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Daily Digest - Jan 28

Monday, January 26, 2009, 10:50 PM
  • World economy leads to currency instability and strong gold
  • In U.S., the new frugality has unintended consequences (Hat Tip CM)
  • The Great Experiment (Hat Tip CM)
  • Dr. Doom Video, 6 Million More Jobs Will Be Lost In 2009
  • S&P/Case-Shiller Home Price Index Declines by 18.2% in November 
  • Video Housing (Hat Tip VanityFox451)
  • Commentary: How to rescue the bank bailout (Hat Tip Christopher Peters)
  • New York Fed Names William C. Dudley President 
  • Forecasters see historic drop in retail sales (Hat Tip CM)
  • Consumer Confidence (Chart)
  • Chief justice: Courts must stay in session, don't furlough employees (Hat Tip CM)
  • Harvard, Dartmouth Losses May Widen on Private Equity(Hat Tip CM)
  • Credit default risk down, but still high (Chart in article)
  • As Home Prices Drop, People's "Savings" Go Negative  
  • WSJ Video, Worse Than Expected - Recovery and Job Cuts

Economy 

World economy leads to currency instability and strong gold 

The fast deteriorating world economy is putting pressure on currencies. Fast rising unemployment is going to cause social strife, and gold is reacting accordingly. 

World unemployment rising fast

US unemployment is publicly stated to be 7%. But those numbers are understated. If you add the people who stopped looking, and the part timers who want full time, that number roughly doubles. ShadowStats.com talks about that. 14% unemployment is over 1 in 8 people. You can basically apply that rate to the US and Europe as well.

Now, we estimate the US will see a minimum of 3 million more jobs lost in 09, probably a lot more, maybe 4 to 5 million. If we take the number of people working in the US (roughly 130 million) 3 million more lost jobs will increase unemployment by roughly 2 to 3%. That would bring official US unemployment to 10%, and the unofficial rate to about 20% by the end of 09.

That is depression level unemployment.

The rest of the world is faring as badly. GDP in Germany and the UK declined at a 6% rate in the last months of 2008. GDP in the US is expected to decline 5 to 6% in the last months of 2008. China has lost over 10 million jobs in 2008 and is seeing riots in the big manufacturing cities, something that China is very worried about. 100,000 factories were closed in China in 2008.

Japan saw an astonishing drop of 35% in exports (by some measures) in later 08. China stated their ‘growth' slowed to 6.8% annualized, but I want to offer this proposition: that China actually saw zero growth in latter 08. Time will tell on that one, but it's no secret that China often understates bad economic data, and who doesn't?

The EU is having fits with a debt bubble implosion, and the weaker economies like Spain, France, and particularly the Eastern EU members are either having riots now or are on the verge of them.

How well will the world handle a depression today? 

In U.S., the new frugality has unintended consequences (Hat Tip CM) 

NEW YORK: A few months ago, as her family's income fell, Laura French Spada, a real estate agent in Glen Rock, New Jersey, began dyeing her own hair and washing the family cars herself. Her husband, Mark, started learning how to do his own electrical repairs. 

Susan Todoroff, a personal trainer in Ann Arbor, Michigan, has begun brewing her own espressos, cutting her own hair and cleaning her own house. And Tamar Zaidenweber, a health care market researcher in New York, is spending more time walking her dog instead of taking it to day care each week.

All of these consumers could praise themselves for their newfound frugality in the midst of an economic downturn. But every step they take toward self-reliance - each shrub they prune themselves, each cupcake they bake from scratch - hurts the individuals and small businesses that have long provided these services.

These businesses are run in storefronts on urban streets and in suburban strip malls, or sometimes just out of pickup trucks. Responsible for roughly 18 million jobs in the United States, according to 2006 Census Bureau data, they have long been seen as engines of the country's economic growth. Yet after years of explosive expansion, beauty salons, dry cleaners, landscapers and restaurants around the United States saw sales slow or even decline in the final months of 2008.

Their services are suddenly, and painfully, being perceived as nonessential.

The question now for these businesses is whether dwindling demand for those services will steady or, eventually, lead them to shutter. And the question now for individuals is whether their new mood of self-reliance is temporary or permanent.

As family incomes rose over the past 50 years, more and more members of the middle class could afford to outsource their household chores. No longer was it just the very rich who had "servants," said Jan de Vries, an economic historian at the University of California at Berkeley. "Household members, particularly women, have been working more in the market," said de Vries, who wrote "Industrious Revolution: Consumer Behavior and the Household Economy, 1650 to the Present" (Cambridge University Press, 2008). "They have had less time and higher money income, and they have been spending a lot of that money income on services they once provided themselves." 

The Great Experiment (Hat Tip CM) 

There is a reason I call this column Outside the Box. I try to get material that forces us to think outside our normal comfort zones and challenges our common assumptions. And this week's letter from Hoisington Investment Management Company does just that. 

Let me give you two quotes to pique your interest: "Monetary policy works by creating the environment for a renewed borrowing and lending cycle. This cycle would require that the debt to GDP ratio, which is already at a record level, grow even higher. Would such an outcome really be that desirable when the controlling problem of the U.S. economy is too much improperly financed debt? If the Fed were able to engender an increase in the debt to GDP ratio, this might merely serve to postpone the reckoning of the current debt levels while laying the foundation for an even more vicious unwinding down the road."

And: "The only really viable option for federal stimulus is a permanent reduction in the marginal tax rates, as highlighted in the research of Christina Romer, incoming Chair of the Council of Economic Advisors. This would have the benefit of raising after tax rates of return, but the drawback in the short run of still having to be financed by an increased budget deficit. Over time, a massive reduction in marginal tax rates would be beneficial, but the operative word is time. Refunds, or transitory tax relief, will have no better results in stemming the recessionary tide in 2009 and 2010 than it did in the spring of 2008."

Van Hoisington and Dr. Lacy Hunt give us a seminar on the current bailout programs that is not the usual analysis we see in mainstream media. This week's letter requires you to think, but it will be worth the effort.

Hoisington Investment Management Company (www.hoisingtonmgt.com) is a registered investment advisor specializing in fixed income portfolios for large institutional clients. Located in Austin, Texas, the firm has over $4-billion under management, composed of corporate and public funds, foundations, endowments, Taft-Hartley funds, and insurance companies. And now let's jump right in to the essay. 

Dr. Doom Video, 6 Million More Jobs Will Be Lost In 2009

http://www.youtube.com/watch?v=mG4g04J-xYQ&eurl=player_embedded 

S&P/Case-Shiller Home Price Index Declines by 18.2% in November  

The S&P Case-Shiller home price index fell in line with expectations in November as the 20-city composite index posted a decline of 18.18% to a reading of 154.59. Economists had forecast a 18.40% drop. 

The three-month annualized rate of decline was 22.29% in November, compared to the 18.39% rate in October and the 17.40% reading in September.

The U.S. Composite-20 Index fell 2.23% in the month, with Tampa leading the way with a 2.77% decline, followed by Atlanta, which recorded a 2.66% decline.

In annual terms, Miami reported a decline of 28.73%, while prices in Los Angeles are down 26.86% compared to a year ago. 

S&P/Case-Shiller Home Price Indices (Chart)

Video Housing (Hat Tip VanityFox451)

Commentary: How to rescue the bank bailout (Hat Tip Christopher Peters) 

Editor's note: Joseph E. Stiglitz, professor at Columbia University, was awarded the Nobel Memorial Prize in Economic Sciences in 2001 for his work on the economics of information. Stiglitz was chairman of the Council of Economic Advisers during the Clinton administration before joining the World Bank as chief economist. 

Economist Joseph E. Stiglitz says the strategy followed by the architects of the bank bailout was flawed.

(CNN) -- America's recession is moving into its second year, with the situation only worsening.

The hope that President Obama will be able to get us out of the mess is tempered by the reality that throwing hundreds of billions of dollars at the banks has failed to restore them to health, or even to resuscitate the flow of lending.

Every day brings further evidence that the losses are greater than had been expected and more and more money will be required.

The question is at last being raised: Perhaps the entire strategy is flawed? Perhaps what is needed is a fundamental rethinking. The Paulson-Bernanke-Geithner strategy was based on the realization that maintaining the flow of credit was essential for the economy. But it was also based on a failure to grasp some of the fundamental changes in our financial sector since the Great Depression, and even in the last two decades.

For a while, there was hope that simply lowering interest rates enough, flooding the economy with money, would suffice; but three quarters of a century ago, Keynes explained why, in a downturn such as this, monetary policy is likely to be ineffective. It is like pushing on a string.

Then there was the hope that if the government stood ready to help the banks with enough money -- and enough was a lot -- confidence would be restored, and with the restoration of confidence, asset prices would increase and lending would be restored.

Remarkably, Bush administration Treasury Secretary Henry Paulson and company simply didn't understand that the banks had made bad loans and engaged in reckless gambling. There had been a bubble, and the bubble had broken. No amount of talking would change these realities.

It soon became clear that just saying that we were ready to spend the money would not suffice. We actually had to get it into the banks. The question was how. At first, the architects of the bailout argued (with complete and utter confidence) that the best way to do this was buying the toxic assets (those in the financial market didn't like the pejorative term, so they used the term "troubled assets") -- the assets that no one in the private sector would touch with a 10-foot pole.

It should have been obvious that this could not be done in a quick way; it took a few weeks for this crushing reality to dawn on them. Besides, there was a fundamental problem: how to value the assets. And if we valued them correctly, it was clear that there would still be a big hole in banks' balance sheets, impeding their ability to lend.

Then came the idea of equity injection, without strings, so that as we poured money into the banks, they poured out money, to their executives in the form of bonuses, to their shareholders in the form of dividends.

Some of what they had left over they used to buy other banks -- to pursue strategic goals for which they could not have found private finance. The last thing in their mind was to restart lending.

The underlying problem is simple: Even in the heyday of finance, there was a huge gap between private rewards and social returns. The bank managers have taken home huge paychecks, even though, over the past five years, the net profits of many of the banks have (in total) been negative.

And the social returns have even been less -- the financial sector is supposed to allocate capital and manage risk, and it did neither well. Our economy is paying the price for these failures -- to the tune of hundreds of billions of dollars. 

New York Fed Names William C. Dudley President 

NEW YORK-William C. Dudley was named today to serve as President and Chief Executive Officer of the Federal Reserve Bank of New York. His appointment by the Board of Directors of the New York Fed, succeeding Timothy F. Geithner who was sworn in as Secretary of the Treasury yesterday, was approved by the Federal Reserve Board of Governors. 

Mr. Dudley, 56, was executive vice president of the Markets Group at the Federal Reserve Bank of New York. He was also the manager of the System Open Market Account for the Federal Open Market Committee. He oversaw domestic open market and foreign exchange trading operations and the provisions of account services to foreign central banks. Dudley expanded the Federal Reserve's contacts with the buy-side investment community and through the Bank's Treasury Market Practices Group was active in pushing forward the implementation of new best practices.

Prior to joining the Bank in January 2007, Mr. Dudley was a partner and managing director at Goldman, Sachs & Company and served for a decade as the firm's chief U.S. economist. At Goldman he held a variety of positions including senior foreign exchange economist. Prior to joining Goldman, his work focused on regulatory and payments issues as a vice president at Morgan Guaranty Trust Company and as an economist in the financial studies department at the Board of Governors of the Federal Reserve System. He has been a member of the Technical Consultants group to the Congressional Budget Office and a member of the Economic Advisory Committee to the New York Fed.

Forecasters see historic drop in retail sales (Hat Tip CM) 

NEW YORK - The nation's retailers had a rough 2008, but this year will likely be even scarier, according to a sales forecast released Tuesday from the world's largest retail trade organization. 

Retailers are expected to record a 0.5 percent drop in revenue in 2009, the first annual decline in three decades and perhaps much longer, according to a National Retail Federation forecast released Tuesday.

That's well below the modest 1.4 percent gain they recorded for 2008.

Massive layoffs, slumping home prices and tight credit are keeping shoppers tightfisted.

The NRF estimated that retail sales for the first half of 2009 will fall 2.5 percent. Then, they'll show a 1.1 percent decline in the third quarter and rebound to a 3.6 percent increase in the fourth quarter, aided by an anticipated government economic stimulus.

Consumer Confidence (Chart)

Chief justice: Courts must stay in session, don't furlough employees (Hat Tip CM) 

Utah Supreme Court Chief Justice Christine Durham told lawmakers Monday a proposed budget cut would force her to furlough all court employees for five workweeks -- a move that could mean closing the courts one day a week. 

And that's just for the current fiscal year.

If legislators press ahead with a 15 percent cut for 2010, Durham said, 283 court employees would be laid off and some courthouses would be permanently closed.

"Let me be clear: This is not the way we as a state want to run our courts; this is not what Utah's citizens are entitled to," Durham told a joint session on Capitol Hill, devoting her entire annual State of the Judiciary address to budget woes.State courts have been asked to weather a 7½ percent, or $8 million, budget cut before the end of June. The only way to accomplish the reduction, Durham said, would be to furlough "every one of our thousand employees for 26 days before June 30th." 

Harvard, Dartmouth Losses May Widen on Private Equity(Hat Tip CM) 

Jan. 27 (Bloomberg) -- North American college endowments lost an average of 22.5 percent on investments from July to November and the declines probably will get bigger after returns on private equity and real estate are calculated.

The funds shed $94.5 billion in asset value in the five months ended Nov. 30, according to a study released today by Commonfund and the National Association of College and University Business Officers. In the same period, the Standard & Poor's 500 Index fell 29 percent, including reinvested dividends, while non- U.S. stocks dropped 37 percent.

Harvard University, whose $28.8 billion endowment is the biggest in higher education, and Ivy League rival Dartmouth College have yet to disclose the value of alternative investments such as buyout funds and property, which take longer to price because they aren't traded on exchanges. These assets probably dragged down returns further, meaning less income for schools that are already cutting budgets.

"It's the real unknown," John Griswold, executive director of the Commonfund Institute, said in an interview. The Wilton, Connecticut-based center is affiliated with Commonfund, a manager of more than $25 billion, and seeks to improve investment returns by nonprofit organizations. "It's as bad as it gets."

 

CREDIT DEFAULT RISK DOWN BUT STILL HIGH (Chart in article)

Below we highlight a chart of an index that measures the default risk of investment grade credit in the US. Throughout the credit crisis, default risk has risen sharply, although it has ticked lower since peaking in December. Any decline in default risk is a good sign, but it needs to fall much more before anyone can make the claim that things are "settling down." As shown, the index has still not broken below the bottom of its uptrend line that formed back in April 2008. 

As Home Prices Drop, People's "Savings" Go Negative 

As Home Prices Drop, People's "Savings" Go Negative 

Home prices fell again in November. Like everything else reported about the economy recently, the drop was at a "record pace"

In the case of housing, The Standard & Poor's/Case-Shiller 20-city housing index plunged by a record 18.2% from November 2007

The housing catastrophe has gone beyond effecting the ability of people to sell homes. With each month that passes it further robs consumers of their sense of well-being. A homeowner with a $300,000 house and $150,000 mortgage might spend some money on the goods and services that kept the economy running. The easy take on the practice is people got into credit trouble by doing just that and tapping home equity. The practice took consumer debt to an unreasonable level and the recession had it source.

The more complex and more troubling part about the numbers is that even if people do begin to save money, they cannot fill up the holes that falling home values create. Economists have said that any money the average American earnings beyond his most basic expenses goes to savings or debt repayment. Once Americans have saved enough money, they will feel safe beginning to spend again.

If home prices continue to drop, people will never be able to save enough, at least not until the economy bottoms and home prices become more stable.

Falling home values become a geometric curse on consumer activity People with mortgages can now see the debt they have and the debt they can imagine. The debt they can imagine comes due the day that they lose a job or default on a mortgage.

For years the home was a wallet. It has moved from that status to becoming a new liability which gives millions of Americans night sweats. 

 
WSJ Video, Worse Than Expected - Recovery and Job Cuts

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33 Comments

Davos's picture
Davos
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Re: Daily Digest - Jan 28

2009-cb-0126200828.gif

Ivo's picture
Ivo
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Re: Daily Digest - Jan 28

Hi everyone,

I've translated an article in today's Telegraaf, the Netherlands' largest newspaper: http://www.telegraaf.nl/dft/nieuws_dft/3110303/__Autobedrijf_Kroymans_stopt_met_Hummer__.html?p=7,2

 (If you'd like to check it you could of course run it through google translator.)

Car Company Kroymans quits Hummer

Amsterdam- Car importer and distributor Kroymans Corporation will stop importing General Motors brands Hummer, Cadillac and Corvette. Due to difficult market conditions, the Hilversum based company is forced to change it's strategy.

Activities will gradually be transferred to the manufacturer. "During this transition it's important that future and current customers of Cadillac, Corvette and Hummer won't be inconvenienced by this, Kroymans said wednesday.

The company, which belongs to the top ten of European car companies, mainly sells car brands like Nissan, Volvo, Opel, Suzuki, Ford and Ferrari in The Netherlands, Belgium and parts of Germany. The firm employs about four thousand people and imports cars in 27 European countries. In The Netherlands it mainly handles Saab, Kia, Alfa Romeo and Jaguar.

 

gregroberts's picture
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Re: Daily Digest - Jan 28

Ron Paul slaying the Keynesians,

Greg

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mainecooncat
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Re: Daily Digest - Jan 28

I loathe the phrase "backward looking" when it's used pejoratively. Imagine if this line of thinking would work in a modern courtroom: "Well, judge, I know I broke into that convenient store and stole $2,000, but, come on, do you really want to be backward looking." It just makes me laugh aloud.

When someone like Mika Brzeznski here uses the phrase what I'm hearing her say is that she really has no interest in history or understanding how complex systems work -- and therefore no sincere interest in knowing how to commence real change -- when, in actuality, this is the beginning of the process forward.

If a math student, upon completing a long equation, comes to an answer that is way off the mark the teacher is going to say let's go back to the beginning, go through each step slowly, and see where mistakes were made. This process in and of itself is illuminating but will also end with the student better understanding the process and actually having a shot at an intelligent way forward. If someone wants to call this process the "blame game" or some other nonsensical cliche, so be it.

Because the mainstream economists, journalists, and investors are fearful of knowledge and self-reflection they more or less resemble a bunch of cockroaches scrambling around after you've lifted up an old box and shined a flashlight upon them.

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Re: Daily Digest - Jan 28

Good one Greg

Poor Ron. They always give him such a hard time. They just don't understand, much like our north American health care and correctional systems, that you have to also look at the causes in addition to treating the symptoms.

I wonder if any of the hoopleheads will ever realize that there are going to have to be losses and some pain. Striving to get back where we were (growth) will only lead back to where we are (shrinking).

Mike Pilat's picture
Mike Pilat
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Re: Daily Digest - Jan 28

Saw that video as well, Greg. Dr. Paul continues to speak the truth and I am slightly encouraged that he is at least getting a lot of air time lately.

Maincooncat: That's absolutely right. I've pretty much quit watching the entertainment news media a long time ago. I only watch for brief periods just to get a feel for the propaganda and stupidity that is being pumped out. It's prevented people from trusting themselves and their instincts, because we are taught that the government always knows what's best and that the "experts" appearing all over the media have a deep understanding not only of what is happening, but what will happen. Interesting that all of this "forward looking" types have no concept of the foundational concepts and processes that got us to where we are now.

Mike

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Vanityfox451
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Re: Daily Digest - Jan 28

Hi Davos,

I had a pleasant surprise today when I found Chris Martenson being mentioned on Rob Hopkins Transition Culture Blog that I'm linking here :-

http://transitionculture.org/2009/01/28/the-crash-course-essential-viewing/

...It is yet another sign that Chris's message is getting out there!!Smile

Oh, thankyou for the 'Hat Tip'...

Hows the snow???

Take Care,

Paul

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Re: Daily Digest - Jan 28

That video is an amazing display of how media battering rams are used to try and beat down the truth. I could not help but notice the last statement of them pretending to understand and comprehend it all and then to repeat the fiction as though it were all encompassing? Thanks for the post, it is encouraging.

In the above article:

"The underlying problem is simple: Even in the heyday of finance, there
was a huge gap between private rewards and social returns. The bank
managers have taken home huge paychecks, even though, over the past
five years, the net profits of many of the banks have (in total) been
negative."

I agree that the underlying problem is simple, but the author does not reach deep enough and accurately identify the 'private rewards' or the parties that retain them. The usury system in place surely must predate the the late great united states? The so-called 'flow of capital' must have shifted into other hands as the old timers died off? 

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Re: Daily Digest - Jan 28

Jeez Greg,

I wrote my last message on this thread blind! As usual, Ron Paul talks total common sense but is sadly met with air-filled-talking-heads. I agree with you mike on your comment where you said," I only watch for brief periods just to get a feel for the propaganda and stupidity..." regarding mainstream media. I'd like a head count of those that feel 'Paul' is talking total common sense and, I bet it would be in the majority!!

Paul 

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Federal Reserve Now "Prepared" to Monetize Debt

"Fed Pledges to Use All Tools to Help Economy"

 http://news.yahoo.com/s/ap/20090128/ap_on_bi_ge/fed_interest_rates

Davos's picture
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Re: Daily Digest - Jan 28

Hello Paul:

Thanks, thawing out a little

DSCF4163.jpg 

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Re: Daily Digest - Jan 28

Banks Sitting On An Inventory Time Bomb

http://www.cnbc.com/id/28898377

 

Quote:

Apparently about 70 percent of foreclosures in its database have not
yet been listed on the MLS. I'm wondering why? Why are the banks
sitting on all these properties instead of listing them for sale?

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Re: Daily Digest - Jan 28

Davos - In regards to the weather, I heard people complaining today about the "atrocious" condition of the roads, that the roads weren't plowed, they weren't sanded, just unbelievable. These are the same people I worry about when the SHTF.

 

Take care,

Joe

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Mike Pilat
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Re: Daily Digest - Jan 28

Yep, Joe, me too!

Looks pretty beautiful to me in the Piedmont region! I'm in southern Indiana for work where we just got 10+ inches of snow and ice. It's the biggest storm they've seen in 10 years supposedly. No problems for me, the DC Metro area doesn't give me enough snow in my opinion!

 

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Re: Daily Digest - Jan 28

Here's another good article

 

World Demand collapsing

 

http://www.godlikeproductions.com/forum1/01/28/09/pg1

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Re: Federal Reserve Now "Prepared" to Monetize Debt

God help us....

Close the Feds.

 Sounds like a prayer...

Mike 

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Damnthematrix
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Re: Daily Digest - Jan 28

It's 106F in South Australia today...

Mike 

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Re: Daily Digest - Jan 28

I'm a big fan of Ron Paul as well as a majority of you guys, but to me his powerful message is delivered so weakly, its frustrating, a more powerful orator would be able to destroy those clowns with short, simple, memorable, powerful soundbites. If he just brought some brevity and a calmer speed of delivery into his speeches he would pack a whole lot more punch and knock those dumb suckers out.

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Re: Daily Digest - Jan 28
joemanc wrote:

Banks Sitting On An Inventory Time Bomb

http://www.cnbc.com/id/28898377

Quote:

Apparently about 70 percent of foreclosures in its database have not
yet been listed on the MLS. I'm wondering why? Why are the banks
sitting on all these properties instead of listing them for sale?

I was thinking about this the other day as well. I was also sensing another wave of foreclosures coming with all the recent layoffs. Just think of the ~82 000 jobs lost on Monday alone. I sense a snowball effect here.

Mike Pilat's picture
Mike Pilat
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Re: Daily Digest - Jan 28

Yeah bartt, I agree with you. Ron Paul is not an orator, he is an intellectual and perhaps one of the truly most insightful people in D.C. In a room full of highly educated people, he would impress them with his knowledge and debating skills.

Unfortunately, we live in an entertainment centered culture that prefers sound bites and one liners to academic rigor. It's a sad state of affairs, but I think that has to be recognized if the Campaign for Liberty is to succeed. The one C4L / Ron Pauler that comes closest to that seems to be Adam Kokesh, but he is a bit of a niche speaker and does not quite have enough influence (yet) to really sway people like Ron Paul could. I sincerely hope that someone else can pick up the torch soon because Ron Paul is not going to be able to do this forever.

Still, I find myself hard pressed to criticize Dr. Paul at all because he has had so much courage to stand alone and has tireless fought a battle with more energy at his age than most of the junior representatives. And the integrity of his message is second to none. He just wants liberty for us.

 

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Re: Daily Digest - Jan 28
Davos wrote:

Hello Paul:

Thanks, thawing out a little

 

This is beautiful!

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Re: Daily Digest - Jan 28
Quote:

In U.S., the new frugality has unintended consequences (Hat Tip CM) 

<snip/>

Their services are suddenly, and painfully, being perceived as nonessential.

<snip/>

I hope people's new frugality opens their eyes to realize there are so many things in life they don't need.

A natural correction. "Trimming the fat" as I've recently heard someone say. We just don't need all this crap.

Like after 9/11 all they want to tell you is -- keep on shoppin'! -- and everything will be just fine.

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caroline_culbert
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Re: Daily Digest - Jan 28
gregroberts wrote:

Ron Paul slaying the Keynesians,

Greg

These people run the news for a living but have no idea what's going on... Unbelievable!  It's as if Ron Paul is speaking in a foreign language (to them).  They are clueless and I don't think they understood anything Ron was talking about esp. after that moron talked about how he can get back to sipping drinks on the beach served to him by a robot.

caroline_culbert's picture
caroline_culbert
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Re: Daily Digest - Jan 28
Mike Pilat wrote:

Yeah bartt, I agree with you. Ron Paul is not an orator, he is an intellectual and perhaps one of the truly most insightful people in D.C. In a room full of highly educated people, he would impress them with his knowledge and debating skills.

I wish more people judged others by what they say and do rather than how they say and do.  We judge so many, including the president, upon the images we see and hear.  Obama is a very good-looking man and his voice and speeches are pleasant to the ear, but charisma is so important to people.  It's almost as if they get intoxicated by it.  I find it fascinating; but in this day and age (as I thought we were smarter than that) we should be listening to the argument and not the voice.  We should see the record (Ron's) and not his face (Obama's appealing image).  We should be reading the arguments rather than listening to how well it was spoken.  Most of America seems to do that which is exactly the opposite of objective reasoning.  It is no wonder why I still believe we are very unintelligent (& unwise).  It is no wonder why we allow the same mistakes to be made.  We, as humans, allow the same abusive person to beat us over and over again.  Maybe that is why I am a misanthrope. Embarassed

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Re: Daily Digest - Jan 28
Quote:

It's as if Ron Paul is speaking in a foreign language (to them).  They are clueless and I don't think they understood anything Ron was talking about esp. after that moron talked about how he can get back to sipping drinks on the beach served to him by a robot.

You couldn't be more right.

This guy is about as bright as a bag of hammers. Everything that's coming out of his mouth is hyperbole and rhetoric. Not a single thought did he produce.

Basically, just as George Orwell wrote in "1984";

Quote:

Sanity is not statistical

Being the last sane man doesn't make you the crazy one Ron. Stay strong.

"In reality". I love hearing him say that, because "reality today" is an oxymoron.

These people live in a self-perpetuated fantasy world where they're important.

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Re: Daily Digest - Jan 28
Aaron Moyer wrote:

These people live in a self-perpetuated fantasy world where they're important.

Exactly.

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Re: Daily Digest - Jan 28
caroline_culbert wrote:
Aaron Moyer wrote:

These people live in a self-perpetuated fantasy world where they're important.

Exactly.

It's sad, though.  Most of us, in the U.S., have been fluffed and pampered by our parents who were fluffed and pampered by their parents, and etc..  We have been told all our lives that we great at everything, we're the best, we're number one, we're wonderful regardless of how well we actually do.  We American have been coddled in every way, including, mentally.  We have this mentality that we are so important, individually.  "We" have a very high pedestal to come down from.

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Re: Daily Digest - Jan 28

Caroline said

"These people run the news for a living but have no idea what's going on... Unbelievable!  It's as if Ron Paul is speaking in a foreign language (to them).  They are clueless and I don't think they understood anything Ron was talking about esp. after that moron talked about how he can get back to sipping drinks on the beach served to him by a robot."

 

I think they know exactly what is going on.   

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Re: Daily Digest - Jan 28
castlewp wrote:

I think they know exactly what is going on.   

  

 

maybe they do... they're just trying to make RP look like an idiot?

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Is It Time to Bail Out of the US?

http://www.informationclearinghouse.info/article21867.htm

Is It Time to Bail Out of the US?

By Paul Craig Roberts

January 28, 2009 "Information Clearinghouse" -- California
State Controller John Chiang announced on January 26 that California’s
bills exceed its tax revenues and credit line and that the state is
going to print its own money known as IOUs. The template is already
designed.

Instead of receiving their state tax refunds in
dollars, California residents will receive IOUs. Student aid and
payments to disabled and needy will also come in the form of IOUs.
California is negotiating with banks to get them to accept the IOUs as
deposits.

California is often identified as the world’s eighth largest economy, and it is broke.

A
person might think that California’s plight would introduce some
realism into Washington, DC, but it has not. President Obama is taking
steps to intensify the war in Afghanistan and, perhaps, to expand it to
Pakistan.

Obama has retained the Republican warmongers in the
Pentagon, and the US continues to illegally bomb Pakistan and to murder
its civilians. At the World Economic Forum at Davos this week,
Pakistan’s prime minister, Y. R. Gilani, said that the American attacks
on Pakistan are counterproductive and done without Pakistan’s
permission. In an interview with CNN, Gilani said: “I want to put on
record that we do not have any agreement between the government of the
United States and the government of Pakistan.”

How long before Washington will be printing money?

On
January 28 Obama announced his $825 billion bailout plan. This comes on
top of President Bush’s $700 billion bailout of just a few months ago.

Obama says his plan will be more transparent than Bush’s and will do more good for the economy.

As
large as the bailouts are--a total of $1.5 trillion in four months--the
amount is small in relation to the reported size of troubled assets
that are in the tens of trillions of dollars. How do we know that by
June there won’t be another bailout, say $950 billion?

Where will the money come from?

Obama’s
bailout plan, added to the FY 2009 budget deficit he has inherited from
Bush, opens a gaping expenditure hole of about $3 trillion.
Who is going to purchase $3 trillion of US Treasury bonds?

Not
the US consumer. The consumer is out of work and out of money. Private
sector credit market debt is 174% of GDP. The personal savings rate is
2 percent. Ten percent of households are in foreclosure or arrears.
Household debt-service ratio is at an all-time high. Household net
worth has declined at a record rate. Housing inventories are at record
highs.

Not America’s foreign creditors. At best, the Chinese,
Japanese, and Saudis can recycle their trade surpluses with the US into
Treasury bonds, but the combined surplus does not approach the size of
the US budget deficit.

Perhaps another drop in the stock market will drive Americans’ remaining wealth into “safe” US Treasury bonds.

If not, there’s only the printing press.

The printing press would turn a deflationary depression into an inflationary depression.
Unemployment combined with rising prices would be a killer.

Inflation would kill the dollar as well, leaving the US unable to pay for its imports.

All
the Obama regime sees is a “credit problem.” But the crisis goes far
beyond banks’ bad investments. The United States is busted. Many of the
state governments are busted. Homeowners are busted. Consumers are
busted. Jobs are busted. Companies are busted.

And Obama thinks he has the money to fight wars in Afghanistan and Pakistan.

Except
for the superrich and those banksters and CEOs who stole wealth from
investors and shareholders, Americans have suffered enormous losses in
wealth and income.

The stock market decline has destroyed
about 45% of their IRAs, 401Ks, and other equity investments. On top of
this comes the decline in home prices, lost jobs and health care, lost
customers. The realized gains in mutual funds and investment
partnerships, on which Americans paid taxes, have been wiped out.

The government should give those taxes back.

Americans
who have seen their retirement savings devastated by complicity of
government regulators and lawmakers with financial gangsters should not
have to pay
any income tax when they draw on their pensions.

The
financial damage inflicted on Americans by their own government is as
great as would be expected from foreign conquest. While Washington
“protected” us from terrorists by fighting pointless wars abroad, the
US economy collapsed.

How can President Obama even think about
fighting wars half way around the world while California cannot pay its
bills, while Americans are being turned out of their homes, while, as
Business Week reports, retirees will work throughout their retirement
(which assumes that there will be jobs), while careers are being
destroyed and stores and factories shuttered.

Americans are facing tremendous unemployment and hardship. Obama doesn’t have another dollar to spend on Bush’s wars.

Taxpayers are busted. They cannot stand another day of being milked by the military-security
complex. The US government is paying private mercenaries more by the
day than the monthly checks it is providing to Social Security
retirees.

This is insanity.

The banksters robbed us
twice. First it was our home and stock values. Then the government
rewarded the banksters for their misdeeds by bailing out the banksters,
not their victims, and putting the cost on the taxpayers’ books.

The
government has also robbed the taxpayers of $3 trillion dollars to
fight its wars. About $600 billion are out of pocket costs, and the
rest is on the taxpayers’ books.

When foreign creditors look at the debt piled on the taxpayers’ books, they don’t see a good credit risk.

Washington
is so accustomed to ripping off the taxpayers for the benefit of
special interests that the practice is now in the DNA. While bailouts
are being piled upon bailouts, wars are being piled upon wars.

Before
Obama gets in any deeper, he must ask his economic team where the money
is coming from. When he finds out, he needs to tell the rest of us.

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Re: Daily Digest - Jan 28

Remember, these minions would be fired if they dared to agree and not try and make a fool out of Ron Paul.  The propaganda is just nauseating.

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Re: Is It Time to Bail Out of the US?

Mike,

Post 30#

When are the people going to start screaming at the sight of their own revulsion???

Paul

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Posts: 62
Re: Daily Digest - Jan 28
barrt wrote:

I'm a big fan of Ron Paul as well as a majority of you guys, but to me his powerful message is delivered so weakly, its frustrating, a more powerful orator would be able to destroy those clowns with short, simple, memorable, powerful soundbites. If he just brought some brevity and a calmer speed of delivery into his speeches he would pack a whole lot more punch and knock those dumb suckers out.

Bartt, then they wouldn't talk to him!

Sad, but true.

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