Daily Digest

Daily Digest - August 1

Saturday, August 1, 2009, 8:58 AM
  • Martin Armstrong – How ALL Systems Can Collapse Overnight…
  • A Comedian That Could Replace The Cable Financial Media (Humor)
  • CRE with Jim the Realitor (Video)
  • 1,200 Rhode Island businesses Face Closure Over Sales Tax
  • Moore's Credit Crunch Film Tops Bill In Venice
  • Beep Beep: The Laws Of Gravity Still Apply
  • Who Made Money as the Market Tanked? (Video)
  • Cash for Clunkers: A 950 Million Dollar Clunk That Got Clunked
  • CNBC Viewership Down 28%

Economy

Martin Armstrong – How ALL Systems can Collapse Overnight…

[Link on page to white paper]

Subtitled, “The 3rd Century economic collapse. Are there lessons from the past that equal solutions for the future?” Martin takes us on a 3rd century history lesson and combines his knowledge of cycles, waterfall collapses, rule of law, history of money and how it influences the political arena to say, YES, it can and is happening to us now… BUT if we are smart we can learn from history to avoid repeating our mistakes.

While I’d like to think we are that smart, collectively I’ve concluded we are not. No, we are experiencing “economic mass-psychosis” and I have yet to see any mass awakening, that’s for sure!

This is an excellent piece, a terrific read, and I hope you enjoy and learn from it!

A Comedian That Could Replace The Cable Financial Media (Humor)

CRE with Jim the Realitor (Video)

1,200 Rhode Island Businesses Face Closure Over Sales Tax

State tax officials have put more than 1,200 businesses across the state on notice this week that they are out of business unless they pay their overdue sales taxes immediately.

For most, that action came in the form of a personal visit from the state Division of Taxation, ordering business owners to lock their doors at once.

Moore's Credit Crunch Film Tops Bill In Venice

Michael Moore's documentary on the global financial crisis, "Capitalism: A Love Story", will vie for the top prize at this year's Venice film festival.

Beep Beep: The Laws Of Gravity Still Apply

There is no doubt that investors are feeling quite exhilarated from the recent wave up. The 1966 cartoon titled “Out and Out Rout” featuring none other than Wile E. Coyote and the Roadrunner comes to mind when comparing the recent drag racing to the top. Investors (gamblers) are chasing the absolute dream of higher returns in the same way that the coyote is addicted to catching the bird.

Fast market action stimulates quick decisions. Are they well planned or is risk thrown at the wind?

Who Made Money as the Market Tanked? (Video)

Cash for Clunkers: A 950 million dollar clunk that got clunked

Four days after it launched, the popular cash-for-clunkers program has burned through its $950-million budget, sending the Obama administration scrambling to find additional money tonight and avoid a shutdown of the program.

CNBC Viewership Down 28%

CNBC has lost 28% of viewers year over year, and 24% in the 25-54 age group category. This is obviously a stunning failure in an environment where the top stories on any other medium are finance and economy related.

11 Comments

SagerXX's picture
SagerXX
Status: Diamond Member (Offline)
Joined: Feb 11 2009
Posts: 2219
Re: Daily Digest - August 1

 Another "the-numbers-are-getting-a-really-nice-deep-tissue-massage" datapoint re unemployment:

http://thecomingdepression.blogspot.com/2009/07/unemployment-figures-far...

Cognitive dissonance is my constant companion...

Viva -- Sager

Davos's picture
Davos
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Re: Daily Digest - August 1

 The first half of this was priceless. The second half - well I'm at a total loss on how to describe.

idoctor's picture
idoctor
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Re: Daily Digest - August 1

Workers who protested at Pittsburgh Mayor Luke Ravenstahl's office this morning for union jobs on city-subsidized projects said they will return this afternoon.

"We want the city to change its economic development policy," said Gabe Morgan, Western Pennsylvania director of the Service Employees International Union, who led about 150 people in chants and songs in the City-County Building, Downtown. "We'll come back at 2 and see if they mayor is there. If we can't talk to the mayor, then we'll go to city council."

Building security kept the doors to the mayor's offices locked before chaining them shut about 8:40 a.m. while a dozen police officers stood guard. The doors are open again.

Union members didn't get to voice their concerns to Ravenstahl, who could not be reached for comment.

Morgan said the protesters dispersed about 9:45 a.m. after police asked them to.

Vincent Smith, a janitor at Fifth Avenue Place, Downtown, took the day off to attend this morning's protest.

"We're here fighting for justice and equality. (The mayor) is a part of the community," he said. "This should be his number one priority."

http://www.pittsburghlive.com/x/pittsburghtrib/news/breaking/s_635143.html

Peter Schiff on Glenn Beck last night.

Alan Grayson: "Which Foreigners Got the Fed's $500,000,000,000?" Bernanke: "I Don't Know."

Ron Paul questions Ben Bernanke on definition of inflation 07/21/2009

Bill Posey conitinues Ron Paul's questioning of Bernanke on inflation/transparency 07/21/2009

idoctor's picture
idoctor
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Posts: 1731
Re: Daily Digest - August 1

Peter Schiff CNBC 7-31-09........... Enjoy this one!

1.

2.

3.

4.

Check out each of the fast money CNBC faces as they talk to Peter here. Very interesting expressions IMHO.

Jeff Borsuk's picture
Jeff Borsuk
Status: Silver Member (Offline)
Joined: Jul 25 2008
Posts: 150
Re: Daily Digest - August 1

OMG!! Dennis Kneale is clueless! He reminds me of David Lereah from NAR in 2005 telling people the RE bubble was "different this time".

An how come investment advisors on TV still make the ignorant claim that "there is lots of money on the sidelines"? What? They need to enroll in Chris's service! Their clients are in trouble!

Jeff

hughacland's picture
hughacland
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Posts: 25
Re: Daily Digest - August 1
idoctor wrote:

Peter Schiff CNBC 7-31-09........... Enjoy this one!

1.

2.

3.

4.

Check out each of the fast money CNBC faces as they talk to Peter here. Very interesting expressions IMHO.

This just shows how moronic CNBC is. Here is Peter Schiff speaking sense, and the guy in the middle-top window as well (about long term trading ranges) The other three are just spouting hyperbole rather than making an argument. And all being 'held together' by a completely incompetent waive of an anchor.

Sorry to say this my American friends, but this interview - and this TV station - just about epitomises the intellectual void at the heart of your economy. (and for that matter the UK's too). The idiotic assumption that the market will just shrug it all off and power ahead whilst the real economy is on its knees. Christ. Only in America can a decline in GDP/employment/etc which is slightly less steep than the month before be made out as good news for the economy! This is the sort of deception that Bresnev would have been proud of. How the heck can an economy - any economy - be described as strong, or rebounding, when the numbers are still decreasing? And as for the muppet in the interview who challenged Peter Schiff as to 'why do you keep worrying about the debt'. There really are some plonkers out there.

One thing though, Peter Schiff should start to think seriously about the worth of these sort of idiotic interviews now that he is (almost) running for the US Senate. They actually do him no favours anymore. He needs to divorce himself from the idiot talking heads.

Cheers for now

H

 

idoctor's picture
idoctor
Status: Diamond Member (Offline)
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Posts: 1731
Re: Daily Digest - August 1

About the only guy I listen to on CNBC is Art Cashin these days. He is a very wise man IMHO. To old & honorable to be duped by all the rest of the clowns there. Maybe CNBC will win the 2009 award for best comedy economic programing money can buy LOL.

Gerald Celente 7-24-09

Davos's picture
Davos
Status: Diamond Member (Offline)
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Posts: 3620
Re: Daily Digest - August 1

A good read, I'll post it again in the DG in a day or 2

Plan C

 

JAG's picture
JAG
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Posts: 2492
Re: Daily Digest - August 1

Hi Davos,

Thanks for the Armstrong article. I read it a few days ago on Nate's blog, but didn't think many would appreciate it here, so I didn't post it. I wish they would give that guy a computer in his jail cell, because these PDF's of his typewritten letters can be difficult to read. Overall, I think Armstrong has a unique perspective and a lot of "free" time to think and analyze. I have read everything of his that Nate has posted, and have found it fascinating. His cycle theory provides a context to his perspective that few financial commentators have. Whether that makes him a genius or just plain crazy, I haven't decided yet. If the market bottoms in March 2010 I think I will have my answer.

Davos's picture
Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - August 1

 Hello JAG:

Anytime. I don't know how the guy wound up in the clink but I do know the guy is usually economically correct. I also think his collapse theory is going to be correct.

I don't know if you read the Minsky (Thee Shadow Banking System and Hyman Minsky’s Economic Journey )piece but I pretty much see a lot of corrolations between that and what he wrote. It was in a Jack McHugh newsletter.

Take care

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
What Event Will End This Rally?

Here is commentary from Stoneleigh at Automatic Earth that I thought was excellent:

Stoneleigh: People have often asked us what event we see precipitating the next phase of the decline once this rally is over. In short, there is no need for a precipitating event as market moves are essentially endogenous. 

I have no doubt that something will be rationalized as the cause after the fact, but it will not actually be causal. It is closer to reality to say that causation runs the other way - that market moves make the news than that the news moves the markets - although it is actually social mood that drives both. 

As confidence ebbs and flows, people behave differently and perceive reality differently, and they do so collectively without being consciously aware of doing so. The exact same events can be rationalized totally differently depending on whether the prevailing mood is pessimistic or optimistic. 

Social mood is extremely 'catching' (see mirror neurons), and is the foundation of herding behaviour, of which markets moves are but one manifestation. Market timing involves probabilistic predictions based on herding behaviour. For this to be possible without foreknowledge of specific future events, about which foreknowledge is impossible, those events must not be causal to market moves. 

Anyone can guess at what may happen that will end up being described as the precipitating event after the fact. It could be an attack on Iran, an outbreak of a more virulent form of swine flu, a terrorist attack, a flare up of violence in one of the world's many powder keg regions, a rapidly escalating trade war, a high-profile assassination or any one of hundreds of possible events. 

Such specifics are not predictable, and the rally will eventually end with or without them, once the most aggressive speculator has made his bet and the biggest sucker has been fleeced. The concern is that whatever happens could (and probably will) be used by the unscrupulous to channel the fear and anger of the herd in the direction of simplistic blame. 

This fall is a reasonable possibility for the resumption of the decline, following a late summer recovery high. This is, however, not cast in stone. As a trend progresses, more and more people buy into it, until it begins to win over even the skeptics. 

The more hold-outs who capitulate to the trend, the closer it is to a reversal. Already we are seeing some notable bears sounding uncharacteristically optimistic. They may not yet be accepting the recovery mantra, but they are seeing the rally lasting for a long time. 

The more bears switch sides, the more bearish the message, as it is evidence that the herd is moving towards an extreme. When received wisdom, in this case as to recovery, is almost unanimous, then the trend will have gone about as far as it can, and the stage will be set for a sharp reversal. I think we are already seeing many clues that we are getting late in the trend.

Once the decline resumes, liquidity should dry up again very quickly. The rally has seen liquidity return with tentatively increasing confidence, which has made covering up the toxic mess very much easier, but that will prove to be very temporary. As liquidity disappears again, the intractable problems will be laid bare again, leading to a logjam in the financial system and rapidly increasing pressure for it to burst in a market cascade.

In a very real way, confidence IS liquidity. A firesale of assets could originate almost anywhere, which would reprice asset classes across the board. The CDS market in particular is a powder keg with a short fuse. 

I expect the coming decline to be longer and much stronger than the downward phase, so next year should be an almost unmitigated disaster from start to finish. If you are still waiting to cash out then I would not wait much longer.

link

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