Daily Digest

Daily Digest - June 9

Tuesday, June 9, 2009, 11:32 AM
  • Top China banker calls for U.S. sales of yuan bonds
  • Consumer Credit, Year over Year Change (Chart)
  • Wall Street: Still Clueless
  • Follow Your Nose?
  • China explores buying $50bn in IMF bonds
  • Consumer Bankruptcy Filings up Sharply (Chart)
  • Great Clip on Why you Should Own SILVER (Video)
  • Ex-trader works as Wall St tour guide (Video)
  • Percent Job Losses in Post WWII Recessions (Chart)
  • Saturday, June 6, 2009 6000 Bankruptcies a day
  • Real Unemployment Situation: Approximately 26,000,000 Unemployed or Underemployed. Job Growth in $10 per Hour Jobs while $20 per Hour Jobs Disappear.

Economy

Top China banker calls for U.S. sales of yuan bonds

NEW YORK (Reuters) - A top Chinese banker on Sunday called on the U.S. government and the World Bank to sell yuan-denominated bonds in Hong Kong and Shanghai to encourage the development of debt markets in those centers and to promote the yuan as a major international currency.

"I think the U.S. government and the World Bank can consider the possibility of issuing renminbi bonds in the Hong Kong market and the Shanghai market," said Guo Shuqing, the chairman of state-controlled China Construction Bank (CCB), the world's second-biggest bank by market value.

In an interview with Reuters, Guo said it was in American interests to see the yuan, also known as the renminbi, become a currency that is traded across the globe. He said that is largely because of the symbiotic relationship between U.S. purchases of Chinese goods and China's purchases of U.S. assets with the proceeds.

Guo, who is a former head of China's foreign exchange administration, said there should be "mutual cooperation" between the U.S. and China to promote China's financial sector and markets.

Guo, who was visiting New York to mark the upgrading of CCB's representative office in the city to branch status, said that the bond issues could be relatively small -- perhaps 1-3 billion yuan ($142 million-$436 million).

He said that developing the Chinese debt markets would help major U.S. companies such as General Electric Co, which needs to fund major investments in China, as well as institutions such as the World Bank, with major commitments there.

(More)

Consumer Credit, Year over Year Change (Chart)

Wall Street: Still Clueless

OK, it's official: Wall Street is still clueless as far as Main Street is concerned.

Otherwise, why would investors keep driving stocks higher in the face of the recent sharp rise in yields, which will make it that much harder for businesses to find their bearings in an already shaky economic environment?

Follow Your Nose? 

FOURTEEN months ago, former King County Executive Ron Sims made an odd statement. People were wondering if the economy was in a recession. Sims said he thought it was, because the volume of garbage was down, and that meant people were buying fewer new things — and throwing away fewer old things.

China explores buying $50bn in IMF bonds

Friday’s statement by China said any investment would be made according to its usual criteria of “safety and reasonable returns”, but made no mention of Beijing’s wish for more power in IMF decision-making, in return for financial support.

Consumer Bankruptcy Filings up Sharply (Chart)

Percent Job Losses in Post WWII Recessions (Chart)

Ex-trader works as Wall St tour guide (Video)

Great Clip on Why you Should Own SILVER (Video)

Saturday, June 6, 2009 - 6000 Bankruptcies a day

But filings are surging back in part because of rising job losses. The unemployment rate could hit 10% this year. And tighter credit, dwindling 401(k) accounts, smaller paychecks and less savings have left unemployed workers and those who are working but struggling with fewer financial resources to keep creditors at bay.

Real Unemployment Situation: Approximately 26,000,000 Unemployed or Underemployed. Job Growth in $10 per Hour Jobs while $20 per Hour Jobs Disappear.

If we break down the unemployment numbers further, we see that nearly 26,000,000 American workers are either unemployed or underemployed:

  • Unemployed: 14,500,000
  • Part-time workers: 9,100,000
  • Marginally Attached: 2,200,000
  • Total = 25,800,000 unemployed or underemployed workers

15 Comments

cwixom's picture
cwixom
Status: Bronze Member (Offline)
Joined: Aug 18 2008
Posts: 44
Re: Daily Digest - June 9

When we start issuing bonds denominated in anything other than USD you can just kiss your country goodbye or at least your currency and your wealth.  This is EXACTLY what lead to the Iceland currency implosion and is causing Latvia to possibly devalue their currency for the THIRD TIME in recent months.  And you know, given the past actions of our monetary titans aka turbo Timmy and Benny B and the Spinners, they will probably do it.

A proposal:  Lets make it illegal for corporations to participate in any way in the political process.  After all this is a government of the people, for the people and by the people.  I don't recall corporations being mentioned.  Every campaign donation has a person's name attached to it and it is all on the Internet for everyone to see.  We should at least know who is buying our government.

A question: Why are people who receive their income from the government allowed to vote?  Isn't that like voting for your boss?  Why would you ever vote for a boss who would do the right thing for the company over the one who would give you the biggest raise?  Just wondering.

As goes Ireland so goes the US??  Looks likely: (From the RGE Monitor) 

Quote:

Ireland Downgraded Again: Is a Third Time Likely?

  • June 8: Standard and Poor's downgraded Ireland to ‘AA' (negative outlook) from ‘AA+' on the basis of higher than expected costs of supporting the Irish banking system. "We now believe that Ireland's net general government debt could exceed 100% of GDP over the medium term - a level that is higher than for Ireland's ‘AA' rated Euro-zone sovereign peers"
  • This is the second downgrade in three months and a "negative" outlook suggests it may not be the last. Fitch and Moody's have both downgraded Ireland's debt in recent months

 

maveri's picture
maveri
Status: Silver Member (Offline)
Joined: Nov 20 2008
Posts: 159
Re: Daily Digest - June 9

WARNING   WARNING  WARNING

The following link contains one very angry man using lots of expletives and a baseball bat to explain why the country is going down.

From WAL$TREETPRO2, we have...

http://www.youtube.com/user/walstreetpro2

Despite the roughness of the message delivery, what he's saying is actually fairly accurate.

 

mono's picture
mono
Status: Martenson Brigade Member (Offline)
Joined: Nov 13 2008
Posts: 70
Re: Daily Digest - June 9

 Hey Maveri,

That´s quite a reasonable point by Walstreetpro2, it just leaves me a tiny little bit concerned

about what would happen if this guy ever get´s angry.

kindly

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Energy fuels new 'Great Game' in Europe

<http://news.bbc.co.uk/2/hi/europe/8090104.stm>

Energy fuels new 'Great Game' in Europe

Construction of the first stage of the Nord Stream pipeline is already
underway
By Richard Galpin
BBC News, Moscow

*The giant Russian energy company, Gazprom, which controls the world's
largest reserves of natural gas, has issued a stark warning to the
European Union saying it must decide if it wants to continue receiving
supplies of Russian gas.*

Speaking in a BBC interview, Gazprom deputy chairman Alexander Medvedev
warned that Europe was now at a crossroads.

"Only three countries can be suppliers of pipeline gas in the long-term
- Russia, Iran and Qatar. So there is no other choice than to deal with
these suppliers," he said.

"Europe should decide how to handle this situation… and if Europe
doesn't need our gas, then we will find a way of selling it differently."

maveri's picture
maveri
Status: Silver Member (Offline)
Joined: Nov 20 2008
Posts: 159
Re: Daily Digest - June 9
mono wrote:

 Hey Maveri,

That´s quite a reasonable point by Walstreetpro2, it just leaves me a tiny little bit concerned

about what would happen if this guy ever get´s angry.

kindly

Looking at his site I think he deliberatly does this as a bit of showmanship. Still, I thought it was a bit of a laugh and a different way of getting the message across. If he didnm't use the bad language so much I think it might have been better - it was a little too distracting for me.

tom815's picture
tom815
Status: Member (Offline)
Joined: Sep 19 2008
Posts: 5
A little philosophy fron the ancients




  "When you concentrate on agriculture and industry and are frugal in expenditures, Heaven cannot impoverish your state."


Xun Zi

 

mono's picture
mono
Status: Martenson Brigade Member (Offline)
Joined: Nov 13 2008
Posts: 70
Re: Daily Digest - June 9

Maveri,

it certainly was a bit of a laugh, at the same time it also showed the potentielly desastrous effects of a

system breakdown which might lead us straight into a Mad Max society.

fujisan's picture
fujisan
Status: Gold Member (Offline)
Joined: Nov 5 2008
Posts: 296
Re: Daily Digest - June 9

Again, China's Electric Consumption Does Not Support Official Growth Statistics-ChinaStakes.com

China's power consumption in May continued to decline. Although the National Bureau of Statistics denied the conflict between economic growth and power consumption decline since the beginning of the year, Zhao Bingren, ex-chairman of China Electricity Regulatory Commission, expressed his doubt on economic statistics reported by some areas.
...

maveri's picture
maveri
Status: Silver Member (Offline)
Joined: Nov 20 2008
Posts: 159
Re: Daily Digest - June 9
mono wrote:

Maveri,

it certainly was a bit of a laugh, at the same time it also showed the potentielly desastrous effects of a

system breakdown which might lead us straight into a Mad Max society.

Very true and frightening in some ways.

Let's hope for everyone's sake it doesn't come down to that level of violence.

People will do what they need to do to survive, let's hope that it doesn't come to people taking it out on others to maintain their wellbeing.

I've experienced a riot before, many years ago. It swells very quickly and most participants don't stop to think about what they are doing - it's the mob mentality at work. It was only quelled after a few days when the general consensus was that law and order prevailed - let's hope that our societies keep projecting this image loud and clear for all of our sakes  :-)

The fact that there are people like those on this forum looking towards the future is reason alone to have hope!

pir8don's picture
pir8don
Status: Gold Member (Offline)
Joined: Sep 30 2008
Posts: 456
Re: Daily Digest - June 9

If actors can be/ are US presidents (or vice versa) then I don't see why they shouldn't be on utube. Although you would have thought that trusted bull dot com could have afforded a better monitor.

Don

Damnthematrix's picture
Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - June 9

http://www.smh.com.au/opinion/its-time-for-a-second-american-revolution-in-the-spirit-of-perestroika-20090609-c25z.html?page=-1

It's time for a second American revolution in the spirit of perestroika

* Mikhail Gorbachev
* June 10, 2009

Years ago, as the Cold War was coming to an end, I said to my fellow leaders around the globe: the world is on the cusp of great events, and in the face of new challenges all of us will have to change, you as well as we. For the most part, the reaction was polite but sceptical silence.

In recent years, I have often told listeners that I feel Americans need their own change - a perestroika, not like the one in my country, but an American perestroika - and the reaction has been markedly different. Halls filled with thousands of people have responded with applause. Some have reacted with understanding. Others have objected, sometimes sarcastically, suggesting that I want the United States to experience upheaval, just like the former Soviet Union. In my country, particularly caustic reactions have come from the opponents of
perestroika, people with short memories and a deficit of conscience.

Our perestroika signalled the need for change in the Soviet Union, but it was not meant to suggest a capitulation to the US model. Today, the need for a more far-reaching perestroika - one for America and the world - has become clearer than ever.

<MORE>

maveri's picture
maveri
Status: Silver Member (Offline)
Joined: Nov 20 2008
Posts: 159
Re: Daily Digest - June 9
Damnthematrix wrote:

http://www.smh.com.au/opinion/its-time-for-a-second-american-revolution-in-the-spirit-of-perestroika-20090609-c25z.html?page=-1

It's time for a second American revolution in the spirit of perestroika

* Mikhail Gorbachev
* June 10, 2009

...

<MORE>

What an excellent article!

Thanks - I really enjoyed reading that one - much appreciated.

This is one article I will definetly be forwarding to others.

The wave of change is certainly here and like the governments, those opossing it will either slow it's progress or encompass it and let it run it's course but either way it will occur.

fujisan's picture
fujisan
Status: Gold Member (Offline)
Joined: Nov 5 2008
Posts: 296
Re: Daily Digest - June 9

China Sees $30 Billion Overseas Lending on New Rules (Update1) - Bloomberg.com

June 9 (Bloomberg) -- China’s top currency regulator relaxed controls on overseas lending, estimating the measures could encourage as much as $30 billion of new financing for businesses to expand abroad.

Companies will be allowed to lend as much as 30 percent of the value of their total equity to units abroad, Sun Lujun, deputy director of the capital-account department at the State Administration of Foreign Exchange told a media briefing in Beijing today. The nation will let more firms provide such funding, including those not owned by the state.
...

Looks like chinese gonna buy yet fewer Treasuries.

fujisan's picture
fujisan
Status: Gold Member (Offline)
Joined: Nov 5 2008
Posts: 296
Re: Daily Digest - June 9

Salaries Safe, Bonuses Hit - WSJ.com

Obama Drops Tough Plan on Bank Compensation; 10 Lenders Repay Bailout Cash

The Obama administration is dropping its plan to cap salaries at firms receiving government bailout money, leaving them subject to congressionally imposed limits on bonuses, according to people familiar with the matter.

...

Farmer Brown's picture
Farmer Brown
Status: Martenson Brigade Member (Offline)
Joined: Nov 23 2008
Posts: 1503
Authorities Will Fail Us Again

Authorities 'Will Fail Us Again': Black Swan CNBC.com | 10 Jun 2009 | 08:34 AM ET The Obama administration's attempts to fight the financial crisis with more cash is like treating a bad tooth with Novocain instead of a root canal, Nassim Taleb, author of "The Black Swan," told CNBC Wednesday. The main problem is the level of debt, and Taleb compared the authorities' efforts with those of a not very skilled pilot who is trying to land a Concorde on a narrow strip, between an ocean of deflation and a mountain of hyperinflation. "These people failed us, they're going to fail us again," Taleb told "Squawk Box." "They tell the banks to lend more but have less leverage," and expect people to go out and consume while unemployment is rising, he added. "The way to restart everything is restructuring, conversion of debt into equity, convince people that debt is not good," Taleb said. "Do not delay a root canal," he added. "Don't do piecemeal solutions to a problem that is fundamental." "The solution is there, convert debt to equity. Usually it happens with Chapter 11, let's do it faster, and across the board," Taleb said.

http://www.cnbc.com/id/31203621

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