Daily Digest

Daily Digest - September 16

Wednesday, September 16, 2009, 10:46 AM
  • Ron Paul on CNN: Fed IS the Source of the Problem
  • D.C.: "The Commercial Version of the Subprime Situation"
  • Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman
  • Minsky, “bubbles”, and gold
  • Blogs vs Mainstream Media
  • Debt
  • Ghost Towns in Ireland
  • US Credit Shrinks at Great Depression Rate, Prompting Fears of Double-Dip Recession

Economy

Ron Paul on CNN: Fed IS the source of the problem

D.C.: "The commercial version of the subprime situation"

... property managers for the 1.4 million-square-foot [Constitution Center in Southwest Washington], which is scheduled to be completed in November, have yet to land any tenants ... Constitution Center is just one of several dozen existing, newly constructed or soon-to-be-completed office buildings in the Washington region that had vacancy rates in the 80 to 100 percent range as of midyear.

... In June ... the amount of vacant space in the region soared nearly 24 percent, to 47 million square feet from 38 million during the same month a year earlier.

Stiglitz Says Banking Problems Are Now Bigger Than Pre-Lehman

Sept. 13 (Bloomberg) -- Joseph Stiglitz, the Nobel Prize- winning economist, said the U.S. has failed to fix the underlying problems of its banking system after the credit crunch and the collapse of Lehman Brothers Holdings Inc.

“In the U.S. and many other countries, the too-big-to-fail banks have become even bigger,” Stiglitz said in an interview today in Paris. “The problems are worse than they were in 2007 before the crisis.”

Minsky, “bubbles”, and gold

As I have pointed out in numerous, previous commentaries (most recently with my “Gold Wars” series), this is why gold and silver are seen by the banksters, themselves, as the bane of Wall Street. This is why this cabal of bankers has (for decades) invested vast amounts of time, effort, money, and much of their own hoards of bullion into an effort to suppress the prices of precious metals, and to use their propaganda-machine to attempt to discredit gold and silver as “financial assets” to the greatest extent possible.

Blogs vs Mainstream Media

63% say that news stories are often inaccurate.

Debt

Ghost Towns in Ireland

The government is taking over most of the non-residential property loans in Ireland. It is amazing that these loans total about half of Ireland's GDP (not including residential).

US credit shrinks at Great Depression rate prompting fears of double-dip recession

Both bank credit and the M3 money supply in the United States have been contracting at rates comparable to the onset of the Great Depression since early summer, raising fears of a double-dip recession in 2010 and a slide into debt-deflation.

25 Comments

Dogs_In_A_Pile's picture
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"First Shot In The Debtors' Revolution??"

Woman revolts, won't pay credit card bill

Posted Sep 15 2009, 04:44 PM by Teresa Mears

Ann Minch is mad as hell and she's not going to take it anymore.

Like many, she has seen the interest rate on her credit card jacked up (in her case, to 30%), even though she made all the payments on time, wasn't over her limit and didn't in any way violate Bank of America's rules. She had been making the minimum payment on her account for years, about $130 a month.

After trying, and failing, to get the interest rate reduced, she has, in her words "fired the first shot in the debtors' revolution" by refusing to pay another cent of her $5,943.34 debt unless Bank of America returns the interest rate to its previous level, 12.99%. She has staked out her position in this YouTube video, which has circulated widely on the Internet and has been viewed more than 150,000 times.

Full article link:  http://blogs.moneycentral.msn.com/smartspending/archive/2009/09/15/woman-revolts-won-t-pay-credit-card-bill.aspx?CommentPosted=true&PageIndex=140

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Re: Daily Digest - September 16

 

2) Greenspan Sees Threat U.S. Congress Will Hamper Fed

 

  • 3) Look at this: Among the derivatives downgraded by Moody's: a CDO of CDOs
  •  
  • 4) Treasury Relaxes Restrictions on Refinancing in an Effort to Stave Off Commercial-Mortgage Defaults
  •  
  • 5) Go for Gold: Inflation Is Here and Going to Get "Much, Much Worse," Pento Says

6) Next Leg Down Will Be "More Painful Than The Last," Pento Says

  • 7) Alan Grayson (D-FL) has announced a hearing for House Resolution 1207, which would subject the Federal Reserve to an independent audit.
  •  
  • 8) Obama administration: Cap and trade could cost families $1,761 a year
  •  
  • 9) China may ban export of gold, silver
  • "In some cases we note serious concern, and in other cases absolute dread over a perceived dollar crash."

 

 

 

 

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Re: Daily Digest - September 16

September 25 is Earth Overshoot Day

What is Earth Overshoot Day?

Earth Overshoot Day marks an unfortunate milestone: the day when humanity begins living beyond its ecological means. Beyond that day, we move into the ecological equivalent of deficit spending, utilizing resources at a rate faster than what the planet can regenerate in a calendar year.

...

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Re: Daily Digest - September 16

Hau kola fujisan,

Thank you for a very interesting article and link. 

It is only a matter of time before Ina Maka, our Mother Earth, begins to tell and show us how disappointed she is with our lack of respect for our home.

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Re: Daily Digest - September 16

Was in Ireland recently.  Views ranged from the gloomy to the depressed.  Pay cuts are widespread even in the State sector (one person told me he had 2 cuts already this calendar year!) and the government cutbacks on social welfare spending will be very substantial next year.
They were living beyond their means and they will be paying the price (for that and many speculative banking decisions) for some time to come.

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More On the Ghost Fleet by Zerohedge

This Zerohedge post is truly stunning:

Thousands of Rusting Ship Hulls Are A Fitting Tribute To This Speculative Market Bubble

The bottom line: world trade has collapsed, shipping lines, once flourishing, have become graveyard archipelagos populated by rusting ship skeletons. Yet all of this is beyond the land, and thus far from sight. Of course, who needs trade when you have a speculative market trading in its own bubble, hitting yearly highs day after day, thanks only and exclusively to the Chairman's printing press. It is a pity these ships can not sail in the sea of hundred dollar bills that is being created each and every day at the Federal Reserve, whose only use these days it seems is to buy junker stocks and to feed the algos that lift whatever offers are stupid enough to float in the equity market.

Be sure to check out the google maps pics showing the lack of shipping activity in the original article. 

Its no wonder nobody wants the dollar, because without any global trade nobody needs it.

Jeff

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Re: Daily Digest - September 16

Rep. Bachmann appears on a Fox Business panel to discuss the impact of Obama's tariff on tires from China, along with his seemingly cohesive relationship with America's unions.

 

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Re: Daily Digest - September 16

Like Jack McHugh says: Protectionism put the Great in Depression.

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Re: Daily Digest - September 16

Denninger is getting more and more serious now saying we can face a major depression or a collapse at this point. Though I would point out a major depression would likely cause an oil prodution collapse so I guess its over either way. Chances of the US governemnt forcing out the bad debts are practically zero so I guess its a collapse, at least according to Denninger.

 

Anyone here agree with him, or think he's wrong in some way? My knowledge is somewhat limited in such manners so I cannot be sure how much to believe there.

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Michael Moore on Jay Leno

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Re: Daily Digest - September 16

I am sorry JAG, but I refuse to watch Michael Moore.  He is the little boy who cried wolf and is to be ignored.

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Re: Moore or Less

Gadfly on the wall

That's the biggest little boy I've ever seen

Michael correctly says both parties are bought and sold

but in the next breath says one party's leader is trying to do the right thing?

Like most of his films

Michael floats on the surface

but never dives deep

JAG's picture
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Re: Daily Digest - September 16
Gadfly wrote:

I am sorry JAG, but I refuse to watch Michael Moore.  He is the little boy who cried wolf and is to be ignored.

I can understand, since he is quite political. Personally, I think politics is for suckers, but anyone who takes on the banksters in the mainstream media is worthy of a few minutes of my attention.

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Re: More On the Ghost Fleet by Zerohedge
JAG wrote:

This Zerohedge post is truly stunning:

Thousands of Rusting Ship Hulls Are A Fitting Tribute To This Speculative Market Bubble

The bottom line: world trade has collapsed, shipping lines, once flourishing, have become graveyard archipelagos populated by rusting ship skeletons. Yet all of this is beyond the land, and thus far from sight. Of course, who needs trade when you have a speculative market trading in its own bubble, hitting yearly highs day after day, thanks only and exclusively to the Chairman's printing press. It is a pity these ships can not sail in the sea of hundred dollar bills that is being created each and every day at the Federal Reserve, whose only use these days it seems is to buy junker stocks and to feed the algos that lift whatever offers are stupid enough to float in the equity market.

Be sure to check out the google maps pics showing the lack of shipping activity in the original article. 

Its no wonder nobody wants the dollar, because without any global trade nobody needs it.

Jeff

JAG,

There is an equally valid way of looking at this conundrum:  With trade collapsing, foreigners have fewer incoming dollars.  Less trade means less dollars.  However, for anyone with dollar-denominated debt, the debt stay and the payments must be made.  Could that be why private foreign dollar holders are retracting their US-based dollars - to bring them home and pay their debts?  Then those whom they owe and are paying dollars to, namely banks, reinvest them in US Treasuries. 

It's getting very lonely over here in the dollar-appreciation camp.  If you can hear me over there at the mega dollar-collapse super convention, let me know what you think.  Once all those foreign-held dollars have left our shores, could that be when the dollar starts going up?  I mean, how are all those international dollar-debtors going to pay their bills without buying up dollars?

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Re: More On the Ghost Fleet by Zerohedge
Farmer Brown wrote:

It's getting very lonely over here in the dollar-appreciation camp.

In case you forgot, I'm standing right next to you and your right, this camp is totally deserted. Of course, I think Goldman Sachs might be joining us soon, I hope they bring some beer.

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Re: More On the Ghost Fleet by Zerohedge
Farmer Brown wrote:
JAG wrote:

This Zerohedge post is truly stunning:

Thousands of Rusting Ship Hulls Are A Fitting Tribute To This Speculative Market Bubble

The bottom line: world trade has collapsed, shipping lines, once flourishing, have become graveyard archipelagos populated by rusting ship skeletons. Yet all of this is beyond the land, and thus far from sight. Of course, who needs trade when you have a speculative market trading in its own bubble, hitting yearly highs day after day, thanks only and exclusively to the Chairman's printing press. It is a pity these ships can not sail in the sea of hundred dollar bills that is being created each and every day at the Federal Reserve, whose only use these days it seems is to buy junker stocks and to feed the algos that lift whatever offers are stupid enough to float in the equity market.

Be sure to check out the google maps pics showing the lack of shipping activity in the original article. 

Its no wonder nobody wants the dollar, because without any global trade nobody needs it.

Jeff

JAG,

 I mean, how are all those international dollar-debtors going to pay their bills without buying up dollars?

I think one must seriously consider that they may not be planning to pay. They'll be OK with debt service payments but when it comes to crunch time......well, 20 years ago I would have never believed that many muny  bonds would be in this boat. Nor would I have believed the gvm't would have forced bond holders at Chrysler and GM to go to the back of the line. There is nothing certain anymore.

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Re: More On the Ghost Fleet by Zerohedge
JAG wrote:
Farmer Brown wrote:

It's getting very lonely over here in the dollar-appreciation camp.

In case you forgot, I'm standing right next to you and your right, this camp is totally deserted. Of course, I think Goldman Sachs might be joining us soon, I hope they bring some beer.

Oh there you are!  It's hard to see you when you're under a pile of discarded articles by some guy named "Mish".  I can see Davos over at the megaconvention.  It looks like he's rigging up a catapult with flaming-oil and aiming it at those Goldman guys as they make their way here!

(Davos: Just kidding, just having fun).

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Re: Daily Digest - September 16

Like Jack McHugh says: Protectionism put the Great in Depression.

I believe it had more to do with FDR tripling the tax rate on businesses and individuals and stiff corporate regulaton that put businesses in a straight jacket. The federal income tax rate jumped from 25% to 79%. Protectionism certainly added a nail, but the tax rate hike welded the casket shut. Who wants to work hard, just to pay the gov't most of your income? Those that had the opportunity in the 1930's to create jobs instead, bought yachts and traveled the world, since it made no sense to make money, only to give it back to the federal gov't.

“We shall tax and tax, spend and spend, elect and elect.”

--Harry Hopkins (FDR advisor)

This depression will be different from the 1930s since the gov't is printing and spending this time, but hasn't significant raised taxes yet. This will probably lead to stagflation as the value of the dollar declines, while unemployment continues to rise. Although today, much of the US economy depends on imports for unfinished goods and energy. Any trade war would probably accelerate the dollars decline, and exports with large dollar reserves stop investing money in the US and spend it increasing the supply of dollars on international markets.

How the economy evolves has to do with how much money the gov't prints and spends. Too little we get deflation, too much will lead to hyperinflation and somewhere in between results in stagflation. Right now we appear to be in a unstable state of stagflation since prices have stablized (at least for the important stuff such as food and energy)

Over the long term we are almost certainly heading for hyper-inflation. We might experience a dip (back to deflation) if the fed does not renew its treasury Quantative Easing (QE) which is set to expire this month. If they fail to renew before its last 15 Billion is printed, it will send the economy into a double dip. After the second dip, he Fed will of course bring back QE again. They may limit the amount of QE and create a period of stagflation, or they may decide to take it up a notch in a vain attempt to kick the economy out of recession, which will lead to high inflation after a period of a year to 18 months. The Fed probably will need to take up a notch just to stabilize the economy after a second dip in order to bring back investor confidence. A second dip and a second round of burned investors are very much less likely to jump back in again, unless the Fed does some amazing things to get them to come back again.

The big issue is the vast amount of boomers now reaching retirement age that have been promised enourmous unfunded entitlements. This is the neutron star that going to vaporizes the camel's back. When the entitlement outlay soar, its going to force the gov't to print like mad or its going to force a hard default. I doubt very much Congress is going to permit a hard default when they control the printing presses, much as a heroin adict would go cold turkey when he has a machine that makes any amount of heroin he desires. I doubt  the gov't would cut or end entitlements since the result would be massive and overnight civil disobedence. Plus, the largest block of voters has been the elderly and the boomers thar rely or plan to rely on gov't entitlements. Cutting entitlements amounts to political suicide. A hard default would also make the dollar worthless overnight.

OT Humour: Just imagine hordes of elderly equiped with Zimmer frames causing mass panic all over the nation when the gov't cancels their entitlements.

 

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Re: More On the Ghost Fleet by Zerohedge
Farmer Brown wrote:
JAG wrote:
Farmer Brown wrote:

It's getting very lonely over here in the dollar-appreciation camp.

In case you forgot, I'm standing right next to you and your right, this camp is totally deserted. Of course, I think Goldman Sachs might be joining us soon, I hope they bring some beer.

Oh there you are!  It's hard to see you when you're under a pile of discarded articles by some guy named "Mish".  I can see Davos over at the megaconvention.  It looks like he's rigging up a catapult with flaming-oil and aiming it at those Goldman guys as they make their way here!

(Davos: Just kidding, just having fun).

ROTFLMAO

Anything can and probably will happen. My mind is open, I have only suspicions.

This is one tangled hair ball.

I think a lot can change if there is a perceived flight to safety or if dollars are needed to settle positions.

Take care

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Re: More On the Ghost Fleet by Zerohedge

Farmer Brown,

If JAG is on your right, I'm standing on your left.  I'm in the same dollar-appreciation camp.

Lori

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Re: Daily Digest - September 16

Look at the chart and the last paragraph.

The U.S. doesn't do too great on this one (saving).

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Re: Daily Digest - September 16
TechGuy wrote:

Like Jack McHugh says: Protectionism put the Great in Depression.

I believe it had more to do with FDR tripling the tax rate on businesses and individuals and stiff corporate regulaton that put businesses in a straight jacket. The federal income tax rate jumped from 25% to 79%. Protectionism certainly added a nail, but the tax rate hike welded the casket shut. Who wants to work hard, just to pay the gov't most of your income? Those that had the opportunity in the 1930's to create jobs instead, bought yachts and traveled the world, since it made no sense to make money, only to give it back to the federal gov't.

Hello TechGuy:

Your post was a good read.

You may be right about the taxes. If I'm not misstaken I think they were around 63% with Hoover, and FDR bought them to 79% and then to 94%, so even worse than what you wrote. Additionally he tried to get 100% from high income earners back then it was 25k. The Supreme Court shot him down 5 to 4 and he went after those 4 on the court.

King FDR.

Puplava talked about it between the 4 and 10 minute point here, take care

Mp3

Windows Media

Real Player

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tx_floods
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Re: Daily Digest - September 16

Hey, not to brag too much, but I'm famous now!  Cool

http://economicedge.blogspot.com/

A co-worker and I had lunch with Nate as he passed through El Paso. An hour just wasn't enough! Cool stuff!

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Re: Michael Moore on Jay Leno

It seems to me that there is an awakening brewing on both the right and left that our leaders have failed us. You hear it on the right from Ron Paul and now on the left from the likes of Huffington and Moore. Corporations, banks and their lobbyists have a chokehold on our nation.  My wish is that the false right left paradigm can be broken and our citizens can unite for the common welfare of our nation. I was first awakened to the notion several years ago listening to Ralph Nader speak of the oligarchs that run our nation. I hope we can turn the tide against the enemy.

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Re: Daily Digest - September 16

double post

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