Financial Crisis

[churchill]

Stop Thinking The 30% Stock Rally Means The Bear Market Is Over

Now that stocks have rallied nearly 30% off their low, pundits agree: It's a new bull market. So be very afraid.

Market punditry is a lagging indicator, not a leading one. Pundits are excellent at describing what has happened, not what is going to happen.

http://www.businessinsider.com/henry-blodg...-is-over-2009-5

[stumonster]

this line in an Atimes article I found to be a reflection of the numbers bullsh1t we are expected to believe

Worse still, if calculated on a pre-Bill Clinton administration basis, to include all those unable to find anything but part-time employment, the current unemployment rate is a staggering 19.2%, or just 0.8% from official depression levels!

http://www.atimes.com/atimes/Global_Economy/KE01Dj03.html

[lannarebirth]

Stop Thinking The 30% Stock Rally Means The Bear Market Is Over

Now that stocks have rallied nearly 30% off their low, pundits agree: It's a new bull market. So be very afraid.

Market punditry is a lagging indicator, not a leading one. Pundits are excellent at describing what has happened, not what is going to happen.

http://www.businessinsider.com/henry-blodg...-is-over-2009-5

Markets are attracted to prices where a lot of transactional volume has occurred. That's what has brought them to the price levels we are at now. It is not out of the question AT ALL that there will be a sufficiently positive stream of news for the next few weeks or months to break above current levels. You'll note from the chart that there is a volume vacuum at prices levels not much higher than here. Should markets breakthrough to the area of low transactional volume you won't believe how fast they'll rise. It's not a prediction, just something to be aware of.

[midas]

Stop Thinking The 30% Stock Rally Means The Bear Market Is Over

Now that stocks have rallied nearly 30% off their low, pundits agree: It's a new bull market. So be very afraid.

Market punditry is a lagging indicator, not a leading one. Pundits are excellent at describing what has happened, not what is going to happen.

http://www.businessinsider.com/henry-blodg...-is-over-2009-5

I confess that I don't understand the psychology of the US stock market and why it

reacted more positively to this headline from the other day

" U.S. consumer confidence rose in April to its highest this year with some expectations the economic downturn may be reaching a bottom "

Than to this headline.............................

" Consumer spending rebounded somewhat, but the economy shrank at a worse-than-expected 6.1

percent pace at the start of this year, reflecting sharp cutbacks by businesses and the biggest

drop in U.S. exports in 40 years."

And knowing that " Consumer spending accounts for two-thirds of U.S. economy "-

which contributed to this mess in the first place - it doesn't appear that investors have changed their behaviour at all as a result of this financial crisis?

[midas]

this line in an Atimes article I found to be a reflection of the numbers bullsh1t we are expected to believe

Worse still, if calculated on a pre-Bill Clinton administration basis, to include all those unable to find anything but part-time employment, the current unemployment rate is a staggering 19.2%, or just 0.8% from official depression levels!

http://www.atimes.com/atimes/Global_Economy/KE01Dj03.html

" Finally, by suspending the needed discipline of mark-to-market

accounting, the profits of many banks have been massaged deceptively upwards.

For example, a "real" loss of more than $2 billion at Citibank was "fudged" into a published profit of $1.6 billion. "

Bullshit indeed !

[teatree]

now the question is is "what are the people going to do about it Who's going to get mad enough to start a revolt."

let's face reality. nobody will do anything except complaining or bitching in a forum or blogspot. by the way, "Economics 101 without the BS" has a lot of flaws and incorrect statements of facts. but it's wasted time to go through the hassle and point them out using collected underlying facts as people only believe what they want to believe.

p.s. nobody seems to realise or care that the majority of statements such as "w/o BS" originate from websites which deal in or promote precious metals and condemn "fiat money"

So you are saying, "Economics 101 without the BS has a lot of flaws and incorrect statements of facts....because I say so". No facts or supporting evidence necessary.

it seems you need reading glasses my friend

Ok, so what you are saying is 'Economics 101 without the BS has a lot of flaws and incorrect statements of facts...but I can't be bothered to say why'.

Then why say anything? Why not leave the debate to people who are prepared to give facts to support their argument.

Go on..please... give us some of your FACTS

[AlexLah]

And there you have it, just as I said would happen..........

And some more great news......

You think we have seen bottom yet?

Get ready for a bumpy ride!

10-13/91

[12DrinkMore]

We're all saved!

No killer pig flu (pity, I was hoping it would selectively wipe out all the pigs in the banks and governments with their noses in the trough)

http://www.bloomberg.com/apps/news?pid=206...&refer=home

May 2 (Bloomberg) -- Swine flu reached 14 countries and there’s evidence the new virus is spreading in five nations among people unconnected to Mexico. The symptoms may be no more severe than seasonal flu, world health officials said.

And the recession is over

http://www.bloomberg.com/apps/news?pid=206...&refer=home

May 1 (Bloomberg) -- U.S. manufacturing and consumer confidence last month unexpectedly jumped to their highest levels since the credit crisis intensified in September, indicating the economy is on the mend.

Our great leaders, Brown, Darling, Obamah, Bernanke have DONE IT! The worst is over, it can only get better from here on in.

So we can all go out and celebrate in a wild spending orgy by maxing out the credit cards, re-mortgaging the houses, and spending the increased salaries. That'll really improve things.

OH! The cards are already maxed out, the houses are in negative equity, the salaries have been frozen and the number of unemployables are increasing day by day. The guys in power are still the same, there are no policies to solve the long term problems, the ever decreasing number of tax payers have been given a huge burden to pay off.

Why do I get a strange nagging feeling that we are being fed a load of bullshit again?

I'm not getting hopeful, because, as Alex states, it's having the hope repeatedly built up and then smashed down that kills.

[midas]

Brown, Darling, Obamah, Bernanke have DONE IT! The worst is over, it can only get better from here on in.

So we can all go out and celebrate in a wild spending orgy by maxing out the credit cards, re-mortgaging the houses, and spending the increased salaries. That'll really improve things.

[flying]

We're all saved!

And the recession is over

I couldn't believe the stupidity on CNBC today.

Three suits all saying.................Yes looks like what ever we have done is working....Yes we may see another healthy little pull back but that is normal. But we are obviously well on our way to a sustained recovery now.

Yes siree bob we are doing fine eh?

Next week the unemployment numbers will come out.........Oh but they say the market has factored that in so dont worry.

These vamps are trying to squeeze the last drop out of any money that may still be parked on the sidelines. What better motivation too.................GREED

[midas]

We're all saved!

And the recession is over

I couldn't believe the stupidity on CNBC today.

Three suits all saying.................Yes looks like what ever we have done is working....Yes we may see another healthy little pull back but that is normal. But we are obviously well on our way to a sustained recovery now.

Yes siree bob we are doing fine eh?

Next week the unemployment numbers will come out.........Oh but they say the market has factored that in so dont worry.

These vamps are trying to squeeze the last drop out of any money that may still be parked on the sidelines. What better motivation too.................GREED

Well the way they are going -CNBC won't have any credibility left.

A fund manager on Bloomberg yesterday was saying the composition of this rally is almost all

traders-not long-term investors. May as well say gamblers and that's fine

nothing wrong with gambling on the stock exchange -but just don't

use it as a yardstick for the health of the economy-it is bullshit

[flying]

Silverton Bank, N.A., of Atlanta was closed Friday by the Office of the Comptroller of the Currency, according to the Federal Deposit Insurance Corporation, making it the 30th bank failure of the year and the 55th since the beginning of the recession.

http://jessescrossroadscafe.blogspot.com/

Actually quite a few good stories on this page again....

Like this one

http://jessescrossroadscafe.blogspot.com/2...from-start.html

The insiders and hedge funds still holding equities would greatly enjoy the stock piggies (institutions, 401k's and private investors) coming back into the markets so they can continue to unload their increasingly worthless assets.

[Abrak]

Stop Thinking The 30% Stock Rally Means The Bear Market Is Over

Now that stocks have rallied nearly 30% off their low, pundits agree: It's a new bull market. So be very afraid.

Market punditry is a lagging indicator, not a leading one. Pundits are excellent at describing what has happened, not what is going to happen.

http://www.businessinsider.com/henry-blodg...-is-over-2009-5

I am not even sure the statistic makes any sense at all.

If you look at the 1929-1932 bear market there were at least 5 bear market rallies of over 25% which subsequently led to new lows. The market then recovered with a 100% rally followed by a pull back and then another 100% rally.

I think it is perfectly possible that the market has bottomed but there are no decent signs - so any rally is likely to be very L shaped.

Bull markets are basically explained by PEs going from below average to well above average - obvious P tends to move faster than E. Every bull market last century started from a single digit PE of normalised earnings (say a 10 year MVA). We are nowhere near that now at about 14x. The MVA is also moving down and the E looks likely to be sub-normal for the next 3-5 years.

Obviously this time could be different, zero interest rates, quantative easing etc. But if prices have bottomed, it just doesnt look like they are going to go anywhere for a long time. The same applies to housing - it only looks 5-10% overvalued but every substantial overvaluation has usually been met by a period of undervaluation. Still with cash being debased as part of policy it might not happen this time.

[12DrinkMore]

Farming land being bought up

http://www.independent.co.uk/news/business...nd-1677852.html

In Africa they are calling it the land grab, or the new colonialism. Countries hungry to secure their food supplies – including Saudi Arabia, the Emirates, South Korea (the world's third biggest importer of corn) China, India, Libya and Egypt – are at the forefront of a frantic rush to gobble up farmland all around the world, but mainly cash-starved Africa.

Over the past few months, Saudi Arabian investors have paid $100m for an Ethiopian farm where they hope to grow wheat and barley, adding to the millions of acres they already own in the war-ravaged country, as well as in neighbouring Sudan. The Saudis also have land in Indonesia and Thailand for growing rice. China owns vast tracts of overseas land, mainly in Algeria and Zimbabwe, and one estimate suggests that more than a million ethnic Chinese farm workers will be living on the continent this year. Kenya and Tanzania have leased land while the Ugandans have been big sellers, allocating two million acres of land to Egypt for wheat and corn.

Further afield, the Saudi government and other Gulf States are negotiating with Pakistan to buy another million acres. The deal includes the services of a 100,000-man private army to protect the food being exported. Buyers or lease-holders have have also been promised legal cover in case a future government in Islamabad is less welcoming.

Well, it sure has much more potential than gambling on the stock markets or buying up Western debt. Farming land and producing food creates real wealth and jobs and not the vapour wealth and pseudo-jobs of the banking/civil service/housing.

In fact, an excellent way of getting rid of all those devaluing USDs and GBPs and securing food into the future.

[churchill]

Farming land being bought up

http://www.independent.co.uk/news/business...nd-1677852.html

In Africa they are calling it the land grab, or the new colonialism. Countries hungry to secure their food supplies – including Saudi Arabia, the Emirates, South Korea (the world's third biggest importer of corn) China, India, Libya and Egypt – are at the forefront of a frantic rush to gobble up farmland all around the world, but mainly cash-starved Africa.

Over the past few months, Saudi Arabian investors have paid $100m for an Ethiopian farm where they hope to grow wheat and barley, adding to the millions of acres they already own in the war-ravaged country, as well as in neighbouring Sudan. The Saudis also have land in Indonesia and Thailand for growing rice. China owns vast tracts of overseas land, mainly in Algeria and Zimbabwe, and one estimate suggests that more than a million ethnic Chinese farm workers will be living on the continent this year. Kenya and Tanzania have leased land while the Ugandans have been big sellers, allocating two million acres of land to Egypt for wheat and corn.

Further afield, the Saudi government and other Gulf States are negotiating with Pakistan to buy another million acres. The deal includes the services of a 100,000-man private army to protect the food being exported. Buyers or lease-holders have have also been promised legal cover in case a future government in Islamabad is less welcoming.

Well, it sure has much more potential than gambling on the stock markets or buying up Western debt. Farming land and producing food creates real wealth and jobs and not the vapour wealth and pseudo-jobs of the banking/civil service/housing.

In fact, an excellent way of getting rid of all those devaluing USDs and GBPs and securing food into the future.

I have some very nice land in Koh Samui with lots of Coconut Trees and the bonus of good sea and sunset views , if there any buyers out there !

[12DrinkMore]

I have some very nice land in Koh Samui with lots of Coconut Trees and the bonus of good sea and sunset views , if there any buyers out there !

Always a buyer around, just need to set the price at the right level.

[churchill]

I have some very nice land in Koh Samui with lots of Coconut Trees and the bonus of good sea and sunset views , if there any buyers out there !

Always a buyer around, just need to set the price at the right level.

No set price will consider any offers ! Upto 50 Rai in Various locations including opposite the new Four Seasons Resort , which recently won an award" Success for The Estates Samui at Asia Pacific Property Awards 2009"http://www.property-report.com/property-news-top-stories.php?id=2517&date=300409

Individual plots or larger areas for hotels resorts or Farmers !

[churchill]

Asia 'must cut export dependency'

"China and India backed Mr Kuroda's calls to boost domestic demand

Asian governments must cut reliance on export-driven growth and spend more to cut poverty, Asian Development Bank (ADB) finance officials have said. "

"Chinese and Indian finance officials were among those backing Mr Kuroda's calls for efforts to stimulate domestic consumption.

Greater spending on infrastructure and education were needed, they said, as well as social safety nets to give Asian consumers, especially the poor, the confidence to spend.

The ADB's main role is lending to alleviate poverty in developing Asian nations.

But it estimates that the economic crisis has kept about 60 million Asian people in severe poverty, who, in less uncertain global economic times, would have been able to improve their standards of living.

At the meeting, Japan, said it would make 6 trillion yen ($40.1bn; $60.5bn) available for currency swaps - giving nations with weaker currencies access to yen in a funding crisis.

And finance ministers from south east Asia along with Japan, China and South Korea, agreed to set up a $120bn (£80.5bn) pool of emergency funds. "

http://news.bbc.co.uk/2/hi/business/8031456.stm

[flying]

Interesting that bank that folded the other day...... I mentioned in post 1752

Was a bank that only loaned to banks

http://www.bizjournals.com/atlanta/stories...7/daily117.html

Silverton’s business, unlike typical banks, courted only other banks, not individual customers, and failure will impact other banks balance sheets in a myriad of ways, from now-worthless stock to loans that will be re-sold to investors at an unknown point in the future.

Then I wonder what does this mean.....Does it means the FDIC just swallows it? I wonder how many mouthfuls the FDIC can handle this year before tossing their cookies?

Silverton’s loans for stock purchases and bank holding company debt will be managed by the FDIC, and not re-sold.

Edited May 4, 2009 by flying

[flying]

Banks Stress Test results delayed

The Federal Reserve and other regulators have delayed releasing the results of "stress tests" they conducted on the nation's 19 biggest banks because they are not sure how to explain them to the public, and they are concerned how financial markets will react, analysts said.

Good Reason I guess eh??

At least six of the 19 banks, including Citigroup and Bank of America, reportedly will need to increase their capital levels.

Raising capital in the private market would be difficult and expensive, said Vincent Reinhart, a longtime senior Fed official who is a resident scholar at the American Enterprise Institute.

A second option would be more capital injections from the federal government. But Mr. Reinhart does not believe the $110 billion remaining in the Troubled Asset Relief Program, or TARP, is adequate to fill the capital hole, which he estimates to be $250 billion to $300 billion "or bigger."

"What's left in TARP will only be a down payment," agreed Christopher Whalen, a managing director at Institutional Risk Analytics, a bank research firm.

[churchill]

E.U. Says Europe Faces Deep Recession

By THE ASSOCIATED PRESS

Published: May 4, 2009

Filed at 5:19 a.m. ET

BRUSSELS (AP) -- The European Union says Europe faces a "deep and widespread recession" and that unemployment will rise sharply over the coming two years.

It says both the 27-nation EU and the 16 countries that use the euro currency will shrink 4 percent this year, way more than its previous forecasts.

It says some 8.5 million jobs will disappear in the EU in 2009 and 2010, more than wiping out the number of new jobs created in the last two years.

It predicts a subdued recovery next year but only if the banking sector and world trade start to recover.

The EU says Germany's economy will contract 5.5 percent this year, Britain and Italy will shrink by between 4 percent to 4.5 percent, while Spain and France will post a 3-percent drop.

http://www.nytimes.com/aponline/2009/05/04...nytimesbusiness

[AlexLah]

Hmmmmmmmmm.........

7-9/92

[samuibeachcomber]

reading these posts/links re land grabs ,in particular africa,is on the face of it a positive sign,but what does it signal for the future..................possible food wars,spiralling food prices in the future,trade wars over food?No one's talking about water?without which food wont grow................thats where the real wars will come,who controls water.

[churchill]

Plenty of water in Koh Samui - It's all about management .

[lannarebirth]

Hmmmmmmmmm.........

7-9/92

7/9/92 ? Your birthdate Alex?

[Naam]

5-11-71

[AlexLah]

No no no no no Lana.

It will soon become clear........ and my apologies it had to be written like this: 7-9/92.98486

I think we have covered that scarcity of water and as a result food some time ago or not extensive enough?

Anyway this year there has been droughts everywhere around the world causing severe reduction in wheat crops and other foody stuff (20-30%).

Groundwater for example in India is so depleted they have to drill like 50% deeper then before to find water.

River water in China is so contaminated it really is not healthy to use it to irrigate veggies.

It is not funny when you do a bit of a search on animal dry food, anti biotics and how all that sh1t eventually end up in the water that in turn is used to

sprinkle over your veggies and been given to the animals we eat, pumping more and more chemicals in the body.

Fresh clean drinking water will be as valuable if not more valuable than oil at some time, maybe as soon as within 10 years.

War about water, check out where China and India and some other countries get their water from and look what is happening with the source.

Not pretty.....and will have for sure an enormous impact on economies.

Sorry no pic's, computer still in repair.......

[12DrinkMore]

Here's an article to give hope for the future...

http://www.atimes.com/atimes/Global_Economy/KE05Dj05.html

Over recent days, observing a sudden increase in car sales and record profits of "bankrupt" banks, Federal Reserve chairman Ben Bernanke has announced that recovery of the US economy was under way. Treasury Secretary Timothy Geithner echoed the same message and even "globalized" his prediction of a recovery for the world economy. President Barack Obama saw "glimmers of hope". While these three top US policymakers were rushing to announce recovery,

That's the good bit, then it just gets depressing.

On Thursday the ECB meets to make its decision on these dam_n "stimulus" policies. I hope they stop meddling, increase interest rates and do not, under any circumstances, copy the UK and US with "money creation".

There are numerous reports in the press saying that we have had the "worst of the recession", based on vague "consumer opinion" polls and a reduction in the RATE of decline, coupled with an upturn in the stock market.

I would say that the consumer opinion is more motivated by false optimism as we move into spring and summer, wait until summer is over and winter comes along. If there is no improvement in unemployment then there will be a massive shift in opinion. And with unemployment still forecast to increase, companies going bust and bankruptcies rising, I cannot see where any new jobs will come from....

A reduction in the RATE of decline. Well great news, that means it is not getting worse as fast as it was a month ago. But still getting worse.

I would cynically suggest that the stock market upturn is merely the manipulation of a few big players trying to liquidate some of their holdings before the next downturn, plus some short term gamblers making a turn.

And to cap it all, we have forecasters talking about "U"s and "V"s, I reckon they are all wrong. It will be at best a Japanese "L", aptly meaning "Lost for a Generation".

[churchill]

We Can't Subsidize the Banks Forever

Government has to show it can handle major insolvencies.

The results of the government's stress tests on banks, to be released in a few days, will not mark the beginning of the end of the financial crisis. If we are to believe the leaks, the results will show that there might be a few problems at some of the regional banks and Citigroup and Bank of America may need some more capital if things get worse. But the overall message is that the sector is in pretty good shape.

Chad CroweThis would be good news if it were credible. But the International Monetary Fund has just released a study of estimated losses on U.S. loans and securities. It was very bleak -- $2.7 trillion, double the estimated losses of six months ago. Our estimates at RGE Monitor are even higher, at $3.6 trillion, implying that the financial system is currently near insolvency in the aggregate. With the U.S. banks and broker-dealers accounting for more than half these losses there is a huge disconnect between these estimated losses and the regulators' conclusions.

The hope was that the stress tests would be the start of a process that would lead to a cleansing of the financial system. But using a market-based scenario in the stress tests would have given worse results than the adverse scenario chosen by the regulators. For example, the first quarter's unemployment rate of 8.1% is higher than the regulators' "worst case" scenario of 7.9% for this same period. At the rate of job losses in the U.S. today, we will surpass a 10.3% unemployment rate this year -- the stress test's worst possible scenario for 2010.

The stress tests' conclusions are too optimistic about the banks' absolute health, although their relative assessment is more precise, because consistent valuation methods were used. Still, with Thursday's announcement of the results, it shouldn't be a surprise when the usual suspects emerge. We fear that we are back to bailout purgatory, for lack of a better term. Here are some suggestions for how to extricate ourselves.

........

http://online.wsj.com/article/SB124147831175584985.html

[stumonster]

5-11-71

11th may 1971

I think he wants you to dust off and don your tutu naam , so you can jump out of the cake on his 38th birthday -