Financial Crisis

Naam · January 16, 2012

Only $500 for a 10 KW home unit.

http://www.e-catworl...cost-50-per-kw/

One million units production run already started.

I bet this has a lot of utility and energy companies sweating it.

logic says "they don't sweat, they grin". why would anybody sell a product that saves a multiple of its purchase cost in the first year for peanuts?

Naam · January 16, 2012

NASA's recent video on producing clean powerful low cost energy from Low Energy Nuclear Reactions that should save cost throughout the economy.

http://technologygat.../lenr/lenr.html

So, when can I buy it from Home Depot?

another scam.

Naam · January 16, 2012

Did Marc Faber recommend buy and hold ? I expect he traded ....

it does not matter what you or i think Faber did. what matters is looking at the "picks of an international investor known for his uncanny predictions."

three years ago the "uncanny predictor" forecasted "100% sure that U.S. will have Zimbabwean inflation.

midas · January 17, 2012

Did Marc Faber recommend buy and hold ? I expect he traded ....

it does not matter what you or i think Faber did. what matters is looking at the "picks of an international investor known for his uncanny predictions."

three years ago the "uncanny predictor" forecasted "100% sure that U.S. will have Zimbabwean inflation.

yes but he didnt give a timeframe ?

Many others believe hyperinflatio will follow deflation because they wont be able to resist printing .

midas · January 17, 2012

It's all about asking the right questions......

Unbelieveable ! Alex Lah !!

Where have you been ?

Naam · January 17, 2012

yes but he didnt give a timeframe ?

Many others believe hyperinflatio will follow deflation because they wont be able to resist printing .

i predict that planet Earth will cease to exist and that Midas, Churchill and Naam will eventually be dead. timeframe? why should i add a time frame to my "uncanny" predictions?

manarak · January 17, 2012

And as far as I can tell, absolutely NOTHING has been solved.

...

The bankers...

It's time to forget the bankers now.

The banking crisis is over, the bank rescue funds have since long been paid back by the banks, and with interest.

So when is the first Leader going to come clean and tell the peeps that this is the best they can offer? A declining standard of living with no end in sight. It ain't gonna get any better, folks.

This is the point.

Looking at the global flows of goods:

Asia produces goods, and currency flows from western countries to Asia.

For how long did anyone think this could go on without either an explosion of debt or inflation or loss of value of western currencies?

The people responsible for this are mostly left-wing (although the center and slightly right were in this too) politicians who were pressured by their left-wing voters to distribute wealth to them. They had to take in debt to try to fulfill their promises.

The debt was fine as long as the economy was growing, because it also meant growing tax income. Now we face a little bit of a recession, and oops! So solly, money finit !

All the idiot socialist politicians have to learn that it is not possible to run debt-financed social politics with hard currency.

Switzerland knows it, Germany knows it.

The others... are catching the votes of the poor by promising riches to them!

I say the decline of standard of living should have begun much sooner.

Now people can prepare for times where the value of real estate will not automatically rise every year (and probably the value will erode if significant inflation does not appear).

Now, the focus of EU countries is on sourcing funds, i.e. stealing.

The tax of financial transactions is just a drop in the ocean.

The brains in the ministries of finance are running hot, they are doing brainstorming sessions to invent new taxes to fleece citizens.

Some countries already introduced new taxes.

At the same time, the rich people that remain in EU are tied down by real estate - they cannot/don't want to sell because the market is depressed, but they put the rest of their assets out of reach of EU tax thieves.

The EU hasn't quite reached that point yet, but it is imaginable that the EU will introduce the same kind of tax policy as the US: tax its citizens who are living abroad, outside of the EU.

I might become a Thai citizen then.

But the EU taxman will not touch the people who are making money off the trade flows that damage the EU:

some people are making huge money by importing Asian goods into Europe through offshore trading companies, while their EU distribution networks and shops make nearly zero profit.

I say: tax the import and distribution companies with 10% of their turnover, regardless of their profits!

And the EU Central Bank and all EU countries should put a minimum legal interest rate of 5% that must apply to all financing inside the EU zone. This applies to private loans as well as public debt. And governments should get 20% of that financial income as tax.

There are the financial resources of the government.

Of course they won't do it, because there are powerful lobbies which won't allow that to happen, and this kind of policy will also shatter the dreams of all the freeloaders who will not be anymore able to buy property without having the funds!

I'm glad I'm outta there.

12DrinkMore · January 17, 2012

It's time to forget the bankers now.

The banking crisis is over, the bank rescue funds have since long been paid back by the banks, and with interest.

???

And I thought the Eurobanks were still well up the creek hoping the zero interest money from the central banks will paddle them out. And have the 'assets' taken onto the massively expanding central banks' balance sheets been sold or returned? And how about all the government bonds issued by the sub-prime nations sitting very uncomfortably on the banks' books?

With the stockmarkets and real estate being supported by low interest rates, there is still massive vulnerability in the banking sector.

The list

http://www.fdic.gov/...d/banklist.html

is getting longer every month

I don't think the banks are in any way robust.

This is the point.

Looking at the global flows of goods:

Asia produces goods, and currency flows from western countries to Asia.

For how long did anyone think this could go on without either an explosion of debt or inflation or loss of value of western currencies?

Ostensibly forever and ever, amen..... A few disappointed faces around, I suppose.

Now people can prepare for times where the value of real estate will not automatically rise every year (and probably the value will erode if significant inflation does not appear).

I think you need to substitute "price" for "value". The ridiculous "get rich on exponential house price increases" bandwagon has fallen off the rails at last.

And the EU Central Bank and all EU countries should put a minimum legal interest rate of 5% that must apply to all financing inside the EU zone. This applies to private loans as well as public debt. And governments should get 20% of that financial income as tax.

That ain't gonna happen. We've got the ZIRP's to prop up asset prices and banks' profits.

"this kind of policy will also shatter the dreams of all the freeloaders who will not be anymore able to buy property without having the funds!"

I would have to include all leveraged transactions and short selling in that sentence. If you don't have the funds you should not be allowed to gamble, and if you don't have the underlying asset you should not be able to sell it, or insure it for that matter.

12DrinkMore · January 17, 2012

It's all about asking the right questions......

Unbelieveable ! Alex Lah !!

Where have you been ?

Where indeed? That was a little blast from the past.

manarak · January 17, 2012

It's time to forget the bankers now.

The banking crisis is over, the bank rescue funds have since long been paid back by the banks, and with interest.

???

And I thought the Eurobanks were still well up the creek hoping the zero interest money from the central banks will paddle them out. And have the 'assets' taken onto the massively expanding central banks' balance sheets been sold or returned? And how about all the government bonds issued by the sub-prime nations sitting very uncomfortably on the banks' books?

With the stockmarkets and real estate being supported by low interest rates, there is still massive vulnerability in the banking sector.

The list

http://www.fdic.gov/...d/banklist.html

is getting longer every month

I don't think the banks are in any way robust.

No they aren't, but this is not part of the "banking crisis" any more.

Bank's problems are just part of the general crisis, and are not due to banks' business practices, policies or bankers' greed.

The current problems banks have (liquidity, balance sheet) are just a consequence of the crisis. No need to blame bankers over this.

manarak · January 17, 2012

And the EU Central Bank and all EU countries should put a minimum legal interest rate of 5% that must apply to all financing inside the EU zone. This applies to private loans as well as public debt. And governments should get 20% of that financial income as tax.

That ain't gonna happen. We've got the ZIRP's to prop up asset prices and banks' profits.

I think you again mistake the bankers for the main target.

Bankers are not spending, they just make the cash available for spending, and they just use what's available, i.e. the low interest rates set by central banks and indirectly governments and their economic policy.

The culprits are the spenders, and governments ahead of everyone.

I say zero interest rates are unhealthy for an economy, because it basically allows to create more money for spending from nothing and inflates prices of income-generating assets beyond belief.

Of course, cranking up the interest rates would put a stop to the stupid mass consumerism. A good thing.

manarak · January 17, 2012

"this kind of policy will also shatter the dreams of all the freeloaders who will not be anymore able to buy property without having the funds!"

I would have to include all leveraged transactions and short selling in that sentence. If you don't have the funds you should not be allowed to gamble, and if you don't have the underlying asset you should not be able to sell it, or insure it for that matter.

No, the leveraged transactions will not suffer from setting higher rates, except the very highly leveraged transactions, which is what matters.

Short selling is not a problem if it is backed by enough cash, and a 5% annual interest has a very small impact on the P&L of speculative transactions.

I'm a financial markets specialist, and I am certain that it is the financing part of the economy that got out of hand, including lending to governments.

The leverage in financial transactions today does not come from taking more risk. It comes from securitizing or "repackaging" real assets into "special purpose vehicles", funds, etc. and they get repackaged again and again, and every time leverage increases.

What should be done is put a limit on how much times tangible assets can be securitized. I'd go for a limit of 3 or 4 times, for example:

bond or stock --> options, forwards --> fund --> fund of funds --> portfolio company

or something like that.

12DrinkMore · January 17, 2012

It's time to forget the bankers now.

The banking crisis is over, the bank rescue funds have since long been paid back by the banks, and with interest.

???

And I thought the Eurobanks were still well up the creek hoping the zero interest money from the central banks will paddle them out. And have the 'assets' taken onto the massively expanding central banks' balance sheets been sold or returned? And how about all the government bonds issued by the sub-prime nations sitting very uncomfortably on the banks' books?

With the stockmarkets and real estate being supported by low interest rates, there is still massive vulnerability in the banking sector.

The list

http://www.fdic.gov/...d/banklist.html

is getting longer every month

I don't think the banks are in any way robust.

No they aren't, but this is not part of the "banking crisis" any more.

Bank's problems are just part of the general crisis, and are not due to banks' business practices, policies or bankers' greed.

The current problems banks have (liquidity, balance sheet) are just a consequence of the crisis. No need to blame bankers over this.

<deleted>.

Absolute <deleted>.

If the banks did not create money and lend it out to basket cases such as sub-prime sub-earners or countries with a long history of fiscal irresponsibility we would not have the current mess.

The banking bastards simply hid behind the rating agencies skirts and declared themselves victims, and not only victims, but declared that unless they were rescued from their own inept decisions blinded through greed, nations would be brought down unless the tax payer continued to fund their bonuses.

The whole mess is due to imprudent debt creation.

12DrinkMore · January 17, 2012

I think you again mistake the bankers for the main target.

Bankers are not spending, they just make the cash available for spending, and they just use what's available, i.e. the low interest rates set by central banks and indirectly governments and their economic policy.

Let's just repeat that.

Bankers are not spending, they just make the cash available for spending, and they just use what's available, i.e. the low interest rates set by central banks and indirectly governments and their economic policy.

Yeah, right, so they do NOT have the obligation to ensure that the idiots they lend money out to are actually able to repay it?

Give me a <deleted> break.

The bastards knew absolutely that any bad decision in money creation/lending would be underwritten in the end by the tax payer. That was absolutely clear and they abused the power of issuing debt in the sovereign currency with ZERO risk to their own personal gains.

The culprits are the spenders, and governments ahead of everyone.

You have the cart way, way, way before the horse.

Good money should not be lent to imbeciles, spendthrifts, incompetents, and <deleted>.

12DrinkMore · January 17, 2012

No, the leveraged transactions will not suffer from setting higher rates, except the very highly leveraged transactions, which is what matters.

Short selling is not a problem if it is backed by enough cash, and a 5% annual interest has a very small impact on the P&L of speculative transactions.

I totally disagree.

You may make a profit from selling stuff you do not own, but I see that as a total market distortion against those who actually produce stuff through the integration of materials and labour.

I'm a financial markets specialist, and I am certain that it is the financing part of the economy that got out of hand, including lending to governments.

Yeah, well I'm a specialist in manufacturing technology and delivering real stuff that serves to produce more actual real wealth through manufacturing. The financial markets have evolved to become a parasite on what I used to do before I retired.

The leverage in financial transactions today does not come from taking more risk. It comes from securitizing or "repackaging" real assets into "special purpose vehicles", funds, etc. and they get repackaged again and again, and every time leverage increases.

What should be done is put a limit on how much times tangible assets can be securitized. I'd go for a limit of 3 or 4 times, for example:

bond or stock --> options, forwards --> fund --> fund of funds --> portfolio company

or something like that.

Give me a break.

I do not want to hear about triple A rated securitised crap for the rest of my life. It has brought the financial system to its knees, sent economies into depression and put millions upon millions out of jobs, destroying their hopes for the future and the pension schemes.

All in the name of "saving the fuc_king bankers".

And this has sent me back to post one, three bloody years ago..

manarak · January 17, 2012

The bastards knew absolutely that any bad decision in money creation/lending would be underwritten in the end by the tax payer. That was absolutely clear and they abused the power of issuing debt in the sovereign currency with ZERO risk to their own personal gains.

That's not really how it works.

I don't support spending tax money or public funds to save investment banks.

But the decision to scrap the commercial/investment bank separation was a political one, it was made by the government of the time, in the US.

In my book, the government should have nationalized the ailing banks and sent the managers to hell.

But, I repeat: that crisis is mostly over.

Bastard bankers or not, today's crisis is a sovereign debt crisis.

Good money should not be lent to imbeciles, spendthrifts, incompetents, and <deleted>.

exactly, and that includes irresponsible politicians controlling a country's money supply.

manarak · January 17, 2012

12DrinkMore, I guess you lost a lot of money and your post is just pure anger.

But no, the world in future won't be able to do without forwards, options, bonds or even ratings. You might not want to hear about those things anymore, but the world won't care.

It is just a question of regulating that stuff in a way that it can't cause as much trouble as it did in the last years. And this is the job of governments.

The current crisis in Europe is due to sovereign debt - widely known as triple A debt - please demonstrate how financial markets are responsible for the problems in Greece? by not warning investors that Greece wouldn't be able to repay whereas the Greek government himself lied and broke his international treaties? Who should go to prison?

And sovereign debt is what it is: sovereign. So the taxpayer of that country should foot the bill, so that taxpayers of other countries don't have to. Because who, at the end, invests in the government issued crap papers? Pension funds, individual investors, etc, YOU.

I would like the following regulations:

* lending, trading and primary market operations should only be allowed for financial institutions who:

- do not manage deposits

- do not take part in the payments system

- will not be saved by the government if they get into trouble

* bank guarantees should only be granted if an equivalent sum is immobilized

* minimum interest rate

* governments should be treated the same way as companies when it comes to borrowing money

Naam · January 18, 2012

Barclays Capital

China: Soft landing on track, we do not expect aggressive easing

Today's better-than-expected GDP report for Q4 confirmed that the economy has not slowed as much as the market expected (Figure 1). This should provide further support to the case for a "soft landing" of the Chinese economy in the coming quarters. The government will probably retain its macroeconomic policy mix of "prudent monetary policy and proactive fiscal policy". The PBoC may further lower its reserve requirement ratios around the Chinese New Year. But this should be regarded as a step to stabilise liquidity conditions, not as aggressive easing. Entering 2012, we remain mindful of the potential downside risks facing the Chinese economy, particularly a deep recession of the global economy and a disorderly correction of the domestic housing market, and maintain our full-year GDP forecast of 8.1%.

Real GDP growth slowed to 8.9% in Q4 (BarCap 8.5%; Bloomberg 8.7%) from 9.1% in Q3. The biggest surprise was the above-consensus retail sales growth at 18.1% y/y in December (BarCap 17.6%; Bloomberg 17.2%), compared with 17.3% in November. Although the pick-up might have been driven by special factors, such as the early Chinese New Year's holiday and year-end fiscal spending, resilient retail sales growth is consistent with our recent call for a great wave of consumption upgrading, as a result of general rebalancing process of the economy (Figure 2). Industrial production (IP) grew 12.8% y/y, matching our above-consensus forecast (BarCap: 12.8%; Bloomberg: 12.3%). FAI growth slowed slightly more than we and consensus expected, easing to 23.8% y/y (BarCap: 24.1%; Bloomberg: 24.1%).

Today's data should, at least at the margin, ease investors' fear about hard landing risks in China. The economy is clearly on track for a soft landing, in our view. We project that economic momentum will bottom during the first half of 2012, our forecasts point to growth at ~7% q/q saar during the first quarter. But the economy does face serious downside risks - a deeper global recession as a result of a worsening of Europe's sovereign debt problems or a collapse of the domestic housing market as a result of administrative restrictions.

Recently, the market has become anxious about the next monetary policy move. The PBoC reiterated its prudent monetary policy stance several weeks ago. And today's data confirmed that there is no urgent need for aggressive easing. In our view, the PBoC will likely cut the reserve requirement ratios again in the coming weeks, most likely around the Chinese New Year. This is mainly because liquidity conditions have become tighter recently, evidenced by rising money market interest rates. Therefore, RRR cuts can be regarded as a reversal action of sterilisation. Unless economic activity shows significant signs of weakness, the PBoC is likely to maintain its prudent monetary policy in 2012.

December IP growth rose to 12.8% y/y from 12.4% in November. The earlier-than-usual Chinese New Year likely boosted December output, as was also seen in the pick-up in the PMIs (Figure 3). On a m/m basis, IP growth rose about 1.1% versus November's 0.9% gain, according to the NBS. Specifically, electricity production growth accelerated to 9.7% y/y from 8.5% (Figure 4). However, growth in major industrial output slowed: cement: 7% y/y versus 11.2%, steel: 6% y/y versus 7.8%, in line with a weakening investment growth. Reflecting sluggish sales and the gloomy sector outlook, auto production dropped 6.5% y/y after falling 1.3% in November. We expect IP growth to edge lower to 10-12% in the coming months on slowing external and domestic demand.

YTD fixed asset investment (FAI) growth continued to come in weaker than expected, slowing to 23.8% y/y from 24.5%. On a monthly basis, December FAI growth slipped to 18.3% y/y, from 21.2% in November and 24.9% in October (in real terms, FAI growth slowed to 16.3% y/y from 18% and 18.9%). The NBS reported that FAI fell 0.14% m/m, compared with -0.4% in November. Specifically, manufacturing investment continued to hold up but property investment has slowed rapidly towards year-end (Figure 5).

Property investment growth slowed to 12.3% y/y, compared with 20.1% y/y in November and 25% y/y in October. Floor space sold continues to contract y/y, leading to a sharp 18.9% y/y drop in floor space started, compared with increases of 9.1% and 2.2% previously (Figure 6). The weak property investment likely reflects in part less support from social housing construction after 2011 targets were met. Looking ahead, the ongoing property market correction will further drag down investment growth in 2012 (Figure 7). We expect more policy support to ensure financing for social housing as private property investment decelerates further.

Retail sales continue to surprise to the upside, rising 18.1 % y/y. According to the NBS, real retail sales growth picked up strongly to 13.8% y/y from 12.8 % and 11.3% previously (Figure 8). Specifically, property-related sales remained robust, contrary to expectations. Furniture and construction materials rose 39.2% y/y and 37.2 %, respectively, from 34.4% and 28.4% in November (Figure 9). Boosted by the end of stimulus measures, household electronics and communication appliance sales growth rose 33.4% y/y and 24.8%, respectively. Discretionary consumption such as jewellery sales growth remained buoyant at 35.6 % y/y.