Daily Digest

Daily Digest - September 30

Wednesday, September 30, 2009, 9:48 AM
  • John Williams of Shadow Statistics: Liquidity Crisis (Again!) Not a Recovery, Dire Shape
  • World Bank Head Sees Dollar’s Role Diminishing
  • FDIC Bankrupt? Uh huh.
  • Mark To Myth Losers: Americans
  • The Case for Inflation
  • Hyperinflation is Coming! Weimar Republic of Germany
  • Simon Johnson: Prospects for Your Future (Video on page)

On the 24th I had a discussion with a mainstream reporter on a number of issues: One being where I get my information from? Blogs. Why? Mainstream reporting. The Dennis Kneale and alike saying the market will be great because they are optomistic isn't optomism, it is delusional thinking. I sent her my iGoogle reader of blogs I read daily, which I shared with everyone here on the DD of the 26th. Here are some documentaries I shared with her that I meant to post on the 26th.

Also, thanks Ron for posting the Excel Spreadsheet with every post I have made since 2008. It is at the bottom of the page should you want to download it. (My link descriptions are blunt I think I starred out the foul words, please don't open if easily offended.)

Take care & visit you in the blogoshere @ CM dot com.

  • "A Crude Awakening" (If you have Netflix)
  • "A Crude Awakening" (If you DON'T have Netflix)
  • Dr. Al Bartlett's Math Videos, 8 parts, amazingly math is not boring
  • US Population/immigration by numbers
  • Marbles demonstration on immigration/US Population
  • Who Killed the Electric Car
  • Solar video
  • Why GS concerns me with energy trading
  • Why GS concerns me with energy trading (No Netflix?)
  • The Corporation

Economy

John Williams of Shadow Statistics: Liquidity Crisis (Again!) Not a Recovery, Dire Shape

28 Minutes +/1 Minute point on, Part 1

World Bank Head Sees Dollar’s Role Diminishing

“The greenback’s fortunes will depend heavily on U.S. choices,” Mr. Zoellick said. “Will the United States resolve its debt problems without a resort to inflation? Can America establish long-term discipline over spending and its budget deficit?”

FDIC Bankrupt? Uh huh.

From CNBC's "Breaking News" banner:

FDIC to Ask Banks to Pre-Pay Premiums to Inject Cash Into Deposit Insurance Fund (story developing)

"Ask"?

Mark To Myth Losers: Americans

I have often written about the fraud in marking so-called "assets" to mythical values. But nowhere does the damage of this practice hit more home than it does in places like this:

Vacant homes can become havens for drug sales and other crimes. Health and sanitation is another issue when homeless people move in to properties where utilities have been disconnected. And as the weather cools, there is yet another worry -- fires started by intruders trying to keep warm in vacant homes.

"They want to find a place to get out of the cold," Rigler says at another home near 300 East and 800 South. Several windows and even two doors have needed boarding up in recent months to keep out those doggedly determined to take up residence.

The Case for Inflation

PhD economist Marc Faber said in May:  “I am 100% sure that the U.S. will go into hyperinflation.”

Hyperinflation is Coming! Weimar Republic of Germany

Simon Johnson: Prospects for Your Future (Video on page)

On the 24th I had a discussion with a mainstream reporter on a number of issues: One being where I get my information from? Blogs. Why? Mainstream reporting. Dennis Kneale saying the market will be great isn't optomism, it is delusional thinking. I sent her my iGoogle reader of blogs I read daily, which I shared with everyone here on the DD of the 26th. Here are some documentaries I shared with her that I meant to post on the 26th.

Take care & visit you in the blogoshere @ CM dot com.

iGoogle RSS Reader of sites I visit daily (Repost)

For us Baby Boomers: Gen-Xers seem to use RSS readers for their "Home Pages" I'm pretty content with Google's iGoogle reader.

31 Comments

Davos's picture
Davos
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Re: Daily Digest - September 30

I found the John Williams interview on FSN to be profound. As I was driving to a client I kept running over it, wondering what will happen if he is correct about the liquidity crisis (and he is a sharp tack I suspect he is correct). But in 2009 we have a broke FDIC and a tapped budget. I suspect this time around it will meet some opposition in Congress and I don't think it will bode well for the dollar, and I wonder how it will or would effect the market.

Take care!

gregroberts's picture
gregroberts
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Re: Daily Digest - September 30

Larry should like this,

dcm's picture
dcm
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Re: Citizens Sell their Kidneys to Pay Off Debts

http://www.timesonline.co.uk/tol/life_and_style/health/article6850879.ece 

 

(and lawmakers sell their soul)

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saxplayer00o1
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Re: Daily Digest - September 30

1) Dollar Share of Reserves Drops as Euro Allocation Hits Record

Sept. 30 (Bloomberg) -- The U.S. dollar’s share of global currency reserves fell in the second quarter to the lowest level since the euro was introduced in 1999, an International Monetary Fund report showed.

The dollar’s share dropped to 62.8 percent in the period ended June 30, from 65 percent the prior quarter, the IMF said today.

 

2) Look at the growth in Government spending

U.S. Lost 254,000 Private-Sector Jobs in September, ADP Says

U.S. GDP Contracted 0.7% in Second Quarter

"The GDP component that includes spending on housing decreased 23.3%, compared to the previously estimated 22.8% tumble and the first quarter's 38.2% drop.

Internationally, U.S. exports fell by 4.1% instead of 5.0% as earlier reported. Imports decreased 14.7%; earlier, the government said imports fell 15.1%.

Federal government spending rose 11.4%, revised from an earlier estimated 11.0% jump. State and local government outlays increased 3.9%."

 

3) Lyndon LaRouche..."This whole world system is about to disintegrate within a matter of weeks"

(Listen at 3:30 of the video)

 

4) IMF warns of more big bank losses

"THE International Monetary Fund estimates that losses from the global financial crisis stand at a mammoth $US3.4 trillion ($A3.9 trillion) for the 2007-10 period - less than half of which has so far been realised - despite some improvement in the world's banking system."

 

 5) China Attempting to Secure 1/6th of Nigeria's Proven Oil Reserves

(His link to the Financial Times)

6) Monetary Union Ratification by Year-end

"ABU DHABI -- The four members of the Gulf Cooperation Council comprising Saudi Arabia, Kuwait, Bahrain and Qatar are expected to ratify the monetary union agreement by the end of this year, according to a top official."

7) US income gap widens as poor take hit in recession

8) CIT in Last-Ditch Rescue Bid

"Lender Readies Plan to Hand Control to Bondholders; Bankruptcy Filing Is an Option"

9) (Pensions)  Almost 3 of 4 multiemployer plans less than 80% funded

10) Public Pension Problems Mount for Local CA Governments

"According to a recent Press-Enterprise article, the Riverside and San Bernardino County pension funds each lost about $1.5 billion—roughly a quarter of their value—in the last fiscal year. Riverside County will have to pay an estimated $119 million a year more than its current $144 million pension contribution—about an 83% increase—starting in fiscal year 2013. Similarly, San Bernardino County will have to contribute an additional $100 million to its pension system.

The situation at the local government level is a microcosm of what is going on across the state. The state’s main pension system, the California Public Employees’ Retirement System (CalPERS) (which also administers the retirement systems of numerous local governments) lost $56.2 billion, or approximately 24% of its total holdings, last year. The California Teachers Retirement System (CalSTRS) lost $43.4 billion, about 25% of its portfolio."

 

11) Massive "Shadow Inventory" Overhang Will Keep Pressure on House Prices (Look at the charts)

crash_watcher's picture
crash_watcher
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Re: Daily Digest - September 30

Expect some more GS zingers to come from Matt Taibbi:

Later on this week I have a story coming out in Rolling Stone that looks at the history of the Bear Stearns and Lehman Brothers collapses. The story ends up being more about naked short-selling and the role it played in those incidents than I had originally planned — when I first started looking at the story...

Last Friday I got a call from a Senate staffer who said that Goldman had just been in his boss’s office, lobbying against restrictions on naked short-selling. The aide said Goldman had passed out a fact sheet about the issue that was so ridiculous that one of the other staffers immediately thought to send it to me. When I went to actually get the document, though, the aide had had a change of heart.

Which was weird, and I thought the matter had ended there. But the exact same situation then repeated itself with another congressional staffer, who then actually passed me Goldman’s fact sheet.

Now, the mere fact that two different congressional aides were so disgusted by Goldman’s performance that they both called me on the same day — and I don’t have a relationship with either of these people — tells you how nauseated they were.

http://trueslant.com/matttaibbi/2009/09/29/sec-weighs-new-rules-for-lending-of-securities-wsj-com/ 

 

(All the best Davos; I'll be sure to check in with you on the "edge.")

DavidC's picture
DavidC
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Re: Daily Digest - September 30

Davos,

Just to add my thanks and gratitude along with all the other messages that have been posted for the sterling work you've done with the Daily Digests. It's been part of my daily routine to have Chris's site up and to look forward to all  the facts and information rather than the MSM's 'infotainment'.

Once again, thank you.

DavidC

JAG's picture
JAG
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Re: Daily Digest - September 30

Regarding the Ron Paul video: AWESOME.!!!! Thanks Greg.

Is Dr. Paul not the most intelligent and well spoken politician out there today?

Perhaps a "bipartisan"  Paul/Grayson or Grayson/Paul Presidential ticket in 2012 is what this country needs. I know its impossible, but wouldn't that turn the whole system on its head. I would be inclined to play the "voting game" for the first time in my life, if only for symbolic reasons.

Davos's picture
Davos
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Re: Daily Digest - September 30
DavidC wrote:

Davos,

Just to add my thanks and gratitude along with all the other messages that have been posted for the sterling work you've done with the Daily Digests. It's been part of my daily routine to have Chris's site up and to look forward to all  the facts and information rather than the MSM's 'infotainment'.

Once again, thank you.

DavidC

The pleasure has been mine, thanks all for the kind words, take care

Davos's picture
Davos
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Re: Daily Digest - September 30
JAG wrote:

Is Dr. Paul not the most intelligent and well spoken politician out there today?

 

Nope. Dr. Rand Paul is! Wink Proof that apples don't fall far from trees.

JAG's picture
JAG
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Re: Daily Digest - September 30
Davos wrote:

Proof that apples don't fall far from trees.

Ron Paul's daughter, Dr. Joy Paul, delivered my daughter, and her character is further testament to that statement.

Mike Pilat's picture
Mike Pilat
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Re: Daily Digest - September 30

I hope this hasn't already been posted somewhere else:

Apparently the government just revised down the July oil demand. While some are touting an "energy-less recovery" others are pointing to lower energy demand as a symptom of weak business conditions: http://www.reuters.com/article/GCA-Oil/idUSTRE58S3BP20090929

 

 

hucklejohn's picture
hucklejohn
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Re: Daily Digest - September 30

Is  there another link to the above  "Ron Paul on the Daily Show"  video?  The one above is no longer available.

One1776's picture
One1776
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Re: Daily Digest - September 30

Greenspan Sees Growth Slowing as Stocks ‘Flatten Out’ (Bloomberg)

"Former Federal Reserve Chairman Alan Greenspan said he sees the U.S. economy slowing next year as the surge in stocks comes to an end"

“The odds are we flatten out,” Greenspan said today in a Bloomberg television interview, referring to the equity market. “That flattening out will put some sort of dull face on 2010.”

 

 

printfaster's picture
printfaster
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Re: Daily Digest - September 30

Greetings Davos

I only logged on to thank you for all your hard work.  I apreacite all the web pointers and your honest insights.

Kudos.

 

Subprime JD's picture
Subprime JD
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BMT's present forecast

2nd Qtr GDP for 2009 was revised to -.7% drop YOY. So get ready for a BIG 3rd qtr rise, maybe somewhere between 2-3% growth YOY. The spin machine will be on full blast as the recession will be "technically" over based on government fake fuzzy numbers.

4th qtr of 2008 was a panic quarter as people were scared. Even those that could have spent werent spending much out of fear. Now that this fear has dissapated and will continue to dissapate for the next 12 months, spending will increase by those who can.

Using Labor Department stats 3rd and 4th qtr GDP will be positive. 3rd qtr had many mortgage sales (funding provided by the FED) so that will be included in the numbers. I see FHA funding to increase and extended like CM so the housing market will continue to stay on life support instead of falling off a cliff.

Employment

Manufacturing job losses have been horrendous but it appears that the worst is over for the battered manufacturing sector. The real job losses need to take place in the service sector. This sector will continue to bleed jobs and when the real funding crisis hits that is when the retail sector will really get hit.

Funding crisis

At the present time there are several scenarios playing out. Heres the most popular ones:

1. A run on the US dollar. China, Japan, EU, Arabia gets fed up with FED monetization and dumps the dollar. Probability: low. Because powers that be in those countries depend on US buying their products.

2. Currency crisis begins overseas: Other nations debase to keep up with the USD debasement and currency crisis takes place overseas. This is the worst case scenario as there will be no escape from inflation. Probability: medium/high

3. US recovers and pays off its debts:  US debases just enough to pay off its debts. US revives manufacturing industry, cuts spending in social security, medicare/medicade, and military spending gets cut to 400 billion a year. Option ARMS get refinanced for 30 yr fixed, CRE deals get refinanced to 20 yr fixed, FED balance sheet grows to 4-5 trillion. Probability: ALMOST ZERO.  Too many interests entrenched in the system to make these changes. Also, congress does not have the backbone to cut so much spending.

 

 

Johnny Oxygen's picture
Johnny Oxygen
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Audit the FED?

I just have to ask this. America, for the time being, is the most powerful counrty on the planet and the FED is the most powerful organization in America. So do you really think that the most powerful organization in the world is going to let a few senators come in and expose their fraud? Not in a million years. There may be a lot of talk and they may even appoint someone to investigate but it will be ememic at best and won't reveal anything.

TheRemnant's picture
TheRemnant
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Re: Daily Digest - September 30

This video is no longer available due to a copyright claim by Viacom.

Sometimes I wonder if they aren't trying to censor future evidence.  Youtube is a great tool for things said/done deleted in rebroadcasting.

JAG's picture
JAG
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Ron Paul on The Daily Show

You can see the Ron Paul Interview by going to the Daily Show website:

http://www.thedailyshow.com/watch/tue-september-29-2009/ron-paul

http://www.thedailyshow.com/watch/tue-september-29-2009/ron-paul

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Farmer Brown
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Mish reflects on today's PMI report

Davos,

You know I couldn't let you go without throwing up one more deflationist post, lol!  Here's Mish's take on today's Purchasing Manager's Index (which fell back into contraction after last month's move into "recovery" - yeah right)

http://globaleconomicanalysis.blogspot.com/2009/09/reflection-on-unexpected-negative.html

Excerpts:

Reflections on the Unexpected Negative Surprise in Chicago Purchasing Index PMI

With each passing day the number of people that think the bottom is in, earnings will keep improving, and even a correction is unthinkable keeps rising. Here are a pair of interesting headlines moments apart on Bloomberg.

 

 

Today a close friend, "HB", pinged me with this thought: "Today's unexpected negative surprise Chicago PMI which is back in contraction, reminds me of 2002. This is how the 2002 waterfall decline began. The trigger was exactly the same, a disappointing PMI."

Fundamentally and technically the market is prime for a huge correction. Sentiment is extreme and the viewpoint expressed by William Dwyer above is consensus. However, it is important to keep in mind that as long as the corporate bond market stays healthy, stocks will likely have a bid. How much longer that remains is anyone's guess.

 

Davos:  Thanks again for all your DD's.  Where am I going to get my news now?  Clearly, there is quality-news-deflation going on!

 

One1776's picture
One1776
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Re: Daily Digest - September 30

Bank of America Chief Lewis Plans to Step Down at End of 2009 (Bloomberg Article)

"Bank of America Corp. Chief Executive Officer Kenneth D. Lewis, his credibility battered by his handling of the Merrill Lynch & Co. takeover, plans to step down at the end of this year."

"No successor was named to replace Lewis, who will also retire as a director, according to a statement today. The resignation ends Lewis’s 40-year career at the bank, including the last eight as CEO."

 

Let's hope he exposes the tyranny that took place here once he is free of the bank, but I'm not holding my breath.

strabes's picture
strabes
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Re: Daily Digest - September 30

hi turbo, I'm sure Lewis will stay mum, or he'll blame impersonal concepts like "corruption" or "big government" or "making the best of a bad situation."  you don't speak against the mafia if you know what's good for you and your family.  BoA is being taken over more tightly by CFR. they put Massey in as chairman a while back.  now the NY establishment is pushing out what they view as a southern outsider.  and they're ensuring he gets the blame for the Merrill debacle that was forced on him by CFR representatives Paulson, Geithner, Bernanke.  

Mike Pilat's picture
Mike Pilat
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Re: Daily Digest - September 30

I don't know if anyone heard, but Mr. Paul recently paid a visit to the NY FED!!

strabes's picture
strabes
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Re: Daily Digest - September 30

love how the private cops of a private bank can make a congressman leave public sidewalk space.

griffin's picture
griffin
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Re: Daily Digest - September 30

Thank you Davos you will be missed!

idoctor's picture
idoctor
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Re: Daily Digest - September 30

Peter Schiff FDIC Inflation, and Gold

gregroberts's picture
gregroberts
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Re: Daily Digest - September 30

The Coffin Shaped Recovery

Darryl Robert Schoon

http://www.24hgold.com/english/news-gold-silver-the-coffin-shaped-recove...

gregroberts's picture
gregroberts
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Re: Daily Digest - September 30

Mike,

If you look closely you'll see Bernanke in the line to get his copy of "End the Fed" signed by Ron Paul. ;-)

cmartenson's picture
cmartenson
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Re: Daily Digest - September 30

Davos,

Thank you again for everything, and don't be a stranger.

Things are about to get interesting again.

Best,
Chris

 

Jeff Borsuk's picture
Jeff Borsuk
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Re: Daily Digest - September 30

Ron Paul will be recognized for his work sooner rather than later!

Jeff

 

Jeff Borsuk's picture
Jeff Borsuk
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Re: Daily Digest - September 30

Crude Awakening....amazing!

Jeff

Jeff Borsuk's picture
Jeff Borsuk
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Posts: 150
Re: Daily Digest - September 30

good one!

Jeff

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