September 20, 2010 posts

Business / Economic / Financial

[ This link to a somewhat more cumulative blog posts page will precede current days news since most all topics remain current in terms of impact and longer-term effect and can be searched by topical index term more easily. The same is provided since the blog site http://alpeiablog.blogspot.com has just been censored as to size by google which is typical for google as nsa / cia / gov’t shill as more are becoming aware of. The same is true for microsoft, another co. that’s seen their best days and relies on the government to maintain their monopoly. Up to now the better page http://www.scribd.com/alpeia is provided for ease of formatting and clarity thereby while the Washington Post page is the real deal but without formatting http://www.washingtonpost.com/wp-srv/community/mypost/index.html?plckPersonaPage=PersonaComments&plckUserId=alpeia&newspaperUserId=alpeia ]

Yes! It is a full moon with predictable lunacy from the lunatic frauds on wall street!

YAHOO [BRIEFING.COM]: ‘The S&P 500 pushed through technical resistance to set a fresh four-month high on Monday. There were no catalysts or headlines to account for the climb. Only a bullish bias among market participants underpinned the move. Stocks made only modest gains in the early going. Most traders took their cues from Europe, where the major bourses staged strong gains as concerns about sovereign debt subsided. Early action was generally consistent with the relatively cautious trade that typically precedes an FOMC announcement, the latest of which will be released tomorrow afternoon. Though no rate actions are expected tomorrow, many will look for changes in the verbiage of the actual the FOMC statement to give clues about where policy might be headed …’ Riiiiight … changes in VERBIAGE … in other words, b*** s*** alone … Come on! … you just can’t make this stuff up … again! (the no-recession fed, then nation-bankrupting spending, then just before election ‘recession over’ … the recession that’s a depression that never ended and there’s desperation in the air … and the the frauds on wall street are taking advantage of the pre-election b*** s***) … the new ‘churn and earn fraud they’ll get their commissions again on the way down’ … THIS IS A GREAT OPPORTUNITY TO SELL / TAKE PROFITS SINCE THERE’S MUCH, MUCH WORSE TO COME!

Gerald Celente: US Economy = Depression Famous investor and billionaire George Soros referred to the US economy as “blah,” saying he expects a further slowdown. US President Barack Obama has insisted however that the US economy is heading in the right direction. Gerald Celente, the director of the Trends Research Institute said the economy is not just blah, it’s in a depression. It’s the summer of the greatest recession,” he said.

Too Much Liquidity Creating New Investment Bubbles … Again?

20 Signs That The Economic Collapse Has Already Begun For One Out Of Every Seven Americans The Economic Collapse | This year, millions more Americans will discover that the music has stopped playing and they are left without a seat at the table. ‘ … The following are 20 signs that the economic collapse has already begun for one out of every seven Americans…..

#1 The Census Bureau says that 43.6 million Americans are now living in poverty and according to them that is the highest number of poor Americans in 51 years of record-keeping.

#2 In the year 2000, 11.3 percent of Americans were living in poverty. In 2008, 13.2 percent of Americans were living in poverty. In 2009, 14.3 percent of Americans were living in poverty. Needless to say the trend is moving in the wrong direction.

#3 In 2009 alone, approximately 4 million more Americans joined the ranks of the poor.

#4 According to the Associated Press, experts believe that 2009 saw the largest single year increase in the U.S. poverty rate since the U.S. government began calculating poverty figures back in 1959.

#5 The U.S. poverty rate is now the third worst among the developed nations tracked by the Organization for Economic Cooperation and Development.

#6 Today the United States has approximately 4 million fewer wage earners than it did in 2007.

#7 Nearly 10 million Americans now receive unemployment insurance, which is almost four times as many as were receiving it in 2007.

#8 U.S. banks repossessed 25 percent more homes in August 2010 than they did in August 2009.

#9 One out of every seven mortgages in the United States was either delinquent or in foreclosure during the first quarter of 2010.

#10 There are now 50.7 million Americans who do not have health insurance. One trip to the emergency room would be all it would take to bankrupt a significant percentage of them.

#11 More than 50 million Americans are now on Medicaid, the U.S. government health care program designed principally to help the poor.

#12 There are now over 41 million Americans on food stamps.

#13 The number of Americans enrolled in the food stamp program increased a whopping 55 percent from December 2007 to June 2010.

#14 One out of every six Americans is now being served by at least one government anti-poverty program.

#15 California’s poverty rate soared to 15.3 percent in 2009, which was the highest in 11 years.

#16 According to an analysis by Isabel Sawhill and Emily Monea of the Brookings Institution, 10 million more Americans (including 6 million more children) will slip into poverty over the next decade.

#17 According to a recently released Federal Reserve report, Americans experienced a $1.5 trillion loss in combined household net worth in the second quarter of 2010.

#18 Manufacturing employment in the U.S. computer industry is actually lower in 2010 than it was in 1975.

#19 Median U.S. household income is down 5 percent from its peak of more than $52,000 in 1999.

#20 A study recently released by the Center for Retirement Research at Boston College University found that Americans are $6.6 trillion short of what they need for retirement … ‘

Black September Postponed, New Month Yet To Be Determined Shell ‘… US markets have to assimilate notes from the FOMC meeting and various housing reports this week. Today, the National Association of Home Builders Index came in at 13, unchanged from the previous month. With 50 a neutral number, there was no optimism here. Tomorrow US building permits and housing starts will be announced. With US home seizures and bank foreclosures rising to records, and banks offering these home in competition with new homes, new home builders may be relying upon divine intervention to assist with their sales…’

Major Indices Up Against the Wall ‘ … Bad News:

Oil dropped to a two week low on concerns for global growth.

Ireland and Portugal were back in the news with the Irish/German Bund spread reaching record highs along with the cost of insurance on their debt; the story was the same in Portugal and these developments helped to drive the Euro down against the dollar.

Barclays Bank (BCS) issued a memo saying that Ireland may need IMF help, a view that was promptly and vigorously denied by the Irish government, but the markets seemed to rebuff those denials as gold reached a new record high.

On the home front, Fed Ex (FDX) reported seeing slower growth ahead and on Friday we saw our 125th bank failure for the year.

The New York Empire Manufacturing Index posted a huge miss for September, coming in at 4.1, down from a previous 7.1 and consensus estimate of 6.4

Industrial production declined in August to +0.2% from +0.6%.

On Friday, an unexpected drop in the University of Michigan Consumer Sentiment index to 66.6 for September took that index to its lowest level in more than a year.

Unemployment remains at a quarter century high while in 2009, the U.S. poverty rate was the highest since 1994, with 14% of Americans living below the poverty line.

In the all important real estate market, Realty Trac reported that bank repossessions hit a record high in August and now one out of every 380 homes in America are in some phase of the foreclosure process. There is now a three year supply of distressed homes on the market and this comes against the backdrop of household wealth declining 2.8% in the second quarter and the lowest median household income since 1997.

The lumber industry is an important facet of the U.S. economy and is reflective of the state of the housing industry. This week the Western Wood Products Association reports that 2009 was its worst year on record and that 2010 timber sales and production could be even worse. In 2005, the U.S. had a record 2.1 million housing starts that dropped to 555,000 in 2009, the lowest number of starts since World War II.

All of this would lead to the obvious conclusion that we could expect still lower home prices ahead.

What It All Means

From a technical standpoint, the markets are poised for a significant decline and from a macro standpoint; significant risks are inherent in the slowing economy and problems in Europe heating up yet again. Seasonality also points to increasing danger as September and October tend to be treacherous months for market declines.

Furthermore, mutual fund cash levels are at record lows and this phenomenon was also in play before both the 2000 and 2008 market meltdowns. With not much gas left in the tank and an ominous macro environment, it’s hard to make a bullish case in the weeks ahead.

However there’s always the possibility for upside surprises from resilient earnings reports and ever present, not so invisible hand of government intervention here and abroad.

A sustained breakout higher will likely lead to a significant rally while failure here will likely lead to a significant correction to test recent lows.

The most likely probability is for a move lower and Wall Street Sector Selector remains in the “Red Flag” mode, expecting lower prices ahead.’

How Wall Street Manipulates the News...And Investors Shaefer Wall Street’s business model depends upon two factors:

(1) Keeping you interested enough in the markets to leave your cash with them so they can float it, make a return on it higher than the one they pay you, and use your cash to convince the regulators that they have enough in “assets” to borrow money to expand their own proprietary trading, and...

(2) Keeping you trading. The easiest way for them to do this is to slant the news favorably for a few weeks to a few months, then slant the same or similar news unfavorably for a few weeks to a few months. This way, they get you to buy on their alleged good news, then sell when the news “turns bad” and hopes are dashed. That gives them two commissions instead of one. Done over the course of a year, it gives them dozens rather than one or two.

A recent case in point is the current rally based upon the fact that the ISM Manufacturing index rose from 55.5 to 56.3, an inconsequential amount not much bigger than a rounding error, from July to August of 2010, an inconsequential time frame too short to measure anything meaningful. The following week, the ISM Non-Manufacturing Index (“services” rather than manufacturing) fell a rather more consequential 54.3 to 51.5, its lowest reading since January, a rather more consequential time frame. Since Services comprise three-quarters of US economic activity, one might think this would have been cause for concern. But the news was buried on page 16 because Wall Street wants us buying now, not selling. Once they have their shorts in place (today? tomorrow?) so they can profit both from their short positions and from retail investors’ panic selling and the commissions that flow only from activity, you’ll find “the news” has magically turned bad again. Then, after they have your commission dollars and their profits from short-selling, they'll spin the news positively again. It’s a classic example of Lucy van Pelt whisking the football away from Charlie Brown every time he gets th-i-i-s close to actually kicking it through the uprights. But you don’t have to play along! Stand back from the daily barrage of data and “commentary” on the data and you’ll see the entire process more clearly. And if you agree, you might take a look at selling into euphoria and buying into despair, as we try to do. The current outlook is supposedly nothing but lollipops and rainbows, so we are now short via ProShares' inverse ETFs: S&P 500 (SH), Emerging Markets (EUM), and Russell 2000 (RWM). I expect a rally based upon real, versus manufactured, slanted and spun, news, this fall. Throwing out the current crop of ne’er-do-wells in Congress alone should be good for a few hundred points on the Dow. But, personally, I don’t see that rally mounting from 10,600. No, Wall Street needs to terrify the public one more time, so they can cover their short positions and buy cheaply as the public sells. A decline below 10,000, possibly well below 10,000, is in their interest before the next big rally. Do your own due diligence – stand aside and watch the manipulation of the silliest sorts of news like: “Only 450,000 newly-unemployed this month in America! Economists had predicted 460,000!! Buy!!! Buy!!!!” And if you agree, take a look at the above and other inverse ETFs. I imagine they’ll be very good to us over the next few weeks or couple months…

Author's Disclosure: We and those clients for whom it is appropriate own or are purchasing SH, EUM, and RWM.

The Fine Print: As Registered Investment Advisors, we see it as our responsibility to advise the following: we do not know your personal financial situation, so the information contained in this communiqué represents the opinions of the staff of Stanford Wealth Management, and should not be construed as personalized investment advice. Past performance is no guarantee of future results, rather an obvious statement but clearly too often unheeded judging by the number of investors who buy the current #1 mutual fund only to watch it plummet next month! We encourage you to do your own research on individual issues we recommend for your analysis to see if they might be of value in your own investing. We take our responsibility to proffer intelligent commentary seriously, but it should not be assumed that investing in any securities we are investing in will always be profitable. We do our best to get it right, and we “eat our own cooking,” but we could be wrong, hence our full disclosure as to whether we own or are buying the investments we write about.’

The Mega-Bear Quartet and L-Shaped 'Recoveries' Doug Short I retired this chart series in early August in deference to my preferred inflation-adjusted series that aligns the S&P 500 2000 high with the Nikkei peak in 1989. Here's an update of the retired series by special request.

This chart series overlays the current S&P 500 with the L-shaped "recoveries" after the Dow Crash of 1929, the Nikkei 225 after Japan's 1989 bubble, and the post Tech Bubble NASDAQ. Click the chart below for a larger version and use the links to see various comparisons. [chart]

I've also included an updated two-decade inflation-adjusted chart, which gives us a fascinating visualization of the impact of inflation on long-term market prices. The higher the rate of inflation during a bear market, the greater the real decline. Compare, for example, the peak of the Dow rally in year seven with the same peak in the two-decade nominal chart. The difference is the result of deflation during the Great Depression.

It's rather stunning to see the real (inflation-adjusted) decline of the Nikkei, two decades years after its crash. The recent lows rival the traumatic Dow bottom in 1932, less than 3 years after its peak.

These charts remind us that bear markets can last a long time. And it's not necessary to go back to the Great Depression for an example.

[See also my preferred version, which puts the start of the current secular bear in 2000 with the popping of the Tech Bubble. In inflation-adjusted terms, the S&P 500 reached its all-time high in March 2000. Although the nominal high in October 2007 was higher, the "real" high was not.]

Note: These charts are not intended as a forecast but rather as a way to study the today's market in relation to historic market cycles.

The Analysts Are Starting to Get Silly Moenning In doing my weekend research, I came across a couple of items that reminded me why I am such a cynic:

First, beware of "Conventional Wisdom": I believe it is safe to say that it is widely accepted that Merger & Acquisition (M&A) activity is generally viewed as a positive. That it reflects a view that "stocks are cheap" and that the act of buying represents a source of demand. While true to some degree, I found the following points from an opposing view to be interesting:

• M&A activity is not a sign that corporate managements are becoming more positive regarding the future. It is, in fact, an indication that those same managements are viewing the growth prospects of their existing markets as diminished if not minimal.
• Many studies have shown that mergers, more often than not, do not work out as expected and do not achieve the results touted by the acquiring managements at the time they are concluded.
• Mergers almost always result in "duplications of effort" and thus lead to layoffs of personnel. More people losing their jobs in the midst of the current recession is certainly not going to be helpful to the economy.

Here are some interesting points; I'm sure you'll agree:

Second, in this week's Barron's I came across the following excerpt from "The Weekly Speculator" (date tagged Sept. 16) in the Market Watch Section. I use this only as an example, and not as a general criticism of this newsletter. The excerpt reads in part as follows:

...but it is our belief that recent months have seen a data cycle play out, rather than a genuine moderation of economic activity. Support for this view has certainly been delivered in recent weeks by a sudden firming of US economic data, which has consistently been above consensus since late August.

Really?

It seems to me that housing sales have collapsed since the the "Home Buyer Credit" ended. Automobile sales cratered after the "Cash for Clunkers" program finished. Inventories are building again, which may very well not be a sign of confidence, but simply overstocking. Consumer credit continues to contract. Consumer sentiment is falling. I could go on.

Certainly there have been some positive reports, mostly it seems relating to layoffs, jobless claims, etc. But in general, I read the data as bottom-bouncing at best, and a re-intensifying contraction as a fair possibility. Examine the below table of recent economic reports which I have compiled. It is by no means complete, but hopefully will give a fair representation of recent economic reports. You be the judge:

Recent Economic Data

Date	Report	Actual	Reuters Estimate	Reuters Actual	Evaluation
9/17	UofM Conf	66.6	70.0	68.9	Worse
9/16	Philly Fed	-0.70	3.8	-7.7	Missed
9/16	Jobless Claims	450K	455K	451K	Better
9/16	Producer Price Index	+0.4%	+0.3%	+0.2%	Worst
9/15	Industrial Production	+0.2%	+0.2%	+1.0%	Worst
9/15	Empire Manuf Survey	4.14	5.00	7.10	Weakening
9/14	Business Inventories	+1.0%	+0.6%	+0.3%	Improving
9/14	Retail Sales	+0.4%	+0.3%	+0.4%	Better?
9/10	Wholesale Inventories	+1.3%	N/A	+0.1%	Improving
9/8	Consumer Credit	-$3.6 billion	-$3.5 billion	-$1.3 billion	Weakening
9/8	Beige Book	Widespread Signs of Deceleration	N/A	N/A	Weakening
9/3	Non-Farm Payroll	-54K	-90K	-131K	Better
9/3	Unemployment Rate	9.6%	9.6%	9.5%	Flat/Worsening
9/2	Factory Orders	+0.1%	+0.3%	-0.6%	Weak
9/1	Domestic Car Sales	8.3M	8.7M	8.9M	Weaker
8/25	New Home Sales	276K	340K	330K	Record Low
8/24	Existing Home Sales	3.83M	4.65M	5.37M	15 year low

Relating to the decline in outstanding consumer credit, I believe that this is part of the consumer getting their house in order. I feel that it will help build a solid foundation from which a secular (long-term) economic advance could begin such as the 50s and 60s and the 80s and 90s.

For the immediate future however, I am of the opinion that declining consumer credit reflects an attitude by the consumer to spend less, and this will be a damper to the economy in the short run.

Inventory build-ups are more of an iffy situation. If the reflect an unintended accumulation of unsold merchandise, then a period of inventory reduction may be forth-coming. It is this inventory reduction that concerns me and would be one more near term negative.

So, what do take away from this? Just because it's written or spoken doesn't make it true, even my statements. Take very little on faith, especially when it is regarding the markets.

"Trust no one" - Walter Donovan to Indiana Jones, Indiana Jones and the Last Crusade

Disclosure: No positions

Ron Paul “This Is Much Bigger Than The Great Depression!” Congressman Ron Paul recently appeared on Fox Business’ The Tom Sullivan Show to discuss the Tea Party, where real change comes from, how he began his study of economics, and where he sees the economy going.

Worst U.S. Recession Since 1930s Ended in June 2009, Group Says Newsmax | The worst U.S. recession since the Great Depression ended in June 2009, the National Bureau of Economic Research said.

US Government ‘hiding true amount of debt’ News.com.au | The actual figure of the US’ national debt is much higher than the official sum of $US13.4 trillion given by the Congressional Budget Office.

U.S. Debt Actually $200 Trillion? News.com.au | The actual figure of the US’ national debt is much higher than the official sum of $US13.4 trillion ($14.3 trillion) given by the Congressional Budget Office.

The Banks Still Win On Friday, Congressman Ron Paul issued the following statement about Obama’s appointment of Elizabeth Warren to head up the creation of the new Consumer Financial Protection Bureau.

UK Proposes All Paychecks Go to the State First The UK’s tax collection agency is putting forth a proposal that all employers send employee paychecks to the government, after which the government would deduct what it deems as the appropriate tax and the pay the employee’s by bank transfer.

Is China Starting To Cave? Yuan Hits New Record Against The Dollar Could China be weakening its stance, a little, regarding the yuan?

Third world America In February, the board of commissioners of Ohio’s Ashtabula County faced a scene familiar to local governments across America: a budget shortfall.

US economy fears as consumer confidence plunges American consumers do not expect to be feeling any more confident in six months’ time, a widely-watched index revealed today, underlining the hurdles facing a recovery in the world’s biggest economy.

Wall Street ‘casino’ spooks small American investors Michael McCaslin is wary of investing his retirement funds in Wall Street. Its volatility and cryptic trading techniques make him feel lost and unsafe, he says.

The Secret List Of 10 States With Soaring Poverty Rates The Government Doesn’t Want You To See This is only half of the story though. Despite all these methodological weaknesses I was curious enough to look for the list of states with the worst and best poverty rates. I skimmed through their 88 page report but I could not find a single table breaking down their flawed results by state. This must be top secret information, I said to myself.

The poor and impoverished turn to the forest RT’s Anastasia Churkina re-visits Tent City – a homeless camp tucked away in the woods of New Jersey, where over 40 people have been forced to live, with nowhere else to go.

Foreclosures and Poverty Across the Country, and DC Yawns Firedoglake | Too bad people in poverty aren’t seen as much of a political constituency.

Global climate change industry is now worth more than $528bn THE global climate change industry is now worth more than $528bn, powered by China’s rise as one of the top nations for climate revenues.

American Businesses and Consumers are NOT Deleveraging … They Are Going On One Last Binge

National / World

Globalists Plan to Dismantle Middle Class With UN Tax Paul Joseph Watson & Alex Jones | Final move for world government and destruction of middle class begins.

Fed Issues More Debt as Gold Rises Bob Chapman | What has happened to America is that the private sector only is allowed to exist to keep banking in business and to supply funds for government, bureaucrats, other criminals and the elitists who actually run your country.

Pennsylvania Homeland Security Targeted Tea Parties Kurt Nimmo | Pennsylvania’s Homeland Security said that two Tea Party rallies against illegal immigration might attract “white nationalists.”

Government Prepares To Seize Paychecks As Statist Cancer Explodes Forget big government – the same elite whose policies caused the financial collapse are now ready to launch the next phase of their fascist takeover of the economy – by forcing businesses to send employee paychecks straight to the government, who would then deduct the “appropriate tax” before the employee receives their wage, as the statist cancer of collectivism grows.

Alex Jones On What We Really Are Alex Jones explains how humanity has become completely disconnected from its primitive survival instinct because of modern consumerist culture, and how this is creating generations of nihilistic, depressed, soulless people who have a death wish and are being brainwashed to hate everything that is good and wholesome.

“Moderate” RINO Colin Powell Calls for Tidal Wave of Illegal Students Kurt Nimmo | Establishment politico admits he has illegal immigrants working on his house.

Most Influential Environmentalists Share Mass-Murder Advocating Green Nazi’s Philosophy Our detailed report today on the now openly active and growing eco-fascism movement, and in particular Finnish “philosopher” Pentti Linkola, exposes a savage and despotic side to the environmental agenda.

Global Warming Alarmist Calls For Eco-Gulags To Re-Educate Climate Deniers A Finnish environmentalist guru has gone further than any other global warming alarmist in openly calling for fascism as a necessary step to save the planet from ecological destruction, demanding that climate change deniers be “re-educated” in eco-gulags and that the vast majority of humans be killed with the rest enslaved and controlled by a green police state, with people forcibly sterilized, cars confiscated and travel restricted to members of the elite.

NY Times edits Tea Party article after White House complains The Bush administration spent years feuding with The New York Times but the Grey Lady hardly ever backed down.

Global ‘internet treaty’ proposed The proposal was presented at the Internet Governance Forum in Lithuania last week, and outlined 12 “principles of internet governance”, including a commitment from countries to sustain the technological foundations that underpin the web’s infrastructure.

British Government to Seize All Paychecks Paul Joseph Watson & Alex Jones | Fresh round of economic fascism is about forcing us to beg big government for handouts in return for our own enslavement.

Shut Up! You’re Disturbing the Elite Keith Johnson | Both the establishment left and right working are in concert to stifle the steadfast American tradition of dissent.

Global Warming Alarmist Calls For Eco-Gulags To Re-Educate Climate Deniers Paul Joseph Watson | “Any dictatorship would be better than modern democracy,” says Finnish philosopher Pentti Linkola.

Obama Administration Financially Supports China’s Population Policies Through UN Population Fund Jurriaan Maessen | Only days after his inauguration, President Barack Obama announced he would resume funding for the UNFPA and its ‘family planning’ activities in China and elsewhere around the globe.

Historian: Mao Greatest Mass Murderer in World History Independent | Mr Dikötter is the only author to have delved into the Chinese archives since they were reopened four years ago.

Globalists Push World Transaction Tax At UN Summit Globalists representing 60 nations will meet at the UN this coming week to push a tax on world financial transactions in the name of solving poverty and climate change, formally launching a massive program to bankrupt the middle class and enrich the coffers of global government.

Pennsylvania Homeland Security Targeted Tea Parties In November, Pennsylvania’s Homeland Security issued a bulletin stating that two Tea Party rallies against illegal immigration might attract “white nationalists.” The report was issued by the Institute of Terrorism Research and Response, an Israeli company.

Members of U.S. platoon in Afghanistan accused of killing civilians for sport The U.S. soldiers hatched a plan as simple as it was savage: to randomly target and kill an Afghan civilian, and to get away with it.

FDA won’t allow food to be labeled free of genetic modification: report That the Food and Drug Administration is opposed to labeling foods that are genetically modified is no surprise anymore, but a report in the Washington Post indicates the FDA won’t even allow food producers to label their foods as being free of genetic modification.

58% Of Americans Want A Third Party Americans’ desires for a third political party are as high as they have been in seven years.

Bill Maher digs up O'Donnell 'witchcraft' clip (AP) [ She’s done! There’s no excuse for that! None! ] ‘… "I dabbled into witchcraft. I never joined a coven," she said. " ... I hung around people who were doing these things. I'm not making this stuff up. I know what they told me they do," she said. "... One of my first dates with a witch was on a satanic altar, and I didn't know it. I mean, there's little blood there and stuff like that," she said. "We went to a movie and then had a little midnight picnic on a satanic altar." …’ Occult Obsessed Elite Claim Christine O’Donnell is a Witch Kurt Nimmo | The corporate media, the propaganda organ of the global elite, sets its sites on Delaware’s Christine O’Donnell. … Sorry kurt … there’s no excuse for that … she’s done!

Poll: Vast majority opposes attack on Iran Fewer than one in five Americans would support a US military strike on Iran if the Middle Eastern country continued to pursue its nuclear program in the face of international sanctions, a new poll indicates.

Defaults - Not Frugality - Account for Debt Decline ‘If you think that American consumers have found religion when it comes to debt, you might be surprised by what really is happening. From the WSJ:

First, consider household debt. Over the two years ending June 2010, the total value of home-mortgage debt and consumer credit outstanding has fallen by about $610 billion, to $12.6 trillion, according to theFederal Reserve. That’s an annualized decline of about 2.3%, which is pretty impressive given the fact that such debts grew at an annualized rate in excess of 10% over the previous decade.

There are two ways, though, that the debts can decline: People can pay off existing loans, or they can renege on the loans, forcing the lender to charge them off. As it happens, the latter accounted for almost all the decline. Over the two years ending June 2010, banks and other lenders charged off a total of about $588 billion in mortgage and consumer loans, according to data from the Fed and the Federal Deposit Insurance Corp.

That means consumers managed to shave off only $22 billion in debt through the kind of belt-tightening we typically envision. In other words, in the absence of defaults, they would have achieved an annualized decline of only 0.08%…’

Drudgereport: GREAT ESCAPE: HOUSE MAY ADJOURN '3 WEEKS EARLY’ [ Two views: 1) Despite the rhetoric, spin, fake data, etc., the country is defacto bankrupt and ashambles 2) At least they won’t be able to do more damage ] '
Prince Charles: 'I happily talk to plants, trees' … yeah, inbreeding eventually takes its toll ...
UK Proposes All Paychecks Go to the State First… Wow! ...

(9-20-10) Dow 10,753 +145 Nasdaq 2,355 +40 S&P 500 1,142 +17 [CLOSE- OIL $74.86 (-54% for year 2008) (RECORD TRADING HIGH $147.27) GAS $2.74 (reg. gas in LAND OF FRUITS AND NUTS $3.11 REG./ $3.26 MID-GRADE/ $3.35 PREM./ $3.69 DIESEL) / GOLD $1,280 (+24% for year 2009) / SILVER $20.80 (+47% for year 2009) PLATINUM $1,623 (+56% for year 2009) / DOLLAR= .76 EURO, 85 YEN, .64 POUND STERLING, ETC. (How low can you go - LOWER)/ 10 YR NOTE YIELD 2.71% …..… AP Business Highlights ...Yahoo Market Update... T. Rowe Price Weekly Recap – Stocks / Bonds / Currencies - Domestic / International This Is a Secular Bear Market and The End of Buy and Hold … and Hope MARKET MANIPULATION AND HOW THE LATEST BUBBLE-FRAUD PRE-COMING CRASH IS BEING ACCOMPLISHED 3-11-10 6 Theories On Why the Stock Market Has Rallied 3-9-10 [archived website file] Risks Lurk for ETF Investors The bull market that never was/were beyond wall street b.s. when measured in gold Property Values Projected to Fall 12% in 2010 Jan 31, 2010 The Week Ahead: Risk Is Off the Cliff; Unwind Has Begun Jan 31, 2010 01-13-10 Forecast for 2010 from Seeking Alpha Contributor THE COMING MARKET CRASH / CORRECTION 1-28-10 Maierhofer (01-15-10) 11 Clear Signs Economy Sinking Economic Black Hole 1-22-10: 20 Reasons Why The U.S. Economy Is Dying And Is Simply Not Going To Recover Current Economic / Fiscal Charts Trendsresearch.com forecast for 2009 1-7-10 Crash is coming! ‘WORST ECONOMIC COLLAPSE EVER’ Must Read Economic / Financial Data This Depression is just beginning The coming depression… thecomingdepression.net MUST READ: JEREMY GRANTHAM’S QUARTERLY UPDATE 25 January 2010 (850 on the S&P) by TPC The Next Wave of Collapse is Coming Sooner than you think Sliding Back Into the Great Depression ABSOLUTELY, ABSURDLY, RIDICULOUS! SELL / TAKE PROFITS WHILE YOU CAN SINCE MUCH, MUCH WORSE TO COME!

Many businesses facing tax hike are too big to be labeled 'small' (Washington Post) [ I almost hate to have to acknowledge the following as true given the dire fiscal circumstances of this defacto bankrupt nation in light of the profligate war spending and other pork, etc., but as was once said and remains true, ‘you can please all of the people some of the time, and some of the people all of the time, but you can’t please all of the people all of the time’.]

Obama ignores critics, appoints Warren to set up agency (Washington Post) [ There are a lot of reasons to be down on wobama’s failed presidency, viz., contrary to campaign rhetoric the continued wars / war spending, no prosecutions of the the wall street frauds, etc., Warren’s appointment is not one of them, assuming her actions match ofr exceed her words. ] In naming Elizabeth Warren to set up a new consumer protection agency on Friday, he swiftly delighted the liberal base of his party after months of disenchantment.

How a touch of inflation could help economy (Washington Post) [ Wow! Just as I began to think I’ve been too harsh on ‘Mr. wall street-glass-half-full-Irwin’, he jars me from such complacency with the foregoing article. Mind you, such is the balderdash that’s being spun these days since, whether desired or not, hyperinflation is a-comin’ in a very big way and the so-called spin-doctors, economy-destroyers are just posturing for a full-fledged swallowing of such total b*** s*** (the over-printing of the evermore worthless fiat Weimar dollaro currency assures that – I also believe the same has been used to bail out holders of the still extant worthless toxic assets in the multi-trillions and now marked to anything, ie., wall street frauds, insiders, etc.). Some of the astute are saying ‘hyperinflationary depression’. Either way, the outlook’s disasterous. I leave ‘Mr. wall street-glass-half-full-Irwin’ with the following simple to remember axiom to guide his thoughts: ‘inflation bankrupts the lender’ and all that such entails. ]Inflation would make the heavy debt that Americans carry a bit more manageable as wages rise but the amount owed stays the same. And it would create more incentive for businesses to invest their cash rather than sit on it.

WHAT YOU SAID: WHAT YOU SAID (Washington Post) ‘ Ralph Novak Lincoln, Calif. I retired in 1983 after 24 years as an Air Force officer and retired again from DoD as a GS-15 in early 2005 after 20 years of service and moved to Northern California in 2006’. … ‘Yeah, I'm not rich, but my out-of-work neighbors who used to have household incomes of $300K to $500K and house payments of $5K to $8K a month look at me with a lot of envy. I worked hard, saved the TSP max and am thankful that my wife took the long view and pressed me to stay with the federal government. It's hard to see what monetary value there is in spending an entire career as a GS employee when you are working long, stress-filled days and years. But the first thing you should do after retirement is to go to your next high school/college reunion and see how the rest of the world is doing.’ [What a typical pathetic loser this guy is; and typifies that government employee attitude of indispensability when in fact they are not only superfluous and expendable, but actually a substantial drag on the nation but are a positive in one respect … adding to the nations insurmountable debt; ‘long, stress-filled days and years’ … don’t make me laugh! He forgot to say that incompetent (and corrupt, etc.) government types like him, living off the ever expanding bureaucratic t*t (bushes are a great example as well, etc.) have played a huge role in creating the deplorable conditions and debacle the defacto bankrupt nation is now facing. ]

Secretary of stand-up: Corny Washington jokes? Robert Gates has a million of 'em. (Washington Post) [ Could it be that’s because he is a joke. Certainly his prognosticating continues to be … a joke. Aw, well, what the heck, he’s an affable killer from the CIA and he has resuscitated the heroin trade in Afghanistan, along with protracted war, etc., after all … eh … cut him some slack … riiiiight! ]

Economists Herald New Great Depression The world is currently experiencing the modern day equivalent of the Great Depression, according to a prominent economist who has added his voice to scores of others now forecasting ongoing economic doom on a scale not seen since the 1930s.) , and my position, Nobel Prize Winner Krugman’s, and that of demographer Dent … This is a global depression. This is a secular bear market in a global depression. The past up move was a manipulated bull (s***) cycle in a secular bear market. This has been a typically manipulated bubble as has preceded the prior crashes with great regularity that the wall street frauds and insiders commission and sell into. This is a typical wall street churn and earn pass the hot potato scam / fraud as in prior crashes’. This national decline, economic and otherwise, will not end until justice is served and the wall street frauds et als are criminally prosecuted, jailed, fined, and disgorgement imposed … Krugman: It's All Downhill From Here Cullen Roche Love him or hate him Paul Krugman has been awfully right with regards to the macro picture in the last few years. He’s one of the rare economists who had the foresight to see the housing bubble and the likelihood of economic downturn that would result from it. Krugman recently caused a stir when he said the US economy was headed for the third depression. He isn’t back down from that outlook:

I’ve had a couple of conversations lately with people who follow politics and public affairs, but aren’t that close to the economic discussion — and I’ve discovered that there are two comforting delusions still out there.

Delusion #1 is that we’re on the road to recovery, just more slowly than we’d like; to be fair, the White House keeps saying this.

But it’s not at all true. GDP is growing below potential; employment, even if you focus just on private employment, is growing more slowly than the working-age population. If you ask how long it will take us to return to, say, 5 percent unemployment on the current track, the answer is forever.

Delusion #2 is the belief that the stimulus may yet do the trick, because there are still substantial funds unspent. I tried to deal with this last year. The level of GDP depends not on total funds spent, but on the rate at which funds are being spent, which has already peaked; GDP growth on the rate of change in the rate at which funds are being spent, which peaked last year. It’s all downhill from here.

If you can ignore the schizophrenic market for just a second it’s hard to reject Krugman’s macro outlook. The private sector has been running on fumes since the debt bubble burst in 2007. The government’s extraordinary actions helped bolster the economy, but merely papered over what was a very weak private sector. As we see the government step aside it’s difficult to imagine that the weakness at the private sector won’t again be exposed for what it really is.
Here Are 13 Signs That We’re Actually In A Depression Right Now Gregory White | David Rosenberg has outlined, in his latest letter, the 13 reasons with this so-called recovery is actually a depression… David Rosenberg has outlined, in his latest letter, the 13 reasons with this so-called recovery is actually a depression.Rosenberg sums it up like this:

This is what a depression is all about — an economy that 33 months after a recession begins, with zero policy rates, a stuffed central bank sheet, and a 10% deficit-to-GDP ratio, is still in need of government help for its sustenance.

Harry Dent, Jr. Economy will be in a Depression by 2011
The worst of this next depression is likely to hit between mid-2010 and mid-2013, especially around early 2011, but if the banking system continues to implode a deep downturn or depression could begin sometime in 2009 instead of 2010.
Dow will Fall to 3,800 – 4,500 by 2012
Nasdaq will Fall Below 1,100, its 2002 low, by late 2010 or mid-2012 at the latest.
Inflation will Increase until mid- 2010 and then turn to Deflation
Interest Rates will Increase
U.S. Dollar will Decline
Housing will Decline by 40 – 60% from Today’s Levels
Greatest Economic and Banking Crisis since the 1930s will Occur Between 2010 and 2012). ]