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About the Ads

Monday, November 3, 2008, 8:28 PM

Sorry CA readers, we've tried to pull the political ads but they keep coming back. 

There's not much we can do about it because we can only block specific sources of ads and we have no way of knowing where these things are coming from before they arrive.

  1. They will end tomorrow
  2. We do not condone or encourage any particular ads.  They just show up.
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Tough economic times (cars, factory output, and bankruptcies)

Monday, November 3, 2008, 4:49 PM

Even as the stock market grinds on through its bear market rally, the real economy continues to slide off its narrow shelf like a boneless chicken seeking someplace lower.

First, factory activity plunged to its lowest reading since 1982.  How significant is this?  Well, in 1982 we were in the depths of a very severe recession.  (This one hasn't even officially started, according to the NBER, who are squirming desperately to avoid proclaiming one right before an election). For factory activity to plunge like this at the outset of a recession speaks to a very deep economic hit in our near future.

Factory sector weakens sharply in October
WASHINGTON (MarketWatch) -- The nation's manufacturing firms reported the worst level of output in 26 years, further evidence that the economy is slumping sharply, according to a closely followed survey of top executives released Monday.

The Institute for Supply Management index fell to 38.9% from 43.5% in September, below the 41.5% expected by economists surveyed by MarketWatch. See Economic Calendar.

The result is the lowest reading since September 1982. The indexes for production and new orders fell to their lowest level in 28 years.

What do factories make?  You know, cars and things.  Perhaps these two news items belong together, then: » Read more

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The other shoe to drop - consumer credit cards

Saturday, November 1, 2008, 6:05 PM

Even as the stock market stages a bear market rally, and the banks are showing some small signs of happiness with their newly-received trillions in public money, the signs from the real economy are pointing down, and hard.

Our most recent economic 'strength' was an illusion built on borrowing. Unfortunately, our preferred measure for our economy, GDP, counts borrowing-fueled "growth" as though it were real.

For example, if two people live next door to each other, and both earn $50k/year, but one of them borrows a million dollars and spends it all,  GDP would measure the borrower as having an economy 20x stronger than the other. » Read more

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A Contest: Design the new DVD artwork and get a prize!

Friday, October 31, 2008, 9:12 PM

Chris Martenson Fans,

We're working as fast as we can behind the scenes, hoping to get the Crash Course DVD done in time for the holiday gift-giving season. We'd love to have a really great-looking graphic label for the DVD, so we decided to invite the growing community to help us through a design contest! Here are the details:

» Read more

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Hartford and AIG - ghoulish results

Friday, October 31, 2008, 4:54 PM

Happy Halloween! 

One of my kids is going out dressed as the queen of hearts...only the front flips open and it says in blood red inside "Your 401k - down 50%!"

We've already decided to split any candy that spills to ground between the kids and dad.

More frightening yet are the "next shoes" that lurk in the insurance industry.  Like the now blood-red pension industry (great summary here by Mish),  the insurance industry took all the premium money and sought a slightly better return by placing it in financial exotica.  » Read more

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Treasury seeks "unprecedented borrowing"

Thursday, October 30, 2008, 5:19 PM

I nominate this for understatement of the year:

Ryan Says Treasury to Need `Unprecedented' Financing
"This year's financing needs will be unprecedented,'' said Anthony Ryan, the Treasury's acting undersecretary for domestic finance, at a Securities Industry and Financial Markets Association conference in New York, where he was a last-minute substitute for Treasury Secretary Henry Paulson.

"Unprecedented" hardly does this justice; we need a more superlative word.  "Ginormous" comes to mind.

Perhaps the Germans have a single word that means "future destroying" that we could use. » Read more

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The Fed cuts rates to 1.00% - the war on savers continues

Wednesday, October 29, 2008, 2:42 PM

Fed cuts rates half-point, leaves door open for more

WASHINGTON (MarketWatch) - The Federal Reserve on Wednesday slashed overnight interest rates by a half-point to 1.0%, and signaled that downside risks to growth remain, indicating even more rate cuts could come.

In its statement, the Federal Open Market Committee said the pace of growth has slowed "markedly" and the extraordinary financial market stress could put the economy at greater risk.
The Fed said that inflation was no longer a threat and that the central bank will cut rates as needed to boost the economy.

No real surprise here, but I will make a comment or two. The Fed, representing status quo interests, is desperately trying to recreate the exponential expansion of credit and debt that marked the last 2 decades (but really picked up steam from 2000 onwards). » Read more

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IEA says world's oilfields declining faster than expected

Tuesday, October 28, 2008, 10:13 PM

I know that the whole issue of Peak Oil seems to be on the back burner, given the financial crisis. Many think that oil demand will be knocked far enough back that even if Peak Oil were happening right now we'd have several years respite before it becomes a significant problem due to demand destruction.

So I've been patiently waiting for any estimates that would allow us to compare world oil production declines to demand destruction to see where we are in the oil sweepstakes race.

On the demand side, I've seen estimates that world oil demand will fall off as much as 4%-5% this next year.

Now for the supply side. » Read more

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New Martenson Report Ready

Tuesday, October 28, 2008, 10:12 PM

LINK:  Market Predictions and Outlook Update

In this report I will review the advice and predictions I made on May 27th of 2008 (exactly 5 months ago) in a report entitled Charting a Course Through the Recession
In striving to be accurate, fair, and complete, and in the spirit of
constant improvement, it’s important to review where we went right and
where we went wrong.  I’m pleased to say that many of my predictions were right on target.  I
didn’t anticipate such an aggressive dollar advance, but now I see this
trend continuing for just a bit longer before resuming its descent.  I am continuing to recommend some of
the same prudent actions as always.  Stay out of debt, keep cash close
by, get some money out of the dollar (gold), and know your neighbors. 
And stay tuned for future reports.

Note:  This report is for subscribers only. » Read more

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Pompous Prognosticators

Tuesday, October 28, 2008, 3:06 PM

This is a post from last April that I want to bring back to the forefront.


Below, I've liberally excerpted from an article I read a couple years back that always stuck with me.

Since our challenge today is to know whom to trust and which story to believe, I thought I'd bring this one
back to the forefront, because the parallels are so striking between the late 1920's and now.

Below is a graph of the Dow Jones during the years of the 1920's bubble, the stock market crash of 1929, and the onset of the Great Depression. The numbers in bubbles indicate when one or more quotes from a famous expert were captured.

I happen to believe that we are somewhere between points #8 and #18.

I get chills every time I re-read them... » Read more