Daily Digest

Daily Digest - June 15

Monday, June 15, 2009, 11:58 AM
  • Historic Bond Market CRASH Underway…
  • FSN Part 3A and 3 B June 13, 2009 Real, WinAmp, Windows, Mp3
  • * * * * ABBY NORMAL (Repost)
  • Inside Look - Investor Psychology (Video)
  • How to fix Financial Television
  • Hotel RevPAR off 22.9 Percent
  • Fed: Household Net Worth Off $14 Trillion
  • Retail Sales in May: Off 10.8% from May 2008
  • Roubini’s RGE Monitor: Threat of ‘Asia-Style Crisis’ in Eastern Europe
  • Update: What is a Depression?
  • U.S. Treasury Receipts: Off 18% (fiscal) YTD
  • New Tomato Plants In Old Milk Jugs: Planting Tomatoes Upside Down (Video)
  • Solar Towers Could Power the Future: Solar Updraft Power Plants
  • UPDATE: Bernanke is worried! HR 1207 to Audit the Federal Reserve is Gaining Momentum FAST!

Economy

Historic Bond Market CRASH Underway…

Folks, your government has already DEFAULTED on its debts, that’s what “quantitative easing” is. When one can no longer sell their debts they resort to buying up their own issued debt with fake and newly printed money. This is what national default looks and feels like for a country that is the world’s reserve currency.

The 10 year just hit a new high today as well – interest rates on fixed rate mortgages are skyrocketing. Get a clue America, you have been sold out.

To learn more, please read:

Bond Market Hide & Seek – A Domed House & 3 Peaks...

FSN Part 3A and 3 B June 13, 2009 Real, WinAmp, Windows, Mp3

3A: All times

  • 16:00 2 trillion dollar portfolio, 9 trillion in credit extended
  • 19:00 Bond market and Fed and deficits, 50 bn week, Mortgages down, Refis Down, Deficits, Jobs, FCB's buying only short term (T-bills)
  • 23:00 Bonds and Currency debasement
  • 25:00 Paygo 3.5 trillion 2010 budget, spend repent, spend repent, spend repent ...
  • 28:00 Tax, tax, tax the tapped out
  • 29:17 Save the economy and sacrafice the dollar or save the dollar and sacrafice the economy. A or B?
  • 30:40 Emerging world market recovery
  • 33:00 Oil, contrary to how economists have looked at this before is NOT static
  • 33:00 media vacume
  • 39:00 CB insolvent just like C(iti)
  • 41:00 BRIC (Brazil. Russia, India, China) dollar meeting, China no more accumulation of USD and phasing out USD
  • 47:00 Admin clueless deisn't know the economy
  • 50:00 Other currency's if you don't like gold but worry about the USD

3B

  • 3:31 $72 buck oil DURING a recession, 35 OPEC projects cancelled, IEA, 2012
  • 8:23 (Can't read notes, written while at dump unloading trash)
  • 9:20 Shiping costs and oil
  • 12:00 Factories move back to US
  • 18:00 new life style
  • 22:50 Cantarell Oil Field - production worse than pessimistic yeild expectations
  • 24:00 Food, sotck up
  • 29:00 SHADOW STATS JOHN WILLIAMS, unemployment figures
  • 31:50 Hype, #'s bad, worse we have had since WWII, most everything down 75%, worse since GD1
  • 34:00 Doomed to printing press
  • 35:20 Financial collapse as USD becomes worthless
  • 35:50 College professors (Summers, Romer, Bernanke) theory isn't reality
  • 37:34 Bernanke is following his 2002 speach he gave on debasing the USD in order to create inflation
  • 38:52 Financial Channels
  • 39:00 Worst financial crisis hasn't even begun
  • 53:00 Inflation or deflation? Inflation! Q & A
  • 55:00 Mish about China's forced buying Q&A
  • 1:00:00 Government bullion banks JP Morgan, Goldman Sachs and Deutsch?
  • 1:05:00 Infaltion/Deflation and credit destruction
  • 1:09:00 What will happen to other currencies that are pegged to the USD if/when the USD tanks?

* * * * ABBY NORMAL (Repost)

The pundits on CNBC who appear every morning proclaim that things are returning to normal. It amazes me that such supposedly intelligent people have no idea what normal means. Since 80% of the people interviewed on CNBC manage other people’s money, I’m guessing they are just trying to stay in business by lying to the average investor. If they were honest, they would say they have no idea what the future holds. If they were outspokenly honest, they would say that a Frankenstein’s Monster is loose in the countryside and will wreak havoc on the American economy for years.

Inside Look - Investor Psychology (Video)

How to fix Financial Television

11. Investigative pieces: David Faber seems to have a monopoly on deep, long thoughtful analyses. Be they on Wal-Mart, the credit crisis, whatever, his long format work is a highlight of CNBC. More of these, please.

Hotel RevPAR off 22.9 Percent

From HotelNewsNow.com: STR reports US performance for week ending 6 June 2009

In year-over-year measurements, the industry’s occupancy fell 13.9 percent to end the week at 56.6 percent. Average daily rate dropped 10.5 percent to finish the week at US$95.90. Revenue per available room [RevPAR] for the week decreased 22.9 percent to finish at US$54.24

Fed: Household Net Worth Off $14 Trillion

This ratio was relatively stable for almost 50 years, and then ... bubbles!

Household percent equity was at an all time low of 41.4%.

Retail Sales in May: Off 10.8% from May 2008

On a monthly basis, retail sales increased 0.5% from April to May (seasonally adjusted), and sales are off 10.8% from May 2008 (retail and food services decreased 9.6%). Much of the increase was due to higher gas prices.

The following graph shows the year-over-year change in nominal and real retail sales since 1993.

Roubini’s RGE Monitor: Threat of ‘Asia-Style Crisis’ in Eastern Europe

I am not the only one who sees events in Latvia as a potential catalyst for further downside risk to the reflation trade. Mary Stokes over at Nouriel Roubini’s site has a very readable post out on why we should be watching events in that tiny Baltic nation for potential signs of contagion elsewhere. She notes:

Update: What is a Depression?

In early March it seemed like the "D" word was everywhere. That raised a question: What is a depression?

This is an update to that earlier post. Although there is no formal definition, most economists agree a depression is a prolonged slump with a 10% or more decline in real GDP.

In March I heard an analyst say that a 10% unemployment rate is a depression. But the unemployment rate peaked at 10.8% in 1982, and that period is not considered a depression.

Some people argue the duration of the economic slump defines a depression - and the current recession is already 18 months old (through May). That is longer than the recessions of '90/'91 and '01. The '73-'75 recession lasted 16 months peak to trough, and the early '80s recession (a double dip) was classified as a 6 month recession followed by a 16 month recession (22 months total). Those earlier periods weren't "depressions", so if duration is the key measure, the current recession probably still has a ways to go.

Here is a graph comparing the decline in real GDP for the current recession with other recessions since 1947. Depression is marked on the graph as -10%.

U.S. Treasury Receipts: Off 18% (fiscal) YTD

New Tomato Plants In Old Milk Jugs: Planting Tomatoes Upside Down (Video)

Solar Towers Could Power the Future: Solar Updraft Power Plants

Many of you have no doubt heard of solar updraft towers, but I had not until today.

Basically the idea is that a tower is constructed, and a large circle of the ground is covered with a material that sits 3-15 feet off the ground. Light can shine through the material, heating the air underneath the material and funneling it toward the only escape for the hot air, a tower at the center of the circle.

In the tower is a turbine. That turbine is turned by the heat rising upwards.

A successful research prototype operated in Spain in the 1980s, and many modelling studies have been published as to optimization, scale, and economic feasibility.

Here's a video of the tower that was done in the 1980's.

 UPDATE: Bernanke is worried! HR 1207 to Audit the Federal Reserve is Gaining Momentum FAST! (Video)

HR 1207 up to 213 co-sponsors! Time to hit the companion bill, S. 604, which has NO co-sponsors. Read updated post here: http://www.breakthematrix.com/node/36442

An impromptu HR 1207 Call-A-Thon kicked off last week on twitter after I saw my rep (Kratovil) STILL hadn't co-sponsored the bill. Much to my delight, he co-sponsored first thing the next morning!! We're keeping it going this week over on twitter, but I'm starting this post so you guys can add your non-compliant reps to the target list.

We'll hit a few a day, and see if we can get the 28 11 5 we need for a majority! Thanks guys!!

21 Comments

fujisan's picture
fujisan
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Re: Daily Digest - June 15

 De-Dollarization - Dismantling America’s Financial-Military Empire - Michael Hudson - financial economist and historian

Challenging America will be the prime focus of extended meetings in Yekaterinburg, Russia (formerly Sverdlovsk) today and tomorrow (June 15-16) for Chinese President Hu Jintao, Russian President Dmitry Medvedev and other top officials of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).

The attendees have assured American diplomats that dismantling the US financial and military empire is not their aim. They simply want to discuss mutual aid – but in a way that has no role for the United States, NATO or the US dollar as a vehicle for trade. US diplomats may well ask what this really means, if not a move to make US hegemony obsolete. That is what a multipolar world means, after all. For starters, in 2005 the SCO asked Washington to set a timeline to withdraw from its military bases in Central Asia. Two years later the SCO countries formally aligned themselves with the former CIS republics belonging to the Collective Security Treaty Organization (CSTO), established in 2002 as a counterweight to NATO.

Yet the meeting has elicited only a collective yawn from the US and even European press despite its agenda is to replace the global dollar standard with a new financial and military defense system. A Council on Foreign Relations spokesman has said he hardly can imagine that Russia and China can overcome their geopolitical rivalry,1 suggesting that America can use the divide-and-conquer that Britain used so deftly for many centuries in fragmenting foreign opposition to its own empire. But George W. Bush (“I’m a uniter, not a divider”) built on the Clinton administration’s legacy in driving Russia, China and their neighbors to find a common ground when it comes to finding an alternative to the dollar and hence to the US ability to run balance-of-payments deficits ad infinitum.
...

An era therefore is coming to an end. In the face of continued US overspending, de-dollarization threatens to force countries to return to the kind of dual exchange rates common between World Wars I and II: one exchange rate for commodity trade, another for capital movements and investments, at least from dollar-area economies.

Even without capital controls, the nations meeting at Yekaterinburg are taking steps to avoid being the unwilling recipients of yet more dollars. Seeing that US global hegemony cannot continue without spending power that they themselves supply, governments are attempting to hasten what Chalmers Johnson has called “the sorrows of empire” in his book by that name – the bankruptcy of the US financial-military world order. If China, Russia and their non-aligned allies have their way, the United States will no longer live off the savings of others (in the form of its own recycled dollars) nor have the money for unlimited military expenditures and adventures.

US officials wanted to attend the Yekaterinburg meeting as observers. They were told No. It is a word that Americans will hear much more in the future.
 

 

Davos's picture
Davos
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Re: Daily Digest - June 15

 Super article Fujisan!

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maveri
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Re: Daily Digest - June 15

Ah Michael Hudson - I do enjoy his writings / work - thanks for the link

idoctor's picture
idoctor
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Re: Daily Digest - June 15

Super article Fujisan! Wow the furture is going to be a different place indeed if these things come true.

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more Steve Keen
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Re: Daily Digest - June 15

Black Swan Capitol (Charts on page)

 

 Liars! Follow the Money...

xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxWhat THEY DO is way more important than what THEY SAY!

And let’s face it; we are being so loaded up with pure b(*& lately that you can almost count on the fact that THEY ARE DOING THE EXACT OPPOSITE OF WHAT THEY SAY.

How do I know? The underlying math and the flow of money does not lie – only people lie. There is a preponderance of evidence that the ratio of lies coming from the current crop of politicians and central bankers is at an extreme high.

This weekend we got lip service from both the Japanese and the Russians regarding their “faith” in America’s debt and her Dollar. Yet the long end of the bond market has collapsed since the beginning of the year which means that somebody’s selling… or at least no longer buying. (See article: Japanese and Russians Playing Games with Bonds & Reserve Currencies…)

This morning’s Treasury International Capital data (TIC flows) for April shows that foreigners, including Japan and Russia have been net sellers of our debts, exactly the opposite of what they just professed!zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz

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Re: Daily Digest - June 15

 I don´t know if you in the US have heard about this and I also don´t know how relevant this is for this page, but maybe someone has an idea what to make of this. This was on the news in Europe 12 hours ago. 

"2 Japanese Travelers where caught trying to smuggle 10 Kennedy-Bonds, worth 1 Billion US-Dollars each, plus 249 US Treasury Bonds, nominated 500 Million Dollars each, a total 134.5 Billion US-Dollars , from Italy to Switzerland.

There´s the suspicion the Kennedy Bonds maybe counterfit while the US Treasuries seem legal. The italian Authorities asked  the SEC for help."

 

Not exactly the kind of money you need for a trip to switzerland, I`ve been there myself and it´s not a particular cheap place, but this is slightly stretching it, i suppose.

 

regards

 

Ready's picture
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Re: Daily Digest - June 15
mono wrote:

Not exactly the kind of money you need for a trip to switzerland, I`ve been there myself and it´s not a particular cheap place, but this is slightly stretching it, i suppose.

 

mono, if you are trading in US Bonds, you never have enough.  A billion woth and $.50 will buy you a cup of coffee

 

There's a thread on this here if you want the details.

 

Rog

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Re: Daily Digest - June 15

 Hello Mono:

 Nate's blog had a comment-not on this but it  made me think of this. He said something to the  effect that countries saying they'd buy would  put bonds in brief cases and take them out of  the country and quietly sell them  all the while they'd be talking up bonds and the USD.

Dont know if these bonds are fake or real, if  they are real-to me it is saver Than fake!

mono's picture
mono
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Re: Daily Digest - June 15

 thanks Ready and Davos, i missed the thread about this earlier, after i read what Zerohedge had to say about this:

 ZeroHegde wrote: 

"Perhaps you (T.Geithner) wanted an easy way to tip the debt crippled Italy 40% of $134 billion (the forfeiture fine for failing to declare) without congressional oversight. That buys a lot of Fiats. China or Japan will probably be blamed for the "incident" and no one will be surprised if it is hushed up. Instead everyone will assume that the remaining 60% went back to the original holder and Italy gets $53 billion without a lot of questions. Clever, Mr. Geithner, JamesTim Geithner."

Believe it or not,  I personally find this the most likely scenario.

regards

 

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Re: Daily Digest - June 15

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Re: Daily Digest - June 15

Just can't take FSN seriously as there is never any deviance from their continual pump: "Gold, gold, gold!" You have to hand it to them: they put on a phenomenal show which deflects from what I consider their primary motive: "Gold, gold, gold!"

They attempt to deflect any possible suspicion (this week!) by their suggestion of "5 ways to hedge..."

They're smart and talented; their show is an elaborate self-serving ruse, IMO, and I'm not buying it. They seem, to me, the San Diego suburban version of  Wall Street Crooks like Goldman Sachs.

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Re: Daily Digest - June 15
Nonzeroone wrote:

Just can't take FSN seriously as there is never any deviance from their continual pump: "Gold, gold, gold!" You have to hand it to them: they put on a phenomenal show which deflects from what I consider their primary motive: "Gold, gold, gold!"

It would be highly unlikely the the size of the FSN audience, even if 100% of them all rushed out and bought gold, would have a noticible impact on the gold market!

 

 

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rht1786
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Re: Daily Digest - June 15

 Can anyone post the "historic collapse in Bond markets" article from Nathan's site on the forum? I am in China, and blogspot is blocked here, so I am unable to read the article.

 

I'd really appreciate it... thanks.

Haerdt

fujisan's picture
fujisan
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Re: Daily Digest - June 15
Davos wrote:

 Hello Mono:

 Nate's blog had a comment-not on this but it  made me think of this. He said something to the  effect that countries saying they'd buy would  put bonds in brief cases and take them out of  the country and quietly sell them  all the while they'd be talking up bonds and the USD.

Dont know if these bonds are fake or real, if  they are real-to me it is saver Than fake!

Italian Police Ask SEC to Authenticate Seized U.S. Treasuries - Bloomberg.com

June 12 (Bloomberg) -- Italy’s financial police said they asked the U.S. Securities and Exchange Commission to authenticate U.S. government bonds found in the false bottom of a suitcase carried by two Japanese travelers attempting to cross into Switzerland.

The bonds, with a face value of more than $134 billion, are probably forgeries, Colonel Rodolfo Mecarelli of the Guardia di Finanza in Como, Italy, said today. If the notes are genuine, the pair would be the U.S. government’s fourth-biggest creditor, ahead of the U.K. with $128 billion of U.S. debt and just behind Russia, which is owed $138 billion.

The seized notes include 249 securities with a face value of $500 million each and 10 additional bonds with a value of more than $1 billion, the police force said on its Web site. Such high denominations would not have existed in 1934, the purported issue date of the notes, Mecarelli said. Moreover, the “Kennedy” classification of the bonds doesn’t appear to exist, he said.

The bonds were seized in Chiasso, Italy. Mecarelli said he expects a determination from the SEC “within a few days.”

This is a huge ammount of high denominations bonds which are apparently only sold to CB. If these are real, why would CB officials take the risk of crossing the border from Italy to Switzerland? It would have been much easier to fly directly to Switzerland and/or use their diplomatic status in order to protect them.

Davos's picture
Davos
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Re: Daily Digest - June 15

 Hello Nonzeroone:

Wow, those are pretty strong sentaments?

I have to be honest, months ago I was maybe 70% in agreement with them. Lately what he says I am 99% in agreement with. Of all the blogs and mainstream sites I visit only 3 fall into that category. Chris, Nate and the News Hour. Oh, and Jim Quinn's burning platform. So 4r.

The FSN website has many differing views, which is good but a about half of it I have to filter out. Did you catch the part that said if you don't like gold then buy currencies in Canada, Australia, Norway and the last I forgot, in fact 2 of those may be wrong but in all honesty the meritts Jim lists do seem valid. Is there something he says that you disagree with, i.e. China not using oil, or Ben not printing money? Or is it just the gold you don't like?

Davos's picture
Davos
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Re: Daily Digest - June 15

 Hello Fujisan:

Good point, don't know if the recent catch is or isn't what Nate talks about. What he wrote made sense as far as a quiet way of dumping bonds. The article made me wonder, and still does.

Headless's picture
Headless
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Re: Daily Digest - June 15

Hi Davos,

You said:

"Is there something he says that you disagree with, i.e. China not using oil, or Ben not printing money? Or is it just the gold you don't like?"

Yes, I listened to the whole podcast--and a few others. I actually like listening to these guys, as they do put on a good show (music, voice, banter, real info.; they create a comfortable ambiance (feeling reminds me of Broadcast News, the movie, somehow)), but I always know the "Gold!!!" sell is coming. Thus, they remind me of a really good used car salesman. I truly believe the whole thing is about pumping gold. They're just such great salesmen that most people don't care. I, myself, do listen to them often; I'm like a crackhead in that way...

Take care. No complaints against your great work lodged here...

Lee

Edit: P.S. GIven that the wealthy will always be a step ahead of their middle-class victims, I do worry that gold is just another version of the bubbles we've been sold. I have to ask myself: Why? Why are there so many people that are so interested in selling (as in marketing) gold...

Davos's picture
Davos
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Re: Daily Digest - June 15

 Hello Lee:

I'd be lying if I said I haven't asked the bubble question before. And this is funny, my answer, "But, I think this time is different!" Ha!

I think Puplava is just bullish on gold, I'm sure he has enough to want it to go up. But my gut take on the guy is that he is a good honest guy and I myself wouldn't put him in the gangster bank column of the ledger.

Silver might be a good option, in fact it might be better (no confiscation worry (or less of one) rises at 3 times the speed of gold?

Just a thought, but I'd have something. His Evergreen Bank might be another option. Some of his guests are too far out there for me, but overall I really like his show the best of any radio shows, other than Prairie Home Companion. Take care

strive4impact's picture
strive4impact
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Re: Daily Digest - June 15

Hey Davos!

Just wanted to say thanks for linking to our tomato plants in old milk jugs video and to my long tirade about the solar updraft power plants.  I'm learning a LOT being here on your site and hope I can get to a point where I am sharing as much incredible info as you are here.

Thanks again!

Warmest,

Jonathan Kraft
http://www.GreenJoyment.com

Davos's picture
Davos
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Re: Daily Digest - June 15

 Hello Jonathan:

Appreciate that you like to be linked to. Out of all the ugly I have to say I think a lot of good will come of this mess. When I read gardening threads on this site or visit your site and other fine sites like it I see a silver lining. 

Thanks for all YOU do! Take care

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