Daily Digest

Daily Digest - July 11

Saturday, July 11, 2009, 11:05 AM
  • Will it take root? (From the Coming Depression) or (From Bloomberg)
  • Wall Street Journal Article Quotes Dr. Chris Martenson (Repost)
  • US slips, China soars in Fortune company rankings
  • The Day The PPIP Died....
  • Former US Assistant Secretary Of The Treasury: "Geithner Works For Goldman" (Video)
  • The foreclosure backlog
  • Hulbert on Sentiment (Video, Let people IN?, All Green Shoots Have Died)
  • Treasury: Plan C
  • Live Webcast On Fed Independence
  • IYR (Chart from Biiwii)
  • The Ultimate Armageddon Stock
  • Same Store Sales (Chart)
  • Same Store 7% worst on record (Video)

Economy

Will it take root? (From the Coming Depression) or (From Bloomberg)

Wall Street Journal Article Quotes Dr. Chris Martenson (Repost)

“Owning bullion,” says gold investor Chris Martenson, 46, a scientist from Montague, Mass., “is buying insurance against the unknown.”

...

The truest gold buffs, though, want nothing to do with ETFs or mining stocks. Mr. Martenson, who runs an investing Web site, dismisses them as creatures beholden to untrustworthy managements and financiers. “I’ve lost faith in how Wall Street does business,” says Mr. Martenson, who keeps more than half his portfolio in bullion.

US slips, China soars in Fortune company rankings

Overall, China had an unprecedented total of 37 companies featured on the list, with nine new entries and the others climbing in the rankings.

The business publication meanwhile said US-based Wal-Mart Stores slid from last year's top spot to third, with revenues of over 405 billion dollars.

But the number of US firms in the top 500 fell to 140, the lowest since Fortune began the list 1995.

The Day The PPIP Died....

The U.S. Treasury Department picked nine money managers yesterday for the Public-Private Investment Program, or PPIP, including BlackRock Inc. and Invesco Ltd. Pimco, which in March announced plans to apply, said it withdrew its application

Former US Assistant Secretary Of The Treasury: "Geithner Works For Goldman" (Video)

The foreclosure backlog

calculated risk:

Ramsey Su (REO broker in San Diego) sent me some data today. He wrote:

[Pent Up Foreclosures - a stat Ramsey follows] measures the difference between foreclosures completed versus defaults. This gap is widening as a result of government intervention. ... If they do not ACCELERATE the foreclosure process and release some of the pressure now, the consequences will be disastrous.

Hulbert on Sentiment (Video, Let people IN?, All Green Shoots Have Died)

Treasury: Plan C

Informally known as Plan C, the internal project is focused on vexing problems such as the distressed commercial real estate markets, the high rate of delinquencies among homeowners, and the struggles of community and regional banks, said government sources familiar with the effort.

The 3.5 Trillion Dollar Time Bomb

The $3.5 trillion commercial real estate market is a ticking “time bomb” that may lead to a second wave of losses at large U.S. banks,

Live Webcast On Fed Independence

IYR (Chart from Biiwii)

The Ultimate Armageddon Stock

[Chart on page]

Since the end of 2007, Family Dollar shares are up 67%. Today, Family Dollar proved again why the downscale retailer is so attractive to investors.

Same Store Sales (Chart)

Same Store 7% worst on record (Video)

13 Comments

A. M.'s picture
A. M.
Status: Diamond Member (Offline)
Joined: Oct 22 2008
Posts: 2368
Re: Dailt Digest - July 11

RE: The new World Currency...

Unity in Diversity?
I guess no one told them what's happening outside their posh accomodations where they can sit back and sip fruity drinks, surrounded by dozens of armed men.

Who needs reality when taxpayer dollars are buying your fantasy?

They say Global Cooperation, I see a business merger that consolidates power and creates a monopoly.

iNo mi Gusta!

JAG's picture
JAG
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Posts: 2492
Hulbert

I did subscribe to Hulbert's Financial Digest briefly, to see which newsletters performed well in the crash of last fall, only one of the 200 that Hulbert tracks did well, Eliiottwave (but they did horrible the previous years). Hulbert has compiled quite an effective measure of "dumb money" with his tracking of financial newsletters.

If the "dumb money" is pulling out of this rally, I would expect that this rally is not over yet, as Hulbert concludes in this video.

SagerXX's picture
SagerXX
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Joined: Feb 11 2009
Posts: 2237
Will it Take Root?

How izzat new Universal Currency backed?  With a mixed basketfulla basketcase fiat currency?  Cowrie shells?A mixed basket of Florida swampland and assorted US interstate bridges?

Pretty coin, though.

Viva -- Sager  

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Will it Take Root?

 Hello Sager:

Don't know. Some observations:

  • Gold in color, made by a mint
  • China is buying a LOT of gold, more than reported
  • It is a coin, I expected a new world currency (and I suspect this is more of a BRIC basket) to be digital, leads me to think it is backed by what is in it (silver, gold or even copper which they bought a lot of and talked about a copper coin in China)

But who knows. Hardly made any of the media outlets.

Glad you are feeling better! Take care

 

FireJack's picture
FireJack
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Joined: Feb 8 2009
Posts: 156
Re: Daily Digest - July 11

I think Denninger has been making a lot of good posts lately and here is another good article from him:

 

Stupidity Bites Hard

Before the "waiver" on mark-to-market accounting these loans were worth no more than they are today.  Yet before that waiver, banks, as I have pointed out in The Ticker previously, were carrying huge books of loans at or very close to "par" - that is, 100 cents on the dollar, despite the fact that when these things trade at all nowdays they are trading for pennies - literal pennies, in some cases as few as one or two!

REALITY folks is that these banks (and many more) are in fact BANKRUPT, right here and now. Again:

“It is well understood that the four major banks would likely need an additional capital injection should they be forced to mark the second-lien mortgages on their balance sheets to a realistic value,” Greenwich Financial’s Frey said.

In English (translation by Tickerguy), for the financially less-literate, this is what Greenwich's Frey said:

These banks have less capital than the loss on these loans if the value of these loans are recorded honestly.  That is, their assets are exceeded by their liabilities.

This is the definition of bankruptcy; ergo, these four banks are in fact BANKRUPT right here and now, have been bankrupt, and it is "widely understood", including by Congress, The Federal Reserve, The FDIC and OCC that this is the case.  All of these "Regulatory Arms" of our government are in fact actively conspiring in violation of the "Prompt Corrective Action" law to hide this.

 

 

When I read about the commercial real estate collapse and the coming alt-a option arm I wonder just how bad the crash is going to be? It sure sounds like these banks are already trillions of dollars in debt and have been hiding it, just how long can they do this?

Davos's picture
Davos
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Posts: 3620
Re: Daily Digest - July 11

 When I read about the commercial real estate collapse and the coming alt-a option arm I wonder just how bad the crash is going to be? It sure sounds like these banks are already trillions of dollars in debt and have been hiding it, just how long can they do this?

3.5 trillion in CRE, and about 1.5 trillion in alt a and option arms, and we shouldn't forget that primes got hit as a result of the systemic risk that rippled through the economy.

If 1.5 trillion in subprime did all this, what will another 5++trillion do?

And take a look at the size of the shadow darivatives, it is bigger than ANYTHING out there put together:

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Re: Daily Digest - July 11

 Wow! JPM with 87 trillion in derivative exposure, unbelievable. Wasn't JP Morgan one of the founders of the Federal Reserve? Even if they only take a 10% loss on those derivative positions, thats still 8.7 Trillion down the black hole.

Sorry, I just can't get over 87 Trillion. Our country is so screwed.

Where did that chart come from Davos?

Thanks.

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Re: Daily Digest - July 11

 

JAG wrote:

 Wow! JPM with 87 trillion in derivative exposure, unbelievable

Please tell me those figures are billions with a B and not trillions with a T.

Woodman's picture
Woodman
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Posts: 1028
Re: Daily Digest - July 11

The numbers are huge;iIs there any info out there on what those derivatives are are really tied to; perhaps that would give us more of an idea of the risk.

Tom

kemosavvy's picture
kemosavvy
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Posts: 254
Re: Daily Digest - July 11

I think, do not know this for fact, and I remember reading about this that these derivatives on JPM's books are not nearly as explosive as you might think.

there are two sides to every trade, a buyer and a seller, JPM might be holding both of these for clients, so the derivatives are accounted for twice and they cancel each other out. if one side of the trade goes up the other side goes down, a zero-sum game.

the area of concern, and i'll blow some dust off of this term, is counter-party risk. if a client takes a massive hit and they cannot cover the loss, JPM has to settle the claim. this may only happen in a fractional percent of cases. but a 1% loss would be $870B (is that right?) but the commish made on these contracts must make up for alot of it.

let me know if i'm wrong on this, i had to dig deep into my memory banks to recall this.

(many of these derivatives could have been acquired through the Bear Stearns takeover, this would explain the amount).

Steve

kemosavvy's picture
kemosavvy
Status: Martenson Brigade Member (Offline)
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Posts: 254
Re: Daily Digest - July 11

The Achilles Heel of the US's global superiority is the world reserve currency. it is the also it's greatest strength (along with it's superior military financed by it's world reserve currency status). So I think a serious attempt to replace the world reserve currency would be met with a firm backhand to the face, maybe a full roundhouse. ultimately you will have to 'kiss the ring' and accept the reality.

So for Medvedev to showcase the new world reserve currency is just posturing at this time by the Russians, possibly by the Chinese as well, t osee what sort of reaction they receive from the West (the Chinese floated this idea on their central bank website, eventually yanking the article). I think we are years and possibly a war away from the loss of the world reserve currency, based on the fact that many of the worlds long term debt is still denominated in dollars (can't just cut and run) and that we are a militaristic state that will defend the WRC.

Steve

Davos's picture
Davos
Status: Diamond Member (Offline)
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Posts: 3620
Re: Daily Digest - July 11

From Nate's site 

Pay attention to the comments of William Greider, author of “The Secrets of the Temple.” He is describing exactly what I was railing about all through the crisis last fall, namely that Jamie Dimon, CEO of JPM, HAD to buy Bear Stearns to save themselves and received $30 billion in guarantees from the Fed while Dimon also sat on the board of the New York Fed of which little Timothy Geithner was the head!

Here’s the real truth. JPM is the center of the derivatives universe and has already imploded. It is only a matter of time before the $90 trillion of derivatives they hold, and hide, and obscure come crashing down.

Link

I'll look for the pdf link that the chart pic was captured from

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Re: Daily Digest - July 11

Sounds like  Jim Rogers "gets" peak oil. Go to about the 54 second mark:

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