Financial Crisis

[lannarebirth]

http://www.federalreserve.gov/boarddocs/meetings/2010/20100607/advancedexp.htm

[BlackJack]

<!--quoteo(post=3669930:date=2010-06-06 14:44:49:name=flying)--><div class='quotetop'>QUOTE (flying @ 2010-06-06 14:44:49) <a href="index.php?act=findpost&pid=3669930"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec--><!--quoteo(post=3669878:date=2010-06-06 14:09:44:name=midas)--><div class='quotetop'>QUOTE (midas @ 2010-06-06 14:09:44) <a href="index.php?act=findpost&pid=3669878"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->flying you are not the first person to use the expression " 'biblical proportions " for this incident <img src="http://static.thaivisa.com/forum/style_emoticons/<#EMO_DIR#>/cool.gif" style="vertical-align:middle" emoid="" border="0" alt="cool.gif" /><!--QuoteEnd--></div><!--QuoteEEnd-->

From what I have seen that top kill is already a fail for the most part.

What they siphon is a small fraction of what is spewing.

Also....

I have read we do rely on the Ocean's contribution for something like 50-70% of our oxygen don't we?

Two thirds of the worlds population live within 40 miles of the ocean.

One-Sixth of the worlds population gets all their protein from the fish of that ocean.

The rain we see & the water we drink are tied to that ocean too.....

Which is what got me thinking of what kind of proportion this could turn into.

<!--QuoteEnd--></div><!--QuoteEEnd-->

Yes but arent we getting a little carried away here.

The mass of the ocean is 1,400,000,000,000,000,000 tons.

The spillage assuming it trebles from here will be about 700,000 tons.

In other words it will add one ounce of oil into every 2 trillion ounces of seawater (I think that is right but there are a lot of zeros). In the global scheme of things it amounts to a large fart in a room the size of Bangkok. Not much consolation to a seagull off the coast of Florida, I will readily admit.

Te problem is that its a slick ( covering ) Environmental experts believe that this oil spill that has covered approximately 9000 square kilometre area of Gulf of Mexico with the layer of oil slick can cause environmental disaster due to petroleum toxicity and unavailability of oxygen to the marine life. So its not about volume in the water.

So back to my point this will effect 1000's of jobs and businesses pushing the US job unemployment figure and effected failed businesses up.

We are talking pristine beaches in Florida that attract millions of visitors and money.

So how will the markets be effected?

[midas]

<!--quoteo(post=3663550:date=2010-06-03 15:45:05:name=midas)--><div class='quotetop'>QUOTE (midas @ 2010-06-03 15:45:05) <a href="index.php?act=findpost&pid=3663550"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->5. <b>Switzerland on home demolitions: Israel breaking international law</b>

<a href="http://www.almoltaqa.ps/english/showthread.php?t=9138" target="_blank"> Switzerland on home demolitions: Israel breaking international law - Al-Qassam English Forum</a><!--QuoteEnd--></div><!--QuoteEEnd-->

Well one thing we can guarantee is that Switzerland will not be subject to an invasion of a 'flotilla of boats'.

Still Israel, Gaza etc. is an exceedingly boring topic and I am sure has nothing to do with the 'Financial Crisis' - well until such time as they decide to nuke someone.

I am sorry Abrak but as of now I must disagree with your statement !

Iran Ratchets Up Mideast Tension With Promise To Escort The Next Gaza Aid Boat

Iran Ratchets Up Mideast Tension With Promise To Escort The Next Gaza Aid Boat

[Abrak]

Still I think the most important question is where we are going to be in six months time.

Now I have always been in the 'we are bound to see a recovery' person simply on 'technical' grounds. As things have turned out there seems to be a little more momentum in the rebound than pure technicals might suggest. Still I think the numbers and fundamentals are increasingly looking towards growth being 'technical' rather than 'fundamental'. That growth expectations that have been on the rise will very rapidly start being revised back down.

I mentioned this a few pages ago but since then the scales have shifted more towards a renewed recession than a continued recovery.

Fundamentally....

(1) There was always the argument that recovery was based on 'restocking' and over-enthusiastic 'fiscal stimulus' and that once that ended the underlying fundamentals would begin to start showing.

(2) The big 'change' fundamentally is that 'fiscal stimulus' can either be good or bad. If it is good people will start spending more if it is bad they will actually spend less (aka Ricardo). It just seems to me that the world has changed to a large degree. Say those people in the UK will not actually spend more until they see that the Government has got their spending under control or else they are going to be hit by higher interest rates and taxes in the future.

(3) Secondly, underlying this is the fundamental weaknesses in the Euro that has been exposed. It is a bit like banks lending to NINJAs to finance the property bubble - people have realized that financing crap based on a false premise is fundamentally destructive and destabilizing. That might sound stupid an arrogant but I mean it more that people are realizing that say financing Greece either through unrealistic interest rates and unlimited debt, or through an unsustainable fiscal deficit, creates nothing and is value destructive.

(4) Finally as the numbers start coming out they are a) getting less good and beginning to falter verses expectations (meaning that although they are good they are no longer surprising on the upside.. As an example of that take a look at the US semiconductor book to bill ratio it has fallen from 1.23 to 1.13 on a 3MVA basis over the last 4 months. Now 1.13 is a very good figure, that figure cannot go up forever but it is coming down not to contraction levels but to levels where at least expectations are not being exceeded.

Ultimately none of this is a bad thing - to lose a belief in father Xmas is rather depressing - but believing in one is probably not intelligent progress.

At present you can definitely say that we face considerable 'uncertainty' going forward. This years numbers might be revised up but it is, 50:50 at best for next years numbers - actually it is well less than 50:50 imho. I think there is a very real possibility that the economy - both global and US - could be close or even in a recession by 1Q next year.

A year ago there was a lot of talk about 'greenshoots' and a lot of denial about their existence or future existence. Now the 'brown shoots' appear to be on the horizon.

[midas]

I mentioned this a few pages ago but since then the scales have shifted more towards a renewed recession than a continued recovery.

As Gerald Celente says...there never was a " recovery " ......it was a " cover up "

[flying]

(3) Secondly, underlying this is the fundamental weaknesses in the Euro that has been exposed. It is a bit like banks lending to NINJAs to finance the property bubble - people have realized that financing crap based on a false premise is fundamentally destructive and destabilizing. That might sound stupid an arrogant but I mean it more that people are realizing that say financing Greece either through unrealistic interest rates and unlimited debt, or through an unsustainable fiscal deficit, creates nothing and is value destructive.

Ultimately none of this is a bad thing - to lose a belief in father Xmas is rather depressing - but believing in one is probably not intelligent progress.

Now the 'brown shoots' appear to be on the horizon.

This statement about lending I agree with in many ways.

I also feel this bailout of Greece is the Last bailout.

Its has raised too many question marks & brought back ugly memories like the one you suggest

about NINJAS

They may all still decide F*#& it & withdraw their promised supports...

It is soon to be everyone for themselves as they will not even be sure they can help themselves.

Gold goes again today to new highs in Euros.....Silver also up 4%

If not for Industrial usage components holding silver back it would be doing even better IMO

We are about to see something.....

It is more true than you imagine that folks will loose that faith in Xmas as you put it BUT...... Xmas is Paper

Even Gold Stocks will be no guarantee of safety unless they are showing big profits & paying dividends.

[Gambles]

QUOTE (Gambles @ 2010-06-05 18:21:51) QUOTE (Naam @ 2010-06-04 08:13:34) QUOTE (Gambles @ 2010-06-04 07:16:00) So the recent happenings in Gaza may or may not be a colossal global political, economic or societal event but we won't know that just yet and undoubtedly they're significant in their own right anyway.

in a couple of months hardly anybody will remember or talk about it. on that claim i bet my [not so] sweet àss

OK, I stand corrected - nobody except Naam knows.....

the list of much more severe atrocities is long. who (besides al-Jazeera) talks about e.g. the "War on Gaza"? by the way, it is my understanding that a "claim" does not denote "knowledge". native english speakers please correct me if i am wrong.

Fair point, Naam

In the interests of terminologoical exactitude, what I should have said is that nobody knows for certain but Naam feels sufficiently confident of his claims to wager the substantial value of his somewhat acrid backside on them....

[Gambles]

As recently promised, the latest thoughts of the excellent Tim Price (repoduced with the author's permission) - interesting that he quotes from Lords of Finance; with the Sovereign crisis coming up, there'll be a series of MBMG Updates over the summer months about that extremely illuminating publication. Enjoy...

7th June 2010 Not inspirational

“The announcement of the rescue package failed to stabilize the situation, perhaps because more people knew how deep the problems went than the government realized.. None of the central bankers had faced an international financial crisis before; they therefore had to make things up as they went along.”

- From „Lords of Finance: 1929, the Great Depression, and the bankers who broke the world‟ by Liaquat Ahamed (Windmill Books, 2010).

Communiqués from government conferences tend to recall the words of Ralph Waldo Emerson:

“The louder he talked of his honour, the faster we counted our spoons.”

The latest official statement from the G-20 in Busan, South Korea, does not disappoint fans of irony expressed on a magnificent scale. Among the highlights from this vapid exercise in giving voice to messianic delusions of relevance, international finance ministers and central bank governors agreed to:

“firmly secure the global recovery”;

“put in place credible, growth-friendly measures..”

rather wonderfully, ensure that “Monetary policy will continue to be appropriate to achieve price stability” and “reduce moral hazard associated with systemically important financial institutions”;

hysterically, to “accelerate the implementation of strong measures to improve transparency, regulation and supervision of hedge funds, credit rating agencies, compensation practices and OTC derivatives in an internationally consistent and non-discriminatory way” [emphasis ours].

There was no commitment to deliver world peace or universal wealth and health, but that may just have been an oversight. The problem with these sorts of statements was well expressed in a letter to the editor of the Financial Times last week from a Mr Nigel Collin, referring to a piece, “solutions for a crisis in its sovereign stage”, written by Nouriel Roubini and Arnab Das. While acknowledging that the original article was “both illuminating and practical”, Mr Collin went on to point out that

“.. a closer examination reveals that the verb “must” is used in three of the five solutions advocated. Without an explanation of how a sovereign state must be compelled to adopt a solution, the solutions are rendered aspirational rather than inspirational.”

Where to begin with the G-20‟s marvellous aspirational announcement ? One does not necessarily expect politicians to declare their own redundancy, but wealth creation and, in a more general sense, “recovery” are the products of private action rather than government direction. Governments take capital from their own people but they are functionally incapable of producing it. The best thing for government to do would be to get out of the way. Instead we have governments that have squandered billions in private capital (not just current billions but claims against future billions from taxpayers not even born) in supporting fundamentally bad banks. A free market has a magically effective way of discriminating between good and bad businesses. Bad businesses fail and are purged from the system and good businesses prosper, begetting more wealth in the process. Not content with their malign achievements to date, governments have now tasked the banks with mutually contradictory objectives: strengthening their balance sheets whilst simultaneously maintaining the provision of credit to the broader economy. You cannot drive a car well by concurrently slamming on both the brake and the accelerator.

There is a similar contradiction in the pursuit of credible attempts to bring sovereign finances back toward balance. In part it constitutes what economists call the fallacy of composition and the paradox of thrift. What may make sense for individual governments to do (turn off the spending taps) could be hugely detrimental for the broader international community. Politicians may not acknowledge the fact, but the world is even more closely interlinked than it was in the crisis of the 1930s, and the economic and financial interactions are undoubtedly faster. What is certain is that beyond a certain point, which Greece has now probably reached, slamming on the fiscal brakes transforms a heavily indebted government from muddle-through financing into insolvency, as the ailing economy, bereft of government spending to which it has become addicted, is unable to provide even sufficient tax revenues to allow that government to service its debts. Default follows.

While it is clear that just as in the 1930s, today‟s politicians and central bankers, having no route map, are making it up as they go along, it is equally apparent to any objective observer that there is precious little of the coordination to which the G-20 communiqué so pompously aspires. Recent policy announcements do not augur well. The German Chancellor unilaterally declares a jihad against speculators in her now infamous tirade promising to beat the markets. The Australians break ranks and run the risk of killing the golden goose by unilaterally hiking taxes on the mining sector. Since world currencies are not, as they were in the 1930s, backed by the solidity and stability of gold, everyone seeks solace in currency devaluation. But by definition not every currency can depreciate against its peers. The balance of probabilities is that as this long emergency continues, the depth and breadth of the US dollar pool wins out against most of the rest of the world‟s paper money, despite its own underlying fiscal precariousness.

The G-20‟s reference to regulation in a consistent and non-discriminatory way is a triumph of absurdity and bare-faced contradiction. How else to describe a regime in which badly run banks are extended indefinite and unlimited financial support, while institutional investors not fortunate enough to be deposit-takers are targeted for daring to point out the nudity of the Emperor ? And this last point gets to the real challenge for investors today. Navigating markets fundamentally distorted by government manipulation, wholesale currency debauchery and fiscal incontinence is bad enough, but we are now tasked with trying to anticipate seemingly random and often unilateral political action.

Some of the rational investor‟s strategy response should by now be obvious. Avoid the debt and currency markets of the most egregiously undisciplined administrations. Buy precious metals as the ultimate in portfolio and currency insurance – their upside potential in price terms is widely understated and misunderstood. In other respects, exposure to equity markets should reflect individual risk appetite and any requirement for albeit irregular income rather than a slavish allegiance to an always volatile asset class.

The G-20 communiqué suggests that recovery is on its way, though characteristically it cites no evidence for the declaration. The evidence from, even by recent standards, unusually nervous financial markets would suggest otherwise.

Tim Price

[lannarebirth]

I'm waiting for the counterfeit Chinese copy to watch it.

CNBC Is About To Unleash This Lehman Brothers Monstrosity On Its Viewers

[flying]

I'm waiting for the counterfeit Chinese copy to watch it.

I saw that a year or so ago from a link here.....

I was surprised it actually had some well known actors.

Like the guy playing Paulson,,,Forget his name but have seen him in other things.

[lannarebirth]

I'm waiting for the counterfeit Chinese copy to watch it.

I saw that a year or so ago from a link here.....

I was surprised it actually had some well known actors.

Like the guy playing Paulson,,,Forget his name but have seen him in other things.

My mistake. I thought it was something current.

[BlackJack]

<!--quoteo(post=3669930:date=2010-06-06 14:44:49:name=flying)--><div class='quotetop'>QUOTE (flying @ 2010-06-06 14:44:49) <a href="index.php?act=findpost&pid=3669930"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec--><!--quoteo(post=3669878:date=2010-06-06 14:09:44:name=midas)--><div class='quotetop'>QUOTE (midas @ 2010-06-06 14:09:44) <a href="index.php?act=findpost&pid=3669878"><{POST_SNAPBACK}></a></div><div class='quotemain'><!--quotec-->flying you are not the first person to use the expression " 'biblical proportions " for this incident <img src="http://static.thaivisa.com/forum/style_emoticons/<#EMO_DIR#>/cool.gif" style="vertical-align:middle" emoid="" border="0" alt="cool.gif" /><!--QuoteEnd--></div><!--QuoteEEnd-->

From what I have seen that top kill is already a fail for the most part.

What they siphon is a small fraction of what is spewing.

Also....

I have read we do rely on the Ocean's contribution for something like 50-70% of our oxygen don't we?

Two thirds of the worlds population live within 40 miles of the ocean.

One-Sixth of the worlds population gets all their protein from the fish of that ocean.

The rain we see & the water we drink are tied to that ocean too.....

Which is what got me thinking of what kind of proportion this could turn into.

<!--QuoteEnd--></div><!--QuoteEEnd-->

Yes but arent we getting a little carried away here.

The mass of the ocean is 1,400,000,000,000,000,000 tons.

The spillage assuming it trebles from here will be about 700,000 tons.

In other words it will add one ounce of oil into every 2 trillion ounces of seawater (I think that is right but there are a lot of zeros). In the global scheme of things it amounts to a large fart in a room the size of Bangkok. Not much consolation to a seagull off the coast of Florida, I will readily admit.

Te problem is that its a slick ( covering ) Environmental experts believe that this oil spill that has covered approximately 9000 square kilometre area of Gulf of Mexico with the layer of oil slick can cause environmental disaster due to petroleum toxicity and unavailability of oxygen to the marine life. So its not about volume in the water.

So back to my point this will effect 1000's of jobs and businesses pushing the US job unemployment figure and effected failed businesses up.

We are talking pristine beaches in Florida that attract millions of visitors and money.

So how will the markets be effected?

well it seems like the banks dont even believe each others lies now and large cracks are starting to appear.

My hunch is that the Euro will continue to fall and will reach a tipping point where in there will be a run for the Euro door.

This will be the major tipping point for the World and so gold, silver, US$ and government bonds should fair well.

Of course Greece will go back to the Drachma! and it will be valued much higher and therefore there will be no debt.

[jcon]

I'm waiting for the counterfeit Chinese copy to watch it.

CNBC Is About To Unleash This Lehman Brothers Monstrosity On Its Viewers

Haha that was brutal. I saw that awhile ago as well. IIRC it was a BBC production.

Sadly, I've never been able to see James Cromwell (yes, Farmer Hoggett in "Babe" - yes, "Babe" the movie about the little pig) in the same light since then.

[midas]

“You can have lower rates and deflation, higher rates and higher inflation or the nightmare scenario of higher rates and deflating asset prices,” he said.

“If the nightmare scenario plays out as I suspect it may then the debt situation gets worse. There is currently no exit strategy and the reaction to the crisis of policy makers remains a big worry.”

As a result, Fry is telling investors to play it safe and buy physical assets like land.

“I don’t want to scare anyone but I am considering investing in barbed wire and guns, things are not looking good and rates are heading higher,” he said.

Read more: Evercore's Anthony Fry: Invest In The Real Hard Assets, Barbed Wire And Guns

[lannarebirth]

"You can have lower rates and deflation, higher rates and higher inflation or the nightmare scenario of higher rates and deflating asset prices," he said.

I don't see that as a nightmare scenario at all. That scenario will bring in real cash to buy distressed assets thereby putting a floor under the market. Low interest rates with little down just begs for the next recession to cause homes to be repossessed.

[midas]

"You can have lower rates and deflation, higher rates and higher inflation or the nightmare scenario of higher rates and deflating asset prices," he said.

I don't see that as a nightmare scenario at all. That scenario will bring in real cash to buy distressed assets thereby putting a floor under the market. Low interest rates with little down just begs for the next recession to cause homes to be repossessed.

But perhaps not everyone would think that way ? Even if you had extra wealth generated

from higher rates on deposits, why would you buy distressed assets if you thought they much further

to go down ? Plus in the case of commercial property wouldnt higher rates make it tougher

for buisness generally and therefore you might find it hard to secure decent tenants

because of their higher costs all around ?

[12DrinkMore]

Jeeze, is it now time for despair?

Strikes me that the Great Leaderz of today are running around like headless chickens without a clue how to fix the problems. Not that I have a clue either, except maybe to nationalise every bank across the western world, cancel all derivate instruments and contracts such as interest swaps, cancel all short sales, insist that any stocks are held for say one month before they can be resold. That should remove the volatility in the "markets". And all those guys screaming "liquidity, liquidity" should be ignored. There is too much liquidity and volatility, which, as far as I can work out, is solely there to serve the short term speculators. Then all the debts should be analysed to find out who owes who what so we can all enjoy some clarity into this mess.

But back to reality.

This week has seen an interesting development. Now young Timmy, that World Traveller, is trying to get the other 19 of the G20 members to keep on spending and push out even more stimulus deficits. Bring it on, let's borrow and spend our way out ala Keynes and that other bunch of economist imbeciles MMT, but the Austrian Austerity Challenge 2010 (AAC 2010) is taking firmer hold of the Euro-Governments and so poor Tim is having a bit of a hard time convincing his opposites across the Atlantic. That bunch of incompetents, Fitch, who failed to downgrade all the sub-prime mess, is now siding with the AAC 2010 and the cheeky bastards are threatening to downgrade UK debt. Hah! About time, should have been downgraded some time ago. But when are these guys going to downgrade the Great US of A Ponzi scheme?

Anyway, to continue my ramblings, it is evident that now our expectations are being reset every few days. From the blaring "stimulus" triumphs, heralded as the way forward into a new level of prosperity, the elected bastards are now talking about

Cameron Prepares U.K. for Cuts Hurting 'Every Single Person'

Cameron Prepares U.K. for Cuts Hurting ‘Every Single Person’ - Bloomberg.com

Presumably the married lot will fare better.

And for those who can remember and felt the evil hand of Thatcher, well, stand by for something completely different, well considerably worse.

In nominal terms the figures are even more striking. In the last year of the Callaghan Labour government, public expenditure (including debt interest) was £71.2bn; in the first full year of the Thatcher administration (1980-81) it actually rose to £120.2 billion, and in 1981-82 it grew again to £130bn. Yet the new touchy-feely Con-Lib coalition will, by their own admission, need to cut public expenditure not just below the rate of inflation, but in nominal terms – something which has not happened in this country since the bleakest post-war austerity years of 1947-48.

"Bernanke Says Unemployment Unlikely to Fall Quickly"

Bernanke Says Unemployment Unlikely to Fall Quickly (Update2) - Bloomberg.com

The preparation for the next step downwards seems to have been taken. Tighten your belts (maybe other issues of obesity, binge drinking etc will be solved as a collateral improvement?) and stand by the LCD TV for the next announcement from the Leaderz. With the hoi palloi already geared up for the World Fartball, I guess maybe a bit of subliminal propaganda might be effective in reducing the expectations of Life during the Crisis. I can not see any way out of this mess for the West. It will be horrible. I hope that all those nice exotic holidays, spanish villas, new cars are carefully archived with the digital camera ready for a nostalgic trip on the 3D LCD TV, all financed by spending the equity on the solid ol' bricks and mortar, which will always increase at 10% per annum.....

I could go on and on, I am the mood, but I'll leave you with this piece of Euro-bullshit

EU to Speed Budget Reviews, Tighten Deficit Penalties (Update2) - Bloomberg.com

Under the German-inspired Stability and Growth Pact, countries with deficits above the euro-area limit face fines of as much as 0.5 percent of GDP unless they get the budget back into compliance.

Well, excuse me while I pick myself off the floor. I mean, if they are running, in today's terms, a very modest budget deficit of 12% and borrowing it off the French banks, what on earth is a paltry fine of 0.5% going to make???? That just makes the deficit 12.5% and

The answer is so simple.

Stop lending money to the profligate bastards.

[Abrak]

Jeeze, is it now time for despair?

Strikes me that the Great Leaderz of today are running around like headless chickens without a clue how to fix the problems. Not that I have a clue either, except maybe to nationalise every bank across the western world, cancel all derivate instruments and contracts such as interest swaps, cancel all short sales, insist that any stocks are held for say one month before they can be resold. That should remove the volatility in the "markets". And all those guys screaming "liquidity, liquidity" should be ignored. There is too much liquidity and volatility, which, as far as I can work out, is solely there to serve the short term speculators. Then all the debts should be analysed to find out who owes who what so we can all enjoy some clarity into this mess.

But back to reality.

This week has seen an interesting development. Now young Timmy, that World Traveller, is trying to get the other 19 of the G20 members to keep on spending and push out even more stimulus deficits. Bring it on, let's borrow and spend our way out ala Keynes and that other bunch of economist imbeciles MMT, but the Austrian Austerity Challenge 2010 (AAC 2010) is taking firmer hold of the Euro-Governments and so poor Tim is having a bit of a hard time convincing his opposites across the Atlantic. That bunch of incompetents, Fitch, who failed to downgrade all the sub-prime mess, is now siding with the AAC 2010 and the cheeky bastards are threatening to downgrade UK debt. Hah! About time, should have been downgraded some time ago. But when are these guys going to downgrade the Great US of A Ponzi scheme?

Anyway, to continue my ramblings, it is evident that now our expectations are being reset every few days. From the blaring "stimulus" triumphs, heralded as the way forward into a new level of prosperity, the elected bastards are now talking about

Cameron Prepares U.K. for Cuts Hurting 'Every Single Person'

Cameron Prepares U.K. for Cuts Hurting ‘Every Single Person’ - Bloomberg.com

Presumably the married lot will fare better.

And for those who can remember and felt the evil hand of Thatcher, well, stand by for something completely different, well considerably worse.

In nominal terms the figures are even more striking. In the last year of the Callaghan Labour government, public expenditure (including debt interest) was £71.2bn; in the first full year of the Thatcher administration (1980-81) it actually rose to £120.2 billion, and in 1981-82 it grew again to £130bn. Yet the new touchy-feely Con-Lib coalition will, by their own admission, need to cut public expenditure not just below the rate of inflation, but in nominal terms – something which has not happened in this country since the bleakest post-war austerity years of 1947-48.

"Bernanke Says Unemployment Unlikely to Fall Quickly"

Bernanke Says Unemployment Unlikely to Fall Quickly (Update2) - Bloomberg.com

The preparation for the next step downwards seems to have been taken. Tighten your belts (maybe other issues of obesity, binge drinking etc will be solved as a collateral improvement?) and stand by the LCD TV for the next announcement from the Leaderz. With the hoi palloi already geared up for the World Fartball, I guess maybe a bit of subliminal propaganda might be effective in reducing the expectations of Life during the Crisis. I can not see any way out of this mess for the West. It will be horrible. I hope that all those nice exotic holidays, spanish villas, new cars are carefully archived with the digital camera ready for a nostalgic trip on the 3D LCD TV, all financed by spending the equity on the solid ol' bricks and mortar, which will always increase at 10% per annum.....

I could go on and on, I am the mood, but I'll leave you with this piece of Euro-bullshit

EU to Speed Budget Reviews, Tighten Deficit Penalties (Update2) - Bloomberg.com

Under the German-inspired Stability and Growth Pact, countries with deficits above the euro-area limit face fines of as much as 0.5 percent of GDP unless they get the budget back into compliance.

Well, excuse me while I pick myself off the floor. I mean, if they are running, in today's terms, a very modest budget deficit of 12% and borrowing it off the French banks, what on earth is a paltry fine of 0.5% going to make???? That just makes the deficit 12.5% and

The answer is so simple.

Stop lending money to the profligate bastards.

Nice post.

Although what Tim has to realize is that they (the US Government) are the 'profligate bastards'.

The concept of 'fiscal stimulus' is to get 'underspending private sector' to spend more, not to prop up the overspending private sector. People are getting really pissed because 1) they did realize they overspent and dont mind cutting back 2) however if they cut back and it is simply replaced by overspending by Governments (it is really annoying - on the basis that when they were overspending you were buying what you wanted while the Government simply overspends their money on things they have no interest in. The 'sheeple' (Midas touch) know the problem but lets face it, if we are going to accumulate debt it is more fun buying a plasma then paying increased taxes. As the sheeple know the problem is excess debt they dont want people accumulating on their behalf. The US realized that ever increasing amounts was achieving nothing and a core problem as ultimately do the Brits. Throwing debt at a debt problem is not a great solution. Someone else accumulating debt on your behalf is incredibly irritating. Look at the numbers, private sector down but saved by public sector spending. But it isnt an equation because everyone pays for the public sector. The concept of Keynes was that fiscal spending in a recession would have a positive multiplier. But I get the feeling that people will only spend more when the Government's stop borrowing on their behalf. Essentially the underlying problem was not a 'recession' but a capitulation of 'financial excess' so the big squeeze coming is political as much as economic.

As the bearded guy crying in Florida said, next to his oil slick lawyer, more oil than those birds, planning his US$20bn class action law suit - it is not about me, my livelihood, my life it is my children and my children's children that I worry about. So the Austerity Challenge is up and running, the US, I doubt can run away. I dont know their fundamentals but Japan seems mysteriously off the map at the moment.

[ronz28]

I am really tired of hearing all the whining about the high marginal tax rates for the wealthy getting even higher. Wealthy pay too much? What a scam. Here in the U.S. the highest 400 earners made a total of $138 billion but only paid 16.6% of that for income taxes and the trend is for even lower collections from the wealthy. See page 10 of the IRS report at http://www.irs.gov/pub/irs-soi/07intop400.pdf It shocked me to see this as I thought they were paying well over 35% after the big Bush tax cuts on the wealthy.

I understand the wealthy Greeks also don’t actually pay its high published tax rates either.

So here is part of the reason for the financial crisis: some countries don’t collect taxes on the wealthy to the extent that they imply and they run deficits to enable the government to shovel out trillions to the wealthy for company and bank bailouts/banker bonuses, excessive counterparty derivatives settlements, etc. Its modern day highway robbery with the police on permanent coffee break. They rob the bank/company blind with certain unreasonable/scam transactions (mostly derivative related but many derivatives are good) and then get their capital replenished with a bailout from the government.

[12DrinkMore]

Here's a throwback to the good ol' days of yesteryear

BBC News | BUSINESS | Record UK budget surplus

The government banked another large surplus in October. The public sector net cash surplus was £7.4bn, taking the total surplus for the year so far to £35.4bn.

That is the highest on record, even after allowing for the £22bn raised from the auction of third generation mobile phone licences, which the Treasury says it will use to reduce total government debt.

Aaah, dream on, dream, because something went very badly wrong since then.

It could have been so good, so nice, but the bastards got greedy, they wanted more, they offered us REAL ESTATE and more and more riches based on REAL ESTATE and everybody has to own their bit of dirt and personal selection of bricks and mortar to provide limitless riches WITHOUT the tedium of actually having to produce something and WORK for a living. YES! We can all join in and clap, and dance, to the song of REAL ESTATE.

10% a year, that's the way to do it!

Money for nothing and your bricks for free!

A villa, a new house in the sun,

A new 50 inch LCD TV,

A new SUV, another Buy to Let too!

Yes, that's the way to do it!

Money for nothing and your bricks for free!

No more work, no more toil

Sit back and enjoy the ride

Next year maybe even 12%

Money for nothing and your bricks for free!

Oh life is so good,

Let's re-mortgage the mortgage

Another holiday in the sun.

Money for nothing and your bricks for free!

Oh. endless riches from my.......property.

Sorry, just drunk and felt a bit inspired. A bad combination.....

And apologies to Dire Straits too.

Edited June 9, 2010 by 12DrinkMore

[phomsanuk]

Americas contribution to the crsis,

Government logic. In a bid to stem taxpayer losses for bad loans guaranteed by federal housing agencies Fanny Mae and Freddy Mac, Senator Bob Corker (R-Tenn) proposed that borrowers be required to make a 5% down payment in order to qualify. His proposal was rejected 57-42 on a party-line vote because, as Senator Chris Dodd (D-Conn) explained, "passage of such a requirement would restrict home ownership to only those who can afford it." People with no money can still vote [for me]....

[midas]

am i right to assume that your question is a rhetoric one Flying and you want to spell out others why a certain group of people have the White House and the U.S. by the balls?

not only US and The White House.........the whole world

I just dont know how they do it...how and why did they get to be so powerful as this ?

What about " crimes " they have committed.........nobody does or says anything......why why?

U.N. Adopts New Sanctions on Iran - NYTimes.com

Edited June 10, 2010 by midas

[flying]

not only US and The White House.........the whole world

I just dont know how they do it...how and why did they get to be so powerful as this ?

What about " crimes " they have committed.........nobody does or says anything......why why?

U.N. Adopts New Sanctions on Iran - NYTimes.com

What is equally amazing is the ongoing question mark about Israels nuclear capabilities...Yet no sanctions exist there do they?

[midas]

What is this world coming to when even hardcore smut mags are demanding an audit of The Fed?

July 2010 copy of Hustler has the article entitled: 'The Federal Reserve for Dummies: Its a Pyramid Scheme that could destroy America'

[Naam]

What is equally amazing is the ongoing question mark about Israels nuclear capabilities...Yet no sanctions exist there do they?

Israel is not a signatory to the NPT (non-proliferation treaty). neither are India and Pakistan (countries which have gone to war with each other 3½ times). these countries are free to enrich Uranium, produce Plutonium and build as many nukes as they want. Iran is entitled to enrich Uranium but inspite of this entitlement sanctions are passed. these are undeniable facts.

[midas]

not only US and The White House.........the whole world

I just dont know how they do it...how and why did they get to be so powerful as this ?

What about " crimes " they have committed.........nobody does or says anything......why why?

U.N. Adopts New Sanctions on Iran - NYTimes.com

What is equally amazing is the ongoing question mark about Israels nuclear capabilities...Yet no sanctions exist there do they?

plus all the other things on the very long list ? this is what i mean and how do

6 million people achieve this ?

[Naam]

I just dont know how they do it...how and why did they get to be so powerful as this ?

money + media = political clout. as simple as that.

[lannarebirth]

I just dont know how they do it...how and why did they get to be so powerful as this ?

money + media = political clout. as simple as that.

True, but why does no one ever observe that the Saudis play the same game.

[Naam]

I just dont know how they do it...how and why did they get to be so powerful as this ?

money + media = political clout. as simple as that.

True, but why does no one ever observe that the Saudis play the same game.

the Saudis are powerful outside Saudi Arabia? they control international media?

[lannarebirth]

I just dont know how they do it...how and why did they get to be so powerful as this ?

money + media = political clout. as simple as that.

True, but why does no one ever observe that the Saudis play the same game.

the Saudis are powerful outside Saudi Arabia? they control international media?

I don't really follow the media so I really couldn't say, but I'd guess not. What the Do do is throw a LOT of money at lobbying efforts and funding of organizations, centers and PAC's that are in a position to guide policy , recommend/demand appointments and shape public opinion. Nothing wrong with that from either country as the law allows it, though I wish it didn't. The fault lies with those who would allow their power, influence and votes to be bought.