Daily Digest

Daily Digest - July 24

Friday, July 24, 2009, 9:49 AM
  • Sprott: It's the Real Economy, Stupid (White paper)
  • Two Biggest US Pension Funds Suffer Huge Losses
  • Student loans (H/T Carlos)
  • Opposition to state budget deal mounts; 27,000 inmates to be freed
  • More bodies go unclaimed as families can't afford funeral costs
  • CRE Developer: "We’re dumbfounded"
  • Investors Just Witnessed the Perfect Bear Trap (H/T Jeff Borsuk)
  • A $6,500,000,000,000.00 CRE Wave & Somewhat Concerned?
  • S&P 1990 - Present (Chart)


Sprott: It's the Real Economy, Stupid (White paper)

Two Biggest US Pension Funds Suffer Huge Losses

Calpers, the largest U.S. pension fund, said on Tuesday it suffered a record 23.4 percent drop in the value of its assets in the last year.

Assets fell to $180.9 billion on June 30 from $237.1 billion a year earlier, the California Public Employees' Retirement System, or Calpers, said. "This result is not a surprise; it is about what we expected given the collapse of markets across the globe," Joe Dear, the fund's chief
investment officer, said in a statement.

Opposition to state budget deal mounts, 27,000 inmates to be freed

Reporting from Sacramento -- Less than 24 hours after Gov. Arnold Schwarzenegger and legislative leaders announced a plan to close California's massive budget deficit, Los Angeles County officials moved to sue the state, a union for government workers said it might strike, and Republicans threatened to back out of the deal over a provision to cut the number of prison inmates by 27,000.

More bodies go unclaimed as families can't afford funeral costs

The poor economy is taking a toll even on the dead, with an increasing number of bodies in Los Angeles County going unclaimed by families who cannot afford to bury or cremate their loved ones.

At the county coroner's office -- which handles homicides and other suspicious deaths -- 36% more cremations were done at taxpayers' expense in the last fiscal year over the previous year, from 525 to 712.

Student loans (H/T Carlos)

CRE Developer: "We’re dumbfounded"

“We’re dumbfounded. We’ve been working on this deal for four-and-a-half years. I don’t know how, all of a sudden, the numbers don’t work.”
JMW Development Principal Mark Johnson

From the Minneapolis / St. Paul Business Journal: SuperTarget planned for Woodbury now on hold (ht Arnold)

Target recently informed JMW that it would not proceed with the project unless it receives “a pretty significant discount” from its previously negotiated deal, JMW Principal Mark Johnson said.

“We’re dumbfounded,” Johnson said, noting that Target officials had told him as recently as June 24 that the project was on track.

Maybe Target has lowered their retail sales estimates for the store? Just saying ...

Investors Just Witnessed the Perfect Bear Trap (H/T Jeff Borsuk)

Bear Traps Are Warning
Signs Nevertheless

In having risen above the breakdown line, the sell signal was aborted. Technicians disagree about the meaning of this aborted signal. Some say it was a sign of special strength that prices did not fulfill the technical forecast of this formation.

But others, including Edwards and Magee, the authors of the first comprehensive book on technical analysis, come to a totally different conclusion …

They argue that the market signaled weakness by showing a topping formation in the first place. And the reality of this weakness should be treated with respect — as a harbinger of more weakness to come relatively soon.

A $6,500,000,000,000.00 CRE Wave & Somewhat Concerned?

We are somewhat concerned about that sector and are paying very close attention to it.

S&P 1990 - Present (Chart)


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Re: Daily Digest - July 24

One thing that caught my attention on the Student Loan hat tip from Carlos peaked my curiosity. Conspicuously missing from the abbreviated trailer version is what was covered in the book "Maxed Out," and that is why universities and colleges can and do charge so much ---- credit, for without it very few could afford today's tuitions.

Looks like the movie will be a good watch, I'll keep my eyes open for it. Thanks Carlos! Take care

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Re: Daily Digest - July 24

Check it out...CNBC's front page got spoofed...and look, it's sponsored by none other than Government Sachs!


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What Congress Really Thinks

Airtime: Fri. Jul. 24 2009 | 12:20 PM ET
Rep. Jeb Hensarling, (R-TX) and Rep. Brad Sherman (D-CA) share their perspectives on Treasury Secretary Geithner and Fed Chairman Bernanke's testimony. www.cnbc.com/id/15840232

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Doug Casey Is In A Bad Mood

Doug Casey of Casey Research provided this amusing interview (I think he must have had low blood sugar or something )


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Re: Daily Digest - July 24


excellent laymen explanation of Goldman sachs.

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More Sprott

King World News interview with Eric Sprott

Part 1

Part 2

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Re: Daily Digest - July 24

 Great interview with Hugh Hendry.  My apologies if this is a re-post.

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Re: Daily Digest - July 24--TARGET deal

Here in So. NM where our economy has been relatively stable, a third Walmart was planned...site chosen...

Looks like plans have been cancelled...the land is up for sale again...


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New Rule : Not Everything in America Has to Make a Profit
New Rule : Not Everything in America Has to Make a Profit By Bill Maher

July 24, 2009 "

Huffington Post" -- How about this for a New Rule: Not everything in America has to make a profit. It used to be that there were some services and institutions so vital to our nation that they were exempt from market pressures. Some things we just didn't do for money. The United States always defined capitalism, but it didn't used to define us. But now it's becoming all that we are.

Did you know, for example, that there was a time when being called a "war profiteer" was a bad thing? But now our war zones are dominated by private contractors and mercenaries who work for corporations. There are more private contractors in Iraq than American troops, and we pay them generous salaries to do jobs the troops used to do for themselves ­-- like laundry. War is not supposed to turn a profit, but our wars have become boondoggles for weapons manufacturers and connected civilian contractors.

Prisons used to be a non-profit business, too. And for good reason --­ who the hell wants to own a prison? By definition you're going to have trouble with the tenants. But now prisons are big business. A company called the Corrections Corporation of America is on the New York Stock Exchange, which is convenient since that's where all the real crime is happening anyway. The CCA and similar corporations actually lobby Congress for stiffer sentencing laws so they can lock more people up and make more money. That's why America has the world;s largest prison population ­-- because actually rehabilitating people would have a negative impact on the bottom line.

Television news is another area that used to be roped off from the profit motive. When Walter Cronkite died last week, it was odd to see news anchor after news anchor talking about how much better the news coverage was back in Cronkite's day. I thought, "Gee, if only you were in a position to do something about it."

But maybe they aren't. Because unlike in Cronkite's day, today's news has to make a profit like all the other divisions in a media conglomerate. That's why it wasn't surprising to see the CBS Evening News broadcast live from the Staples Center for two nights this month, just in case Michael Jackson came back to life and sold Iran nuclear weapons. In Uncle Walter's time, the news division was a loss leader. Making money was the job of The Beverly Hillbillies. And now that we have reporters moving to Alaska to hang out with the Palin family, the news is The Beverly Hillbillies.

And finally, there's health care. It wasn't that long ago that when a kid broke his leg playing stickball, his parents took him to the local Catholic hospital, the nun put a thermometer in his mouth, the doctor slapped some plaster on his ankle and you were done. The bill was $1.50, plus you got to keep the thermometer.

But like everything else that's good and noble in life, some Wall Street wizard decided that hospitals could be big business, so now they're run by some bean counters in a corporate plaza in Charlotte. In the U.S. today, three giant for-profit conglomerates own close to 600 hospitals and other health care facilities. They're not hospitals anymore; they're Jiffy Lubes with bedpans. America's largest hospital chain, HCA, was founded by the family of Bill Frist, who perfectly represents the Republican attitude toward health care: it's not a right, it's a racket. The more people who get sick and need medicine, the higher their profit margins. Which is why they're always pushing the Jell-O.

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Re: Daily Digest - July 24


UK economy suffers worst annual dip

24 July 2009

Britain's economy has suffered its biggest annual decline on record.

Hopes of a quick recovery from the UK's worst recession for 30 years were ended on Friday when the government disclosed the nation's gross domestic product (GDP) fell 0.8 per cent in the second quarter of 2009.

The latest fall for April to June brings the annual rate of decline to 5.6 per cent, the steepest drop since 1955 and more than double what economists had predicted.

Ross Walker, UK economist at RBS Financial Markets, said: "These are awful, awful numbers.

"It casts doubt on whether we will actually see growth in the third quarter."

Analysts shocked

The contraction also comes amid a record fall in manufacturing output and major losses in financial services.

Many analysts were shocked at the size of the second-quarter contraction.

The minutes of the Bank of England's (BoE) July meeting, published on Wednesday, had suggested the near-term outlook for the economy was brighter than the central bank had predicted in May, not worse.

The decline in the UK economy, which has now shrunk for five consecutive quarters,
is more than double the drop seen in the early 1990s recession and not far off the six per cent contraction experienced in the early 1980s.

'False security'

David Blanchflower, a former policymaker at the BoE who left the central bank in May, said: "The talk of green shoots had lulled people into a false sense of security."

Blanchflower, who was the only person on the bank's interest rate-setting committee to predict the current recession, said the bank could not afford to call a halt to its asset-buying programme to pump money into the economy.

"The end-game for quantitative easing (QE) is a long way off," he said.

"The BoE needs to expand QE a lot right now because otherwise any recovery will take an awfully long time."

The bank has already cut interest rates to a record low of 0.5 per cent and has pumped close to $200bn of new money into the economy in order to pull the country out of recession and promote lending.

Policymakers will debate next month whether more stimulus is needed.

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Re: Daily Digest - July 24

Great piece on MSNBC with Elliot Spitzer and Dylan Ratigan:

A MUST see:



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