Financial Crisis

[AlexLah]

Just back from an 'economical' research trip to Singapore.

Had a friendly talk with a taxi driver and he assured me that bizz is just a little down, not much to worry about he said.

Shopping malls loaded with people and buying stuff like crazy, looked like Christmas promotion eves. Restaurants most of them loaded. Went to visit several high and medium end clubs as well.

Guess what? Loaded with people drinking 2-300 dollar botties of wikkie and other alcoholic liquids. Talked with the owner (Steven) of club Sabai Sabai which was also fully loaded (on a Wednesday night!) He flies in 30-50 (Thai) acts per month that stay for a few days or a few weeks to do their performance (Singing and dancing) very nice place, with lot's of good professional act's.

In my desperate search to find at least some doom and gloom and/or recessionary signals, I talked with a real estate agent, he said no problems with selling million or even multi million dollar places, no significant decrease in prices and some parts are even up. New condo projects are being finished and started as witnessed.

The only place where I could notice some kind of doom signal was at a massage place kind of establishment where there is fish therapy on offer.

It's a big fish tank where you can put your uncovered lower legs in and hundreds of small fish will start eating the dead skin cells from them.

I asked the lady how the bizz was, she said it is fine, you wanna try? Me scared so I asked her to demonstrate so she put her hand inside the tank and within seconds all the fish where sucking on her flesh like mad zombies.

Heh, heh, heh, at that moment I asked myself, if the bizz is so good, why are the fish so hungry, hmmmmm?

More street reports will follow...

PS, I did not try the flesh eating fish, maybe next time when I have gathered more information (and courage).

[flying]

It's a big fish tank where you can put your uncovered lower legs in ....

I asked the lady how the bizz was, she said it is fine, you wanna try? Me scared so I asked her to demonstrate so she put her hand inside the tank and within seconds all the fish where sucking on her flesh like mad zombies.

Hmmm will the fish suck any leg?

That interesting bit aside....I feel you have a future on CNBC easily

Edited August 7, 2009 by flying

[midas]

It's a big fish tank where you can put your uncovered lower legs in ....

I asked the lady how the bizz was, she said it is fine, you wanna try? Me scared so I asked her to demonstrate so she put her hand inside the tank and within seconds all the fish where sucking on her flesh like mad zombies.

Hmmm will the fish suck any leg?

That interesting bit aside....I feel you have a future on CNBC easily

Indeed ..........at least another 100 points on the Dow tonight for this story

[AlexLah]

No seriously guys. I really think we have been cheated. At least here in Asia I do not see doom and gloom signs.

I was in another place last night where a Thai band was performing and they had about 6 lady singers (all dressed in various very skimpy clothing and two performing per song) and the audience could buy them those flower, (how to say) necklaces. They cost 10 SGD each and the band and bar get a 50/50 split. This was a medium level place,also packed with people. The lady that was selling the flower thing told me that on average they get about 5 to 6000 SGD on average a week just from the flower thingy. A bottle of Black Daniels cost 150 SGD, we finished 2.5 of them and the group I was with are not high flyers. After the band finished we went to this Sabai place and they finished another 1.5 bottle of Black Daniels. This was all on a weekday night and I personally witnessed one guy buying about 300 SGD of flowers.

There seem to be no recession in SG, although the papers and other media say there is. I did not see it.

[Naam]

Would you lend out your money at .23% ? neither would I.

a lot of investors, especially institutional ones, do. who do you think is buying the billions of UST, Bunds, Gilts, etc. each and every day?

Speculators are buying them so that they can sell to the federal reserve and the only reason the fed is buying is because nobody wants them. Nobody is buying a 30 year bond to collect a 3% return. Also, central banks that are trying to peg their currency to the USD.

hmmm... i always had the feeling that Thaivisa is THE source for indepth financial information. finally i know who and for what purpose U.S. Treasuries are bought.

would you please be kind enough to tell me which kind of speculators buy e.g. €UR denominated Bunds which yield less than UST, which the speculators can neither sell to the Federal Reserve nor the ECB and which central banks of the EU are trying to peg the €UR to the USD and who buys gilts to sell them to the BoE or tries to peg a currency to GBP?

[flying]

No seriously guys. I really think we have been cheated. At least here in Asia I do not see doom and gloom signs.

Trust me I would not feel cheated as you say of anything should we see a real economic recovery. But so far all I have seen here is a suedo government throwing unsustainable future tax dollars (if they have any incomes to tax) at a problem they for the most part allowed.

Alex with all due respect I do not think anyone has ever used booze-sex-drugs as a economic indicator. In fact if anything those things flourish in bad times.

Then again I am not in Singapore....

I am in the US where today they have much jubilation over the Unemployment number dropping from 9.5% to 9.4%

This in spite of the fact that we lost another 247,000 jobs...hmmmm

In it always amusing to see how the stats are calculated & then twisted to sound as if unemployment is somehow better. I guess you could say the US job market died a little less this month than last?

http://www.chrismartenson.com/blog/unemplo...stortions/24080

Then you have things like the UE benefits that will steadily run out for many so when ever they post these numbers I wish at the same time they would post the obvious increases in Welfare recipients we will surely have. At least give a balanced view. I think cheer leading is great to watch given the usual short skirts etc.... But when it comes to real life situations/political positioning maybe not so much....

Please take note this article is a TRUE lagging indicator As it is the Stats for May 09 it is surely worse today.

http://www.reuters.com/article/domesticNew...E57569720090806

WASHINGTON (Reuters) - For the first time, more than 34 million Americans received food stamps in May, the government said on Thursday, another symptom of the longest and one of the deepest recessions since the Great Depression.

Edited August 7, 2009 by flying

[midas]

No seriously guys. I really think we have been cheated. At least here in Asia I do not see doom and gloom signs.

Trust me I would not feel cheated as you say of anything should we see a real economic recovery. But so far all I have seen here is a suedo government throwing unsustainable future tax dollars (if they have any incomes to tax) at a problem they for the most part allowed.

Alex with all due respect I do not think anyone has ever used booze-sex-drugs as a economic indicator. In fact if anything those things flourish in bad times.

Then again I am not in Singapore....

Regarding Singapore - this company without doubt has to be amongst the best in the world if not THE BEST-

and if they can't keep their head above water then all is not well

Singapore Airlines suffers first loss in six years

The global economic downturn, swine flu and unfavorable fuel hedges were enough to drag Singapore Airlines to its first quarterly deficit since 2003, a S$307.1 million ($212.6 million) loss that compared to a S$358.6 million profit in the fiscal first quarter of 2008-09.

Edited August 8, 2009 by midas

[AlexLah]

Alex with all due respect I do not think anyone has ever used booze-sex-drugs as a economic indicator. In fact if anything those things flourish in bad times. wink.gif

Then again I am not in Singapore

Well they should Fly, this is real world economics. Remember a while back I talked with a very pretty service girl and she would go long time for just 500 THB. Last night I went out and talked with a few service girls and they assured me they would not go for less then 2000 THB.

Bars here in BKK are full with foreigners and it seems they are taking out the girls again like before as was being told to me by a mamasan.

Checked some hotels about occupancy rate and most of them are around 70-80%, well that is what they told me so I called a friend who is a manager of a hotel and he told me the same thing.

Tried to get a cheap (Budget) flight back to BKK and all was full, had to book a Thai Airways flight back and the lady said I was lucky to have a seat as the flight was almost booked full.

It seems there is no recession here in Asia.

[Abrak]

It seems there is no recession here in Asia.

Where this may be true for Asia as a whole but not true of Thailand. Even if flights are more difficult to book it is because Nok Air, 1-2-Go, Jet Star, Silk Air, Tiger Airways have all reduced their flights to say Phuket. Phuket arrivals are down 14% year to date.

Bangkok looks just as bad...

Bangkok arrivals

I just dont see people in the restaurants and pubs like before.

Car sales were down 28% in the first six months.

Edited August 8, 2009 by Abrak

[teletiger]

Didn't know you could play the fiddle Alex?

http://www.bloomberg.com/apps/news?pid=206...id=ahpXdVdVDYCo

The Baltic dry index is on it's way down again? -17.2% last week. 35% down on 2009 highs.

http://www.telegraph.co.uk/finance/economi...mand-slows.html

Regards.

[Abrak]

Didn't know you could play the fiddle Alex?

http://www.bloomberg.com/apps/news?pid=206...id=ahpXdVdVDYCo

The Baltic dry index is on it's way down again? -17.2% last week. 35% down on 2009 highs.

http://www.telegraph.co.uk/finance/economi...mand-slows.html

Regards.

The Baltic Dry Index sort of fascinates me because I cant see how it is that correlated to much.

Employment participation in the US peaked in December 2006, the market about October 2007. The Baltic index (which I would have thought would be a lead indicator) peaked mid 2008 which would seem very late.

My guess is that the reason for this is that it is more related to emerging market (India and China) growth than the US and their slowdown came much later. As I say I dont how to read it but I guess if there was any conviction in a sustainable global economic recovery, you would expect rates to have recovered far more.

[lannarebirth]

Didn't know you could play the fiddle Alex?

http://www.bloomberg.com/apps/news?pid=206...id=ahpXdVdVDYCo

The Baltic dry index is on it's way down again? -17.2% last week. 35% down on 2009 highs.

http://www.telegraph.co.uk/finance/economi...mand-slows.html

Regards.

The Baltic Dry Index sort of fascinates me because I cant see how it is that correlated to much.

Employment participation in the US peaked in December 2006, the market about October 2007. The Baltic index (which I would have thought would be a lead indicator) peaked mid 2008 which would seem very late.

My guess is that the reason for this is that it is more related to emerging market (India and China) growth than the US and their slowdown came much later. As I say I dont how to read it but I guess if there was any conviction in a sustainable global economic recovery, you would expect rates to have recovered far more.

You can view some $BDI correlations and non-correlations here:

http://www.investmenttools.com/futures/bdi...c_dry_index.htm

I note a triple bottom breakdown on its weekly P&F chart the other day. It looks to lead the $SSEC on LT weekly charts.

[Abrak]

You can view some $BDI correlations and non-correlations here:

http://www.investmenttools.com/futures/bdi...c_dry_index.htm

I note a triple bottom breakdown on its weekly P&F chart the other day. It looks to lead the $SSEC on LT weekly charts.

Thanks for all those charts.

You would expect the BDI to be a lead indicator but it seems (to the extent I can make out) to be a coincident indicator.

I mean even against the $SSEC, the $SSEC bottomed before the BDI.

It also looks quite closely correlated to the price of oil (hardly surprising given it is a major cost) and the DJI. And that makes the index slightly unreliable because it is difficult to know to what extent a movement is simply a reflection of the oil price

As far as I can see from the data the fall in the BDI seems to indicate a correction in markets is likely or that the BDI is going up.

[LaoPo]

Just back from an 'economical' research trip to Singapore.

Had a friendly talk with a taxi driver and he assured me that bizz is just a little down, not much to worry about he said.

Shopping malls loaded with people and buying stuff like crazy, looked like Christmas promotion eves. Restaurants most of them loaded. Went to visit several high and medium end clubs as well.

Maybe the Singaporians you talked to and watched buying stuff like crazy didn't know that Singapore's economy contracted 6,5% in the first 6 months of 2009 whilst exports dropped 14 consecutive months.... ?

http://www.bloomberg.com/apps/news?pid=new...id=ahpXdVdVDYCo

edit: just saw that teletiger posted this link also.....sorry about that; can't watch all of them experts and their know-how

LaoPo

[Abrak]

BTW another conspiracy theory.

Does anyone get the feeling that the numbers coming out are either false or fudged, Because they just dont add up.

For instance one thing you learn in your first year of economics is that a fall in GDP of 2.5% of GDP from potential leads to a 1% rise in unemployment (it used to be 3% but Bernanke revised the equation). So assuming GDP decline of 1.0% this year unemployment should rise 1.4%. But in the first six months it has already risen 2%.m Now this optimistically assumes the US economy has a NAIRU of 2.5% which given there was no growth from 2000 to 2006 without MEW is stretching it a bit.

Unemployment numbers or decline in employment seem to indicate a much greater decline than is being admitted. Capacity utilization and production output would see to indicate the same. Obviously consumer spending could have risen rapidly but where are the loan growth numbers.

[lannarebirth]

BTW another conspiracy theory.

Does anyone get the feeling that the numbers coming out are either false or fudged, Because they just dont add up.

For instance one thing you learn in your first year of economics is that a fall in GDP of 2.5% of GDP from potential leads to a 1% rise in unemployment (it used to be 3% but Bernanke revised the equation). So assuming GDP decline of 1.0% this year unemployment should rise 1.4%. But in the first six months it has already risen 2%.m Now this optimistically assumes the US economy has a NAIRU of 2.5% which given there was no growth from 2000 to 2006 without MEW is stretching it a bit.

Unemployment numbers or decline in employment seem to indicate a much greater decline than is being admitted. Capacity utilization and production output would see to indicate the same. Obviously consumer spending could have risen rapidly but where are the loan growth numbers.

And thusly a website was born:

http://www.shadowstats.com/

[Abrak]

And thusly a website was born:

http://www.shadowstats.com/

Yes and one of my favourite websites. How do you inflate your GDP figures, you simply fudge your deflator or CPI number.

Its a great site full of facts how they manage their numbers. As well as admissions to the fact that they have deliberately improved the numbers by revised definition,

[Abrak]

Actually here are a few charts from the website....

First of all look what has happened to growth over the last 20 years,,,,

There has been no real growth for 20 years....this is because they have revised the way they calculated inflation (SGS numbers use the old methodology)

If there has been no growth then unemployment must have increased. If you want to be employed but can only find temporary employment you dont count. And if you are unemployed and have giving up looking for a job you dont count (Bill Clintons' idea).

Revise the numbers and you see this...

What seems most important to me is the money supply numbers. M3 is growing at less than an annualised 2%. I think this last happened in 1992. Money is now growing slower than the rate of gold supply.

It looks different on this graph but that is because of massive Fed injections nearly a year ago.

[Naam]

The Baltic dry index is on it's way down again? -17.2% last week. 35% down on 2009 highs.

the BDI without any details might present a wrong picture. important is the ratio of cheap commodities (e.g. scrap metal) compared to high value products (which are shipped in containers). as the index contains both (and a lot more) categories a drop of e.g. 15% of iron ore, coal or fertiliser might be offset by an increase of merely 1% of valuable high-tech products.

[sokal]

Would you lend out your money at .23% ? neither would I.

a lot of investors, especially institutional ones, do. who do you think is buying the billions of UST, Bunds, Gilts, etc. each and every day?

Speculators are buying them so that they can sell to the federal reserve and the only reason the fed is buying is because nobody wants them. Nobody is buying a 30 year bond to collect a 3% return. Also, central banks that are trying to peg their currency to the USD.

hmmm... i always had the feeling that Thaivisa is THE source for indepth financial information. finally i know who and for what purpose U.S. Treasuries are bought.

would you please be kind enough to tell me which kind of speculators buy e.g. €UR denominated Bunds which yield less than UST, which the speculators can neither sell to the Federal Reserve nor the ECB and which central banks of the EU are trying to peg the €UR to the USD and who buys gilts to sell them to the BoE or tries to peg a currency to GBP?

Hedge funds like Goldman Sachs.

The euro is not a pegged currency BTW

[sokal]

BTW another conspiracy theory.

Does anyone get the feeling that the numbers coming out are either false or fudged, Because they just dont add up.

For instance one thing you learn in your first year of economics is that a fall in GDP of 2.5% of GDP from potential leads to a 1% rise in unemployment (it used to be 3% but Bernanke revised the equation). So assuming GDP decline of 1.0% this year unemployment should rise 1.4%. But in the first six months it has already risen 2%.m Now this optimistically assumes the US economy has a NAIRU of 2.5% which given there was no growth from 2000 to 2006 without MEW is stretching it a bit.

Unemployment numbers or decline in employment seem to indicate a much greater decline than is being admitted. Capacity utilization and production output would see to indicate the same. Obviously consumer spending could have risen rapidly but where are the loan growth numbers.

The governments GDP and inflation numbers are fudged, the real numbers are on www.shadowstats.com

[flying]

BTW another conspiracy theory.

Does anyone get the feeling that the numbers coming out are either false or fudged, Because they just dont add up.

For instance one thing you learn in your first year of economics is that a fall in GDP of 2.5% of GDP from potential leads to a 1% rise in unemployment (it used to be 3% but Bernanke revised the equation). So assuming GDP decline of 1.0% this year unemployment should rise 1.4%. But in the first six months it has already risen 2%.m Now this optimistically assumes the US economy has a NAIRU of 2.5% which given there was no growth from 2000 to 2006 without MEW is stretching it a bit.

Unemployment numbers or decline in employment seem to indicate a much greater decline than is being admitted. Capacity utilization and production output would see to indicate the same. Obviously consumer spending could have risen rapidly but where are the loan growth numbers.

The governments GDP and inflation numbers are fudged, the real numbers are on www.shadowstats.com

I am not sure if I mentioned this here before nor not?

But, Many folks are surprised by the method the US calculates Unemployment rate with.

Most seem to think they just look at how many are on Unemployment benefits. Many say that is not accurate because they do not count those who are either not on or not qualified to receive benefits

But that does not matter since that is not how they calculate Unemployment Rate at all.

Surprisingly here in the USA all they do is poll 60k households. Then base that as a percentage against population numbers. Really accurate eh? Considering in 2008 there was an estimated 114.5 million households in America.

So 1%...just 1% of households equals 1,145,000 households.

They poll 60k households to get an important number like the Unemployment Rate?

They poll less households to find the Unemployment Rate than the Nielsen Ratings poll to see what TV programs folks like best?

Edited August 10, 2009 by flying

[midas]

I am not sure if I mentioned this here before nor not?

But, Many folks are surprised by the method the US calculates Unemployment rate with.

Most seem to think they just look at how many are on Unemployment benefits. Many say that is not accurate because they do not count those who are either not on or not qualified to receive benefits

But that does not matter since that is not how they calculate Unemployment Rate at all.

Surprisingly here in the USA all they do is poll 60k households. Then base that as a percentage against population numbers. Really accurate eh? Considering in 2008 there was an estimated 114.5 million households in America.

So 1%...just 1% of households equals 1,145,000 households.

They poll 60k households to get an important number like the Unemployment Rate?

They poll less households to find the Unemployment Rate than the Nielsen Ratings poll to see what TV programs folks like best?

No - I didn’t know this before flying.

Yes I am surprised that the country that invented the computer and the internet are using these primative methods. How do they justify doing this ?

What would stop them from giving a full breakdown of all categories ( i.e. not on or not qualified to receive benefits ) – or would that be too transparent ?

Edited August 10, 2009 by midas

[lannarebirth]

I am not sure if I mentioned this here before nor not?

But, Many folks are surprised by the method the US calculates Unemployment rate with.

Most seem to think they just look at how many are on Unemployment benefits. Many say that is not accurate because they do not count those who are either not on or not qualified to receive benefits

But that does not matter since that is not how they calculate Unemployment Rate at all.

Surprisingly here in the USA all they do is poll 60k households. Then base that as a percentage against population numbers. Really accurate eh? Considering in 2008 there was an estimated 114.5 million households in America.

So 1%...just 1% of households equals 1,145,000 households.

They poll 60k households to get an important number like the Unemployment Rate?

They poll less households to find the Unemployment Rate than the Nielsen Ratings poll to see what TV programs folks like best?

No - I didn't know this before flying.

Yes I am surprised that the country that invented the computer and the internet are using these primative methods. How do they justify doing this ?

What would stop them from giving a full breakdown of all categories ( i.e. not on or not qualified to receive benefits ) – or would that be too transparent ?

Transparency is not to be wished for. Inflation is, but in a way that does not appear to be inflation. Too much of US budget is tied to COLA's and more and more of its public debt is inflation adjusted. Seems to me they've painted themselves into a corner which they'll have to lie their way out of.

Edited August 10, 2009 by lannarebirth

[12DrinkMore]

Cynicus has made a detailed analysis of the UK "recovery" as is being heralded in the press.

http://cynicuseconomicus.blogspot.com/2009...very-in-uk.html

He concludes that

What we are looking at is simply more delusion, more hiding from the underlying dire state of the UK economy. The 'recovery' is founded on printing money and more debt.

So what next? Where is it heading?

And a bit on the FED purchases of T-Bonds

http://www.chrismartenson.com/blog/fed-buy...y-auction/23880

[midas]

I am not sure if I mentioned this here before nor not?

But, Many folks are surprised by the method the US calculates Unemployment rate with.

Most seem to think they just look at how many are on Unemployment benefits. Many say that is not accurate because they do not count those who are either not on or not qualified to receive benefits

But that does not matter since that is not how they calculate Unemployment Rate at all.

Surprisingly here in the USA all they do is poll 60k households. Then base that as a percentage against population numbers. Really accurate eh? Considering in 2008 there was an estimated 114.5 million households in America.

So 1%...just 1% of households equals 1,145,000 households.

They poll 60k households to get an important number like the Unemployment Rate?

They poll less households to find the Unemployment Rate than the Nielsen Ratings poll to see what TV programs folks like best?

No - I didn't know this before flying.

Yes I am surprised that the country that invented the computer and the internet are using these primative methods. How do they justify doing this ?

What would stop them from giving a full breakdown of all categories ( i.e. not on or not qualified to receive benefits ) – or would that be too transparent ?

Transparency is not to be wished for. Inflation is, but in a way that does not appear to be inflation. Too much of US budget is tied to COLA's and more and more of its public debt is inflation adjusted. Seems to me they've painted themselves into a corner which they'll have to lie their way out of.

I wonder if we can ever go back to expecting even just a little of integrity out there ?

[Abrak]

I dont want to get into any statistical debate but it is remarkable how accurately you can measure a statistic with a relatively low sample rate compared to a very high aggregated total number (assuming your sample is totally unbias.)

The BLS claims it can accurately predict unemployment (using their definition) to within 0.2% with a 90% confidence limit using 60k households out of a total over 100m. That is statistically very possible assuming an unbiase figure. The accuracy of the data is much more statistically variable to the choice rather than number of households. (For instance as most unemployed do not own homes this might effect numbers as they would not be included in the data, and a high income employee with 5 homes might be overrepresented.)

The Nielsen data is a case in point. They poll more homes (I think 70k) but they interview mostly housewives who have little idea what their husbands or children watch. At one stage they showed high viewing figures in the evening for a channel that stopped broadcasting at 6pm.

[12DrinkMore]

Here's a speech from Gieve; previously Deputy Governor of the BoE.

http://www.bankofengland.co.uk/publication...9/speech377.pdf

Some waffle, but also some interesting insights.

[flying]

How do they justify doing this ?

What would stop them from giving a full breakdown of all categories ( i.e. not on or not qualified to receive benefits ) – or would that be too transparent ?

Transparency is not to be wished for. Seems to me they've painted themselves into a corner which they'll have to lie their way out of.

I think LB has it pegged. Oh what a tangled web they weave...When they practiced to deceive

I am sure they could easily give the number of folks on UE benefits + The folks on Welfare cash ( unemployed with kids who exhausted their UE benefits ) & that number would shock. But even then that number would be the tip of the iceberg as it would not include unemployed adults without children. But they could get closer by adding the stats from the food stamp program. Their computers show if the recipients are employed or just low income. Even then it would be short the folks like myself who are self employed & never file for such things. So yes like LB said Transparency is not wished for. But things that were ignored previously seem to be ticking folks off these days.

You know about the Mr O posters turning up in various places like LA & Atlanta? Folks argue that it is racist & some say no it is the joker from Batman & what he said that it mimics.

Do a search for Obama Joker & you can read the various sides if you like.

(assuming your sample is totally unbias.)

There in lies the rub

When I think of things like the CPI/CP-Lie I cannot help but think

this is the same as asking the foxes to tell us how many chicken are left in the coup.

Or more to the point similar to them not allowing an independent audit of Fort Knox since ???

I wonder if we can ever go back to expecting even just a little of integrity out there ? bah.gif

Hard to go back to sleep once rudely awakened eh?

Edited August 10, 2009 by flying

[AlexLah]

Ha ha ha!

So what are you going to do about it?

Keep bitching here?

Put up some posters?

Ha ha ha!

20% not employed so what?

How about 40%?

ha ha ha!

What are you going to do na?

Nothing and you know it!

Ha ha ha!