclair, Peter Schiff, et. al. I no longer think this will happen.
As the United States slowly takes its place among the worn out socialist countries of history a combination of debt and money printing will take place that will devalue our currency.
There is no other currency to take our place as a reserve currency.
World governments, who are all socialist or communist, will not give up the power of the printing press and therefore there will be no GOLD standard. Not to say that gold will not gain value against paper.
The Japanese, Arabs, and Chinese will fight to spend the dollars received from us to buy up world assets, and we will print the short falls creating a constant battle of perpetual inflation in food, medical, fuel costs etc. Forget the gov. stats they are all lies.
Americans will learn to do with less, and that is just the way the future will run its course.
The Japanese, Arabs, and Chinese, need us to purchase what products we can from them, and they will continue this game of buying our debt for many years to come. The interest rates will be low and interest that cannot be paid will be rolled into new debt.
Those that have built up wealth, and paid off debt, will be in the best financial condition for the next few decades. Those that did not will just be poorer, everyone will learn to adjust!
The concentrated wealth of the world will be moved away from the United States and spread among the billions that never had access to it.
All of you new comrades out there have a short amount of time to secure what you can for your families future, but you must be very careful. The money sharks in the real-estate business, wall street, and the government, are in the water and they are looking straight at you.
Over the next few years our new socialist government will means test Social Security, make it illegal to speculate in food and fuel futures, means test medical care, raise taxes at every level, redistribute wealth, etc. etc.
In Ten years none of us will recognize the United States.
Why can anyone think that a foreign government would have any inclination to protect your assets if you keep some of them there? In my opinion, it only makes it that much harder to keep an eye on things and provides no assurances that the foreigners don't have something nefarious in mind, down the road....
I knew it would happen.
I agree with this. If one is not smart enough to buy some gold and silver and hide it they are not smart enough to have money in foreign countries. What do you think will happen to Americans off shore investment accounts if the dollar goes to nothing? Do you think the foreigners will let you keep it?
Frozen accounts, and confiscation, is already in the handbook of most governments.
Look at what’s happening now to all the commodity ETF’S, as well as Swiss banks. Once the government gets a scent of your offshore money they will be on it!
Do you have your garage sale planned before the cash runs out?
By JUDY LIN, Associated Press Writer - Fri Aug 28, 2009 10:27AM EDT
SACRAMENTO, Calif. - Gov. Arnold Schwarzenegger is hoping that the "Great California Garage Sale" will turn government clutter like surplus prison uniforms and office furniture into cash to bulk up the state's depleted finances.
On offer as the state clears out clutter are nearly 600 state-owned vehicles and thousands of pieces of office furniture, computers, electronics, jewelry, pianos, even a surf board, a food saver and an Xbox 360 gaming system.
State officials estimate the giant two-day yard sale being held at a state warehouse will bring in hundreds of thousands of dollars. In addition to clearing out office products, the state is also selling unclaimed property from state parks and items confiscated by law enforcement, said California Department of General Services spokesman Eric Lamoureux.
The prison department contributed dental chairs and surplus prison shirts and jeans.
Box of 20
Disturbing Trends in Recent Markets
i am on the "Schiff" side of the fence
good articles and site. I read the info on the TRIN, seems to be another good indicator to keep abreast of.
What generally is the Schiff side of the fence?
I read, or skimmed a couple of his articles but not sure what or where he stands as to the markets or his overall philosophy of market dynamics.
<< <i>57,
good articles and site. I read the info on the TRIN, seems to be another good indicator to keep abreast of.
What generally is the Schiff side of the fence?
I read, or skimmed a couple of his articles but not sure what or where he stands as to the markets or his overall philosophy of market dynamics. >>
Less Government, cut spending, unleash capitalism. The Austria school of economics who believe leaving the Gold Standard in 1971 to implement fiat currency was a monumental and historical mistake which allowed Governments and politicians to play Santa Claus and print currency forever. The
imbalances won't be corrected w/o a severe recession and possibly a 10 year depression.
From 2006. Schiff predicts
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Jobs continue to be lost, with exaggerations and deceptions rampant. Seasonal adjustments and continued Birth-Death Model hokum continue to be relied upon. The end of the General Motors plant shutdown, and the magnificent but costly ‘Clunker’ rebate program do not a recovery make. Almost half a million people fell off the state unemployment insurance system in July, which was hailed as evidence of a recovery. The home prices continue to fall, but less quickly. The home loan delinquencies and foreclosures continue unabated, up 7% from June to July alone. The USGovt has become the pathetic new Subprime Lender of last resort, statistical details provided in HTLetter reports. The ugly story in the housing market is the hidden overhang of bank-owned (REO) properties, which bankers withhold from the market. So the home inventory figures are much worse than reported. The people and investment community desperately want a recovery to occur. Their lack of economic savvy permits them to be betrayed and misinformed consistently. They do not realize that debt cream cannot heal debt wounds from deep knife cuts at the hands of job loss and home equity loss. They do not realize that redemption of worthless mortgage bonds held by the big banks does not constitute a reform of the banks, who still hold deeply impaired bonds on their balance sheets, or rather off their balance sheets. They do not realize that ballooning USGovt deficits have failed to rebuild or revive American industry, which still lies in China. Nationalization is not Reconstruction. No, they come from the herd known as Homo Ovinus, the sheeple species. Thanks to John Mauldin's column for this artful work.
Plummeting tax revenues come when President Obama and USCongress pile up major deficits, from stimulus plans, from bank rescues, and expansion of health care. The numbers are worse than fiction. Tax receipts are on pace to drop 18% this year, the biggest single-year decline since the Great Depression. An Associated Press analysis provides details on the recession’s impact and federal insolvency. Social Security tax receipts could drop for only the second time since 1940, and Medicare taxes are on pace to drop for only the third time ever. Thus pressures build for more hidden monetization, and more retaliation by creditor nations.
The service sector, which makes up nearly 90% of the USEconomy, unexpectedly shrank at a faster pace in July than in the previous month. So economic activity continued to decline last month despite the propaganda promulgated by prattle specialists. The Institute for Supply Management (ISM) reported Wednesday that its non-manufacturing index declined to 46.4 last month from 47 in June. It was the first decrease since March. Readings below 50 indicate contraction, while readings above 50 represent expansion. Their report monitored business activity, employment, order backlogs and new orders, including those for export. They all declined slightly more in July than the previous month.
DeutscheBank forecasts 48% of all US mortgage loans to be underwater by 2011. Ouch! Borrowers of loan products with already high underwater rates will only grow worse. By 2011, DBank predicts 89% of Option ARM borrowers will be underwater, up from 77% in 2009. That is correct, 77% of current Option ARM mortgages are stuck with negative equity, upside down. That is a recovery??? No! It is the source of further home price declines, to any analyst that features a brain stem. They expect the rate of underwater subprime borrowers to increase from 50% to 69%, and underwater Alt-A borrowers to increase from 49% to 66%. Then there is the commercial mortgage wrecking ball soon to hit the financial bank structures. The $3.5 trillion commercial real estate market is eroding. Defaults are doubling on loans for apartment buildings, office buildings, housing complexes, strip malls, hotels, hospitals. A staggering amount of loans must be rolled over this year into refinancing, or else go bust with liquidation to follow. Prices in commercial real estate have fallen about 39% from the peak in mid 2007, according to the MIT Center for Real Estate, with no signs of improvement or abatement.
FDIC Chairman Sheila Bair believes up to 500 more banks could fail, according to conversations between US senators and Bair from recent meetings. That story received little if any coverage. The real number is 1000 banks, from Bair’s own conversations. Little banks are dropping like flies, and we are due for a big bank to fail very soon. No need to guess, since accidents will be random among the crippled edifices. The biggest bailed out banks merely invest in USTreasurys, capturing easy profits from the steep yield curve. Lastly, prepare for a big surprise. AIG will soon be forced to reveal it is bankrupt again, encountering another painful failure, despite all its falsified reports of revival. It is dead, even after $180 billion in aid. AIG has been busy conducting a shell game to move assets from recently audited subsidiaries to the next subsidiary to be audited, in order to hide its neverending bust played out. It is a veritable Black Hole under the USGovt roof. For each and every sector of the ailing defunct landscape, one can safely said THAT AINT RECOVERY, FOLKS!! Stimulus, rescue, bailouts, nationalizations, and more USDollar ruination lie directly ahead. Gold will thrive in the coming months, as panic sets in.
Pressure (Countdown) Toward Breakdown
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Less Government, cut spending, unleash capitalism. The Austria school of economics who believe leaving the Gold Standard in 1971 to implement fiat currency was a monumental and historical mistake which allowed Governments and politicians to play Santa Claus and print currency forever. The imbalances won't be corrected w/o a severe recession and possibly a 10 year depression.
I agree with all this. But even though the dropping of the gold standard started the mess rolling, the bankers, regulators and lobbyists found a way around fiat restrictions when they discovered that credit was better than cash. In essence the bankers created unlimited credit outside the monetary system (and for the most part off the balance sheets as well) when they discovered the world of totally unregulated and opaque derivatives. Where else could one create private contracts hidden from shareholders, investors and regulators, value it any way they choose with very optimistic models, and then declare huge profits and bonuses based on those estimates? In 1999 Congress gave them the ok to go ahead with that plan along with the blessing of Alan Greenspan. The merging of the investment and commercial banking interests at that same time was the last vital piece that the bankers needed. AG said who better to police the otc derivatives than the bankers themselves? The bankers would ensure that they took only the "appropriate" amount of risks (ie let the "free" markets police themselves). But....the bankers already knew that the FED would bail them out of any jams just as they did with LTCM, S&L's, and Asian money crisis.
So without free access to the money supply, the banks simply did an end-around Congress and ramped up world derivatives from <$10 TRILL to >$1,000 TRILLION (100X) in less than 10 yrs time....all legal and blessed by TPTB. Even with a gold standard still in place, the bankers would have taken these same steps. Ironically, even the FED/Treasury have now found ways to create money without hardly affecting M1/M2 stats. Between adding to the FED's balance sheet and conducting huge currency swaps with other nations, monetization can occur without creating alarm.
Banks weren't satisfied with their profits by 1999, they wanted even more money and more control. Did the bankers see the writing on the walls and realize that gains in the SM were soon to come to an end, therefore other vehicles and conduits were needed to keep their party going? Certainly the euphoria of never-ending massive market gains in '98-'99 might have presented the perfect emotional opportunity to slip such legislation by Congress. It certainly would not have flown well in 2001-2003. The only question remaining is how does one wind down the $593 TRILL in remaining listed otc derivatives as well as a similar quantity even further "off" the balance sheet that is not listed with BIS, OCC, etc.?
roadrunner
Just askin'.................what parts don't make sense to you?
What gives you confidence that we're doing well?
Just askin'...
I knew it would happen.
The International Monetary Fund (IMF) will officially implement the recently approved general allocation of special drawing rights (SDR) among its 186 members, equivalent to about USD 250 billion, on August 28, according to a statement by Director of the IMF External Relations Department Caroline Atkinson posted on the fund's official Web site.
Ukraine, in line with its quota in the fund, will receive USD 1.589 billion on August 28 and will transfer the funds to its gold forex reserves. On September 9, the IMF is about to implement a one-time allocation of 21.5 billion SDRs, about USD 33 billion, of which Ukraine will receive another USD 456
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Hummmmmmm...realestate, namely single family residential realestate, looking good. Lots of money on the sideline boomers, Chinese, and Mideasterners are vacuuming up anything that floats to the surface and they are fighting over it like vultures picking over the carcases of the old American Dream. Not to worry, the 20 and 30 somethings are gonna be there to pick these up from the folk that had a little cash on the sideline to buy up these properties. They were just over priced and the price had to come down some...actually, a lot. Not to worry, it's just evolution. The new generation of home owners, those reaching for a little corner of America to call their own...they're out there and they're gonna buy but they're probably not from Iowa either. The feel good talk about the govt helping all those afflicted with a.r.m.s and getting the banks to make them right again...it's gone, actually, it never happened, just a little smoke and mirrors to let the gov bail out the financial institutions...hee hee. Actually, the funniest thing was the proposed gov program to let the foreclosed people rent their homes from the govt till they can get caught up...HA! Don't you think that if they could pay rent that they would be able to keep up their mortgage or maybe it's just a way to give them a free house. So what if they don't pay the rent what would the gov do...kick them out...HA! The gov has no bidness at all in housing, that's what they tried with fannie and freddie and just look at them now. And now, with all the sidelined cash having a place to go, it's not so much of an issue any more, it's just evolution.
Ahhhhhhh, now the apartment owners...that's a different story. They never were gonna get any help anyway, promised or implied. So all those cash flush folks in 2006-2008 that bought apartment buildings are starting to wobble. Some starting to stop paying their tax assessments, stop paying the water bills, stop paying for the plumber or pay for the pool repair/servicing, can't repair the leaky roof or keep the stray dogs and rats out of the abandoned units, no money to keep the apartment buildings up. So the folk that live in the apartments are starting to show up on the news at night; poor, helpless souls, begging for mercy and public assistance because the apartment owner went belly up and there's no water and the crack freaks are in the abandoned units and there are gun shots at night. The problem is that the longer these hulks in the landscape decay, the more time and money it takes to get them back in the housing inventory. The response for now is to shuffle these hapless folk into some other apartment complex, preferrably public housing or if not, to pay for them to live in any available unit regardless of price via public assistance. So, what happens when the line is crossed, what happens when there are no more places to shuttle these people, what happens when enough of these commercial loans go bad, when there are more seekers than places to put them? What happens when the apartment owners say "Not in my complex"? Look for it in your local news broadcasts, this will be a news item to watch for.
It's just evolution, be sure and be on the right side of the curve.
$960.55
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