U.S. dollar plummets around the world

U.S. dollar plummets around the world

Posted in the Denver Forum

Since: Aug 09

Winnetka, IL

#1 Oct 15, 2010
SOURCE: U.K. Daily Mail Online http://www.dailymail.co.uk/news/article-13207...
The dollar tumbled around the world yesterday amid fears the global economy could be destabalized.

Experts warned that further falls in the U.S. dollar could force other countries to devalue their currencies to protect exports.

Investors are expecting the Federal Reserve to pump more money into the economy next month to try to stimulate growth.

The effects can be seen almost everywhere.

Since late summer, when Chairman Ben Bernanke first hinted that the Fed was ready to act, anticipation of the move has rippled across the economy: Stock prices have surged. So have oil prices.

Commodities like gold, silver and corn have risen. Treasury yields have slid.

Mortgage rates have sunk, too, along with yields on money markets and CD accounts.

The steep decline has even raised worries of a global currency war in which nations would compete to keep their currencies from rising in value as the dollar sags.

On Thursday, the dollar fell to a 15-year-low against the yen in Tokyo, after flirting with a post-World War II bottom.

It also touched its lowest level against the euro since January.

The dollar has slid more than 10 per cent against the euro in the past three months.

What does all this mean for American consumers and businesses?

For one, imports can cost more. So does travel abroad. Goods from U.S. companies become cheaper for foreigners, and oil tends to cost more.

Even the likelihood of some new price bubble in investments such as stocks or real estate could rise.

When you total it all up, the U.S. economy is so weak that the Fed considers a cheaper dollar to be a good thing.
It’s been a while since US monetary policy was run with anything approaching a long-term strategy. For the past decade especially the goal has been to get through the week without a global financial collapse. So it’s probably asking too much to expect the Fed to have thought through the implications of another round of quantitative easing.

If the Fed dumps another trillion dollars into a market where the prices of gold, oil and food are already surging, how will it keep asset inflation from accelerating?

If the Fed accepts soaring asset prices as the cost of staving off a deflationary crash, how will it keep either interest rates from spiking or the dollar from tanking?

If it chooses to suppress interest rates by buying long-term Treasuries and allows the dollar to fall, how will it stop America’s trading partners from retaliating and pushing down the value of their own currencies?

If all the major economies are competitively devaluing their currencies, how will they prevent asset prices and/or interest rates from going parabolic, leading to energy shortages and food riots in the first case and a collapse of the housing/consumer finance sector in the second?

The answer to the last question is that governments can bend economic laws for a time but can’t suspend them forever. So in the long run they can’t control both asset prices and interest rates. When the supply of something — in this case pieces of colored paper or computer bits called “dollars,”“euros” and “yen”— soars, its price plunges. And one way or another, markets react to restore equilibrium.

Study the Weimar Republic and what their monetary policy wrought.
Those who fail to learn from history are doomed to repeat it.


Since: Aug 09

Winnetka, IL

#2 Oct 15, 2010
SOURCE: https://www.adbusters.org/magazine/88/chris-h...

Aleksandr Herzen, speaking a century ago to a group of anarchists about how to overthrow the czar, reminded his listeners that it was not their job to save a dying system but to replace it:“We think we are the doctors. We are the disease.” All resistance must recognize that the body politic and global capitalism are dead.

We should stop wasting energy trying to reform or appeal to it. This does not mean the end of resistance, but it does mean very different forms of resistance.

It means turning our energies toward building sustainable communities to weather the coming crisis, since we will be unable to survive and resist without a cooperative effort.

We stand on the cusp of one of the bleakest periods in human history when the bright lights of a civilization blink out and we will descend for decades, if not centuries, into barbarity.

The elites have successfully convinced us that we no longer have the capacity to understand the revealed truths presented before us or to fight back against the chaos caused by economic and environmental catastrophe.

As long as the mass of bewildered and frightened people, fed images that permit them to perpetually hallucinate, exist in this state of barbarism, they may periodically strike out with a blind fury against increased state repression, widespread poverty and food shortages. But they will lack the ability and self-confidence to challenge in big and small ways the structures of control. The fantasy of widespread popular revolts and mass movements breaking the hegemony of the corporate state is just that – a fantasy.

You might give The Zero Point different meanings, in your mind. What it means to me is that moment when Wylie Coyote steps of the cliff, right after all his forward momentum is exhausted. The very fraction of a second before he actually begins to fall into the abyss below.

That's where the world is now. For the last year or two, we had been off the cliff but, we still had some momentum and hung in the air and the very fact of it was just as ...miraculous and cartoon like as in the picture above. All of that is now gone. The Zero Point has arrived.


Since: Aug 09

Winnetka, IL

#3 Oct 15, 2010
Bernanke says Federal Reserve ready to further stimulate the economy
SOURCE: L.A. Times http://www.latimes.com/business/sc-dc-bernank...

The Fed chairman suggests creating a program of buying U.S. Treasury bonds in an effort to drive down long-term interest rates. Still, it's unknown how and when the central bank will take action.

Federal Reserve Chairman Ben S. Bernanke on Friday laid out a case for the central bank to take further action to bolster growth, citing the risks of prolonged high unemployment and a U.S. economy slipping into a deflationary spiral.

In a much-anticipated speech in Boston, Bernanke did not spell out details of how and when the Fed would take action. But the first option that he mentioned was a program of buying additional assets, namely government bonds, in an effort to drive down long-term interest rates and stimulate economic growth.

The central bank is widely expected to announce such a program, known as quantitative easing, at the conclusion of its next policymakers' meeting on Nov. 2 and 3.
Well, surprise, surprise, the Fed will be meeting,(and making major announcements), on election day and the day after election day.

A little misdirection perhaps? Trying to forestall the collapse of the dollar perhaps?

There is no long-term intelligent economic strategy... just the desperate attempt to shore up a crumbling system.

Bernanke is signaling more monetary manipulation is ahead. The Fed will dump another trillion dollars into a market and the prices of gold, oil and food will continue surging.

When the Fed suppresses interest rates by buying long-term Treasuries and allows the dollar to fall, how will it be before America’s trading partners retaliate and push down the value of their own currencies to protect THEIR economies?

When all the major economies are competitively devaluing their currencies, they cannot prevent asset prices and interest rates from going postal.

There will be energy shortages and food riots and a collapse of the housing/consumer finance sector.

Gloom and doom you say? No, I'm not even THAT optimistic. I always wondered what it was like in Germany during the 1930's, but I never thought I'd get to find out first hand in 21st. century America.


Since: Aug 09

Winnetka, IL

#4 Oct 20, 2010
With protesters in France entering a seventh day of strikes, Time Magazine is now conceding that the prospect of a civil war in the States “doesn’t seem that far fetched

What is the most likely cause, the Federal Reserve. November 3rd is when the Federal Reserve's next policy committee meeting ends. The US central bank is expected to announce its next move to boost the faltering economic recovery.

Chairman Ben Bernanke has indicated in recent speeches that the central bank plans to try to drive down already low-interest rates by buying up long-term bonds. A number of people both inside the Fed and out believe this is the wrong move.

The Fed's plan is not only moronic, but "positions US society one step closer to civil war if not worse.

I'm not sure what "if not worse," is supposed to means, but the idea of civil war over economic issues doesn't seem that far-fetched these days.

I'm not convinced we are headed for Fedamageddon. That being said, the Fed's early November meeting is an important one. Here's why:

Usually, there is generally a consensus about what the Federal Reserve should do.

Nearly two years after the Fed cut short-term interest rates to basically zero, more and more economists are questioning whether the US central bank is making the right moves. The economy is still very weak and unemployment seems stubbornly stuck near 10%.

The Fed only directly sets short-term interest rates, and they are already about as close to zero as you can go. That's why Ben Bernanke has been recently talking about something called "quantitative easing."

Some people are calling this "QE2" because the Fed made a similar move during the height of the financial crisis when it bought mortgage bonds.

Not everyone agrees this is a good move. In fact, a number of presidents of regional Fed banks have recently come out against Bernanke's plans. Some say it sets bad policy. Few, though, have warned of armed conflict.

In a very real sense, Bernanke is throwing Granny and Grandpa down the stairs - on purpose. He is literally threatening those at the lower end of the economic strata, along with all who are retired, with starvation and death, and in a just nation where the rule of law controlled instead of being abused by the kleptocrats he would be facing charges of Seditious Conspiracy, as his policies will inevitably lead to the destruction of our republic.

Lower rates do tend to favor borrowers over savers. And the largest borrowers in the country are banks, speculators and large corporations. The largest spenders in our country though tend to be individuals. Consumer spending makes up 70% of the economy. And the vast majority of consumers are on the low-end of the income scale.

That being said, civil war, probably not. "It is a gross exaggeration," says Allan Meltzer, who is a top Fed historian at Carnegie Mellon. "I cannot recall ever learning about riots or civil war even when the Fed made other mistakes."

Some smart people, though, including Meltzer, it appears, and Rosenberg do think the path of quantitative easing that the Fed looks likely to embark on is the wrong move. John Taylor, a top Fed scholar at Stanford, says eventually you will have to pull the support out, and when you do a year from now when the economy is recovering he thinks it could be quite disruptive.

Raghuram Rajan, who has became famous for warning about the possibility of a financial crisis back in 2005, believe low-interest rates could be creating new bubbles in say gold or commodities.

Well now ain't that special? Let's throw granny and grandpa down the stairs so the Fed can lower interest rates for the large corporate borrowers.

If the American people ever allow banks to control their currency, first by inflation, then by deflation, the banks and corporations will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.


Since: Aug 09

Winnetka, IL

#5 Oct 21, 2010
Unions and Democrats are scared. They should be.

Very soon, Democrats and their union bosses’ worst fears may soon be realized and, if they cannot continue their slight of hand, it may threaten their very existence.

On Nov. 1, the Financial Accounting Standards Board (FASB) ceases to take public comment on a new rule requiring that companies more accurately report liabilities they have from participation in multiemployer pension plans. Unless FASB is persuaded otherwise, the rule takes effect Dec. 15.
There are some 1,500 multiemployer pension plans in the United States, which are unique to unions. In these plans, multiple companies pay into the pension plan, but each company assumes the total liability.

Under “last man standing” accounting rules, if five companies are in a plan and four go bankrupt, the fifth company is responsible for meeting the pension obligations for the employees of the other four companies.

What this means is that companies with union labor often have pension liabilities that are several multiples higher than the pension expenditures they report — the Kroger grocery store chain shocked analysts last year when it disclosed its multiemployer pension liabilities more than doubled in a year to $1.2 billion.

FASB’s new rule could effectively wipe out the paper worth of many companies, especially in the trucking and construction industries. Once banks and creditors are aware of these staggering pension liabilities, it will make it nearly impossible for union businesses to get loans, credit lines or bonding.
The effects of having to meet reality will almost certainly cause a significant drop in stock prices for those companies affected and, as a result, may cause a large ripple effect throughout the rest of the economy. In those cases where the liabilities exceed the value of the unionized companies, it is entirely possible many of those companies will go out of business, laying off tens of thousands of employees, and further causing a drop in economic activity.
Some companies risk having their ratings downgraded, especially if weaker companies become bankrupt and leave the pension plans.

One example of a company that would likely go out of business is YRC trucking, which employs approximately 35,000 Teamsters. While the freight currently carried by YRC would likely be picked up by other carriers (many of which are non-union), the loss of members (and their dues) would be devastating for the Teamsters and the Democrats.

America is careening toward bankruptcy. While blame can initially be laid at the feet of both parties, over the last 20 months, Democrats’ meddling in the private-sector, out-of-control spending, and sheer ineptitude in recognizing the job-killing policies they promote have pushed the nation closer to the precipice.

Now, with two weeks before November 2nd, Democrats are hiding the fact that financial Armageddon may be right around the corner. If Americans are the ’shareholders’ and politicians are the executives in charge, the lack of disclosure on the part of Democrats would be criminal.

How's that "Hope and Change" thing workin' out for ya?


Since: Aug 09

Des Plaines, IL

#6 Oct 23, 2010
JAPAN warned yesterday that the global economy will lose if countries compete to devalue their currencies, as top finance officials from the world’s leading economies gathered for two days of talks they hope will defuse growing tensions over exchange rates.

Unfortunately for most Americans, the real story was several paragraphs down and the ultimate outcome of this G20 meeting, which will be a plain vanilla statement with a dark underside was revealed here:

Separately, China, Brazil, Russia and India – the BRIC countries – were holding a meeting ahead of the G20 gathering to discuss issues of mutual interest, including reform of the International Monetary Fund and increasing trade and investment among themselves, according to D.S. Malik, an official with India’s Ministry of Finance.

If in fact this session of the G20 reveals a statement that indicates another G20 do nothing but let’s tow the line move but forces the U.S. into declaring currency stability as the ultimate goal which would indicate dollar stability and strengthening, it would provide the underpinnings for a massive rally which would catch the dollar shorts snoozing and possibly cause the exact opposite of the chart above and a 200 bps rally in the USDX. Unfortunately, the course of action the BRIC nations choose will be quite discreet and the American and trading public will not know it until after it has hit the tape. On Sunday night we’ll have a better idea as to what happens as the statements are absorbed and the perception of what the idiots in the Fed will do which in this writer’s opinion will be a classic follow up blunder to the one they made in the summer of 2008..

To be clear, I think the Fed might just misread the economic “strength” perceived by their economic staffs and project that the economy does not need as much interference thus the QE2 program will be below expectations and closer to the $500 billion or $750 billion mark to be spread anywhere from 12-18 months when announced on November 3rd. If that perception or leak is discovered you will see a sharp move in the TLT and USDX just before the election and as a result a massive stock market correction as the days of easy money take a pause, rather than come to a complete halt. This misreading of the economy, the stability of the jobs data, and the misconception that housing is not of the utmost concern will result in the same type of economic plunge we witnessed in Q4 2008 and Q1 2009. Bernanke is known for one thing since this crisis began and that is doing the wrong thing, at the wrong time, and destroying several quarters of economic growth and a portion of the financial system with each ‘technical error’ the Fed makes.

Blunder away Ben. We’re waiting with popcorn and beer to watch the show.


Since: Aug 09

Des Plaines, IL

#7 Oct 24, 2010
Food price spikes coming...

Lately a huge number of articles about the coming spike in food prices have been appearing from such sources as the Federal and state Ag departments.

If one follows what has been happening with crop failures worldwide and the effects upon the commodities market of late it is no exaggeration that multiple major increases in the food prices will continue throughout 2011.

SOURCE: Bloomberg News http://www.bloomberg.com/news/2010-10-21/gene...

General Mills, the maker of Cheerios, Chex and Wheaties, will raise cereal prices on Nov. 15. The increase will affect about 25 percent of its cereal production and amount to a “low single-digit” percentage, Kirstie Foster, a company spokeswoman, wrote today in an e-mail.

Prices for some baking mixes are set for “a mid single- digit increase,” effective Jan. 3, Foster wrote. The company’s product lines include Betty Crocker, Bisquick and Pillsbury.

“While General Mills may be the first of the large food companies to really press higher on pricing, we believe many others may follow,” Growe wrote.“It’s just a matter of time, given what is coming down the pike in the way of inflation.”

The UBS Bloomberg Constant Maturity Commodity Index for farm products jumped 50 percent between June 7, when it fell to this year’s low, and yesterday, when it set a record by closing at 1,770.479. The previous high was set in July 2008.

SOURCE: CNBC http://www.cnbc.com/id/39576384...

U.S. corn and soybean futures rose their daily trading limits early Friday after the U.S. Department of Agriculture slashed its estimate of this year's harvest, traders said.

Wheat futures also rose sharply, although by mid-morning they had edged off their limit higher moves. USDA lowered the projected corn yield in Illinois, typically the No. 2 corn-producing state, by 14 bushels per acre. Yields in top corn producer Iowa and Indiana were cut by 10 per bushels per acre.

For soybeans, USDA estimated this year's crop at 3.408 billion bushels on an average yield of 44.4 bushels per acre, below analysts' forecasts for 3.475 billion bushels and 44.9 bushels per acre. "It's a confirmation of what the people on the ground already know -- the corn yield just isn't there," said Don Roose, analyst with U.S. Commodities in West Des Moines, Iowa. "Smaller crops get smaller in both corn and beans. You are going to have to fight for acres on corn. Soybeans have lost their cushion."

SOURCE: Day Press News http://www.dp-news.com/pages/detail.aspx...

The farmlands spreading north and east of the Euphrates river were once the bread basket of the region, a vast expanse of golden wheatfields and bucolic sheep herds.
Now, after four consecutive years of drought, this heartland of the Fertile Crescent - including much of neighboring Iraq - appears to be turning barren. Ancient irrigation systems have collapsed, underground water sources have run dry and hundreds

Of villages have been abandoned as farmlands turn to cracked desert and grazing animals perish.
Sandstorms have become far more common, and vast tented cities of dispossessed farmers and their families have risen up around the larger towns and cities of Syria and Iraq.
Time to stock up on more flour, sugar, brown sugar, baking powder, soda, yeast and Crisco, corn meal and salt. Baking from scratch is easy and better for you without all the preservatives and high fructose corn syrup.

A chicken in every pot? The phrase has its origins in seventeenth century France; Henry IV reputedly wished that each of his peasants would enjoy "a chicken in his pot every Sunday." With the current economic "policy" we no longer even have the pot!


Since: Aug 09

Des Plaines, IL

#8 Oct 25, 2010
Here we go again?(Oct. 24)
Asian markets open, no big deal. Except gold is up $14 and on the move and the U.S. Dollar Index has dipped below 77.

Preliminary G20 has wrapped up; No rhyme, no reason, it seems...

I'm really beginning to fall into the Kid's way of thinking, in that none of this really means anything anymore...

I got into another debate on Friday night about the current economic state. I kept asking the question that no one could answer, although everyone believed there "was" an answer (along the lines of "we've always come out of it before"), which was, "How do we get out of this?".

Crickets. At this point, even educated people do not have a clue for a "positive" solution.

We can debate if the ultimate solution, which will be put to us do to simply math or outright warfare, is positive or not, but not in the traditional sense.

There is no way out of this that does not involve drastically lower living standards. And on that line, we are in the second or third inning. We ain't seen nothing yet.


Since: Aug 09

Des Plaines, IL

#9 Oct 25, 2010
SOURCE:Bloomberg News http://www.bloomberg.com/news/2010-10-25/trea...

The Treasury sold $10 billion of five-year Treasury Inflation Protected Securities at a negative yield for the first time at a U.S. debt auction as investors bet the Federal Reserve will be successful in halting deflation.

The securities drew a yield of negative 0.55 percent, the same as the average forecast in a Bloomberg News survey of 7 of the Federal Reserve’s 18 primary dealers. The sale was a reopening of an $11 billion offering in April. Conventional Treasuries rallied amid speculation about the amount of debt the Fed may purchase to spur the economy in a strategy called quantitative easing.

“It signals people’s expectation of the Fed being able to create some inflation with the QE program,” said Alex Li, an interest-rate strategist in New York at Deutsche Bank AG, one of 18 primary dealers required to bid at Treasury auctions.“With nominal rates so low, in order have high TIPS breakevens you’ve got to have negative real yields on the five-year.”

Holders of TIPS receive an adjustment to the principal value of their securities equal to the change in the consumer price index, in addition to a fixed rate of interest that is smaller than the interest paid to a holder of conventional debt. The difference between is known as the breakeven rate.

The fixed payment on five-year TIPS, known by traders as the real yield, has been pushed below zero because the increase in the consumer price index is greater than the yield on regular five-year U.S. notes, which has fallen along with other Treasury yields as investors sought the relative safety of U.S. government debt.

SOURCE: Marketwatch http://www.marketwatch.com/story/dollar-slips...
Dollar hits 15-year low vs. yen after G-20
Pledge to avoid competitive devaluation fails to halt slide.

The U.S. dollar fell across the board Monday, pushing the greenback to a fresh 15-year low against the Japanese yen, as the outcome of the meeting of finance ministers and central bankers from the Group of 20 nations gave traders no reason to stop selling the U.S. currency.The G-20’s joint communiqué Saturday didn’t have enough teeth to trump worries that the U.S. Federal Reserve will soon announce a huge quantitative-easing program, which will weaken the value of the dollar.

HSBC economists said Monday the Fed could buy up to $2 trillion in U.S debt eventually, which could push the greenback down another 3%.With the Fed decisions on QE [quantitative easing] still pending, these efforts may not be enough to help in depth the beleaguered U.S. dollar,” said Roberto Mialich, foreign-exchange strategist at UniCredit Bank in Milan.

SOURCE The Wall Street Journal http://online.wsj.com/article/BT-CO-20101025-...
A weaker dollar and renewed concerns about currency risk and inflation helped Comex gold futures gain 1% Monday.

The most actively traded contract, for December delivery, settled up 1%, or $13.80, at $1,338.90 per troy ounce on the Comex division of the New York Mercantile Exchange.

Gold futures rallied on the weaker U.S. dollar, which retreated versus other currencies Monday. Dollar-denominated contracts like gold futures become cheaper for investors using foreign currencies when the dollar weakens. The ICE Dollar Index was recently at 77.069, from 77.436 earlier.

"The dollar is putting in new lows and the mostly soft news from the G-20" is keeping gold prices supported, said Charles Nedoss, senior market strategist with Olympus Futures. Some traders worried that a firm regulatory shift from the G-20 would alter the strong inverse relationship between gold prices and the dollar.

But as the summit saw member nations sign only a non-binding accord to avoid "competitive devaluation" of their currencies, traders returned to gold markets amid skepticism that a currency war could be avoided.

Since: Aug 09

Des Plaines, IL

#10 Oct 25, 2010
FIVE powerful new forces are about to converge on the financial markets at virtually the same time.

You’re keenly aware of Force #1 — the far-reaching consequences of the mid-term elections, now only eight days away.

And you probably also know about Force #2 — a new round of mass money printing by the Fed likely to be announced just nine days from today.

Force #3
G-20 Nations Have Just
FAILED to End Currency Wars!

Governments will battle each other to see who can devalue their currencies the most. Plus, until the entire system can be thoroughly revamped, every effort to end the currency wars is doomed to fail.

Despite a massive effort by the U.S. and some of its allies at the G-20 in Korea, the only thing the ministers could agree to was a vague, toothless promise to TRY to avoid currency wars.Meanwhile …

• Emerging market countries, which see themselves as the primary victims of the currency wars, pushed for — and have just gotten — more voting power in the International Monetary Fund at the very same G-20 meeting where the U.S. failed to get its way.

• Not ONE single nation at the G-20 conference agreed to give up its right to devalue or hold down its currency as much as it wants, using any means at its disposal.

• Even as the “currency peace talks” were still ongoing at the G-20 meetings, major countries such as Japan, Brazil, and South Korea continued to take steps to devalue their currencies — or at least hold them down.

• Most revealing of all, two of the most powerful countries — China and Germany — attacked the U.S. as the number one culprit in the currency devaluations. By running its money printing presses, they argued, the U.S. Federal Reserve is doing precisely what the Americans are telling everyone else NOT to do — wantonly devaluing its own currency!

This is definitely NOT the “currency stabilization pact” that markets were hoping for last week. Quite the contrary, it opens the gauntlet to a whole new round of currency battles in the weeks ahead. If the currency wars continue, the U.S. will CONTINUE to devalue its dollar even more.

Force #4
World’s Largest Bond Fund Is
Not Waiting Around. It’s Already
Dumping U.S. Treasury Bonds!

According to a recent Bloomberg news release, Pacific Investment Management Co.’s (PIMCO)$252 billion Total Return Fund, the world’s biggest bond fund, is slashing its exposure to U.S. Treasury bonds.

It has cut its investments in U.S. government debt to 33% of assets, from 63% of assets in June.

In other words, one of the largest players in the bond market has now dumped almost HALF of its U.S. government debt holdings.

But PIMCO is not alone!
Instead, PIMCO’s a trendsetter among bond funds all over the world — not only for mutual funds and hedge funds, but also for sovereign governments.

Among them, China and Germany clearly see the handwriting on. That’s why they berated the U.S. at this weekend’s G-20 meetings. And that’s also why they are likely to dump U.S. bonds in increasing quantities.

Force #5
Corporate Insiders Selling SIX TIMES
As Many Shares As They’re Buying

In the 30 days ended October 18, corporate insiders dumped more than 205 million shares of their stock, compared to purchases totaling a mere 32.4 million — a ratio of more than six to one.

Moreover, in terms of market value, their sales add up to almost $3.5 BILLION, versus only $236 million in buys —$14.83 in stock sold for every dollar bought.

Does this necessarily mean the stock market will plunge tomorrow? No. But there’s no question that U.S. stocks are overpriced given the wobbly American economy.

And there’s no question that the U.S. stock market indices are vulnerable to fears of austerity in the wake of the upcoming elections … any disappointment in the Fed’s November 3rd announcements … any further failures by the G-20 … any plunge in the bond market … or any sustained large selling by insiders.
I always wondered what the 1930's were like in Germany...

Since: Aug 09

Des Plaines, IL

#11 Oct 27, 2010
Sigh. As usual you have to come here for the truth. The blogosphere reports facts, hell even the Bureau of Commerce reports the facts but to keep the cheerleading and propaganda machine rocking and rolling to insure “their team” doesn’t look bad, they are going to report the “seasonally adjusted annual rate” number which is so full of crap it is not even funny. The media promotes the nonsense in this fashion (links included):

New Home Sales Rose 6.6% in September, But Remain Low
The Atlantic - ‎1 hour ago‎

US new home sales leap in September
RTE.ie - ‎1 hour ago‎

September new home sales up 6.6% from August
Detroit Free Press - Greta Guest – ‎1 hour ago‎

New home sales continue recovery
CNNMoney - Charles Riley – ‎1 hour ago‎

New home sales rise 6.6 pct. after dismal summer
The Associated Press - ‎1 hour ago‎

Sales of US New Homes Increased Again in September
Bloomberg - Bob Willis – ‎2 hours ago‎

U.S. New Home Sales Climb Well Off Record Lows
RTT News - ‎59 minutes ago‎

And it just goes on and on and on. The truth? The decline was 1,000 fewer total home sales on a non-seasonally adjusted basis, in other words the raw numbers. Only 6,000 homes were sold with a sales price above $300,000. The total sold in August (NSA) was a dismal 25,000 followed with September’s number of 24,000 which ties it for the second worst number which was previously recorded in December 1974, January and December of 2009, then lately in January of 2010. Those months are the worst months for home sales as that is the dead of winter and coincides with Christmas so I guess some excuse such as an “early” Christmas shopping season will be the excuse for this number being so horrid. The MBA Mortgage Purchase Applications which I have been tracking are validating this information and to add insult to injury:

The September number is only 1,000 units above the all time record low of 23,000 new homes sold in December of 1966; when the U.S. population was HALF the size that it is now.

Unless there is a massive wave of new home purchases between now and the end of the year,(a highly unlikely scenario), 2010 will record the fewest new home sales in United States history since records were first kept in January of 1963.

Thus prepare for a nightmare ladies and gentleman as the second shoe in the housing fiasco has impacted the floor loudly. Too bad nobody could hear it over the cheering for the political fools and distractions designed to keep your eye off of the ball.


Denver, CO

#12 Oct 27, 2010
Wow! This translates to an average of less than 500 new homes sold in each state. WOW!

Since: Aug 09

Mundelein, IL

#13 Nov 1, 2010
SOURCE: AP http://news.yahoo.com/s/ap/20101101/ap_on_bi_...

WASHINGTON – A mixed picture of the economy emerged one day before key midterm elections that have focused on the nation's financial health.

Spending by Americans slowed in September and their incomes fell for the first time in more than a year. At the same time, manufacturing activity grew by the most in five months and the weak construction industry showed a little life.

The new data suggests the economy is growing, albeit at an anemic pace.

Consumer spending had helped boost third-quarter growth. It was the best showing since a 4.1 percent rise in consumer spending at the end of 2006, before a severe recession hit.

However, Monday's report suggested the strength occurred in July and August and that spending slowed considerably in September.

The savings rate fell to 5.3 percent in September, the lowest rate since August 2009. But it is still well above the 2.1 percent average savings rate for all of 2007.

An inflation gauge tied to consumer spending rose a slight 0.1 percent in September and was flat after excluding volatile food and energy.

In response to the weak economy, the Federal Reserve this week is expected to announce a program to buy Treasury bonds. The effort is designed to drive interest rates lower and spur economic activity.

"It is encouraging that economic growth no longer appears to be slowing. Nonetheless, the economy is not growing fast enough to reduce the unemployment rate or boost inflation," said Paul Dales, U.S. economist with Capital Economics

“A Word Means What I Say it Means; no More, no Less”: The Red Queen "Alice Through Th Looking Glass
In other news...
SOURCE Reuters

Ambac Financial Group Inc (ABK.N), which was the second-largest U.S. bond insurer before suffering huge losses on risky mortgages, said it may file for bankruptcy protection this year after missing an interest payment on some debt.

Shares of Ambac slid as much as 59.8 percent.

In a regulatory filing, Ambac said it has been unable to raise capital to avoid bankruptcy. It said it remains in talks with senior bondholders about a consensual restructuring through the bankruptcy process that preserves a $7 billion tax benefit.

Ambac said if it cannot agree on a "prepackaged" bankruptcy in the near term, it intends to seek Chapter 11 protection this year, perhaps without the support of creditors. It said this would cause $1.62 billion of debt to be payable immediately.

Meanwhile, Obama tells us; we are emerging robust and healthy from the second Great Depression, with historically low unemployment, no foreclosure problem, terrorism ended, Iran tamed, the entire world running on wind power, and all the wealth spread around a bit.

The truth is that these folks are unfit to govern and should be removed from office. The only question is: can the nation survive until the next election? Perhaps this is why they are trying to cram the most radical changes in the history of the republic into the shortest possible time, knowing that their days in office are numbered.


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