Financial Crisis

[Wrong Turn]

You have to laugh as you watch the news these days

regarding the USA debt ceiling. Approaching expiration/default

August 2nd

Actually expired back in May? but, they have been running on

Federal pensions/fumes

But what I find funny is the show they put on...The Democrats & the Republicans

pretending they will not agree to raise it......as if they have that choice.

Spot-on.

I am hearing a lot of talk about this firstly among American expacts, and now also from the Europeans and people of other parts of the world. All this talk about the debt ceiling.

It's political posturing. And it's very stupid. The elections are 16 months away and both parties and their politicians are posturing.

The debt ceiling will will be raised IMO, as the negative consequences are to big. So these games and accusations are just childish actions by incompetents.

Personally, I'd like to the see the debt ceiling not raised, as it would further awaken the public into how screwed up the US is, and will be in the future.

It's a house of cards.

[flying]

Personally, I'd like to the see the debt ceiling not raised, as it would further awaken the public into how screwed up the US is, and will be in the future.

It's a house of cards.

Wrong Turn.....

Andrew Jackson in his farewell address 1837 would agree ......

"The paper system being founded on public confidence and having of itself no intrinsic value, it is liable to great and sudden fluctuations, thereby rendering property insecure and the wages of labor unsteady and uncertain.

The corporations which create the paper money can not be relied upon to keep the circulating medium uniform in amount. In times of prosperity, when confidence is high, they are tempted by the prospect of gain or by the influence of those who hope to profit by it to extend their issues of paper beyond the bounds of discretion and the reasonable demands of business; and when these issues have been pushed on from day to day, until public confidence is at length shaken, then a reaction takes place, and they immediately withdraw the credits they have given, suddenly curtail their issues, and produce an unexpected and ruinous contraction of the circulating medium, which is felt by the whole community.

The banks by this means save themselves, and the mischievous consequences of their imprudence or cupidity are visited upon the public. Nor does the evil stop here. These ebbs and flows in the currency and these indiscreet extensions of credit naturally engender a spirit of speculation injurious to the habits and character of the people. We have already seen its effects in the wild spirit of speculation in the public lands and various kinds of stock which within the last year or two seized upon such a multitude of our citizens and threatened to pervade all classes of society and to withdraw their attention from the sober pursuits of honest industry.

It is not by encouraging this spirit that we shall best preserve public virtue and promote the true interests of our country; but if your currency continues as exclusively paper as it now is, it will foster this eager desire to amass wealth without labor; it will multiply the number of dependents on bank accommodations and bank favors; the temptation to obtain money at any sacrifice will become stronger and stronger, and inevitably lead to corruption, which will find its way into your public councils and destroy at no distant day the purity of your Government."

Andrew Jackson, Farewell Address, 1837

[craigt3365]

One off topic post deleted. I know this thread has run it's course, and strayed all over the place, but let's try to continue on with the OP.

[12DrinkMore]

One off topic post deleted. I know this thread has run it's course, and strayed all over the place, but let's try to continue on with the OP.

On the contrary, the financial crisis, debt crisis, banking crisis, euro-crisis have certainly not played out. I wish they had reached some sort of resolution. All that has happened is that the can has been kicked down the road a bit further, but the structural issues are still very much with us.

And, unlike a Thai massage, I cannot see any hope for a happy ending for millions of people in the west.

As Congress wrangles over spending cuts, surging numbers of Americans are relying on the government just to put food on the table

http://www.economist.com/node/18958475

IMAGINE a patient clutching at his heart, complaining of sharp chest pains. A doctor arrives, examines him carefully and pronounces him healthy—provided he is not having a cardiac arrest. The same air of unreality infects today's stress-test results for European banks: most institutions are fine unless there is a sovereign-debt crisis.

http://www.economist...7/europes-banks

[lannarebirth]

One off topic post deleted. I know this thread has run it's course, and strayed all over the place, but let's try to continue on with the OP.

On the contrary, the financial crisis, debt crisis, banking crisis, euro-crisis have certainly not played out. I wish they had reached some sort of resolution. All that has happened is that the can has been kicked down the road a bit further, but the structural issues are still very much with us.

And, unlike a Thai massage, I cannot see any hope for a happy ending for millions of people in the west.

As Congress wrangles over spending cuts, surging numbers of Americans are relying on the government just to put food on the table

http://www.economist.com/node/18958475

IMAGINE a patient clutching at his heart, complaining of sharp chest pains. A doctor arrives, examines him carefully and pronounces him healthy—provided he is not having a cardiac arrest. The same air of unreality infects today's stress-test results for European banks: most institutions are fine unless there is a sovereign-debt crisis.

http://www.economist...7/europes-banks

While I can't stand The Economist and see them only as a capatalist tool for hire to the highest bidder (see Amsterdam/Thaksin); I think they got this story right. I doubt if they'll get the next story right as I don't think poor people can pay their fee.

[cloudhopper]

I know this thread has run it's course,

Reminds me of Lord Kelvin's comment on physics. This thread has a long way to run.

[craigt3365]

I know this thread has run it's course,

Reminds me of Lord Kelvin's comment on physics. This thread has a long way to run.

Unfortunately, you are 100% correct!!!! This week will be interesting for sure...

[Naam]

I know this thread has run it's course,

Reminds me of Lord Kelvin's comment on physics. This thread has a long way to run.

Unfortunately, you are 100% correct!!!! This week will be interesting for sure...

make that these months and years!

[flying]

The Only Thing You Can Count On Edited July 19, 2011 by flying

[flying]

Mastering the Machine

Dalio believes that some heavily indebted countries, including the United States, will eventually opt for printing money as a way to deal with their debts, which will lead to a collapse in their currency and in their bond markets. “There hasn’t been a case in history where they haven’t eventually printed money and devalued their currency,” he said. Other developed countries, particularly those tied to the euro and thus to the European Central Bank, don’t have the option of printing money and are destined to undergo “classic depressions,” Dalio said. The recent deal to avoid an immediate debt default by Greece didn’t alter his pessimistic view. “People concentrate on the particular thing of the moment, and they forget the larger underlying forces,” he said. “That’s what got us into the debt crisis. It’s just today, today.”

Read more http://www.newyorker.com/reporting/2011/07/25/110725fa_fact_cassidy?printable=true&currentPage=all#ixzz1SXRWyZpE

[cloudhopper]

It may go that way flying but it's hardly the slam dunk these guys make it seem.

Lifted off Mish -"Treasury spreads, oil prices, and food prices would likely make Bernanke's life miserable should he decide any time soon to embark on another round of Quantitative Easing."

[cloudhopper]

This looks exciting. In a deflationary sort of way.

They say the net risk of all the sovereign CDS is low but that assumes the counter parties will not default. Heh not even Ross Perot imagined a sucking noise this loud.

http://www.zerohedge.com/article/greek-bonds-collapse-ecbs-nowotny-announces-bank-will-compromise-agree-temporary-greek-defau

[Wrong Turn]

Flying,

Thanks for the Ray Dalio article. The last 2 paragraphs are the way I see it, and I am a layman.

Also, US housing is poised to gown 10-20% next year. QE, high unemployment in US, European Union problems from Greece, to now Italy to the other piggs later.

Tough times coming ahead - for some.

[12DrinkMore]

Tough times ahead indeed, and for more than "some". Many many millions.

Here comes Portugal, another sunny southern European country, once a powerful conquistador of the Americas, and now a lay-back in the sun, port and wine swilling bunch of debtors.

http://www.telegraph.co.uk/finance/financialcrisis/8646189/Portugals-Prime-Minister-Pedro-Passos-Coelho-discovers-colossal-budget-hole.html

What happened guys? Got a bit lazy did we?

Portugal's new leader Pedro Passos Coelho has told the nation to brace for further austerity measures after his government discovered a "colossal" €2bn (£1.7bn) hole in the public accounts left by the outgoing Socialists.

Presumably the idea is that all the countries under the southern European sun should sit out and enjoy life, whilst Germany and France work their balls off to pay for it?

But you have to laugh when they complain

The penal rate of interest charged by the EU is expected to top 5.5pc

5.5% Penal????

Before they had the Euro- the interest rate was way higher than that.

But now the

And its time to pay the bill.

I am so unhappy for them

[flying]

Also, US housing is poised to gown 10-20% next year.

Yes even the hopefuls here are saying 2016 before housing *possibly* resumes...

From my own view here in the US it does not look hopeful.

Inventories are swamped with excess new homes & to top it off there are all the foreclosures/walk away types.

Prices are now getting down to a point that *if* anyone wanted to buy I cannot see a reason why they would

not buy existing. They in no way can build new for what they can buy existing homes for.

Even then there is much more inventory than buyers. Understandable when one looks at UE.

[craigt3365]

Also, US housing is poised to gown 10-20% next year.

Yes even the hopefuls here are saying 2016 before housing *possibly* resumes...

From my own view here in the US it does not look hopeful.

Inventories are swamped with excess new homes & to top it off there are all the foreclosures/walk away types.

Prices are now getting down to a point that *if* anyone wanted to buy I cannot see a reason why they would

not buy existing. They in no way can build new for what they can buy existing homes for.

Even then there is much more inventory than buyers. Understandable when one looks at UE.

Being a RE investor in the US, I watch this fairly closely. From what I've read, it's several years before prices stabilize. Sure, some areas will increase, but most won't.

Although my REIT mutual fund rocked this past year. 30% increase in 12 months and 6% YTD.

[Naam]

Portugal's new leader Pedro Passos Coelho has told the nation to brace for further austerity measures after his government discovered a "colossal" €2bn (£1.7bn) hole in the public accounts left by the outgoing Socialists.

"colossal"

[flying]

Although my REIT mutual fund rocked this past year. 30% increase in 12 months and 6% YTD.

Congrats Craig!

Very happy to hear that. Nice folks like you deserve a break.

[craigt3365]

Although my REIT mutual fund rocked this past year. 30% increase in 12 months and 6% YTD.

Congrats Craig!

Very happy to hear that. Nice folks like you deserve a break.

Thanks...but the main reason I need a break is I am American, no retirement plan, no health care, lazy and retired at 46! Gotta take of stuff somehow.

[BEENTHEREDONETHAT]

Although my REIT mutual fund rocked this past year. 30% increase in 12 months and 6% YTD.

Congrats Craig!

Very happy to hear that. Nice folks like you deserve a break.

Thanks...but the main reason I need a break is I am American, no retirement plan, no health care, lazy and retired at 46! Gotta take of stuff somehow.

Craig....You picked a tough time to retire in the US, things will get much worse before better. Good luck to you! and hope you have a long and enjoyable retirement. It's not a bad lifestyle if you have the $$ to go with it.

[midas]

Although my REIT mutual fund rocked this past year. 30% increase in 12 months and 6% YTD.

Congrats Craig!

Very happy to hear that. Nice folks like you deserve a break.

Thanks...but the main reason I need a break is I am American, no retirement plan, no health care, lazy and retired at 46! Gotta take of stuff somehow.

Craig....You picked a tough time to retire in the US, things will get much worse before better. Good luck to you! and hope you have a long and enjoyable retirement. It's not a bad lifestyle if you have the $$ to go with it.

many CNN viewers agree with you

http://www.youtube.com/watch?v=TA7GVOS0uD8

[flying]

many CNN viewers agree with you

Along those lines Gonzalo Lira recently wrote...........

Currently, the American military’s budget is $700 billion a year—not including the occupations of Iraq and Afghanistan. This is more than the entire military budgets of all other countries on earth combined. The total costs of the so-called Global War on Terror—including the off-books costs of the Iraq and Afghanistan invasions and occupations—come to some $5,700,000,000,000, according to some credible research ($5.7 trillion, if you are confused by all the zeros). That amount is equivalent to the gross domestic product of China.

A great deal of this massive expenditure is for weapons that serve no purpose, and strategies and doctrines that have been superceded by a changed reality.

To take a single example: An intercontinental ballistic missile submarine costs several billion dollars—yet it serves no purpose now that the Cold War is over and the likelihood of an overwhelming surprise nuclear attack from either China or Russia is literally non-existent. Yet those great white elephants of the sea still slink around, for no discernible purpose except pride.

Pride is what is sinking America. Pride—arrogance—vanity—hubris—conceit: Call it what you will, it’s still the same thing.

[craigt3365]

Pretty sad, eh? Saw a report on the US million dollar soldier...what it costs to train, support and equip a soldier in the field.

Wish we had a better say in what our governments do...or at least have politicians that listen to those who elected them.

[flying]

Pretty sad, eh? Saw a report on the US million dollar soldier...what it costs to train, support and equip a soldier in the field.

Wish we had a better say in what our governments do...or at least have politicians that listen to those who elected them.

Well they say "No Taxation Without Representation"...

While I see civil unrest as a real possibility I would rather

see a unanimous Tax Revolt !

America is not Europe. If civil unrest breaks out it will not be cops with batons & water

pushing angry mobs back. It will be people voting from rooftops. In turn it that will mean military brought in

& things will go downhill very quickly.

Instead a unanimous tax revolt would be peaceful & accomplish the desired task quickly.

[cloudhopper]

Instead a unanimous tax revolt would be peaceful & accomplish the desired task quickly.<br />

Maybe so flying but there are just too many voters administrating or receiving (directly like SS, soldiers and food stamps or indirectly like teachers and the military industrial FIRE complex) for a political resolution. But that of course assumes there is a possible solution to a mathematically insoluble problem. Collapse is unavoidable with or without laws or revolts of any type.

[flying]

Collapse is unavoidable with or without laws or revolts of any type.

Agreed but I just dont feel like pedaling to the finish line towing all this dead weight.

There would be some degree of satisfaction in jettisoning the scurvy dogs before the line.

If we are going down in flames I prefer not to let them continue to ride free.

[churchill]

Santelli tells it straight

Rick Santelli Goes On A Deficit Rampage: "Gov't Must Live Within Its Means! Now, Now, Now! Stop Spending Now!"

http://dailybail.com/home/rick-santelli-goes-on-a-deficit-rampage-govt-must-live-withi.html

[flying]

Santelli tells it straight

Rick Santelli Goes On A Deficit Rampage: "Gov't Must Live Within Its Means! Now, Now, Now! Stop Spending Now!"

http://dailybail.com/home/rick-santelli-goes-on-a-deficit-rampage-govt-must-live-withi.html

I saw that live & once again I thought ....This Santelli is the only guy ( of the talking heads on TV )who gets it.

[churchill]

'Former Tory chancellor Lord Lamont said the crisis tearing through the Eurozone was ‘much more serious’ than the phone hacking scandal. He urged European leaders to ‘come up now with a comprehensive solution’.'

!!!!!

Read more: http://www.dailymail.co.uk/news/article-2016664/Debt-crisis-IMF-warns-Eurozone-400bn-global-earthquake.html#ixzz1SdHLk8f7

[midas]

'Former Tory chancellor Lord Lamont said the crisis tearing through the Eurozone was ‘much more serious’ than the phone hacking scandal. He urged European leaders to ‘come up now with a comprehensive solution’.'

!!!!!

Read more: http://www.dailymail.co.uk/news/article-2016664/Debt-crisis-IMF-warns-Eurozone-400bn-global-earthquake.html#ixzz1SdHLk8f7

have you noticed recently the MSM is dominated entirely from week to week by a single story?

Osama Bin Laden, then Casey Anthony, then the pre-rehearsed debt negotiations , then this hacking scandal...............don't let them know what's really going on

Give them bread and circuses

Edited July 20, 2011 by midas