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Daily Digest - Feb 20

Thursday, February 19, 2009, 8:35 PM
  • Santelli's Chicago Tea Party (HatTip CM)
  • Celente (Predicted the 1997 Asian Currency Crisis & More (Hat Tip Christopher Peters))
  • Trader Panzner Foresees Wealth Destruction, Rising Crime, Guns
  • Keep Taking Bricks Out of the Wall & the Other D(ebasement) Word
  • Wish I Had Financed My Vehicles
  • Bank of England Assets 2007-2009
  • Balance Sheet of European System Central Banks 2007-2009
  • Federal Reserve Total Factors Supplying Reserve Funds
  • The threat to Switzerland
  • More...
  • Video: The Wall Street Journal talks about Eastern Europe
  • Calculate Your Financial Comeback (Includes Inflation Rate Variable) (Hat Tip CM)
  • Asian box ports see alarming drop in throughput
  • Bank Run Pictures
  • Citibank has cut all lending in Denmark
  • Wholesale inflation takes biggest jump in 6 months
  • Unemployment
  • Obama's $75B Housing Plan to Assist 3-4 Million Homeowners
  • Charlie Rose: Nouriel Roubini, Mark Zandi and Fred Mishkin
  • Free Fallin'??? (Hat Tip CM)
  • PC Sales Start To Look Like The Car Industry 

Economy 

Santelli's Chicago Tea Party

Celente (Predicted the 1997 Asian Currency Crisis, the Subprime Mortgage Collapse and more (Hat Tip Christopher Peters))

Trader Panzner Foresees Wealth Destruction, Rising Crime, Guns 

His outlook is grim. We stand on the cusp of what hedge- fund manager Barton Biggs would call "an episode of great wealth destruction," Panzner writes in "When Giants Fall: An Economic Roadmap for the End of the American Era." Things are already bad for Americans and they are going to get worse. 

Working hours will rise and pay will fall, forcing many people to take two or even three jobs, he asserts. We'll be traveling on foot -- or by bicycle or boat. More and more of us will live in extended-family households, three generations under one roof. We'll recycle rainwater, draw heat from the sun and eat food grown in our own gardens.

Tax revenue will slump, unraveling safety nets like Social Security and Medicare. Hospitals will shut. Police budgets will be slashed, crime will surge, more people will pack guns. The dollar and modern payment mechanisms may give way to "barter arrangements, alternative financial instruments and collective support networks," he says. 

Humor, (I hope) Lead Pipe (Hat Tip Harvey)

Keep Taking Bricks Out of the Wall & the Other D(ebasement) Word

Wish I Had Financed My Vehicles

Bank of England Assets 2007-2009

Balance Sheet of European System Central Banks 2007-2009

Federal Reserve Total Factors Suppying Reserve Funds

The threat to Switzerland 

As the eastern European spiral continues down, Ed Harrison of credit writedowns translates an article from the domestic Swiss press interviewing economic journalist Arthur p. Schmidt and highlighting the massive potential sovereign solvency problems facing Switzerland should eastern Europe collapse. 

What Switzerland must do now?

Now, the possible losses caused by these loans must be made transparent. Above all, all of the Eastern European risks must be fully disclosed. Together with the loan losses from UBS and Credit Suisse, the entire writedown for Switzerland could exceed the Swiss gross domestic product.

That is to say?

Switzerland, like Iceland, is threatened with a potential national bankruptcy. One consequence would be that the Swiss currency could fall massively in value - possibly even crash. Another would be that Switzerland's credit rating would be massively downgraded. That would be a trauma for the country: Switzerland was always as a stronghold of stability. The franc could become an unstable soft currency. Then Switzerland would perhaps be forced to abandon the franc and take on the euro.

this is potentially an alarmist view -- but problems in Switzerland are less than they are in Austria, which might give one some sense of the desperation in Vienna. Harrison further notes that Germany, softening on previous rumblings, seems more likely to intervene to bail out Austria.

Willem Buiter also notes the return of capital controls is likely in eastern Europe.

Video: The Wall Street Journal talks about Eastern Europe

Calculate Your Financial Comeback (Includes Inflation Rate Variable) (Hat Tip CM)

Asian box ports see alarming drop in throughput 

Box throughput at Singapore, the world's largest container port took a 19% dive in January this year to 2m teu compared to 2.4m teu for the first month of 2008. 

Singapore's sharp drop in volumes in particular reflect the collapse in the Asia- Europe trade where it is a key relay port transhipping exports from surrounding countries to Europe and the Middle East.

The picture for world's third busiest boxport, Hong Kong was even bleaker.

Hong Kong, saw January throughput plunge 23% in January to 1.6m teu. Its flagship Kwai Tsing Terminals moved 1.2m teu, down 19% from the same month last year. 

Bank Run Pictures

Citibank has cut all lending in Denmark

 

"They are still threatened with bankruptcy, and I think that is why they will not lend more money," says Finn Ostrup to Ekstra Bladet.

 

For Danish Citibank customers bankruptcy could be a hard blow.

Wholesale inflation takes biggest jump in 6 months 

WASHINGTON (AP) -- Inflation at the wholesale level surged unexpectedly in January, reflecting sharply higher prices for gasoline and other energy products. 

The Labor Department said Thursday that wholesale prices increased by 0.8 percent last month, the biggest gain since last July and well above the 0.2 percent increase that economists had expected.

The acceleration was led by a 3.7 percent surge in energy prices with gasoline prices jumping by 15 percent, the biggest gain in 14 months.

Even outside the volatile food and energy sectors, wholesale prices showed a bigger-than-expected increase, rising by 0.4 percent. Economists had expected a slight 0.1 percent rise in so-called core inflation.

Food prices were well-behaved last month, falling for a second straight month. The 0.4 percent decline in January reflected lower costs for beef and dairy products which offset gains in the price of vegetables and chicken products.

In addition to the big jump in gasoline costs, prices for home heating oil were up by 5.4 percent and liquefied petroleum gas, which is often used to heat homes in rural areas, surged by 20.2 percent, the biggest jump in more than six years.

Outside of food and energy, there were increases for pharmaceuticals, light trucks and passenger cars and civilian aircraft.

Despite the big jump in wholesale prices in January, economists do not believe inflation is on the verge of becoming a problem, given the country's deep recession. 

Unemployment

Obama's $75B Housing Plan to Assist 3-4 Million Homeowners 

The Obama administration unveiled a $75 billion housing plan on Wednesday, which it says will help seven to nine million American families avoid foreclosure. 

In a White House press release, the Obama administration said the mortgage plan will boost confidence by creating lower mortgage rates and will allow refinancing for four to five million homeowners and assist another three to four million "hard pressed" homeowners.

As part of the plan, the U.S. Treasury will increase its stock purchases of Fannie and Freddie by up to $400 billion, or $200 billion each - double the original level. The Treasury will also boost its purchase of Fannie and Freddie's mortgage portfolios by $50 million each to $900 billion. 

The administration said the move will strengthen confidence in Fannie Mae and Freddie Mac, and will ensure mortgage stability.

The $75 billion initiative will be available only to owner-occupied homes and aims to modify loans to reduce payments to more affordable levels, the administration added.

By Stephen Huebl and edited by Sarah Sussman 

Charlie Rose: Nouriel Roubini, Mark Zandi and Fred Mishkin

Free Fallin'??? (Hat Tip CM)

PC Sales Start To Look Like The Car Industry 

Domestic car sales are down about 30%. Sales at Chrysler have been hit hardest, down 50% in the most recent two months. In a bad economy, it makes sense that consumers will avoid a $25,000 purchase. Analysts and economists are trying to figure out how much people are willing to spend for almost everything. Will they buy a new refrigerator for $500 if their current model is old but not broken? The data from the last quarter indicates that they won't. 

Two industries were supposed to do relatively well when purchasing power got into a tough spot-cell phones and PCs. It may be that the focus on tech growth potential has been too much about Apple (AAPL) which has done well, at least in its most recent quarter. But, Apple is as much a cult as a business. Some people will borrow themselves into the poor house to own a new Mac or iPhone. 

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22 Comments

Davos's picture
Davos
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Re: Daily Digest - Feb 20

2008: Bear Sterns, Fannie Mae/Freddi Mac, AIG, Auto Industy, TARP, Citigroup, Chrysler/GM............

2009: "Same As It Ever Was, Same As It Ever Was, Same As It Ever Was, Same As It Ever Was, Same As It Ever Was, Same As It Ever Was, Same As It Ever Was, Same As It Ever Was, Same As It Ever Was" (INSOLVENT)

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Re:Frontline - Inside The Meltdown (17th February 2009)

On Thursday, Sept. 18, 2008, the astonished leadership of the U.S. Congress was told in a private session by the chairman of the Federal Reserve that the American economy was in grave danger of a complete meltdown within a matter of days. "There was literally a pause in that room where the oxygen left," says Sen. Christopher Dodd (D-Conn.). (more »

http://www.peakprosperity.com/forum/frontline-inside-meltdown-17th-february-2009/13617

Paul

 

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Re: Daily Digest - Feb 20

"As part of the plan, the U.S. Treasury will increase its stock
purchases of Fannie and Freddie by up to $400 billion, or $200 billion
each - double the original level. The Treasury will also boost its
purchase of Fannie and Freddie's mortgage portfolios by $50 million
each to $900 billion. "

 

Am I to understand this as they plan to spend a total of $1,375bn ($900bn + $400bn + $75bn = $1,375bn) for this housing plan? Or am I reading that horribly wrong. 

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Re: Daily Digest - Feb 20

Davos,

Great video.  We need some positive reinforcement and inspiration too.  I think our theme song should be "We Won't Get Fooled Again" by THE WHO?!?!

Randy

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Re: Daily Digest - Feb 20

For evidence that the average citizen is reaching the breaking point and that there is a movement afoot:

 

CNBC Poll: Tell Us What You Think
Would you want to join Rick Santelli's "Chicago Tea Party?"   * 223620 responses
Yes
94%
No
4.8%
Not Sure
1.5%
Not a Scientific Survey. Results may not total 100% due to rounding.
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Re: Daily Digest - Feb 20

February 20, 2009 Peter Schiff

Predatory Legislators

With millions of homeowners now struggling to repay money they clearly never should have borrowed, our leaders have been righteously wagging fingers at predatory lenders who allegedly enticed innocent borrowers, and the country, into a financial snake pit. While the mortgage industry clearly deserves a good share of the blame, unindicted co-conspirators abound. The ringleaders are still at-large and are, in fact, busy hatching a plan to dwarf the earlier mistakes.

Contrary to the message bouncing off the marble walls of the Capitol, most borrowers in the inflating housing bubble clearly understood the terms of their loans. Most knew that they could not afford their mortgage payments once their teaser rates expired, but enthusiastically jumped into the debt pool anyway believing that guaranteed real estate appreciation, or a quick and profitable sale, would keep them afloat.

Although both lenders and borrowers were acting in their own perceived self-interest, what can we say of our economic policymakers who are expected to protect the good of all? Their actions encouraged the whole sad circus. Were it not for the excessively low interest rates provided by the Fed, the lax lending standards and moral hazards supplied by Congress courtesy of Freddie, Fannie, and the FHA, and the many real estate subsidies built into the tax code, none of these predatory loans would have been possible.

Had lenders exercised better judgment and had borrowers avoided overly burdensome debt loads, both parties would clearly be in better financial positions today. Instead, as borrowers were demanding the credit to fuel their dreams of instant real estate riches, lenders were being ordered to accommodate them.

In past generations, homebuyers were required to save for down payments and postpone their purchases until they could actually afford conventional 30-year fixed mortgages. But in recent years, as home ownership became a matter of public policy, the government accused lenders of discrimination and urged lower standards and easier terms. With government guarantees in place, the mortgage industry was happy to both expand their revenues and promote a better society.

But by denying credit, even if it requires borrowers to forgo something they clearly want, lenders not only provide a valuable service to borrowers, but to society. Given the mess in which we now find ourselves, due to the bad loans made during the real estate bubble, this lesson should have been well learned. Unfortunately it hasn’t, as the same dynamic is now playing out on a much larger scale.

Faced with a prospect of downgrading its lifestyle, the U.S. government is instead borrowing trillions of dollars to artificially inflate our deflating bubble economy. The money is being used to both expand the size of government and finance additional consumer spending. Given our financial position, this is the exact opposite of what we should be doing.

Our global creditors are now making the same mistakes made by subprime mortgage lenders. They are loaning us money that we will never be able to repay. In the process, they are enabling the largest expansion in the size of our government since the New Deal and crippling an economy already suffering from excess consumption.

Although it may sound harsh, it would be far better for all involved if our foreign friends simply cut us off. Since their loans are merely fueling the growth of our government and artificially pumping up consumer spending, their savings will not only be lost but their sacrifice will severely exacerbate our problems as well.

Just as homebuyers did earlier in this decade, the U.S. government will borrow as much money as the world is foolish enough to lend, and it will use those funds to smother the life out of our economy. At this point government is growing like a cancer, feeding mainly off the funds it borrows from abroad. In the process, it is placing a horrific debt burden on its people, committing them to either a lifetime of crippling interest payments or run-away inflation.

There is nothing inherently wrong with foreign lending. If funding were directed toward private business to enable capital investments, the loans would not only benefit lenders, but they would benefit our nation as well. The funds would fortify our industrial base and provide the necessary foundation upon which to rebuild a viable economy.

If foreigners were to cut us off, there would be some immediate pain, but tough love is exactly what we need right now. Forcing Americans to live within their means, particularly the U.S. government, will be just as beneficial to the long-term health of our economy as similar restraint would have been had it been exercised by mortgage lenders. It’s too bad so few of us seem capable of making this connection, or learning anything from the mistakes of the past – even when the ink in the history books has barely dried.

Mr. Schiff is president of Euro Pacific Capital and author of "The Little Book of Bull Moves in Bear Markets" (Wiley, 2008).


To view additional commentary, click here.

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Re: Daily Digest - Feb 20

Has anyone seen this yet? 

Gone in 60 Days: Citi and Bank of America Won’t Live to See May

http://www.chartingstocks.net/2009/02/gone-in-60-days-citi-and-bank-of-america-wont-live-to-see-may/

Citigroup (C) and Bank of America (BAC) won’t live to see May. The government will take them over within the next 60 days. The announcement may come as soon as tomorrow evening.

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Re: Daily Digest - Feb 20

 http://finance.yahoo.com/tech-ticker/article/187534/Get-Ready-for-Mass-Retail-Closings?tickers=sks,^gspc,jwn,tif,zlc 

Quote:

Get Ready for Mass Retail Closings

Posted Feb 19, 2009 11:58am EST by Tech Ticker in Investing, Products and Trends, Recession

About 220,000 stores may close this year in America, says our guest, retail consultant Howard Davidowitz of Davidowitz & Associates. As more Americans save and spend less, it's clear there's too much retail space. Just visit Web site deadmalls.com and track retail's growing body count. And luxury retailers? They're on "life support," Davidowitz says. 

Among the brandname stores Davidowitz says are in trouble:

  • Nordstrom
  • Neiman Marcus
  • Tiffany
  • Jeweler Zale Corp.
  • Saks
  • J.C. Penney
  • Sears

Plus, earlier we discussed:

 http://www.salon.com/wires/ap/world/2009/02/20/D96FB62O0_eu_latvia_government_resigns/

Quote:

Latvia's government resigns amid economic crisis

Feb 20th, 2009 | RIGA, Latvia -- Latvia's center-right coalition government resigned Friday after weeks of instability brought on by the country's economic collapse.

President Valdis Zatlers said he accepted the resignation of Prime Minister Ivars Godmanis and his administration, which had been in power since December 2007. Zatlers said he would begin talks with party leaders Monday to find a new candidate for prime minister.

Earlier Friday, the two largest parties in the ruling coalition parties had urged Godmanis to step down.

Godmanis blamed those parties -- the People's Party, and the Greens and Farmers Union -- for the government's collapse, particularly at a time when Latvia must carry out tough economic reforms to get a rescue package from international creditors.

"I am ready to continue working, but I think that responsibility for the consequences created by this government's resignation must be taken by those parties that overturned the government," Godmanis told reporters.

International lenders, including the EU, the International Monetary Fund and Nordic countries, have pledged euro7.5 billion (US$9.5 billion) to help the Baltic country recover from its economic predicament.

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Re: Daily Digest - Feb 20

 

Best as it ever was, Inflation with style Cool Take each day one day at a time. Just remember WHO put us HERE "Government" and when all is put in to perspective why would you trust them. Those meddling incompetent over absorbed egomaniacs.  

 

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Re: Daily Digest - Feb 20

Another government falls, this time Latvia:

http://www.reuters.com/article/worldNews/idUSTRE51J4G920090220

On a personal note, I happened to be in the capital Riga last September and was just amazed at the number of expensive cars and suv's I saw on the road. When I asked someone in Riga, an American ex-pat, on how the people coming off of communism just 10 years ago could possibly afford so many expensive cars, he told me it was being done the American way, the banks were giving out 10 to 15 year car loans. It's sad, plain and simple.

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Re: Daily Digest - Feb 20

Court's 'rocket docket' blasts through foreclosures

Quote:

FORT MYERS - Hoping to save her house, Saundra Hill Scott
arrived at the county courthouse clutching dog-eared mortgage bills and
letters from her lender.

She need not have bothered. The foreclosure hearing lasted less than
20 seconds, with Judge John Carlin asking her two questions: Are you
current on your mortgage and are you living in the home? She answered
no and yes and then offered to show him her paperwork.

"I don't
need to see that. That's between you and the bank," he said as he gave
Hill Scott, her husband and three grandchildren 60 days to work out a
deal with their lender or vacate their three-bedroom house.

 

http://www.heraldtribune.com/article/20090219/ARTICLE/902190341/2055/NEW...

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Re: Daily Digest - Feb 20

It's sad that people can't see that "downgrading" our lifestyle is the only way to get out of this mess? I don't understand why anybody is entitled to live in a mansion or townhouse they couldn't afford in the first place. People have been losing their jobs in this world forever and when that happens and when you're broke, you do what has always been done and downsize. Sell your car, sell your house, or whatever you have to do, move into a smaller house, and cut back on luxuries. Why isn't that being encouraged, instead of the idea that you are entitled to stay in your huge home that you couldn't afford in the first place, and now everybody else has to pay for you to stay there?

 I guess it's because the minute "WE" have to downgrade, then we will call for the government to downgrade also and they'll have to give up their expensive wars and empire building around the world and pork barrel. 

 

It's like they're keeping us irresponsible so we won't notice their irresponsibility

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Prelude to a kiss-of-death

Commentary

7:29 AM, 20 Feb 2009

Alan
Kohler

Prelude
to a kiss-of-death

http://www.businessspectator.com.au/bs.nsf/Article/Prelude-to-a-kiss-of-death-$pd20090220-PERQS?OpenDocument&src=ei

 
The
humiliation of the US Securities and Exchange Commission over Bernard Madoff and Sir Allen Stanford, and President Obama’s
$US275 billion mortgage bailout plan are early wake-up calls for Australia.

There are big
differences between Australia and the US, but they shouldn’t breed
complacency.

It’s
likely that Australia’s hard landing has merely been postponed, not
cancelled. Even if, by some miracle, Australia can actually escape the global
meltdown that is now evident, should Australia’s policy-makers assume
that this country will somehow muddle through (as opposed to asserting that for
political purposes)?

From what we
are now witnessing in the news out of Japan and Europe, including Russia, as
well as the US, the world is experiencing an economic catastrophe far beyond
anything imagined even a few months ago. The idea that Australia can avoid a
painful recession is a delusion.

It is
imperative that Australia’s economic and securities policy-makers now
establish a disaster plan, just like the police forces did with the threat of
terrorism. The government and the Australian Securities and Investments
Commission have been given some precious breathing space, which is quickly
running out. It should be used urgently.

In the US, it
has been discovered that the SEC can’t pick up Ponzi
schemes. Madoff and Stanford ran obvious ones: they
were one-man bands; they were hedge funds without hedge fund fees; their
returns were suspiciously consistent – in 1995 and 1996, for example, the
returns were identical – 15.71 per cent – and so on.

Are there none
of these in Australia? Well, yes, there was Chartwell in Geelong, which has
caused so much misery in a town that can least afford it.

Storm Financial
in Townsville was not so much a Ponzi scheme, where
new money finances the returns on old money, as a scandalous partnership
between spivs and a bank, that should have known better, to place ordinary
people in harm’s way.

ASIC should
urgently audit Australia’s investment schemes and look for the warning
signs that have been highlighted by the Madoff and
Stanford debacles, if only for its own sake. The credibility and morale of the
SEC has been severely damaged by its failure to act early against those two
charlatans.

Australia has
an appalling system for managing savings in this country, in which financial
salespeople are allowed to masquerade as advisors and receive large commissions
for selling on “investment products”, which in turn are allowed to
charge high, unregulated fees. It is a disaster waiting to happen.

And the Rudd
government should not simply assume that Australia will escape a significant
rise in mortgage defaults.

Yes, there are
two big differences: Australia’s banks are well capitalised and, unlike
in the US, mortgage interest rates have fallen sharply with the reduction in
the cash rate.

But
unemployment here is about to rise sharply and house prices are still too high
relative to income (three times average income versus a long-term figure of
less than one).

The US
government has now been forced to use taxpayers’ money to subsidise the
modification of home loans (that is, reduce repayments in an effort to cut
foreclosures).

The plan is a
vast experiment in moral hazard (borrowers who took on too much debt are just
being let off the hook) and it may not work anyway because ownership of the
loans is so widely dispersed through mortgage securitisation.

But what is
Kevin Rudd’s plan? Hope for the best?

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Gold Tops $1,000

Gold Tops $1,000, Highest Since March, as Global Equities Slide
By Nicholas Larkin and Pham-Duy Nguyen

Feb. 20 (Bloomberg) -- Gold surpassed $1,000 an ounce in New York
for the first time in almost a year as investors, hurt by plunging
stocks and a deepening recession, sought to protect their wealth.

Gold futures for April delivery rose $25.70, or 2.6 percent, to
$1,002.20 an ounce on the New York Mercantile Exchange’s Comex
division. Earlier the price touched $1,007.70, the highest since March
18. Gold, the only metal to advance in 2008, has rallied annually since
2000 and is up 13 percent this year.

Global stocks extended an eight-session slide, erasing
54 percent of their market value since the start of last year on
concern that the economic slump may worsen and wipe out corporate
earnings. Governments are lowering interest
rates and spending trillions of dollars to combat the recession,
spurring investors to buy bullion as a hedge against inflation.
Demand has pushed gold holdings in exchange-traded funds to records.

“There’s a general fear of chaos in the financial system that’s weighing on markets across the globe,” said William O’Neill,
partner at Logic Advisors in Upper Saddle River, New Jersey. “This is a
perfect storm for gold and its flight-to- quality characteristic is
coming through.”

Gold last topped $1,000 in March as interest-rate cuts by the
Federal Reserve propelled the dollar to an all-time low against the
euro in July. The metal reached a record $1,033.90 on March 17 before
retreating to as low as $681 by October.

Analysts say the rally may continue as investors lose confidence in financial assets.

Stocks and bonds have trailed gold this year. The Standard &
Poor’s 500 Index of equities has declined 15 percent and the benchmark
10-year U.S. Treasury has returned 0.23 percent.

‘Fragile’ Financial Situation

“The financial situation remains extremely fragile and gold seems to be the only safe haven,” said Ron Goodis,
retail trading director at Equidex Brokerage Group Inc. in Closter, New
Jersey. “Currencies are losing value and holders of currencies are
losing confidence. Gold may break through $1,000 and not look back.”

“One camp of investors is buying gold because of fear the fiscal
stimulus packages are insufficient to bring the economy out of
recession,” said Peter Fertig,
owner of Quantitative Commodity Research Ltd. in Hainburg, Germany.
“The other camp fears the stimulus packages will lead to inflation.”

The U.S. government has committed more than $9.7 trillion to resolve the economic crisis.

Benchmark interest rates in Japan and the U.S. are near zero while
the Bank of England has slashed its main lending rate to 1 percent, the
lowest ever.

Low-Rate Policies

“Given the zero interest-rate policy being pursued by central banks
around the world, the incentive to hold national currency has been
taken away,” said James Turk, founder of GoldMoney.com. The company had $548 million of gold and silver in storage for investors at the end of January.

Gold above $1,000 may attract more investors seeking to take
advantage of the longest streak of annual advances in the metal’s price
in 60 years. Assets in some of the industry’s largest exchange-traded funds are at all-time highs.

Holdings in ETF Securities Ltd.’s gold exchange-traded commodities rose to a record 7 million ounces as of Feb. 13. The SPDR Gold Trust, the biggest ETF backed by the metal, expanded to 1,029 metric tons yesterday.

Investment demand for bullion, including coins and bars, almost
tripled to 399 tons in the fourth quarter, as total demand climbed 26
percent to 1,036.5 tons, the London-based World Gold Council said on Feb. 18. Retail and professional investors will continue to seek gold’s stability, said Aram Shishmanian, the council’s chief executive officer.

[ ... ] 

Gold’s all-time inflation adjusted
record is $2,224 an ounce on Jan. 21, 1980, according to a calculator
on the Web site of the Federal Reserve Bank of Minneapolis.

“From an inflation-weighted basis, gold is still pretty cheap,” O’Neill of Logic Advisors said.

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Re: Daily Digest - Feb 20


It's sad that people can't see that "downgrading" our lifestyle is the only way to get out of this mess?

AND just how do you reckon everybody downgradse all at once?  If YOU own a Mc Mansion you want to get rid of, who will you sell it to?  And at how big a loss?  Then when we all live in nice cosy little houses, what happens to all the empty McMansions?

I don't understand why anybody is entitled to live in a mansion or townhouse they couldn't afford in the first place.

NEITHER do I, but you know what....  ever heard of MARKETING?  Those poor bastards were sold a pup...  The whole concept was SOLD to them.... 

 People have been losing their jobs in this world forever and when that
happens and when you're broke, you do what has always been done and
downsize. Sell your car, sell your house, or whatever you have to do

WHO TO?

I guess it's because the minute "WE" have to downgrade, then we will
call for the government to downgrade also and they'll have to give up
their expensive wars and empire building around the world and pork
barrel. 

AND destroy the growth economy?

You see, you can't have your cake and eat it  too.  I'm surprised anyone who has (we assume) done the CC doesn't understand this.....

This is all about growth.  Even houses grew in size EXPONENTIALLY....  now it's all blowing up in our faces.

We need a new world order.  A sustainable one.  No growth, no usuary, no banks.  Oh and no advertising agencies either.

Mike 

 

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joemanc
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Joined: Aug 16 2008
Posts: 834
Re: Daily Digest - Feb 20

Rick Santelli responds to the White House on CNBC...this is great!

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dickey45
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Posts: 77
Re: Daily Digest - Feb 20

"I don't understand why anybody is entitled to live in a mansion or townhouse they couldn't afford in the first place."

Could it be that that was all that was available to buy?  In 2002 I went looking in my town for a house.  I wanted 700-1000 sqft.  I noticed the small homes were all the really old, uninsulated, and generally in poor condition.  So I went looking for a small lot.  No luck, only available lots were in housing developments that had CCR that required a garage and a minimum footprint of 1500sqft.

I asked realtors about this and they said it simply isn't worth making something that small.

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scotthw
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Posts: 59
Re: Daily Digest - Feb 20
jeb781 wrote:

Has anyone seen this yet? 

Gone in 60 Days: Citi and Bank of America Won’t Live to See May

http://www.chartingstocks.net/2009/02/gone-in-60-days-citi-and-bank-of-america-wont-live-to-see-may/

Citigroup (C) and Bank of America (BAC) won’t live to see May. The government will take them over within the next 60 days. The announcement may come as soon as tomorrow evening.

 

From that article:

"We don’t watch the news for the information, we watch if for THE LIE. "

I LOVE IT! ... so much I've added it to my signature.

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Soulmaster
Status: Bronze Member (Offline)
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Posts: 27
Re: Daily Digest - Feb 20
dickey45 wrote:

I asked realtors about this and they said it simply isn't worth making something that small.

 

 

This brings up a very good point.  Before I went back to school, I briefly worked in construction and I never worked on what I considered a modestly sized house.  In fact, after reading your comment, I can remember that I worked on a handful houses that were to cost right around $1m--I remember them so well because I could never afford one!--Anyway, this was only 5 or so years ago and these houses are all in areas where the income is higher but not that high.

 

I guess my point is that there do seem to be a lot of expensive houses located in areas where the median income is not high enough to support that standard of living.  Does that mean that there are too many bigger homes?  Maybe...but couldn't it also mean that these large, cheaply built homes are just way way overpriced for the income levels of the 90% of the population who might want to live in them?

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Soulmaster
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Posts: 27
Re: Daily Digest - Feb 20

...that and we do have that 'bigger is better' mentality in this country...

dickey45's picture
dickey45
Status: Bronze Member (Offline)
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Posts: 77
Re: Daily Digest - Feb 20

"but couldn't it also mean that these large, cheaply built homes are
just way way overpriced for the income levels of the 90% of the
population who might want to live in them"

Absolutely, right on, and I suppose that is why we are partially in this trouble to begin with.  They have been building 1000-1200 sqft homes in my area but they are a garage with a house on top.  Not my idea of a dwelling.

We currently have plans to build a 36x24 house right now and I consider that huge.  Granted it will have a full basement and full loft for "storage", it will be very useable, less on taxes, and easier to heat and maintain (it is literally a rectangular house).

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Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Daily Digest - Feb 20

Hello Dickey45:

We just built, ourselves, a 30'x26' home, all ourselves. I have 2 regrets:

 

  1. I learned of Earth Rammed homes after we built
  2. It has 30 steps/stairs a split level
Good luck with your project, we have 1800 sq ft with stair well, came down from 4,000 sq ft. Feels fine, glad to shed a lot of junk. Take care

 

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