Daily Digest

Daily Digest - March 24

Wednesday, March 24, 2010, 9:47 AM
  • Manufacturing Areas in U.S. Post Biggest Declines in Population
  • Amtrak Seeks $446 Million to Replace Aging Rail Fleet
  • Villaraigosa Warns: Blocking DWP Rate Hikes = Bankruptcy for LA
  • Fed’s Yellen Says Too Soon to Raise Interest Rates
  • U.S. Lawmakers Urged to Consider Tax Hikes, Spending Cuts
  • Wayne County Leads Nation In Population Loss Again
  • French Bankruptcies Rise 3% in 2010 in ‘Fragile’ Economy
  • San Diego Tollway Builders File Bankruptcy
  • Americans Say They Missed 73% Rise in S&P 500 as Economy Surged
  • AP Analysis: Average County Was Stressed In January
  • More Homeless on New York City Streets Than Last Year
  • Rite Aid Says It Welcomes EBT Cards/Food Stamps
  • More Middle-Class Jobless Need Government Aid
  • Further Fears For Greece Following Central Bank Report
  • New York City: 19,000 Layoffs, Aid Reduction Would Be "Catastrophic" For The City

Economy

Manufacturing Areas in U.S. Post Biggest Declines in Population

The report shows the effects on cities as the U.S. economy becomes more service-oriented. Some 5.7 million manufacturing jobs have been lost since 2000, while service-producing employment has grown by about 5.8 million, according to Labor Department figures..... In a separate report today, the Census Bureau said state government tax collections decreased 8.6 percent, or $66.9 billion, to $715 billion in fiscal 2009. Income tax collection declined 12 percent to $245.9 billion, and government revenue from corporate taxes dropped 21 percent to $40.3 billion, the report showed.

Amtrak Seeks $446 Million to Replace Aging Rail Fleet

Amtrak, the U.S. long-distance passenger railroad, asked Congress for $446 million to begin replacing locomotives and passenger cars as President Barack Obama increases transportation spending on rail.... Passenger cars in Amtrak’s fleet have been in service for an average of 24 years, an all-time high for the railroad that plans to replace rail cars and locomotives over the next 30 years. Boardman said Amfleet I railcars, which he called the “backbone” of the regional service on the Northeast Corridor between Washington and Boston, were built in the late 1970s.

Villaraigosa Warns: Blocking DWP Rate Hikes = Bankruptcy for LA (News audio)

Click on play button above to hear podcast (Click on the forward arrow under where it says "KNX 1070's Ed Mertz and Claudia Peschiutta report ")

Fed’s Yellen Says Too Soon to Raise Interest Rates

Fed’s Yellen Says Too Soon to Raise Interest Rates Federal Reserve Bank of San Francisco President Janet Yellen said it’s too soon to raise interest rates, and she discounted concerns record budget deficits might fuel inflation.....“I’m not alarmed by the current enormous deficits” that are “transitory and recession-related,” said the 63-year-old regional bank chief, who is President Barack Obama’s choice as the next central bank vice chairman. “The economy will be operating well below its potential for several years,” hindered by foreclosures and unemployment that she forecast at about 9.25 percent by the end of the year. “I don’t think we’re due for an outbreak of inflation, not in the short run, as a result of the Fed’s economic stimulus measures and not in the long run as a consequence of massive federal budget deficits,” she said.

U.S. Lawmakers Urged to Consider Tax Hikes, Spending Cuts

The U.S. government's rising debt load cannot be sustained over the long haul and reducing it will require a combination of spending cuts and tax hikes, experts told lawmakers in the House of Representatives Tuesday during a hearing on taxes and the federal budget. Last year, the federal government deficit reached $1.4 trillion, the highest since World War II, and more red ink is projected. Rising spending on Social Security and Medicare is part of the problem, but spending cuts alone won't suffice, Syracuse University professor Leonard Burman said before the House Ways and Means Committee's subcommittee on Select Revenue Measures. "As unpalatable as it may be, you're going to have to have to raise taxes, and not just on the rich," Burman said.

Wayne County Leads Nation In Population Loss Again (Detroit)

Around a third of Detroit is now vacant and Mayor Dave Bing has proposed demolishing empty buildings as part of a plan to scale down the city and improve public services.

Bing is expected to detail plans to demolish 3,000 buildings this year and 10,000 in the next four years. In 2008, the city razed about 600. Demolitions could be a key step in downsizing, a broad, multiyear plan that intends to preserve viable neighborhoods to reflect population declines from about 1.8 million in 1950 to about 900,000 today.

French Bankruptcies Rise 3% in 2010 in ‘Fragile’ Economy

Three percent more French companies sought court protection from creditors in the first two months of 2010 than during the same period a year earlier, according to a report by French reorganization specialists. As of March 5, the number of companies that asked for creditor protection under either pre-insolvency or post- insolvency procedures totaled 10,400, according to today’s report by Deloitte France and Altares SAS.

San Diego Tollway Builders File Bankruptcy

The recession has taken its toll on operators of San Diego County's lone tollway. South Bay Expressway LP and partner California Transportation Ventures Inc. filed Monday in San Diego for Chapter 11 bankruptcy protection. The companies completed the nine-mile South Bay Expressway connecting Spring Valley with Otay Mesa less than three years ago with much fanfare. But the building boom slowed to a halt and traffic volume was only a third of projections. The court documents cite the economic and mortgage meltdown as well as a halt in development for lowering traffic projections. Instead of the projected 60,000 vehicles daily by 2009, the tollway average only 23,000.

Americans Say They Missed 73% Rise in S&P 500 as Economy Surged

By an almost 2-to-1 margin Americans believe the economy has worsened rather than improved during the past year, according to a Bloomberg National Poll conducted March 19-22. Among those who own stocks, bonds or mutual funds, only three of 10 people say the value of their portfolio has risen since a year ago.

AP Analysis: Average County Was Stressed In January

Worsening economic conditions caused the nation to reach a bleak milestone in January: For the first time since The Associated Press began analyzing conditions in more than 3,100 U.S. counties nearly a year ago, the average county was found to be economically stressed.

More Homeless on New York City Streets Than Last Year

In the past year, New York City saw a significant increase in the homeless people sleeping on the streets, subways, and in parks. Data released by the city's Department of Homeless Services (DHS) on Friday found that, compared with last year, there has been a 34 percent increase in the number of homeless people living on the streets of New York. In January, the City did its annual homeless sweep, where 2,500 volunteers combed through five boroughs in search of the homeless sleeping on the streets, in subways, and in other public spaces. The sweep found 3,111 homeless persons—an increase of 783 over the previous year's findings.

Rite Aid Says It Welcomes EBT Cards/Food Stamps

"One in eight Americans are receiving food assistance through SNAP according to the USDA," said Brian Fiala, Rite Aid Executive Vice President, Store Operations. "With nearly 4,800 Rite Aid stores nationwide offering assorted groceries, accepting EBT cards is just another convenience we can offer to our customers and help make their lives a little easier."

More Middle-Class Jobless Need Government Aid (California)

"The duration of long-term unemployment, which is over six months, is unlike anything we've seen since the Depression, and even though we are extending the safety net, it is not enough for some folks," said Stephen Levy with the Center for the Continuing Study of the California Economy in Palo Alto. "The situation is awful, way beyond the 12.5 percent figure" of unemployment. This bleak landscape is leading more middle-class families, like the Tanners, to turn to government assistance programs.

Further Fears For Greece Following Central Bank Report

There were further fears for debt-stricken Greece today after the country's central bank, the Bank of Greece (BoG), said economic growth will fall this year by 2%, worse than the Government’s forecast of between 1.2% and 1.7%. According to the BoG: “The Greek economy has fallen into a vicious circle with only one way out: the drastic reduction of the deficit and debt.”

New York City: 19,000 Layoffs, Aid Reduction Would Be "Catastrophic" For The City

"It does not appear that the city will weather the Albany budget without having a significant impact on our own operations and our own fiscal situations," Skyler says. The possible $1.3 billion cut in state aid to New York City could mean layoffs of 19,000 city employees, including 8,500 teachers. Bloomberg says the aid reduction would be "catastrophic" for the city. Agencies are being asked to submit their revised budgets by April 7. While the state's budget deadline is April 1, the city's is July 1.

17 Comments

saxplayer00o1's picture
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Re: Daily Digest - March 24

"LONDON — The euro slid to a ten-month low Wednesday amid mounting expectations that the International Monetary Fund will play a central role in any financial package for Greece and the news that Portuguese debt has been downgraded by one of the world's leading credit rating agencies."

................1A) Portugal credit rating downgraded

"Portugal's credit rating has been downgraded by leading credit rating agency Fitch.

Concerns about the country's high levels of debt led the agency to drop the rating from AA to AA-.

Earlier this month, Portugal passed an austerity budget aimed at cutting its deficit to the level permitted for countries using the euro currency.

The Portugal downgrade heightens concerns about the health of some of Europe's heavily indebted economies.

"The downgrade has more impact on the wider sovereign debt crisis, rather than on Portugal at the moment," said Peter Chatwell at Credit Agricole.

However, the downgrade could mean Portugal has to pay higher yields on government bonds to attract investors, making it more expensive for the country to borrow money - even though other leading ratings agencies may not necessarily follow Fitch's lead. "

..........................1B) Greece Will Default `at Some Point,' Hurt Euro, UBS Economist Donovan Says

"(Reuters) - Japan's parliament approved on Wednesday a record $1 trillion budget for the fiscal year from April, with an all-time high of 44.3 trillion yen ($490 billion) in new bond issuance underlining the country's tattered finances."

"The new pension plan would require local governments to contribute an added $63 million in the first year. Within two years, their payments would rise to $337 million.

Supporters said state forecasts predict shortfalls between revenues and expenses for years into the future, a trend that Wall Street firms that play a role in setting the interest on Maryland's debt dislike.

"The state is under a lot of stress," said Sen. Richard S. Madaleno Jr., a Montgomery County Democrat who supported the pension shift in the budget committee.

The state this year owes $900 million in teacher pension payments, and that is expected to grow to $1.2 billion in the coming years. About a quarter of the amount is now funded with federal stimulus money, which will not be available next year. "

"SACRAMENTO, Calif- State Superintendent Jack O'Connell today announced a 17 percent increase in the number of school districts that may be unable to meet future financial obligations because of the continuing state budget crisis and cuts to public education.

Massive state budget cuts are crippling our public school system's ability to operate," O'Connell said.

In the first interim status report of the 2009-10 fiscal year, 126 local educational agencies are now on the Fiscal Warning List list, which is up 17 percent from the 108 school districts on the watch list last June."

"March 24 (Bloomberg) -- Britain might not face as “monumental” a situation as people assume if the nation were to lose its top AAA credit rating, former Bank of England policy maker David Blanchflower said. "

"Budget Due

Darling will present his budget to Parliament at 12:30 p.m. today as the ruling Labour Party trails in opinion polls with an election due within weeks. The deficit is set to reach about 12 percent of gross domestic product in the current fiscal year.

Former finance minister Norman Lamont said today “it’s a risk” that Britain loses the top ratings grade because the nation’s tax take may not be enough to cover the cost of borrowing. The public finances are too tight to allow Darling to increase spending, he said.

“We are getting near to a situation where receipts are not necessarily going to be adequate for paying the debt interest,” Lamont said on Bloomberg Television. “It’s crystal clear that Alistair Darling doesn’t have any room for maneuver.” "

"US Treasury Secretary Timothy Geithner on Tuesday swatted aside pressure for a swift reform of troubled government-backed mortgage giants, as data pointed to a still struggling US real estate market.

Geithner told Congress any restructuring of the mega-lenders Fannie Mae and Freddie Mac that found themselves at the epicenter of the global financial meltdown, "must be done as part of a reform of the wider housing finance system.""

"Some council members suggested a sliding scale, rather than 10 percent across the board cut, to make it less painful for employees, but the mayor insists the city needs money, especially since $138 million went to employee retirement funds this year. The city's obligation next year is expected to go up another $53 million.

"I also ask union leaders to come to the negotiating table with egos set aside and share with us the responsibility of doing what's necessary," said Paul Higgins, a San Jose resident.

Community members spoke out asking everyone, including the unions, to help -- even if it hurts. "

"The first emergency vehicle to arrive at the burning apartment building was a fire truck, a type of apparatus that carries no water or fire hoses. The firehouse that sent it — Station 11, at Broadway and 25th Street — could not deploy its fire engine to douse the flames because of a service "brownout" program the city recently instituted due to budget shortfalls.

Under the cost-cutting measure, engine companies at 13 of the city's 47 fire stations are deactivated for a month at a time on a rotating basis, leaving up to eight of them out of service each day. The firefighters that typically staff those vehicles fill in for other crew members who are absent from duty.

The plan, which went into effect Feb. 6, is aimed at saving the city about $11.5 million in overtime expenditures."

..............8A) Councilmember Emerald Pings False Bankruptcy Allegations (San Diego)

"On March 1, the state agency that invests public pension money issued a news release bragging about a 16.3 percent rebound in its portfolio in the second half of 2009.

Two days later, the State Board of Administration sat down with its advisory council and revealed the rest of the story:

Even with those gains, Florida's public pension fund slipped into the red in 2009 for the first time in a dozen years. And the fund's shortfall is projected to be even bigger this year. That news has not been as widely publicized.

While past surpluses in the pension fund kept a lid on local contributions during boom times, now the bill is coming due. And plugging the multibillion-dollar deficit will require about a 40 percent hike in contributions from local governments stretched by declining revenues."

"Media reports from Canada, the U.S. and the U.K. this week are pointing to a creaky global public retirement system that is chronically underfunded and possibly unsustainable. "

"Delusional

Biggs believes that public pension plans are hiding behind unrealistically low deficit figures, allowing policy-makers to defer tough choices today at the cost of a much heavier burden on taxpayers in the future.

“There is no question in my mind that public pension funds are deluding themselves if they think they will make up the shortfall by investing more in hedge funds and private equity, or by leveraging up their bond portfolio,” he says.

Biggs points to the American political system as a major factor in the chronic underfunding of public pension plans, as it is much easier—and politically expedient—to withhold pension contributions during times of budget shortfalls. In fact, there’s a strong political incentive to increase benefits and virtually no upside to tackling the burgeoning costs. "

"WASHINGTON (Reuters) - Sales of newly built U.S. single-family homes fell for a fourth straight month to a record low in February, a government report showed on Wednesday, heightening fears of renewed weakness in the housing market.

The Commerce Department said sales fell 2.2 percent to a 308,000 unit annual rate from an upwardly revised 315,000 units in January.

Analysts polled by Reuters had expected new home sales to edge up to a 320,000 unit annual pace from January's previously reported 309,000 units.

The data came on the heels of report on Tuesday showing existing home sales fell for a third straight month in February and a jump in the supply of houses on the market."

................11A) Inventories Rose in February

"The national housing inventory has risen to its highest level since September, before first-time buyers started rushing to put contracts on houses and beat a November 30 deadline that Congress subsequently extended to April 30. 2010.

At that time, the months’ supply was 8 months. Now it is even higher, at 8.6 months, a reflection that the softer demand we are currently experiencing is moving inventory at a slower pace. "

"Cranston's 'Ticking Time Bomb'

But the comfortable retirement promised to retired firefighters and police officers is taking its toll on the city where DeGenova still lives. Today, Cranston is staggering under a huge underfunded pension liability equal to more than twice its annual budget, and paying the pensions of retired police officers and firefighters now absorbs some 20 percent of the city's budget.

"Right now the unfunded liability is well over $240 million," says Mayor Allan Fung. "And so it's a big obligation and is basically a ticking time bomb for the city of Cranston that we are trying to get a handle on."

How this happened is a monument to political shortsightedness. For years, Cranston operated a separate pension fund for more than 500 police and firefighters who regularly contributed money from their paychecks to the fund. (Other municipal employees were part of the state pension system.) Instead of setting the money aside and investing it, the city used the funds to pay operating expenses — everything from shoveling snow to paying employee salaries, says former Mayor Stephen Laffey.

"It was like taking your 401(k) plan and saying, 'I have to buy a lot of bubble gum with it.' That's what they did, and they really did it with a straight face," Laffey says."

"If states could go bankrupt, Illinois might be the first.

State finances are in such a mess that many experts say the "Land of Lincoln" is on borrowed time and money."

Today, the unfunded pension liability in Illinois is much greater than the pension funds' assets, and has ballooned to a staggering $77.8 billion.

""That means every man, woman and child in the state of Illinois is on the hook for $6,031 in pension promises that we don't have the assets for," says Lawrence Msall, president of The Civic Federation, a Chicago-based group that keeps tabs on state and local government finances.

"And that [pension underfunding] has grown dramatically by almost 300 percent to 400 percent over the last decade, because the state has used gimmicks," Msall says. "It has ignored its pension obligations, it has borrowed or had partial pension holidays, and it has just flat out not made the adequate contributions to the pensions.""

"Pension promises are now causing problems in Pennsylvania. Some school district's are looking at a 500% increase in payments to the state teacher's pension fund something they say they just can't cover.

The budget process for next year has already started and in this economy people say they can't afford property tax increases. That leaves school districts stuck with trying to find a creative ways to generate revenue, like pay to play. But they say nothing they can do will account for the pension problem.

"It will bankrupt every school district in the state.""

"Fresno County government got a double dose of bad news Tuesday -- the grand jury declared the county's pension plan unsustainable just as county supervisors learned they face deep cuts next year, driven in part by soaring pension costs.

The county's pension costs are expected to rise by tens of millions of dollars each year and deprive taxpayers of government services, the grand jury said in a report issued Tuesday."

  • Other headlines:

NC short $65 billion for roads

California, in Financial Crisis, Opens Prison Doors

Dealmakers meet to sort $26 bln Dubai World debt

Mayor's budget plan includes layoffs of more than 600 (Baltimore)

CMS board votes to start layoffs of 600 teachers (Charlotte)

Layoffs to hit Shaw's in Vermont (up to 1,000 employees)

Long Beach's projected deficit swells from $11 million to $18.5 million

Sonoma Co. To Pay Less Toward Employee Retirement

Venezuela Arrests Top Opposition Leader

Ten reasons why this is not a bull market (Commentary)

New Jersey Cuts Workers' Benefits

Bank of America Says Its Lehman-Style Bogus Balance Sheet Manipulation Is A-Okay

Economic Downturn: The Decline of Shopping Malls (Youtube video from Flint, Michigan)

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Re: Daily Digest - March 24

Preparing For Peak Oil - Part 1 of 4 (video) & links to other parts

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Re: Missing the rise in the S&P 500

I am one of those who got out of the  market before it  tumbled in the fall of 2008. But I also failed to get back in and benefit from the upturn in stock prices.  I am 54 yrs old and still wanting my IRA to grow in value instead of sitting on the sidelineswith cash any longer..........

I just need one of you readers to remind me that this is a bear market rally and that the rise in the market is due to the bankers money making the S&P go up and not the true worth of the earnings from the corporations themselves. I am getting restless on the sidelines but I have been reminded that during the depression of 1929, there were several rallies and severe consequent crashes and big declines that followed. I don't think I am sophisticated enough to safely invest in Wall street. My gut says it is a ruthless game of chance.

I think the days of investing in  Wall Street for the long term are not what they used to be.

It is hard to sit here and shine my gold coins and at the same time watch the market go up. Any thoughts ?

Tom

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Re: Daily Digest - March 24

I first watched the Crash Course in 2007. I bought the DVD's as soon as you put them out.  I was knowledgeable about the crash. I prepared as best I could, but I couldn't get a job that was secure. I have been out of work for 9 months and it has been a long haul. I am blogging about it at www.aimlow.com

Thank for your putting this situation in a context that is understandable. I feel for the people who don;t see what else is coming. 

Aimlow Joe

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Re: Daily Digest - March 24

 

March 24 (Bloomberg) -- Treasury five-year notes dropped the most in seven months after a record-tying $42 billion auction of the securities sold at the widest difference in yield over the average forecast of primary dealers since July.

Yields on 10-year notes increased to the highest level since January as demand from a group of investors that includes foreign central banks was the lowest in eight months. U.S. interest-rate swap spreads plunged to the lowest levels in more than two decades after Fitch Ratings’ downgrade of Portugal raised the risk of owning sovereign debt and corporate bond issuance surged.

“The momentum is to higher yields,” said Aaron Kohli, an interest-rate strategist in Stamford, Connecticut, at Royal Bank of Scotland Group Plc, one of 18 primary dealers obligated to bid at Treasury auctions. “It’s not the auction that started the trend, it was the swap spreads. But the auction kept it going. It’s dimmed the outlook for tomorrow’s auction.”

"March 24 (Bloomberg) -- Treasuries, the euro, stocks and commodities slid as a downgrade of Portugal’s debt and weaker- than-forecast demand in a U.S. bond auction added to concern governments will struggle to fund swelling deficits. "

 

"MERCED, Calif. – The mysterious 4-year-old crisis of disappearing honeybees is deepening. A quick federal survey indicates a heavy bee die-off this winter, while a new study shows honeybees' pollen and hives laden with pesticides.

Two federal agencies along with regulators in California and Canada are scrambling to figure out what is behind this relatively recent threat, ordering new research on pesticides used in fields and orchards. Federal courts are even weighing in this month, ruling that the U.S. Environmental Protection Agency overlooked a requirement when allowing a pesticide on the market.

And on Thursday, chemists at a scientific conference in San Francisco will tackle the issue of chemicals and dwindling bees in response to the new study."

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Re: Missing the rise in the S&P 500
Tommygun wrote:

I am one of those who got out of the  market before it  tumbled in the fall of 2008. But I also failed to get back in and benefit from the upturn in stock prices.  I am 54 yrs old and still wanting my IRA to grow in value instead of sitting on the sidelineswith cash any longer..........

I just need one of you readers to remind me that this is a bear market rally and that the rise in the market is due to the bankers money making the S&P go up and not the true worth of the earnings from the corporations themselves. I am getting restless on the sidelines but I have been reminded that during the depression of 1929, there were several rallies and severe consequent crashes and big declines that followed. I don't think I am sophisticated enough to safely invest in Wall street. My gut says it is a ruthless game of chance.

I think the days of investing in  Wall Street for the long term are not what they used to be.

It is hard to sit here and shine my gold coins and at the same time watch the market go up. Any thoughts ?

Tom

I can't give advice - but I got out pre-2008 and I'd stick broken glass in my eyes before going back in, and I'm not a wuss, I took a significant risk in real estate in 2006-2007 and got out of that right at peak, my wife and I did kick ourselves for a few weeks when after tripping our money the RE investor tried to double his. Didn't work out for him, we now have no regrets at settling for a 6 figure triple or the insane capitol gains check we wrote. I'm not going to be greedy in a casino rigged with HFT and players on Maiden Lane with a basement full of gold in a world where PE and valuations and volume means jack.

There'll be PLENTY of money on the table for the polished metal.

I only have to make a few bets in my life - as long as they are all correct.

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Re: Daily Digest - March 24

"A survey of 200 sites in 20 countries around the world has found that bisphenol A, a synthetic compound that mimics estrogen and is linked to developmental disorders, is ubiquitous in Earth’s oceans."

http://www.wired.com/wiredscience/2010/03/ocean-bpa/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+wired%2Findex+%28Wired%3A+Index+3+%28Top+Stories+2%29%29&utm_content=Google+Feedfetcher

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Re: Missing the rise in the S&P 500

Hi Tommy,

In the last year, the stock market and the gold market have been one and the same market, so if you your holding gold then you participated in the stock market per se.

One day, the cash that you have been sitting on will become highly valued by the market again. Wait until that day to "trade" your cash for some cheap securities. 

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leo0648
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Re: Missing the rise in the S&P 500
Tommygun wrote:

I am one of those who got out of the  market before it  tumbled in the fall of 2008. But I also failed to get back in and benefit from the upturn in stock prices.  I am 54 yrs old and still wanting my IRA to grow in value instead of sitting on the sidelineswith cash any longer..........

I just need one of you readers to remind me that this is a bear market rally and that the rise in the market is due to the bankers money making the S&P go up and not the true worth of the earnings from the corporations themselves. I am getting restless on the sidelines but I have been reminded that during the depression of 1929, there were several rallies and severe consequent crashes and big declines that followed. I don't think I am sophisticated enough to safely invest in Wall street. My gut says it is a ruthless game of chance.

I think the days of investing in  Wall Street for the long term are not what they used to be.

It is hard to sit here and shine my gold coins and at the same time watch the market go up. Any thoughts ?

Tom

I have invested in canadian energy trusts which have done really well for me.  The dividends aren't as nice as they were, but still pay around 7-8%.  The trick is timing though.  I bought when oil was around $50 and plan to sell when oil prices get out of whack again.  Even at $40 oil, the trusts were paying dividends (although cut them significantly).  I figure the dividends are a little more stable now as well as oil prices.  If ng rebounds, even better as most of the companies are 50/50 ng/oil.

 

Other than that, I am all metals/miners.  I am young and don't have a family yet, so the risk isn't a big deal to me. 

 

IMO, Ben Bernake will not let the stock market crash.  The pensions are dependent on the market returning 8-9% per year.  Figure in that most pensions are underfunded now, so the market will have to gain even more to catch up to 2007 levels.  We will see Ben's liquidity flow into the commodity markets.  I wouldn't be surprised if we saw commodities make some really large moves in the next 2-3 years.

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Re: Daily Digest - March 24

<http://english.aljazeera.net/news/middleeast/2010/03/2010324131416372358.html>

Saudi arrests over 'terror plot'

Saudi Arabia, the world's biggest oil exporter, has arrested more than 100 people suspected of having links with al-Qaeda, the interior ministry has said.

A statement from the ministry on Wednesday said the suspects were plotting attacks on oil and security installations in the kingdom.

One cell consisted of 101 people, and two smaller cells were made up of six men each.

The large cell comprised 47 Saudis and 51 Yemenis, as well as a Somali, a Bangladeshi and an Eritrean, said the statement read out on state television.

The two smaller groups were made up of 11 Saudis and a Yemeni, who security officials described as being a prominent member of al-Qaeda.

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pinecarr
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Re: Daily Digest - March 24

SaxPlayer, that honeybee die-off story is just is just getting scarier all the time.  Nothing like watching the food chain take a hit!

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Re: 12 Local Schools Could Face Bankruptcy

Schools, Municipalities, and States stubbornly refuse to acknowledge that the spending party is OVER.  A local County Executive talks of 'riding out' the recession--the NYS Senate has refused to accept the Governor's budget proposal--saying cuts need to be 'softer'!!  The NYS Controller has to jockey the checkbook so as not to run out of cash!

Most shameful has been the use of the central governments borrowed stimulus money to put off the cuts that will have to be made. More debt pumped into a debt saturated economy will only accelerate the fall. The coruptocrats have neither the comprehension or the the will to do what it takes. In the long run a quick reset (bankruptcy or default) would seem to be less painful-- would it not?

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nyfarmer
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Re: 12 Local Schools Could Face Bankruptcy

Schools, Municipalities, and States stubbornly refuse to acknowledge that the spending party is OVER.  A local County Executive talks of 'riding out' the recession--the NYS Senate has refused to accept the Governor's budget proposal--saying cuts need to be 'softer'!!  The NYS Controller has to jockey the checkbook so as not to run out of cash!

Most shameful has been the use of the central governments borrowed stimulus money to put off the cuts that will have to be made. More debt pumped into a debt saturated economy will only accelerate the fall. The coruptocrats have neither the comprehension or the the will to do what it takes. In the long run a quick reset (bankruptcy or default) would seem to be less painful-- would it not?

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Damnthematrix
Status: Diamond Member (Offline)
Joined: Aug 10 2008
Posts: 3998
Re: Daily Digest - March 24

Portugal downgrade knocks euro as Merkel imposes IMF solution for Greece

By Ambrose Evans-Pritchard, International Business Editor
Published: 7:39PM GMT 24 Mar 2010

Finance minister Teixeira dos Santos said he would do his utmost to ensure that Portugal does not succumb to the same sort of crisis engulfing Greece. "I am worried because we know that markets overshoot sometimes. The risk exists, I cannot ignore that," he said.

UBS said Greece should consider default within EMU rather that risk leaving monetary union if matters ever reach that stage.

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farmjohnny
Status: Member (Offline)
Joined: Oct 9 2008
Posts: 2
Re: Daily Digest - March 24

Tommy

After 33 years in Vegas I've learned that the only advantage you have over the house is that you do not have to play.

Invest in yourself, Aquaculture, Vermiculture, Permiculture (you get the idea).

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Jasenica
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Joined: May 6 2009
Posts: 35
Re: Missing the rise in the S&P 500
Tommygun wrote:

I am one of those who got out of the  market before it  tumbled in the fall of 2008. But I also failed to get back in and benefit from the upturn in stock prices.  I am 54 yrs old and still wanting my IRA to grow in value instead of sitting on the sidelineswith cash any longer..........

I just need one of you readers to remind me that this is a bear market rally and that the rise in the market is due to the bankers money making the S&P go up and not the true worth of the earnings from the corporations themselves. I am getting restless on the sidelines but I have been reminded that during the depression of 1929, there were several rallies and severe consequent crashes and big declines that followed. I don't think I am sophisticated enough to safely invest in Wall street. My gut says it is a ruthless game of chance.

I think the days of investing in  Wall Street for the long term are not what they used to be.

It is hard to sit here and shine my gold coins and at the same time watch the market go up. Any thoughts ?

Tom

I am similar to you. Bailed out of stocks during July 2008 although was contemplating the move in November 2007 (doh!). Sold my house in February 2008 and moved in with parents. All was looking like I had made the right decisions until March 2009. Since then I have been waiting for the correction which has not come. I have given up on waiting for a 1929 style crash and believe this decline into the second great depression will be a slow, drawn out affair. Once countries start to default on their debts, then the real 'fun' will start.

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Davos
Status: Diamond Member (Offline)
Joined: Sep 17 2008
Posts: 3620
Re: Missing the rise in the S&P 500
Jasenica wrote:

 I have given up on waiting for a 1929 style crash and believe this decline into the second great depression will be a slow, drawn out affair. Once countries start to default on their debts, then the real 'fun' will start.

IMO the last one wasn't too fast. Also, Bernanke has chided that Fed for sitting on it's hands, something he isn't doing, which imo will prolong the 1929-1930 bear correction and exacerbate the peak and the trough. BK is BK with Bernanke it is BK on Steroids, masking the pain and prolonging it. 

 

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